Farmers Ins. Co. v. McFarland

• Decision Date: 21 July 1998
• Docket Number: No. WD,WD
• Parties: FARMERS INSURANCE COMPANY, Respondent, v. David McFARLAND, Appellant. 54948.
• Court: Missouri Court of Appeals

Page 559

976 S.W.2d 559

FARMERS INSURANCE COMPANY, Respondent, v. David McFARLAND, Appellant.

No. WD 54948.

Missouri Court of Appeals Western District.

July 21, 1998.

As Modified Sept. 1, 1998.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Sept. 1, 1998.

Application for Transfer Denied Oct. 20, 1998.

Thomas J. Walsh, Lee's Summit, for Appellant.

Lance W. LeFevre, Kansas City, for Respondent.

Before HANNA, P.J., and LAURA DENVIR STITH and EDWIN H. SMITH, JJ.

EDWIN H. SMITH, Judge.

David McFarland appeals the circuit court's summary judgment for the respondent, Farmers Insurance Company, in the amount of $12,900 for reimbursement of benefits paid by it to him under a personal injury protection (PIP) endorsement of a Kansas motor vehicle insurance policy. The benefits paid were for medical expenses and lost wages the appellant incurred for injuries he received in an accident in which he was a passenger in a motor vehicle licensed in Kansas and driven by Michael Smith, a Kansas resident who was insured by the respondent.

The appellant raises three points on appeal. Points I and II are alternative challenges to the trial court's granting of the respondent's motion for summary judgment on its claim, while Point III challenges the trial court's denial of the appellant's motion for summary judgment on his counterclaim.

In Point I, in two subpoints, the appellant claims that the trial court erred in granting summary judgment to the respondent because there were genuine issues of material fact in that there was a factual dispute as to: (a) whether the benefits paid to him were PIP payments, requiring reimbursement to the respondent upon the appellant's recovery from the tortfeasor who caused the accident, or whether the payments were made pursuant to the policy's liability provision, requiring no reimbursement; and, (b) whether the claim of the appellant against the tortfeasor had been assigned to the respondent by virtue of the fact that the appellant failed to pursue his claim within eighteen months, extinguishing the respondent's right to reimbursement from the appellant as provided in the policy.

In Point II, the appellant claims that the trial court erred in granting summary judgment to the respondent because it was not entitled to judgment as a matter of law in that, based on the undisputed facts, the policy's PIP reimbursement and subrogation provision was unenforceable in a Missouri court as being against Missouri's public policy prohibiting the assignment of personal injury claims.

In Point III, the appellant claims that the trial court erred in denying his motion for summary judgment on his counterclaim against the respondent for tortious interference with a contract.

We reverse and remand in part and dismiss in part.

Facts

On December 23, 1993, the appellant was injured in a motor vehicle accident near Odessa in Lafayette County, Missouri, while a passenger in a vehicle owned and operated by Michael Smith, a Kansas resident. Mr. Smith's vehicle was hit broadside by a vehicle driven by Scott Alber. Mr. Smith's vehicle, licensed in Kansas, was insured under a Kansas insurance policy issued by the respondent.

Following the accident, the appellant made a claim for any benefits due him under Mr. Smith's policy as a passenger injured while occupying Mr. Smith's vehicle. Pursuant to that claim, the respondent paid medical and lost income benefits to the appellant in the amount of $12,900. The appellant also made a claim against the alleged tortfeasor, Scott Alber, through Motorists Insurance Company, Mr. Alber's liability insurance carrier. The appellant and Motorists Insurance settled the claim for $125,000.

The PIP reimbursement provision in Mr. Smith's policy provided that the respondent was to be reimbursed for benefits it paid in the event the injured person recovered by judgment, settlement or otherwise from the tortfeasor to the extent it was duplicative of the PIP benefits paid. The appellant refused to reimburse the respondent for the $12,900 in PIP benefits paid to him by the respondent. As a result, the respondent filed its petition for declaratory judgment and/or reimbursement in the Jackson County Circuit Court on December 6, 1995, requesting: (1) a declaration of its right to reimbursement of PIP benefits paid in the event that the appellant recovered from a third-party tortfeasor; and, (2) reimbursement of the $12,900 paid to the appellant pursuant to the policy's PIP provision. The appellant filed a counterclaim for damages alleging tortious interference with a contract.

The respondent filed on May 15, 1997, a motion for summary judgment on its petition for declaratory judgment. On June 23, 1997, the appellant filed a motion for summary judgment upon his counterclaim. The trial court subsequently sustained the respondent's motion, while overruling the appellant's. On September 5, 1997, the appellant filed a motion for reconsideration, which the trial court denied.

This appeal follows.

Standard of Review

SB21 The purpose of summary judgment under Missouri's fact-pleading regime is to identify cases (1) in which there is no genuine dispute as to the facts and (2) the facts as admitted show a legal right to judgment for the movant.

ITT Commercial Finance v. Mid-Am. Marine, 854 S.W.2d 371, 380 (Mo. banc 1993).

When considering appeals from summary judgments, the Court will review the record in the light most favorable to the party against whom judgment was entered. Facts set forth by affidavit or otherwise in support of a party's motion are taken as true unless contradicted by the non-moving party's response to the summary judgment motion. We accord the non-movant the benefit of all reasonable inferences from the record.

Our review is essentially de novo. The criteria on appeal for testing the propriety of summary judgment are no different from those which should be employed by the trial court to determine the propriety of sustaining the motion initially. The propriety of summary judgment is purely an issue of law. As the trial court's judgment is founded on the record submitted and the law, an appellate court need not defer to the trial court's order granting summary judgment.

Id. at 376 (citations omitted). We will review the record in the light most favorable to the party against whom judgment was entered and accord him the benefit of all reasonable inferences from the record. Id. Summary judgment will be upheld on appeal if: (1) there is no genuine dispute of material fact; and, (2) the movant is entitled to judgment as a matter of law. Id. at 377.

I.

The appellant contends in Point I that the benefits he received were not PIP payments, and therefore, were not subject to the policy's PIP reimbursement endorsement. In Point II, he claims that even if the benefits paid were PIP payments, the trial court still erred in granting summary judgment to the respondent because it was not entitled to judgment as a matter of law in that, based on the undisputed facts, the PIP reimbursement provision of the policy was unenforceable in a Missouri court as being against Missouri's public policy prohibiting the assignment of personal injury claims. Logically, we will address the appellant's claim in Point II before addressing his claim in Point I, because if the former is correct, it would render the issue raised in the latter moot.

The respondent contends that it was entitled to reimbursement because the benefits paid to the appellant were PIP payments subject to reimbursement pursuant to the policy's PIP endorsement, which was enforceable in Missouri, in that it is undisputed that the policy was a Kansas insurance contract requiring Missouri courts to apply Kansas law upholding such an endorsement. The issue for us to determine is whether the PIP lien in the motor vehicle insurance policy in question, a Kansas contract, was unenforceable in a Missouri court as being against Missouri's public policy prohibiting the assignment of personal injury claims, where the accident for which benefits were paid occurred in Missouri and the party from whom reimbursement is sought, the appellant, is a Missouri resident. The resolution of this issue turns on whether Kansas or Missouri law is applied. If Kansas law is applied, the lien is enforceable. If Missouri law is applicable, it is not.

To be entitled to summary judgment under Rule 74.04, the respondent must have satisfied the two-part test that: (1) there was no genuine dispute as to the material facts; and, (2) the undisputed facts demonstrate it was entitled to judgment as a matter of law. ITT, 854 S.W.2d at 380. Where the claimant, as in the case at bar, seeks summary judgment, he or she has the burden of establishing all of the facts necessary for his or her claim and showing entitlement to judgment as a matter of law. Id. at 381. Thus, given the undisputed facts in this case, the respondent here, in order to be entitled to summary judgment as a matter of law, had to show, inter alia, that the policy's PIP reimbursement provision was enforceable in Missouri as not being against public policy.

All Kansas motorists are required to maintain an insurance policy conforming to the requirements of the "Kansas Automobile Injury Reparations Act." Bell v. Mid-Century Ins. Co., 750 S.W.2d 708, 710 (Mo.App.1988).

[The act] provides for payment under the insurance policy to the insured of certain benefits called 'personal injury protection benefits' which includes 'disability benefits, funeral benefits, medical benefits, rehabilitation benefits, substitution benefits, and survivors benefits.'

Id. Section 40-3113a(b) of the act provides, in pertinent part, that: "[i]n the event of recovery from [the] tortfeasor by the injured person ... by judgment, settlement or otherwise, the insurer ... shall be subrogated to the extent of duplicative personal injury protection benefits provided to date of such recovery and shall have a lien...