Ford Motor Credit Co. V. Allstate Ins. Co.

• Court: Missouri Court of Appeals
• Writing for the Court: Spinden
• Citation: Ford Motor Credit Co. V. Allstate Ins. Co. , 2 S.W.3d 810, WD 55892 (Mo. App. Feb 23, 1999)
• Decision Date: 23 February 1999
• Docket Number: WD 55892
• Parties: FORD MOTOR CREDIT COMPANY, Respondent, v. ALLSTATE INSURANCE COMPANY, Appellant.

2 S.W.3d 810

FORD MOTOR CREDIT COMPANY, Respondent v. ALLSTATE INSURANCE COMPANY, Appellant.

WD 55892

COURT OF APPEALS OF MISSOURI, WESTERN DISTRICT

February 23, 1999, Filed

Appellant's Motion for Rehearing & (Or) Transfer to Supreme Court Denied March 30, 1999.

APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY. The Honorable Thomas L. Sodergren, Judge.

Affirmed.

Paul M. Spinden, Judge, Patricia Breckenridge, Chief Judge presiding, and Laura D. Stith, Judge, concur.

PAUL M. SPINDEN

OPINION

Allstate Insurance Company appeals the circuit court's judgment enforcing a lien in favor of Ford Motor Credit Company on the proceeds of an insurance settlement. Allstate contends that the lien was unenforceable because it was void against public policy prohibiting assignment of a claim for personal injury. For the reasons outlined in this opinion, we affirm the circuit court's judgment.

The dispute arose out of a dispute between Steven Clerkley and Ford Motor Credit after Clerkley defaulted on his automobile loan in October 1996. On January 15, 1997, Ford Motor Credit sued him in circuit court for payment of the loan. 1 Clerkley told Ford Motor Credit's representative that he had a potential personal injury claim pending which emanated from an automobile collision. The driver of the other car, he said, had liability insurance issued by Allstate, and he was expecting a settlement check from Allstate. Ford Motor Credit agreed to drop its lawsuit against him in exchange for his giving it a lien on, and an assignment of, any proceeds which he might receive from Allstate.

On March 21, 1997, Clerkley entered into a "Lien Agreement and Assignment" with Ford Motor Credit. This agreement granted to Ford Motor Credit a lien on any proceeds from the expected settlement and assigned the proceeds from any settlement in an amount sufficient to satisfy the unpaid balance of the loan.

On April 15, 1997, Ford Motor Credit sent a copy of the agreement to Allstate's claims representative. Allstate's representative, Deanna Swan, responded by sending a letter to Ford Motor Credit on May 6, 1997, in which she said:

We cannot agree to Paragraph I in the agreements [sic] section: "Said lien shall take priority over all other liens, including, but not limited to hospital liens, medicaid liens, attorney's liens, or judgment liens."

We cannot agree to give this lien priority over any of those liens listed in the quoted portion above. In fact, the only way we could agree to honor this lien fully would be if those liens listed above be given priority over this lien and that some additions be made to above paragraph.

The following change would be acceptable:

"Said lien shall take priority over all other liens except, [sic] hospital liens, medicaid liens, medicare liens, other government liens, attorney's liens, or judgment liens."

If you are in agreement, please forward [a] new lien agreement and assignment to my attention.

Ford Motor Credit reworded the agreement as suggested by Swan and sent it back to Allstate on May 16, 1997.

Apparently believing that Allstate had agreed to honor its agreement with Clerkley if it altered the priority provision as suggested by Allstate, Ford Motor Credit dismissed its suit against Clerkley. On September 5, 1997, Allstate notified Ford Motor Credit that it had settled the personal injury action with Clerkley directly without putting Ford Motor Credit's name on the settlement check or without any other recognition of the lien. Ford Motor Credit did not receive any funds from Allstate or from Clerkley.

Ford Motor Credit sued Clerkley and Allstate on September 17, 1997. Ford Motor Credit dismissed its suit against Clerkley when authorities were unable to serve him with process. In the petition's remaining counts, Ford Motor Credit prayed for $ 16,309.80 plus interest from Allstate in enforcement of the lien on the basis of its contract with Clerkley and, in the alternative, on a theory of promissory estoppel. After trial, the circuit court entered judgment on April 23, 1998, for Ford Motor Credit for $ 16,309.80 on the grounds that the lien was enforceable and that Allstate was estopped from denying the lien because of its promise to acknowledge it. Allstate appeals.

Because this was a court-tried case based on stipulated facts and did not require the circuit court to resolve conflicting testimony, the only issue for us to consider is whether the circuit court reached the proper legal conclusions from the facts stipulated. Schroeder v. Horack, 592 S.W.2d 742, 744 (Mo. banc 1980). HN1In reviewing the circuit court's interpretations of stipulated facts, we employ general rules governing the construction of contracts. Howard v. Missouri State Board of Education, 847 S.W.2d 187, 190-91 (Mo. App. 1993).

Allstate contends that the circuit court erred in determining that the lien was valid and enforceable against Allstate because the underlying agreement amounted to an assignment of a claim for personal injuries, and assignment of a claim for personal injuries is unenforceable because it is contrary to public policy. 2 Ford Motor Credit responds that, to the extent that the agreement was a lien on a claim and not an assignment of a claim, it was enforceable. We agree with Ford Motor Credit.

HN2A lien is a charge on property--as opposed to a right in the property itself--for payment or discharge of a debt or duty. Estate of Griffitts, 938 S.W.2d 621, 624 (...