Frickleton v. Fulton

• Decision Date: 24 November 1981
• Docket Number: 11970,Nos. 11965,s. 11965
• Citation: 626 S.W.2d 402
• Parties: 33 UCC Rep.Serv. 979 Lorain FRICKLETON, and James W. Frickleton, Plaintiffs-Garnishors-Respondents, Walter J. Fischer and Marty Murray, Plaintiffs-Garnishors-Appellants, v. Robert P. FULTON, Defendant, v. FARMERS INSURANCE COMPANY, INC., Garnishee-Appellant-Respondent.
• Court: Missouri Court of Appeals

Page 402

626 S.W.2d 402

33 UCC Rep.Serv. 979

Lorain FRICKLETON, and James W. Frickleton, Plaintiffs-Garnishors-Respondents, Walter J. Fischer and Marty Murray, Plaintiffs-Garnishors-Appellants, v. Robert P. FULTON, Defendant, v. FARMERS INSURANCE COMPANY, INC., Garnishee-Appellant-Respondent.

Nos. 11965, 11970.

Missouri Court of Appeals, Southern District, Division One.

Nov. 24, 1981.

Motion for Rehearing or to Transfer Denied Dec. 16, 1981.

Donald E. Bonacker, Jerry L. Reynolds, Bonacker & Reynolds, P.C., Springfield, for Lorain Frickleton and James Frickleton.

Thomas Strong, Matthew W. Placzek, Strong & Placzek, P.C., Springfield, for Marty Murray and Walter J. Fischer.

Warren S. Stafford, Taylor, Stafford & Woody, Springfield, for Farmers Insurance Co., Inc.

FLANIGAN, Judge.

These two appeals, one by Farmers Insurance Company, Inc., ("Farmers"), and the other by Walter Fischer and Marty Murray, stem from three garnishment actions against Farmers which were consolidated for a four-day trial before a jury. Fischer and Murray filed separate garnishment actions. The third garnishment action was filed jointly by James Frickleton and his wife Lorain Frickleton.

On November 14, 1974, a collision occurred which involved a vehicle operated by Robert P. Fulton who carried a policy of liability insurance with Farmers. The principal issue, between Farmers on the one hand and the four garnishors on the other, was whether the bodily injury limits of the policy were 15/30 ($15,000 for all damages arising out of bodily injury sustained by one person in any one occurrence and $30,000 for all damages arising out of bodily injury sustained by two or more persons in any one occurrence) or 25/50 ($25,000-one person; $50,000-one occurrence). Farmers took the position that the limits were 15/30 and the garnishors asserted that the limits were 25/50. This issue was submitted to the jury which found that the limits were 25/50. Farmers appeals from that finding which the trial court incorporated in the judgment in all three actions.

Service of the garnishment documents upon Farmers was accomplished in the Frickleton garnishment approximately a month before it was accomplished in the Fischer and Murray garnishments. In making distribution of the proceeds the trial court held that the Frickletons were entitled to priority over Murray and Fischer. The latter two appeal from that determination.

As a result of the collision of November 14, 1974, four people sustained bodily injuries. They were Murray, Fischer, James Frickleton and Lorain Frickleton. Three lawsuits, one by James and Lorain Frickleton (No. 3198), one by Fischer (No. 3208) and one by Murray (No. 3209), were filed against Fulton in the Circuit Court of Taney County. The three cases were consolidated for trial and on February 2, 1978, that trial culminated in jury verdicts in favor of all four plaintiffs.

In addition to making claims for their own injuries, each of the Frickletons asserted a derivative claim based on injuries to the respective spouse. Judgments against Fulton and in favor of the respective plaintiffs were entered on the day of the verdicts as follows:

(1) Lorain Frickleton-$48,133 ($41,300 for her injuries and $6,833 on her derivative claim);

(2) James Frickleton-$26,210 ($15,840 for his injuries and $10,370 on his derivative claim);

(3) Walter Fischer-$24,580; and

(4) Marty Murray-$70,416. ¹

On May 19, 1978, Farmers issued four drafts totaling $30,000, plus interest at the legal rate accruing since February 2, 1978. The $30,000 was distributed pro rata among the four plaintiffs based upon the amounts of their respective judgments. ² The four drafts were delivered to the attorneys for the respective plaintiffs on May 19.

When originally issued the Fulton policy had liability limits of 25/50. It was the trial theory of Farmers that Fulton had requested a reduction to 15/30 and that Farmers effected the reduction prior to the collision. Under this theory the payments of May 19, 1978, exhausted the policy coverage.

All four garnishors took the position, however, that the policy limits were not reduced prior to the collision and that the coverage available for payment of the judgments was 25/50. With regard to the division of that coverage, however, Fischer and Murray parted ways with the Frickletons. Essentially it was the Murray-Fischer theory that Farmers was entitled to credit for the $30,000 already paid and that the additional $20,000 should also be distributed pro rata among the four plaintiffs. It was the theory of the Frickletons, which the trial court adopted, that the Frickletons had priority over the other two plaintiffs in seeking partial satisfaction of their judgments out of the $50,000 coverage. It was also the trial theory of the Frickletons, adopted by the trial court and reflected in instructions given on Frickleton's behalf, that no matter whether the policy limits were 15/30 or 25/50 Farmers was entitled to credit for the amounts of the Frickleton drafts but was not entitled to credit for the amounts of the Fischer and Murray drafts.

After the jury returned its verdict finding that the policy limits were 25/50, the trial court, in Case No. 3198, awarded Lorain Frickleton judgment against Farmers in the amount of $23,723.26 ($23,305.79 as principal and $417.47 as interest). In the same case James Frickleton was awarded judgment against Farmers in the amount of $11,397.21 ($11,196.65 as principal and $200.56 as interest). These calculations ³ gave credit to Farmers for the amount of the Frickleton drafts, but gave no credit to Farmers for the Fischer and Murray drafts. The judgment of the trial court then recited that after the foregoing amounts had been paid, there remained available, under a coverage of 25/50, the sum of $2,327 for application to the Fischer and Murray judgments. As to the latter judgments only, Farmers was given credit for the Fischer and Murray drafts respectively and the judgments recite that "after applying such credit the court finds that Farmers has made payments exhausting the personal injury coverage and the court will direct that Fischer and Murray take nothing in this action against Farmers." Fischer and Murray were denied relief in their respective garnishments and as intervenors in the Frickleton garnishment.

The dispositive issue on this appeal is this: After the Fischer and Murray drafts were issued (see § 400.3-102(1)(a)) ⁴ by Farmers on May 19, 1978, and delivered on that date to the attorneys for Fischer and Murray, were the amounts represented by those drafts subject to garnishment on May 22, 1978, when Farmers was served with the Frickleton garnishment documents? Resolution of this issue requires consideration of the nature of the drafts involved and the sequence of the material events. This court holds that the amounts represented by the Murray and Fischer drafts were not subject to the subsequent Frickleton garnishment and that the Frickleton trial instructions, based on the theory that they were so subject, were prejudicially erroneous to Farmers.

The material events were as follows:

May 19, 1978-The four claims drafts were delivered to their respective payees and their attorneys. Draft 774309 was drawn on Farmers, payable to the order of Marty Murray (and his attorneys), was in the amount of $12,720.94, was "payable through " Commerce Bank of Kansas City, was dated May 18, 1978, and was signed by Robert O. Biser, Farmers claims representative. ⁵ The draft contained additional information including the policy number of the Fulton policy, the date of the accident, and identification of Fulton as the named insured. The other drafts, except for their payees and amounts, were similar.

May 21, 1978-In Case No. 3198, at the instance of the attorney for the Frickletons, the circuit clerk of Taney County issued general executions against Fulton and in favor of Lorain Frickleton in the amount of $48,133 and in favor of James Frickleton in the amount of $26,210.

May 22, 1978-In Case No. 3198, at the instance of the attorney for the Frickletons, the sheriff of Cole County served upon the Superintendent of Insurance a summons to garnishee addressed to Farmers in aid of the James Frickleton execution. The summons stated, in part, "I do hereby seize and attach in your hands all debts due or to become due by you to Robert P. Fulton, the defendant in the above entitled cause, or so much thereof as will be sufficient to satisfy the sum of $26,210 with interest and costs of suit." On the same date the sheriff also delivered to the superintendent a summons in aid of the Lorain Frickleton execution. That summons was similarly worded except that the sum to be satisfied, with interest and costs, was $48,133.

May 23, 1978-Walter Fischer executed a partial satisfaction of judgment ($4,354.58 plus $85.90 interest) and this document was later filed with the circuit clerk.

May 25, 1978-Lorain Frickleton executed a partial satisfaction of judgment ($8,527.21 plus $168.21 interest) and James Frickleton executed a partial satisfaction of judgment ($4,643.35 plus $91.59 interest). These documents were later filed with the circuit clerk.

May 26, 1978-Marty Murray executed a partial satisfaction of judgment ($12,474.86 plus $246.08 interest) and it was later filed with the circuit clerk.

"Some date after May 22, 1978" but within a few days thereof, the four drafts arrived at Commerce Bank of Kansas City and were delivered by that bank to Farmers the next day. Farmers gave that bank a draft drawn on the Bank of America in California for the total amount of the four drafts, and others.

June 21, 1978-In Case No. 3208 and Case No. 3209, at the instance of the attorney for Fischer and Murray, the circuit clerk of Taney County issued a general execution against Fulton and in favor of Fischer for $15,225.42 and in favor of Murray for $52,941.14.

June 23, 1978-In Case No. 3208 and Case No. 3209 garnishment...