Grissom v. First Nat'l Ins. Agency

• Decision Date: 05 June 2012
• Docket Number: No. SD 31400.,SD 31400.
• Citation: 371 S.W.3d 869,115 Fair Empl.Prac.Cas. (BNA) 124
• Parties: Lisa GRISSOM, Plaintiff–Respondent, v. FIRST NATIONAL INSURANCE AGENCY, et al., Defendants–Respondents, v. General Insurance Company of America, Garnishee–Appellant.
• Court: Missouri Court of Appeals

371 S.W.3d 869
115 Fair Empl.Prac.Cas. (BNA) 124

Lisa GRISSOM, Plaintiff–Respondent,
v.
FIRST NATIONAL INSURANCE AGENCY, et al., Defendants–Respondents,
v.
General Insurance Company of America, Garnishee–Appellant.

No. SD 31400.

Missouri Court of Appeals,
Southern District,
Division Two.

May 16, 2012.
Motion for Rehearing and Transfer
Denied June 5, 2012.

Application for Transfer Denied Aug. 14, 2012.

[371 S.W.3d 870]

T. Michael Ward, St. Louis, MO, for Appellant.

James E. Spain, Poplar Bluff, MO, for Defendants.

John P. Clubb, Cape Girardeau, MO, for Respondent.

JEFFREY W. BATES, Judge.

Lisa Grissom (Grissom) filed a garnishment action against General Insurance Company of America (GICA) seeking to satisfy a judgment entered on Grissom's Missouri Human Rights Act (MHRA) claim (hereinafter referred to as the underlying

[371 S.W.3d 871]

judgment) from a GICA insurance policy. Both parties moved for summary judgment, and the trial court entered judgment in Grissom's favor. None of the material facts are in dispute. Because Grissom is not entitled to judgment as a matter of law, we reverse and remand with directions for the trial court to enter judgment in favor of GICA.

I. Factual and Procedural Background

Grissom filed this garnishment action to satisfy the underlying judgment entered against Loy Welker (Welker) under a GICA insurance policy issued to Tri–Star of Sikeston, Inc. (Tri–Star), a business selling commercial and residential insurance products.¹ Welker was the owner and president of Tri–Star from January 2005 to January 2008.

In 2006 and 2007, GICA issued an annual claims-made “Insurance Professionals Errors and Omissions” liability insurance policy to Tri–Star as the named insured. Officers of Tri–Star, like Welker, were additional insureds under the policy. Each policy covered claims made during the one-year policy period that commenced on January 6th. Each year's policy covered a claim made during the annual policy period and reported either during the policy year or up to 60 days after the policy period expired on January 6th. If a claim was not properly reported during the policy year or within 60 days thereafter, the claim was not covered. Hereinafter, the 2006–07 and 2007–08 policies are referred to as Policy A and Policy B, respectively.²

In January 2005, Grissom was hired to work at Tri–Star. In July 2005, Grissom hand delivered a letter from her attorney to Welker accusing him of “perpetual and continual sexual harassment” that Grissom endured by Welker's “comments and physical contact during the past year.” The letter further stated that Grissom documented Welker's harassment “for future use with potential litigation” and that Welker's actions had caused Grissom “great emotional and physical injury.” Grissom stated that, if the harassment did not stop, she would file a claim with the Equal Employment Opportunity Commission (EEOC) and sue Welker.

In January 2006, Welker fired Grissom. Thereafter, Grissom filed a complaint against Welker with the Missouri Commission on Human Rights (MCHR), accusing Welker of wrongful discharge and retaliation due to her prior accusations of sexual harassment. In May 2006, Welker received a “letter of complaint” (complaint) from the MCHR notifying him of Grissom's claims.

In July 2006, Grissom filed a “Charge of Discrimination” (charge) against Welker with the MCHR and the EEOC, again asserting that Welker sexually harassed and retaliated against Grissom. Each charge stated that she sought “compensatory damages, including compensation for pain, humiliation and suffering, and whatever else the Commission deems just and proper.” In August 2006, Welker received notices from both the MCHR and the EEOC of Grissom's charge. In October or November 2006, Welker asked Grissom to meet with him to discuss settlement of her claims. Grissom did not meet with Welker at that time.

In November 2006, Welker filled out an application to renew Policy A for the following year. In the “Loss History” section,

[371 S.W.3d 872]

the application asked Welker if he had any employment-related claims:

9. Regardless of whether or not such may have been covered by any insurance policy, have you had or do you presently have any employment-related claims including, but not limited to, complaints, charges, grievances, arbitrations, litigation, administrative agency proceedings (federal, state, or local), or negotiated settlements (“claims”) concerning employment issues such as hiring, promotion, termination, discrimination, or sexual harassment? If yes, please provide information on the Supplemental Application—Claims for each such “claim” in the past five years. ___ Yes X No

10. After diligent inquiry, does the applicant or any of its predecessors in business, subsidiaries, affiliates, past or present partners, owners, salespersons, employees, or independent contractors have knowledge of any facts, incidents, internal complaints, or circumstances (“incidents”) which may result in employment-related claims being made against you? If yes, please provide information on the Supplemental Application–Claims for each such “incident.” ___ Yes X No

As indicated above, Welker answered “No” to both questions and did not report Grissom's complaint or the charges Welker had received from the MCHR and EEOC. The application further warned:

Any employment-related claims, or claims that may arise from facts, incidents, or circumstances that you have disclosed, or should have disclosed in response to questions 9 and 10, will be excluded from coverage under the insurance for which this Application is made.

(Bold emphasis in original.)

On January 22, 2007, the MCHR issued two “Notice of Right to Sue” letters to Grissom for her prior complaints filed in 2006. The MCHR sent copies of both letters to Welker. In February 2007, the EEOC issued a “Notice of Right to Sue” letter to Grissom, and also sent a copy of the notice to Welker. On April 13, 2007, Grissom filed suit against Welker for, inter alia, wrongful discharge and retaliation (the MHRA claims).

On April 24, 2007, Welker first notified GICA of Grissom's claims. Welker sought coverage for defense and indemnity of Grissom's claims under Policy B, which had a policy period of January 6, 2007 through January 6, 2008. Following an investigation, GICA denied coverage because Grissom first asserted her claims against Welker in 2006 before Policy B's inception, and Welker failed to report the claims to GICA. GICA also denied coverage under Policy A because Welker received notice of Grissom's complaint and charge against him from the MCHR and EEOC during the 2006–07 policy period and failed to report the claim by March 7, 2007, which was 60 days after Policy A's expiration.

On August 10, 2010, following a jury trial, the trial court entered the underlying judgment in favor of Grissom and against Welker on the MHRA claims. Grissom was awarded $25,000 in actual damages, $100,000 in punitive damages, $84,007.50 in attorney's fees and $5,500.41 in court costs.

On August 19, 2010, Grissom filed this action to garnish Policy B to satisfy the underlying judgment. Grissom and GICA each filed motions for summary judgment. The undisputed facts supporting each motion were supplemented, following additional discovery, at the trial court's direction.

After hearing argument on the matter, the trial court granted Grissom's motion

[371 S.W.3d 873]

for summary judgment and denied GICA's cross-motion. The court's judgment stated that the 2006 MCHR and EEOC notices did not constitute a “claim” that Welker was required to report according to the provisions of Policy B. The trial court reasoned that the policy definition of “claim” required findings to have been made. The court also reasoned that no claim existed until Grissom obtained her right-to-sue letters from the MCHR and EEOC in January and February 2007, which permitted her to file her civil lawsuit in April 2007. The court concluded that the policy language defining a “claim” was not ambiguous and that a “lawsuit is a claim.” The court therefore ordered GICA to pay Grissom the full amount of the garnishment, $217,673.63, plus $5,000 for attorney's fees authorized under § 213.111. This appeal followed. Additional facts will be provided as necessary to address GICA's single point on appeal.

II. Standard of Review

Summary judgment is appropriate where no genuine issues of material fact exist and the movant is entitled to judgment as a matter of law. ITT Commercial Fin. Corp. v. Mid–Am Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993); Rule 74.04(c)(6).³ “The key to summary judgment is the undisputed right to judgment as a matter of law; not simply the absence of a fact question.” ITT, 854 S.W.2d at 380. Appellate review is de novo.Id. at 376. Consequently, this Court does not defer to the trial court's decision to grant summary judgment. Barekman v. City of Republic, 232 S.W.3d 675, 677 (Mo.App.2007). Instead, we use the same criteria the trial court should have employed in initially deciding whether to grant the motion. Id., ITT, 854 S.W.2d at 376. “A ‘claimant’ must establish that there is no genuine dispute as to those material facts upon which the ‘claimant’ would have had the burden of persuasion at trial.” ITT, 854 S.W.2d at 381. For Grissom to prevail on her garnishment claim, she had to prove that Policy B provided coverage for the underlying judgment. See Inman v. St. Paul Fire & Marine Ins. Co., 347 S.W.3d 569, 579 (Mo.App.2011); Wilson v. Traders Ins. Co., 98 S.W.3d 608, 612 (Mo.App.2003).

III. Discussion and Decision

In GICA's point, it contends the trial court erred by granting Grissom's motion for summary judgment and denying GICA's cross-motion for summary judgment because Policy B provides no coverage for the underlying judgment. GICA argues that Welker failed to comply with the claim-reporting requirements in Policy B.

The interpretation of an insurance policy is an issue of law that we review de novo.Burns v. Smith,...