Hampton v. Carter Enterprises, Inc.

• Decision Date: 21 August 2007
• Docket Number: No. WD 66706.,WD 66706.
• Parties: Jennie HAMPTON and Marvin Vail, Appellants, v. CARTER ENTERPRISES, INC., and American Family Mutual Insurance Company, Respondents.
• Court: Missouri Court of Appeals

238 S.W.3d 170

Jennie HAMPTON and Marvin Vail, Appellants, v. CARTER ENTERPRISES, INC., and American Family Mutual Insurance Company, Respondents.

No. WD 66706.

Missouri Court of Appeals, Western District.

August 21, 2007.

Application for Transfer to Supreme Court Denied September 25, 2007.

Application for Transfer Denied December 18, 2007.

James P. Frickleton, Michael C. Rader, Leadwood, KS, for Appellant.

Daniel T. Defeo, Kansas City, Curtis O. Roggow, Overland park, KS, for Respondent.

PAUL M. SPINDEN, Judge.

State Farm Insurance Company accused Jennie Hampton and her brother-in-law Marvin Vail, of insurance fraud on the basis of a report by Carter Enterprises, Inc. Hampton and Vail sued Carter Enterprises for intentional infliction of emotional distress¹ and malicious prosecution and obtained a $4 million judgment. They initiated this action against Carter Enterprises and its insurer, American Family Mutual Insurance Company, to collect the judgment. They also charged American Family with bad faith refusal to settle an insurance claim. The circuit court issued summary judgment for American Family, and Hampton and Vail appeal.

Hampton and Vail contend that the circuit court erred in denying their motion for summary judgment and in issuing summary judgment for American Family because the parties are not disputing genuine issues of fact and, as a matter of law, American Family's business insurance policy issued to Carter Enterprises covered intentional infliction of emotional distress and malicious prosecution. We affirm the circuit court's judgment.

This dispute arose from a claim that Hampton made to the insurer of her vehicle, State Farm. Hampton claimed that her vehicle had been stolen and destroyed in a fire in Miami County, Kansas, during December 1997. Suspecting that Hampton's claim was fraudulent, State Farm hired Carter Enterprises to investigate. Carter Enterprises informed State Farm that its investigators had concluded that the vehicle's engine was inoperable before the vehicle was set on fire. Based on this report, State Farm asked Kansas authorities to prosecute Hampton and Vail. Kansas authorities charged Hampton and Vail with conspiracy to commit insurance fraud, but a jury acquitted them after one of Carter Enterprises' investigators admitted during trial that he had no evidence to support his theory.

On April 23, 2002, Hampton and Vail initiated this action against Carter Enterprises. American Family agreed to defend Carter Enterprises under a reservation of rights agreement, but Carter Enterprises rejected the reservation of rights defense and retained its own attorney. American Family withdrew its defense.

On July 13, 2004, Hampton and Vail entered into an agreement with Carter Enterprises that, if they obtained a judgment or settlement against Carter Enterprises, they would seek satisfaction from Carter Enterprises only to the extent of the insurance coverage provided by American Family. In exchange for this promise, Carter Enterprises agreed not to contest its liability in any future proceedings.

On October 22, 2004, Hampton and Vail dismissed their petition against Carter Enterprises in Jackson County circuit court and refiled it in Cass County circuit court. They asserted claims for malicious prosecution and intentional infliction of emotional distress. Carter Enterprises did not file an answer. After trial, during January 2005, the circuit court entered judgment for Hampton and Vail on both claims and awarded $4 million in damages to them.

On January 25, 2005, Hampton and Vail informed American Family of the judgment by letter and demanded satisfaction. American Family did not pay. On March 9, 2005, Hampton and Vail filed a two-count petition against American Family. Count I asserted an action for equitable garnishment, pursuant to Section 379.200, RSMo 2000, in which they sought satisfaction of the $4 million judgment. Count II asserted an action for bad faith refusal to settle a claim, pursuant to Section 375.420, RSMo 2000. Both parties filed motions for summary judgment, and, on February 24, 2006, the circuit court denied Hampton's and Vail's motion and entered summary judgment for American Family on both counts.

In reviewing the grant of a summary judgment, we review de novo. ITT Commercial Finance Corporation v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).

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. (citations omitted). We may affirm a summary judgment only when the parties are not disputing material facts and the moving party is entitled to judgment as a matter of law. Id. at 380.

When considering appeals from summary judgments, the [c]ourt 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.

Id. at 376 (citations omitted).

In their first point in this appeal, Hampton and Vail aver that the circuit court erred in denying their motion for summary judgment because, as a matter of law, the policy that American Family issued to Carter Enterprises covered acts of malicious prosecution and infliction of emotional distress. They assert that none of the policy's exclusions applied.

Although neither party raised the issue, we must determine sua sponte our jurisdiction to consider the merits of this claim. In re Care and Treatment of Paul E. Bowles v. State, 83 S.W.3d 93, 94 (Mo.App.2002). For this court to have jurisdiction, the circuit court must have entered a final judgment—that is, a judgment that disposes of all issues and leaves nothing for future determination. Id.

Hampton and Vail are appealing the circuit court's denial of their summary judgment motion. Denial of a summary judgment motion is not a final judgment because it leaves the merits of dispute for future determination. In re Foreclosure of Liens for Delinquent Land Taxes by Action in rem, 150 S.W.3d 364, 371 n. 3 (Mo.App.2004). We, therefore, dismiss this point of error.

In their second point, Hampton and Vail claim that the trial court erred in granting American Family's motion for summary judgment because, as a matter of law, the business insurance policy issued by American Family to Carter Enterprises covered the injuries arising from Carter Enterprises' actions. They contend that none of the policy's exclusions applied.

A moving party's right to judgment as a matter of law differs significantly depending on whether or not the moving party is a claimant or a defending party. Missouri Employers Mutual Insurance Company v. Nichols, 149 S.W.3d 617, 623 (Mo.App.2004). If the moving party is a defendant:

[A] prima facie case for summary judgment can be established by employing one or more of three means: (1) showing undisputed facts that negate any one of the plaintiff's required proof elements; (2) showing that the plaintiff, after an adequate period of discovery, has not produced and will not be able to produce evidence sufficient to allow the trier of fact to find the existence of one or more of the plaintiff's proof elements; or (3) showing that there is no genuine dispute as to the existence of the facts necessary to prove the movant's properly pleaded affirmative defense. . . . Regardless of which of these three means is employed by the `defending party,' each establishes a right to judgment as a matter of law.

Childress Painting and Associates, Inc. v. John Q. Hammons Hotels Two, L.P., 106 S.W.3d 558, 561 (Mo.App.2003) (quoting ITT Commercial Finance, 854 S.W.2d at 381). To constitute a final, appealable judgment, the moving party must establish that he or she is entitled to judgment as a matter of law as to every theory of recovery pleaded. Bost v. Clark, 116 S.W.3d 667, 674 (Mo.App.2003).

In their equitable garnishment action, Hampton and Vail had the burden of proving that they had obtained a judgment against Carter Enterprises, that American Family's insurance policy was in effect when Carter Enterprises committed the intentional infliction of emotional distress and malicious prosecution, and that the policy covered the damages awarded in the judgment against Carter Enterprises. Wilson v. Traders Insurance Company, 98 S.W.3d 608, 612 (Mo.App.2003). American Family, however, had the burden of showing that an applicable exclusion in its policy relieved it of liability. American States Insurance Company v. Herman C. Kempker Construction Company, Inc., 71 S.W.3d 232, 235 (Mo.App.2002).

American Family contends that it alleged in its motion for summary judgment undisputed material facts which entitled it to judgment as a matter of law with respect to Hampton's and Vail's alternative theories of intentional infliction of emotional distress and malicious prosecution. American Family also contends that, by showing that it was entitled to judgment as a matter of law as to those theories, it established that it was entitled to judgment as a matter of law as to their claim concerning bad faith refusal to settle because the allegations concerning this claim are dependent on Hampton's and Vail's being successful on their claim of intentional infliction of emotional distress and malicious prosecution. Because American Family, as the defendant, was not entitled to summary judgment on all of Hampton's and Vail's claims unless it could show an entitlement to judgment...