Heartland Stores, Inc. v. Royal Ins. Co., N-G
| Decision Date | 16 July 1991 |
| Docket Number | N-G,No. WD,WD |
| Citation | 815 S.W.2d 39 |
| Parties | HEARTLAND STORES, INC. d/b/a Shop-o, Inc., Appellant/Cross-Respondent, v. ROYAL INSURANCE COMPANY, Respondent/Cross-Appellant. 43664. |
| Court | Missouri Court of Appeals |
Roy A. Larson, Thomas H. Davis, Kristine S. Focht, Watson, Ess, Marshall & Enggas, Kansas City, for appellant/cross-respondent.
Hal D. Meltzer, Patricia A. Wohlford, Turner and Boisseau, Kansas City, for respondent/cross-appellant.
Before LOWENSTEIN, P.J., and TURNAGE and FENNER, JJ.
Heartland Stores, Inc. brought suit against Royal Insurance Company for damages for bad faith refusal to settle a lawsuit, for damages for negligence on the part of the attorney hired by Royal, and for a declaratory judgment that Royal's policy covered punitive damages. The jury returned a verdict in favor of Royal on the damage counts and the court entered judgment in favor of Royal on the declaratory judgment count. Heartland contends the court erroneously instructed the jury on the damage counts and erroneously declared the law on the declaratory judgment count. 1 Affirmed.
Royal issued a business comprehensive insurance policy to Heartland. In March, 1982, Steven Swinney filed suit against Heartland seeking actual and punitive damages for injuries suffered by Swinney when his hand went through the glass door of a Heartland store. The suit sought actual and punitive damages for negligence on the part of Heartland in having plate glass in the door rather than safety glass. The suit also sought actual and punitive damages for malicious prosecution resulting when Heartland filed criminal charges against Swinney for destroying its property and such charges were later dismissed. The jury returned a verdict in favor of Swinney for $225,000.00 actual damages and $500,000.00 punitive damages on the negligence claim. On the malicious prosecution claim the jury awarded Swinney $600.00 actual damages (reduced to $500.00 by the court) and $50,000.00 punitive damages.
An appeal was taken from the judgment entered on those verdicts and in the course of the appeal the Swinney case was settled with Royal paying the actual damages and Heartland paying $169,656.00 in settlement of the punitive damages.
Heartland brought this suit against Royal in three counts. The first count sought recovery for bad faith on the part of Royal in refusing to settle the Swinney case. Heartland contends the Swinney case could have been settled for about $100,000.00 but that Royal refused to offer any more than $30,000.00, which was the amount of special damages claimed by Swinney. Royal told Heartland that its policy did not cover punitive damages and Royal advised Heartland that it was on its own with respect to the claim for punitive damages.
Heartland's second count was for negligence on the part of the attorney Royal retained to defend the Swinney case. Heartland contends that the attorney was negligent in failing to file a motion for a directed verdict at the close of all the evidence.
In its third count Heartland sought a declaratory judgment that the Royal policy covered punitive damages. The Royal policy provided:
(A) The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of personal injury or advertising injury to which this insurance applies, sustained by any person or organization and arising out of the conduct of the named insured's business....
Personal injury was defined as:
"Personal injury" means injury arising out of one or more of the following offenses committed during the policy period: (1) false arrest, detention, imprisonment or malicious prosecution; ....
The first two counts of Heartland's suit against Royal were submitted to a jury which returned a verdict in favor of Royal. The court entered judgment against Heartland on the third count for declaratory judgment.
Heartland first contends that the court erred in giving Instruction No. 7 2 when it submitted the bad faith refusal to settle count to the jury.
Heartland contends error in paragraph four because of the tail "rather than negligently." Heartland contends that the phrase "rather than negligently" violates the instructions on the use of MAI, is an abstract statement of law, was argumentative, required a negative finding by the jury, injected a false issue, and made the instruction confusing and misleading. Instruction No. 7 was based on the elements of the tort for an insurer's bad faith refusal to settle as stated in Dyer v. General American Life Ins. Co., 541 S.W.2d 702, 704 (Mo.App.1976). The court stated four elements of the tort with the fourth element being "in so refusing, the insurer acts in bad faith, rather than negligently."
It should first be observed that statements in opinions setting forth rules of law are not meant to be literally incorporated into jury instructions any more than statutes should be literally embodied into jury instructions. Here, the court felt that since Dyer required that the insurer act in bad faith rather than negligently that the entire statement in Dyer must be included in the instruction. In this the court fell into error because the opinion in Dyer was not intended to be a jury instruction but was a statement of the elements of the tort. The "rather than negligently" phrase was stated to emphasize that the tort of bad faith refusal to settle is an intentional tort contrasted with an action in negligence. In this case the court found evidence of bad faith when it submitted that cause of action to the jury. It was not necessary to tell the jury any more than that it must find that Royal acted in bad faith. The phrase "rather than negligently" should not have been added to the instruction.
The question now becomes whether the addition of this phrase was prejudicial. The only complaint leveled that merits discussion is that the addition of the phrase may have been misleading or confusing to the jury. In evaluating whether a jury has been misled an appellate court may assume that the jury is composed of reasonably intelligent people with an average understanding of the English language. Weniger v. Famous-Barr Co., 686 S.W.2d 553, 557 (Mo.App.1985). Further, the meaning of an instruction is not found in isolated words or phrases but is drawn from its entirety. Eickelman v. Illinois Cent. Gulf R. Co., 714 S.W.2d 611, 618 (Mo.App.1986). Further, the trial judge is in the best position to...
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