Inman v. Leader National Insurance Co.

• Decision Date: 07 August 2001
• Docket Number: ED78679
• Citation: 58 S.W.3d 590
• Parties: Phyllis (Inman) Freeman and Jennifer R. Tobin, Plaintiffs/Appellants v. Leader National Insurance Company, Louis J. Basso, Brown & James, P.C. and Rabbit, Pitzer & Snodgrass, P.C., Defendants/Respondents. ED78679 and ED78716 Missouri Court of Appeals Eastern District 0
• Court: Missouri Court of Appeals

Phyllis (Inman) Freeman and Jennifer R. Tobin, Plaintiffs/Appellants v Leader National Insurance Company, Louis J. Basso, Brown & James, P.C. and Rabbit, Pitzer & Snodgrass, P.C., Defendants/Respondents

ED78679 and ED78716

Missouri Court of Appeals Eastern District

08/07/2001

Appeal From: Circuit Court of the City of St. Louis, Hon. Robert H. Dierker, Jr., and Hon. Michael R. Calvin

Counsel for Appellant: Lawrence W. Ferguson and Joseph W. Rigler

Counsel for Respondent: Thomas B. Weaver and John Gianoulakis

Opinion Summary:

Phyllis Inman Freeman and Jennifer Tobin Harcrow appeal the court's grant of summary judgment in favor of Brown & James and the dismissal of their petition against Leader National Insurance for failure to state a cause of action.

Division Four holds: (1) The court lacked jurisdiction to grant summary judgment to Brown & James because Freeman and Harcrow had previously voluntarily dismissed their claims against Brown & James; (2) the court did not err in dismissing Freeman's and Harcrow's breach of duty-to-defend and breach of duty-to-settle claims for failure to state a cause of action; and (3) Freeman and Harcrow abandoned their claim that the court erred in dismissing their breach of fiduciary-duty claim.

Simon and Sullivan, J.J., concur.

Lawrence E. Mooney, Presiding Judge

Plaintiffs Phyllis Inman Freeman and Jennifer Tobin Harcrow appeal the trial court's grant of summary judgment to defendant Brown and James, P.C. (Brown & James). Because the Plaintiffs had voluntarily dismissed their petition against Brown & James, the trial court was without jurisdiction to grant summary judgment. Thus, as to the summary judgment, we reverse and remand.

Plaintiffs further appeal the trial court's dismissal of their petition for failure to state a cause of action against Leader National Insurance (Leader). In their petition, Plaintiffs allege that their rights to sue were received by assignment from a party to a prior declaratory judgment. Because the assignor's causes of action preserved for our review were precluded by the prior declaratory judgment, Plaintiffs' petition does not state a cause of action against Leader. We affirm the dismissal.Facts

This lawsuit has its origins in a May 1990 automobile accident, in which Gary Claus's car struck a car containing four persons. Phyllis Freeman's son, Randy Williams, was killed in the accident and Jennifer Tobin was injured. Claus was intoxicated at the time of the accident, and pleaded guilty to two charges of involuntary manslaughter as a result of the accident.

Claus's liability insurance policy, issued by Leader, had policy limits of $25,000 per person and $50,000 per accident. The policy provided as follows:

We will pay damages for bodily injury or property damage for which you become

legally responsible....

The policy also provided:

We [Leader] will pay for the cost of investigating the auto accident and arranging for the settlement of any claim against you. We will also defend you, hire and pay a lawyer and pay all defense costs if you are sued by someone for damages because of an auto accident even if the accusations are not true.... We may investigate and settle any claim or suit as we think appropriate. We will not be obligated to pay for the cost of any further investigation or arrangement for settlement or defend you further after we have paid our entire limit of liability.

This coverage does not apply to anyone if he, or his legal representative, settles a claim without our consent.

Leader hired Brown, James & Rabbitt¹ to defend Claus in a lawsuit filed in Dent County by William Tobin, as next friend of Jennifer Tobin. Leader issued a check for $50,000, the limit of liability under Claus's insurance policy. Brown, James & Rabbitt handled the case and filed a counterclaim for interpleader on behalf of Claus, added all parties that might assert claims against Claus, and deposited the $50,000 into the court's registry. In August 1991, the Dent County Court entered its judgment in interpleader apportioning Claus's $50,000 policy limits among the four occupants injured in the accident with Claus. The court stated in its judgment that the claimants were free to proceed against Claus, with the amounts of their recoveries subject to a setoff.

Prior to the court's entry of judgment in interpleader, Leader filed a petition for declaratory judgment against Claus, who was then incarcerated, seeking a declaration that its duty to defend and indemnify Claus under the insurance policy had been fully discharged with the payment of its $50,000 policy limit into the court registry. The court entered declaratory judgment on March 17, 1992, finding that Leader had no further duty to defend Claus. The court, however, did not declare that Leader had no further duty to indemnify. Pursuant to the declaratory judgment, Rabbitt, Pitzer & Snodgrass sought leave to withdraw their representation of Claus, and Brad Eidson was appointed as a trustee to represent Claus in both the Tobin and Freeman lawsuits, pursuant to RSMo. section 460.100.²

In October 1991, Phyllis Freeman filed suit against Claus in Dent County for the wrongful death of Randy Williams; the Freeman case went to trial in August 1993. Claus did not appear, and no attorney appeared on his behalf. Following the trial, a judgment was entered for Freeman in the amount of $800,000. Claus or his representatives then unsuccessfully demanded that Leader settle within the policy limits.

The Tobin case then went to trial in September 1995. Claus, who was out of prison at the time of trial, filed a declaration with the court that he did not intend to appear and no attorney appeared on his behalf. A judgment was entered for Tobin in the amount of $2,500,000. Claus or his representatives then unsuccessfully made a demand on Leader to settle for $17,500.

Following both the Freeman and Tobin trials, Claus filed for Chapter 7 bankruptcy. The bankruptcy trustee then assigned to Freeman and Tobin the right to bring all claims Claus possessed against Leader, Basso, Brown & James, and Rabbitt, Pitzer & Snodgrass. As a result, Plaintiffs brought the present case pursuant to the bankruptcy court's assignment. In their petition, both Freeman and Tobin allege Leader failed to settle their claims within Claus's policy limits and therefore Leader incurred liability for the judgments rendered. Plaintiffs also allege that at the time of trial, Leader's policy limits had not been exhausted and thus Leader wrongfully failed to provide Claus with a defense in both lawsuits. Further, Plaintiffs' petition asserts that Leader, Basso, Brown & James, and Rabbitt, Pitzer & Snodgrass breached their fiduciary duties. Lastly, Plaintiffs pleaded legal malpractice claims against Basso, Brown & James, and Rabbitt, Pitzer & Snodgrass.

Motions to dismiss were filed by all defendants. The trial court entered an order dismissing Plaintiffs' breach of duty-to-settle, duty-to-defend, and fiduciary-duty claims against Leader for failure to state a cause of action and overruling the motions as to defendants Basso, Brown & James, and Rabbitt, Pitzer & Snodgrass; those three defendants then filed motions for summary judgment against Plaintiffs. On October 16, 2000, Plaintiffs took a voluntary dismissal without prejudice against defendants Basso, Brown & James, and Rabbitt, Pitzer & Snodgrass in order to appeal the court's dismissal of their claims against Leader. On October 23, 2000, the trial court granted Brown & James's motion for summary judgment, but denied summary judgment to both Rabbitt, Pitzer & Snodgrass and to Basso. Plaintiffs now appeal the trial court's dismissal of their petition against Leader and the grant of summary judgment to Brown & James. Analysis

We now examine the gravamina of Plaintiff's complaints on appeal. First, Plaintiffs contend the trial court erred in granting summary judgment to Brown & James because the court lacked jurisdiction given Plaintiffs' previous voluntary dismissal without prejudice against Basso, Brown & James, and Rabbitt, Pitzer & Snodgrass. Second, according to Plaintiffs, the court erred in dismissing their claims against Leader for breach of duty to settle, breach of duty to defend and breach of fiduciary duty based upon Plaintiffs' failure to state a cause of action.Plaintiffs' Voluntary Dismissal Against Brown & James

First, we address whether the trial court had jurisdiction to grant summary judgment to Brown & James given Plaintiffs' previous voluntary dismissal without prejudice against Brown & James. Defendant argues that although Plaintiffs' voluntary dismissal memorandum was received on October 16, 2000, by the circuit clerk's office cashier located on the first floor of the civil courts building, the voluntary dismissal was ineffective because it was not properly filed in the third-floor clerk's office. Therefore, according to Brown & James, the trial court retained jurisdiction to later enter summary judgment on October 23, 2000. We disagree.

A plaintiff's voluntary dismissal pursuant to Rule 67.02(a) is effective as of the date it is filed. Thornton v. Deaconess Medical Cntr. West Campus, 929 S.W.2d 872, 873 (Mo.App. E.D. 1996). And after a case is dismissed, the trial court may take no further action and any step attempted is viewed as a nullity. Curators of the University of Missouri v. St. Charles County, 985 S.W.2d 810, 814 (Mo.App. E.D. 1998). In other words, the trial court loses jurisdiction as of the date of dismissal. Liberman v. Liberman, 844 S.W.2d 79, 80 (Mo.App. E.D. 1982).

Here, the record reflects that Plaintiffs' voluntary dismissal, notice of appeal against Leader, and docketing fee check were filed with the circuit clerk's office cashier on October 16, 2000. Further, it is undisputed that the parties knew of Plaintiffs' intent to dismiss their case prior to the court's October 23, 2000 entry of summary judgment to Brown & James. These...