Krenski v. Continental Cas. Co., 67809
Decision Date | 07 November 1995 |
Docket Number | No. 67809,67809 |
Citation | 908 S.W.2d 917 |
Parties | Amy KRENSKI, Plaintiff/Appellant, v. CONTINENTAL CASUALTY COMPANY, Defendant/Respondent. |
Court | Missouri Court of Appeals |
David J. Rauscher, Kathleen L. Rauscher, David J. Rauscher, P.C., Clayton, for appellant.
Daniel T. Rabbitt, Suzanne Woodard, Rabbitt, Pitzer & Snodgrass, St. Louis, for respondent.
Plaintiff, Amy Krenski, appeals from the trial court's grant of defendant Continental Casualty's motion for summary judgment on plaintiff's claim against a supersedeas bond issued by defendant. We affirm.
Krenski sued Richard Aubuchon for personal injuries arising from an automobile accident. She was awarded a judgment of $108,266.63, which included interest, against Aubuchon. Aubuchon appealed the judgment to this court. Aubuchon had a liability insurance policy for $25,000 through Atlanta Casualty Company. Atlanta filed, and this court granted, an application for leave to file an appeal bond. We set the amount of bond at $45,000, and stayed execution only against Atlanta. The bond was posted by Atlanta in the prescribed amount with Continental Casualty Company as the surety. We affirmed the judgment in favor of Krenski. Krenski v. Aubuchon, 841 S.W.2d 721 (Mo.App.1992). Atlanta tendered the limits of its liability policy, plus post-judgment interest (a total of $27,995.89) to the trial court. The court entered an order of partial satisfaction of judgment but noted that issues remained in the case concerning the amount of additional pre-judgment and post-judgment interest.
Plaintiff sought a summary judgment on the appeal bond which was denied by the court and from which denial Krenski appealed. That summary judgment was to recover an additional amount for pre- and post-judgment interest. While that appeal was pending, Krenski initiated an equitable garnishment action against Atlanta. Atlanta then deposited an additional $17,553.55, representing pre- and post-judgment interest plus costs for the equitable garnishment. The parties signed a consent judgment stipulating that the $17,553.55 was in satisfaction of the judgment between plaintiff and Atlanta. Thereafter plaintiff's appeal was dismissed by this court because there was no final appealable judgment. Krenski v. Aubuchon, 868 S.W.2d 526 (Mo.App.1993). In the opinion dismissing plaintiff's appeal this court noted that "It is agreed Atlanta Casualty has paid plaintiff all that it owed on the policy it issued to defendant Aubuchon."
Plaintiff then filed this action against Continental Casualty, the surety on Atlanta's bond. Both parties filed motions for summary judgment. The trial court denied plaintiff's motion and granted defendant's. This appeal followed.
Plaintiff acknowledges the general rule that if a principal is discharged from its bonded obligation, the surety's obligation also terminates. State ex rel. Missouri Highway and Transportation Commission v. Morganstein, 703 S.W.2d 894 (Mo. banc 1986) [1-3]; Continental Bank & Trust Co. v. American Bonding Co., 605 F.2d 1049 (8th Cir.1979) . If the principal performs the underlying promise, the surety is not liable. In general, the obligation of a surety is both measured and limited by the principal's obligation. Morganstein, supra. There is no dispute that Atlanta has been discharged from its bonded obligation, to which Continental was the surety. Plaintiff contends that there is an exception to the general rule when a surety, by the terms of its contract, takes on greater and different obligations than the principal. She relies upon certain language of the bond and the case of School District No. 37 In Butler County v. Aetna Accident & Liability Co., 234 S.W. 1017 (Mo.App.1921) (hereinafter Aetna).
The conditions for payment of the bond relied upon by plaintiff are:
"WHEREFORE, if appellant, Richard D. Aubuchon, should himself satisfy the judgment in full, if appellant's insurer, the Atlanta Casualty Company, should satisfy the judgment in full, or if the judgment is reversed in part or in full, then the obligation of the surety, Continental Casualty Company, shall be void; otherwise the obligation of the surety, Continental Casualty Company, remains in full force and effect to be executed at the order and direction of the Eastern District Court of Appeals, State of Missouri."
The judgment against Aubuchon has never been satisfied in full by Aubuchon or by Atlanta, and the judgment has not been reversed. Atlanta has satisfied in full its obligation under its insurance policy in an amount exceeding the amount of Continental's bond. The bond did not stay execution against Aubuchon and was not posted for his benefit. Under the general rule, upon the discharge of the principal, Atlanta, the obligation of the surety, Continental, terminated. The bond specifically provides that the principal and surety "are held and firmly bound in the sum of Forty-Five Thousand Dollars ... for which ... we bind ourselves ... jointly and severally ...." (Emphasis supplied)
The Aetna case relied upon by plaintiff recognized the general rule but added an exception when the surety, by the terms of its contract, casts upon itself a greater and different obligation than the principal. Defendant seeks to distinguish Aetna on the basis that Aetna's obligations under the bond were substantially different than Continental's under this bond and that in Aetna the principal had never paid any part of the debt involved. Whatever the merits of those distinctions we believe a more substantial distinction exists because Aetna was required to satisfy the very debt for which its bond was executed. Some further discussion of Aetna is required.
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