Morgan v. State Farm Fire

• Decision Date: 26 April 2011
• Docket Number: No. SD 30654.,SD 30654.
• Citation: 344 S.W.3d 771
• Parties: Lori MORGAN, Appellant,v.STATE FARM FIRE AND CASUALTY COMPANY, Respondent.
• Court: Missouri Court of Appeals

344 S.W.3d 771

Lori MORGAN, Appellant,
v.
STATE FARM FIRE AND CASUALTY COMPANY, Respondent.

No. SD 30654.

Missouri Court of Appeals, Southern District, Division Two.

April 26, 2011.Motion for Rehearing and Transfer

Denied May 13, 2011. Application for Transfer Denied Aug. 30, 2011.

[344 S.W.3d 773]

Aaron W. Smith, Columbia, MO, for Appellant.Dale L. Beckerman, Kansas City, MO, for Respondent.WILLIAM W. FRANCIS, JR., Judge.

Lori Morgan (“Appellant”) brought an equitable garnishment claim against State Farm Fire and Casualty Company (“State Farm”) to satisfy a judgment rendered in a separate wrongful death action, in accordance with sections 379.200, 537.021 and 537.080.¹ Each party moved for summary judgment. The trial court granted State Farm's motion for summary judgment and denied Appellant's motion for summary judgment finding State Farm may raise policy defenses in this case, and no insurance policy was subject to the equitable garnishment action. We affirm the judgment of the trial court.

Facts and Procedural Background

A review of the facts and procedural background from the separate wrongful death action, and the current action, is necessary to understand the position of the parties in context.

The Separate Wrongful Death Action

Richard D. Parchman, Jr. (“Richard”),² was the son of Richard D. Parchman, Sr.,

[344 S.W.3d 774]

and Judith Parchman (“parents”). From November 2002 until his death on July 7, 2007, Richard lived at 500 South Robin in Duenweg, a residence owned by parents as rental property. He used 500 South Robin as his address for his vehicle registration and banking records. He received mail at a post office in Duenweg.

On July 7, 2007, Richard was operating an all terrain vehicle (“ATV”) on a public road in Carthage. Latisha Doring (“Doring”), Appellant's decedent, was a passenger on the ATV. Richard failed to negotiate a curve and the ATV left the roadway resulting in the deaths of Richard and Doring.

At the time of the accident, parents also owned property in Carthage, Missouri (“Carthage residence”), and in Sun City West, Arizona (“Sun City West residence”). Parents resided at the Sun City West residence. Parents had obtained from State Farm a rental dwelling insurance policy for the Duenweg residence and homeowners' policies for the Carthage and Sun City West residences.

On November 5, 2007, Appellant brought a cause of action for wrongful death, pursuant to section 537.080, naming the following parties as defendants: (1) Empire District Electric Company; (2) Carthage Special Road District; (3) Thomas Mann (“Mann”), as defendant ad litem for Richard; and (4) parents, as representatives of the Estate of Richard D. Parchman Jr. No other parties were named as defendants at any time in the wrongful death action. Specifically, State Farm was never named as a defendant in the wrongful death action and never received formal service of a summons or petition.

Appellant also filed with the petition, a motion to appoint Mann as defendant ad litem, pursuant to section 537.021.1. Section 537.021.1 permits appointment of a defendant ad litem if the decedent had liability insurance. The motion was sustained the next day. There is no record as to any proof or testimony offered with respect to insurance coverage for Richard. The motion was filed before any service was accomplished on Mann.

The fundamental issues framed by the pleadings were whether Richard was negligent in causing the death of Doring and if so, what damages Appellant may have sustained.

On December 17, 2007, Mann filed an answer through attorney Warren Harris (“Harris”), who had been retained by State Farm, subject to a reservation of its right to deny coverage. The reservation of rights letter was sent to Mann on December 20, 2007. As an affirmative defense, Mann asserted that

[Appellant] has failed to satisfy the statutory prerequisites of Section 537.021 for the appointment of a Defendant Ad Litem in that [Appellant] has failed to demonstrate that any insurance coverage exist[ed] for [Richard] and by entering an appearance on behalf of Defendant Ad Litem Thomas Mann, no entity or individual is admitting the existence of any insurance coverage.

On September 22, 2008, following some discovery, State Farm determined that Richard was not insured under any of its policies and was not covered for the operation of the ATV. Based on this conclusion, on September 26, 2008, Harris filed a motion to withdraw as attorney of record for Mann. That motion was sustained on November 5, 2008.

On November 19, 2008, Appellant filed a motion for partial summary judgment; it was uncontested by Mann. On January 12, 2009, the trial court entered judgment against Mann and State Farm with detailed findings as to State Farm's position

[344 S.W.3d 775]

in the litigation and coverage afforded by State Farm. ³ All other parties, with the exception of Mann, were dismissed without prejudice.

On February 2, 2009, State Farm filed a “Motion for Leave to Intervene for the Purpose of Moving Pursuant to Rule of Civil Procedure 74.06(b)(4) to Set Aside as Void for Lack of Personal Jurisdiction so Much of the Judgment as Purports to Enter Judgment Against [State Farm] or to Move under Rule 73.01 to Amend the Judgment” because State Farm was not a named party in the litigation. The trial court sustained the motion and an amended judgment was entered, against Mann only, in the amount of $500,000. The amended judgment recited “that passenger “[Doring's] death was directly and proximately caused in part by driver [Richard's] negligence; that judgment is hereby entered in favor of [Appellant] against [Mann] in the amount of $500,000.00.”

The Equitable Garnishment Action

The current action for equitable garnishment was filed on December 31, 2009. The fundamental issues framed by the pleadings in this action are whether State Farm had one or more policies of insurance which would be available to satisfy the judgment in the wrongful death action, and whether post-judgment interest should be paid from the policies. Appellant seeks garnishment on the three policies issued by State Farm. All insurance policies are owned by parents and were for coverage for the residences mentioned above; Richard was not named in any capacity in the policies.

Each party filed a motion for summary judgment. The trial court granted State Farm's motion and denied Appellant's motion.⁴ The trial court entered specific findings concluding: (1) State Farm could assert policy defenses; and (2) the insurance policies in question did not provide coverage for the underlying judgment because the ATV accident occurred on a public road and, therefore, the accident was excluded by operation of the motor vehicle exclusion for ATV's contained within the policies.

Appellant raises three points on appeal. Appellant's points relied on violate Rule 84.04 ⁵ in that the points are multifarious and do not specifically identify the legal reasons for Appellant's claim of reversible error with an explanation in summary fashion as to why those reasons support the claim of reversible error.⁶ See

[344 S.W.3d 776]

Rule 84.04(d). Deficient points preserve nothing for appellate review; however, we may choose to review them if the deficiency does not impede a disposition on the merits. DeLong Plumbing Two, Inc. v. 3050 N. Kenwood LLC, 304 S.W.3d 784, 788 (Mo.App. S.D.2010). Because we believe we are able to discern Appellant's position from the points relied on, Appellant's argument, and further clarification during oral argument, we choose to review them ex gratia. ⁷

As best we can discern, Appellant's first two points contend the trial court erred as a matter of law in concluding State Farm may raise policy defenses in this case because State Farm: (1) waived its right to assert policy defenses; and (2) is barred from raising policy defenses, by operation of res judicata or collateral estoppel.⁸ Appellant also contends the trial court erred by failing to enter post-judgment interest for Appellant from the time the final judgment was entered against Mann in the wrongful death lawsuit. Appellant does not challenge the trial court's policy interpretation of the exclusion provisions and the ultimate conclusion that no policy was available to garnish.

State Farm contends its policy defenses were appropriate in this equitable garnishment action and any issues as to interest on the separate judgment were required to be addressed in that action and not in this equitable garnishment action. The primary issues presented for our determination are:

1. Did State Farm waive its policy defenses prior to the filing of the equitable garnishment action?

2. Are State Farm's policy defenses barred by principles of res judicata or collateral estoppel?

Standard of Review

Appellate review of a grant of summary judgment is de novo. Kinnaman–Carson v. Westport Ins. Corp., 283 S.W.3d 761, 764 (Mo. banc 2009). “The Court reviews the record in the light most favorable to the party against whom summary judgment was entered.” Id. “ ‘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.’ ” Id. (quoting ITT Commercial Finance Corp. v. Mid–America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993)). “ ‘Summary judgment will be upheld on appeal if: (1) there is no genuine dispute of material fact, and (2) the movant is entitled to judgment as a matter of law.’ ” Id. at 765 (quoting ITT Commercial Finance, 854 S.W.2d at 376).

[344 S.W.3d 777]

State Farm Did Not Waive its Right to Raise a Coverage Defense

Appellant argues State Farm waived its right to raise and pursue a coverage defense in the underlying wrongful death action. Because the record is void of any express or implied conduct by State Farm to relinquish this right, we find State Farm did not waive its right to assert a coverage defense in this...