Oates v. Safeco Ins. Co. of America

• Decision Date: 17 July 1979
• Docket Number: No. 60892,60892
• Citation: 583 S.W.2d 713
• Parties: Patrick Louis OATES, Appellant, v. SAFECO INSURANCE COMPANY OF AMERICA, Respondent.
• Court: Missouri Supreme Court

Page 713

583 S.W.2d 713

Patrick Louis OATES, Appellant, v. SAFECO INSURANCE COMPANY OF AMERICA, Respondent.

No. 60892.

Supreme Court of Missouri, En Banc.

July 17, 1979.

Donald L. Schlapprizzi, Murphy & Schlapprizzi, St. Louis, for appellant.

Daniel T. Rabbitt, Jr., Mark F. Haywood, Moser, Marsalek, Carpenter, Cleary, Jaeckel, Keaney & Brown, St. Louis, for respondent.

BARDGETT, Chief Justice.

This appeal involves the issue of whether a prior judgment adverse to plaintiff-appellant in an action against an uninsured motorist now precludes appellant from maintaining an action against his "uninsured motorist" insurance carrier because of the doctrine of collateral estoppel. This cause was transferred after opinion by the Missouri Court of Appeals, Eastern District, on application of respondent, pursuant to Rule 83.03. Portions of the Court of Appeals opinion will be utilized without the use of quotation marks.

On September 30, 1972, an automobile collision occurred in Iron County, Missouri, between the appellant, Patrick Oates, and one Bernard Coad. On January 15, 1973, Oates filed suit against Coad in Iron County. Mr. Coad filed an answer and counterclaim and further responded by way of interrogatory that he had no automobile insurance to cover his liability at the time of the collision. Oates answered the counterclaim through counsel retained by his insurance carrier, respondent, Safeco Insurance Company of America.

Thereafter, on April 25, 1973, Oates filed this suit in the city of St. Louis against respondent, Safeco, on the uninsured motorist provision in appellant's policy. On May 15, 1973, appellant Oates, by leave of court, dismissed his cause of action in Iron County against Mr. Coad without prejudice.

On May 29, 1973, Safeco moved that the city circuit court case be dismissed for lack of jurisdiction and venue. This motion was premised on allegations that Safeco had no office in the city and that St. Louis County was the proper venue and jurisdiction for the case. This motion was overruled on June 18, 1973.

On June 28, 1973, Safeco filed its answer to Oates's petition in St. Louis City Circuit Court in which Safeco admitted that Oates was an insured under a policy issued by it which included uninsured motorist coverage and that the policy was in effect on the day of the collision with Coad. No special defenses were raised.

Coad's counterclaim in the Iron County suit then proceeded to a judgment in Coad's favor for $1500 in April 1974. Upon that judgment becoming final, Safeco, on August 14, 1974, filed an amended answer in the St. Louis City suit setting forth the additional defenses of res judicata and estoppel by judgment against Oates, referring to Rule 55.32(a) and attaching a certified copy of the pleadings, instructions, and judgment from the Iron County suit. On joint motion for change of venue, the suit was transferred to the Circuit Court of St. Louis County in June of 1975.

On September 20, 1976, Oates struck all allegations of primary negligence from his petition and left remaining only the humanitarian negligence allegations against Safeco. Safeco reargued its motion to dismiss and the court sustained Safeco's position on the grounds that Oates was collaterally estopped by the Iron County judgment from proceeding in the case.

Appellant Oates contends that the trial court erred in dismissing his petition, whether it did so on the grounds of collateral estoppel, res judicata, or compulsory counterclaim. Respondent Safeco replies (1) that because appellant dismissed his suit against Coad, the uninsured motorist, initially instituted by him in Iron County, and permitted the negligence issues to be decided in Coad's favor on Coad's counterclaim in the tort action, the appellant is barred from pursuing his rights under the uninsured motorist coverage afforded by Safeco's policy by reason of Rule 55.32(a), the compulsory counterclaim rule; (2) that appellant's claim is barred by the doctrine of collateral estoppel because the liability of the uninsured motorist has already been decided adversely to him in the tort action and he may not relitigate that issue again in this proceeding; (3) that appellant's claim is barred by the doctrine of res judicata; and (4) that since appellant may not recover against Coad, the uninsured motorist, he may not recover under the terms of the policy of insurance issued to him by respondent Safeco.

I

Safeco contends, inter alia, the appellant was not "legally entitled to recover" damages against Coad after the termination of the Iron County case and is, therefore, precluded from proceeding against Safeco. One of the terms of uninsured motorist coverage is that the insured be legally entitled to recover against the tortfeasor.

To recover under an uninsured motorist policy, the insured does not need an unsatisfied judgment against the uninsured motorist, Noland v. Farmers Insurance Exchange, 413 S.W.2d 530 (Mo.App.1967), but has the burden of proving (1) that the other motorist was uninsured, (2) that the other motorist is legally liable to the insured, and (3) the amount of damages, Noland, supra; Hill v. Seaboard Fire & Marine Ins. Co., 374 S.W.2d 606, 609 (Mo.App.1963). The second element set out is equivalent to the statutory and contractual requirement that the insured be "legally entitled to recover".

In Crenshaw v. Great Central Insurance Co., 527 S.W.2d 1, 4 (Mo.App.1975), the court stated that the insureds must show "that At the time (the) litigation against the insurer was commenced (the insureds' action against the insurance company under the uninsured motorist clause) they . . . (the plaintiff was) . . . legally entitled to recover damages from the owner or operator of the uninsured highway vehicle." (Emphasis added.) See also Byrn v. American Universal Insurance Co., 548 S.W.2d 186, 188 (Mo.App.1977). In Crenshaw the court held that the insured was not legally entitled to recover because the two-year wrongful death statute of limitations had lapsed before the insured filed suit under the uninsured motorist policy and, therefore, the insured was not "legally entitled to recover" at the time the litigation was commenced. See also Hunt v. State Farm Mutual Auto Ins. Co., 560 S.W.2d 280, 282 (Mo.App.1977).

Crenshaw and Hunt, supra, stand only for the proposition that where there is a built-in, substantive limitation on the underlying tort action, which would bar insured's action against the uninsured motorist at the time the action is filed against the insurer under the uninsured motorist policy, such limitation also bars the action against the insurer. Id.; Davis, Uninsured Motorist Coverage: Some Significant Problems and Developments, 42 Mo.L.Rev. 1, 9 (1977).

However, in Edwards v. State Farm Insurance Co., 574 S.W.2d 505, 506-507 (Mo.App.1978), the court held that the insured was not barred from proceeding against his uninsured motorist carrier even though the insured could not recover against the tortfeasor because the 5 year tort statute of limitation had expired prior to suit thus barring the insured's suit against the tortfeasor.

Additionally, in Reese v. Preferred Risk Mutual Insurance Co., 457 S.W.2d 205 (Mo.App.1970), the insured originally sued both the uninsured motorist and the insurance company under the uninsured motorist clause; subsequently dismissed with prejudice the uninsured motorist, and then obtained a judgment against the insurance company. This judgment was set aside when the trial court sustained insurer's motion for a judgment n. o. v. on the grounds that the dismissal with prejudice of the uninsured motorist deprived insurer of any right to recover from the uninsured motorist and made it impossible for the insured to show he is "legally entitled to recover". On appeal the court reversed, reasoning that the dismissal with prejudice did not adjudicate the issue of whether insured is legally entitled to recover from the uninsured motorist. The court stated at 208:

"This phrase 'legally entitled to recover' was discussed in Booth v. Fireman's Fund Ins. Co., 253 La. 521, 218 So.2d 580, 583 where the court stated: ' * * * We interpret the words "legally entitled to recover" to mean simply that the plaintiff must be able to establish fault on the part of the uninsured motorist which gives rise to damages and prove the extent of those damages. * * * '

"Also in Sahloff v. Western Casualty & Surety Company, Wis., 171 N.W.2d 914, 917 the court agreed with the Louisiana court's interpretation of this phrase in stating: ' * * * We think the phrase (legally entitled to recover) was used only to keep the fault principle as a basis for recovery against the insurer and deals with the question of whether the negligence of the uninsured motorist and the absence of contributory negligence is such as to allow the insured to recover. * * * '

"Again in DeLuca v. Motor Vehicle Acc. Indem. Corp., 17 N.Y.2d 76, 268 N.Y.S.2d 289, 215 N.E.2d 482 the court stated that the language in question 'legally entitled to recover' simply means and denotes fault on the part of the uninsured motorist. We agree with the interpretation placed on this phrase by these courts and hold that this phrase refers to fault on the part of the uninsured motorist. The phrase involves the causal negligence on the part of the uninsured motorist (and the absence of contributory negligence where submitted) and the resulting damages to the insured. Also we believe this phrase is ambiguous and as such must be construed in favor of the insured." (Emphasis supplied.)

Under these decisions, the insured is "legally entitled to recover" if his action is not barred by a substantive limitation at the time the action is brought against the uninsured motorist carrier (Crenshaw, supra ) and he can show (1) causal negligence or fault on the part of the uninsured motorist, (2) the absence of contributory negligence where submitted, and (3) resulting damage to himself (Rees...