Parshall v. Buetzer

• Decision Date: 18 November 2003
• Docket Number: No. WD 61586.,WD 61586.
• Citation: 121 S.W.3d 548
• Parties: Roger PARSHALL d/b/a Parshall Concrete, Plaintiff/Respondent, v. Doyle O. BUETZER and Green Hills Insurance Service, L.L.C., Defendants and Third-Party Plaintiffs/Appellants, v. Employers Mutual Casualty Company, Third-Party Defendant/Respondent.
• Court: Missouri Court of Appeals

121 S.W.3d 548

Roger PARSHALL d/b/a Parshall Concrete, Plaintiff/Respondent, v. Doyle O. BUETZER and Green Hills Insurance Service, L.L.C., Defendants and Third-Party Plaintiffs/Appellants, v. Employers Mutual Casualty Company, Third-Party Defendant/Respondent.

No. WD 61586.

Missouri Court of Appeals, Western District.

November 18, 2003.

Motion for Rehearing and/or Transfer to Supreme Court Denied December 23, 2003.

Zel M. Fischer, Rock Port, MO, for Respondent Parshall.

Thomas R. Larson, David E. Larson, and Jimmy E. Allen, Jr., Kansas City, MO, for Appellants.

Steven Martin Aaron, Shirley Ward Keeler, and Kirsten A. Roth, Kansas City, MO, for Respondent Employers Mutual Casualty Company.

Before LOWENSTEIN, P.J., and SMART and EDWIN H. SMITH, JJ.

EDWIN H. SMITH, Judge.

Roger Parshall (Parshall), d/b/a Parshall Concrete, filed a petition in tort for damages in the Circuit Court of Harrison County, alleging that Doyle O. Buetzer, an independent insurance agent, and his employer, Green Hills Insurance Company, L.L.C. (referred to collectively as Agent), negligently failed to procure casualty insurance from Employers Mutual Casualty Company (Insurance Company) for a portable concrete plant owned by Parshall, which was destroyed in a storm. In response to Parshall's lawsuit, Agent, pursuant to the Declaratory Judgment Act, § 527.010-.130,¹ filed a third-party petition for a declaratory judgment against Insurance Company, seeking a declaration of the circuit court that Insurance Company was contractually obligated to provide insurance for the concrete plant.

Parshall filed a motion for partial summary judgment on the issue of Agent's liability on Parshall's claim for negligent failure to procure insurance, which was granted. Agent and Insurance Company filed competing motions for summary judgment on Agent's declaratory judgment action. The trial court granted Insurance Company's motion and denied Agent's. A jury trial ensued on the sole issue of Parshall's damages, resulting in a verdict awarding him $209,277.59 in compensatory damages. Agent appeals from the trial court's judgment granting Parshall's and Insurance Company's summary judgment motions and denying its motion. Agent also appeals from the trial court's judgment entered on the jury's verdict awarding Parshall damages.

Dismissed, in part, and reversed and remanded, in part.

Facts

Parshall owned and operated a number of concrete plants. In 1997, he entered into an insurance broker/client relationship with Agent, pursuant to which Agent procured coverage from Insurance Company for a number of Parshall's plants.

On March 25, 1998, Buetzer visited Parshall's concrete plant located in Tarkio, Missouri. At the time, Parshall was in Oklahoma, dismantling a newly acquired portable plant for transport to Phelps City, Missouri. Parshall's wife talked with Buetzer during his visit and asked him to procure coverage on the new plant. Mrs. Parshall told Buetzer that Parshall needed the coverage to be effective in time to cover transport of the concrete plant from Oklahoma to Missouri. She told Buetzer that she did not know any particulars about the plant, just that it was a portable concrete plant. Buetzer advised Mrs. Parshall that he was binding coverage for the plant, but he would need the plant's serial number, brand, and value. According to Buetzer, he told Mrs. Parshall to have her husband get back to him with the information. According to Mrs. Parshall, however, Buetzer advised her that he would contact Parshall for the information. In any event, Buetzer and Parshall did talk by telephone on March 30, 1998, but it is unclear whether the information Buetzer had requested was discussed.

As provided in the "Agency-Company Agreement (Agreement)" between Agent and Insurance Company, Agent was to "[f]orward copies of all binders, policies, certificates and endorsements issued by the Agent, or otherwise notify the Company of all liability accepted, not later than the third succeeding business day following the inception date of such coverage." In addition, Insurance Company's "Current Instructions to Agents," which were incorporated by reference into the Agreement, provided that Insurance Company "must receive written notice within three business days after the date the property and/or casualty coverage was first bound." Contrary to this provision, Agent did not notify Insurance Company of the binder on the cement plant until April 29, 1998, one day after the newly acquired plant was destroyed in a storm, and Buetzer contacted Insurance Company about the loss. On April 30, 1998, Insurance Company sent a letter to Parshall by certified mail, in which it denied coverage on the newly acquired plant.

On January 25, 1999, Parshall filed a petition in the Circuit Court of Harrison County, alleging that Agent negligently failed to procure insurance coverage on the new plant with Insurance Company. On February 25, 1999, Agent filed its answer, raising the affirmative defense of comparative negligence. On August 17, 2001, Agent filed a third-party petition against Insurance Company, seeking a declaratory judgment "that insurance coverage exists on the destroyed portable concrete plant."

On December 31, 2001, Agent filed a motion for summary judgment on Agent's third-party petition for declaratory judgment against Insurance Company. The motion alleged that Agent had actual and apparent authority to bind Insurance Company's coverage of the destroyed concrete plant, despite Agent's failure to inform Insurance Company within the three-day deadline specified in the Agreement. On February 21, 2002, Parshall filed a motion for partial summary judgment on the issue of Agent's liability to Parshall for negligent failure to procure insurance. On February 25, 2002, Insurance Company filed a motion for summary judgment on Agent's declaratory judgment action. In its motion, Insurance Company alleged that Agent did not have either actual or apparent authority to enter into a binding insurance contract on behalf of Insurance Company without providing notice within the three-day period specified in the Agreement.

On April 15, 2002, the trial court granted Parshall's motion for partial summary judgment on the issue of liability, leaving the issue of damages for a jury trial. On the same date, the trial court also entered summary judgment for Insurance Company on Agent's third-party petition for declaratory judgment and denied Agent's motion. In disposing of the summary judgment motions in the declaratory judgment action, the trial court concluded that the record did not support a finding that Agent had actual authority to bind Insurance Company without timely notice to Insurance Company, and that Agent's claim of apparent authority failed as a matter of law.

On March 26, 2002, the case proceeded to trial on the sole issue of damages as to Parshall's tort claim against Agent. The jury returned a verdict awarding Parshall $209,277.59 in compensatory damages, which the trial court entered judgment thereon.

This appeal followed.

I. Agent's Declaratory Judgment Action Against Insurance Company

Agent raises six points on appeal. Point I claims error with respect to the trial court's granting of Parshall's partial motion for summary judgment on his petition for damages. Point II claims error with respect to the denial of Agent's motion for summary judgment and the grant of Insurance Company's on Agent's petition for declaratory judgment as to coverage. In Point III, Agent claims error with respect to the issue of whether Agent admitted that "it did not have actual authority to bind insurance coverage for more than three days." Point IV claims error with respect to the grant of Parshall's partial summary judgment motion on the issue of Agent's affirmative defense of comparative fault. Finally, in Points V and VI, Agent claims error with respect to the trial court's judgment on the jury's verdict awarding damages to Parshall.

Before addressing the merits of Agent's points on appeal, we first must address whether the trial court abused its discretion in failing to dismiss Agent's third-party petition for declaratory judgment for failing to state a claim upon which relief can be granted, as provided in Rule 55.27(a)(6).² Preferred Phy. Mut. v. Risk Ret. Group, 916 S.W.2d 821, 823 (Mo. App.1995). This issue is inherent in every appeal and may be raised, sua sponte, by the reviewing court. Id.; Adkisson v. Dir. of Revenue, 891 S.W.2d 131, 132 (Mo. banc 1995). This is because the failure to state a claim on which relief can be granted essentially deprives the trial court of subject matter jurisdiction and, thus, the authority to rule on the plaintiff's petition, Adkisson, 891 S.W.2d at 132; and, if the trial court lacked subject matter jurisdiction to rule, we necessarily have no jurisdiction to review the court's ruling on the merits. Stone v. Stone, 393 S.W.2d 201, 204 (Mo.App.1965). Thus, there is raised the threshold jurisdictional question as to whether Agent's third-party petition for declaratory judgment, given its most liberal interpretation and according it all reasonable inferences deducible from the facts alleged, states a cause of action so as to vest the trial court with jurisdiction to grant relief on Agent's petition, Adkisson, 891 S.W.2d at 132, and thereby vest us with jurisdiction to review the court's ruling thereon.

While we recognize that the trial court is vested with discretion in applying the provisions of the Declaratory Judgment Act, the exercise of that discretion "must be sound, based on good reason, and calculated to serve the purposes for which the legislation was enacted." Preferred, 916 S.W.2d. at 824-25. The Declaratory Judgment Act is not to be invoked where an adequate remedy already exists. Id. at 824. For purposes of this rule, an adequate remedy exists if the defendant could assert the issues sought to be declared as a defense in an action...