Pink v. Knoche

• Court: Missouri Court of Appeals
• Writing for the Court: Harold L. Lowenstein
• Citation: Pink v. Knoche, 103 S.W.3d 221 (Mo. App. 2003)
• Decision Date: 18 February 2003
• Docket Number: No. WD 60788.,WD 60788.
• Parties: Leo S. PINK, et al., Respondents, v. Timothy KNOCHE, Defendant, American Family Mutual Insurance Company, Appellant.

103 S.W.3d 221

Leo S. PINK, et al., Respondents, v. Timothy KNOCHE, Defendant American Family Mutual Insurance Company, Appellant.

No. WD 60788.

Missouri Court of Appeals, Western District.

February 18, 2003.

Motion for Rehearing and/or Transfer to Supreme Court Denied April 1, 2003.

Application for Transfer Denied May 27, 2003.

Rhonda S. Loeppke, Independence, MO, Susan Ford Robertson, Columbia, MO, for Appellant.

William H. Pickett, Kansas City, MO, for Respondents.

Before LOWENSTEIN, P.J., SMART and NEWTON, JJ.

HAROLD L. LOWENSTEIN, Judge.

Appellant, American Family Mutual Insurance Company (American Family), appeals from a judgment following a jury verdict in the amount of $525,000 on a breach of contract claim filed by respondents, Leo and Nora Pink, under the uninsured motorist provisions of three American Family automobile policies they hold. This court finds that the trial court erred by preempting a fact question for the jury by declaring, via a ruling on an in limine motion and a subsequent ruling on an offer of proof at trial that, as a matter of law, a reservation of rights letter of the tortfeasor's liability carrier amounted to a denial of coverage. The sole viable issue here was whether or not the tortfeasor was insured. In this case where the suit was against the insurer, with submission to the jury under MAI 31.11 (set out on page 224 infra), the ruling caused the only issue to be being submitted to the jury to be the amount of damage.

Factual and Procedural History

On the morning of January 31, 1998, Timothy Knoche was driving a vehicle that rear-ended with a vehicle driven by Leo Pink, resulting in very serious injuries to Pink. In March of 1998, Mr. Pink and his wife, Nora Pink, filed this lawsuit claiming personal injury and loss of consortium against Knoche. Knoche did not file a responsive pleading; Instead he wrote a letter informing the court he was incarcerated and asked for a year postponement of the court date. In May of 1999, the Pinks filed a first amended petition, which claimed that Knoche was uninsured and added American Family, the Pinks insurance carrier, as a defendant on a contract action.¹ The petition alleged that the vehicle driven by Knoche was not owned by him, that the owner reported the vehicle stolen, and that the insurance carrier for the vehicle denied coverage. The vehicle driven by Knoche was owned by Raoul Lindo. Lindo had a liability policy with Allstate Insurance Company (Allstate). The Pinks filed a claim against Allstate, which was denied on the basis of non-permissive use.² The first amended petition again alleged that Knoche himself had no insurance.

A second and third amended petition were filed as the Pinks added claims on other American Family policies they held. The counts in the third (and final) amended petition included: I. Negligent operation of a motor vehicle; II. Loss of consortium; III. American Family insurance coverage; and IV. and V., concerning stacking of their American Family policies. Ultimately, the Pinks sought coverage under three stacked policies on their three cars.³

In June of 2000, the Pinks voluntarily dismissed their claims against Knoche without prejudice for Counts I and II, leaving their carrier, American Family, as the only defendant. American Family filed a motion for summary judgment arguing that its policies provide that, as a condition precedent to maintaining a suit to determine liability or damages, the suit must include the operator of the vehicle, as a defendant. American Family also filed a motion for leave to amend its answer to the third amended petition to include as an affirmative defense the alleged failure of the Pinks to comply with the policy's condition precedent because of their dismissal of Knoche from the suit. The trial court denied the motion for leave to amend and also denied American Family's motion for summary judgment relating to the issue of conditions precedent. The condition precedent issue is not before the court.

Meanwhile, during cross-examination of Knoche during his deposition, it was revealed that at the time of the accident Knoche owned a truck which had liability coverage with Farmer's Insurance (Farmers).⁴

Farmers was subsequently notified of the accident, lawsuit, and trial date (then a month away). Farmers issued a reservation of rights letter to Knoche reserving its right to assert the policy defenses of late notice, non-permissive use, and any other grounds revealed through an investigation.⁵

Approximately a week prior to trial, the Pinks filed a motion in limine requesting the trial court prohibit American Family from mentioning to the jury any insurance policy in which Knoche was the named insured and which might provide liability coverage for Knoche. Additional facts on the Farmers' ruling appears in the opinion portion of this opinion.

During a pre-trial conference regarding the motion in limine concerning the mention of other insurance policies, the trial judge ruled that the Farmer's reservation of rights letter constituted a denial of coverage as a matter of law, and, as such, Knoche was operating an uninsured vehicle according to the definition of uninsured motorist/vehicle in the American Family policies. Thus, the only issue at trial was the amount of plaintiffs' damages.⁶

During the trial, an offer of proof was made on the pivotal issue of admission of evidence relating to the Farmers policy. The trial court ruled that as a matter of law the reservation of rights letter was a denial of coverage and rendered Knoche/ the vehicle uninsured as a matter of law. No evidence was presented on whether or not the other driver had insurance or, if so, whether coverage had been denied.

The verdict director for an uninsured motorist suit is MAI 31.11, which sets out the following elements for the jury:

Your verdict must be for plaintiff if you believe:

First, (name of operator of uninsured motor vehicle) was the operator of an uninsured motor vehicle, and

Second, (name of operator) violated the traffic signal, and

Third, (name of operator) was thereby negligent, and

Fourth, as a direct result of such negligence plaintiff sustained damage.

Additionally, the Notes on Use state that the appropriate definition of uninsured motor vehicle from 12.01 must be given. Here, the appropriate section of 12.01 would have been II, which reads, "The phrase `uninsured motor vehicle' as used in these instructions means a motor vehicle with respect to which a company writing insurance on said vehicle has denied coverage."

The trial court entered a judgment in accordance with the jury verdict of $525,000 in favor of the Pinks. American Family appealed; however, the appeal was dismissed for failure to dispose of Counts IV and V of the Pinks' petition, which alleged that the American Family policies stacked. The court entered an amended judgment finding in favor of the Pinks on the stacking issue, which is not at issue here.

I.

American Family's second and third points will be combined and taken first. American Family argues that (1) the trial court erred in sustaining the Pinks' motion in limine to exclude from evidence the existence of Knoche's liability policy with Farmers because the subject matter of the motion was not proper for a motion in limine; and (2) the trial court erred in ruling as a matter of law that the vehicle driven by Knoche was uninsured because there existed a genuine factual dispute in that the evidence showed the vehicle was insured by both Allstate and Farmers and that Farmers had not denied coverage via its reservation of rights letter.

This court will affirm the judgment of the trial court unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).

The American Family policies contained the following provisions concerning uninsured motorist/vehicle coverage:

You have this coverage if Uninsured Motorist coverage is shown in the declarations.

We will pay compensatory damages for bodily injury, which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle. The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the uninsured motor vehicle.

We, and the insured person, will agree on whether the insured person is legally entitled to recover damages and the amount of damages.

If any suit is brought by you to determine liability or damages, the owner or operator of the uninsured vehicle must be made a defendant and you must notify us of the suit. Without our written consent we are not bound by any resulting judgment....

3. Uninsured motor vehicle means a motor vehicle which is:

a. Not insured by a bodily injury liability bond or at the time of the accident.

* * *

d. Insured by a bodily injury liability bond or policy at the time of the accident but the company denies coverage or is or becomes insolvent within two years from the date of the accident. (Emphasis added).

There were two possible applicable liability policies that would take this case out of American Family's definition of an uninsured motor vehicle. First, Lindo, the owner of the vehicle Knoche was driving, had an Allstate liability policy. The Pinks made a claim against the Allstate policy and received a letter from Allstate denying coverage on the basis of non-permissive use. Second, it was discovered during a deposition of Knoche that he had a Farmers liability policy on a truck at the time of the accident. Farmers was notified of the accident and pending lawsuit. Farmers subsequently issued a reservation of rights letter to Knoche, which is set out in footnote five.

As stated earlier, the Pinks submitted a motion in limine requesting the trial court to exclude from evidence the existence of any insurance policy in which Knoche was the...