Powell v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 18 October 2005
• Docket Number: No. WD 64690.,WD 64690.
• Parties: Raymond POWELL and Renee Powell, Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent.
• Court: Missouri Supreme Court

173 S.W.3d 685

Raymond POWELL and Renee Powell, Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent.

No. WD 64690.

Missouri Court of Appeals, Western District.

October 18, 2005.

COPYRIGHT MATERIAL OMITTED

John E. Turner and Christopher P. Sweeny, Kansas City, MO, for appellants.

Kevin Weakley, Kansas City, MO, for respondent.

Before RONALD R. HOLLIGER, P.J., ROBERT G. ULRICH and JOSEPH M. ELLIS, JJ.

ROBERT G. ULRICH, J.

Raymond and Renee Powell appeal the judgment of the trial court reducing the jury verdict in their action against their insurance carrier, State Farm Mutual Automobile Insurance Company, for underinsured motorist benefits. The judgment of the trial court reduced the verdict awarding damages in favor of Officer Powell by $9,011.44 as an offset under the insurance policy for workers' compensation benefits paid or payable to him. Officer Powell claims that the trial court erred in reducing the verdict because (1) there was no competent or substantial evidence that $9,011.44 was paid or payable to him and (2) as a matter of law the amount should have been reduced from the policy limits not the damages. The judgment of the trial court is reversed, and the case is remanded for further proceedings.

Facts

Shortly after 3:00 a.m. on March 18, 2001, Raymond Powell, a police officer with the Kansas City, Missouri, Police Department, was riding his motorcycle on duty when a drunk driver struck him. Officer Powell suffered injury to his foot requiring medical attention and ultimately surgery. Officer Powell missed work as a result of his injury and surgical recovery. The Powells sued the driver and their insurance provider, State Farm, from which they had purchased underinsured motorist coverage. Prior to trial, the Powells settled with the driver for $50,000, the limit on his liability insurance policy. At trial, the jury returned a verdict in favor of Officer Powell for $75,000 for his personal injuries. Thereafter, State Farm filed a motion to reduce the verdict by $9,011.44, which allegedly represented the amount of workers' compensation benefits paid to Officer Powell.¹ The trial court sustained State Farm's motion and entered judgment in favor of Officer Powell in the amount of $15,988.56, which represented the verdict ($75,000) less the settlement with the driver ($50,000) and the amount of workers' compensation benefits received by Officer Powell ($5,739.96 medical bills and $3,271.38 lost wages). This appeal by Officer Powell followed.

Points on Appeal

Officer Powell raises two points on appeal. He claims that the trial court erred in reducing the verdict by $9,011.44 because (1) State Farm failed to prove by competent substantial evidence that the amount was paid or payable to him under the Missouri Workers' Compensation Law and (2) as a matter of law the amount should have been reduced from the policy limits, not the verdict for damages. Because the first point is dispositive, Officer Powell's second point is not addressed.²

Following the jury verdict, State Farm filed a motion to reduce the verdict by $9,011.44, which it claimed represented the amount of benefits paid to Officer Powell under the Missouri Workers' Compensation Law. It relied on the following policy provision:

Limits of Liability

Coverage W

* * *

2. Any amount payable under this coverage shall be reduced by any amount paid or payable to or for the insured under any worker's compensation, disability benefits, or similar law.

State Farm argued that it was entitled to offset against the amount of the verdict the amount of medical bills paid or payable to Officer Powell by his employer, $5,739.96, and two-thirds of the amount of injury time paid or payable to Officer Powell by his employer, $3,271.38. In support of this argument, State Farm attached six exhibits to its motion: the insurance policy; Kansas City, Missouri, Police Department Personnel Policy 818-7; Kansas City, Missouri, Police Department Personnel Policy 1005; Board of Police Commissioners of Kansas City, Missouri, Resolution 95-5; a summary of Officer Powell's medical bills totaling $5,739.96; and a summary of Officer Powell's regular duty lost wages totaling $4,956.64. State Farm also relied on evidence at trial that Officer Powell's medical bills totaled $5,739.96 and on an offer of proof outside of the hearing of the jury where Officer Powell testified that he believed the City of Kansas City had paid his medical bills.

Thereafter, Officer Powell filed suggestions in opposition to the motion to reduce the verdict. He argued, inter alia, that the trial court should not take judicial notice of or consider the Kansas City Police Department Personnel Policy documents attached as exhibits to State Farm's motion and that State Farm otherwise did not prove the amount of any sums paid or payable by Officer Powell's employer, the Board of Police Commissioners.³

The question of application of the offset provision of the insurance policy was tried to the trial court following the jury trial on Officers Powell's personal injury claim. In a court-tried case, the trial court is presumed to consider only properly received evidence. State ex rel. Webster v. Cornelius, 729 S.W.2d 60, 65 (Mo.App. E.D.1987). The erroneous admission of evidence requires reversal only when no sufficient competent evidence to support the trial court's judgment was presented. Id. In reviewing a court tried case, the appellate court only considers properly admitted evidence and ignores that which was improperly admitted. Id.

A party seeking to establish coverage under an insurance policy has the burden of proving that the claim is within the coverage afforded by the policy. M.A.B. v. Nicely, 911 S.W.2d 313, 315 (Mo.App. W.D.1995). If, however, an insurance company seeks to escape coverage based on a policy exclusion, it has the burden of proving facts that make the exclusion applicable. Id.; Harold S. Schwartz & Assocs., Inc. v. Cont'l Cas. Co., 705 S.W.2d 494, 498 (Mo.App. E.D.1985). State Farm argues that the offset provision of the policy is not an exclusion and that Officer Powell had the burden of proving that his claim was within the coverage of the policy. State Farm's argument is incorrect. By definition, an exclusion provision in an insurance policy excludes risk. Schwartz, 705 S.W.2d at 498. It does not endow coverage but rather limits the obligation of indemnity. Id. Although not specifically labeled an exclusion, the offset provision in the policy is an exclusion because it does not endow coverage but limits the responsibility of State Farm for Officer Powell's damages. Given State Farm's reliance on the offset provision, it had the burden of proving facts that make the provision applicable.

Rule 78.05 authorizes affidavits, depositions, and oral testimony in connection with after trial motions. Prewitt v. Cofer, 979 S.W.2d 521, 525 (Mo.App. E.D.1998)(quoting Peth v. Heidbrier, 789 S.W.2d 859, 862 (Mo.App. E.D.1990)). Where the issue raised in the after trial motion requires resolution of factual matters not based on facts appearing in the record, the rule authorizes proof by any of the listed methods. Id. (quoting Peth, 789 S.W.2d at 862).

The issue raised in State Farm's motion to reduce the verdict required resolution of factual matters not appearing in the record, specifically, whether any amount was paid or payable to Officer Powell under workers' compensation laws. Except for evidence at trial that Officer Powell incurred $5,739.96 in medical bills and his testimony in the offer of proof, no other evidence was presented on the issue. No evidentiary hearing was held. Although State Farm attached several exhibits to its motion, the exhibits were not in the form of affidavits and were never introduced into evidence. Officer Powell did not stipulate to any of the exhibits and, in fact, challenged their consideration. "Exhibits attached to motions filed with the trial court are not evidence and are not self-proving." Kulaga v. Kulaga, 149 S.W.3d 570, 573 n. 6 (Mo.App. W.D.2004).

State Farm requested and the trial court apparently took judicial notice of the personnel policies and resolution of the Board of Police Commissioners attached to State Farm's motion. The Kansas City Board of Police Commissioners is a state agency created by statute and endowed with the power to adopt rules and regulations governing the conduct of the police department. §§ 84.350 and 84.420.2(1), RSMo 2000; State ex rel. Nixon v. Karpierz, 105 S.W.3d 487, 489 n. 6 (Mo. banc 2003). Under section...