Reese v. U.S. Fire Ins. Co.

• Court: Missouri Supreme Court
• Writing for the Court: Per Curiam
• Citation: Reese v. U.S. Fire Ins. Co., 173 S.W.3d 287 (Mo. 2005)
• Decision Date: 01 November 2005
• Docket Number: No. WD 63555.,WD 63555.
• Parties: Joyce REESE, Teresa Reese, and April Reese-Imbrogno, Respondents, v. UNITED STATES FIRE INSURANCE COMPANY, Appellant, Charles Mizer, Defendant.

173 S.W.3d 287

Joyce REESE, Teresa Reese, and April Reese-Imbrogno, Respondents, v. UNITED STATES FIRE INSURANCE COMPANY, Appellant Charles Mizer, Defendant.

No. WD 63555.

Missouri Court of Appeals, Western District.

June 30, 2005.

Motion for Rehearing and/or Transfer to Supreme Court Denied August 30, 2005.

Application for Transfer Denied November 1, 2005.

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John E. Turner, Timothy W. Monsees, Kansas City, MO, for Respondents.

David R. Buchanan, Dennis J. Cassidy, Kansas City, MO, T. Michael Ward, St. Louis, MO, for Appellant.

Before HOWARD, P.J., and ULRICH and BRECKENRIDGE, JJ.

PER CURIAM.

Appellant United States Fire Insurance Company ("USF") appeals from a judgment in the Circuit Court of Jackson County, which awarded Respondents Joyce Reese, Teresa Reese, and April Reese-Imbrogno ("the Reeses") an equitable garnishment of $1,000,000 against USF pursuant to section 379.200¹ as a result of judgments against KCR International Truck, Inc., and Charles Mizer for the wrongful death of Gerald Reese. USF argues three points on appeal. In Point I, USF argues the trial court erred in denying USF's motion to set aside the December 31, 2002 judgment and to quash the Reeses' equitable garnishment action against USF, because the trial court lacked subject matter jurisdiction, in that the Reeses previously obtained satisfaction of their damages resulting from their decedent's wrongful death, and as a result, the July 23, 2001 judgment against Charles Mizer, for which the Reeses seek equitable garnishment, is null and void. In Point II, USF argues the trial court erred in entering judgment in favor of the Reeses and against USF, because coverage for Charles Mizer under the liability insurance policy was precluded, in that Mizer was a fellow employee of Gerald Reese and the policy includes an unambiguous "fellow employee" exclusion, such that parol evidence should not be considered. In Point III, USF argues the trial court erred in denying USF's motion to set aside the December 31, 2002 judgment and to quash the Reeses' equitable garnishment action against USF, because the trial court lacked subject matter jurisdiction, in that the Reeses' allegations against Charles Mizer failed to meet the "something extra" required to take a tort action outside the purview of Workers' Compensation Law, and as a result, the July 23, 2001 judgment, for which the Reeses seek equitable garnishment, is null and void. For the reasons set forth below, the judgment of the trial court is affirmed.

Background

Gerald Reese was killed in an accident on March 17, 1995, when a load of rock from a dump truck was dumped onto him while he was working for Barber & Sons quarry. Charles Mizer ("Mizer") was driving the dump truck at the time of Gerald Reese's death. Gerald Reese was the husband of Joyce Reese and the father of Teresa Reese and April Reese-Imbrogno. When the fatal accident occurred, Mizer was driving a dump truck that was owned by Barber & Sons.

At the time of Gerald Reese's death, Barber & Sons carried a Business Auto Insurance policy with USF. The insurance policy provided, in relevant part:

A. COVERAGE

We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto."

. . . .

1. WHO IS AN INSURED

The following are "insureds":

a. You for any covered "auto."

b. Anyone else while using with your permission a covered "auto" you own, hire or borrow

. . . .

B. EXCLUSIONS

This insurance does not apply to any of the following:

. . . .

3. WORKERS' COMPENSATION

Any obligation for which the "insured" or the "insured's" insurer may be held liable under any workers' compensation, disability benefits or unemployment compensation law or any similar law.

4. EMPLOYEE INDEMNIFICATION AND EMPLOYER'S LIABILITY

"Bodily Injury" to:

a. An employee of the "insured" arising out of and in the course of employment by the "insured"; or

b. The spouse, child, parent, brother or sister of that employee as a consequence of paragraph a. above.

This exclusion applies:

(1) Whether the "insured" may be liable as an employer or in any other capacity; and

(2) To any obligation to share damages with or repay someone who must pay damages because of the injury.

. . . .

5. FELLOW EMPLOYEE

"Bodily Injury" to any fellow employee of the "insured" arising out of and in the course of the fellow employee's employment.

Following the accident, the Reeses received workers' compensation benefits from Barber & Sons. The Reeses also filed a civil lawsuit for the wrongful death of Gerald Reese against Mizer and KCR International Truck, Inc. (KCR), in the Circuit Court of Jackson County, which was assigned case number CV97-8519. The Reeses dismissed Mizer from that case and proceeded to trial against KCR. The jury returned a verdict finding both KCR and Gerald Reese 50% at fault and finding the Reeses' damages to be $2,000,000. Based on comparative fault, the net recovery to the Reeses was $1,000,000, and the trial court judge entered judgment in that amount for the Reeses and against KCR on September 23, 1999.

On or about September 23, 1999, the Reeses instituted another lawsuit in the Circuit Court of Jackson County against Mizer seeking damages for the wrongful death of Gerald Reese, designated case number 99CV-220923. The Reeses brought the lawsuit in their individual capacities, seeking consequential damages resulting from Gerald Reese's death. The Estate of Gerald Reese was not a party to the lawsuit. Mizer tendered the defense of the Reeses' wrongful death suit to USF, but USF denied coverage and declined to defend Mizer. The Reeses and Mizer then entered into agreement pursuant to section 537.065 to limit the Reeses' recovery to insurance proceeds. On July 23, 2001, the Circuit Court of Jackson County entered a $2,000,000 judgment in favor of the Reeses and against Mizer in accordance with the terms of the agreement to limit recovery to any applicable liability insurance policies.

The Reeses then filed an equitable garnishment action against USF. The Reeses sought to have the judgment against Mizer made applicable through a finding that USF's policy covered the judgment plus interest. USF filed a counterclaim for Declaratory Judgment seeking a determination of no coverage under the policy.

The trial court conducted a bench trial of the equitable garnishment action beginning on October 15, 2002. USF acknowledged at the trial that Mizer was covered by the insurance policy unless that coverage was precluded by an exclusion. After the opening statements by the Reeses and USF and the admission of evidence and deposition testimony, the trial was adjourned to allow USF to conduct discovery on whether the amount of the underlying judgment was reasonable. The trial was reconvened on November 12, 2002, at which point USF informed the court it would not be contesting the reasonableness of the underlying judgment.

On December 31, 2002, the trial court entered judgment in favor of the Reeses and against USF in the amount of $1,000,000, which is the amount of USF's policy limit. The trial court also found that interest on the judgment was covered under USF's policy and entered judgment in favor of the Reeses for the interest which was running on the underlying judgment entered on July 23, 2001.

USF appealed the December 31, 2002 judgment to this court, but the case was remanded because the judgment was not final. USF had filed a counterclaim for declaratory judgment seeking a finding of no coverage that had not been decided by the trial court. On remand, USF and the Reeses filed a joint motion to amend the December 31, 2002 judgment so it would be final for purposes of appeal. USF then withdrew its support of the joint motion to amend and filed a separate motion to set aside the December 31, 2002 judgment and quash the Reeses' equitable garnishment action. USF contended in its motion that the trial court lacked subject matter jurisdiction in the equitable garnishment action because the trial court lacked subject matter jurisdiction over Mizer in the underlying wrongful death judgment entered on July 23, 2001. USF asserted that the Reeses had previously obtained a judgment against another tortfeasor, thus depriving the trial court of jurisdiction in the Reeses' wrongful death action against Mizer. USF further asserted that the July 23, 2001 judgment was null and void. The trial court conducted a hearing on this matter on October 9, 2003.

On December 3, 2003, the trial court entered an amended judgment in favor of the Reeses and against USF. The amended judgment: (1) denied USF's motion to set aside the December 31, 2002 judgment and quash the Reeses' equitable garnishment action, (2) entered judgment in favor of the Reeses and against USF in the amount of $1,000,000 (liability limit under the business auto policy) plus interest on the full amount of the July 23, 2001 judgment, and (3) certified the December 3, 2003 amended judgment as final under Rule 74.01(b). This appeal follows.

Subject Matter Jurisdiction

(Points I and III)

USF argues two points challenging the subject matter jurisdiction of the Reeses' equitable garnishment action. In Point I, USF argues the trial court lacked subject matter jurisdiction because the Reeses previously obtained satisfaction of their damages resulting from their decedent's wrongful death. In Point III, USF argues the trial court lacked subject matter jurisdiction because the Reeses' allegations against Charles Mizer failed to meet the "something extra" required to take a tort action outside the purview of Workers' Compensation Law.

Subject matter jurisdiction may be raised at any time, including for the first time on appeal. Romero v. Kansas City Station Corp., 98 S.W.3d 129, 133 (Mo.App....