Scottsdale Ins. Co. v. Addison Ins. Co., WD75963
| Decision Date | 01 October 2013 |
| Docket Number | WD75963 |
| Parties | SCOTTSDALE INSURANCE COMPANY AND WELLS TRUCKING, INC., Appellants, v. ADDISON INSURANCE COMPANY, ET AL., Respondents. |
| Court | Missouri Court of Appeals |
SCOTTSDALE INSURANCE COMPANY
AND WELLS TRUCKING, INC., Appellants,
v.
ADDISON INSURANCE COMPANY, ET AL., Respondents.
WD75963
Missouri Court of Appeals Western District
OPINION FILED: October 1, 2013
This is a case of first impression involving an excess insurer's attempt to recover from a primary insurer the amount contributed from an excess policy to resolve a claim where the primary insurer has allegedly failed to settle the claim within its policy limits in bad faith. The trial court entered summary judgment in favor of the primary insurer Addison Insurance Company and United Fire & Casualty Company (collectively "United
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Fire"1), and against the excess insurer Scottsdale Insurance Company ("Scottsdale") and the insured Wells Trucking, Inc. ("Wells Trucking") (collectively "Appellants"), on seven alternatively pled causes of action, each of which sought to recover the amount Scottsdale contributed toward the settlement of a lawsuit against Wells Trucking.
Because we conclude that an excess insurer can recover on a theory of equitable subrogation amounts contributed from an excess policy as a result of the primary insurer's bad faith failure to settle a claim within policy limits, and because the uncontroverted facts do not negate any of the essential elements of that cause of action, we affirm in part and reverse in part, necessitating a remand for further proceedings consistent with this Opinion.
In August 2007, a Wells Trucking employee driving one of the company's trucks pulling a flatbed trailer was involved in an automobile accident. The driver of the other vehicle sustained severe bodily injuries from which he died.
At the time of the accident, Wells Trucking had a primary liability insurance policy with United Fire and an excess liability insurance policy with Scottsdale. The United Fire policy contained liability limits of $1 million. The Scottsdale policy contained liability limits of $2 million and specified that it would not apply unless and until the underlying United Fire policy was exhausted.
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In April 2008, the decedent's family made demand that United Fire settle for its $1 million policy limits. At the time, the decedent's family was unaware of the excess policy. After United Fire rejected the demand, the decedent's family filed a wrongful death lawsuit against Wells Trucking and its employee. The decedent's family again demanded that United Fire settle for its $1 million policy limits. United Fire again rejected the demand. United Fire extended a $250,000 counteroffer which was rejected.
Scottsdale learned of the pending lawsuit in September 2008. The decedent's family learned about the excess policy around the same time. Though aware of the excess policy, the decedent's family renewed their demand on United Fire to settle for its $1 million policy limits. Wells Trucking and Scottsdale also demanded that United Fire settle with the decedent's family for its $1 million policy limits. United Fire refused.
In August 2009, the decedent's family increased their settlement demand to $3 million. United Fire and Scottsdale participated in pre-trial mediation with the decedent's family in October 2009. The decedent's family agreed to accept a total settlement of $2 million. United Fire contributed its $1 million policy limits toward the settlement. Scottsdale contributed $1 million from the excess policy toward the settlement. Scottsdale expressly reserved its right to pursue United Fire for bad faith failure to settle, and secured a written assignment from Wells Trucking of its bad faith failure to settle claim.
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Scottsdale filed suit against United Fire in its name and in the name of Wells Trucking for the benefit of Scottsdale.3 In a first amended petition, Scottsdale sought to recover the $1 million it paid to settle the lawsuit on one of seven alternative theories:
•Count 1: the written assignment from Wells Trucking;
•Count 2: equitable subrogation;
•Count 3: contractual subrogation;
•Count 4: as a third party beneficiary of the insurance policy between United Fire and Wells Trucking;
•Count 5: because United Fire owed Scottsdale the legal duty to exercise good faith to settle within its policy limits;
•Count 6: prima facie tort; and
• Count 7: declaratory judgment.
United Fire filed a motion for summary judgment on August 30, 2012, seeking judgment in its favor on all seven counts. The motion for summary judgment argued that Scottsdale has no right under Missouri law to bring a bad faith failure to settle claim, and that Scottsdale could not recover through the rights of Wells Trucking because Wells Trucking could not establish all of the elements of a bad faith failure to settle claim.
Scottsdale twice secured United Fire's consent to extend the deadline for filing a response to the motion for summary judgment. Each time, Scottsdale filed a pleading entitled "Extension to File Response to Defendants' Motion for Summary Judgment." In
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each pleading, Scottsdale granted itself an additional four days and an additional seven days, respectively, to file a response to United Fire's summary judgment motion. Neither pleading sought leave of court, or an order from the court, granting an extension of time to respond. Scottsdale filed its response to United Fire's motion for summary judgment on October 11, 2012, approximately ten days after the initial thirty-day limit imposed by Rule 74.04(c)(2).4
On November 1, 2012, the trial court entered an interlocutory order finding that Scottsdale's response to United Fire's motion for summary judgment was untimely. The trial court deemed all allegations in the motion for summary judgment admitted pursuant to Rule 74.04(c)(2). As directed by the interlocutory order, United Fire prepared and submitted a proposed form of judgment.
Scottsdale filed a motion for reconsideration and objections to the proposed form of judgment. Scottsdale argued that the trial court should have exercised its discretion under Rule 44.01(b) to enlarge Scottsdale's time for filing a response to the motion for summary judgment. Scottsdale argued that the motion for summary judgment should have been denied in any event because United Fire did not meet its burden to produce legally cognizable evidence, and instead relied solely on allegations drawn from the first amended petition. Finally, Scottsdale registered a variety of objections to the proposed form of judgment submitted by United Fire.
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After a hearing, the trial court entered a judgment on December 4, 2012, sustaining the motion for summary judgment and entering judgment in favor of United Fire on all seven counts asserted in the first amended petition ("Judgment"). The Judgment again concluded that Scottsdale's response to the motion for summary judgment was untimely pursuant to Rule 74.04(c)(2), and deemed the factual allegations in the motion for summary judgment admitted.
The Judgment alternatively found that "[t]o the extent this court would have considered [Scottsdale's] untimely filed Response, [the response] did not comply with Rule 74.04(c)(2) in that [the] response to paragraphs 1, 4, 10, and 11 of [United Fire's statement of uncontroverted facts] was 'objection' and failed to admit or deny those paragraphs as required by Rule 74.04."
The Judgment also alternatively concluded that "[t]o the extent this court would have considered [Scottsdale's] untimely filed Response, [its] Statement of Additional Material Facts consisted of facts that were either immaterial or did not create a genuine issue of material fact."5
The Judgment then reached the following legal conclusions pertaining to the claims asserted in the first amended petition:
(1) That "based on the findings of fact above," Wells Trucking would have been unable to establish two essential elements of the tort of bad faith failure to settle as a matter of law because "United Fire did not refuse, in bad faith or otherwise, to settle the
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claim within the liability limits of the policy," and because "Wells Trucking was not subjected to a judgment in excess of the policy limits."
(2) That "Missouri law does not permit the assignment of a bad faith failure to settle claim."
(3) That "[t]here is no duty of good faith between primary and secondary insurers."
(4) That "Missouri law does not permit an excess insurer to bring a lawsuit for bad faith failure to settle against a primary insurer."
(5) That "Scottsdale is not a third-party beneficiary of the insurance policy between United Fire and Wells Trucking."
(6) That Scottsdale "failed to state a claim for prima facie tort."
The first of these legal conclusions depended upon the uncontroverted facts. The remaining legal conclusions involved pure questions of law, the resolution of which did not depend on the uncontroverted facts.
Scottsdale filed this timely appeal.
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