Universal Underwriters Ins. Co. v. Dean Johnson Ford, Inc., WD

• Decision Date: 22 August 1995
• Docket Number: No. WD,WD
• Citation: 905 S.W.2d 529
• Parties: UNIVERSAL UNDERWRITERS INSURANCE CO., Respondent, v. DEAN JOHNSON FORD, INC., Appellant. 49897.
• Court: Missouri Court of Appeals

Page 529

905 S.W.2d 529

UNIVERSAL UNDERWRITERS INSURANCE CO., Respondent, v. DEAN JOHNSON FORD, INC., Appellant.

No. WD 49897.

Missouri Court of Appeals,

Western District.

Aug. 22, 1995.

Rehearing Denied Oct. 3, 1995.

Max Von Erdmannsdorff, Kansas City, for appellant.

Thomas D. Billam, Eriv Van Beber, Kansas City, for respondent.

Before KENNEDY, P.J. and SMART and LAURA DENVIR STITH, JJ.

LAURA DENVIR STITH, Judge.

Universal Underwriters Insurance Company (Universal) filed this declaratory judgment action to determine whether the particular insurance policy it issued to Dean Johnson Ford, Inc. (Dealership) for the year June, 1989 to June, 1990 provided coverage or a duty to defend a lawsuit filed against the Dealership by the Shrewsburys in January, 1990. The Shrewsburys claimed that the Dealership was liable to the Shrewsburys for negligence, breach of warranty, fraudulent misrepresentation and violation of Missouri merchandising laws in that it sold the Shrewsburys a defective automobile which had been damaged in a previous accident.

The trial court granted summary judgment to Universal. It found that the policy in question did not provide coverage and provided defense costs only up to the amount of $10,000. The Dealership appeals. We find that the policy provided for up to $20,000 in legal defense costs and further that questions of fact exist as to whether the umbrella provisions of the policy, when read in conjunction with earlier versions of the policy or other policies, provide coverage for some or all of the Shrewsburys' claims. We also find that it was premature to grant summary judgment when Universal had failed to respond to outstanding discovery requesting other policies. Accordingly, we reverse and remand.

I. Factual and Procedural Background

The Shrewsburys alleged that they purchased a car from the Dealership in March of 1987, believing it to be in good condition. They discovered in November, 1987 that the automobile had been damaged in a prior accident. After learning this, the Shrewsburys took the vehicle to the Dealership and told Mr. Johnson that the vehicle had been wrecked prior to their purchase. On January 25, 1990, the Shrewsburys filed suit against the Dealership. This litigation shall be referred to as "the underlying suit."

The Dealership notified Universal of the underlying suit by the Shrewsburys in February, 1990. In June, 1992, Universal filed a Petition for Declaratory Judgment against (1) the Dealership, (2) Dean and Margie Johnson (Dean Johnson was the owner of the Dealership), and (3) the Shrewsburys. Universal did not request a determination that none of its policies provided coverage for or a duty to defend the Shrewsburys' suit. To the contrary, Universal's action specifically sought determination solely of the question whether coverage or a duty to defend were provided by Policy No. 454997P issued by Universal to the Dealership and solely as that policy was written for the period from June, 1989 to June, 1990. The policy in question was attached to Universal's Petition as Exhibit A.

The Dealership and the Johnsons, in answering the Petition for Declaratory Judgment, denied that Exhibit A was the policy under which they were insured at the time of sale and related events in 1987. They argued it was inappropriate to construe coverage in a vacuum solely by examining coverage under a single year of a single policy. They requested that the court require Universal to provide them with the policy in effect at the time of the sale to the Shrewsburys in 1987, and filed a Request for Production asking for this policy. ¹

In November, 1993, Universal filed a Motion for Summary Judgment on the ground that, while it admitted Policy No. 454997P, as in effect from June, 1989 to June, 1990, provided for $10,000 in defense costs, it excluded other defense costs or coverage for damages arising from the claims set forth in the Shrewsburys' underlying suit. Universal's Motion was based on nine paragraphs, labeled as "undisputed facts" and quoted verbatim from an affidavit of a Universal employee.

The trial court initially denied the motion, as well as a motion to reconsider, "on the basis that important factual issues still exist." However, in July, 1994, in response to Universal's motion to clarify the court's denial of summary judgment, the court reversed itself and granted summary judgment. It stated that it was not ruling that Universal had no duty of coverage or duty to defend the Shrewsburys' suit at all. It was solely addressing Universal's duty under Policy No. 454997P, and solely as that policy was in effect from June, 1989 to June, 1990, which was the period during which the underlying suit was filed. As to that policy, however, the trial court said that "[Universal]' § obligation under that specific policy is limited to providing a defense up to the limit of the thousand dollars ($10,000.00) in defense costs, and that Plaintiff has no obligation thereunder to pay any damages that may hereafter be assessed."

II. Standard of Review

A claimant seeking summary judgment must establish that there is no genuine dispute as to those material facts upon which the claimant would have had the burden of persuasion at trial. In addition, a claimant moving for summary judgment in the face of an affirmative defense must also establish that the affirmative defense fails as a matter of law. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 381 (Mo. banc 1993).

Only after the movant has made the required showing that no genuine issue of material fact exists does the duty arise for the non-movant to show, by affidavit, deposition, or otherwise, that one or more genuine issues are in dispute. ITT, 854 S.W.2d at 381-82. A genuine issue exists if there is a dispute that is real, not merely argumentative, imaginary or frivolous. The mere existence of slight doubt, or of an immaterial or frivolous dispute, will not defeat summary judgment. Id.

Universal argues that, because the Dealership's response to the motion for summary judgment failed to controvert any of the "undisputed" facts quoted in its motion from its supporting affidavit, these "undisputed facts" must be taken as true and that they entitle Universal to summary judgment. Among the "facts" by which the Dealership was allegedly bound are the following:

4. The Declaration Sheet of policy # 454997P at page 1E limits "legal damages" to defense costs up to Ten Thousand and 00/100 Dollars ($10,000) per suit. (See Exhibit 3, pg. 1E).

5. The providing of a defense for Dean Johnson Ford, Inc. in the underlying Shrewsbury case (Shrewsbury v. Dean Johnson Ford, Inc.) fulfills Universal Underwriter's obligations against a "legal damages" suit under Coverage Part 500. (See Exhibit 2, para. 6)

6. The claims by the Shrewsburys in the Second Amended Petition against Dean Johnson Ford, Inc. do not allege any damages that fall within the definition of "injury" within Policy No. 454997P. (See Exhibit 2, para. 7).

7. The claims by the Shrewsburys in the Second Amended Petition against Dean Johnson Ford, Inc. do not allege any damages that fall within the definition of "occurrence" within Policy No. 454997P. (See Exhibit 2, para. 8).

8. Policy No. 454997P, under Part 500, limits the obligations of Universal Underwriters to paying defense costs up to Ten Thousand and 00/100 ($10,000) for any one suit for "legal damages." (See Exhibit 2, para. 9).

As is evident, the above statements are not facts but legal conclusions. As such, they were not binding on plaintiffs or on the court below. Orphant v. Orphan, 622 S.W.2d 1, 4 (Mo.App.1981). The court below was required to determine whether any disputed issues of material fact do exist. If so, then summary judgment was improper. If not, then summary judgment was proper.

Our review of the grant of summary judgment is essentially de novo. We do not defer to the trial court's order, although the criteria we utilize in considering the propriety of summary judgment are the same as those utilized by the trial court. The record will be viewed in the light most favorable to the nonmoving party, and the latter will also be accorded the benefit of all reasonable inferences from the record. ITT, 854 S.W.2d at 381-82; Carlisto v. General Motors Corp., 870 S.W.2d 505, 508-09 (Mo.App.1994).

In addition, in reviewing insurance policies, the policies will be given a reasonable construction and interpreted so as to afford coverage rather than defeat coverage. Nixon v. Life Investors Ins. Co., 675 S.W.2d 676, 679 (Mo.App.1984). Unambiguous language of an insurance contract is enforceable but, if the language is ambiguous, it will be construed against the insurance company. Robin v. Blue Cross Hosp. Serv., Inc., 637 S.W.2d 695, 698 (Mo. banc 1982). In addition, policy provisions designed to cut down, restrict or limit insurance, or imposing exceptions or exemptions, will be strictly construed against the insurer. Union Elec. Co. v. Pacific Indem. Co., 422 S.W.2d 87, 92 (Mo.App.1967).

Universal argues that the policy is unambiguous and, as such, the court must enforce the policy language as written in accordance with its plain meaning. We agree with the general proposition of law that unambiguous policies should be enforced but do not agree that this entitled Universal to summary judgment on all issues involving the policy in question.

III. The Policy Provides Defense Costs of up to $20,000

Universal argued below and in this Court, and the trial court found, that Policy No. 454997P as in effect from June, 1989 to June, 1990 did not obligate Universal to provide coverage for the types of claims made by the Shrewsburys. Moreover, it only obligated Universal to provide defense costs for claims for "Legal Damages" and "Product Related Damages" up to the $10,000 limit set out on the Declarations Page of the policy.

The portion of the policy governing claims for Legal Damages and for...