Vulgamott v. Perry

• Decision Date: 07 December 2004
• Docket Number: No. WD 63981.,WD 63981.
• Citation: 154 S.W.3d 382
• Parties: Chad A VULGAMOTT, Appellant, v. Brent A. PERRY, Respondent, Toni L. Detwiler, Defendant and Shelter Mutual Insurance Company, Respondent.
• Court: Missouri Court of Appeals

154 S.W.3d 382

Chad A VULGAMOTT, Appellant, v. Brent A. PERRY, Respondent, Toni L. Detwiler, Defendant and Shelter Mutual Insurance Company, Respondent.

No. WD 63981.

Missouri Court of Appeals, Western District.

December 7, 2004.

Motion for Rehearing and/or Transfer to Supreme Court Denied February 1, 2005.

Application for Transfer Denied March 1, 2005.

Andrew Jay Gelbach, Warrensburg, John Turner, Kansas City, Jeffrey Bauer, Springfield, for Appellant.

John Kent Thomas, St. Joseph and Thomas Oswald, Jr., Kirksville, for Respondent.

Before THOMAS H. NEWTON, Presiding Judge, HAROLD L. LOWENSTEIN, Judge, and RONALD R. HOLLIGER, Judge.

RONALD R. HOLLIGER, Judge.

Chad Vulgamott appeals a judgment denying his request to enforce a claimed settlement of his lawsuit against a co-employee, Brent Perry, for injuries from an automobile accident and a further finding that the court lacked subject matter jurisdiction because of the exclusivity provisions of the Workers' Compensation Act, Section 287.120.2, RSMo. (2000).¹ Although Vulgamott raises six points on appeal we need not address four of them because we find that the trial court did have subject matter jurisdiction over the alleged settlement and that the trial court erred in finding that no valid enforceable settlement agreement existed. Reversed and remanded.

FACTS AND PROCEDURAL BACKGROUND

Chad Vulgamott was a passenger in a vehicle driven by Brent Perry which was involved in a collision with another driver on May 25, 1994. Shelter Mutual Insurance Company insured Perry's vehicle. At the time of the accident, Perry and Vulgamott were fellow employees acting within the course and scope of their employment.

On December 5, 1996, Vulgamott filed a lawsuit in Livingston County alleging negligence against Perry and the driver of the other vehicle seeking compensation for the injuries sustained in the car accident.² The case was eventually set for trial on May 21, 2001. Moments before trial was to begin, the parties told the court that they had reached a settlement agreement. The agreement provided that Perry's liability insurance carrier, Shelter, would pay $25,000 plus the statutory court costs to Vulgamott, that Perry would confess a judgment for one million dollars, and that the format of the written settlement agreement would follow the format utilized in another case called Noland v. Welch.³ It was the intent of the settlement that a bad faith claim would then be litigated against Shelter.

Before the jury was discharged, a copy of the Noland v. Welch agreement was faxed to the Livingston County Courthouse and, in turn, faxed to Shelter's in house counsel for approval. Shelter's in house counsel approved the agreement and authorized Perry's attorney to enter into the settlement agreement according to the aforementioned terms. The parties then informed the court that the case had been settled, a formal record was made concerning the agreement, and the jury was discharged.

After making a record of the agreement in open court, the attorneys for Vulgamott and Perry went to an office to prepare a written version of the settlement agreement. A written version of the agreement was prepared and signed by the attorneys and then sent to Shelter for final approval and signature.

Over the course of the next year, the parties communicated extensively about the language of the final version of the written agreement to no avail. Both Shelter⁴ and Perry eventually filed motions to enforce the settlement agreement. Both argued that a valid and binding settlement agreement had been reached on May 21, 2001.

Subsequently, attorneys for all parties agreed to meet on May 31, 2002, for the purpose of finalizing the written settlement agreement. Prior to that meeting the Missouri Supreme Court handed down its opinion in State ex. rel Taylor v. Wallace, 73 S.W.3d 620 (Mo. banc 2002), which Shelter believed divested the circuit court of jurisdiction over the subject matter of the Vulgamott v. Perry lawsuit giving exclusive subject matter jurisdiction to the Labor and Industrial Relations Board under Section 287.120.2.⁵

At the May 31, 2002 meeting, Shelter's counsel announced that it was no longer interested in pursuing a written version of the settlement agreement and took the position that Vulgamott had repudiated the settlement agreement by refusing to execute a written settlement contract.

On June 3, 2002, Vulgamott filed a motion to enforce the settlement agreement he claimed was reached May 21, 2001. Now all parties had filed motions arguing that a valid settlement had been reached on May 21, 2001. Neither Perry nor Shelter filed suggestions in opposition to Vulgamott's motion to enforce the settlement agreement. Rather, both filed motions to dismiss Vulgamott's action for lack of subject matter jurisdiction arguing that, per the Taylor decision, workers' compensation law provided Vulgamott's exclusive remedy.

The circuit court heard arguments on the motions to dismiss and Vulgamott's motion to enforce the settlement agreement on March 6, 2003. On August 22, 2003, the court entered its order granting Shelter's and Perry's motions to dismiss for lack of subject matter jurisdiction and, in the alternative, found that there was insufficient proof that any binding settlement agreement was agreed to by all parties on May 21, 2001. Vulgamott now appeals claiming, in part, that the trial court erred in refusing to enforce a valid enforceable settlement agreement reached by the parties on May 21, 2001.⁶

We must first address, however, Vulgamott's point on appeal that the trial court erred in dismissing the case for lack of subject matter jurisdiction. Shelter claimed in its motion to dismiss, and the trial court agreed, that after the Taylor decision the trial court had no subject matter jurisdiction because Taylor had extended the employer's immunity to co-employees unless there was a pleading and proof of the "something extra" in the conduct of the negligent co-employee.⁷

Vulgamott contends on appeal that there are two aspects to this issue. First, he contends that he pled, or should have been allowed to plead by amended petition, the necessary "something extra." Secondly, he contends that the trial court retained subject matter jurisdiction to enforce a settlement contract between the parties even though it no longer had jurisdiction over the underlying suit after Taylor. Because we agree that the trial court had jurisdiction to enforce the settlement agreement, we do not reach the first aspect described above.

JURISDICTION

Vulgamott argues that enforcement of a settlement agreement is a separate or collateral contract action from the underlying suit. Under Vulgamott's theory, once a settlement agreement was reached, jurisdiction over the underlying suit was irrelevant because that suit had been suspended as a result of the parties on-the-record settlement agreement. Thus, Vulgamott avers, that after May 21, 2001, (the date of the alleged settlement agreement), all that remained of this suit was a contract action, and the circuit court had jurisdiction to enforce the settlement contract (if validly formed) even if the court no longer had jurisdiction over the underlying action.

Conversely, Shelter argues that the circuit court never had subject matter jurisdiction over the original action because the Supreme Court didn't change the law in its Taylor opinion but simply interpreted existing law. Shelter asserts that a lack of subject matter jurisdiction over Vulgamott's original action means his original action is a nullity and never existed and, thus, any settlement pursuant to such an action is invalid. Shelter also argues that there was no consideration for the alleged settlement because there was no valid claim over which the trial court had jurisdiction. We disagree.

Settlement agreements are a species of contract. "A motion to compel settlement adds to a pending action a collateral action for specific performance of the settlement agreement." McKean v. St. Louis County, 964 S.W.2d 470, 471 (Mo.App.1998) (court rejected argument that settlement could only be enforced by a separate action for that purpose). In Hauk v. First National Bank of St. Charles, 680 S.W.2d 771 (Mo.App.1984), the bank had foreclosed under a second and third deed of trust property on which the Hauks held the first mortgage. The Hauks did not want to accept payment of the balance due of approximately $58,000 because of tax reasons instead asking for a premium for early payment and release. Id. at 772. The Hauks believed in good faith, but mistakenly, that their note did not allow prepayment. Subsequently the bank by letter offered to pay $68,000. The Hauks accepted but the bank then declined saying it had made a unilateral mistake in the amount. The Hauks sued on the settlement contract and the trial court found for the bank. Id. at 773. On appeal the bank argued that because there was no prohibition of prepayment that there was no consideration for its offer of $68,000 to discharge the note and deed of trust. The court of appeals reversed holding that "compromise of a doubtful claim is good consideration for a contract." Id. at 775.⁸ There is certainly no claim here that Vulgamott's claim against his co-employee for negligent operation of a motor vehicle was not brought in good faith as to the state of Missouri law before Taylor. In fact, Perry never raised a defense under the Workers' Compensation Act until after Taylor was handed down.

Shelter's argument fails even if we consider the trial court to have lacked subject matter jurisdiction from the initial filing of Vulgamott's suit. In Groh v. Groh, 910 S.W.2d 747 (Mo.App.1995), this court vacated a decree of dissolution of marriage because the trial court lacked subject matter jurisdiction over the action⁹ yet still found enforceable the partial settlement agreement entered into before the decree. We said "that the fact that the trial...