Waldrop v. Shelter Mut. Ins. Co.

• Decision Date: 18 April 2006
• Docket Number: No. WD 65518.,WD 65518.
• Citation: 221 S.W.3d 401
• Parties: Andrew D. WALDROP, Appellant, v. SHELTER MUTUAL INSURANCE COMPANY, Respondent.
• Court: Missouri Court of Appeals

221 S.W.3d 401

Andrew D. WALDROP, Appellant, v. SHELTER MUTUAL INSURANCE COMPANY, Respondent.

No. WD 65518.

Missouri Court of Appeals, Western District.

April 18, 2006.

Herbert W. McIntosh, Kansas City, MO, for appellant.

William A. Mallory, Kate E. McKinney, Co-Counsel, Kansas City, MO, for respondent.

Before LOWENSTEIN, P.J., ELLIS and NEWTON, JJ.

HAROLD L. LOWENSTEIN, Judge.

This is a suit to enforce a settlement agreement. Andrew Waldrop, the injured plaintiff (hereinafter "Appellant"), was a passenger in a car insured by respondent Shelter Mutual Insurance Company ("Shelter"), which was forced off the road by a vehicle that left the scene. Appellant and Shelter agreed to settle for the policy limits of $25,000. The issue at the heart of the case is whether Shelter was then entitled to a provision in the release that subrogates it to any amount Appellant may also receive in uninsured coverage from his insurance company. Following motions from both sides, Shelter was granted summary judgment. This court reverses the trial court's judgment granting Shelter summary judgment and remands with instructions to order payment of $25,000 to Appellant.

FACTS

On September 12, 2002, Appellant was a passenger in a vehicle operated by Danny Barnes when another vehicle crossed the centerline, forcing Barnes's vehicle to a ditch. The driver of the oncoming vehicle left the scene without stopping. As a result of the accident, Appellant sustained a permanent spinal injury. Barnes was insured by a policy issued by Shelter at the time of the accident, which had uninsured motorist coverage in the amount of $25,000. There is no contention here that Barnes was negligent.

On November 12, 2003, Appellant made a written demand to Shelter to settle his claim against Barnes in exchange for the payment of the policy limits. On November 18, 2003, Shelter's adjuster Marcks faxed a letter, stating "[t]he available Uninsured Motorist policy limit is $25,000.00. We would like to offer this amount in settlement of [Appellant's] injury claim. Please contact me at your earliest convenience to discuss settlement of [Appellant's] injury claim." The cover letter accompanying Marcks' fax instructed in relevant part, "call [Marcks] at your earliest convenience to complete the paperwork to settle this Uninsured Motorist claim." That same day, Appellant's counsel telephoned Marcks and accepted Shelter's $25,000.00 offer of settlement. Also on that same day, Marcks faxed a Receipt and Trust Agreement (Agreement) to Appellant's attorney. The Agreement stated in relevant part:

In consideration of the payment of the [$25,000.00] by Shelter Mutual Insurance Co. Company ...:

(1) Hereby releases and forever discharges [Shelter] from any and all liability whatsoever to the undersigned under the Uninsured Motorist provisions of the . . . policy . . . for bodily injury, sickness, or disease arising out of the . . . accident.

(2) Agrees to hold for the benefit of [Shelter] all rights, claims and causes of action which [Appellant] has or may have against anyone other than [Shelter] for such bodily injury, sickness or disease.

(3) Agrees to take, through any representative designated by the [Shelter], such action in the name of [Appellant] as may be necessary or appropriate to recover damages for such injuries, sickness or disease, the [Shelter] to pay all costs and expenses in connection therewith.

(4) Agrees that any money so recovered by [Appellant] for such injuries, sickness or disease, whether by settlement or otherwise, not in excess of the above amount, plus expenses, costs and attorney's fees incurred by [Shelter] in connection with such recovery, shall be held in trust by [Appellant] and paid to the [Shelter] upon demand.

(5) Represents to [Shelter] that [Appellant] has not released anyone other than [Shelter] from any rights, claims or causes of action which [Appellant] may have to recover damages for such injuries, sickness or disease, and that [Appellant] has received no payment from anyone other than [Shelter] as damages, compensation or otherwise, for such injuries, sickness or disease.

On November 19, 2003, Appellant's attorney returned the Agreement unsigned after adding the following language to paragraph (2) above: "[e]xcept for any uninsured claim that may be made against American Family Insurance Company." American Family Insurance Company is Appellant's personal insurance company. Adjuster Marcks informed Appellant's attorney that Shelter would not accept the altered Agreement. Appellant filed suit against Shelter to enforce the settlement agreement. Each party filed a motion for summary judgment. The trial court granted Shelter's motion for summary judgment and denied Appellant's.¹

STANDARD OF REVIEW

This court reviews the propriety of the trial court's judgment granting Shelter's motion, de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is appropriate if no genuine issue of material facts exists and the moving party has a right to judgment as a matter of law. Id; Liberty Mut. Ins. Co. v. Havner, 103 S.W.3d 829, 831 (Mo.App.2003). The record is read in the light most favorable to the party against whom summary judgment was granted, and all the facts properly pled by the nonmoving party and all inferences therefrom are assumed as true. Liberty Mut., 103 S.W.3d at 831-32. Reversal of a grant of summary judgment is required if either (1) there is a genuine issue as to a material fact, or (2) the trial court erred as a matter of law. Id. at 832. The only issue here is whether the trial court erred in applying the law.

ANALYSIS

Appellant argues the trial court erred by granting Shelter's motion for summary judgment because (1) Appellant and Shelter entered into an enforceable agreement, (2) the contract was definite, unambiguous, and complete in its terms, (3) Adjuster Marcks' affidavit (stating that he expected and believed that no funds would be exchanged until Appellant executed the Agreement) was inadmissible as parol evidence, and (4) the Shelter could not as a matter of law require Appellant to execute the Agreement as a condition of payment under the case of Schaeffer v. American Motorists Insurance Co., 973 S.W.2d 180 (Mo.App.1998).²

A settlement agreement is a type of contract. Vulgamott v. Perry, 154 S.W.3d 382, 387 (Mo.App.2004). Appellant first contends an enforceable agreement was reached between the parties. This facts of this case are similar to the case of Schaeffer in which the court began its analysis by stating an executory contract was formed between the parties, despite, as here, the parties' disagreement regarding the language of the subrogation provision, the plaintiffs' refusal to sign the release, and the fact that the settlement money was not paid. 973 S.W.2d at 181-82. This court similarly concludes Appellant and Shelter entered into an executory contract.³

Shelter's argument that the parties' lacked a meeting of the minds originates from the parties' disagreement over a subrogation provision in Shelter's release that, as discussed infra, contravenes Missouri law. It is self-evident, therefore, that Shelter should not be able to use this provision to argue that a meeting of the minds did not occur as to the essential terms of the contract. A contract will be valid and enforceable despite the fact that some terms may be missing as long as the essential terms are sufficiently definite to enable the court to give them exact meaning. See Restatement (Second) of Contracts § 33 cmt. a. (1981) ("Where the parties have intended to conclude a bargain, uncertainty as to incidental or collateral matters is seldom fatal to the existence of the contract."). Without determining whether the subrogation provision is an essential term to this contract, the insurer's subrogation rights are already provided for in section § 379.203.4, RSMo 2000.

This court now turns to the issue of the validity of the subrogation provision at issue. The settlement document sent by Shelter is in the form of a "Trust Agreement." This mode is utilized to effectuate the subrogation rights afforded an insurer under section 379.203.4 that pays uninsured motorist benefits to an insured. Roberts v. Progressive Nw. Ins. Co., 151 S.W.3d 891, 899 (Mo.App.2004). "Subrogation exists to prevent unjust enrichment." Keisker v. Farmer, 90 S.W.3d 71, 75 (Mo. banc 2002).

Paragraph two of the Agreement states that Waldrop "agrees to hold for the benefit of [Shelter] all rights, claims and causes of action which [Appellant] has or may have against anyone other than [Shelter] for such bodily injury, sickness or disease." Waldrop objected to the settlement agreement because he sought to except claims he intended to make to his carrier American Family. A similar subrogation provision was struck down in Schaeffer. In that case, five plaintiffs, who were children of the decedent killed in accident by an uninsured motorist, made claim for the decedent's wrongful death under two insurance policies with uninsured motorist coverage totaling $200,000. 973 S.W.2d at 181. The insurer required the plaintiffs to execute a release before it made payment. Id. The subrogation provision required the plaintiffs to hold in trust all rights of recovery which the plaintiffs had against any other company for the insurer's benefit. Id. Plainti...