White v. Auto Club Inter-Insurance Exchange

• Citation: 984 S.W.2d 156
• Decision Date: 17 November 1998
• Docket Number: No. WD,INTER-INSURANCE,WD
• Parties: Lloyd WHITE, Jr., and Becky White, Appellants, v. AUTO CLUBEXCHANGE, Robert Ernest Gould, and Gould And Thompson, P.C., Respondents. 54674.
• Court: Court of Appeal of Missouri (US)

Page 156

984 S.W.2d 156

Lloyd WHITE, Jr., and Becky White, Appellants, v. AUTO CLUB INTER-INSURANCE EXCHANGE, Robert Ernest Gould, and Gould And Thompson, P.C., Respondents.

No. WD 54674.

Missouri Court of Appeals Western District.

Nov. 17, 1998.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Dec. 22, 1998.

Application for Transfer Denied

Feb. 23, 1999.

Christopher Heigele, Kansas City, for Appellants.

Peter Sloan, Arlen Tanner, Kansas City, for Respondents.

SPINDEN, Judge.

Lloyd White, Jr., and his wife, Becky White, appeal the circuit court's summary judgment for Auto Club Inter-Insurance Exchange, Robert Ernest Gould, and Gould and Thompson, P.C. We affirm the circuit court's judgment.

The dispute stems from a collision on October 18, 1988, between cars driven by Larry Stephenson and Lloyd White. The Whites sued Stephenson for their injuries. Auto Club insured Stephenson under an automobile liability insurance policy, and, pursuant to the policy's terms, Auto Club defended Stephenson in the lawsuit. Auto Club arranged for Gould, an attorney with the law firm of Gould and Moore, P.C., ¹ to represent Stephenson in the lawsuit. On February 28, 1990, the Whites received a judgment against Stephenson for $126,250.

After obtaining the judgment, the Whites asked Gould to make an offer to Auto Club:

Part (1) Automobile Club Inter-Insurance Exchange will pay to Mr. and Mrs. White the full extent of its applicable liability insurance coverage for Mr. Stephenson, whatever that amount may be (which [plaintiff's counsel] understand [s] to be $50,000.00 plus liability for court costs and statutory interest on the judgment).

Part (2) Mr. and Mrs. White will receive an assignment from Mr. Stephenson of Mr. Stephenson's claim against Automobile Club Inter-Insurance Exchange for breach of its fiduciary responsibilities to Mr. Stephenson, including but not limited to Mr. Stephenson's claim against Automobile Club Inter-Insurance Exchange for bad faith refusal and failure to settle the claims of Mr. and Mrs. White for the offers of settlement that were made by Mr. and Mrs. White before trial within the policy limits of insurance coverage provided to Mr. Stephenson. Mr. Stephenson would assign to Mr. and Mrs. White all rights and causes of action Mr. Stephenson has against Automobile Club Inter-Insurance Exchange and against you and your law firm, both those arising from breach of contract with Mr. Stephenson and those arising in tort.

On March 13, 1990, Auto Club, through Gould, accepted the offer of Part (1) of the agreement without modification.

On March 17, 1990, the Whites and Stephenson agreed that the Whites would not execute the judgment against Stephenson's personal assets in exchange for Stephenson's agreeing that the Whites were entitled to "the policy limits of [his] liability insurance coverage[.]" Stephenson also agreed to assign to the Whites all causes of action which he had against Auto Club and Gould. On March 19, 1990, 19 days after the circuit court entered its judgment, Auto Club paid $50,000 to the Whites, the limit of Auto Club's insurance.

On February 12, 1995, Stephenson executed the assignment of all his causes of action against Auto Club and Gould. Five days later, the Whites sued Auto Club and Gould. Count I of their petition alleged that Auto Club breached its contact with Stephenson by not paying the "policy limits" as contemplated by the March 17, 1990, agreement and Auto Club's insurance policy. Count II claimed that Gould was negligent and breached his duties and responsibilities to Stephenson because Stephenson's interests conflicted with Auto Club's interests. Count III averred that Auto Club and Gould conspired to deprive Stephenson of the opportunity and rights he had to force Auto Club to pay the entire judgment entered against him because of Auto Club's bad faith and negligence. The Whites contended that, because of Auto Club's and Gould's actions, they were deprived of the use of the judgment's full amount.

Auto Club and Gould filed motions for summary judgments which the circuit court granted. The circuit court, however, entered judgment for the Whites against Auto Club for $977 to reimburse them for 19 days of statutory interest on the judgment of $126,250 ($592) and interest on the $592 of unpaid interest up to the entry of the summary judgment ($385). The Whites appeal.

In their first point, the Whites assert that the circuit court erred in entering summary judgment for Auto Club on Count I for breach of contract and in entering judgment for the Whites for only $977. They contend that Auto Club did not satisfy its contractual obligation to pay the "policy limits" as required by the agreement and the insurance policy. We disagree.

Auto Club agreed to pay the Whites the "full extent of its applicable liability insurance coverage for Mr. Stephenson[.]" The agreement said that the Whites understood that the full extent of applicable liability insurance coverage meant "$50,000.00 plus liability for court costs and statutory interest on the judgment." The agreement, however, did not control when, and how much, interest had to be paid. This was controlled by the language of Stephenson's insurance policy.

Stephenson's insurance policy provided, "The limit of liability shown in the Declarations for 'each person' for Bodily Injury Liability is our maximum limit of liability for all damages for bodily injury, including damages for care and loss of services, sustained by any one person and any one auto accident." ² The policy's declarations page provided that the liability limit was $50,000 per person and $100,000 per occurrence. The policy also included a provision, entitled "Supplementary Payments," which said:

In addition to our limit of liability, we will pay on behalf of a covered person:

....

3. Interest on all damages owed by a covered person as a result of a judgment in any suit we defend. Our duty to pay interest ends when we offer to pay that part of the judgment which does not exceed our limit of liability for this coverage. ³

The issue is whether Auto Club's liability for interest on the entire judgment, which exceeded the policy limits, ended when it paid the Whites the limit of its coverage ($50,000) without paying the accrued interest on the entire judgment. The supplementary payment provision provided for compensation to a covered person "[i]n addition to [the] limit of liability." It was a separate obligation beyond the company's limit of liability of $50,000. "Costs and interest after judgment, even though they accompany or follow a judgment, are separate and apart from a judgment." Levin v. State Farm Mutual Automobile Insurance Company, 510 S.W.2d 455, 458 (Mo. banc 1974). The phrase, "[i]n addition to our limit of liability," referred to the limits for damages arising out of bodily injury. The limit of Auto Club's liability on the judgment--that is, "[the] limit of liability for this coverage"--was fixed by the limit of liability stated in the declarations ($50,000).

The Whites claim that the language in Stephenson's policy mirrored language which the Supreme Court said in Levin would make an insurer responsible for all interest accruing on the entire amount of a judgment until the insurance company paid or tendered the full amount of its liability under the policy. The Levin court said that an insurer was liable for an entire judgment only if its policy said: "until the company has paid or tendered such part of such judgment as does not exceed the limit of the company's liability under the policy." Id. at 459 (emphasis added). ⁴

Stephenson's policy set its limit at the "limit of liability for this coverage." Just as the court in Levin found that "thereon" is not synonymous with "under the policy," we find that "limit of liability for this coverage" is not synonymous with "the company's liability under the policy." See also High v. Southern Farm Bureau Casualty Insurance Company, 247 Ark. 373, 445 S.W.2d 507, 509 (Ark.1969) (recognized and applied by Levin, 510 S.W.2d at 459). "[L]imit of liability for this coverage" referred to the limit of liability for the bodily injury coverage and was not pertinent to the payments provided in the supplementary provision. ⁵

Under its policy, Auto Club was obligated to pay all interest accruing on the entire judgment--even though that amount exceeded the limit of its liability coverage--until it tendered the $50,000 to the Whites. Auto Club, therefore, was liable for the interest on the entire judgment which accrued during the 19 days after the circuit court entered the original judgment and before the $50,000 was paid to the Whites. Auto Club's liability for further interest, however, ended on March 19, 1990, when it paid the Whites the $50,000 policy limit. Auto Club's policy provided that when Auto Club offered to pay the $50,000--the "limit of liability for [its] coverage"--its duty to pay interest ended. The Whites' contention is, therefore, without merit.

In their second point, the Whites assert that the circuit court erred in entering summary judgment for Gould on their claim for malpractice. ⁶ The circuit court concluded that Stephenson could not assign his malpractice claim to the Whites. We agree.

Generally, Missouri law does not permit assignment of tort claims for personal injuries, for wrongs done to persons, to reputations, or to feelings, or those based on a contract of purely personal...