Whitehead v. Lakeside Hosp. Ass'n
| Decision Date | 10 November 1992 |
| Docket Number | Nos. WD,s. WD |
| Citation | 844 S.W.2d 475 |
| Parties | Kristen Jean Nicole WHITEHEAD, et al., Respondent, v. LAKESIDE HOSPITAL ASSOCIATION, et al., Respondent, Missouri Hospital Plan, Intervenor-Appellant, Robert L. Blackann, D.O., Respondent, Aline Stull, Respondent. Kristen Jean Nicole WHITEHEAD, et al., Respondent, v. LAKESIDE HOSPITAL ASSOCIATION, et al., Respondent, Missouri Hospital Plan, Intervenor-Appellant, Robert L. Blackann, D.O., Respondent, Aline Stull, Respondent. Kristen Jean Nicole WHITEHEAD, et al., Respondent, v. LAKESIDE HOSPITAL ASSOCIATION, et al., Respondent, Missouri Hospital Plan, Appellant, Robert L. Blackann, D.O., Respondent, Aline Stull, Respondent. 45105, WD 45324, WD 45511. |
| Court | Missouri Court of Appeals |
Ronald R. McMillin, R. Max Humphreys and Dana L. Frese, Jefferson City, for Missouri Hospital Plan.
Max W. Foust and James P. Frickleton, Kansas City, for Kristen Jean Nicole Whitehead.
Paul Douglas Cowing, Kansas City, for Lakeside Hosp. Ass'n.
Kirk J. Goza, Kansas City, for Robert L. Blackann.
Sally H. Harris, Kansas City, for Aline Stull.
Before ULRICH, P.J., and SHANGLER and FENNER, JJ.
This proceeding consolidates three separate appeals by Missouri Hospital Plan [MHP], a non-party, from two separate orders denying motions to intervene in the circuit court litigation, Kristen Whitehead, by her mother, next friend and individually, Karen Whitehead v. Lakeside Hospital and others, and from the judgment on the merits of the litigation. The course of that litigation, as well as the initiatives of MHP to participate, follow in sequence.
The plaintiffs Whitehead brought a medical malpractice action against Lakeside Hospital and other health care providers for brain damage injury to Kristen relating to her birth in February 1987. At the time of the birth, Lakeside Hospital had a medical malpractice insurance policy with MHP, which was a claims policy. In order for the coverage to apply, the policy required that a claim be made during the policy period. The policy period of the professional liability policy issued by MHP to Lakeside was January 1, 1987 to January 1, 1988. The malpractice action was filed on February 10, 1989. MHP denied coverage on the ground that no claim was made during the policy period. However, MHP did tender, and Lakeside Hospital accepted, a defense of the suit under a reservation of rights. MHP engaged the firm of Blackwell, Sanders, Matheny, Weary and Lombardi to defend Lakeside in the suit.
In order to resolve the dispute over coverage, MHP filed a petition for declaratory judgment, and the Whiteheads were granted intervention. [The declaratory judgment action was still pending in the circuit court at the time of oral arguments in this court.] MHP then filed in the malpractice action an application for leave to intervene "Solely to Apply for a Stay of Proceedings." The application requested the trial court to stay the Whiteheads' malpractice suit pending determination of the declaratory judgment action. The request to intervene was denied on December 1, 1989. This order was not appealed and is not before us.
On June 6, 1991, the Whiteheads entered into a settlement agreement under § 537.065, RSMo 1986, with Lakeside Hospital whereby the Whiteheads promised to limit the collection of any judgment to the assets of any insurer which insured the legal liability of Lakeside, including any proceeds available under the liability insurance policy. The agreement included the consent of Lakeside to a separate trial on the issues of liability and damages and to waive a jury. Lakeside also agreed not to defend the suit, or present evidence, or cross-examine any witnesses at trial. In the event of judgment in favor of the Whiteheads, Lakeside agreed not to request a new trial or to appeal. In event of a judgment against Lakeside in excess of $1,000,000, Lakeside agreed to unconditionally assign to the Whiteheads its right to any cause of action against MHP for bad faith, refusal to settle or other action.
In accordance with the terms of the settlement agreement, the Blackwell, Sanders firm withdrew as counsel for Lakeside in the malpractice action.
The settlement agreement was approved by the court on June 6, 1991. In response to the agreement event, MHP sought again to intervene in the malpractice action to protect its interests as a potential indemnitor under the insurance policy. Intervention was denied on July 18, 1991. The notice of appeal of that order was filed on July 26, 1991. [Appeal I ].
On August 15, 1991, the malpractice action was heard by the circuit court, and on August 16, 1991, a judgment for $8,500,000 was entered for the Whiteheads against Lakeside. On September 21, 1991, MHP appealed that judgment, "individually and on behalf of Lakeside only and solely by virtue of its position as its possible but disputed indemnitor pursuant to the aforementioned insurance policy and 'settlement agreement.' " [Appeal II ].
On August 29, 1991, MHP sought to intervene in the malpractice action for the purpose of filing a motion to vacate judgment and for new trial. Intervention was once again denied. On November 19, 1991, MHP appealed that order, "individually and on behalf of Lakeside only and solely by virtue of its position as Lakeside's possible but disputed indemnitor." [Appeal III ].
The first contention is that the denial of the successive applications by MHP to intervene in the Whiteheads' medical malpractice suit was error. [Appeal I and Appeal III ]. The first overture for intervention to contest coverage was in response to the settlement agreement between the Whiteheads and Lakeside. [Appeal I ]. The second was in response to the judgment entered for the Whiteheads after evidence was received under the plan of the settlement agreement, and for the purpose of a motion to vacate judgment and for a new trial. [Appeal III ]. 1
The assertion of right to intervene, then as now, was to "protect its interests as potential indemnitor under its insurance policy." MHP argues that the effect of the settlement agreement by Lakeside to forgo the right to defend the suit against the Whiteheads, "to cross-examine witnesses or to contest the liability and damages issue" is to leave the insurer as "the only real party in interest" so as to entitle MHP to intervention, both under Rule 52.12(a) and as a matter of due process of law.
Rule 52.12(a) grants to anyone intervention as of right in an action:
. . . . .
(2) when an applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
The rule gives to anyone who comes within its terms the absolute right to intervene a right that may be compelled by mandamus or redressed by appeal. State ex rel. Aubuchon v. Jones, 389 S.W.2d 854, 860-61[4-7] (Mo.App.1965); State ex rel. Ashcroft v. American Triad Land Co., 712 S.W.2d 62, 64 (Mo.App.1986). To come within the terms of the rule, the application must satisfy its three enumerations: (1) an interest, (2) a disposition of the action that may impede the ability of the applicant to protect that interest, and (3) inadequate representation of that interest. State ex rel. Ashcroft, 712 S.W.2d at 64.
The "interest" that qualifies for intervention as of right in an action State ex rel. Farmers Mut. Auto Ins. Co. v. Weber, 364 Mo. 1159, 273 S.W.2d 318, 321 (banc 1954).
MHP argues that shorn by the settlement agreement of the right to present evidence, or to cross-examine, or to appeal, and on terms that relieves Lakeside of any risk of personal liability, the putative insured in effect acceded to the entry of an uncontested judgment. Thus, the interest of MHP as potential indemnitor under its policy to Lakeside is not only directly affected by the judgment, but MHP alone remains to protect that interest.
The liability of an insurer as potential indemnitor of the judgment debtor does not constitute a direct interest in such a judgment so as to implicate intervention as of right in that action. Rule 52.12(a). That is because the insurer does not either "gain or lose from the direct operation of that judgment." State ex rel. Farmers Mut. Auto Ins. Co. v. Weber, 364 Mo. 1159, 273 S.W.2d at 321. An insurer does not have an interest that implicates the rule until the insurer is called upon to make indemnity as to the judgment. It is when a claim for potential indemnity becomes a demand for actual indemnity that the direct interest [right] of the insurer to intervene in the other action accrues. That "interest" is "only, and nothing more than, the right to some day in some proper forum and cause litigate its liability upon its above policy." 364 Mo. 1159, 273 S.W.2d at 322.
There has been no call upon MHP to indemnify the judgment against Lakeside nor suit to enforce the obligation to make indemnity. MHP would be entitled to litigate the question of coverage in any such proceeding. 364 Mo. 1159, 273 S.W.2d at 322; Meyers v. Smith, 375 S.W.2d 9, 13[2, 3] (Mo.1964). The right to litigate the question is also open to an insurer by declaratory judgment petition, an action independent of the tort proceeding against the putative insured. State ex rel. Farmers Ins. Co., 364 Mo. at...
To continue reading
Request your trial
-
Citizens Ins. Co. of America v. Leiendecker
...State ex rel. Mid-Century Ins. Co., Inc. v. McKelvey, 666 S.W.2d 457, 459 (Mo.App.1984). See also Whitehead v. Lakeside Hosp. Assn., 844 S.W.2d 475, 479 (Mo.App.1992). Accordingly, it is not necessary that the underlying lawsuit be fully resolved before the declaratory judgment action may b......
-
James v. Paul, Respondent, State Farm Fire
...may challenge the coverage question. See Augspurger, 940 S.W.2d at 937; Lodigensky, 898 S.W.2d at 665; Whitehead v. Lakeside Hospital Ass'n, 844 S.W.2d 475, 479-80 (Mo. App. 1992); Drennen v. Wren, 416 S.W.2d at 234. A garnishment proceeding is one forum in which Missouri courts have held t......
-
Williams v. Emp'rs Mut. Cas. Co.
...to the insured for all resultant damages from that breach of contract." Schmitz, 337 S.W.3d at 710 (citing Whitehead v. Lakeside Hosp. Ass'n, 844 S.W.2d 475, 481 (Mo. Ct. App. 1992)); see also Columbia Cas. Co. v. HIAR Holding, L.L.C, 411 S.W.3d 258, 273 (Mo. 2013)("Columbia cannot refuse t......
-
Fid. Nat'l Title Ins. Co. v. Captiva Lake Invs., LLC
...Ballmer, 923 S.W.2d 365 (Mo.Ct.App.1996); State ex rel. Rimco, Inc. v. Dowd, 858 S.W.2d 307 (Mo.Ct.App.1993); Whitehead v. Lakeside Hosp. Ass'n, 844 S.W.2d 475 (Mo.Ct.App.1992); State ex rel. Mid–Century Ins. Co. v. McKelvey, 666 S.W.2d 457 (Mo.Ct.App.1984). These cases all involved an insu......