Insurance Law Update
April 2015
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In This Issue
Case Law Updates

Court Approves Open-and-Obvious Defense Instruction in Trip-and-Fall Trial   

In Medley v. Joyce Meyer Ministries, Inc., No. ED101434 (Mo. App. E.D., April 7, 2015), the Missouri Court of Appeals discussed, in dicta, a defense instruction that permitted the jury to find against the plaintiff if the jury found that the condition at issue was an "open and obvious" one. While the majority of the Court's seventeen-page decision addressed issues of possession of, and control over, the area of the fall, the Court's decision is significant because the Court approved the submission of the defendant's affirmative defense instruction that authorized the jury to return a defense verdict in the event the jury concluded that the allegedly dangerous condition was so open and obvious that the plaintiff knew or by using ordinary care could have known that the condition was not reasonably safe. 

Definition of "Underinsured Motor Vehicle" Is Not Ambiguous

In Burger v. Allied Prop. & Cas. Ins. Co., No. 4:14-CV-393-RWS (E.D. Mo., March 31, 2015), the United States District Court for the Eastern District of Missouri concluded the insurer's definition for "underinsured motor vehicle" was clear and unambiguous where the insurer defined an "underinsured motor vehicle" as one with liability limits less than those of the UIM limits in the insurer's policy. Rejecting various ambiguity challenges, the District Court found the insured was not entitled to recover UIM benefits under the insurer's policy's because the accident did not involved an "underinsured motor vehicle" in that the tortfeasor's liability limits were equal to the insurer's UIM limits. The Burger decision demonstrates, despite the many pro-policyholder decisions addressing UIM coverage in Missouri, that satisfaction of the definitional requirement remains a critical factor in determining the availability of UIM coverage.

Uninsured Motorist Set Off Provision Held Valid   

In Hayes-Schneiderjohn v. GEICO General Ins. Co., No. 4:14-CV-01547-JCH (E.D. Mo., April 10, 2015), the United States District Court for the Eastern District of Missouri, in finding the insured plaintiffs were not entitled to UM coverage under a GEICO UM coverage part, upheld the policy's set-off provision as a complete defense to coverage. The District Court explained that since a joint tortfeasor had paid $100,000 in settlement to GEICO's insureds, the insureds were not entitled to UM coverage because the policy's UM limit was $100,000, despite the insureds' contention that their damages were caused by an uninsured phantom vehicle. 

Court Upholds "Owned Auto" Exclusion 

The Missouri Court of Appeals, in Mendota Ins. Co. v.  Lawson, No. WD77483 (Mo. App. W.D., March 24, 2015), held the insurer's "owned auto" exclusion in an automobile liability policy was clear and unambiguous and, thus, barred coverage for a wrongful death action brought against its insured who was operating an owned vehicle that was not a covered auto under the insurer's policy. The Court, in ruling for the insurer, further held the exclusion did not violate Missouri's Motor Vehicle Financial Responsibility Law and, thus, the insurer was not required to provide the statutory minimum coverage. The Court explained the Missouri Supreme Court's recent decision in Dutton v. American Family Mut. Ins. Co., No. SC94075 (Mo. banc, Feb. 3, 2015), controlled the question. In Dutton, the Supreme Court held that when a policy unambiguously bars coverage for the insured's use of an owned vehicle that is not designated as a covered auto under the policy, the Financial Responsibility Law does not require the statutory minimum coverage.

Insurer in Equitable Garnishment Action May Not Take Credit for a Set Off 

In another equitable garnishment action that followed the insurer's declination of coverage and the entry of an uncontested judgment against the insured, the Missouri Court of Appeals held the insurer was bound by the amount of the underlying judgment. The Court of Appeals, in McDonald. v. Insurance Co. of the State of Pennsylvania, No. WD77854 (Mo. App. W.D., March 31, 2015), held the insurer was collaterally estopped from attacking the judgment because the insurer had wrongfully denied coverage. In addition, the Court rejected the insurer's argument that it should receive a credit for payments made by first-party insurers to the insureds because they would qualify as collateral sources. The McDonald decision, which makes for recommended reading, joins the swelling ranks of decisions in Missouri that illustrate the pitfalls that insurers face when they deny coverage outright, and do not provide a defense.

Court Allows Class Certification in an Asbestos Medical Monitoring Case  

In a very broad and far-reaching decision, the Missouri Court of Appeals in Elsea v. U.S. Eng'g Co.No. WD77687 (Mo. App. W.D., March 17, 2015), reversed the trial court's decision refusing to grant class certification in a medical monitoring case, holding the trial court erred when it considered contested evidence on the claim's merits at the class certification hearing. In reversing the trial court, the Court of Appeals held that trial courts must take as true the Plaintiff's allegations in deciding class certification. The Court further held that since the class action was a medical monitoring case, and not a personal injury case, the class was identifiable and manageable, and that the merits of the medical monitoring claim would be a matter to be decided at a subsequent jury trial.

Carrier Pays Twice in Settlement of Uninsured Motorist Death Claim  

In Braughton v. Esurance Ins. Co.No. WD77686 (Mo. App. W.D., March 17, 2015), the Missouri Court of Appeals held an insurer providing UM coverage had to pay its limits twice in a case in which the insurer had agreed to pay its UM policy limits to the decedent's husband, to the exclusion of the decedent' minor children. In a case of first impression, the Court of Appeals ruled that a court-approved settlement did not bar the children from bringing their own claim because the children were not independently represented by a guardian ad litem to protect their interest at the hearing approving the settlement. The insurer's settlement with the father, who was later convicted of molesting the children, was made without any protections for the minor children and, thus, since the minor children were also insureds under the policy, they had standing to bring their own UM claim.

County Waived Sovereign Immunity by Purchasing Liability Insurance

The United States Court of Appeals for the Eighth Circuit, in Argonaut Great Central Ins Co., v. Audrain County, No. 13-3252 (8th Cir., March 9, 2015), held that Defendant Audrain County had waived its common-law sovereign immunity by purchasing liability insurance coverage. In an action in which the plaintiff alleged that the failure of the County's 911 dispatcher to properly monitor an alarm system allowed a burglary and fire to occur, the Eighth Circuit held the County could be sued because its liability policy did not include a sovereign immunity endorsement that preserved sovereign immunity as a defense.

Lawyer not Covered under Errors & Omissions Policy for Business Transactions with a Client    

When a lawyer enters into a business relationship with a client involving loans for which the insured lawyer received commissions, the lawyer's Errors & Omissions coverage did not cover the lawyer's actions in a subsequent lawsuit brought against the lawyer by the client. The Missouri Supreme Court, in Taylor v. Bar Plan Mut. Ins. Co., No. SC94250 (Mo. banc, March 10, 2015), held the insurer's "legal representative of investors" exclusion unambiguously barred coverage for the claim. The exclusion barred coverage for claims arising out of the lawyer's representation of investors in an enterprise in which the lawyer owns an equity interest or for which the lawyer receives a commission from an entity other than the investor. Based on the facts of the case, the Missouri Supreme Court held that no reasonable attorney purchasing the subject insurance policy would understand the policy to cover the lawyer's conduct in advising the client on the loans.

Official Immunity Applies to Fireman Responding to an Emergency 

A fireman, who responded to an emergency in his own vehicle, was protected by the official immunity doctrine. In Rhea v. Sapp, No. WD77301 (Mo. App. W.D., March 3, 2015), the Missouri Court of Appeals held that, even though the defendant fireman was speeding when he struck the plaintiffs, he was cloaked with official immunity and could not be sued because he was responding to an emergency at the time of the accident.

Recent Trial Results

Trip-and-Fall Case Concludes with Defendant's Verdict

Irene J. Marusic brought in a defendant's verdict when a Greene County jury returned a unanimous verdict for her client who owned a historic banquet hall. The plaintiff tripped and fell on a step leading to one of the hall's upper rooms and incurred $90,000 in medical bills. The jury found no fault on the defendant business owner's part.

Defendant in Auto Collision Trial Gets Unanimous Verdict

Jacqueline M. Kinder received a defendant's jury verdict in the City of St. Louis in a case in which the plaintiffs claimed over $40,000 in medical expenses. The plaintiffs claimed Jackie's client ran into their vehicle while the defendant claimed the plaintiffs had cut him off on the highway. The jury returned a unanimous verdict for Jackie's client.     

No Viable Cause of Action against Condo Association

In a lawsuit brought by condominium owners against their condominium association, Patrick A. Bousquet convinced the appellate court that the condominium owners had no viable cause of action against the association. In a complex action over condominium fees and expenses, Patrick obtained a complete victory for the condominium association.

Unanimous Defense Verdict in Medical Malpractice Trial
Christine A. Vaporean and Kroopa Desai obtained a unanimous defense verdict in federal court for their client, a physician on a prison medical staff, in a case in which a prison inmate alleged medical malpractice and deprivation of his constitutional rights related to his medical care while incarcerated at the St. Louis County Jail.  

Summary Judgment for Insurer in Stacking Case

Russell F. Watters obtained summary judgment in Pettis County, Missouri, for his insurance company client in a $200,000 UM stacking case. The court found the policy's anti-stacking language to be clear and enforceable.  

Appellate Victory for Rental Car Company Insurer

Russell F. Watters, on behalf of a national rental car company and its insurer, obtained an appellate court victory when the appellate court held there was no coverage for an unauthorized driver of a rental car. The appellate court, in ruling for Russ's clients, ruled that prohibitions in the rental agreement concerning the illegal use of the rental vehicle were valid and enforceable, and, thus, barred coverage for the vehicle's driver who had been sued by a third party who was injured as a result of an accident involving the rental vehicle.

Defendant's Verdict in Madison County Auto Collision Trial
John P. Cunningham obtained a defense verdict in an auto collision trial in Madison County. The plaintiff in the minor rear-end collision case claimed neck and back injuries and $30,000 in medical bills. The jury returned a verdict for the defendant.
Summary Judgment Affirmed in Wheelchair Accident Case
John P. RahoyEdward W. Zeidler II, Teresa M. Young and Kelly M. Brunie convinced the Missouri Court of Appeals to affirm a summary judgment in their defendant's favor. In this case, the defense presented testimony that the plaintiff had disembarked from a transport van and traveled several feet from the van before falling from her wheelchair. The plaintiff disputed this testimony by introducing statements found in plaintiff's medical records suggesting the accident took place as she disembarked. On appeal, the Court held that the trial court correctly disregarded the hearsay statements contained in the plaintiff's medical records, holding the statements did not fall within the "treating physician" hearsay exception because statements regarding how and where the accident occurred were not pertinent to the plaintiff's treatment.
Limitation-of-Liability Provision in Defendant's Contract Not Enforceable in Business Litigation Case
David R. McCourt and Russell F. Watters obtained partial summary judgment in a business litigation case in the federal court, convincing the district court that the $50,000 limitation-of-liability provision in the defendant's contract with the plaintiff was not an enforceable defense to their client's claim. This ruling increased the realm of potentially covered damages for their client by $11 million.

Insurance Company Wins First-Party Fraud Case

David P. Bub brought in a defendant's jury verdict in a first-party fraud case in Morgan County, Missouri, on behalf of his insurance company client. The jury, in ruling for the insurer, found the insured had committed fraud in a $125,000 property damage claim.  

District Court Rules for Insurer in Class Action Pollution Case

Russell F. Watters, T. Michael Ward, Robert L. Carter, and David R. McCourt obtained summary judgment in a large class action pollution case in the United States District Court for the Eastern District of Missouri. The district court sustained their insurance company client's motion for judgment on the pleadings, finding the insurer's pollution exclusion provided a complete defense to coverage for the substantial underlying judgment that was entered against the insured following a Section 537.065 agreement.

Summary Judgment for Defendant in Uninsured Motorist Claim

Irene J. Marusic and Alexandra C. Wells won summary judgment for their insurance company client in an uninsured motorist case in federal court. The court held the set-off provision in the insurer's UM coverage part was valid and enforceable and, thus, provided a complete defense to the insureds' UM claim.

In the News
Brown & James Attorney Speaking Engagements/Presentations

Coming up

Steven H. Schwartz will moderate the general session of "All Hands on Deck: Pressing Cyber Liability Issues," at ALFA International's 2015 Insurance Law Round Table,  June 10-12, 2015. Steve will also present at ALFA International's 2015 Labor & Employment Practice Group Seminar on July 22-24, 2015.


Elaine M. Moss will guide a Women's Initiative discussion, "The Evolution of 'Success,'" at ALFA International's 2015 Insurance Law Round Table, June 10-12, 2015.


Denise Baker-Seal is serving as  a liaison for the Women's Initiative event at ALFA International's 2015 Labor & Employment Practice Group Seminar on July 22-24, 2015.


Edward W. Zeidler II was a panelist for a session addressing video surveillance issues at the National Retail & Restaurant Defense Association Annual Conference February 11-13, 2015.

Kristie S. Crawford served on the 2015 Mid Year Meeting planning committee for the National Association for Women  Lawyers (NAWL) event held on March 5.  

Elaine M. Moss co-authored "It's Bound to Happen: Managing Losses For the Inevitable Data Breach," an article presented at ALFA International's 2015 International Client Seminar held March 5-8, 2015.  

During the week of April 13, 2015 Joseph R. Swift co-presented a mock corporate representative deposition at Performance Food Group's "Journey to Safety Excellence" Safety Summit 2015.

Timothy J. Wolf was a keynote speaker for "Ferguson: Emergency Management, Response and the Implications on Insurance," a program sponsored by the St. Louis CPCU Society Chapter on April 14, 2015. The seminar addressed the emergency responses to the civil unrest in Ferguson. Tim's presentation focused on coverage under first-party property policies, policies covering business interruption and lost business income, homeowner's policies, and law enforcement policies. Robert McCulloch, the St. Louis County Prosecuting Attorney, also spoke at the seminar.

Philip L. Willman presented to the third-year students in the Washington University physical therapy program on risk management and preparing for depositions on April 21, 2015.   

If you are interested in having a Brown & James attorney present/speak on industry/legal-related topic for your company, please contact your BJPC lawyer, or contact Mary Wilson ( for more information.
Contact us with any questions:

T. Michael Ward
Managing Principal
Russell F. Watters
Brown & James, P.C. is a Midwest regional law firm with more than 100 attorneys representing companies in litigation, appeals and insurance coverage matters.

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