Amy Leigh Sauvain v. Acceptance Indemnity Insurance Company
2016 Mo. App. LEXIS 989
| Mo. Ct. App. | 2016Background
- In 2005 a vehicle driven by David Bowman, Jr. crossed the centerline and caused a fatal collision that produced a $6,000,000+ judgment (after insurer USAA paid $50,000). Plaintiffs are the wrongful-death and injured passengers/claimants.
- Bowman executed a Section 537.065 settlement; Plaintiffs then brought an equitable garnishment under §379.200 against Acceptance Indemnity Insurance (Acceptance), claiming Bowman was covered under Acceptance's policy.
- After remand and a bench trial, courts ultimately entered an equitable garnishment judgment against Acceptance for the $100,000 policy limit, which Plaintiffs collected.
- Plaintiffs then filed a traditional garnishment in aid of execution (Chapter 525 / Rule 90) seeking to garnish Acceptance for the remaining ~$5.9 million, alleging Acceptance breached a contractual duty to defend (which, if proved, can expose an insurer to judgment excesses).
- Acceptance moved to quash, arguing a Rule 90 garnishment in aid of execution cannot be used to adjudicate new substantive claims (like breach of duty to defend) or to award extra-contractual damages beyond what was already adjudicated; the trial court granted the motion and Plaintiffs appealed.
- The Missouri Court of Appeals affirmed, holding garnishment in aid of execution is an ancillary in rem remedy limited to enforcing existing judgments and cannot be used to decide or award damages on independent claims against the garnishee insurer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a garnishment in aid of execution (Rule 90 / Chapter 525) may be used to determine and collect extra-contractual damages for an insurer's alleged breach of duty to defend | Sauvain: Rule 90 garnishment may be used to recover full judgment against Acceptance because Acceptance's alleged failure to defend makes it liable for entire unpaid judgment | Acceptance: Rule 90 garnishment is an ancillary in rem remedy limited to enforcing an existing judgment; it cannot decide separate substantive claims (duty to defend) or award extra-contractual damages | Held: No. A garnishment in aid of execution cannot adjudicate separate claims against a garnishee insurer (like breach of duty to defend) or award damages beyond what the underlying adjudication establishes |
| Whether a debt based on alleged breach of duty to defend is a present "chose in action" subject to attachment in a Rule 90 garnishment | Sauvain: Breach-of-defense liability yields a debt the creditor can garnish | Acceptance: Such liability is not a debt "due" for Rule 90 purposes until adjudicated; garnishment cannot be used to declare that debt due | Held: A debt based on breach of duty to defend is not appropriately declared or collected via garnishment in aid of execution; court lacks authority to decide that issue in Rule 90 proceedings |
Key Cases Cited
- Sauvain v. Acceptance Indem. Ins. Co., 339 S.W.3d 555 (Mo. App. W.D. 2011) (remanding for trial on coverage issues)
- Sauvain v. Acceptance Indem. Ins. Co., 437 S.W.3d 296 (Mo. App. W.D. 2014) (affirming equitable garnishment judgment for policy limits)
- Schmitz v. Great Am. Assurance Co., 337 S.W.3d 700 (Mo. banc 2011) (insurer that breaches duty to defend may be liable for entire judgment)
- Columbia Cas. Co. v. HIAR Holding, LLC, 411 S.W.3d 258 (Mo. banc 2013) (declaratory resolution of insurer duties may permit garnishment for full settlement once duty is adjudicated)
- Johnston v. Sweany, 68 S.W.3d 398 (Mo. banc 2002) (distinguishing equitable garnishment under §379.200 from ancillary garnishment proceedings)
- Moore Auto. Grp., Inc. v. Goffstein, 301 S.W.3d 49 (Mo. banc 2009) (garnishment in aid of execution is an ancillary remedy in derogation of common law)
- State ex rel. Koster v. Cain, 383 S.W.3d 105 (Mo. App. W.D. 2012) (explaining garnishment in aid of execution enforces an existing judgment rather than creating new substantive liability)