384 S.W.3d 224
Mo. Ct. App.2012Background
- Equitable garnishment action to reach MVG insurance proceeds to satisfy a judgment for indemnity and contribution.
- Underlying judgment found MVG liable and MVG agreed to indemnify DHP for damages arising from MVG’s negligent work.
- Secura initially defended MVG but withdrew its defense, effectively abandoning its insured.
- Damages included a $150,000 Clayco settlement and $288,927.97 in DHP defense costs.
- Trial court awarded $438,927.97 in favor of DHP against MVG, with collection limited to MVG’s insurance proceeds; Secura appeals.
- Court held Secura bound by underlying judgment on MVG’s indemnity liability; on occurrence and your-work exclusions, remanded for asset-damages delineation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Insured contract existence for indemnity | DHP asserts an insured contract indemnifying DHP. | Secura contends no insured contract existed. | Secura bound by underlying finding; insured contract evidenced despite lack of written agreement. |
| Occurrence as basis for coverage | Damages resulted from MVG’s negligence creating an occurrence. | Mathis/Hawkeye distinctions apply; not an occurrence. | Damages caused by MVG’s negligence qualify as an occurrence. |
| Your work exclusion applicability | Exclusion does not bar coverage for damages to non-MVG work. | Exclusion should bar coverage for MVG’s work damage. | Exclusion does not bar coverage for damages to work or materials not performed by MVG; remand to allocate amounts. |
| Estoppel/defense by insurer | Secura’s failure to defend should estop opposing findings. | No estoppel defense separate from liability findings. | Insurer bound by underlying judgment on indemnity issues but not on remaining coverage questions. |
Key Cases Cited
- Stark Liquidation Co. v. Florists' Mut. Ins. Co., 243 S.W.3d 385 (Mo.App. E.D. 2007) (construction of exclusions; coverage for damages to non-product property)
- Schmitz v. Great Am. Assurance Co., 337 S.W.3d 700 (Mo. banc 2011) (insurer bound by underlying litigation when able to defend/participate)
- Fostill Lake Builders, LLC v. Tudor Ins. Co., 338 S.W.3d 336 (Mo.App. W.D. 2011) (insurer’s duty to defend and consequences of refusal)
- Whitehead v. Lakeside Hosp. Ass’n, 844 S.W.2d 475 (Mo.App. W.D. 1992) (insurer bound by judgment where defense opportunity existed)
- Mathis v. American States Ins. Co., 974 S.W.2d 647 (Mo.App. E.D. 1998) (occurrence defined in part by insured’s negligence; breach distinctions discussed)