Bar Plan Mutual Insurance Co. v. Chesterfield Management Associates
2013 Mo. App. LEXIS 485
| Mo. Ct. App. | 2013Background
- CMA sued SSB and Kime for mishandling an $11M real estate transaction; CMA gave notice in Feb 2009.
- The Bar Plan issued two claims-made policies: 2008 policy ($250k limit) and 2009 policy ($250k), both with MICC provisions.
- On Dec 22, 2009 CMA’s insured designee requested settlement within policy limits; CMA later added Count IV alleging inadequate insurance coverage.
- CMA and Bar Plan engaged in mediation; CMA added Count IV after initial settlement discussions; mediation agreement excluded Bar Plan from the mediation.
- In Feb 2011 CMA demanded settlement on Count IV under the 2009 policy; Bar Plan rejected; Bar Plan filed a declaratory judgment seeking to clarify coverage; trial court granted partial summary judgment that all counts I–IV were one claim under the 2008 policy with no 2009 coverage.
- Kime’s counterclaims for bad faith were adjudicated alongside discovery issues, and the trial court ultimately entered final judgment affirming the Bar Plan’s positions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| MICC scope and relation back of Count IV | Kime: Count IV is not related to Counts I–III under MICC. | Bar Plan: MICC ties Count IV to Counts I–III as a single claim under 2008 policy. | Count IV relates back; 2009 policy does not cover Count IV; Counts I–IV are a single claim under 2008 policy. |
| Bad faith handling of settlement | Kime: Bar Plan acted in bad faith in refusing to settle under 2009 limits. | Bar Plan offered full 2008 limit for a complete release; no bad faith given the MICC and settlement records. | No bad faith; Bar Plan offered full policy limits and acted within its contractual rights. |
| Motion to quash discovery | Kime sought full client file; argues waiver and client ownership of file. | SSB/Bar Plan asserted attorney-client and insurer-insured privileges; limited waivers exist. | No prejudicial error; trial court did not abuse discretion; limited waiver and privileges supported quash. |
Key Cases Cited
- Todd v. Missouri United School Insurance Council, 223 S.W.3d 156 (Mo. banc 2007) (claims-made policy framework; related to timing of claims)
- Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co., 5 Cal.4th 854 (Cal. 1993) (MICC relatedness; broad meaning of ‘related’ not inherently ambiguous)
- A.C. Strip v. Home Ins. Co., 868 F.2d 181 (6th Cir. 1989) (MICC back-relating multiple claims; related claims share single limit)
- Zumwalt v. Utilities Ins. Co., 360 Mo. 362, 228 S.W.2d 750 (Mo. 1950) (bad faith in settlement decisions; insurer’s duty not to mishandle within policy limits)
- State ex rel. Great Am. Ins. Co. v. Smith, 574 S.W.2d 379 (Mo. 1978) (attorney-client privilege foundational protection)