606 S.W.3d 181
Mo. Ct. App.2020Background
- McConnell was injured on CS&L’s premises; CS&L had Covington coverage; Vangard (security) had a West Bend policy and provided security under an oral agreement with CS&L.
- CS&L and Vangard each tendered defense; West Bend defends Vangard but refused to defend CS&L; Covington also refused to defend CS&L (exclusion).
- CS&L entered a § 537.065 settlement with McConnell and the parties submitted McConnell’s claim to binding arbitration, which awarded $3,000,000 against CS&L; that award was confirmed as a judgment.
- McConnell filed equitable garnishment under § 379.200 against West Bend (and others); CS&L cross-claimed against West Bend for bad faith and breach of the duty to defend.
- West Bend moved to dismiss for failure to state a claim, arguing CS&L is not an insured under its policy; the trial court dismissed McConnell’s and CS&L’s claims with prejudice and certified the judgment for immediate appeal.
- The appellate court reviewed de novo and affirmed, holding the petitions failed to plead ultimate facts showing CS&L was covered by West Bend’s policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether equitable garnishment alleged that West Bend’s policy covered CS&L | McConnell alleged West Bend’s commercial policy provided coverage to CS&L for the incident (referencing the policy) | West Bend: petition asserts only legal conclusion; plaintiffs failed to plead ultimate facts showing CS&L was an insured or that policy covered judgment | Dismissed — plaintiff must plead ultimate facts showing insurer’s policy covered the insured; mere legal conclusion insufficient |
| Whether CS&L pleaded bad faith / breach of duty to defend against West Bend | CS&L alleged West Bend breached duty to defend and acted in bad faith by refusing to defend CS&L | West Bend: bad faith/duty-to-defend claims require existence of a contract obligating West Bend to defend CS&L (i.e., CS&L must be an insured) and plaintiffs pleaded only legal conclusions | Dismissed — coverage is an element; plaintiffs failed to allege ultimate facts that CS&L was an insured, so breach/bad-faith claims fail |
| Whether West Bend’s offer to defend waived coverage defenses or created coverage | Plaintiffs argued West Bend waived the right to contest coverage by offering an unconditional defense | West Bend: waiver/estoppel cannot create coverage where none exists; the waiver allegation is a legal conclusion unsupported by ultimate facts | Rejected — waiver cannot create coverage; allegation was a legal conclusion and insufficient to survive dismissal |
| Whether the dismissal was a final, appealable judgment | Plaintiffs sought Rule 74.01(b) certification to appeal dismissal as final despite related claims pending against other defendants | West Bend: dismissal disposes of claims against it and is properly appealable once certified; dismissal should be reviewed on merits | Court exercised jurisdiction (distinguishing Butala) and affirmed dismissal on the merits |
Key Cases Cited
- R.M.A. by Appleberry v. Blue Springs R-IV Sch. Dist., 568 S.W.3d 420 (Mo. banc 2019) (de novo review and requirement to plead ultimate facts)
- Musser v. Musser, 221 S.W. 46 (Mo. 1920) (legal conclusions are not ultimate facts)
- Hendricks v. Curators of Univ. of Mo., 308 S.W.3d 740 (Mo. App. W.D. 2010) (court may disregard conclusory legal allegations)
- Whitney v. Aetna Cas. & Sur. Co., 16 S.W.3d 729 (Mo. App. E.D. 2000) (waiver/estoppel cannot create insurance coverage)
- Kretsinger Real Estate Co. v. Amerisure Ins. Co., 498 S.W.3d 506 (Mo. App. W.D. 2016) (elements for equitable garnishment)
- Truck Ins. Exch. v. Prairie Framing, LLC, 162 S.W.3d 64 (Mo. App. W.D. 2005) (duty to defend distinct from duty to indemnify)
- Willamette Indus., Inc. v. Clean Water Comm’n, 34 S.W.3d 197 (Mo. App. W.D. 2000) (conclusory allegations and legal conclusions insufficient)
- Clayborne v. Enter. Leasing Co. of St. Louis, LLC, 524 S.W.3d 101 (Mo. App. E.D. 2017) (elements required to state breach of contract)