Extended Stay Inc. v. American Automobile Insurance Co.
2012 Mo. App. LEXIS 825
| Mo. Ct. App. | 2012Background
- ESA appeals a trial court summary judgment in IPSI's favor on ESA's broker negligence claim (Count III).
- ESA alleges IPSI failed to procure no-gap primary insurance for Quaker, creating an uninsured gap for two years (2000–2002) that affected umbrella coverage.
- Quaker settled with Quaker’s insurers; ESA was assigned Quaker’s claims against brokers and against AAIC for extra-contractual damages.
- Consent Judgment and Settlement: ESA pursued $24.375 million against Non-Settling Insurers for the Quaker settlement, with limitations and asset protection language in the Settlement Agreement; Quaker released from further liability except as to Non-Settling Insurers’ proceeds.
- Phase I/Phase II proceedings: bench trial on garnishment against Non-Settling Insurers and damages; jury trial on Count II (AAIC) and Count III (Brokers).
- Trial court ultimately held AAIC paid $20 million in umbrella coverage; IPSI was granted summary judgment on Count III for lack of damages; final judgment discharged IPSI as a defendant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did ESA prove damages from IPSI's alleged negligence? | ESA argues a gap in coverage caused damages recoverable from IPSI. | IPSI contends no gap or damages, as AAIC's umbrella prevented any recoverable loss. | No damages shown; IPSI entitled to judgment. |
| Whether the assigned Quaker claims support damages against IPSI. | ESA argues assignment permits damages for resulting gaps. | No gap translated into damages; assignment cannot create damages. | Damages not proven; claim fails as a matter of law. |
| Whether collateral litigation costs against AAIC may be recovered from IPSI. | Costs incurred in related litigation are recoverable from the broker. | Costs were asserted against AAIC (settled) and cannot be recovered again from IPSI. | Not recoverable; double recovery barred. |
| Does the Settlement Agreement's treatment of recovery against Non-Settling Insurers foreclose further damages from IPSI? | ESA should recover $2 million or more as damages from IPSI. | Agreement caps recovery to Non-Settling Insurers' proceeds; no further damages. | Settlement language negates damages from IPSI. |
Key Cases Cited
- Busey Truck Equipment, Inc. v. American Family Mut. Ins. Co., 299 S.W.3d 735 (Mo. App. E.D. 2009) (negligent failure to procure insurance exposes broker to tort damages)
- Parshall v. Buetzer, 121 S.W.3d 548 (Mo. App. W.D. 2003) (damages must be proven with proof of actual loss)
- ITT Commercial Fin. Corp. v. Mich-Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. Banc 1993) (summary judgment burden and prima facie showing standards)
- Autry Morlan Chevrolet Cadillac, Inc. v. RJF Agencies, Inc., 332 S.W.3d 184 (Mo. App. S.D. 2010) (undisputed facts and damages nexus in broker negligence claims)
- Ameristar Jet Charter, Inc. v. Dodson Int’l Parts, Inc., 155 S.W.3d 50 (Mo. Banc 2005) (damages must be established with reasonable certainty)
- Harpagon MO, LLC v. Clay County Collector, 335 S.W.3d 99 (Mo. App. W.D. 2011) (summary judgment review standards for absence of dispute and grounds)