Katina Piatt v. Indiana Lumbermen's Mutual Insurance Company, 2015 Mo. LEXIS 32

Background

Linda Nunley died when a kiln door at Missouri Hardwood Charcoal, Inc. fell and crushed her while she was working.
Plaintiffs (Nunley’s survivors) obtained a $7 million wrongful-death bench judgment against Junior Flowers, the company’s sole owner, director, and executive officer; the judgment found Flowers acted under his duties as president/executive officer and that Nunley was an employee of the corporation.
Flowers assigned his insurance claims to the plaintiffs and they sued Indiana Lumbermen’s Mutual Insurance Co. (ILM) for failure to defend and indemnify under a CGL policy and an umbrella policy.
Both policies named executive officers as insureds but expressly excluded coverage for bodily injury to an "employee of the insured" arising out of employment or performing duties for the insured; both policies also had separation-of-insureds provisions.
The circuit court granted summary judgment for ILM, concluding the employee exclusions applied because the wrongful-death claim was essentially for an employer’s failure to provide a safe workplace; this Court affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ILM had a duty to defend Flowers	Flowers was an "executive officer" insured; petition alleged "personal duty" and thus a potential for coverage	Claim alleged only employer-type negligent failure to provide safe workplace, so exclusions remove any potential coverage	No duty to defend; employee exclusions eliminated any potential coverage
Whether policies’ employee exclusions bar coverage	Separation-of-insureds and "executive officer" status prevent treating Flowers as the employer for exclusion purposes	Exclusions apply to bodily injury to an "employee of the insured" and plaintiffs sued Flowers for duties he performed as employer/agent of the corporation	Exclusions apply because the alleged negligence was in his role as employer/agent; coverage barred
Effect of separation-of-insureds clause	Plaintiffs: separation language prevents insurer from invoking exclusion based on another insured being the employer	ILM: clause preserves separate treatment but does not prevent application where the insured (Flowers) is the employer claiming coverage	Clause does not save coverage; it prevents imputation from other insureds but Flowers was the insured asserting the policy while acting as employer
Whether ILM is collaterally estopped from relitigating employment status	Plaintiffs: wrongful-death judgment found Nunley "not [Flowers’s] employee" — insurer cannot relitigate	ILM: wrongful-death pleadings and judgment involved Flowers acting as corporate officer/agent; findings do not preclude treating Nunley as an employee of the insured for policy purposes	No collateral estoppel; judgment language supports that Flowers acted as corporate officer/agent and Nunley was an employee of the corporation (thus within exclusion)

Key Cases Cited

Goerlitz v. City of Maryville, 333 S.W.3d 450 (Mo. banc 2011) (summary-judgment standard; de novo review)
Allen v. Continental W. Ins. Co., 436 S.W.3d 548 (Mo. banc 2014) (distinguishing duties to defend and indemnify; duty to defend requires potential for coverage based on facts known at outset)
Ward v. Curry, 341 S.W.2d 830 (Mo. 1960) (CGL not intended to cover employer liability for employee injuries)
Baker v. DePew, 860 S.W.2d 318 (Mo. banc 1993) (construction and effect of separation-of-insureds provision)
Kelley v. DeKalb Energy Co., 865 S.W.2d 670 (Mo. banc 1993) (duty to provide safe workplace is nondelegable employer duty; limits on personal-capacity suits)
State ex rel. Taylor v. Wallace, 73 S.W.3d 620 (Mo. banc 2002) (workers’ compensation exclusivity and preemption of certain personal-capacity claims)
Naylor Senior Citizens Housing, LP v. Side Constr. Co., 423 S.W.3d 238 (Mo. banc 2014) (corporations act through agents; relevance to suing officers)
Martin v. U.S. Fid. & Guar. Co., 996 S.W.2d 506 (Mo. banc 1999) (ambiguity in officer-insured language construed against insurer)