State Farm Mutual Automobile Insurance Company (“State Farm”) appeals from the trial court’s denial of its motion to intervene in a wrongful death action filed by Sylvia Ballmer against her son, Wilbur Ballmer, arising out of the death of Daniel Ellis, Sylvia’s son and Wilbur’s half-brother, in an automobile accident in which Daniel was a passenger in a vehicle driven by Wilbur Ballmer.
This is the second time this case has come before this court. The record reveals that on September 18, 1991, Sylvia Ballmer filed this wrongful death suit against Wilbur Ballmer. State Farm provided a policy of insurance to Sharon Kulenkamp, Wilbur’s half-sister and the owner of the car he was driving at the time of the accident in question. State Farm retained an attorney for the purpose of filing an answer to the lawsuit. The attorney was instructed to appear and defend Wilbur pursuant to a reservation of State Farm’s right to withdraw from the defense and deny liability under the household exclusion provision in the policy issued to Kulenkamp. Wilbur refused State Farm’s offer and asked the attorney hired by State Farm to withdraw from the case.
State Farm filed a declaratory judgment action on November 21, 1991, asking the court to find that the policy issued to Kulen-kamp did not cover Wilbur or Daniel because of the household exclusion provision in the policy. State Farm also filed a motion for leave to intervene in the wrongful death suit for the purpose of seeking a stay of those proceedings. In a letter to Sylvia Ballmer’s attorney dated November 21, 1991, State Farm discussed the case of
Halpin v. American Family Mutual Insurance Company
which, at the time, was pending before the Supreme Court of Missouri, stating that
Hal-pin
would possibly decide the validity of the
Unbeknownst to State Farm, Sylvia Ballmer and Wilbur Ballmer executed a settlement agreement on December 2, 1991, pursuant to § 537.060 and § 537.065, RSMo 1986, which released Wilbur from the wrongful death claim and agreed that Sylvia would limit her recovery to the proceeds of the State Farm insurance policy. Prior to the convening of the hearing on State Farm’s motion for leave to intervene to stay the wrongful death action, counsel for the Ballmers filed an offer of judgment and a purported acceptance of such offer, both dated December 9, 1991, in which Wilbur Ballmer confessed judgment in the amount of $1,500,000. Following the hearing on the motions for leave to intervene and for a stay, the court granted the motions and declined to act on the offer of judgment and acceptance.
State Farm filed a motion to vacate the purported offer of judgment and acceptance on December 10,1991, setting forth the relationship between the parties and arguing that the amount of the purported settlement, the relationship between the parties, and the facts and circumstances of the case illustrated that the offer and acceptance constituted a sham and artifice designed to perpetrate a fraud upon State Farm and upon the court’s own processes. Because the wrongful death action was stayed, the trial court has neither heard the motion nor taken any action on the purported offer and acceptance of judgment.
On January 28, 1992, the Supreme Court issued an opinion in the
Halpin
case determining that the Missouri Motor Vehicle Financial Responsibility Law, §§ 303.010 — .370 rendered an otherwise applicable household exclusion unenforceable up to the minimum statutory liability limits.
In August 1993, the declaratory judgment action was tried in the Circuit Court of Henry County. The cpurt held that the insurance policy afforded no liability coverage for the death of Ellis by reason of the household exclusion, but that State Farm was obligated to provide liability coverage of $25,000, the minimum financial responsibility limits required by Missouri law, pursuant to the Hal-pin decision. The court also declared that State Farm had no duty to defend or indemnify Wilbur in the wrongful death action, could not do so without his consent, and had no right to intervene in the wrongful death action. Sylvia Ballmer, Wilbur Ballmer, and State Farm all appealed the trial court’s judgment to this court. We affirmed the trial court’s ruling in an unpublished opinion authored by Judge Paul M. Spinden and transferred the ease to the Missouri Supreme Court.
In
State Farm Mut. Auto. Ins. Co. v. Ballmer,
[I]t is unnecessary to address State Farm’s ... assertion that it has a right to intervene in the wrongful death action for the reason that State Farm has not attempted to do so. State Farm may seek to intervene in that action pursuant to Rule 52.12(a)(2). In the event of an adverse judgment, State Farm may appeal.
Id.
at 527. Thereafter, on June 1, 1995, State Farm filed a motion to intervene in the wrongful death action, claiming that it is
I. STANDARD OF REVIEW
The applicable standard of review is found in
Murphy v. Carron,
II. STATE FARM’S RIGHT TO INTERVENE
The manner in which one not a party to an action may establish an interest in the subject matter of the dispute and protect that interest is by intervention.
State ex rel. Hughes v. Smith,
[T]he applicant claims an interest relating to the property or transaction that is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.
As the rule indicates, a would-be intervenor must meet three requirements in order to intervene as a matter of right: (1) an interest in the subject matter; (2) a disposition of the action that may impede the ability of the applicant to protect that interest; and (3) the applicant’s interests are not adequately represented by the existing parties.
Whitehead v. Lakeside Hosp. Ass’n,
State Farm claims it satisfies the three requirements for intervention as a matter of right because it has a claim or interest in the transaction as a result of $25,000 in liability insurance coverage it must provide if a judgment is entered in Sylvia Ballmer’s favor. Additionally, the settlement agreement between Sylvia and Wilbur Ballmer indicates Sylvia will try to collect the full judgment from State Farm and not seek recovery from Wilbur. Second, State Farm claims its ability to protect this interest will be impaired or impeded by the judgment sought by Sylvia Ballmer in the wrongful death claim because “it is apparent plaintiff [Sylvia Ballmer] expects to contend that the amount of any judgments she obtains cannot be contested by State Farm in any later action, whether by garnishment or a subsequent proceeding to collect the entire judgment including excess over policy limits.” Finally, State Farm claims its interests will not be adequately represented by the existing parties because Wilbur Ballmer has already agreed to confess judgment in a large amount under the § 537.065 agreement with Sylvia Ballmer.
As to whether State Farm has an “interest” in the underlying action, this court has stated that “the liability of an insurer as a potential indemnitor of the judgment debt- or does not constitute a direct interest in such a judgment as to implicate intervention as a matter of right.”
Whitehead,
There has been no direct call by any party upon State Farm to indemnify any judgment
We do not believe State Farm has established that it has an “interest” in the underlying wrongful death action to justify intervention as a matter of right. We further note that any “interest” State Farm argues to exist in the cause at hand has been determined by the outcome of the declaratory judgment action resolved in Ballmer I. State Farm’s claim of intervention as a matter of right does not satisfy the standards provided in Rule 52.12 for such a claim. The trial court did not err in denying State Farm’s motion to intervene.
III. STATE FARM’S CONSTITUTIONAL CLAIMS 1
State Farm claims that a denial of its alleged right to intervene in the wrongful death action pursuant to Rule 52.12 constitutes a denial of its right of access to the courts protected by Mo. Const, art. I, § 14 (1945), and its due process rights protected by Mo. Const, art. I, § 10 (1945) and the U.S. Const, amend. XIV. State Farm concludes that due to the terms of the settlement agreement between Sylvia Ballmer and Wilbur Ballmer, it is the only party from whom Sylvia will seek to collect the judgment, therefore it has an interest it must be allowed to protect.
Insurers cannot force insureds to accept a reservation of rights defense.
State ex rel. Mid-Century Ins. Co., Inc. v. McKelvey,
An insurers’ decision to file a declaratory judgment action rather than to drop their reservation of rights defense is a risky one.
Whitehead,
The insurer has the opportunity to control the litigation by accepting the defense without reservation. If it elects some other course it forfeits its right to participate in the litigation and to control the lawsuit. If its decision concerning coverage is wrong it should be bound by the decision it has made.
State ex rel. Rimco, Inc. v. Dowd,
Recognizing the dilemma an insurer is in when it believes it has a valid defense to coverage, the courts have provided that the insurer may file a declaratory judgment action to determine whether its policy provides coverage.
McKelvey,
State Farm chose to continue asserting a reservation of rights defense through its declaratory judgment action. The law treats that decision as a refusal to defend. 2 As a result, State Farm has given up its right to involve itself in the defense of Wilbur Ballmer.
State Farm asserts, however, that it has an independent right to intervene in the wrongful death suit because it has an interest in the ease that is not being protected by the parties. As we determined in the preceding portion of this opinion, any claimed interest by State Farm, if such exists, is not sufficient to require intervention as a matter of right. That a settlement has been reached between Sylvia Ballmer and Wilbur Ballmer has no effect on the issue, especially when that settlement has not yet been approved by the court.
Whitehead,
IV. CONCLUSION
State Farm has failed to satisfy the elements required for intervention as a matter of right pursuant to Rule 52.12. Also, because State Farm has failed to establish a sufficient interest in the wrongful death action, its constitutional claims must fail. State Farm has already taken advantage of all the protection it is due under current Missouri law.
All Concur.
Notes
. This portion of our opinion is derived predominantly from the opinion of another panel of this court in our unpublished decision in Ballmer I. In the opinion authored by Judge Paul M. Spin-den, the alleged violation of State Farm’s constitutional rights as a result of a denial of its motion to intervene was fully addressed. As we have noted, the Supreme Court determined that there was no need to address this issue in their opinion because State Farm had not yet moved to intervene in the wrongful death action. Now that State Farm has timely appealed the denial of its motion to intervene in the wrongful death action, the issue is properly before this court. Having reviewed the opinion authored by Judge Spin-den, we find it to have accurately resolved the question presented to us and adopt a substantial portion of that opinion as our own below.
. The Supreme Court found State Farm’s refusal in this case to be justified when it determined State Farm had no duly to defend Wilbur Ballmer.