Utica Mutual Insurance Company appeals the judgment entered upon a jury verdict for the plaintiff, Heartland Payment Systems, L.L.C., on its claim for insurance benefits against Utica. We affirm.
Factual Background
Heartland is a computer processing center that processes credit-card transactions for retail merchants that have contracted with it for credit-authorization services. 1 The instant case and coverage dispute arises оut of Heartland’s processing credit-card transactions for Golf Concepts, Inc., a company that sold golf clubs through telephone sales orders. Golf Concepts did not have sufficient funds to satisfy all of its customers’ refund claims, thus creating un-collectible chargebacks for Heartland. 2 Heartland sought to recover its losses resulting from these uncollectible charge-backs under two insurance policies.
To protеct itself against the possibility of chargebacks it could not recover, Heart
Under the Banclnsure policy, denominated as “Plastic Card Fraud Policy for Financial Institutions,” Banclnsure agreed to indemnify Heartland for the following: merchant fraud, merchant’s customer fraud, electronic terminal fraud, telephone sales and mail-order merchant fraud, and telephone sales and mail-order merchant’s customer fraud.
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The policy had an aggre
Heartland filed proofs of losses with both Utica and Banclnsure. In its proof of loss submitted to Utica, Heartland claimed a loss of outstanding chargebacks for returns and non-delivery of golf clubs in the amount of $528,899.17. This proof of loss was subject to amendment, and Heartland filed a seсond proof of loss with Utica some six months later. In this second proof of loss, Heartland claimed $1,054,000 in uncollectible chargebacks as a result of Golf Concepts’ acts. 6
After investigation, Utica informed Heartland that it had concluded that Golf Concepts committed covered acts under the policy. Utica further acknowledged that Heartland had provided Utica -with data establishing that, to date, the total overdraft balance was $1,473,270.44. Uti-ca took the position that, because of the effect of the two “other insurance” clauses in the Utica and Banclnsure policies, it was responsible for only a portion of the covered losses Heartland had sustained. Utica asserted that Banclnsure’s policy applied on a pro-rata basis with its indemnity policy for any loss in excess of the $500,000 deductible in the Banclnsure policy. Basеd on this position and its construction of the two insurance policies, Uti-ca calculated that it owed Heartland $519,478.80, and tendered a check for that amount.
Heartland also made a claim under the Banclnsure policy for the uncollectible chargebacks on the Golf Concepts account. In the proof of loss submitted to Bancln-sure, Heartland claimed a total loss in the amount of $1,473,957.44 as a result of Golf Conсepts’ various fraudulent acts. Ban-clnsure declined to make any payment.
Heartland filed suit against Utica and Banclnsure. In its action against Utica, Heartland alleged it had sustained losses in excess of $1,293,024.14 as a result of the acts of Golf Concepts. 7 Heartland claimed that Utica was obligated to pay the full policy limit and sought to recover the remaining balance of Utica’s $1.2 million limit of liability — $680,526.20—plus interest. As against Banclnsure, Hеartland alleged it had sustained losses in excess of $1,293,024.14 as a result of certain fraudulent acts by Golf Concepts. Heartland sought indemnification from Banclnsure for all losses caused by the fraudulent acts of Golf Concepts in excess of the $1.2 million limit insured by Utica, up to Ban-clnsure’s policy limit of liability of $10 million dollars.
In addition to filing answers, both Utica and Banclnsure filed cross-claims against each other. In Banelnsure’s cross-claim against Utica, Banclnsure argued that under its “other insurance” clause, its policy provided coverage only in excess of that provided by Utica. Banclnsure sought declaratory relief from the court stating that
After a period of discovery, various motions for summary judgment were filed by both Utica and Banelnsure. 8 Among these motions was Banelnsure’s motion for partial summary judgment on the issue of primary versus excess coverage. In this motion, Banelnsure requested the trial court to enter judgment finding that the Utica policy was the primary insurer of the losses claimed by Heartland as a result of the chargebacks incurred on the Golf Concepts account and that Banelnsure coverage is excess only for those specific losses that resulted from fraud. In denying this motion, the trial court ruled that “both policies identify and cover the same risk, i.e., loss to Heartland resulting from acts of fraud committed by Golf Concepts.” The trial court further noted that under Missouri law, although “other insurance” clauses are enforceable, when two policies cover the same risk and contain closely similar “other insurance” clauses, the clauses are not enforced, and each insurer is liable for its pro-rata share of the loss based upon a comparison of the policy limits. The trial court also ruled that with respect to the Golf Concepts claim, the insurance policies issued by Banelnsure and Utica afforded Heartland concurrent coverage.
Just prior to trial, Heartland and Ban-clnsure settled, with Heartland receiving $826,724.90 for the losses it suffered on the Golf Concepts account. 9 Heartland then proceeded to trial on its claim against Uti-ca. Heartland filed a pretrial motion in limine to prevent Utica from presenting any evidence that Heartland was covered by the Banelnsure policy and to prevent Utica from introducing any evidence or argument that since there was concurrent coverage, Utica’s policy provided coverage for only a portion of Heartland’s losses. In support of its motion, Heartland claimed that because Utica was attempting to disclaim certain amounts of coverage as being concurrently covered under another policy, and because the policy issued by Utica provided coverage even in the absence of fraud on the part of Golf Concepts, that Utica thus had the burden of proving which transactions and losses were the result of fraud, and therefore subject to proration with the Banelnsure policy. Heartland further claimed that Utica was rеquired to present expert testimony to show which chargebacks were the result of fraud, and that because Utica failed to designate any experts, it could not support any argument that there were losses for which there was concurrent coverage. The trial court granted Heartland’s motion and sustained Heartland’s subsequent trial objections to the introduction of evidence and argument of the existence of the Ban-clnsure policy. 10
Discussion
Utica raises three points on appeal. First, Utica аlleges the trial court erred in ruling that the proofs of loss were not sufficient evidence of Golf Concepts’ fraud. In a related claim, Utica next alleges that even if it was required to produce evidence on fraud other than the proofs of loss, the trial court erred in ruling that Utica was required to produce expert testimony on the issue of fraud. And third, Utica claims the trial court erred in precluding it from presenting evidencе of Banclnsure’s settlement. Although Utica raises three separate points on appeal, the underlying argument for each point is essentially the same. Utica complains that it was forced to pay more than its pro-rata share of Heartland’s losses.
Utica’s position that it is only liable for its pro-rata share of Heartland’s losses is based on its interpretation of the two policies at issue in this case, and on its аpplication of a general rule governing “other insurance” clauses.
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Under that general rule, “when two policies both contain similar ‘other insurance’ clauses, the clauses are treated as mutually repugnant and are disregarded.”
Federal Insurance Company v. Gulf Insurance Company,
In this case, the Utica and Banclnsure policies both contained “other insurance” clauses. Although expressed in different ways, the meaning and intent of each clause is the same — if there exists other insurance covering the loss, the insurer will only provide excess coverage over the limits of the other policy. Because the Utica and Banclnsure policies contain like excess “other insurance” clauses, the provisions are mutually repugnant, and the clauses arе to be disregarded. Neither policy contains any further “other insurance” provisions purporting to limit their liability. Accordingly, Heartland’s losses are to be prorated between Utica and Ban-clnsure in proportion to the amount of coverage by their respective policies.
See Federal Insurance,
That the losses here are prorated between Utica and Banclnsure is of no benefit, however, to Utica on its current claims of triаl-court error in the exclusion
And so, here, even though Heartland’s losses are to be prorated between Utica and Banclnsure, Utica remained contractually obligated to Heartland under its policy to cover the full extent of Heartland’s covered losses, up to the policy limit. Uti-ca sought to introduce evidence regarding Banclnsure’s concurrent coverage, in an effort to limit damages and reduce the amount Heartland could recover from Uti-ca. In this case, however, such evidence of Banclnsure’s concurrent coverage was irrelevant and properly excluded. 12
To the extent Utica has paid more than its pro-rata share, it may yet have a remedy. Utica may have a right to assert a cause of action against Bancln-sure for equitable contribution. Equitable contribution is the right to recover from a co-obligor who shares liability with the party seeking contribution.
Fireman’s Fund,
The judgment is affirmed.
Notes
. Heartland is essentially the middleman between these individual retail merchants and various credit-card companies. When a customer makes a purchase with a credit card, the merchant uses Heartland to obtain verification for the purchase from the credit-card company. The customer's credit-card information is sent to Heartland’s computer center, and then relayed to the credit-card company to obtain authorization for the purchase. Once the purchase is authorized or declined, that information is then sent back from the credit-card company to Heartland, and from Heartland back to the merchant. After a purchase is approved, Heartland deposits funds in the merchant’s account and then ultimately collects payment from the credit-card company.
. As рart of processing credit-card transactions, Heartland processes chargebacks on behalf of the bank or financial institution issuing the credit cards. If a customer protests a credit charge on their statement, and the merchant declines to refund their money, the customer can lodge a complaint with the bank that issued the credit card and ask the bank for credit. When this occurs, the issuing bank generates a chargеback, crediting the customer’s account. The amount is then deducted from the sums the credit-card company pays to Heartland. It is then up to Heartland to receive reimbursement from the merchant. To do so, Heartland may either deduct the amount from the merchant's next deposit or it may debit the merchant’s bank account. If there are insufficient funds to cover the chargeback, an account receivable is сreated. An account receivable becomes an uncollectible chargeback when Heartland determines it cannot recover that sum from the merchant.
. Utica’s policy defined a loss, in part, as follows: a "monetary loss sustained by the insured as a direct result of an 'uncollectible chargeback’ occurring on or after the 'retroactive date,' if any....”
. Utica's policy defined a "Covered act," as the following acts committed by a "merchant":
(1) Failing to reimburse a cardholder following nondelivery of a product to such cardholder;
(2) Processing mail order transactions not authorized by the Insured;
(3) Processing telephone order transactions not authorized by the Insured;
(4) "Factoring” of "bank card” transactions;
(5) Misappropriating cardholder funds on deposit with the "merchant”;
(6) Making material misrepresentations in a merchant application to the Insured;
(7) Processing "bank card” transactions not authorized by a cardholder;
(8) Using deceptive or misleading methods to solicit funds form a cardholder; or
(9) Use of counterfeit, lost or stolen credit numbers by "merchants.”
. These are set out in Banclnsure’s policy:
A.MERCHANT FRAUD
Loss resulting directly from the Insured's Uncollectible chargeback, or series of Un-collectible chargebacks, to a Merchant to the extent that the chargeback, or series of chargebacks, is the result of fraud perpetrаted on the Merchant by the Merchant's customer involving the use of Plastic Cards, but only when the chargeback is uncollectible because the Merchant is a debtor in Bankruptcy.
B. MERCHANT'S CUSTOMER FRAUD
Loss resulting directly form the Insured's Uncollectible chargeback, or series of Un-collectible chargebacks, to a Merchant to the extent the chargeback, or series of chargebacks is the result of fraud perpetrated on the Merchant by the Merchant’s customer involving the use of Plastic Cards, but only when the chargeback is Uncollectible because the merchant is a debtor in Bankruptcy.
C. ELECTRONIC TERMINAL FRAUD
Loss resulting directly form the fraudulent use of a Plastic Card at an Electronic Terminal.
D. TELEPHONE SALES AND MAIL ORDER MERCHANT FRAUD
Loss resulting directly from an Uncollectible chargeback, or series of Uncollectible chargebacks, to a Merchant to the extent the chargeback, or series of chargebacks, is the result of fraud committed by the telephone sales and/or mail order Merchant(s) involving the use of a Plastic Card.
E. TELEPHONE SALES AND MAIL ORDER MERCHANT’S CUSTOMER FRAUD
Loss resulting directly from the insured's Uncollectible chargeback, or series of Un-collectible chargebacks, to a Merchant to the extent the chargeback, or series of chargebacks, is the result of fraud perpetrated on the telephone sales and/or mail order Merchant by the telephone sales and/or mail order Merchant's customer involving the use of Plastic Cards, but only when the chargeback is Uncollectible because the telephone sales and/or mail order Merchant is a debtor in Bankruptcy.
. Heartland asserted that Golf Concepts had engaged in the following covered acts under Utica’s policy: (a) failing to reimburse cardholders following nondelivery of products to such cardholders; (b) misаppropriating cardholder funds or deposits with the merchant; (c) making material misrepresentations in a merchant application to the insured; (d) processing bank-card transactions not authorized by cardholders; and (e) using deceptive or misleading methods to solicit funds from a cardholder.
. According to testimony at trial, the total chargebacks eventually totaled $1.8 million dollars.
. The trial court denied all motions for summary judgment.
. Banelnsure dismissed its cross-claim against Utiсa. We reject Heartland's argument that Utica had abandoned its cross-claim against Banelnsure. Utica dismissed its cross-claim against Banelnsure after the notice of appeal was filed, thereby disposing of all counts and claims and vesting this Court with jurisdiction.
.The trial court entertained Utica’s offer of proof with respect to the court’s ruling on Heartland’s motion in limine at the close of
. “Other insurance’’ clauses are provisions inserted in insurance policies to vary or limit an insurer’s liability when additional, concurrent insurance exists to cover the same loss. Planet Insurance Company v. Ertz, 920 S.W.2d 591, 593 (Mo.App. W.D.1996). Three basic types of "other insurance” clauses are utilized: pro-rata clauses that limit the insurer’s liability to a proportion of the total loss; excess clauses that make the policy excess or payable after other policies; and escape clauses that allow the insurer to escape all liability. Id.
. In so holding, we note that this Court is primarily concerned with the correctness of the trial court's result.
See Trimble v. Pracna,
. Banclnsure is free to answer and defend such a suit with any argument that is not precluded by the holdings of this appeal.