Maryland Casualty Company appeals the circuit court’s summary judgment for Bobby and Jean Taggart in their equitable garnishment action against Maryland Casualty. The Taggarts seek to satisfy a judgment that they obtained against Maryland Casualty’s insured, CTL Farm Services. Among its allegations, Maryland Casualty complains that the circuit court erred in granting the Taggarts’ motion for summary judgment because material issues of fact had not been resolved. We agree and reverse the judgment.
This dispute arose out of an incident on March 19, 2002, in which Bobby Taggart was seriously injured by anhydrous ammonia released at CTL’s liquid fertilizer plant near Bethany. The Taggarts sued CTL, but Maryland Casualty refused to assume liability for providing for CTL’s defense.
The Taggarts and CTL settled the lawsuit with an agreement that CTL would not contest liability in exchange for the Taggarts’ seeking satisfaction from CTL only to the extent of insurance coverage by Maryland Casualty. The circuit court entered judgment for the Taggarts in which it awarded them more than $2.2 million and prejudgment interest.
The Taggarts then filed this lawsuit against Maryland Casualty to collect the judgment. Maryland Casualty’s answer asserted two defenses, including a contention that CTL’s settlement with the Tag-garts resulted from fraud and collusion and was unreasonable. The parties filed cross motions for summary judgment. The circuit court issued its order granting the Taggarts’ motion and denying Maryland Casualty’s motion.
Maryland Casualty raises four points on appeal, but, because its third point is dis-positive, we address it only. In that point, Maryland Casualty asserts that the circuit court erred in granting summary judgment to the Taggarts because they did not negate Maryland Casualty’s properly pleaded defense that the underlying judgment was unreasonable, fraudulent, and the result of collusion.
In reviewing a circuit court’s summary judgment, we review it
de novo. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp.,
Whether or not summary judgment is proper depends partly on whether the party moving for summary judgment is a claimant or a defending party.
State ex rel. Nixon v. Watson,
The Taggarts were claimants. To establish their equitable garnishment claim, they had the burden of proving that they had obtained judgment against CTL, that Maryland Casualty’s insurance policy covered the damages awarded in the judgment, and that this policy was in effect when the accident occurred.
Hampton v. Carter Enterprises Inc.,
In its answer, Maryland Casualty asserted that the circuit court erred in enforcing the Taggarts’ judgment because, under
Gulf Insurance Company v. Noble Broadcast,
Collusion is a secret concert of action between two or more people for the promotion of a fraudulent purpose.
Vaughan v. United Fire and Casualty Company,
To determine whether or not a Section 537.065 settlement is reasonable, the Supreme Court instructed that the circuit court must decide what a reasonably prudent person in the defendant’s position would have accepted in settling the plaintiffs claim. In making this decision, the
Maryland Casualty avers that it raised an affirmative defense when it asserted that the Section 537.065 settlement between the Taggarts and CTL resulted from fraud and collusion and was unreasonable. We found no case holding that Maryland Casualty’s claim constituted an affirmative defense, but we conclude that Maryland Casualty is correct. First,
Gulf Insurance
and
Betts-Lucas
held that an insurer bears the burden of establishing that a judgment was unreasonable or resulted from fraud and collusion. Second, Maryland Casualty’s claim comports with this court’s definition of “affirmative defense:” “[A] procedural tool available to defendants which ‘seeks to defeat or avoid the plaintiff’s cause of action ... and avers that[,] even if the allegations of the petition are taken as true, the plaintiff cannot prevail because there are additional facts that permit the defendant to avoid the legal responsibility alleged.’”
Thompson v. Brown and Williamson Tobacco Corporation,
Hence, the Taggarts’ burden was to plead undisputed facts that negated one or more of the elements of Maryland Casualty’s affirmative defense.
ITT Commercial Finance,
First, the Taggarts’ motion for summary judgment did not plead facts and did not refer to the Gulf Insurance defense. By not addressing Maryland Casualty’s affirmative defense in their motion for summary judgment and waiting to deal with the affirmative defense in their reply to Maryland Casualty’s response, the Tag-garts waited too late. Because Maryland Casualty’s claim that the Section 537.065 settlement was an affirmative defense that the Taggarts had to negate with undisputed facts to obtain summary judgment, they were obligated to aver these facts in their motion for summary judgment. They did not. They waited until their reply to deal with Maryland Casualty’s defense.
Second, assuming that the circuit court could use the Taggarts’ reply motion to save their facially deficient summary judgment, summary judgment was still not appropriate because material factual issues were in dispute concerning Maryland Casualty’s contention that the Taggarts’ and CTL’s Section 537.065 settlement resulted from fraud and collusion. In its response to the Taggarts’ motion for summary judgment, Maryland Casualty alleged that, contrary to testimony at the trial on the settlement that an employee of CTL, Ellison Preston, had admitted CTL’s negligence, Preston was not employed by CTL. In their reply, the Taggarts averred that, although Preston was not CTL’s employee, David Callaway, who operated the liquid fertilizer plant where the accident occurred in a joint venture with CTL, did employ him. Hence, if the Taggarts are correct that we should consider their aver-ments set forth in their reply, Preston’s authority to bind CTL with his admissions was an unresolved material issue of fact. Finally, in their appellate brief, the Tag-garts presented other factual reasons why Maryland Casualty’s defense would fail, but, because they did not present these arguments to the circuit court, they have not been preserved for our consideration.
Third, even were we to assume that the Taggarts could make a prima facie case for summary judgment by negating Maryland Casualty’s defense for the first time in its reply, the Taggarts’ reply did not make a prima facie case for summary judgment on Maryland Casualty’s affirmative defense that the Section 537.065 settlement was unreasonable. The Taggarts, in both their motion and reply, did not allege any facts that negated this part of Maryland Casualty’s affirmative defense and completely ignored the issue of whether or not their Section 537.065 settlement with CTL was unreasonable. They did nothing to negate this aspect of Maryland Casualty’s affirmative defense.
For example, Maryland Casualty asserted. that it was uncontroverted that the judgment for the Taggarts against CTL was invalid under
Gulf Insurance.
The Taggarts’ reply said, “Plaintiffs object on the basis that this testimony is irrelevant. However, plaintiff admits that this testimony occurred.” Furthermore, the reply listed other facts that it claimed were undisputed, but none of them addressed the issue of Maryland Casualty’s affirmative defense that the judgment was based on a settlement and unreasonable. Hence, at no time, either when refuting Maryland
Hence, for these reasons, we reverse the circuit court’s judgment.
Notes
. The parties entered into a Section 537.065 settlement and submitted the issues of damages to the circuit court. After receiving a judgment, the plaintiffs instituted an equitable garnishment action against the insurance company. On appeal of the equitable garnishment action, the appellate court did not apply the doctrine of collateral estoppel and reviewed whether or not the judgment was reasonable.
Rinehart,