United States District Court, E.D. Missouri, Northern Division
MEMORANDUM AND ORDER
RODNEY W. SIPPEL, District Judge.
This matter is before the Court on the parties' cross motions for summary judgment on whether Plaintiff Auto-Owners is entitled to subrogation recovery from Defendant Pruitt.
Larry Apperson was injured in a car accident caused by defendant Wayne Pruitt. After the accident, plaintiff Auto-Owners Insurance Company ("Auto-Owners") paid Apperson $500, 000 pursuant to the underinsured motorist provision of its policy with Apperson. Auto-Owners argues that Pruitt should reimburse it for the $500, 000 payment to Apperson because Pruitt was responsible for the car accident. Defendant Pruitt argues that Auto-Owners has no right of recovery against him because Missouri law prohibits subrogation recovery for personal injuries. For the following reasons, defendant Pruitt is entitled to judgment as a matter of law.
Summary Judgment Standard
Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Lynn v. Deaconess Medical Center, 160 F.3d 484, 486 (8th Cir. 1998) (citing Fed.R.Civ.P. 56(c)). The party seeking summary judgment bears the initial responsibility of informing the court of the basis of its motion and identifying those portions of the affidavits, pleadings, depositions, answers to interrogatories, and admissions on file which it believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When such a motion is made and supported by the movant, the nonmoving party may not rest on his pleadings but must produce sufficient evidence to support the existence of the essential elements of his case on which he bears the burden of proof. Id. at 324. In resisting a properly supported motion for summary judgment, the plaintiff has an affirmative burden to designate specific facts creating a triable controversy. Crossley v. Georgia-Pacific Corp., 355 F.3d 1112, 1113 (8th Cir. 2004).
On January 6, 2012, Larry Apperson was injured in a car accident that occurred in Audrain County, Missouri. Apperson was a passenger in a car driven by Wayne Pruitt. Apperson notified his insurer, Auto-Owners Insurance Company, of the accident and requested a copy of his insurance policy. Apperson then filed suit in Missouri state court against the driver of the car, Wayne Pruitt. After Apperson filed his action against Pruitt, he sent Auto-Owners a copy of the petition. Auto-Owners did not intervene in the lawsuit.
Before the case went to trial, Apperson and Pruitt entered into a Section 537.065 Agreement. MO. REV. STAT. § 537.065 (2014). The agreement provided that while the parties would still participate in a bench trial, Apperson would limit his recovery against Pruitt to $100, 000, the limit of Pruitt's insurance policy. On October 22, 2012, following a bench trial, Apperson received a judgment against Pruitt for $2, 500, 000. Soon afterwards, Pruitt's insurer paid Apperson $100, 000 in satisfaction of the judgment.
After the trial, Apperson made a claim to Auto-Owners under the underinsured motorist insurance provision of his policy. Auto-Owners refused to pay on the grounds that Apperson had breached his obligation to preserve Auto-Owners' subrogation rights when he settled with and released Pruitt for less than his full liability. On March 14, 2013, Apperson filed this action against Auto-Owners in the Circuit Court of Randolph County, Missouri, seeking a declaration that Auto-Owners owed him underinsured motorist coverage. On April 19, 2013, Auto Owners removed the action to this Court based on diversity jurisdiction.
On November 6, 2013, with leave of the Court, Auto-Owners filed a third-party complaint against Pruitt. In the complaint, Auto-Owners sought declaratory judgment that it would be entitled to subrogation recovery against Pruitt in the event it was determined to owe coverage to Apperson. On December 5, 2013, Pruitt moved to dismiss Auto-Owners' claims for lack of jurisdiction, arguing that only an insured can bring an action for subrogation recovery.
Prior to my ruling on Pruitt's motion to dismiss, on December 6, 2013, Auto-Owners and Apperson voluntarily settled their claims. Auto-Owners agreed to pay Apperson $500, 000 under the underinsured motorist insurance provision of the policy, and it has since satisfied that obligation. On December 13, 2013, I dismissed all claims and counterclaims between Auto-Owners and Apperson. On February 13, 2014, I denied Pruitt's Motion to Dismiss and allowed Auto-Owners to pursue subrogation in its own name. Thus, the only claims remaining in this case are Auto-Owners' claims against Pruitt.
On August 15, 2014, Pruitt filed a motion for summary judgment, arguing that 1) Auto-Owners has no direct right of action against him, 2) any subrogation right in the Auto-Owners policy is void as against Missouri policy prohibiting the assignment of a personal injury cause of action, which the Missouri Supreme Court recently clarified in Nevils v. Grp. Health Plan, Inc., 418 S.W.3d 451, 453 (Mo. 2014), and 3) the Court should not grant equitable relief for the same public policy reasons.
On August 18, 2014, Auto-Owners filed its motion for summary judgment, arguing that it is entitled to subrogation recovery for the underinsured motorist payment it made to Apperson because Pruitt is the party responsible for Apperson's injuries and Apperson's agreement to release Pruitt for less than his full liability did not destroy Auto-Owners' subrogation rights. Auto-Owners further argues that Missouri policy disfavoring subrogation for a personal injury cause of action does not bar recovery under these circumstances ...