Court of Appeals of Missouri, Western District, Third Division
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Appeal from the Circuit Court of Jackson County, Missouri. The Honorable Bryan Round, Judge. All concur.
Paul Hasty, Jr., Overland Park, KS, Counsel for Appellants.
Kathryn O'Shea, Overland Park, KS, Co-Counsel for Appellants.
Aaron French, St. Louis, MO, Counsel for Respondents.
Meghan Lewis, Overland Park, KS, Co-Counsel for Respondents.
Before Division Three: Victor C. Howard, P.J., James Edward Welsh, and Gary D. Witt, JJ. All concur.
James Edward Welsh,
Randel and Kathryn McDonald, doing business as McDonald Marketing Services, appeal the circuit court's judgment in an equitable garnishment action finding that Insurance Company of the State of Pennsylvania (ICSOP) is entitled to a credit in the amount of $62,500 for amounts paid to the McDonalds by two different insurance carriers in an underlying lawsuit. The McDonalds assert six points on appeal. The McDonalds contend that the circuit court erred: (1) by admitting evidence of payments by their insurance carrier, Charter Oak Fire Insurance Company, because evidence of payments from a collateral source is inadmissible and prejudicial; (2) by admitting evidence of their settlement with Charter Oak because the settlement was irrelevant, immaterial, and prejudicial and may not be used to mitigate the damages owed by ICSOP, (3) by finding that ICSOP is entitled to a credit for their settlement of claims against Charter Oak and Certain Underwriters at Lloyd's of London because ICSOP cannot re-litigate the liability of its insured in the underlying lawsuit and is bound by the judgment entered in the underlying lawsuit, (4) by failing to enter judgment in their favor and against ICSOP for the entirety of the judgment entered by the court in the underlying lawsuit because the judgment is binding on ICSOP in an equitable garnishment action, (5) by failing to award them prejudgment interest because they are entitled
to prejudgment interest pursuant to section 408.020, RSMo 2000, and (6) by failing to assess court costs against ICSOP because they are entitled to costs pursuant to section 514.060, RSMo 2000, and Rule 77.01. We reverse the circuit court's judgment and remand for the circuit court to determine whether it wants to exercise its discretion to award prejudgment interest and costs in this case in light of our reversal.
On December 3, 2012, the McDonalds filed suit in the District Court of Wyandotte County, Kansas, against Bam, Inc. (Bam); Certain Underwriters at Lloyd's of London (Lloyd's), and Charter Oak Fire Insurance Company (Charter Oak). Through the petition, the McDonalds alleged that they contracted with Bam to transport frozen food from a warehouse in Independence, Missouri, to a warehouse in Wyandotte County, Kansas. According to the petition, the goods were frozen when placed onto Bam's trailer and had to remain frozen to be edible and useable food products. The petition further alleged that Bam delayed the transportation of the products and that when the products arrived in Kansas City, Kansas, the products were no longer frozen. The McDonalds claimed that Bam was insured under a policy of insurance issued by Lloyd's and that they were entitled to pursue a direct case of action against Lloyd's. They also asserted that they were insured under a policy of property insurance issued by Charter Oak. The McDonalds stated that claims had been made on both insurance companies for the loss, but neither insurance company had agreed to pay. The McDonalds prayed for damages in the amount of $75,000 against Bam, Lloyd's, and Charter Oak and requested costs and attorney's fees.
After filing the petition, the McDonalds settled with Lloyd's in the amount of $25,000 in exchange for the McDonalds' dismissing Lloyd's from the underlying lawsuit with prejudice. The McDonalds also settled with Charter Oak in the amount of $37,250 in exchange for the McDonalds' dismissing Charter Oak from the underlying lawsuit with prejudice.
Service in the underlying lawsuit was effectuated on Bam by serving the Missouri Secretary of State. Bam did not answer or otherwise respond to the McDonalds' petition in the underlying ...