APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY. The Honorable Patricia Joyce, Judge.
The survivors were represented by Thomas G. Pirmantgen and John H. Lake of Lake Law Firm LLC in Jefferson City.
The insurance company was represented by John R. Weist and Robert J. Luder of Luder & Weist LLC in Overland Park, Kansas.
Russell, C.J., Breckenridge, Stith, Draper and Wilson, JJ., concur; Teitelman, J., dissents in separate opinion filed.
Zel M. Fischer, Judge.
Prior to this insurance dispute, Linda Nunley was killed while working for a charcoal manufacturer. The plaintiffs obtained a judgment for wrongful death against Junior Flowers, the company's sole owner, director, and executive officer. Flowers assigned his insurance claims to the plaintiffs, and they sued the insurer for breach of duties to defend and indemnify under commercial general liability (CGL) and umbrella policies. The circuit court applied the policies' employee exclusions, which prevented coverage for work-related injuries to employees of the insured, and granted summary judgment for the insurer. This Court agrees, and the circuit court's judgment is affirmed.
Standard of Review
This Court reviews a grant of summary judgment de novo. Goerlitz v. City of Maryville, 333 S.W.3d 450, 452 (Mo. banc 2011). Summary judgment is appropriate if there is no genuine issue as to any material fact, and the movant is entitled to judgment as a matter of law. Rule 74.04(c)(6). The Court views assertions of fact in the light most favorable to the non-movant and draws all reasonable factual inferences in that party's favor. Goerlitz, 333 S.W.3d at 453. The Court may affirm summary judgment on any appropriate theory supported by the record. Columbia Cas. Co. v. HIAR Holding, L.L.C., 411 S.W.3d 258, 264 (Mo. banc 2013).
Factual and Procedural Background
Ms. Nunley was killed while working for Missouri Hardwood Charcoal, Inc. The manufacturing process involved kilns with gigantic steel doors. Company policy required removing the doors from time to time and leaning them upright against the kilns. Tragically, one of the doors was blown over by the wind and crushed Ms. Nunley.
Her three children and her mother filed a wrongful death action against Junior Flowers, the company's sole owner, director, and executive officer at the time of Ms. Nunley's death. The petition alleged
that Flowers, while engaged as an agent or employee of the company, was negligent in ordering employees to lean the kiln doors upright, even though he knew it was unsafe. The petition also alleged that Flowers breached a " personal duty of care owed to Linda Nunley" and that his actions were " something more" than a breach of the company's duty to provide a safe workplace for employees.
Flowers requested a defense from Indiana Lumbermen's Mutual Insurance Company (ILM). He made this request with respect to two insurance policies: a CGL policy with a limit of $1 million per occurrence and an umbrella policy adding another $5 million per occurrence. Both policies insure Missouri Hardwood and its executive officers but exclude liability for a work-related injury to an " employee of the insured." Both policies also have " separation-of-insureds" provisions, stating that the insurance applies " [s]eparately to each insured against whom claim is made or suit is brought." ILM declined to defend Flowers, and he retained other counsel.
After litigation not pertinent here, Flowers and the plaintiffs came to an agreement under § 537.065. Pursuant to the agreement, the plaintiffs promised not to collect from Flowers personally, only from his insurance policies. In return, Flowers agreed to setting the case for trial at the circuit court's earliest convenience; to testify truthfully; to waive his rights to a jury trial; to waive his rights to present evidence and make objections and arguments; and to assign his claims against ILM to the plaintiffs. A bench trial on the wrongful death claim resulted in the circuit court entering a $7 million judgment in favor of the plaintiffs. The circuit court's judgment determined Flowers was liable for negligence in maintaining the kiln door policy, " acting under his duties as president, executive officer, and director of Missouri Hardwood Charcoal, Inc." It also found that " Linda Nunley was not Mr. Flowers' employee, but instead she was an employee of the corporation Missouri Hardwood Charcoal, Inc. at all relevant times."
The plaintiffs then sued ILM and Flowers in this action for equitable garnishment under § 379.200, breach of contract for refusal to defend, declaratory judgment, and vexatious refusal to pay. The plaintiffs and ILM both moved for summary judgment. The circuit court granted summary judgment for ILM. It found that Flowers was Ms. Nunley's employer within the meaning of the insurance policies and based its ruling on the policies' employee exclusions, along with several alternative grounds that need not be discussed. The circuit court's judgment states:
Under the undisputed facts, Missouri Hardwood Charcoal was Flowers' business. He owned it. He controlled it. He was the sole officer and director. Under these facts, to the extent that Flowers was negligent in failing to provide a safe work environment to Nunley (as stated in the judgment) then Nunley was, in substance, " an 'employee' of the insured [Flowers]," and her injury and death arose out ...