Court of Appeals of Missouri, Western District, First Division
Appeal from the Circuit Court of Jackson County, Missouri The Honorable Jack R. Grate, Jr., Judge
Before James Edward Welsh, Presiding Judge, and Thomas H. Newton and Karen King Mitchell, Judges
Karen King Mitchell, Judge
Ashley Markeson appeals the trial court's denial of her motion to reduce the verdict, which was obtained against her by Virginia Payne in an action for damages arising out of personal injuries Payne suffered in an automobile accident resulting from Markeson driving while intoxicated. Markeson argues that she was entitled to a settlement credit against the verdict as a result of Payne entering a pre-trial settlement with Markeson's co-defendant, MM Investments, Inc., the dram shop that provided Markeson alcohol on the day of the injury-producing collision. The trial court denied the motion to reduce the verdict, finding that Markeson was barred by both statute and public policy from obtaining a settlement credit. We reverse in part and affirm in part.
In September 2009, Markeson drove her vehicle across the centerline and collided with Payne's vehicle. Payne suffered numerous injuries, including fractures to her right ankle, left femur, and right wrist. Markeson, who was on probation for a prior DUI conviction, had been drinking at a bar just before the accident. At the time of the accident, her blood alcohol level was .166 (more than twice the legal limit). She ultimately pleaded guilty to second-degree assault due to intoxication.
Payne filed a lawsuit against Markeson, seeking both compensatory and punitive damages on the basis that Markeson was negligent in causing the accident and that Markeson's actions demonstrated conscious disregard for the safety of Payne and others.
Payne also sued MM Investments, Inc. (d/b/a Doc Holliday's), pursuant to Missouri's "Dram Shop Act." § 537.053. She alleged that MM Investments continued to serve Markeson alcohol that evening even though she was visibly intoxicated. Payne and MM Investments reached an agreement under which MM Investments agreed to pay Payne $475, 000. The trial court subsequently dismissed MM Investments on Payne's motion.
Markeson then filed an amended answer to include an affirmative defense for a reduction in the amount of the settlement agreement, pursuant to section 537.060. Following a bifurcated jury trial, a verdict was entered in favor of Payne for $350, 000 in compensatory damages and $700, 000 in punitive damages.
After trial, Markeson filed a "Motion to Reduce the Verdict, " in which she sought a reduction of $475, 000 in order to reflect the prior settlement, as required by section 537.060. Without ruling on Markeson's motion, the trial court entered its "Judgment" in favor of Payne for $350, 000 in compensatory damages and $700, 000 in punitive damages. Markeson filed a "Motion for New Trial and Motion to Amend the Judgment, " again seeking a reduction in the judgment in the amount of $475, 000, pursuant to section 537.060. The trial court denied the motion for new trial, but set Markeson's Motion to Reduce the Verdict for a hearing.
At the hearing, there was a question raised as to whether the court retained jurisdiction to rule on the motion. Following briefing and a rescheduled hearing, the trial court told the parties that it had intended to provide Markeson the reduction but that, due to the passage of time, the court no longer had jurisdiction over the case and the motion to reduce the verdict could not be granted. Markeson appealed that ruling, and we reversed the trial court's decision, noting that the court had jurisdiction to decide Markeson's motion. Payne v. Markeson, 414 S.W.3d 530, 542-43 (Mo. App. W.D. 2013). Though the parties raised issues regarding the propriety of Markeson's requested relief, we declined to rule the merits and instead remanded for the trial court to do so. Id. at 542 n.14.
On remand, Markeson filed suggestions in support of reducing the verdict, wherein she claimed that she was entitled, under section 537.060, to a reduction of the jury's $350, 000 compensatory damages verdict down to zero as a result of the $425, 000 settlement reached between Payne and MM Investments. Markeson further concluded that, if the court reduced the compensatory damages to zero, it would also have to set aside the punitive damages because "there can be no recovery for punitive damages when there is no award for actual damages." Payne filed opposing suggestions, claiming that section 537.060 did not apply for two reasons: (1) MM Investments was liable only under section 537.053 and not "liable in tort, " as is contemplated for a reduction under section 537.060; and (2) Missouri's public policy of placing responsibility for injuries resulting from drunk driving accidents on the driver precluded application of section 537.060 in favor of Markeson. Payne further argued that, even if the compensatory damages were reduced to zero, the award of punitive damages would stand because it is the existence of the compensatory damage award and not its amount that determines whether a plaintiff is eligible for punitive damages.
The trial court found that section 537.060 did not apply because a "settlement entered into with a party whose liability was based on the Dram Shop law (a statutory claim) is not a settlement with a person liable in tort, " as required by the terms of section 537.060. The trial court further determined "that allowing an intoxicated driver to reduce a verdict would be contrary to public policy as expressed in § 537.053." Finally, relying on Freeman v. Myers, 774 S.W.2d 892, 894-95 (Mo. App. W.D. 1989), the court declared that, "even if the Court were to allow a reduction of the actual damages, the punitive damages award would be unaffected." Markeson appeals.
Standard of Review
So long as the disputes giving rise to the denial of a motion to reduce judgment under section 537.060 are purely legal questions, "[w]e review the denial of a motion to reduce [that] judgment . . . de novo." Heckadon v. CFS Enters., Inc., 400 S.W.3d 372, 378-79, 379 n.4 (Mo. App. W.D. 2013). Here, because the disputes involve solely legal questions, our review is de novo.
Markeson raises two points on appeal. First, she argues that the trial court improperly denied her motion to reduce the compensatory damages to zero because reduction was required by section 537.060, and neither of the trial court's reasons for denial were legally supportable. Second, she claims that the trial court erred in ruling on the propriety of punitive damages because such judgment was premature in light of the court's denial of Markeson's motion to reduce the compensatory damage award.
A. Application of Section 537.060
Section 537.060 provides, in pertinent part:
When an agreement by release . . . is given in good faith to one of two or more persons liable in tort for the same injury or wrongful death, . . . such agreement shall reduce the claim by the stipulated amount of the agreement, or in the amount of consideration paid, whichever is greater.
The trial court found that the statute did not allow for reduction in Markeson's case because MM Investments (the dram shop) was not "liable in tort" and because public policy, as suggested by section 537.053 (the Dram Shop ...