United States District Court, W.D. Missouri, Western Division
AXIS SPECIALTY INSURANCE COMPANY, and THE YOUNG MEN’S CHRISTIAN ASSOCIATION OF GREATER KANSAS CITY, Plaintiffs,
NEW HAMPSHIRE INSURANCE COMPANY, Defendant.
AND OPINION (1) GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT ON
COUNT II AND YMCA’S CLAIMS; (2) GRANTING IN PART AND
DENYING IN PART DEFENDANT’S MOTION FOR PARTIAL SUMMARY
JUDGMENT ON PRAYERS FOR ATTORNEYS’ FEES, COSTS, AND
CONSEQUENTIAL DAMAGES; (3) GRANTING IN PART AND DENYING IN
PART DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT ON
THE PRAYER FOR PREJUDGMENT INTEREST; AND (4) DENYING
DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT ON
D. SMITH, SENIOR JUDGE
are four motions for partial summary judgment filed by
Defendant New Hampshire Insurance Company
(“NHIC”): Motion for Partial Summary Judgment on
AXIS Specialty Insurance Company’s (“AXIS”)
Prayers for Attorneys’ Fees, Costs, and Consequential
Damages (Doc. #39); Motion for Partial Summary Judgment on
the Prayer for Prejudgment Interest (Doc. #42); Motion for
Partial Summary Judgment on The Young Men’s Christian
Association of Greater Kansas City’s
(“YMCA”) Claims and On Count II for Equitable
Subrogation (Doc. #44); and Motion for Partial Summary
Judgment on Count III for Vexatious Refusal (Doc. #45).
following facts are undisputed. This lawsuit arises out of an
underlying personal injury lawsuit filed by Isaiah Rider
against the YMCA (hereinafter, “Rider lawsuit”).
NHIC defended its insured, the YMCA, in the Rider lawsuit.
Doc. #46, at 7; Doc. #59, at 5. AXIS provided excess
insurance coverage beyond the $1, 000, 000 limits of
NHIC’s primary policy. Doc. #46, at 7; Doc. #46-2; Doc.
#59, at 5. The Rider trial took place in May 2013 in the
Circuit Court of Jackson County, Missouri. Doc. #46, at 7-8;
Doc. #59, at 6. The jury returned a verdict finding the total
amount of damages was $5, 906, 525, but that amount was
reduced to $590, 625.50 because the jury found Rider was 90%
at fault. Doc. #46, at 7-8; Doc. #46-4; Doc. #59, at 6, 11;
Doc. #72, at 10.
Missouri Court of Appeals found the trial court erred in
submitting a jury instruction for comparative fault for
failure to keep a careful lookout. Rider v. The Young
Men’s Christian Ass’n of Greater Kan. City,
460 S.W.3d 378, 383-88 (Mo.Ct.App. 2015); Doc. #46-5. The
Court of Appeals reversed the trial court’s judgment,
and entered judgment to reflect YMCA was 100% at fault and
that Rider’s damages award was $5, 906, 525, the full
amount assessed by the jury. Id. at 388. NHIC paid
the limits of its policy toward this judgment. Doc. #46, at
8; Doc. #46-6; Doc. #59, at 7-8; Doc. #72, at 2. AXIS paid
the remainder of the judgment. Doc. #46, at 8; Doc. #59, at
2015, the YMCA executed an assignment assigning AXIS any and
all causes of action arising out of the claims alleged
against and judgment entered against the YMCA in the Rider
lawsuit. Doc. #46, at 8; Doc. #46-7; Doc. #59, at 7. The
assignment stated the YMCA was assigning claims it had
“arising out of or related to that certain policy of
liability insurance issued by New Hampshire Insurance
Company…issued to the YMCA….” Doc. #46-7.
The agreement indicated AXIS may pursue the claims in its own
name as well as the name of the YMCA. Doc. #59, at 7, 12;
Doc. #72, at 11; Doc. #46-7, at 2. It is undisputed that the
claims in this lawsuit are included in the YMCA’s
assignment. Doc. #46, at 8; Doc. #59, at 7.
and YMCA filed this lawsuit alleging bad faith failure to
settle by assignment (Count I), equitable subrogation (Count
II), and vexatious refusal to pay (Count III). Doc. #1-2.
NHIC seeks summary judgment on the YMCA’s claims,
AXIS’s claims under Counts II and III, and
Plaintiffs’ prayers for relief for attorneys’
fees, consequential damages, costs, and prejudgment interest.
moving party is entitled to summary judgment on a claim only
if there is a showing that “there is no genuine issue
as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” See Williams v.
City of St. Louis, 783 F.2d 114, 115 (8th Cir. 1986).
“[W]hile the materiality determination rests on the
substantive law, it is the substantive law’s
identification of which facts are critical and which facts
are irrelevant that governs.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). Thus,
“[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.” Wierman v.
Casey’s Gen. Stores, 638 F.3d 984, 993 (8th Cir.
2011) (quotation omitted). In applying this standard, the
Court must view the evidence in the light most favorable to
the non-moving party, giving that party the benefit of all
inferences that may be reasonably drawn from the evidence.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 588-89 (1986); Tyler v. Harper, 744
F.2d 653, 655 (8th Cir. 1984). However, a party opposing a
motion for summary judgment “may not rest upon the mere
allegations or denials of the… pleadings, but…
by affidavits or as otherwise provided in [Rule 56], must set
forth specific facts showing that there is a genuine issue
for trial.” Fed.R.Civ.P. 56(e).
NHIC’s Motion for Partial Summary Judgment on
YMCA’s Claims and Count II (Doc. #44)
seeks summary judgment on the YMCA’s claims (Counts II
and III) as well as AXIS’s claim for equitable
subrogation under Count II.
argues the YMCA is not the real party in interest and lacks
standing to bring this lawsuit. In a diversity action, state
law determines who is a real party in interest. Kuelbs v.
Hill, 615 F.3d 1037, 1041 (8th Cir. 2010). “The
general rule is that an absolute assignment of an entire
right or interest works as a divestiture of all right or
interest of the assignor; and, for the purpose of maintaining
a civil action, the assignee becomes the real party in
interest.” Daniele v. Mo. Dep’t of
Conservation, 282 S.W.3d 876, 880 (Mo.Ct.App. 2009)
(quoting McMullin v. Borgers, 806 S.W.2d 724, 731
(Mo.Ct.App. 1991)); see also Home Serv. Oil Co. v.
Hess, 485 S.W.2d 616, 618 (Mo. banc 1972); Cantor v.
Union Mut. Life Ins. Co., 547 S.W.2d 220, 225
undisputed the YMCA assigned all claims it may have arising
out of or related to its NHIC insurance policy applicable to
the Rider lawsuit to AXIS. Doc. #46, at 8; Doc. #46-7; Doc.
#59, at 7. While the agreement stated AXIS could pursue
claims in its own name as well as the name of the YMCA,
Plaintiffs have not cited (and the Court has been unable to
locate) a case where a complete assignment of rights
permitted both the assignor and the assignee to bring the
same claims in a lawsuit. Missouri case law is clear that a
complete assignment of claims divests the assignor’s
right to bring the claims, and the assignee becomes the real
party in interest. Daniele, 282 S.W.3d at 880;
Home Serv. Oil Co., 485 S.W.2d at 618;
Cantor, 547 S.W.2d at 225. The Court finds the YMCA
is not the real party in interest and does not have standing
to bring the claims it has alleged against NHIC. Thus,
NHIC’s motion for partial summary judgment on the
YMCA’s claims is granted.
AXIS’s Claim for Equitable Subrogation
also contends that because there was a complete assignment,
AXIS cannot maintain Count II for equitable subrogation. NHIC
argues assignment and subrogation cannot co-exist; either
there is an assignment or subrogation. AXIS
maintains it is permitted to pursue an equitable subrogation
recognizes a cause of action for equitable subrogation.
Scottsdale Ins. Co. v. Addison Ins. Co., 448 S.W.3d
818, 831 (Mo. banc 2014) (citation omitted).
“[S]ubrogation arises when the insurer pays its
insured’s loss and allows the insured to recover from
any third party who may have caused the loss.”
Id. (citing Benton House, LLC v. Cook
& Younts Ins., Inc., 249 S.W.3d 878, 882 (Mo.Ct.App.
2009)). Subrogation has been utilized “by an excess
insurer to recover from a primary insurer a portion of the
insured’s settlement that the primary insurer was
obligated to pay under its policy.” Id.
(citation omitted). With regard to equitable subrogation,
that right belongs to “one, not a volunteer, who pays
another’s debt, to recover the amount paid, which in
good conscience should be paid by the one primarily
responsible for the loss.” Id. at 832
question facing this Court is the same question the Missouri
Supreme Court recently addressed: “whether an excess
insurer who pays a third-party claim on behalf of its insured
after a primary insurer refuses in bad faith to settle the
claim has a right to equitable subrogation to obtain the
amount paid from the primary insurer.” Id. at
831-32. When the insured had assigned its claims to its
excess carrier, the Missouri Supreme Court found the excess
carrier, which paid for the loss caused by the primary
insurer, “should be equitably subrogated to the rights
of [the insured] and able to bring a bad faith refusal to
settle action….” Id. at 832. The
Missouri Supreme Court further noted “allowing an
excess insurer to bring an action under equitable subrogation
does not create a new duty or impose a new obligation on the
primary insurer; it simply substitutes the excess insurer for
the insured.” Id. at 833.
Court is persuaded by the Missouri Supreme Court’s
ruling in Scottsdale Insurance Company. Accordingly,
NHIC’s motion for summary judgment on AXIS’s
claim of equitable subrogation is denied.
NHIC’s Motion for Partial Summary Judgment on ...