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Sauvain v. Acceptance Indemnity Insurance Co.

Court of Appeals of Missouri, Western District, Second Division

October 4, 2016

AMY LEIGH SAUVAIN, ET AL., Appellants,
v.
ACCEPTANCE INDEMNITY INSURANCE COMPANY, Respondent.

         Appeal from the Circuit Court of Clay County, Missouri The Honorable Janet L. Sutton, Judge

          Before: Karen King Mitchell, Presiding Judge, Cynthia L. Martin, Judge and Gary D. Witt, Judge

          Gary D. Witt, Judge

         Appellants Amy Sauvain, Ericka Sauvain, and Bonnie Hughes (collectively "Plaintiffs") appeal from the Circuit Court of Clay County's granting of Acceptance Indemnity Insurance Company's ("Acceptance") Motion to Quash a garnishment sought by the Plaintiffs. We affirm.

         Factual and Procedural Background

         In a separate underlying lawsuit that preceded the present case, Plaintiffs brought suit alleging that David Bowman, Jr.'s ("Bowman, Jr.") negligence caused a head-on collision with a vehicle operated by John Sauvain, III ("Sauvain") in Barry County, Missouri on April 30, 2005. Bowman, Jr. was driving a 1998 Ford Contour when he crossed the center line and struck Sauvain's 1998 Ford Escort ("the Collision"). Bonnie S. Hughes ("Hughes") was a passenger in Sauvain's vehicle at the time of the accident. Sauvain was killed, and Hughes suffered serious injuries in the accident. The circuit court ultimately entered judgment against Bowman, Jr., awarding to Ericka Sauvain and Amy Sauvain $2, 000, 000 for the wrongful death of Sauvain and $4, 000, 000 to Hughes for her injuries (the "Judgment"). Bowman, Jr.'s personal auto insurer, USAA, agreed to pay the sum of $50, 000. In addition, Plaintiffs entered into a settlement agreement, pursuant to Section 537.065[1], with Bowman, Jr.

         On July 14, 2008, following the Judgment and the Section 537.065 settlement, the Plaintiffs filed an equitable garnishment action against Acceptance, alleging that Bowman, Jr. was an insured under a policy issued by Acceptance ("Policy") and that the Policy provided coverage for the Collision. This case has previously been before this court twice during the equitable garnishment action. Sauvain v. Acceptance Indem. Ins. Co., 339 S.W.3d 555 (Mo. App. W.D. 2011) ("Sauvain I"); Sauvain v. Acceptance Indem. Ins. Co., 437 S.W.3d 296 (Mo. App. W.D. 2014) ("Sauvain II").[2] In Sauvain I, Acceptance challenged the circuit court's finding that its Policy covered Bowman, Jr. at the time of the accident. This Court concluded that the undisputed facts of this case were not sufficient for either party to be entitled to summary judgment; hence, we remanded the case for a trial. Upon remand, the parties waived their right to trial by jury and proceeded with a bench trial. On January 21, 2013, the trial court found that the Plaintiffs were entitled to judgment against Acceptance on their claim for equitable garnishment in the amount of the policy limits of $100, 000 ("Equitable Garnishment Judgment").

         Acceptance appealed this Equitable Garnishment Judgment in Sauvain II, arguing that there was substantial evidence to find the vehicle was not covered under the Policy. This Court found that, although there was substantial evidence in the record that would have supported Acceptance's position, the trial court's finding that Bowman, Jr. was covered by the Policy was also supported by substantial evidence and was not against the great weight of the evidence. We affirmed the Equitable Garnishment Judgment against Acceptance for the limits of the Policy of $100, 000.

         Plaintiffs collected the $100, 000 from Acceptance but then filed a garnishment action under Chapter 525 and Rule 90[3], seeking to garnish from Acceptance the remaining $5, 900, 000[4] of the Judgment against Bowman, Jr. ("Garnishment"). As a factual basis of support for the Garnishment, Plaintiffs contended that Acceptance had a duty to defend Bowman, Jr. in the negligence case and, in refusing to do so, Acceptance breached its contractual duty. In Missouri, if an insurer is found to have breached its duty to defend, it may be liable for all resultant damages (the amount of the judgment)--even beyond the policy limits. See Schmitz v. Great Am. Assurance Co., 337 S.W.3d 700, 708-09 (Mo. Banc 2011). Thus, Plaintiffs claimed that they were entitled to recover the full remaining judgment against Bowman, Jr. from Acceptance.

         Acceptance filed a Motion to Quash Garnishment on May 29, 2015 ("Motion to Quash"). Acceptance argued that a court lacks authority in a garnishment action under Chapter 525 and Rule 90 to enter an award for the full Judgment. Chapter 525 and Rule 90 garnishment actions are traditional "garnishment in aid of execution" actions that are ancillary in rem proceedings. In such garnishment in aid of execution actions, the merits of an underlying action--in this case Acceptance's alleged breach of its duty to defend--are an improper subject matter for the court. Acceptance contended that the circuit court was limited to issuing a garnishment order for the limits of the Policy because that was the sole issue that had been previously decided. Acceptance argued that outstanding questions regarding Acceptance's duty to defend and any liability stemming from that duty were not before the court for consideration.

         The trial court agreed and granted Acceptance's Motion to Quash on December 2, 2015. This appeal followed.

         Standard of Review

         "Appellate review of a trial court's decision on a motion to quash requires that the judgment be affirmed unless there is not substantial evidence to support it, the judgment is against the weight of the evidence, or it erroneously declares or applies ...


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