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Keystone Mutual Insurance Co. v. Kuntz

Court of Appeals of Missouri, Southern District, First Division

December 21, 2016

KEYSTONE MUTUAL INSURANCE COMPANY, Plaintiff-Respondent,
v.
CHRISTINE KUNTZ, CARMEN MELTON, TERESA MORRIS-PICKRELL, and TONY PICKRELL, Defendants-Appellants.

         APPEAL FROM THE CIRCUIT COURT OF POLK COUNTY Honorable Michael O. Hendrickson.

         REVERSED AND REMANDED

          OPINION

          MARY W. SHEFFIELD, C.J.

         Christine Kuntz ("Ms. Kuntz"), Carmen Melton ("Ms. Melton"), Teresa Morris-Pickrell ("Ms. Morris-Pickrell"), and Tony Pickrell ("Mr. Pickrell") (collectively, "Appellants") appeal from the trial court's order granting summary judgment in favor of Keystone Mutual Insurance Company ("Keystone").[1] Appellants raise two points: (1) that the trial court erred in denying Ms. Kuntz and Ms. Melton's motion for summary judgment because the undisputed material facts prove their right to equitable garnishment and (2) that the trial court erred in granting Keystone's motion for summary judgment because there are disputed issues of material fact with respect to Keystone's claim that the policy was void ab initio due to its insured's misrepresentations. Appellants' first point is unreviewable because the denial of a motion for summary judgment is not an appealable order. However, Appellants' second point has merit. Consequently, we reverse the trial court's judgment and remand the case for further proceedings.

         Factual and Procedural Background

         On appeal from summary judgment, this Court views "the record in the light most favorable to the party against whom judgment was entered" and accords "the non-movant the benefit of all reasonable inferences from the record." ITT Comm. Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). So viewed, the following facts were presented in the parties' summary judgment documents.

         Dr. Nolan Crisp ("Dr. Crisp") practiced medicine at the Pomme De Terre Bolivar Family Wellness Clinic ("the clinic"). On July 7, 2009, Dr. Crisp submitted an application for medical malpractice insurance the ("2009 application") to Keystone. In the 2009 application, Dr. Crisp made several representations by marking check-boxes, including that he had never had his privileges to practice at any healthcare facility revoked and that he had never been accused of sexual misconduct of any kind. As part of the application, Dr. Crisp also included a supplemental claims data sheet which listed several medical negligence lawsuits. Dr. Crisp's application further stated "he had no knowledge of any incident that resulted, or may result, in a claim or potential claim that was not listed in the supplemental information sheet."

         Keystone did not conduct any independent search for potential litigation against Dr. Crisp after receiving his 2009 application. Keystone issued a policy ("the 2009 policy") based on Dr. Crisp's representations in his 2009 application. The policy term for the 2009 policy ran from July 7, 2009, until July 6, 2010. During that time, Dr. Crisp failed to notify Keystone of any changes to his answers and statements in the 2009 application. Among other things, Dr. Crisp did not inform Keystone when Taylor v. Crisp, an additional medical negligence lawsuit, had been filed. Neither did Dr. Crisp inform Keystone that there had been complaints by a female patient about Dr. Crisp's inappropriate sexual behavior towards her.

         On July 1, 2010, Dr. Crisp sent a letter ("the 2010 letter") to Keystone. The reference line of the letter stated "Malpractice/Liability insurance[.]" The body of the letter stated:

Please be advised that there have been no changes to my information regarding malpractice insurance from the previous years. There have been no claims filed in the last twelve months. If you need further information, please feel free to call my office.

         Keystone did not conduct any independent search for potential litigation against Dr. Crisp nor did Keystone obtain any information about Dr. Crisp from Dr. Crisp's prior insurance carriers after receiving the 2010 letter. Keystone did not require nor did it receive another completed and signed application form from Dr. Crisp in July 2010. After receiving the 2010 letter, however, Keystone issued a second medical malpractice insurance policy to Dr. Crisp ("the 2010 policy"). The 2010 policy had a policy period of July 7, 2010, to July 6, 2011.

         After the 2010 policy was issued, Dr. Crisp again failed to inform Keystone of any changes to the information provided in the 2009 application. But there were changes. These changes included reports from patients about inappropriate sexual contact as well as termination of Dr. Crisp's privilege to practice at the clinic on November 10, 2010.

         On April 18, 2011, Keystone sent Dr. Crisp a letter stating that it was rescinding the 2010 policy because Dr. Crisp had failed to disclose information. With its letter, Keystone enclosed a refund of the premium Dr. Crisp had paid for the 2010 policy.

         Approximately a year later, on March 21, 2012, Ms. Kuntz and Ms. Melton sued Dr. Crisp for battery, negligent infliction of emotional distress, intentional infliction of emotional distress, and medical negligence based on alleged sexual misconduct and over prescription of drugs. On November 15, 2013, Ms. Kuntz and Ms. Melton consolidated their cases and dismissed their claims of negligent infliction of emotional distress, intentional inflection of emotional distress, and battery. The remaining medical negligence counts were tried to the court, and the trial court entered judgment in favor of Ms. Melton and Ms. Kuntz. On October 19, 2012, Ms. Morris-Pickrell and Mr. Pickrell sued Dr. Crisp for intentional infliction of emotional distress ...


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