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Maher Brothers, Inc. v. Quinn Pork, LLC

Court of Appeals of Missouri, Eastern District, Third Division

March 7, 2017

MAHER BROTHERS, INC, Appellant,
v.
QUINN PORK, LLC, Defendant, And STATE FARM INSURANCE COMPANY, Respondent.

          Appeal from the Circuit Court of Monroe County Hon. Frederick P. Tucker

          ROBERT G. DOWD, JR, Judge

         Maher Brothers, Inc. ("Appellant"), appeals from a summary judgment in favor of State Farm Fire & Casualty Company ("State Farm"). We reverse and remand for further proceedings consistent with this opinion.

         Appellant contracted with Quinn Pork to have Quinn Pork provide certain services related to Appellant's pigs. Pursuant to the contract, Quinn Pork was to utilize its own facilities in caring for the pigs and was required to provide daily care and management of the pigs placed in Quinn Pork's facility while they are fed. All of its services were to be performed consistent with "good husbandry practices." Quinn Pork was required to check the pigs at least twice daily "to observe and monitor health" and to notify Appellant "at the first sign of sickness or other unusual conditions." Thereafter, Quinn Pork tended to the pigs at its grower nursery, and Appellant retained ownership of the pigs. Quinn Pork involved Buckman Farms and Kendrick Nutrient Management, LLC, in the care of the pigs. All of Appellant's 1, 073 pigs subsequently suffocated when the ventilation was cut off due to the nursery being pumped to remove manure from the facility.[1]

         Appellant filed the underlying action, alleging breach of contract and negligence claims against Quinn Pork for the loss of the pigs. Prior to trial, Appellant and Quinn Pork entered into an agreement under Section 536.065 whereby Appellant agreed not to pursue a judgment against the personal assets of Quinn Pork or Alan Quinn or by seeking a lien or other encumbrance against Quinn Pork or Alan Quinn's property. Quinn Pork agreed that there was sufficient evidence to make a submissible case and agreed not to oppose Appellant's efforts to obtain a judgment, and Appellant agreed to limit its collection efforts to any of Quinn Pork's insurance coverage, including the policy issued by State Farm.

         After a bench trial, the trial court entered judgment in favor of Appellants. In its judgment, the court found that Quinn Pork made representations to Appellant that it "would provide the facilities, buildings, utilities, equipment, bedding, water, daily care and management of the pigs consistent with good husbandry" and further represented that it "would check the pigs at least twice daily to observe and monitor their health." The trial court then noted that Quinn Pork "hired agents and independent contractors to perform the work on the facilities" in its care. The trial court found that Quinn Pork was negligent in selecting "said independent contractors and subcontractors" and that the agents were "incompetent to perform the work for which they were hired." The trial court found that Quinn Pork should have known that the agents were incompetent but "failed to observe and supervise the work or to investigate the qualifications of said individuals." As a direct result of its negligence, Appellant suffered damages in the amount of $127, 526.05. Judgment was entered in favor of Appellant in this amount plus interest at a rate 5.15% per annum.[2]

         Thereafter, Appellant brought an equitable garnishment action against State Farm, alleging that State Farm issued a general liability insurance policy to Quinn Pork in effect on the day the pigs suffocated and that the policy provided coverage for Quinn Pork's negligence related to the incident. Appellant sought judgment against State Farm in the amount of the judgment against Quinn Pork in the underlying action.

         State Farm argues Appellant's claims against it are barred by an exclusionary provision in the insurance policy it issued to Quinn Pork. In particular, State Farm relies upon the following provision in that policy:

SECTION II-
EXCLUSIONS
. . .
2. Coverage L-Farm Liability does not apply to:
. . .
c. property damage to property rented to, occupied or used by or in the care of the insured. This exclusion does not apply to property damage ...

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