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Olsen v. Siddiqi

Court of Appeals of Missouri, Eastern District, First Division

March 14, 2017

JOHN OLSEN, et al., Respondents,
v.
JAVED Q. SIDDIQI and GLOBAL BIZDIMENSIONS, L.L.C., Defendants, and AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellant.

         Appeal from the Circuit Court of St. Louis County 08SL-CC00248-01 Honorable Steven H. Goldman

          ROBERT M. CLAYTON III, Presiding Judge.

         American Family Mutual Insurance Company ("American Family") appeals the grant of summary judgment in favor of John Olsen, individually and on behalf of the other members of a certified class as assignees (collectively "Plaintiffs"). The trial court's grant of summary judgment awarded Plaintiffs a total amount of $6, 439, 644.54 on their third garnishment action against American Family, the general commercial liability insurer for defendant Global Bizdimensions, L.L.C. ("Global"). In the underlying garnishment action at issue in this appeal, Plaintiffs sought to satisfy damages and post-judgment interest awarded to them in a May 2009 underlying judgment approving a settlement agreement between Plaintiffs and defendants Global and Javed Q. Siddiqi (collectively "Defendants") out of insurance proceeds from American Family's insurance policies issued to Global. We affirm.

         I. BACKGROUND

         A. The Procedural History

         This case has a lengthy and complex procedural history. The history includes: an original and amended class-action petition filed by Plaintiffs against Defendants; a tender of defense of the matter to American Family; American Family's subsequent denial of insurance coverage; a settlement agreement entered into by Plaintiffs and Defendants that was approved by the trial court; three separate garnishment actions filed by Plaintiffs against American Family; multiple orders and judgments entered by the trial court; two prior direct appeals to this Court filed by American Family; and a Missouri Supreme Court decision abrogating one of our Court's prior opinions in this case.

         1. Plaintiffs' Petitions Against Defendants, Defendants' Involvement of Global's Insurer American Family, Relevant Language of the Insurance Policies, and American Family's Denial of Insurance Coverage

         In January 2008, Plaintiffs filed an original class-action petition against Siddiqi, an individual doing business as Quizno's Subs and managing member of Global, alleging Siddiqi sent unsolicited advertising faxes to Plaintiffs in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. section 227 et seq.[1] Plaintiffs sought an injunction prohibiting Siddiqi from engaging in further violations of the TCPA and an award of $500.00 in damages for each violation of the TCPA.[2]

         Shortly after the lawsuit was filed, Siddiqi tendered defense of the matter to American Family pursuant to insurance policies issued to Global. By letter dated June 11, 2008, American Family acknowledged receipt of Siddiqi's tender of defense, and American Family admitted it afforded certain general commercial liability coverage to Global.

         American Family issued three insurance policies to Global, affording coverage for policy periods from: March 6, 2004 through March 6, 2005; March 6, 2005 through March 6, 2006; and March 6, 2006 through March 6, 2007. The aggregate policy limits for each policy period were $2, 000, 000.00. Each policy insured against "those sums that the insured becomes legally obligated to pay as damages because of . . . 'property damage' . . . to which this insurance applies . . .." In addition, the provisions of the policy relating to "property damage" included an explanation that it is caused by an "occurrence, " which means "an accident." Finally, the policies afforded coverage "[i]n addition to the [l]imit of [i]nsurance . . ." for "[a]ll interest on the full amount of any judgment that accrues after entry of the judgment and before [American Family] ha[s] paid, offered to pay, or deposited in court the part of the judgment that is within [its] [l]imit of [i]nsurance . . .."

         In its June 11, 2008 letter, American Family, (1) stated it would be unable to defend Defendants for any claims in the Plaintiffs' original petition; and (2) denied insurance coverage for the claims based upon language in the insurance policies. In August 2008, Plaintiffs amended their original petition, adding Global, a Missouri entity, as a defendant.

         2. The Settlement Agreement Entered into Between Plaintiffs and Defendants and the Resulting May 2009 Underlying Judgment

         Subsequently, Plaintiffs and Defendants entered into a settlement agreement for $4, 917, 500.00 in damages, executable only against American Family. The settlement agreement provided that, inter alia, Defendants sent Plaintiffs a total of 9, 835 unsolicited advertising faxes between March 14, 2004 and March 6, 2007. On May 26, 2009, the trial court entered a judgment approving Plaintiffs' and Defendants' settlement agreement and approving class certification ("Underlying Judgment" or "May 2009 Underlying Judgment"). In the Underlying Judgment, the trial court found the terms of the settlement agreement were fair, reasonable, and adequate and that the settlement amount was reasonable. The trial court also directed the parties to consummate the settlement agreement in accordance with its terms. Finally, the Underlying Judgment was entered in favor of Plaintiffs and against Global in the total amount of $4, 917, 500.00, a figure representing $500.00 in damages for each of the total 9, 835 unsolicited advertising faxes sent by Global between March 14, 2004 and March 6, 2007.[3] As indicated below, the Underlying Judgment remained unsatisfied as of the time the third garnishment at issue in this appeal was filed.

         3. The Procedural History Relating to Plaintiffs' First and Second Garnishment Actions Filed Against American Family Including the Resulting August 2011 and August 2012 Judgments and This Court's Opinion in Olsen I

         On July 15, 2009, Plaintiffs filed a traditional garnishment action against American Family, numbered 09-GARN-50750, seeking to satisfy the damages and post-judgment interest awarded to them in the May 2009 Underlying Judgment out of insurance proceeds from American Family's insurance policies issued to Global ("First Garnishment"). Plaintiffs subsequently filed a motion to dismiss their First Garnishment action without prejudice, and the trial court entered an order granting the motion.

         On December 8, 2010, Plaintiffs filed a second traditional garnishment action against American Family, numbered 10-GARN-89109, again seeking to satisfy the damages and post-judgment interest awarded to them in the May 2009 Underlying Judgment out of insurance proceeds from American Family's insurance policies issued to Global ("Second Garnishment"). American Family filed a motion for summary judgment on their Second Garnishment action, which the trial court denied. On August 24, 2011, the trial court entered a judgment against American Family on Plaintiffs' Second Garnishment action, directing American Family to satisfy the Underlying Judgment in the amount of $4, 917, 500.00 in damages plus post-judgment interest ("August 2011 Judgment").

         American Family appealed the denial of its motion for summary judgment and the August 2011 Judgment to this Court, arguing its general commercial liability insurance policies issued to Global did not cover the statutory TCPA damages awarded in the Underlying Judgment. A 2-1 majority of our Court agreed with American Family, concluding the statutory TCPA damages awarded in the Underlying Judgment did not constitute "property damage" under the terms of American Family's insurance policies issued to Global because statutory TCPA damages of $500.00 for each violation of the TCPA are penal in nature. Olsen v. Siddiqi, 371 S.W.3d 93, 95-100 (Mo. App. E.D. 2012) ("Olsen I"). Accordingly, the Court in Olsen I reversed the trial court's denial of American Family's motion for summary judgment and the court's August 2011 Judgment against American Family, and the Court remanded the cause with directions for the trial court to enter summary judgment in favor of American Family. Id. at 98. After Olsen I was mandated, the trial court entered summary judgment in favor of American Family on Plaintiffs' Second Garnishment action ("August 2012 Judgment").

         4. The Procedural History Relating to Plaintiffs' Third Garnishment Action Filed Against American Family Including the Missouri Supreme Court's Decision in HIAR Abrogating Olsen I and This Court's Decision in Olsen II

         After the trial court entered the August 2012 Judgment, the Missouri Supreme Court handed down Columbia Cas. Co. v. HIAR Holding, L.L.C., 411 S.W.3d 258 (Mo. banc 2013) ("HIAR") on August 13, 2013. HIAR, like the procedural history in this case, involved circumstances where: an insurer declined to defend an unsolicited fax class action claiming TCPA violations; the class and the insured settled the claims for an assignment of right to collect from the insurer; and the trial court ruled the settlement was fair and reasonable. Id. at 261-62. Additionally, the insurance policy at issue in HIAR had identical "property damage" coverage as American Family's commercial liability policies insuring Global. Compare id. at 265-66, with language of American Family's insurance policies set out above in Section I.A.1.[4] The Missouri Supreme Court affirmed the trial court's decision finding the class' claims were covered under the insurance policy and ordering the insurer to pay the judgment plus interest thereon, concluding the insurance policy's coverage for "property damage" applied to statutory TCPA damages. HIAR, 411 S.W.3d at 261, 263, 265-69. The Missouri Supreme Court specifically determined statutory TCPA damages of $500.00 for each violation of the TCPA are not penal in nature; instead, the Court found such damages are considered remedial in nature and stated, "[t]o the extent that Olsen [I] declared otherwise, it no longer should be followed on this issue." HIAR, 411 S.W.3d at 265-68. In other words, the Missouri Supreme Court explicitly abrogated Olsen I. See id. at 268.[5]

         On August 18, 2014, Plaintiffs filed a third traditional garnishment action against American Family, numbered 14-GARN-59892, once again seeking to satisfy the damages and post-judgment interest awarded to them in the May 2009 Underlying Judgment out of insurance proceeds from American Family's insurance policies issued to Global ("Third Garnishment").

         Thereafter, on September 2, 2014, Plaintiffs filed a motion for relief from the August 2012 Judgment pursuant to Rule 74.06(b)(5), [6] requesting the trial court to reopen the Second Garnishment action. American Family then filed a motion to quash the Third Garnishment action. In an October 20, 2014 order, the trial court denied Plaintiffs' motion for relief with respect to their Second Garnishment action and denied American Family's motion to quash the Third Garnishment action ("October 2014 Order").

         American Family then filed a petition for writ of prohibition to this Court, challenging the trial court's October 2014 Order denying American Family's motion to quash the Third Garnishment action. After our Court denied American Family's petition, American Family filed a motion in the trial court requesting it to denominate the October 2014 Order as a "judgment." The trial court granted American Family's motion, and American Family then filed a notice of appeal in this Court, appealing the "judgment" denying its motion to quash the Third Garnishment action.

         On June 9, 2015, our Court issued a decision dismissing American Family's appeal as premature, finding the trial court's "judgment" denying its motion to quash the Third Garnishment action was not a final judgment from which an appeal would lie. Olsen v. Global Biz Dimensions, LLC, 462 S.W.3d 886, 888-91 (Mo. App. E.D. 2015) ("Olsen II"). We found the trial court had not entered a judgment determining the controverted issue of whether garnishment was appropriate in light of the Missouri Supreme Court's decision in HIAR, there was no evidence in the record that any money or bond had been deposited with the trial court, and the name "judgment" alone did not accomplish finality. Id. at 889-90. Our Court further found "the possibility remains that the trial court, after considering the interrogatory responses and exceptions, could enter judgment in either party's favor under Rule 90, " and the appellate court "must give the trial court the opportunity to do so." Id. at 891.

         B. The Procedural Posture Immediately Preceding the Instant Appeal, Including the October 2015 Judgment American Family is Appealing in This Case

         After our Court's decision in Olsen II, American Family and Plaintiffs each filed motions for summary judgment in the trial court with respect to Plaintiffs' Third Garnishment action. In its motion filed on July 10, 2015, American Family argued it was entitled to summary judgment on Plaintiffs' Third Garnishment action because our Court had concluded in Olsen I that there was no coverage under American Family's insurance policies issued to Global, and Plaintiffs were barred from re-litigating the issue under the doctrines of collateral estoppel and res judicata despite the Missouri Supreme Court's subsequent decision in HIAR.

         Plaintiffs' motion for summary judgment filed on July 22, 2015 argued they were entitled to summary judgment on their Third Garnishment action because, (1) the May 2009 Underlying Judgment remained completely unsatisfied; (2) since Olsen I and the resulting August 2012 Judgment that entered summary judgment in favor of American Family on Plaintiffs' Second Garnishment action, the Missouri Supreme Court issued HIAR, a decision that changed the law on the issue of whether there was insurance coverage pursuant to the language in American Family's insurance policies issued to Global; and (3) the doctrines of collateral estoppel and res judicata do not apply to successive traditional garnishment actions, particularly where there is an intervening change in the law. Plaintiffs requested $4, 917, 500.00 in damages plus post-judgment interest, which was the amount agreed upon by Plaintiffs and Defendants in the May 2009 Underlying Judgment.

         American Family's response to Plaintiffs' motion for summary judgment alleged their "ultimate exposure" of damages was $3, 629, 000.00. American Family alleged that amount of damages was "based upon the aggregate [policy] limits of $2, 000, 000.00 for March 2006 through March 2007; actual damages of $1, 147, 000.00 for March 2005 through March ...


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