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Holesapple v. Missouri Highways and Transportation Commission

Court of Appeals of Missouri, Southern District, First Division

April 6, 2017

LAURIE HOLESAPPLE, et al., Plaintiffs-Appellants,
v.
MISSOURI HIGHWAYS AND TRANSPORTATION COMMISSION, Defendant-Respondent.

         APPEAL FROM THE CIRCUIT COURT OF HOWELL COUNTY Honorable David P. Evans, Circuit Judge.

          OPINION

          JEFFREY W. BATES, P.J.

         This case arises out of an automobile accident involving Joshua Holesapple (Holesapple) and Preston Ary (Ary) that occurred near a construction zone on Route 63 in West Plains, Missouri. Holesapple died in the accident. The Missouri Highways and Transportation Commission (MHTC) was overseeing the construction project and hired H.R. Quadri Contractors, L.L.C. (Quadri) to perform much of the work. After the accident, Holesapple's wife, three children and parents (hereinafter referred to collectively as Appellants) filed a wrongful death suit against Ary, Quadri and MHTC. Appellants settled with everyone except MHTC, and the case proceeded to trial based on an alleged dangerous condition of MHTC's property. The jury returned a verdict against MHTC in the amount of $6, 700, 000. The trial court reduced the judgment against MHTC to the statutory sovereign immunity cap of $409, 123 pursuant to § 537.610.[1] Thereafter, Appellants filed a motion for apportionment, which asserted that each of the six individual plaintiffs was entitled to the full amount of the statutory cap. That aspect of the apportionment motion was denied. The trial court entered an amended judgment against MHTC in the amount $409, 123 and apportioned that sum equally among the individual plaintiffs so that each was awarded $68, 187.

         Appellants present two points for decision. In Point 1, Appellants contend the trial court erred by reducing the judgment to $409, 123 pursuant to § 537.610 because MHTC waived sovereign immunity by procuring liability insurance with larger limits, which covered the wrongful death claim involving Holesapple. In Point 2, Appellants contend the trial court erred by reducing the judgment to $409, 123 pursuant to § 537.610 because, rather than sharing one capped amount, each plaintiff was individually entitled to recover $409, 123 from MHTC. Finding no merit in either point, we affirm.

         Standard of Review and Overview of Relevant Law

         "The existence of sovereign immunity and questions of statutory interpretation are issues of law, " which this Court reviews de novo. Moore v. Lift for Life Academy, Inc., 489 S.W.3d 843, 845 (Mo. App. 2016); Wyman v. Missouri Department of Mental Health, 376 S.W.3d 16, 18 (Mo. App. 2012). The "primary rule of statutory interpretation is to give effect to legislative intent as reflected in the plain language of the statute." Moore, 489 S.W.3d at 845. Moreover, "statutory provisions waiving sovereign immunity must be strictly construed." Richardson v. State Hwy. & Transp. Comm'n, 863 S.W.2d 876, 880 (Mo. banc 1993).

         To better understand the issues involving sovereign immunity in this case, a brief overview of sovereign immunity law in Missouri is necessary. In Jones v. State Highway Comm'n, 557 S.W.2d 225 (Mo. banc 1977), our Supreme Court prospectively abrogated the common law doctrine of sovereign immunity effective August 15, 1978. In response, the legislature enacted §§ 537.600-.650 RSMo (1978), which reinstated the doctrine with two exceptions. Sovereign immunity was expressly waived for torts arising out of: (1) the negligent operation of motor vehicles by public employees (the motor vehicle waiver); and (2) the dangerous condition of a public entity's property (the dangerous property waiver). § 537.600(1)-(2) RSMo (1978). In Bartley v. Special School Dist. of St. Louis Cty., 649 S.W.2d 864 (Mo. banc 1983), our Supreme Court held that "sovereign immunity is only waived in the two areas provided by § 537.600, and then only to the extent that the public entity acquires insurance for such purpose." Id. at 870 (also construing § 537.610.1). The legislature again responded by amending § 537.600 to clarify that the express waiver of sovereign immunity in the two specified instances "are absolute waivers of sovereign immunity in all cases within such situations … whether or not the public entity is covered by a liability insurance for tort." § 537.600.2 RSMo (1986) (emphasis added); Oldaker v. Peters, 817 S.W.2d 245, 249 (Mo. banc 1991); see Martin v. City of Washington, 848 S.W.2d 487, 490 (Mo. banc 1993). Since this amendment, the language of these first two provisions of § 537.600 has remained unchanged. See § 537.600.1-.2.[2]

         At the same time the legislature expressly waived sovereign immunity in the two circumstances specified by § 537.600.1(1)-(2), the amount that could be recovered from a governmental entity was limited via statutory caps contained in § 537.610.2 RSMo (1978). See Richardson, 863 S.W.2d at 880. Section 537.610.2 currently states:

The liability of the state and its public entities on claims within the scope of sections 537.600 to 537.650, shall not exceed two million dollars for all claims arising out of a single accident or occurrence and shall not exceed three hundred thousand dollars for any one person in a single accident or occurrence, except for those claims governed by the provisions of the Missouri workers' compensation law, chapter 287.

Id. Apart from changes over the years to the amount of the caps, the language of this particular provision has remained unchanged since its inception in 1978. The purpose of the statutory caps on recovery was discussed in Winston v. Reorganized School District R-2, 636 S.W.2d 324 (Mo. banc 1982), in which our Supreme Court explained that "[i]t is readily apparent the legislature intended to balance the need for protection of governmental funds against a desire to allow redress for claimants injured in limited classes of accidents." Id. at 328; see also Richardson, 863 S.W.2d at 880.[3]

         A third method of waiving sovereign immunity is authorized in § 537.610.1. That method involves the purchase of liability insurance (the insurance waiver), but that form of waiver only applies to "torts other than the two exceptions set forth in § 537.600." Brennan By & Through Brennan v. Curators of the Univ. of Missouri, 942 S.W.2d 432, 436 (Mo. App. 1997) (emphasis added).[4] When a public entity purchases liability insurance to cover torts, other than the negligent operation of motor vehicles by public employees and the dangerous condition of a public entity's property, § 537.610.1 provides that sovereign immunity is waived as to those other torts "to the extent of and for the specific purposes covered by the insurance purchased." Brennan, 942 S.W.2d at 434 (involving medical malpractice); Hummel v. St. Charles City R-3 Sch. Dist., 114 S.W.3d 282, 284 (Mo. App. 2003) (involving wrongful termination); see also State ex rel. Cass Med. Ctr. v. Mason, 796 S.W.2d 621, 624 (Mo. banc 1990) ("Section 537.610 provides an independent basis for waiving sovereign immunity - a basis cemented in the existence of coverage for the damage or injury at issue under the language of the insurance policy"). Coverage limits, identical to the statutory caps previously set forth under § 537.610.2, are also specified for the insurance exception under § 537.610.1, i.e., that the "maximum amount of such coverage" shall not exceed $2, 000, 000 for "all claims arising out of a single occurrence" and $300, 000 "for any one person in a single accident or occurrence[.]" § 537.610.1. With these principles in mind, we address Appellants' two points on appeal.

         Discussion and Decision

         Point 1

         Appellants' first point contends the trial court erred in reducing the judgment against MHTC to the statutory sovereign immunity cap of $409, 123 pursuant to § 537.610. The following facts are relevant to this point.

         The road construction contract between Quadri and MHTC incorporated standard specifications for highway construction (the specifications) requiring Quadri to indemnify MHTC for Quadri's own negligence in the event of a lawsuit arising out of the construction project. To ensure Quadri met the indemnification obligations, the specifications also required Quadri to: (1) carry commercial general liability insurance, in the minimum amount of $500, 000 per claimant and $3, 000, 000 per occurrence; and (2) name MHTC as an additional insured.

         Quadri purchased two insurance policies from United Fire & Casualty Company (United Fire). The first was a commercial general liability policy (the general policy) with coverage up to $1, 000, 000 per occurrence, and the second was a commercial umbrella policy (the umbrella policy) with coverage up to $5, 000, 000 per occurrence (collectively, the policies). As required by the specifications, the general policy included an "additional insured" provision to cover MHTC, but only with respect to Quadri's liability which may be imputed to MHTC. Additional insureds under the general policy were automatically included as "additional insureds" under the umbrella policy and limited to the same coverage.

         The accident involving Holesapple occurred in April 2013. Appellants filed their wrongful death action a few months later in mid-July 2013, naming Ary, Quadri and MHTC. With respect to MHTC, Appellants alleged MHTC waived immunity under § 537.600.1(2) for damages caused by a dangerous condition of its property. In late July 2013, Appellants settled with Ary for $50, 000 and an underinsured motorist carrier for $100, 000. In March 2015, Appellants settled with Quadri for $800, 000 and released Quadri and United Fire, but reserved their claims against MHTC.

         The case then proceeded to trial against MHTC alone. Appellants submitted the case to the jury under the dangerous property exception to sovereign immunity. The jury returned the verdict of $6, 700, 000, which the trial court reduced to the statutory cap "for any one person in a single accident" pursuant to § 537.610.2. The amount stated in the statute is $300, 000 but the cap adjusts to $409, 123 pursuant to § 537.610.5.[5]

         Appellants' first point contends the trial court erred in reducing the judgment to the statutory cap because "under section 537.610.1 [Appellants] were entitled to judgment to the extent of MHTC's applicable liability insurance, in that MHTC waived sovereign immunity by procuring $6, 000, 000 in ...


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