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Clayborne v. Enterprise Leasing Co. of St. Louis, LLC

Court of Appeals of Missouri, Eastern District, Second Division

April 11, 2017


         Appeal from the Circuit Court of the City of St. Louis Honorable Joan L. Moriarty

          SHERRI B. SULLIVAN, P.J.


         Carlus Parker (Appellant) appeals from the trial court's summary judgment entered in favor of Enterprise Leasing Company of St. Louis, LLC (Enterprise) and Elco Administrative Services Company (ELCO)[1] (collectively Respondents). We affirm.

         Factual and Procedural Background

         On March 6, 2013, Appellant rented a 2013 Ford Escape (Escape) from Enterprise under a written rental agreement between himself and Enterprise. Appellant declined to purchase insurance coverage from Enterprise when he rented the Escape. Appellant also declined the option to purchase supplemental liability protection (SLP), which includes excess insurance from a third-party insurance company by initialing the box indicating this declination on the rental agreement. He also signed the rental agreement and expressly indicated he had read and agreed to the terms and conditions on Pages 1 through 4 of the agreement.

         As to the MVFRL, the rental agreement provides:

7. Responsibility to Third Parties. Owner complies with applicable motor vehicle financial responsibility laws as a state certified self-insurer, bondholder, or cash depositor. Except to the extent required by the motor vehicle financial responsibility laws of the applicable state or otherwise by law, Owner does not extend any of its motor vehicle financial responsibility or provide insurance coverage to Renter, AAD(s), passengers or third parties through this Agreement. If valid automobile liability insurance or self-insurance is available on any basis to Renter, AAD(s) or any other driver and such insurance or self-insurance satisfies the applicable state motor vehicle financial responsibility law, then Owner extends none of its motor vehicle financial responsibility. However, if Renter and AAD(s) are in compliance with the terms and conditions of this Agreement and if Owner is obligated to extend its motor vehicle financial responsibility to Renter, AAD(s) or third parties, then Owner's obligation is limited to the applicable state minimum financial responsibility amounts. Unless required by law, Owner's financial responsibility shall not extend to any claim made by a passenger while riding in or on or getting in or out of Vehicle. Owner's financial responsibility shall not extend to liability imposed or assumed by anyone under any worker's compensation act, plan or contract. SEE PARAGRAPH 17 FOR INFORMATION ON OPTIONAL SLP.

         On March 11, 2013, Appellant was involved in a motor vehicle accident with Darion Clayborne (Clayborne), when Appellant ran a stop sign at a high rate of speed in the Escape and collided with Clayborne's car at the intersection of Shreve and Margaretta Avenues. At the time of the accident, Appellant maintained his own automobile liability insurance policy through Benchmark Insurance Company (Benchmark), which provided insurance coverage to Appellant for this accident.

         On April 25, 2014, Appellant's counsel Thomas Hershewe (Hershewe), from Dollar, Burns & Becker, sent a letter to ELCO's Maureen Gehbauer (Gehbauer), which stated: "My client is willing to settle within the policy limits for Twenty-Five Thousand Dollars ($25, 000.00)."

         On June 19, 2014, Appellant and Clayborne entered into a Section 537.065 agreement[2]which provided, in pertinent part, that in return for $15, 000 from Benchmark, Clayborne would not pursue Appellant's personal assets and not enforce any judgment by execution or garnishment against Appellant's personal or real properties other than his insurance policies. Appellant agreed to waive his right to contest venue and trial by jury, agreed to a bench trial, and agreed to accept representation from Dollar, Burns & Becker as his counsel in the lawsuit brought by Clayborne. In addition, he agreed that he would not accept a defense from Enterprise or ELCO.

         On July 2, 2014, Clayborne filed his Petition alleging he was injured by Appellant's negligent operation of the Escape. (Circuit Court of the City of St. Louis Case No. 1422-CC09095). On July 8, 2014, Hershewe called Gehbauer and advised her Clayborne had filed suit against Appellant. On July 9, 2014, Gehbauer responded to Hershewe that Benchmark and not Enterprise had the duty to defend and indemnify Appellant. On October 6, 2014, after a bench trial, judgment on liability and damages was entered for Clayborne and against Appellant for $575, 000 and post-judgment interest.

         On November 7, 2014, Clayborne filed a Section 379.200 garnishment action against Enterprise, ELCO, and Appellant for the MVFRL $25, 000 limit. (Circuit Court of the City of St. Louis Case No. 1422-CC10024). On November 13, 2014, Appellant filed a cross-claim against Enterprise and ELCO for bad faith failure to settle and breach of contractual duty to defend. Enterprise and ELCO satisfied Clayborne's garnishment claim against them for $25, 000, resulting in Clayborne's voluntary dismissal of them from his garnishment action with prejudice on October 30, 2015.

         On November 12, 2015, Enterprise and ELCO filed a motion for summary judgment on Appellant's claims for breach of a duty to defend and bad faith asserting neither Enterprise nor ELCO had a contractual duty under the rental agreement or a statutory duty under the MVFRL to defend Appellant, and neither the rental agreement nor the MVFRL gave Enterprise or ELCO the exclusive right to contest or settle any claims against Appellant or ...

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