Case Summary for November 5, 2009

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Case Summary for November 5, 2009

THE FOLLOWING DOCKET SUMMARIES ARE PREPARED BY THE COURT'S STAFF FOR THE INTEREST AND CONVENIENCE OF THE READER. THE SUMMARIES MAY NOT INCLUDE ALL ISSUES PENDING BEFORE THE COURT AND DO NOT REFLECT ANY OPINION OF THE COURT ON THE MERITS OF A CASE. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION. SUMMARIES ARE UNOFFICIAL AND SHOULD NOT BE QUOTED OR CITED.

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DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9 a.m. Thursday, Nov. 5, 2009

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SC90041
Eric D. Burns v. Lynn M. Smith, and Farmers Alliance Mutual Insurance Company of Kansas
St. Clair County
Insurance policy exclusion and prejudgment and postjudgment interest
Listen to the oral argument:

Farmer's was represented during argument by Thomas C. Walsh of Bryan Cave LLP in St. Louis, and Burns was represented by Anthony L. DeWitt of Bartimus, Frickleton, Robertson & Gorny, P.C. of Jefferson City.

Eric Burns was a truck driver for Kennon Redi-Mix Inc., owned by Lynn Smith. In April 2000, Smith placed a weld on a salvage water-pressure tank over an area that had become corroded and was rusted through. Burns was injured when the water-pressure tank exploded. Burns sued Smith for negligence. Smith insured his home and farm through Farmers Alliance Mutual Insurance Co. His policy included a $1 million in personal liability coverage plus prejudgment and postjudgment interest. He asked the insurance company to indemnify him, but the insurance company denied coverage and withdrew from defending Smith when he refused its offer to defend under a reservation of right (allows an insurer to defend a claim without waving the insurer's right to later deny coverage). At trial, Smith was represented by his commercial general liability insurance carrier, Oak River Insurance Company. The trial court awarded Burns more than $2 million in damages plus more than $670,000 in prejudgment interest for personal injuries Burns suffered. In March 2004, Burns filed garnishment proceedings against Farmers pursuant to Smith's insurance policy. Farmers responded that Smith's policy did not apply to bodily injury or property damage arising out of "business pursuits" except activities that ordinarily occur during farming or non-business activities. Smith testified he did not intend his Farmer's policy to cover his company. In March 2008, the trial court concluded that the business pursuits exclusion in Smith's insurance policy with Farmer's did not apply because Smith's negligent welding did not occur on his farm and, therefore, ordered Farmer's to pay Burns the personal liability limits of $1 million, the underlying prejudgment interest of more than $670,000 and postjudgment interest of more than $730,000. Farmer's appeals.

Farmer's argues the trial court erred in entering judgment for Burns. It contends the business pursuit exclusion in the policy bars insurance here because Burns's injury resulted from Smith's engaging in an occupation other than farming. It asserts the trial court erred in computing interest on the full amount of that judgment. Pursuant to its policy, Farmer's contends, it was responsible for prejudgment interest only on that part of the judgment that it pays – interest on the $1 million policy limit – and postjudgment interest should have been reduced to reflect Burns's receipt of $675,000 in partial payment of the judgment in April 2007.

Burns responds that the business pursuit exclusion of Smith's policy did not exclude coverage for the injuries Smith caused. He argues the court calculated the prejudgment and postjudgment interest properly because they were based on the entire amount of the underlying judgment against Farmer's, which never paid or deposited in court its liability limits of coverage as required by its policy's supplementary payments provisions to stop the accrual of prejudgment and postjudgment interest. Burns further responds that Farmer's waived the issues of its liability for prejudgment and postjudgment interest when it withdrew from defending its insured and failed to preserve for review the issues of the proper amounts due.

SC90054
Ronald Joe Hayes, et ux. v. Trish G. Price
Jasper County
Comparative fault and prejudgment interest
Listen to the oral argument:

Hayes was represented during argument by David W. Ransin of David W. Ransin, P.C. in Springfield, and Price was represented by John L. Mullen of Franke, Schultz & Mullen, P.C. of Kansas City.

In September 2004 in Joplin, Trish Price made a left-hand turn in her vehicle, colliding with a motorcycle driven by Ronald Hayes. Hayes suffered injuries to his leg and hip, resulting in a permanent disability. In December 2004, Hayes sent Price a demand letter offering not to sue if Price would pay $325,000 and provide copies of specific information, documents and sworn witness statements. Price rejected the offer, and Hayes sued Price for his injuries and his wife sued Price for loss of consortium. At trial, Price submitted a "lookout" comparative fault instruction and argued Hayes should have been alert to the possible collision. Hayes moved to exclude any argument of comparative fault, and both parties moved for directed verdicts. The trial court overruled all three motions. The jury's verdict awarded Hayes an amount that exceeded the settlement offer, but the court reduced the verdict by 20 percent based on Hayes's comparative fault. Hayes moved to amend the judgment or for judgment notwithstanding the verdict, asking the trial court to award prejudgment interest pursuant to section 408.040, RSMo. He argued that, under this statute, he was entitled to prejudgment interest because the verdict exceeded his December 2004 settlement offer. The trial court did not award any prejudgment interest. Hayes appeals.

Hayes argues the trial court erred in submitting Price's verdict instruction to the jury and in allowing her to argue, during closing arguments, that he was also at fault. He contends the evidence supports neither the instruction nor her argument. Hayes asserts he is entitled to prejudgment interest pursuant to section 408.040.2 because he offered a settlement, the settlement was not accepted and the judgment exceeded the offer. He contends prejudgment interest shall be calculated from 60 days after he made the offer or from the date Price rejected the offer without making a counter-offer. He argues the statute does not give the trial court discretion to deny the prejudgment award when Hayes satisfied all its requirements.

Price responds that the trial court properly submitted the issue of Hayes's comparative fault to the jury under a "failure to keep a careful lookout" theory. She argues there is evidence that Hayes could have perceived a dangerous situation as he approached the intersection and had the time and ability to take evasive action. She contends the evidence established that Hayes was not looking at the road ahead of his motorcycle or at the intersection where the accident occurred and that, had Hayes kept a careful lookout, he would have had at least four seconds and more than 170 feet to slow down or otherwise maneuver his motorcycle to avoid the accident. Price further responds that the trial court properly denied Hayes's claim for prejudgment interest because a settlement demand pursuant to section 408.040(2) must contain a "reasonably ascertainable" settlement amount and cannot depend on the conduct of third parties. She asserts that Hayes's demand letter did not contain a "reasonably ascertainable" monetary demand because he requested items to which no monetary value reasonably could be ascertained, such as certified copies of indemnity agreements, insurance policies, copies of titles to all vehicles owned or driven by or available to Price and her parents, and a sworn statement court reporters took from Price.

SC90251
Roger Worley v. Ronald Hoffman, et al.
Greene County
Disability retirement benefits
Listen to the oral argument:

Worley was represented during argument by David J. Moen of Jefferson City, and the board was represented by Paul Sherman of Mann, Walter, Bishop & Sherman, P.C. of Springfield.

Roger Worley was a Springfield police office from April 1992 to December 2002. In September 2002, Worley applied for duty-related disability retirement benefits from the Springfield police and fire retirement system board of trustees. In his application, Worley alleged he was disabled by work-related stress because his occupational duties caused him to suffer from major depression and anxiety disorders. In December 2002, the board found that Worley was disabled but denied his claim, instead giving him non-duty-related disability retirement benefits. Worley appealed the board's determination to a hearing examiner, who conducted a hearing at which a city attorney representing the board argued Worley should not receive duty-related disability retirement benefits. In March 2004, the hearing examiner determined Worley was totally and permanently disabled from performing the occupational duties of a police office and ordered the board to pay Worley duty-related disability benefits retroactive to the date the board first approved him for non-duty-related disability retirement benefits. Subsequently, the board met and again denied Worley duty-related disability retirement benefits. Worley sought judicial review of the board's decision, alleging procedural irregularities and errors in applying the law. The circuit court affirmed the board's favor to deny the duty-related benefits. Worley appeals.

Worley argues the board violated his due process rights. He contends the undisputed evidence proves the city's attorney advocated for the board in an administrative hearing against Worley and then entered into extensive ex parte communications with the board, giving the board evidence outside the record and without giving Worley the opportunity to be present. Worley further argues the board erred in rejecting the hearing examiner's award of duty-related disability retirement benefits because the board's decision was not supported by competent and substantial evidence. He contends the board based its decision on evidence outside the record and failed to review the record from the administrative hearing as required by section 536.080, RSMo.

The board responds that the circuit court properly denied Worley duty-related disability retirement benefits because there was competent and substantial evidence in the record to support the board's decision. The board contends Worley failed to object at his first opportunity to preserve a purported due-process violation for judicial review. The board argues the city attorney's multiple roles in Worley's case were authorized, proper and afforded Worley judicial review in the circuit court.

SC88625
State ex rel. Andrew Lyons v. Larry Crawford and Jeremiah Nixon
Scott County
Request to set aside death sentence due to mental retardations
Listen to the oral argument:

Lyons was represented during argument by Frederick A. Duchardt, Jr. of Trimble, and the state was represented by Stephen D. Hawke of the attorney general's office in Jefferson City.

Andrew Lyons was convicted in 1996 of two counts of first-degree murder and one count of involuntary manslaughter and was sentenced to death. This Court affirmed the conviction and sentence in Lyons v. State, 39 S.W.3d 32 (Mo. banc 2001). In 2007, Lyons sought a writ of mandamus based on the United States Supreme Court's decision in Atkins v. Virginia, 536 U.S.304 (2002), and section 565.030.6, RSMo, which provide that individuals who are mentally retarded cannot be sentenced to death. In his writ, Lyons contended that he is mentally retarded and, therefore, is not eligible for the death penalty. This Court appointed a special master to hear evidence and make findings of fact and conclusions of law as to whether Lyons is mentally retarded as defined in section 565.030.6. The master concluded that Lyons is mentally retarded. Lyons seeks to set aside his death sentence.

Lyons argues this Court should sentence him to life in prison without possibility of probation or parole. He contends this action is required by the 8th and 14th amendments of the United State Constitution and article 1, section 10 of the Missouri Constitution because the master found, by a preponderance of the evidence, that Lyons is mentally retarded as defined in Atkins and in section 565.030.6.

The state responds that this Court should not issue its writ setting aside the sentence because Lyons has not proven he is mentally retarded. It contends Lyons has not provided evidence that he has significantly below-average intellectual functioning or continual extensive deficits and limitations in two or more adaptive behaviors such as communication, self-care, home living or social skills.