Case Summary for November 5, 2014

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Case Summary for November 5, 2014

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.

Attached to the following docketed cases are electronic copies of briefs filed by the parties. These electronic briefs have been converted to PDF to accommodate various word processors. If you do not already have Acrobat reader, which is necessary to open the PDFs, you may obtain it free at the Adobe website. (A set of free tools that allow visually disabled users to read documents in Adobe PDF format is available from access.adobe.com.) These briefs do not reflect any opinion of the Court about the appropriateness of the format of the briefs or the merits of the case, nor are they official court records. Copies of all briefs filed with the Court are available at the Supreme Court Building in the court en banc division.

The attachments below may not reflect all briefs filed with the Court, the complete filing or the format of the original filing. Appendices and other attachments generally will not be posted here. To see what documents have been filed in a particular case, visit Case.net.

DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9:30 a.m. Wednesday, November 5, 2014
____________________________________________________________________________________________________

SC94250
Jimmie Lee Taylor v. The Bar Plan Mutual Insurance Company, et al.
Jackson County
Challenge to professional liability policy exclusions
Listen to the oral argument:

SC94250.mp3
Taylor was represented during arguments by Jonathan Sternberg of Jonathan Sternberg, Attorney, PC in Kansas City; The Bar Plan was represented during arguments by Brent W. Baldwin of The Baldwin Law Group in St. Louis.

Judge Richard K. Zerr, presiding judge of the 11th Judicial Circuit (St. Charles County), sat in this case by special designation in place of Judge Zel M. Fischer; Judge Peggy Richardson, an associate circuit judge in Moniteau County (in the 26th Circuit), sat in this case by special designation in place of Judge Paul C. Wilson.

Jimmie Taylor hired attorney James Wirken and his law firm to represent Taylor and his family in several claims against an individual for mismanagement of Taylor’s mother’s trust. Taylor became sole trustee and beneficiary of his mother’s trust after she died, and Wirken continued to represent him in issues relating to administering the mother’s estate. During this representation, Taylor made several loans from the trust to Wirken’s law firm. Wirken also advised Taylor to make additional loans from the trust to one of Wirken’s clients, a company seeking lenders for real estate development projects. Wirken did not disclose that the company was paying him a commission for securing a lender, nor did Wirken advise Taylor to seek other legal counsel regarding any of the loans. Neither Wirken nor his client ever repaid Taylor for any of the loans, and Taylor sued Wirken and his law firm for breach of fiduciary duty. In November 2010, the circuit court entered judgment against Wirken and his law firm and awarded Taylor a total of nearly $941,000 in loan principal, loan interest and attorney fees. Taylor then filed a garnishment action against The Bar Plan Mutual Insurance Company, which issued Wirken’s law firm a professional liability insurance policy, seeking payment of his judgment. The Bar Plan responded that it had no duty to indemnify Wirken because his acts or omissions fell outside the scope of the insurance coverage. In March 2013, the circuit court entered judgment in favor of The Bar Plan, holding that, although Wirken’s drafting of the loan documents constituted “legal services” under the policy, insurance coverage nonetheless was excluded under the “legal representative of investors” provision, finding Wirken had a financial interest in both sets of loans. Taylor appeals.

Taylor argues the circuit court erred in granting judgment to The Bar Plan and finding the policy excluded coverage for Taylor’s underlying judgment against Wirken. Taylor contends that ambiguous exclusions in insurance contracts should be construed strictly against the insurer. He asserts that the terms “investor” and “investment” in the policy exclusions are undefined and that the exclusion language is ambiguous and reasonably should not be read to encompass Taylor or the loans from the trust. He argues the exclusion for claims arising from the insured’s “capacity” is not limited to the insured’s role as “a legal representative of investors” but rather states that “capacity” is the insured’s role as a public official, an ERISA fiduciary, an investment adviser “and” – not “or” – a legal representative of investors. He contends The Bar Plan did not and cannot meet its burden to prove Wirken acted in all of these roles so as to activate the “capacity” exclusion. Taylor also asserts the exclusion for claims arising from an insured’s capacity as “a legal representative of investors” did not exclude coverage for the damages in his underlying case. He argues that, even if one cause is excluded, a non-excluded concurrent cause of an injury must result in coverage. He contends his damages should be covered because they were caused concurrently by Wirken’s breach of his fiduciary duties to Taylor for his representation of Taylor in the administration of Taylor’s mother’s trust.

The Bar Plan responds that the circuit court correctly granted it judgment and found that the professional liability policy did not cover Taylor’s judgment. It argues that the policy unambiguously excludes coverage because Wirken represented Taylor in loans made to the law firm and the development company. The Bar Plan contends the loans constituted investments under that term’s plain meaning. It asserts Wirken owned an equity interest in the law firm and received commissions for the loans made to the development company. The Bar Plan responds that the policy excludes coverage for damages caused by an attorney taking part in representation in which he has a conflict due to financial self-interest. The Bar Plan argues that, no matter the cause of the loss, Wirken’s breach of fiduciary duty was related to his role as Taylor’s lawyer for the loans to the law firm and the development company, and so the concurrent proximate cause rule does not apply. The Bar Plan contends that a reasonable insured individual would know that the four elements of “capacity” are separate exclusions.

SC94250_Taylor_brief.pdf

SC94250_Bar_Plan_brief.pdf

SC94250_Taylor_reply_brief.PDF

SC94309
Rita Wommack v. Edward J. Grewach
Lincoln and Warren counties
Legal malpractice

At the parties' request, the Court on November 3 removed this case from the oral argument docket.

SC94075
Adam Dutton v. American Family Mutual Insurance Company
Jackson County
Applicability of motor vehicle insurance policy
Listen to the oral argument:

SC94075.mp3
Dutton was represented during arguments by Randall W. Brown of Thornberry, Eischens & Brown LLC in Kansas City; American Family was represented during arguments by Susan Ford Robertson of The Robertson Law Group LLC in Kansas City.

Adam Dutton was injured in a May 2009 automobile accident in Blue Springs. Barbara Hiles, who was driving a Nissan Maxima at the time, was found liable for the accident and Dutton’s damages. At the time, she had automobile liability insurance policies from American Family Mutual Insurance Company for the Nissan as well as a Ford F-250 truck. She owned both vehicles, and both policies contained the same language, including a clause that the policy did not cover vehicles other than the vehicle insured by that policy and used by the insured owner. American Family agreed to pay Dutton the $25,000 limit under the Nissan policy but declined coverage under the Ford policy. Dutton filed an action for declaratory judgment (determination of legal rights), seeking to recover the $25,000 limit under the Ford policy. In February 2012, the circuit court entered judgment in favor of American Family, holding the Ford policy provided no liability coverage for the accident. Dutton appeals.

Dutton argues the circuit court erred in entering judgment for American Family. He contends state law mandates that every motor vehicle insurance policy must provide the minimum limits of liability coverage required by the statutes. Dutton asserts that Hiles is liable for his damages sustained in the accident and that her policy provides $25,000 in liability coverage. He argues that any exclusions or limitations on minimum coverage in the policy are invalid. Dutton contends the clause contained in the policy regarding “other insurance” is ambiguous and conflicts with anti-stacking language contained in the policy. He asserts the clause grants broad coverage without limitations or qualifiers and should be found to favor coverage.

American Family responds that the circuit court correctly entered judgment in its favor. It argues that there is no requirement in the state statutes or case law that every owner’s liability policy must provide the minimum coverage limits under the statutes when a motor vehicle owned by the insured is not involved in the accident and that state law does not require “stacking” owner policies for vehicles owned but not involved in the accident. American Family contends there is no coverage under Hiles’ Ford policy because the Ford was not involved in the accident. American Family asserts the circuit court also correctly determined that the “other insurance” anti-stacking provision was valid. American Family argues the clause is not ambiguous and does not conflict with other anti-stacking language in the policy. It contends case law Dutton raises in his argument does not apply to this case.

The Missouri Organization of Defense Lawyers argues, as a friend of the Court, that the state law does not require a motor vehicle owner’s policy to provide liability coverage for the operation of a household vehicle that is not designated in the policy. It contends the law expressly permits issuance of a motor vehicle “owners policy” that covers only the operation of the vehicle specifically designated in the policy. The organization asserts the state law should be applied according to its terms and not a different interpretation. The organization asserts that the case law cited in Dutton’s argument does not apply to this matter.

Farmer’s Insurance Company Inc. argues, as a friend of the Court, that neither state statutes nor case law requires stacking under the facts of this case because the Ford policy is an owner’s policy that did not insure the vehicle involved in the accident, which was insured separately under another owner’s policy. It contends there is no public policy basis under state law for nullifying the “owned vehicle” exclusion or limitations on stacking in an owner’s policy. Farmer’s Insurance asserts that a decision finding American Family liable under the Ford policy would impact insurance policies and risks in the future.

The Missouri Insurance Coalition and the National Association of Mutual Insurance Companies argue, as friends of the Court, that the American Family owner’s liability policy for the Ford did not cover the vehicle involved in the accident. It contends the Ford policy did not designate or identify the Nissan as an insured vehicle. It asserts the exclusion of the Nissan as an “owned vehicle” did not violate Missouri’s policy that a minimum liability coverage be provided.

SC94075_Dutton_brief.pdf

SC94075_American_Family_brief.pdf

SC94075_Dutton_reply_brief.pdf

SC94075_MO_Org_of_Defense_Lawyers_amicus_brief.pdf

SC94075_Farmers_Insurance_amicus_brief.pdf

SC94075_MO_Insurance_Coalition_&_Nat'l_Insurance_amicus_brief.pdf

SC94109
Fred Weber v. Director of Revenue
St. Louis County
Challenge to sales tax refund
Listen to the oral argument:

SC94109.mp3
The director was represented during arguments by Deputy Solicitor General Jeremiah J. Morgan of the attorney general's office in Jefferson City; Fred Weber was represented during arguments by Aarnarian "Appollo" D. Carey of Sandberg, Phoenix & Von Gontard PC in St. Louis.

Fred Weber Inc. sells asphalt and sells rock aggregate to contractors who use it to construct roads and parking lots. Weber sold more than $2.6 million in hot asphalt and rock aggregate to two paving contractors to construct roads and parking lots. The contractors paid sales tax on their purchases from Weber. In November 2011, Weber sought a refund of nearly $140,000 in sales taxes for the paving contractors, claiming the contractors were “manufacturing, producing or processing” a product and, therefore, should qualify for the tax exemption provided in section 144.054, RSMo. The director of revenue denied the refund. Weber sought review from the administrative hearing commission, which found Weber was entitled to the refund, concluding the exclusion applies because the construction of an asphalt road or parking lot is “processing,” “manufacturing,” “compounding” and “producing” a “product.” The director appeals.

The director argues the commission erred in finding Fred Weber was entitled to a sales tax refund. The director contends the statute makes no reference to construction or road building. The director asserts that construction of a road or parking lot does not qualify for a tax exemption under section 144.054.2 because it is not the “manufacturing, processing, compounding, mining or producing” of a product. The director argues that the statute merely expands the materials subject to tax exemption, not the type of manufacturing activities. The director contends the construction of roads and parking lots is not the type of industrial activity ordinarily associated with manufacturing.

Weber responds that the commission correctly concluded that it qualified for the tax exemption under section 144.054.2 because the paving contractors were engaged in “manufacturing, processing, compounding, mining or producing.” Weber argues that, applying both the plain meaning of the terms in the statute and this Court’s prior interpretations of the statute’s terms, the paving contractors’ work constituted manufacturing because they took an input of rock aggregate and hot mix asphalt and produced an output of asphalt parking lots, roads and driveways. Weber contends the commission correctly concluded it qualified for the tax exemption because the paving contractors manufactured, processed, compounded or produced a “product.” It asserts that this Court previously has held that section 144.054.2 applies to products, regardless of whether they eventually are affixed to real property.

SC94109_Director_of_Revenue_brief.pdf

SC94109_Fred_Weber_brief.PDF

SC94109_Director_of_Revenue_reply_brief.pdf