Opinion ID: 2803237
Heading Depth: 2
Heading Rank: 1

Heading: Equitable Garnishment

Text: Minden seeks equitable garnishment, a cause of action governed by statute in Missouri. Missouri statutes provide that when a personal injury plaintiff has recovered a final judgment against a defendant for what should have been an insured loss, he is entitled to have insurance proceeds applied to satisfy the judgment. Mo. Rev. Stat. § 379.200. The action is a suit in equity against the insurance company to seek satisfaction of a judgment under an insurance policy. Id. The party seeking the judgment is in the shoes of the insured, so the insurer may raise the same defenses in an equitable garnishment action that it could have in an action by the insured. Glover v. State Farm Fire and Cas. Co., 984 F.2d 259, 260 (8th Cir. 1993) (per curiam). To collect a judgment through equitable garnishment, the plaintiff has the burden to show by substantial evidence that the claim is within the coverage provided within the insurance contract. Heacker v. Safeco Ins. Co. of Am., 676 F.3d 724, 727 (8th Cir. 2012) (applying Missouri law). However, if the insurance company relies on a policy exclusion to deny coverage, the insurance company bears the burden of proving that such exclusion is applicable, and we must construe the exclusion clause strictly against the insurer. Jensen v. Allstate Ins. Co., 349 S.W.3d 369, 374-75 (Mo. Ct. App. 2011). In addition, if the language of the policy is ambiguous and reasonably open to different constructions, the language will be construed against the insurer and as ordinarily understood by the lay person who bought and paid for the policy. Pruitt v. Farmers Ins. Co., 950 S.W.2d 659, 664 (Mo. Ct. App. 1997). Atain argues that it cannot be liable for equitable garnishment because the automobile exclusion and the assault and battery exclusion in Gannon's policy both exclude coverage for Minden's claims. The auto exclusion provides that the insurance policy does not apply to: bodily injury arising out of any auto whether or not owned, maintained, used, rented, leased, hired, loaned, borrowed or entrusted to others or provided to another by any insured. Further, the exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, -6- entrustment, permitting, training or monitoring of others by an insured. The district court found that while it was a close question, the exclusion did not bar coverage because a lay person could reasonably have understood the exclusion to apply only to autos related to the insured, in other words, a car operated by or on behalf of Gannon's. Given the above standard applicable to an insurance company seeking to exclude coverage, we agree with Minden and the district court that Atain cannot prove that the auto exclusion bars coverage here. Specifically at issue is the construction of the phrase whether or not. Minden argues that the phrase simply modifies the insured's act of possessing the auto, and does not modify the term any insured. Atain argues that the phrase means whether the insured owned/used the auto or whether the insured did not own/use the auto (which would include Lammert's use of his auto to injure Minden), and that the district court impermissibly removed the whether or not phrase from the policy. The parties agree that no particular Missouri case is on point, but Minden cites a Louisiana case involving somewhat similar facts, and an identically worded exclusion. In Lewis v. Jabbar, 5 So. 3d 250 (La. Ct. App. 2009), the Louisiana Court of Appeals considered an insurance company's argument that the same auto exclusion barred coverage in a premises liability case brought by a grocery store patron injured by a vehicle in the parking lot. The Louisiana court noted that neither the injured victim, nor the owner of the store was using the auto, and the auto was not being used with the store owner's permission. Id. at 257. The court further found that the common and essential element of the premises liability claim against the grocery store did not involve use of an auto. Instead, allegedly improper lighting was the crux of the negligence claim against the insured. Id. Accordingly, the exclusion did not bar coverage. Id. at 257-58. -7- The instant matter is not directly on point with Lewis, as the crux of Minden's premises liability complaint does not involve improper lighting, but instead an unreasonably dangerous design that placed pedestrian patrons in harm's way while proceeding to the remotely located parking lot. Nonetheless, if the wording of the auto exclusion were as clear as Atain alleges, the Lewis court would not have had occasion to consider whether it applied in the circumstances alleged in that case and would have simply upheld the decision to bar coverage. As the district court noted, the auto exclusion could be interpreted as Atain urges, but also reasonably could be understood as Minden advocates. A layperson, especially one purchasing general liability insurance for a bar whose premises included a parking lot, could reasonably have thought that the auto exclusion only excluded coverage for injuries arising out of an auto somehow connected to the insured. Minden v. Atain Specialty Ins. Co., No. 4:11CV01284, 2013 WL 5106519 at  (E.D. Mo. Sept. 12, 2013). In this situation, because the insurer is seeking to bar coverage by way of an exclusion, the tie goes to the insured, see Jensen, 349 S.W.3d at 374-75, and the auto exclusion does not bar coverage for Minden's premises liability claims. With regard to the assault and battery exclusion, the policy states that it does not apply to any bodily injury arising out of Assault and Battery committed by any Insured, any employee of any Insured or any other person; or Assault or Battery, whether or not caused by or arising out of negligent, reckless or wanton conduct of the Insured, the Insured's employees, patrons or other persons lawfully or otherwise on, at or near the premises owned or occupied by the Insured, or by any other person. The district court found that because Lammert pleaded guilty to manslaughter, a reckless mens rea crime rather than an intentional one, Atain could not rely upon the conviction to deny coverage, and there was enough other evidence in the record to lead to the conclusion that the act was not intentional. Accordingly, Atain could not meet its burden of proving the exclusion applied. Atain appears to argue that the convoluted wording of this assault and battery exclusion entitles it to exclude from -8- coverage acts caused by something less than intentional conduct. An examination of Missouri case law leads us to the conclusion that Atain's argument cannot prevail. In Missouri, civil assault and battery both include the element of intent. Phelps v. Bross, 73 S.W.3d 651, 656 (Mo. Ct. App. 2002) (holding that an element of civil assault is intent to cause offensive contact); Baltzell v. Van Buskirk, 752 S.W.2d 902, 906 (Mo. Ct. App. 1988) (defining battery as an intentional tort which, by definition, is not a cause of action for negligence). If an intentional act is required before one can commit assault and battery, we cannot fathom that Missouri courts would allow insurance companies to use the exclusion to bar coverage when there has been no intentional act that caused the initial injury. Unfortunately, though there are legions of Missouri cases discussing insurance policies with an assault and battery exclusion, none of them illuminate the precise issue here. The instant case does not present the usual tavern assault and battery scenario, which tends to involve either patrons injuring one another or bouncers forcibly removing patrons and shoving them. See, e.g., Trainwreck West Inc. v. Burlington Ins. Co., 235 S.W.3d 33, 36 (Mo. Ct. App. 2007); Hunt v. Capitol Indem. Corp., 26 S.W.3d 341, 342 (Mo. Ct. App. 2000). These assault and battery cases generally focus on the identity of the person committing the assault and battery, not whether the act itself was an assault and battery. Hunt, 26 S.W.3d at 344 (discussing whether an assault and battery committed by fellow patron as opposed to a bar employee fell within the exclusion). With respect to the exclusion's reference to negligent or reckless conduct, cases analyzing both intentional and negligent conduct frequently do so in the context of whether a bar employee was negligent or reckless in allowing the initial assault or battery to happen–not whether the initial injury was caused by merely negligent conduct. E.g., Capitol Indem. Corp. v. Callis, 963 S.W.2d 247, 249 (Mo. Ct. App. 1997) (holding that assault and battery exclusion in policy precluded coverage of claim for negligent failure to protect patron from assault and battery). -9- This case, on the other hand, involves a patron who by all accounts was upset, had been drinking, was driving in the parking lot at night, and ultimately hit another patron with the right side of his vehicle as he exited the parking lot. There is certainly record evidence6 supporting both the idea that the incident was intentional, or that it was an unfortunate accident; this, and the fact that Lammert ultimately pleaded guilty to a reckless and not intentional crime, leads us to conclude that Atain cannot meet its burden of proving the exclusion applied to bar coverage. See Jensen, 349 S.W.3d at 374-75. Accordingly, we affirm the district court's equitable garnishment ruling.