Court Opinion

ID: 9659563
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:49:26.912474+00
Date Added: 2024-06-11T18:14:09.411455
License: Public Domain

CLIFFORD H. AHRENS, Judge,
concurring.
I concur in the majority opinion because the language of Missouri’s Motor Vehicle Financial Responsibility Law essentially imposes strict liability on insurers for the minimum required insurance coverage. The statute specifically provides that the liability of the insurer regarding the insurance required by the statute “shall become absolute whenever injury or damage covered by the said motor vehicle policy occurs ... no violation of said policy shall defeat or void said policy!,]” section 303.190.6 RSMo (2000).
However, it should be noted that there are due process concerns that exist in the *578clash between compulsory auto insurance laws imposing strict liability and the contractual rights of insurers to notice and a reasonable opportunity to defend an action. In both Rodgers-Ward v. American Standard Insurance Company of Wisconsin, 182 S.W.3d 589 (Mo.App.2005) and this case, it is undisputed that the insurers had no notice of the filing of the suit against their insureds, and no notice or knowledge of the default judgments within the one-year period following the entry of the default judgment, within which a motion to set aside the default judgment could have been filed under Rule 74.05(d). The equitable garnishment actions in both cases were filed more than one year after the entry of the default judgment. Due process issues relating to the right to notice and an opportunity to appear in and defend the action were not before this court either in Rodgers-Ward or in the present case.
In some states, compulsory auto insurance statutes address these due process issues. For example, Michigan’s compulsory automobile insurance statute provides that
The insurance carrier shall not be liable on any judgment if it has not had prompt notice of and reasonable opportunity to appear in and defend the action in which such judgment was rendered, or if the judgment has been obtained through collusion between the judgment creditor and the insured.
Mich. Comp. Laws Ann. Section 257.520(f)(6). See also Kleit v. Saad, 153 Mich.App. 52, 395 N.W.2d 8 (1985). In 1981 the Georgia Supreme Court held in Young v. Allstate Insurance Company, 248 Ga. 350, 282 S.E.2d 115 (1981) that the insured’s failure to notify the insurer of a lawsuit, as required by the policy, did not constitute a defense to the insurer’s liability to the injured third party that filed the lawsuit. The Georgia Legislature responded by enacting legislation requiring that automobile insurance policies mandate that the insured promptly notify the insurer of litigation, and providing that the failure of the insured to notify the insurer of service of process
shall constitute a breach of the insurance contract, which, if prejudicial to the insurer, shall relieve the insurer of its obligation to defend its insureds under the policy and of any liability to pay any judgment or other sum on behalf of its insureds.
Ga.Code Ann. Section 33-7-15. However, the legislation also stated that coverage would not be denied by the statute if a third party sent appropriate notice to the insurer or the insurer’s agent. Ga.Code Ann. Section 33-7-15(c).
In other states, appellate courts have addressed the issue and found no due process violation where the insurer had notice and the opportunity to be heard. See Sandoval v. Chenoweth, 102 Ariz. 241, 428 P.2d 98 (1967) (insurer was not deprived of due process where the insurer had the opportunity to set aside the default judgment, but failed to act promptly); Baldridge v. Kirkpatrick, 63 P.3d 568 (Ok.App.2002) (insurer had right to due process and present its case in court, and that it could do so in an equitable garnishment action following a judgment against its insured).
Some appellate courts, while taking note of due process issues, have held that insurance companies have waived any due process rights that they might have by doing business in a state that has legislation mandating compulsory automobile insurance coverage. See National Indemnity Co. v. Simmons, 230 Md. 234, 186 A.2d 595 (1962); Jones v. State Farm Mutual Automobile Insurance Company, 270 N.C. 454, 155 S.E.2d 118 (1967).
*579Ultimately, these due process issues will need to be addressed by the Missouri legislature or the courts. Because these issues are not before us in this case, I concur in the majority opinion.