Court Opinion

ID: 6335089
Source: CourtListenerOpinion
Date Created: 2022-04-26 18:07:13.922517+00
Date Added: 2024-06-11T09:23:48.081919
License: Public Domain

SUPREME COURT OF MISSOURI
                                           en banc

CLIFTON JAMESON,                                 )    Opinion issued April 26, 2022
                                                 )
                                Appellant,       )
                                                 )
v.                                               )    No. SC99279
                                                 )
ALEXIS STILL,                                    )
                                                 )
                                Respondent.      )

           APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY
                     The Honorable John N. Borbonus, Judge

         After Clifton Jameson and Alexis Still were involved in an automobile accident,

Jameson sent Still’s insurer, MetLife, an offer to settle pursuant to sections 408.040 and

537.058 1 in which he agreed to release all of his legal claims against Still if MetLife

agreed to pay Jameson the lesser of $150,000 or all available coverages. MetLife

responded with a counteroffer to pay $24,751. Taking MetLife’s counteroffer as a

rejection of his settlement offer, Jameson sued Still in the circuit court for his damages

arising from the accident. MetLife then sent several letters to Jameson attempting to

accept his original settlement offer. Still moved for summary judgment, arguing that

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     All statutory references are to RSMo 2016 unless otherwise noted.
MetLife’s counteroffer did not terminate the settlement offer and that its subsequent letter

of acceptance created a settlement agreement between the parties. The circuit court

agreed and granted judgment in Still’s favor. This Court has jurisdiction, Mo. Const.

art. V, sec. 10, and holds there is no settlement agreement between the parties because

MetLife’s counteroffer constituted a rejection that terminated Jameson’s settlement offer

under the common law of contracts. The circuit court’s entry of summary judgment is

vacated, and the case is remanded for further proceedings.

                                        Background

       On December 31, 2018, Still and Jameson were involved in an automobile

accident in St. Louis County. According to Jameson, Still’s negligence caused the crash

and his resulting injuries. On May 20, 2019, Jameson’s counsel sent a letter to Still’s

insurer, MetLife, offering to settle the matter. The letter was titled “Offer to Settle

Pursuant to RSMo § 408.040 and RSMo § 537.058” (hereinafter referred to as the “May

20 settlement offer”) and provided in relevant part:

       My firm is authorized to offer to settle this matter for the sum of one-
       hundred and fifty thousand dollars ($150,000.00) or all available coverages,
       whichever is less, for a full release of any and all claims against Ms. Still.
       This offer to settle will remain open for ninety (90) days from the date of
       MetLife Insurance Company’s receipt of this offer. … The following must
       occur within ninety (90) days from the date MetLife receives this offer
       letter in order to constitute acceptance:

       1) MetLife must complete, execute, and return the enclosed Insurance
          Company Affidavit ….

       2) MetLife must agree to tender and deliver payment of one-hundred and
          fifty thousand dollars ($150,000.00) or all available coverages,
          whichever is less, … to [Jameson’s counsel at his law firm] ….

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On June 21, 2019, MetLife responded with a letter offering to settle Jameson’s claim for

$24,751 (hereinafter referred to as the “June 21 counteroffer”). Taking MetLife’s June

21 counteroffer as a rejection of his May 20 settlement offer, Jameson filed suit in late

June 2019 against Still for his damages arising from the accident.

       After Jameson filed suit, MetLife proceeded to send Jameson several letters

attempting to accept his May 20 settlement offer. On August 6, 2019, MetLife sent a

letter offering to pay its policy limits of $100,000. Jameson did not respond. On August

14, 2019, MetLife sent another letter reiterating its August 6 offer to pay the $100,000

policy limits. The next day, on August 15, 2019, MetLife sent its final letter, which

stated, “On behalf of Ms. Still we accept your demand to settle set out in your letter of

May 20, 2019.” On August 20, 2019, Jameson responded, explaining that the May 20

settlement offer was no longer available because the June 21 counteroffer constituted a

rejection that terminated MetLife’s ability to later accept the May 20 settlement offer.

       In her answer to Jameson’s petition for damages, Still pleaded the affirmative

defense of settlement. Still alleged that MetLife’s counteroffer did not terminate the May

20 settlement offer and that MetLife’s August 15 letter constituted an acceptance, thereby

settling Jameson’s injury claim. Still argued the statutes under which Jameson made the

May 20 settlement offer – sections 408.040 and 537.058 – altered the common law rule

that a counteroffer operates as a rejection that terminates an offer and required the

settlement offer to remain open for 90 days despite any counteroffer or rejection that may

occur during that time frame. Still renewed her argument in a motion for summary

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judgment. The circuit court agreed with Still that a settlement agreement was reached

despite MetLife’s June 21 counteroffer and granted summary judgment.

                                          Analysis

       This Court reviews the circuit court’s entry of summary judgment de novo and

views the record in the light most favorable to the non-moving party. ITT Commercial

Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).

When the defending party moves for summary judgment (as Still did here), it may

establish a right to judgment by showing there is no genuine dispute as to the existence of

each of the facts necessary to support the movant’s affirmative defense. Id. at 381. Even

if the facts relevant to the affirmative defense are undisputed, however, the movant still

must establish the right to judgment as a matter of law. Id. As the facts are not disputed

here, this Court’s inquiry is whether Still established the right to judgment as a matter of

law – in other words, whether a settlement agreement was reached between the parties.

This turns on the legal question of whether the June 21 counteroffer constituted a

rejection that terminated the May 20 settlement offer or whether the May 20 offer

survived MetLife’s counteroffer and, therefore, was accepted by MetLife’s subsequent

letter of acceptance.

       “The question of whether the parties entered into an enforceable settlement

agreement is governed by contract law.” Ste. Genevieve Cnty. Levee Dist. #2 v. Luhr

Bros., Inc., 288 S.W.3d 779, 783 (Mo. App. 2009) (citing Emerick v. Mut. Benefit Life

Ins. Co., 756 S.W.2d 513, 518 (Mo. banc 1988)). “To show a legal, valid settlement

agreement, one must prove the essential elements of a contract: offer, acceptance and

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consideration.” Id. To be effective, the terms of the acceptance must mirror the terms of

the offer, and “[a]ny acceptance that includes new or variant terms from the offer

presented amounts to a counter-offer and a rejection of the original offer.” Pride v.

Lewis, 179 S.W.3d 375, 379 (Mo. App. 2005). Thus, under the common law of contracts,

which governs the formation of settlement agreements, a counteroffer operates as a

rejection that terminates the ability to later accept a settlement offer.

       Indeed, both parties agree that the common law generally applies to the formation

of settlement agreements and that a counteroffer generally operates as a rejection under

the common law. Still argues, however, that the legislature intended to alter this common

law counteroffer rule for offers made expressly under sections 408.040 and 537.058. Still

asserts the plain language of these statutes renders any such offers irrevocable and “non-

rejectable” for 90 days.

       It is well established that the legislature has the authority to modify common law

rules. Ordinola v. Univ. Physician Assocs., 625 S.W.3d 445, 450 (Mo. banc 2021).

However, the legislature must do so “expressly or by necessary implication;” otherwise

“the common law rule remains valid.” State ex rel. KCP&L Greater Mo. Operations Co.

v. Cook, 353 S.W.3d 14, 20 (Mo. App. 2011). “[N]o statute should be construed to alter

the common law further than the words import.” Est. of Williams v. Williams, 12 S.W.3d

302, 307 (Mo. banc 2000). When “doubts exist about the meaning or intent of words in a

statute, the words should be given the meaning which makes the least, rather than the

most, change in the common law.” Id. “To read words and concepts into our statutes

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that the general assembly did not write shows disrespect to both the general assembly and

for the common law.” Overcast v. Billings Mut. Ins., 11 S.W.3d 62, 69 (Mo. banc 2000).

       Thus, the question now before the Court is whether sections 408.040 and 573.058

demonstrate a legislative intent to alter the common law contract formation rule that a

counteroffer operates as a rejection. Because neither statute relates to the formation of

settlement agreements – rather, they each govern distinct issues, as discussed below – this

Court holds that neither section alters the common law rule that a counteroffer operates as

a rejection of a settlement offer.

       Section 408.040, titled “Interest on judgments, how regulated—prejudgment

interest allowed when, procedure,” is intended to govern interest on judgments and

provides when prejudgment interest is allowed. Subsection 1 provides, “Judgments shall

accrue interest on the judgment balance as set forth in this section[,]” then proceeds to

define “judgment balance” and discuss how postjudgment payments shall be applied.

§ 408.040.1. Subsection 2 involves interest on judgments in nontort actions.

§ 408.040.2. Relevant here, subsection 3 governs interest on judgments in tort actions

and allows a plaintiff in a tort case to recover prejudgment interest if that party makes an

offer of settlement to the opposing party or his or her representative and any subsequent

judgment in the case exceeds the amount specified in the settlement offer. § 408.040.3.

In addition, subsection 3 provides, “In order to qualify as a demand or offer pursuant to

this section, such demand must” meet various requirements and “[r]eference this section

and be left open for ninety days.” Id. Section 408.040, therefore, merely provides a list

of items that must be included in a settlement offer for the plaintiff to be entitled to

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prejudgment interest if the case does not settle. It does not, expressly or impliedly,

indicate any intent to change the common law rules governing the formation of

settlement agreements.

       Section 537.058, titled “Personal injury, bodily injury, or wrongful death, time-

limited demand to settle, requirements,” explains what a settlement offer must include to

qualify as a “time-limited demand to settle” and governs when evidence of an

opportunity to settle is admissible in tort actions for extra-contractual damages, i.e., for

bad faith refusal to settle claims. Subsection 1 defines various terms, including “[e]xtra-

contractual damages,” “[t]ime limited demand,” and “[t]ort-feasor,” as used in the

section. § 537.058.1. Subsection 2 provides that, for an offer to qualify as a “time-

limited demand to settle,” such offer “shall be in writing, shall reference this section,

shall be sent certified mail return-receipt requested to the tort-feasor’s liability insurer,

and shall contain [various] material terms” such as “[t]he time period within which the

offer shall remain open for acceptance by the tort-feasor’s liability insurer, which shall

not be less than ninety days from the date such demand is received by the liability insurer

.…” § 537.058.2. Subsection 7 provides that “a time-limited demand that does not

comply with the terms of this section shall not be considered as a reasonable opportunity

to settle for the insurer and shall not be admissible in any lawsuit alleging extra-

contractual damages against the tort-feasor’s liability insurer.” § 537.058.7. Section

537.058, therefore, lists the requirements for a “time-limited demand” to qualify as “a

reasonable opportunity to settle” that is admissible in a bad faith refusal to settle claim

against the liability insurer; it does not govern the formation of settlement agreements.

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Id. Like section 408.040, section 537.058 does not expressly or impliedly indicate a

legislative intent to change common law formation rules regarding settlement

agreements.

       Because neither section alters the common law regarding formation of settlement

agreements, the common law governs. The June 21 counteroffer operated as a rejection

of the May 20 settlement offer, terminating MetLife’s ability to later accept. The circuit

court erred in granting summary judgment for Still on the basis of settlement because no

such settlement agreement was reached.

                                           Conclusion

       For the reasons set forth above, the judgment of the circuit court is vacated, and

the case is remanded for further proceedings. 2

                                                           _____________________________
                                                           Paul C. Wilson, Chief Justice

All concur.

2
   This Court expresses no view as to whether the May 20, 2019, letter from Jameson’s counsel
to Still’s insurer satisfied sections 408.040 or 537.058 for purposes of Jameson’s entitlement to
prejudgment interest should he end up securing a judgment for more than was offered or for
purposes of making the offer admissible should he sue the insurer for bad faith refusal to settle.

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