Joplin, MO Business Blog

Case Review - Ambiguity in Insurance Policies

In Williams v. Silvola the appellate court considered whether Missouri or Kansas law would apply to stacking of insurance policies.  The plaintiff, Jaynes, was a resident of Kansas and had purchased seven automobile insurance policies from Farmers Insurance Co. and Mid-Century Insurance Co. (collectively called "Farmers") in Kansas, which prohibits the stacking of policies.  While driving her sister's vehicle in Missouri, Jaynes was rear-ended by Silvola, who was uninsured.  The sister's vehicle was insured and registered in Missouri.  Farmers paid Jaynes $50,000, which was the limit per person per occurrence under each of Jaynes' insurance policies.  Farmers' position was that Kansas prohibited stacking and Jaynes was not entitled to any more money under the policies even though her medical bills were over $350,000.  Jaynes sued for breach of the insurance policies and vexatious refusal to pay on the grounds that each of the insurance policies contained language in the "Limits of Liability" section that contained the phrase that the limits were "subject to the laws of the state of the occurrence" and Missouri was the state of the occurrence and allowed stacking.

The trial court ruled that the insurance policies purchased by Jaynes were ambiguous due to the above-stated provision and other limiting clauses in the policies prohibiting stacking and found against Famers Insurance Co. for $250,000 and against Mid-Century Insurance Co. for $50,000.  Farmers appealed.  The appellate court found that  under  the law of both Missouri and Kansas, where there is ambiguity in an insurance policy the ambiguity must be construed against the insurer and in favor of the insured.  Ambiguity is found where different constructions of the language can reasonably be made; the language will be given the ordinary interpretation understood by the layman who bought  the policy.  The appellate court found that the trial court did not err in its ruling.

Source:  Williams v. Silvola, Missouri Court of Appeals, Western District, WD66055, April 10, 2007

Case Review - Sellers' Breach of Contract on Sale of Property

The Sellers in Minor v. Rush contracted to sell their 230 acre farm to the Buyers for a price lower than they had anticipated.  Before entering into the contract the Sellers contacted their bank to see if the sale price would pay off enough of their debt for the bank to release the property.  The bank told them it "looked like" it would.  Time was of the essence in the deal so the Sellers signed the contract with the Buyers but did not put in the contract a contingency provision should the sale proceeds not be enough to release the property.  After the signing of the contract the Sellers learned that the proceeds would not be enough for the bank to release the property and allow them to tender title in fee simple at closing.  The Sellers refused to give the Buyers a deed to the property.  The Buyers sued for specific performance on the contract and the trial court ruled in favor of the Buyers.  The Sellers appealed on the ground that their refusal should be excused on the basis of impossibility of performance.  The appellate court ruled against the Sellers and affirmed the trial court judgment.  It held that a party must comply with the terms of a contract "unless performance is rendered impossible by an Act of God, the law, or the other party," and if a party desires to be excused upon a contingency, the contingency must be included in the contract.  The Sellers failed to have the contingency that the sale would not go forward if  the sale proceeds were not  enough to release the property put into the contract.  This failure results in them having to perform the terms of the contract.

Source:  Minor v. Rush, WD65439, (Mo. App. W.D.  03/06/2007)

Case Review - Mortgage Co. Must Give Homeowner Deed of Release or Face Statutory Damages

When a homeowner pays off the mortgage on his residence the mortgage company or financial institution must release the deed of trust and give to the homeowner the deed of release.  In Huber v. Wells Fargo Home Mtg. the homeowner paid off the loan on his residence and Wells Fargo recorded a deed of release.  However, Wells Fargo failed to provide to the homeowner the deed of release.  The homeowner sent a demand letter to Wells Fargo demanding immediate release of the deed of trust and for the deed of release to be delivered to the homeowner within 15 days.  Wells Fargo failed to respond to the letter and the homeowner filed suit against Wells Fargo and Franklin American Mortgage Co., which initially made the loan but then sold it to Wells Fargo.  The trial court granted summary judgment for both defendants because Wells Fargo had recorded the deed of release and, therefore, the homeowner was not entitled to statutory damages.  The homeowner appealed.  The appellate court determined that the homeowner had failed to provide Franklin American with the required notice and it affirmed the summary judgment as to it.  However, Wells Fargo was not so lucky.  The court determined that even though Wells Fargo had complied with the purpose of section 443.130, which is aimed at financial institutions who fail to release the mortgagee's property, in accordance with the ruling the Missouri Supreme Court handed down in Glass v. First National Bank of St. Louis, 191 S.W.3d 662 (Mo. banc 2006), that did not excuse it from providing the homeowner with the deed of release as required by section 443.130.1.  The homeowner was entitled to statutory damages and the appellate court reversed the trial court's ruling as to Wells Fargo.

Source:  Huber v. Wells Fargo Home Mtg., ED88183, (Mo. App. E.D., 03/06/2007)

Case Review - Commercial Driving License - Not Elgible for Expungement

Any person who has been issued a commercial driver's license is ineligible to have an expungement of an alcohol-related driving offense pursuant to section 577.054.  This statute allows for a person convicted of an alcohol-related driving offense, first offense, to have the record expunged after ten years if the person has not been convicted of any other offenses during that time.   However, subsection 2 of the statute states that the expungement shall not apply to a person who "has been issued" a commercial driver's license.  In State v. Owen, the defendant received a conviction of driving with excessive blood alcohol content on August 21, 1981.  This offense did not involve a commercial vehicle and the defendant did not receive any other convictions.  After ten years he filed a petition to have the record expunged.  The Director of Revenue objected because the defendant had been issued a commercial driver's license and had only surrendered it right before the petition had been filed.  The Director contended that this made the defendant ineligible to have his record expunged.  The defendant contended that because he did not have a commercial driver's license at the time he filed the petition, he was eligible for the expungement.  The trial court and the appellate court agreed with the Director of Revenue's interpretation of the statute and the defendant's record was not expunged.

Source:  State v. Owen, WD66655, (Mo. App. W.D., 03/06/2007)

Case Review: Workers' Compensation vs. Personal Injury Suit

The Missouri Supreme Court, sitting en banc, recently ruled on whether an employee can sue a co-employee for injuries sustained as a result of the co-employee's negligent act.  Here, the plaintiff was employed as a driver for the employer.  The defendant was the president of the company and the plaintiff's supervisor.  Plaintiff was injured when a water pressure tank on the side of the company truck exploded and threw him to the ground.  The trial court ruling allowed plaintiff to sue the defendant personally and outside of the workers' compensation regulations.  The Supreme Court stated that section 287.120 does not explicitly prevent the plaintiff from suing his co-employee but that the Missouri courts have ruled to extend the employer's scope of immunity from liability to a fellow employee except in limited circumstances.  These limited circumstances require that there be an affirmative negligent act outside the scope of an employer's responsibility to provide a safe workplace (the "something more" test).  This was described to be "an affirmative act that creates additional danger beyond that normally faced in the job-specific work environment."  The court refused to adopt a reasonable person standard in this test.  Under the circumstances of this case the Supreme Court found that the evidence was substantial to find that the defendant had negligently welded the rusted pressurized water tank and that he directed the plaintiff to "run it till it blows;"   that this satisfied the "something more" test; and that this constituted an affirmatively negligent act by the defendant in creating an additional danger beyond what plaintiff normally faced in his job-specific environment.  The court upheld the trial court's ruling.

Source:  Burns v. Smith, SC87789, (Mo. banc 02/13/2007)

Case Review - Gender-Based Discrimination

A female employee was discharged after an incident in which she was the only female participant.  The males involved were not discharged.  The Missouri Commission on Human Rights determined that the female employee made a prima facie case that her employer, Buchheit, Inc., discharged her for gender-based discrimination and that Buchheit's nondiscriminatory reasons for her discharge were pretextual.  Buchheit appealed to the circuit court, which found that Buchheit did have a legitimate reason to discipline her but that her firing was disparate treatment compared to the discipline imposed on the male counterparts.  The trial court affirmed the Commission's decision in part and reversed in part, and remanded the case for a Commission order.  Buchheit appealed again and alleged that there was no evidence to support the Commission's finding that Buchheit's reason for discharging the female was pretextual or that it was motivated by sex or that she was treated less favorably than the male counterparts.  The appellate court upheld the Commission's finding that Buchheit's reasons were pretextual, found that the female employee was treated less favorably because the male counterpart was dealt with and disciplined by the same supervisor and was subject to the same standards as the female, and found that the female was discharged based on her gender.

Source:  Buchheit, Inc. v. Missouri Commission on Human Rights, WD65985, Missouri Court of Appeals, Western District, February 20, 2007

Case Review - Retaliatory Denial of Cost-of-Living Pay Increase

On February 20, 2007, the Western District of the Missouri Court of Appeals found that the State of Missouri denied Probation and Parole Officers II an across the board cost-of-living pay increase of $1,200 for state employees because of retaliation for exercising their constitutional and statutory rights to engage in union activity.  In 2003 the Probation and Parole  Officers II, through negotiations by   their union (Service Employees International Union Local 2000) and the State of Missouri, were given raises through a step adjustment plan for their grade level.  These raises were effective December 2003.  Thereafter the Senate Appropriations Committee and House Budget Committee met and discussed rolling back these raises.  Instead the cost-of-living pay increase of $1,200 for the 2004-2005 fiscal year was denied to those who received the raises in December 2003.  The trial court ruled that this action violated the Probation and Parole Officers II rights and was in retaliation for union activity.  This was upheld by the appellate court.

Source:  Service Employees International Union Local 2000, et al. v. State of Missouri, WD66255, Missouri Court of Appeals, Western District, February 20, 2007

Humor - Tech Help

We all know how frustrating it is when the computer does not function the way we want it to.   Sometimes we feel like throwing the computer out the window.  Good tech help soothes the beast.  Here is a perfect example -

http://www.youtube.com/watch?v=eRjVeRbhtRU

Enjoy.

Case Review- Unemployment Benefits Denied

In Peoples v. ESI Mail Pharmacy Services, Inc., et al., unemployment benefits were denied to Peoples based on reckless negligence.  Peoples had worked for ESI Mail Pharmacy Services, Inc. as a packer.  The pharmacy had problems with Peoples sending incorrect prescriptions to its customers and he was fired.  Peoples filed for unemployment benefits and the pharmacy contested his claim.  Peoples appealed the decision and it eventually was reviewed by the the Missouri Court of Appeals, Eastern District.  The appellate court upheld the denial of benefits on the basis of reckless negligence and stated that under Missouri laws

"misconduct" is defined as:  an act of wanton or willful disregard of the employer's interest, a deliberate violation of the employer's rules, a disregard of standards of behavior which the employer has the right to expect of his or her employee, or negligence in such degree or recurrence as to manifest culpability, wrongful intent or evil design, or show an intentional and substantial disregard of the employer's interest or of the employee's duties and obligations to the employer.  Section 288.030.1(24), RSMo. Cum. Supp. 2005.

The court also  found that there was a disregard of standards of behavior in this case.

Source:  Peoples v. ESI Mail Pharmacy Services, Inc., et al., Missouri Court of Appeals, Eastern District, Case number ED87565, February 6, 2007

Prenups for Women

What do you think about first when someone mentions the words "prenup" or "alimony"  (called "maintenance" in Missouri)?  You probably think that the man is wanting the prenup so he doesn't have to pay alimony to the woman in the event of a divorce.  Right?  Well, it is time to rethink this.  Women should start thinking about protecting their assets before they get married or even enter into a living arrangement with a man.  Why?  More and more women are seeing an increase in their income due to owning their own business, working their way up the corporate ladder, etc.  In many cases the woman's income will be more than the man.  Women need to start thinking about protecting their assets just like the men have always done.

You may be thinking that no man will ask for alimony - that it will hurt their "manly" pride.  Wrong, think again.  Men are starting to seek alimony and it just isn't the rich and famous like Nick Lachey or Elizabeth Taylor's ex.  It is the man who stayed home with the children while the woman went off to work; it is the man who works part-time  or who doesn't make as much as the woman and got used to the finer things that her money helped provide.  It could be the man you are planning on marrying or moving in with.

How do you protect your assets?  If you plan ahead you can have a prenuptial agreement or living arrangement agreement prepared by your attorney.  Be prepared to reveal all of your assets to your attorney and to your soon-to-be spouse.  If you don't reveal all of the assets in the prenup those assets will not be part of the agreement and there could possibly be grounds for fraud and setting aside the whole agreement.  If you want to enter into a contract before you live with someone you will need to include whether any or all monies will be combined, how the joint bills are to be paid, how the separate and personal bills will be paid, what will happen to the joint assets should there be a separation or parting of the ways, etc.

What if you are already married but want to protect your assets?  PINK magazine, February/March 2007 issue, has listed four things you can do.  These include:

1. Getting the man back into the workforce before you ask for a divorce or even hint that you are thinking about one.  If he is working and earning money on his own, he should not need as much or any support from you;
2. Keep all assets that you inherit in your name alone and do not co-mingle them with your spouse.  This means you do not put any monies into a joint account with your husband, you do not put his name on any real property, stocks, etc. Do not let your parents or other persons give assets to you and your spouse.  Have them just give it to you.  In other words, keep the assets totally in your control and name. 
3. You should build up a nest egg in a separate account under your control only.  This way should something happen you will have access to money if you need it.
4. You may be able to get your husband to sign a post-nuptial agreement, but don't count on it.  If you ask for one after the marriage you are probably going to be giving up more assets than you would have had you entered into a prenuptial agreement (think along the terms of a divorce settlement on this one.)

Due to tradition a woman may not feel comfortable asking the man in her life to enter into the agreements described above.  Women have come a long way in the work force and have worked hard to build up their assets and to provide for themselves and not have to rely upon the man taking care of them.  Women want to be treated as equals and are equal to men in this area and they should not hesitate to protect their assets just like the men should not hesitate to protect theirs.  Remember - entering into an agreement before the marriage or living arrangement is concluded is the best way to do this.

Source:  PINK, February/March 2007