Insurance Law Update
Brown & James, P.C.
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 IN THIS ISSUE
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ABOUT US
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Brown & James, P.C. is a Midwest regional law firm with over 100 trial lawyers practicing in a wide variety of corporate and insurance litigation practice areas.
St. Louis, MO
Kansas City, MO
Springfield, MO
Belleville, IL
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Happy Holidays!
From all of us at Brown & James, we wish everyone a happy and peaceful holiday season and a very prosperous New Year.
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 Missouri Supreme Court Refuses to Take Transfer in Co-Employee Decision
As you may remember from our September newsletter, the Western District of the Missouri Court of Appeals in Robinson v. Hooker, No. WD71207 (Mo. App. W.D. August 13, 2010), eliminated co-employee immunity under the Missouri Workers’ Compensation Law. Following the Court of Appeals decision, the co-employee appealed to the Missouri Supreme Court. The Supreme Court has now ruled in the matter and refused to hear the co-employee’s appeal.
The Court’s ruling renders the Court of Appeals decision final and has the effect of eliminating co-employee immunity in Missouri. Technically, the Robinson decision only impacts the western side of Missouri. However, we predict both the Eastern District and Southern District of the Missouri Court of Appeals will follow and most, if not all, Missouri trial judges will allow these suits to go forward. This sea change in Missouri law will lead to a flood of work-related accidents hitting the courts, cases in which injured employees will now file common-law civil actions against their co-workers and supervisors for negligence.
Going forward under Missouri law, the injured workers gets to collect workers’ compensation benefits and then sue a co-worker and collect again under the employer’s CGL policy, and even possibly under the co-worker’s homeowner’s policy. Insurers beware! If your policy does not clearly exclude these types of claims, be prepared for an onslaught of lawsuits.
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No Investigation by Insurer Equals Vexatious Conduct
In a very long insurance coverage opinion (starting on page 34 of the decision) addressing an ambiguity in an aviation policy, the Western District of the Missouri Court of Appeals, in Dodson Intern’l Park, Inc., v. National Union Fire Ins. Co., No. WD71893 (Mo. App. W.D. November 30, 2010), reiterated the rule under Missouri law which holds that an insurer which simply relies on the allegations contained in a complaint to deny coverage can be subject to liability for bad faith and vexatious refusal to pay. The Missouri Court of Appeals explained that an insurer’s “self serving reliance” on the plaintiff’s allegations in the lawsuit with no other independent investigation into the factual basis for the plaintiff’s allegations was “inappropriate.” The Court went on to list other facts in the case that also demonstrated vexatious-type conduct.
The Court’s lengthy 36-page opinion also addressed the issue of care, custody or control and general ambiguity law which makes the case very good reading for a thorough review of those areas of insurance law.
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Measure of Damages in Property Damage Case can be Cost of Repair
In a case with only $10,000 in dispute, the Southern District of the Missouri Court of Appeals, in Cason v. King, No. SD30183 (Mo. App. S.D. November 18, 2010), handed down an excellent dissertation on the proper measure of damages in Missouri property damage cases. In a 17-page opinion, the Court takes the reader through the history of the measures of damage for property damage and loss of use. The Court held for purposes of contract actions the remedial measures necessary to put the injured property in the condition that the original contract called for is the proper measure of damage, i.e., the cost of repair. In contrast, the Court explained that in tort actions, the proper measure is normally the property’s diminution in value, i.e., the difference in reasonable market value before and after. We highly recommend reading this decision in its entirety. The decision gives the reader the current law on property damage cases as it relates to the different causes of action that may be brought.
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In Other News
Judge Nominated to United States District Court
St. Louis County Circuit Court Judge John Ross has been nominated to become the next United States District Court Judge for the Eastern District of Missouri. Judge Ross is awaiting confirmation by the United States Senate.
Bloodied but Still Standing – Local Judge Takes Up Boxing
The Honorable Larry Permuter, a 63-year old St. Louis County judge, recently entered the boxing ring for his first fight. Bloodied and losing on a decision, Judge Permuter is not deterred and is going back for more!
Click here for the full story.
Illinois Implements New Codified Rules of Evidence
Effective January 1, 2011, Illinois will implement new codified rules of evidence. Until this point, the rules of evidence in Illinois have been drawn from various sources, including case law, Illinois Supreme Court rules, and various state statutes. The Illinois Rules of Evidence (IRE) are modeled after the Federal Rules of Evidence, but include certain key differences from the federal rules, including the standard for admitting expert testimony, procedures for depositions, and issues relating to privilege. In the New Year, we expect to see some interesting cases developing in Illinois courts interpreting these rules.
Click here for the complete list of rules.
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Brown & James News
Brown & James Annual General Defense & Insurance Law Seminar
The Brown & James Annual General Defense and Insurance Law Seminar is set for Thursday, January 27, 2011, at the St. Louis Marriott West. The registration deadline is January 7, 2011. Please register soon, as the limited space is quickly filling up. If you did not receive a registration form or still wish to sign up, click here for registration information.
Mike Ward recently gave a presentation on "Fundamental Issues in Insurance Policy Construction and Interpretation" at the Missouri Bar's annual Insurance Coverage & Litigation Seminar on December 10, 2010, in Clayton, Missouri. Teresa Young, a Brown & James senior associate, was the seminar’s moderator.
John J. Johnson has been recognized by the Missouri Bar's Continuing Legal Education Committee. The body honored John in its Best of CLE Spotlight for his ongoing contributions to the Missouri Bar in the field of workers’ compensation law. John is chair of the firm’s Workers’ Compensation practice group and routinely lectures on workers’ compensation issues and serves as a reviewer for Missouri Bar’s Workers’ Compensation Law CLE deskbook.
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Recent Trial Results
Tim Wolf obtained a defense verdict on our client’s behalf in an auto accident case that he tried before the United States District Court for the Western District of Missouri in Kansas City. The plaintiff claimed $51,000 in specials and alleged the defendant cut the plaintiff off, causing him to leave the road and hit a tree.
Steve Schwartz represented the plaintiff in an Arkansas trial court in a complicated dispute over computer software. After a two-week trial, the jury awarded Steve’s client a verdict, including substantial damages and attorney fees.
After a three-day jury trial in a defective construction case, David Bub obtained a defense verdict for our construction company client. The plaintiff alleged construction defects caused moisture intrusion leading to property damage and mold.
Justin Chapell defended our national retail client, Auto Zone, in a premises liability case. The plaintiff filed suit for $125,000 after tripping and falling and fracturing his shoulder. After only a twenty-minute deliberation, the jury returned a defense verdict, awarding the plaintiff nothing.
After investigating the plaintiff’s allegations that her vehicle was stolen and set on fire, Matt Young represented our insurance client, which had determined that the plaintiff had violated her policy’s intentional acts exclusion. An arbitration panel found for the insurer and awarded the plaintiff nothing.
Beth Kamp Veath and Matt Hodge obtained the dismissal of a dental malpractice case that the plaintiff had brought under a breach of contract theory, rather than as an action for professional negligence. The plaintiff apparently chose to file the action this way to avoid the need to hire an expert witness.
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The Insurance Law Update is a monthly publication and is offered as a service to the clients and friends of Brown & James, P.C. to provide an informal summary of cases, legislation, rulings, and other developments impacting insurance law in Missouri, Illinois, Kansas and Arkansas. We hope you find it useful. Please let us know what you would like to see in upcoming installments. We look forward to your feedback.
The Insurance Law Update does not constitute legal advice or a legal opinion and is not an adequate substitute for the advice of counsel.
Click here to contact the editor
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