Sykora v. Farmers Ins. Co.

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TRACY SYKORA, ASHLEY SYKORA, AND MATTHEW SYKORA, Respondents, v. FARMERS INSURANCE COMPANY, INC., Appellant.

Nos. WD86567, WD86584

Court of Appeals of Missouri, Western District, Second Division

September 17, 2024

APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY, MISSOURI THE HONORABLE KENNETH GARRETT, JUDGE

W Douglas Thomson, Presiding Judge, Karen King Mitchell, Judge and Janet Sutton, Judge.

OPINION

G THOMSON, JUDGE.

Farmers Insurance Company appeals from the trial court's grant of summary judgment in favor of Tracy, Ashley, and Matthew Sykora on their claim for equitable garnishment. Because Farmers does not appeal from a final judgment, we lack jurisdiction and dismiss Farmers's appeal.

I. FACTUAL AND PROCEDURAL HISTORY

This is Farmers's second attempt to appeal from the trial court's grant of summary judgment in favor of the Sykoras for equitable garnishment. We set forth the relevant facts in Farmers's first appeal:

On April 21, 2014, Joseph Surratt drove his vehicle while intoxicated and struck George Sykora's vehicle, causing George's death.^[1] Joseph later pled guilty to first-degree involuntary manslaughter and was sentenced to ten years' imprisonment. George's wife Tracy Sykora and their two children sued Joseph for wrongful death and obtained a judgment awarding $22,500,000 in damages. The wrongful death action initially named Chad and Kristy Surratt (Joseph's parents) as defendants as well under the theory of negligent entrustment with respect to Joseph. The petition alleged that, though he was over 18 years old at the time, Joseph was living with Chad and Kristy and was unable to make decisions for himself as a result of drug usage, and Chad and Kristy were aware of and enabled Joseph's drug usage.

At the time of George's death, Chad and Kristy had an automobile insurance policy with Farmers. The policy identified Chad and Kristy as the "named insured[s]," with an address [in] Lee's Summit, Missouri. The policy did not identify Joseph by name as a "household driver," but it did provide:

We will pay damages for which any insured person is legally liable because of bodily injury to any person and property damage arising out of the ownership, maintenance or use of a private passenger car, a utility car, or a utility trailer.

We will defend any claim or suit asking for these damages. We may settle when we consider it appropriate. We will not defend any suit or make additional payments after we have paid the limit of liability for coverage.

Insured person as used in this part means:

1. You or any family member.

The policy defines "family member" as follows "Family member means a person related to you by blood, marriage or adoption who is a resident of your household."

In conjunction with the wrongful death suit, Sykora issued a demand letter to Farmers to pay out the limit of its policy. Farmers rejected Sykora's demand, asserting that Joseph was not covered by Chad and Kristy's policy because Joseph was not a resident of [their Lee's Summit home] at the time of the accident.

After obtaining the $22,500,000 wrongful death judgment against Joseph, Sykora filed an equitable garnishment action against Farmers, arguing that Joseph was covered by Chad and Kristy's policy at the time of George's death and that Farmers had a duty to both defend and indemnify Joseph. Sykora argued that, because the underlying wrongful death judgment included a finding of fact that Joseph was a resident of [the Lee's Summit home] at the time of the accident, Farmers was estopped from contesting or otherwise challenging the underlying judgment. Both parties moved for summary judgment, arguing about the legal issue of Farmer's ability to contest Joseph's residency. The court below denied Farmers's motion for summary judgment and granted Sykora's motion, specifically determining that Farmers had a duty to defend Joseph in the wrongful death claim and, by failing to do so, it could not subsequently challenge the residency determination made in the wrongful death judgment. The court below did not, however, make any determination as to the damages necessitated by its finding of Farmers's liability.

Sykora v. Farmers Ins. Co., 642 S.W.3d 381, 382-83 (Mo. App. W.D. 2022) (emphasis in original). Farmers appealed the trial court's judgment finding it had a duty to defend Joseph. We dismissed that appeal for lack of a final judgment. Id. at 384-85.

The Sykoras filed a motion to amend their pleadings to add a new cause of action - bad faith failure to settle - against Farmers. The Sykoras alleged they had been properly assigned the bad faith failure to settle claim pursuant to Missouri law. Farmers filed its answer to the petition. Farmers also filed a motion for partial summary judgment on the issue of damages on the Sykoras' equitable garnishment claim, arguing that, while it disputed the trial court's judgment finding against it, damages were limited to the $500,000 limit set forth in the policy. The Sykoras filed a cross-motion for summary judgment on the same issue.

On January 31, 2023, the trial court entered a "Decree/Order" that ruled on various pending motions, including Farmers's partial motion for summary judgment and the Sykoras's corresponding cross-motion for summary judgment. On the issue of damages, the trial court granted Farmers's partial motion for summary judgment and denied the Sykoras's cross-motion for summary judgment.

After the trial court entered that order, Farmers filed a "Motion to Alter, Amend, or Modify Decree/Order" which in part asked the trial court to "find that there is no just reason for delay pursuant to Rule 74.01(b) and enter judgment on the claim by [the Sykoras] for equitable garnishment under Section 379.200."

On August 4, 2023, the trial court entered an "Amended Decree/Order" that addressed a number of pending motions, including Farmers's motion to alter, amend, or modify the January 31 "Decree/Order."

Then, after a hearing on August 22, 2023, the trial court entered a "Second Amended Decree/Order" on September 8, 2023 in which the trial court stated in part, "It is hereby ORDERED that said "Decree/Order" of January 31, 2023 and said "Amended Decree/Order" of August 4, 2023 are VACATED and AMENDED by this Order, Amended Order, and Judgment."^[2] (L.F. 299). Thereafter, the trial court entered the following "Judgment Against Farmers: Count I:" Therefore, finding no just reason for delay pursuant to Rule 74.01(b), the Court hereby enters JUDGMENT against Farmers and in favor of the plaintiffs on Count I of the plaintiffs' second amended petition for:

A. Five Hundred Thousand and 00/100 Dollars ($500,000), which represents the coverage limit of the Farmers policy, plus

B. One Hundred Seventy-Nine Thousand Three Hundred Eighty-Three and 56/100 Dollars ($179,383.56), which represents post-judgment interest at a rate of 6.75% per year on the $500,000 coverage limit from the date the underlying judgment was entered against Joseph Surratt to the date of the entry of this Order, Amended Order, and Judgment, for a total judgment of Six Hundred Seventy-Nine Thousand Three Hundred Eighty-Three and 56/100 Dollars ($679,383.56); and

C. post-judgment interest on said total judgment against Farmers at a rate of 9% per year following the entry of this judgment until satisfaction.

Farmers timely appealed this Judgment, and now argues that this Court has jurisdiction to hear its appeal because the trial court certified the judgment final for the purposes of appeal pursuant to Rule 74.01(b).

II. ANALYSIS

This Court has an obligation "to determine its authority to hear the appeals that come before it." First Nat'l Bank of Dieterich v. Pointe Royale Property Owners' Assoc., Inc., 515 S.W.3d 219, 221 (Mo. banc 2017) (citing Gibson v. Brewer, 952 S.W.2d 239, 244 (Mo. banc 1997)). "'A prerequisite to appellate review is that there be a final judgment.'" Halderman v. City of Sturgeon, 592 S.W.3d 824, 828 (Mo. App. W.D. 2020) (quoting Gibson, 952 S.W.2d at 244). In its simplest terms, "[a] final judgment 'resolves all issues in a case, leaving nothing for future determination.'" Id. (quoting First Nat'l Bank of Dieterich, 515 S.W.3d at 221).

Rule 74.01(b) "provides a limited exception to [this Court's jurisdictional] finality requirement." First Nat'l Bank of Dieterich, 515 S.W.3d at 221. Rule 74.01(b) states:

(b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may enter a judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay. In the absence of such determination, any order or other form of decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

In cases involving multiple claims, "Rule 74.01(b) authorizes a trial court to enter judgment on one or more - but fewer than all - of the claims in an action and make that judgment a 'final judgment' for purposes [of appeal] by certifying that there is no just reason to delay the appeal of that judgment." First Nat'l Bank of Dieterich, 515 S.W.3d at 221-22.

"The circuit court's designation is not conclusive however." Halderman, 592 S.W.3d at 828. "'[T]he question of whether a judgment is eligible for certification under Rule 74.01(b) is a question

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