In a case involving two uninsured motorist policies, the Missouri Court of Appeals, Eastern District held that a State Farm policy provided coverage only to the extent that its policy limits exceeded the primary underinsured motorist coverage.
Two provisions in the policy were at issue. One read,
The most we pay will be the lesser of: a. the difference between the amount of the insured’s damages for bodily injury, and the amount paid to the insured by or for any person or organization who is or may be held legally liable for the bodily injury; or b. the limits of liability of this coverage.
The other read,
If the insured sustains bodily injury while occupying a vehicle not owned or leased by you, your spouse or any relative, this coverage applies: a. as excess to any underinsured motor vehicle coverage which applies to the vehicle as primary coverage, but b. only in the amount by which it exceeds the primary coverage.
The plaintiff argued that the first provision appears to grant coverage while the other provision appears to take the coverage away, thus creating an ambiguity that should be resolved against the insurer. The trial court agreed with the plaintiff, but the appellate court reversed.
Dr. Nigro, a physician, entered into a memorandum of understanding with St. Joseph’s Medical Center regarding his suspension. The hospital agreed to maintain the peer review materials relating to the matter confidential. It also agreed to report to the National Practitioner Data Bank, “The [hospital’s] Medical Executive Committee terminated the primary suspension. Dr. T. Lee Nigro’s medical staff privileges lapsed.”
Two years later the hospital received a request for information about Dr. Nigro in connection with his application for network participation with Blue Cross. The request was accompanied by an authorization and release signed by Dr. Nigro, which stated, “I further consent and authorize these entities and persons, and their employees … to supply written information, records, or documents in response to any inquiries received from Blue Cross.” The release stated further, “I consent to and authorize and release … [persons responding to inquiries from Blue Cross] … from liability for the release of information … provided that such release of information is done in good faith and without malice based on a reasonable belief that the information is true.” [emphasis in original]
Dr. Nigro sued for breach of contract, defamation, and tortious interference. The trial court granted the defendants’ motion for summary judgment and the Missouri Court of Appeals, Western District affirmed.
With respect to the breach of contract claim, the court held that Dr. Nigro had released the hospital from any liability associated with responding to the request of Blue Cross for information. Summarizing the rule at issue, the appellate court stated, “In order to prove the defense of release, defendants must show that the plaintiff intended to release them from liability for the subject conduct and that the plaintiff used clear, precise, and unequivocal language in so doing.” The court found that Dr. Nigro’s intention to release the defendants was clear and that the defendants had acted in good faith in providing information to Blue Cross.
Footnote 19 of the appellate court’s opinion is worthy of note with respect to releases in general:
The authorization and release contains a consent clause and a release of liability clause. The former is arguably broader than the latter in that it is not limited to the release of information in good faith. Nevertheless, since we conclude that the letter satisfied the good faith limitation contained in the release clause, we need not address whether St. Joseph and Davis would have been entitled to summary judgment based on the consent clause alone.
Bank of New York was not entitled to rescission of a foreclosure sale where the status quo could not be restored: “The books are full of decisions that if a party would rescind a contract for fraud or other cause, he must, as far as in his power, put the other party in the condition he would have been in had the contract not been made.”
The Missouri Court of Appeals, Eastern District upheld a trial court’s judgment that the president of a company did not personally guarantee the company’s obligations. The defendant signed the credit application at issue, which contained guarantee language, but he signed the document only once, the signature did not indicate whether he was signing in his individual capacity or on behalf of the company, there was only one signature line, and the guarantee language did not clearly evidence that a personal guarantee was intended.
The appellate court stated,
When considering whether a signatory to a contract intended to sign the agreement in his corporate or individual capacity, the determinative question is whether, in view of the form of the signature to the agreement, the language of the so called guaranty clause is sufficient to manifest a clear and explicit intent by [the signatory] to assume a personal guaranty contract. … Accordingly, our courts have adopted the policy that in order to hold a corporate officer individually liable in signing a contract of guaranty … the officer should sign the contract twice[,] once in his corporate capacity and once in his individual capacity…. By signing the contract twice, the officer executing the contract for his corporation clearly manifests his intent to assume personal liability. [citations and internal quotation marks omitted]
John Olsen brought a class action against Global BizDimensions, LLC, alleging that unsolicited faxes sent by Global violated the Telephone Consumer Protection Act (TCPA). The parties settled the suit for $4,917,500 and agreed that the judgment would be recovered only from Global’s general commercial liability insurance policy with American Family Mutual Insurance Co., which had refused to defend Global in the suit.
Resolution of the subsequent garnishment action against American Family turned on whether the award granted to Olsen in his settlement with Global constituted “property damage” under the policy. The trial court found that it did, but the Missouri Court of Appeals, Eastern District reversed, holding that an award of statutory damages under the TCPA does not constitute “property damages” where the term, as defined in an insurance policy, doesn’t include penalties.
The court distinguished Universal Underwriters Insurance Co. v. Lou Fusz Automotive Network, Inc., 401 F.3d 876 (8th Cir. 2005), on the grounds that the policy at issue in that case included punitive damages in its definition of “damages,” while the American Family policy did not. Under Missouri law, the term “damages” doesn’t include fines and penalties unless otherwise bargained for. Thus, if statutory damages under the TCPA are in the nature of fines or penalties, they won’t be covered by an insurance policy unless the policy covers punitive damages. The court held that statutory damages provided under the TCPA are penal in nature and thus not covered under the American Family policy.