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Roth v. La Societe Anonyme Turbomeca France9/30/2003
When a lawsuit's defendants lie about insurance coverage and induce the plaintiff to settle, should the courts permit the plaintiff to enforce the settlement but sue for damages growing out of the fraudulent inducement? That is the issue in this case. Sheila and Robert Roth sued La Societe Anonyme Turbomeca France, Turbomeca Engine Corporation, numerous insurance companies, the law firm of Mendes and Mount, LLP, and attorneys Kevin Cook and Douglas N. Ghertner on various claims for damages growing out of their claim that they had been wrongfully induced to settle their lawsuit by lies about insurance coverage. The Roths, however, want to enforce their settlement and pursue this claim. The circuit court dismissed this lawsuit on the primary ground that, if the settlement was fraudulently induced, it was void and their only remedy was to pursue their original action. The circuit court erred, and we reverse its judgment in part and affirm in part. We remand the case for further proceedings.
The Roths sued originally for injuries sustained by Sheila Roth in a 1993 helicopter crash in which she was permanently crippled. She was working as a nurse on the flight. The helicopter's engine failed because of a defective engine part manufactured by La Societe Anonyme Turbomeca and distributed by Turbomeca Engine. The pilot and a medical patient being transported in the helicopter died in the crash. A respiratory therapist on board also suffered serious injuries.
The Roths, the therapist and relatives of the two decedents sued Turbomeca and others. Because of the multiplicity of lawsuits with identical issues, the circuit court ordered that all of the plaintiffs share discovery. Details of the other lawsuits are reported in Letz v. Turbomeca Engine Corporation, 975 S.W.2d 155 (Mo. App. 1998), and Barnett v. La Societe Anonyme Turbomeca France, 963 S.W.2d 639 (Mo. App.), cert. denied, 525 U.S. 827 (1998).
One of the plaintiffs asked in interrogatories submitted to Turbomeca whether or not the firms had insurance to cover any judgment arising from the helicopter crash. Turbomeca responded that the maximum insurance coverage was approximately $50 million. The Roths later learned that, in fact, the firms had a maximum insurance coverage of approximately $1 billion.
The circuit court scheduled the Roths' suit for trial after the suits of the other plaintiffs. Before learning of the actual amount of insurance coverage, the Roths feared that $50 million in insurance coverage would not be sufficient to satisfy all of the plaintiffs' judgments, so they decided to settle. On April 14, 1995, they executed a release and settlement agreement with Turbomeca. The following week, the defendants established and funded annuities to fulfill the settlement agreement.
On May 3, 1995, the Roths discovered the actual amount of insurance coverage. The Roths, however, decided against asking the circuit court to set aside the settlement agreement in favor of suing on an independent action for fraud. One reason, they explained at oral argument, was that the settlement moneys had been dispersed and expended, making its return highly impracticable. Pursuant to their release, the Roths voluntarily dismissed their lawsuit with prejudice, and later filed this action naming multiple defendants, including Turbomeca, various primary and excess insurers, and the attorneys providing legal representation for the defendants in the underlying personal injury action, Mendes and Mount, Kevin Cook, and Douglas N. Ghertner.
The suit sounded in four counts and sought recovery for the harm caused by alleged misrepresentations regarding insurance coverage. Count I alleged fraud and named
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