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Carroll v. Missouri Intergovernmental Risk Management Association10/25/2005
Opinion Vote: AFFIRMED.
Smart, P.J., Holliger, J., concur.
Opinion:
In this equitable garnishment action, the circuit court granted summary judgment, allowing Michael Carroll to recover $150,000 from the Missouri Intergovernmental Risk Management Association (MIRMA) as the insurer for the City of Stanberry. MIRMA appeals, contending the court incorrectly applied the law in determining it was obligated to pay on a claim that was submitted untimely.
FACTUAL AND PROCEDURAL HISTORY
On October 8, 1999, Michael Carroll was injured in a vehicular collision that occurred when he ran a stop sign in Stanberry, Missouri ("City"). On November 21, 2000, Carroll's attorney sent a letter to the City alleging Carroll's injuries were caused by the City's negligence in failing to trim an overgrown tree that obscured the stop sign. Based on this negligence allegation, Carroll filed a lawsuit against the City on December 15, 2000.
At all times relevant herein, the City was a member of MIRMA, a non-profit association of fifty-eight municipalities organized under Section 537.620 - 537.650 and authorized as an "insurance entity" by the Missouri Department of Insurance. The City notified MIRMA's claims administrator about Carroll's lawsuit on January 11, 2001. MIRMA promptly denied the claim as untimely. MIRMA's "Claims Handling Procedures" required that claim forms be completed and in the mail within forty-eight hours of the incident which gave rise to a claim, or within forty-eight hours of the member's first knowledge of the incident. The procedure also allowed a grace period of up to thirty days for notification of a claim. MIRMA denied coverage because it did not receive the City's claim until fifty-one days after the City first had knowledge of Carroll's accident and negligence allegation.
Prior to trial in the negligence lawsuit, Carroll agreed, pursuant to Section 537.065, to seek collection from MIRMA for any judgment against the City. Carroll presented his case at trial, and the City offered no evidence. The court found in Carroll's favor, awarding him $150,117.30 in damages based on the City's negligence.
Carroll filed an equitable garnishment action against MIRMA to collect on the judgment against the City. As an affirmative defense, MIRMA asserted the City's claim was not covered due to its untimely submission. Both Carroll and MIRMA filed motions for summary judgment addressing whether MIRMA was required to show prejudice to avoid payment of an untimely claim. MIRMA stipulated that no prejudice resulted from the late claim notice but argued that it was not subject to the prejudice requirement as a "self-insurance" association organized under Section 537.620.
The court granted summary judgment in favor of Carroll, concluding that MIRMA was required to show prejudice and had failed to do so in denying coverage on the City's claim. The court entered a garnishment ordering MIRMA to pay the judgment of $150,117.30, plus costs and interest.
POINTS ON APPEAL
MIRMA raises three points on appeal, all contending the circuit court erroneously applied the law in granting Carroll's summary judgment motion. Point I asserts the court erred in determining MIRMA was subject to the judicially created requirement that "insurers" must demonstrate prejudice before denying coverage on an untimely filed claim. Point II argues that even if MIRMA was an insurance company, the court erred in determining the prejudice requirement applied to the "self-insurance risk pool" created by MIRMA and its members. Point III asserts the equitable garnishment action failed to state a proper claim for relief becau
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