Opinion
No. WD 63831
June 14, 2005
Appeal from the Circuit Court of Jackson County, Missouri, The Honorable Charles E. Atwell, Judge.
Before: Smith, C.J., and Howard and Holliger, JJ.
State Farm Fire and Casualty Company appeals from the judgment of the Circuit Court of Jackson County for the respondent, Kristen Dhyne, on her claim for damages and attorney's fees, brought pursuant to § 375.420. Section 375.420 allows an insured to recover damages and attorney's fees from an insurer when the insurer "has refused to pay [a covered] loss without reasonable cause or excuse." In her initial petition, the respondent sought recovery from the appellant for a loss under her uninsured motorist policy for injuries she sustained in a motor vehicle accident, while working, as well as damages and attorney's fees as authorized by § 375.420. In her first amended petition, the respondent's uninsured motorist loss claim was dropped after it was satisfied in full by the appellant. However, she continued to seek damages and attorney's fees from the appellant under § 375.420, alleging that its agents and employees had engaged in "vexatious conduct" by "[d]iscouraging [her] from making a legitimate claim and making misrepresentations to her about the repayment provisions of the uninsured motorist provisions of the policy." The jury returned a verdict for the respondent for $5,150 in damages and $18,089.57 in attorney's fees.
All statutory references are to RSMo, 2000, unless otherwise indicated.
The appellant raises three points on appeal. In Point I, it claims that the trial court erred in denying its motion for judgment notwithstanding the verdict (JNOV) because the evidence was insufficient to make a submissible case on the issue of whether it had actually refused to pay the respondent's uninsured motorist claim, a required proof element for recovery under § 375.420. In Point II, it claims that the trial court erred in denying its motion for JNOV because, even if we find in Point I that the evidence was sufficient to make a submissible case on the issue of its refusal to pay, it was insufficient to make a submissible case on the issue of whether its refusal was willful and without reasonable cause, an additional required proof element for recovery under § 375.420. In Point III, it makes two claims of instructional error. It claims that the trial court erred in giving the respondent's verdict director, Instruction No. 5, because that instruction failed to instruct that the jury, in order to find for the respondent, had to find that it willfully refused to pay the loss under the respondent's uninsured motorist policy. It also claims in Point III that the trial court erred in giving Instruction No. 5 because it failed to "define willful and without reasonable cause as persisting in a refusal to pay after becoming aware that there is no meritorious defense[.]"
We dismiss for a lack of jurisdiction.
Facts
On February 6, 2001, the respondent, while working as a paramedic, was struck by an uninsured motorist as she exited her emergency vehicle. As a result of the accident, she suffered a broken right pelvis, nerve damage in one of her fingers and kidney failure. At the time of the accident, she owned an insurance policy issued by the appellant, providing $50,000 in uninsured motorist coverage.
On January 22, 2002, the respondent reported her accident and injuries to the appellant. On February 20, 2002, she filed a petition seeking to recover the policy limits under her uninsured motorist policy, as well as additional damages and attorney's fees as authorized by § 375.420. On August 29, 2002, the appellant tendered a check for $50,000 to the respondent to settle her loss claim.
On October 16, 2002, the respondent filed her first amended petition against the appellant, alleging that she was "entitled to additional damages as set forth in § 375.420 RSMo because of the vexatious behavior of the [appellant] insurance company[.]" Specifically, she alleged that: (1) she presented a claim to the appellant under her uninsured motorist policy; and (2) the appellant initially refused, without reasonable cause or excuse, to fulfill its obligation under the policy. She conceded, however, that the appellant eventually fulfilled its obligation under the terms of the policy, tendering a check directly to her and her attorney in the amount of $50,000. Consequently, she sought only penalties and attorney's fees pursuant to § 375.420.
On October 7, 2003, the respondent's claim for damages and attorney's fees under § 375.420 proceeded to a jury trial. On October 9, 2003, the jury returned its verdict, awarding the respondent $5,150 in damages and $18,089.57 in attorney's fees, with the trial court entering judgment thereon on October 23, 2003. On November 6, 2003, the appellant filed its "MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT AND/OR REMITTITUR OR, ALTERNATIVELY, FOR NEW TRIAL." On February 5, 2004, the trial court issued an order denying the motion in all respects except for the appellant's motion for remittitur with respect to attorney's fees. In that regard, the court remitted the amount of attorney's fees awarded to the respondent to $15,955.22.
This appeal followed.
Appellate Jurisdiction
In every case, before addressing the merits of the appeal, we first have to determine our jurisdiction, sua sponte. Nicholson Constr. Co. v. Mo. Highway Transp. Comm'n , 112 S.W.3d 6, 9 (Mo.App. 2003) (citing Comm. for Educ. Equal. v. State , 878 S.W.2d 446, 450 (Mo. banc 1994). Without jurisdiction, we must dismiss the appeal. Id. (citing Gibson v. Brewer , 952 S.W.2d 239, 244 (Mo. banc 1997).
In determining our jurisdiction, here, we must address the issue of whether the trial court should have dismissed, for failing to state a claim upon which relief can be granted, pursuant to Rule 55.27(a)(6), the respondent's first amended petition. Parshall v. Buetzer , 121 S.W.3d 548, 551 (Mo.App. 2003). The issue of whether a claim has been stated upon which relief can be granted is inherent in every appeal and may be raised, sua sponte, by this court. Preferred Physicians Mut. Mgmt. Group, Inc. v. Preferred Physicians Mut. Risk Retention Group , 916 S.W.2d 821, 823 (Mo.App. 1995). "This is because the failure to state a claim on which relief can be granted essentially deprives the trial court of subject matter jurisdiction and, thus, the authority to rule on the plaintiff's petition; and if the trial court lacked subject matter jurisdiction to rule, we necessarily have no jurisdiction to review the court's ruling on the merits." Parshall , 121 S.W.3d at 551-52 (citations omitted); see also Commercial Bank of St. Louis Co. v. James , 658 S.W.2d 17, 21 (Mo. banc 1983) (stating that the issue of whether a petition fails to state a claim on which relief can be granted, depriving the trial court of subject matter jurisdiction, "is appropriately raised, sua sponte, because it is the sound and uniform rule that parties may not create subject matter jurisdiction by agreement").
All rule references are to the Missouri Rules of Civil Procedure, 2005, unless otherwise indicated.
Pursuant to Rule 55.05, a petition must "contain a short and plain statement of the facts showing that the pleader is entitled to relief." The failure to plead facts showing entitlement to the relief sought deprives the trial court of jurisdiction to grant it. Commercial Bank of St. Louis Co. , 658 S.W.2d at 21. Although the petition does not have to plead evidentiary or operative facts showing an entitlement to the relief sought, it must plead ultimate facts demonstrating such an entitlement and cannot rely on mere conclusions. Westphal v. Lake Lotawana Ass'n, Inc. , 95 S.W.3d 144, 152 (Mo.App. 2003); Miller v. Ford Motor Co. , 732 S.W.2d 564, 565 (Mo.App. 1987). Courts disregard conclusions not supported by facts in determining whether a petition states a cause of action. Lick Creek Sewer Sys. v. Bank of Bourbon , 747 S.W.2d 317, 322 (Mo.App. 1988).
In determining whether a petition states a claim on which relief can be granted, "all facts properly pleaded are assumed true, the averments are given a liberal construction, and the petition is accorded those reasonable inferences fairly deducible from the facts stated." Commercial Bank of St. Louis Co. , 658 S.W.2d at 21-22. We "construe the allegations favorably to plaintiff to determine whether they invoke principles of substantive law and inform defendant of what plaintiff will attempt to establish at trial." Defino v. Civic Center Corp. , 718 S.W.2d 505, 509 (Mo.App. 1986). A plaintiff's petition states a cause of action where "its averments invoke principles of substantive law which may entitle the plaintiff to relief." Asaro v. Cardinal Glennon Mem'l Hosp. , 799 S.W.2d 595, 597 (Mo. banc 1990). A petition is sufficient if it:
invokes substantive principles of law entitling plaintiff to relief and alleges ultimate facts informing defendant of that which plaintiff will attempt to establish at trial. It should not be dismissed for mere lack of definiteness or certainty or because of informality in the statement of an essential fact.
Grewell v. State Farm Mut. Auto. Ins. Co. , 102 S.W.3d 33, 36 (Mo. banc 2003). In assessing the sufficiency of a petition:
[n]o attempt is made to weigh the factual allegations contained in the petition to determine whether they are credible or persuasive. Instead, the petition is reviewed in an almost academic manner, to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause that might be adopted in that case.
Anderson v. Vill. of Jacksonville , 103 S.W.3d 190, 193 (Mo.App. 2003) (citations omitted). To properly plead a cause of action, the "petition must state allegations of fact in support of each essential element of the cause pleaded." Duvall v. Lawrence , 86 S.W.3d 74, 80 (Mo.App. 2002). Section 375.420 provides:
In any action against any insurance company to recover the amount of any loss under a policy of automobile, fire, cyclone, lightning, life, health, accident, employers' liability, burglary, theft, embezzlement, fidelity, indemnity, marine or other insurance except automobile liability insurance, if it appears from the evidence that such company has refused to pay such loss without reasonable cause or excuse, the court or jury may, in addition to the amount thereof and interest, allow the plaintiff damages not to exceed twenty percent of the first fifteen hundred dollars of the loss, and ten percent of the amount of the loss in excess of fifteen hundred dollars and a reasonable attorney's fee; and the court shall enter judgment for the aggregate sum found in the verdict.
Because this section is penal in nature, it must be strictly construed. Watters v. Travel Guard Int'l , 136 S.W.3d 100, 108-09 (Mo.App. 2004); Legg v. Certain Underwriters at Lloyd's of London , 18 S.W.3d 379, 387 (Mo.App. 1999). Section 375.420 is applicable "[i]n any action against any insurance company to recover the amount of any loss under a policy of automobile, fire, cyclone, lightning, life, health, accident, employers' liability, burglary, theft, embezzlement, fidelity, indemnity, marine or other insurance except automobile liability insurance[.]" It provides that the damages and attorney's fees authorized are "in addition to the amount [of the loss] and interest," and it directs the court to "enter judgment for the aggregate sum found in the verdict." § 375.420. This language has been interpreted as meaning that a claim and an award for damages and/or attorney's fees, under § 375.420, cannot stand alone, but requires a judgment on an underlying claim for a loss under a policy of insurance. Victor v. Manhattan Life Ins. Co. , 772 S.W.2d 826, 831 (Mo.App. 1989); Calvert v. Safeco Ins. Co. of Am. , 660 S.W.2d 265, 269 (Mo.App. 1983); State ex rel. U.S. Fid. Guar. Co. v. Walsh , 540 S.W.2d 137, 141 (Mo.App. 1976). A claim and award of interest for an insurer's delay in paying a loss claim is sufficient to support an award of damages and/or attorney's fees, pursuant to § 375.420. Victor , 772 S.W.2d at 831. In our case, the respondent insured did file an underlying loss claim in her initial petition. However, once that claim was paid, she amended her petition so as to request, only, a judgment for damages and attorney's fees, under § 375.420. This she could not do, such that her petition failed to state a claim for relief under § 375.420.
In Victor , the Eastern District of this court addressed a similar situation to that confronting us here. In that case, a group of named beneficiaries brought suit against the insurer under a life insurance policy, alleging that it had vexatiously refused to pay in accordance with the policy. Victor , 772 S.W.2d at 827. Immediately thereafter, the insurer tendered a check to the beneficiaries for the face amount of the policy, $95,000, which they accepted. Id. Consequently, the beneficiaries amended their petition, praying for "maximum statutory interest on said ninety-five thousand dollars proceeds during the aforesaid period [March, 1982, to September, 1983] of [the appellant's] refusal to pay; for the maximum penalty on such loss as provided in § 375.420 RSMo; for reasonable attorneys' fees as provided therein; and for costs and damages and such other relief as this court may deem meet and proper." Id. Following a trial before the court, judgment was entered in favor of the respondents for interest on the $95,000 during the period of delay, as well as damages and attorney's fees as authorized under § 375.420. Id. at 828. The insurer appealed, claiming, inter alia, that the beneficiaries' claim for damages and attorney's fees based on the underlying claim for interest on the $95,000 was not cognizable under § 375.420. Id. at 831. Specifically, it argued that without an underlying claim and judgment for a loss under a policy of insurance, § 375.420 damages and attorney's fees were not authorized. While the appellate court agreed with this proposition of the law, it found that the claim and judgment for the beneficiaries' "loss of use" of the insurance proceeds was a loss under a policy of insurance sufficient to allow a claim and judgment for damages and attorney's fees, under § 375.420. Id.
In her first amended petition, the respondent did not seek to recover a loss under her uninsured motorist policy. Instead, she simply sought damages and attorney's fees, under § 375.420. As we discuss, supra, such a claim is not cognizable under that statute such that the respondent failed to state a claim upon which relief could be granted under § 375.420. Therefore, because the respondent failed to state a claim, in her first amended petition, upon which relief could be granted, the trial court was deprived of subject matter jurisdiction, rendering its judgment entered thereon null and void and depriving us of jurisdiction to review the court's ruling on the merits. Parshall , 121 S.W.3d at 551-52. Accordingly, we dismiss.
Conclusion
Because the trial court's purported judgment, assessing a penalty against the appellant and awarding the respondent attorney's fees, under § 375.420, is void, we dismiss for a lack of jurisdiction.