WILLIAM SOUTHERLY v. UNITED FIRE & CASUALTY COMPANY

WILLIAM SOUTHERLY, )
)
Appellant, )
)
vs. ) No. SD33165
)
UNITED FIRE & CASUALTY COMPANY, et al., ) FILED: October 27, 2014
)
Respondents. )
APPEAL FROM THE CIRCUIT COURT OF BUTLER COUNTY
Honorable Michael M. Pritchett, Judge
(Before Francis, P.J./C.J., Bates, J., and Scott, J.)
AFFIRMED
PER CURIAM. William Southerly obtained personal injury judgments against
four co-workers after a workplace accident, then sought to collect from the
employer’s commercial general liability (CGL) and umbrella insurance policies. A
key issue was whether Southerly, a seasonal worker, was a “temporary worker” not
subject to the policies’ employee exclusions. On cross-motions for summary
judgment, the trial court ruled against Southerly. We affirm.
Background
Southerly worked at Cardwell’s cotton gin for the four-month ginning seasons
in 2007, 2008, and 2009. After suffering a 2009 workplace injury there, he sought
and recovered $150,000 from Cardwell’s workers’ compensation insurer. He also
filed a personal injury suit against various co-workers, made § 537.065 agreements1
with them, obtained a $4 million judgment collectable only from Cardwell’s CGL and
umbrella policies issued by United Fire (Insurer), then sued to equitably garnish
Insurer.
Predictably, the policies excluded coverage if Southerly was an “employee.”
Such exclusions developed alongside workers’ compensation law to draw a “sharp
line” between liability to employees and to the general public. American Family
Mut. Ins. Co. v. Tickle, 99 S.W.3d 25, 29 (Mo.App. 2003). Injured employees get
workers’ compensation, while CGL insures a company’s liability to the public. Id.
Employee policy exclusions protect employers who have provided workers’
compensation benefits from being twice liable to a worker for the same incident.
Gavan v. Bituminous Cas. Corp., 242 S.W.3d 718, 721-22 (Mo. banc 2008).
Gavan, factually similar to this case, is illustrative. From 1996 to 2000, a
builder periodically hired Gavan, who got hurt on the job in 2000 and collected
workers’ compensation. Gavan also sued two co-workers, made a § 537.065
agreement with them, took a $2.3 million judgment to be satisfied only from the
1 “In Section 537.065, RSMo 2000, the General Assembly authorized a party
claiming damages for personal injuries or death to enter into an agreement with a
tortfeasor before judgment against the tortfeasor to limit the claim’s satisfaction to
the tortfeasor’s specific assets, including insurance.” Taggart v. Maryland Cas.
Co., 242 S.W.3d 755, 758 (Mo.App. 2008).
2
builder’s CGL and umbrella policies, then sued to equitably garnish the insurer,
claiming he was a “temporary worker” not subject to employee exclusions.
Specifically, the Gavan policies – as in this case – defined “employee” to exclude a
“temporary worker,” i.e., “a person who is furnished to [the policyholder] … to meet
seasonal or short-term workload conditions” (emphasis added).
Gavan lost at trial and in our supreme court, which held, consistent with most
other jurisdictions, that “furnished to” plainly and “necessarily implies that a third
party has been involved in providing or supplying the worker to the insured.” 242
S.W.3d at 721. No third party had furnished Gavan, so he was not a “temporary
worker,” but an employee subject to employee exclusions that barred his recovery
under the policies. Id. at 722. Our supreme court also noted what Tickle earlier
had detailed: CGL and workers’ compensation policy terms are coordinated with
each other and with applicable law so as to cover injured persons under one policy or
the other, but not both. Tickle, 99 S.W.3d at 29-30, cited in Gavan, 242 S.W.3d at
721-22.
In the instant case, the trial court considered policy definitions and employee
exclusions identical to those in Gavan and reached the same result. Southerly’s
second point on appeal challenges the finding that he, like Gavan, was an employee
and not a temporary worker. We consider that point first.
Point II – Temporary Worker Coverage
Southerly acknowledges that his “temporary worker” argument for avoiding
employee exclusions hinges on whether he was “furnished to” Cardwell, as there is
“no dispute that the phrase ‘furnished to’ requires the involvement of a third party.”
3
Mendenhall v. Prop. & Cas. Ins. Co. of Hartford, 375 S.W.3d 90, 92 (Mo.
banc 2012) (citing Gavan).
In Point II, Southerly states that his 2007 hiring was on a co-worker’s
recommendation, and argues from Mendenhall that he was “furnished” by this
recommendation.2 Even if we accepted this reasoning arguendo as to the 2007
hiring, Southerly was injured two seasons (and thus two hirings) later, and his own
testimony demonstrates that he was not “furnished to” Cardwell by referral in 2009:
Q: In your mind why did you get the job in 2009? Was it because
they knew you and you did a good job?
A: Yes.
Q: Or just because you knew - -
A: I knew what I was doing.
Q: They obviously like the work that you had been doing?
A: Yes, sir.
Q: And they thought that you were a hard worker?
A: Yes, sir.
Q: It wasn’t just because you knew Shawn [Matheny]?
A: Right.
Q: Or just because you knew Johnny [Zolman]?
A: Right.
2 In Mendenhall, a sharply-divided Missouri Supreme Court found “temporary
worker” status where an employer “relied solely” on a referral in deciding to hire a
worker without any interview, and “the employment decision [was] based solely on
the third party referral.” 375 S.W.3d at 93.
4
Compare Gavan, 242 S.W.3d at 720, noting evidence that Gavan had obtained
work by referral in the past, but that Gavan’s own testimony demonstrated that his
2000 hiring was not based on a referral.
This case is like Gavin, not Mendenhall. Point II fails.
Point I – Executive Officer Coverage
As to one defendant only, Southerly offers a second theory of coverage. The
policies cover bodily injury claims against Cardwell’s “executive officers.” Southerly
urges that defendant Williams, who managed Cardwell’s gin, was an “executive
officer” since his position was created by Cardwell’s bylaws. We do not find this
argument persuasive.
The policies at issue define “executive officer” as someone “holding any of the
officer positions created by [Cardwell’s] charter, constitution, by-laws or any other
similar governing document.” (Our emphasis.) According to relevant portions of
Cardwell’s by-laws (all emphasis ours):
• “The officers of the Corporation shall be a President, one or more Vice-
Presidents (the number thereof to be determined by the Board of
Directors), a Treasurer, a Secretary and such other officers as may be
elected in accordance with the provisions of this Article.”
• “No person shall be eligible to any office except the offices of Secretary
and Treasurer or any assistants to said offices, who is not a Director of
the Corporation.”
• “The officers of the Corporation shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after
each annual meeting of Shareholders.”
• “The Board of Directors, at its discretion, may appoint a Manager
whose powers and duties shall be prescribed by the Board of
Directors.”
5
Thus, Cardwell’s by-laws (1) require officers to be corporate directors (with
exceptions inapplicable here) and to be elected annually, and (2) allow (not require)
a non-director manager to be appointed (not elected) with no set term of service.
Defendant Williams was appointed, not elected, to a manager position he held
for 27 years, and he was never a corporate director. He was not an “executive
officer” under Cardwell’s by-laws or as defined in its insurance policies. Southerly
offers no reported cases, Missouri or otherwise, interpreting by-laws in the manner
he suggests.3 We deny Point I.
Conclusion
Southerly admits that he must win Point I or Point II to prevail on appeal.
Thus, we deny his other points as moot and affirm the judgment.
3 Southerly cites a Pennsylvania trial court memorandum, not formally published
and apparently lacking precedential value even in that state, which considered
whether a township engineer was an “executive officer” under Pennsylvania’s
“Second Class Township Code,” 53 Pa. Stat. §§ 65101 et seq.
6
WILLIAM SOUTHERLY, )
)
Appellant, )
)
vs. ) No. SD33165
)
UNITED FIRE & CASUALTY COMPANY, et al., ) FILED: October 27, 2014
)
Respondents. )
APPEAL FROM THE CIRCUIT COURT OF BUTLER COUNTY
Honorable Michael M. Pritchett, Judge
CONCURRING OPINION
While I fully concur in the principal opinion, I also reject Point II for a second
reason: Southerly should not twice collect from Cardwell’s insurers, first by claiming
that he was an employee, and now by claiming the contrary.
“[T]here is ample case law to support the contention that parties are not
allowed to take clearly inconsistent positions in differing lawsuits.” In re Contest
of Primary Election Candidacy of Fletcher, 337 S.W.3d 137, 145 (Mo.App.
2011). “Missouri courts in particular have consistently refused to allow litigants to
take contrary positions in separate proceedings to ensure the integrity of the judicial
process.” Id. at 146. “This doctrine of judicial estoppel can apply to quasi-judicial
administrative actions.” Shockley v. Dir., Div. of Child Support
Enforcement, 980 S.W.2d 173, 175 (Mo.App. 1998). Litigants cannot take one
position in one proceeding to obtain benefits, but take a contrary position in a later
proceeding to obtain benefits from the contrary position. Vinson v. Vinson, 243
S.W.3d 418, 422 (Mo.App. 2007). In these situations, we consider three issues:
1. Was the party’s later position clearly inconsistent with its earlier
position?
2. Was the party successful in persuading a tribunal to accept its earlier
position?
3. Would the party asserting inconsistent positions gain an unfair
advantage or impose unfair detriment on its opponent if not estopped?
Id.
As to #2 above, Southerly called himself, and claimed he was, an “employee”
in obtaining $150,000 from Cardwell’s workers’ compensation insurer.
As to #3, our supreme court recognized the unfairness of double-dipping in
Gavan v. Bituminous Cas. Corp., 242 S.W.3d 718, 721-22 (Mo. banc 2008).
Finally, as to #1, it is clearly inconsistent that Southerly now denies the
“employee” status he claimed in collecting workers’ compensation, especially when
our courts “‘consistently turn to the Workmen’s Compensation Act in determining
the meaning of the word “employee” as used in exclusion clauses of liability
insurance policies ....’” American Family Mut. Ins. Co. v. Tickle, 99 S.W.3d
25, 29 (Mo.App. 2003) (quoting Ward v. Curry, 341 S.W.2d 830, 836 (Mo.
1960)).
Having claimed “employee” status to reap the benefits of Cardwell’s workers’
2
compensation policy, Southerly cannot disavow that status to double-dip against
other policies insuring Cardwell’s liability to the general public.1
DANIEL E. SCOTT – CONCURRING OPINION AUTHOR
1As noted by the principal opinion, Tickle, 99 S.W.3d at 29-30, details legislative,
regulatory, and insurance industry efforts to cover temporary workers and
employees (direct or statutory, including leased workers) under either CGL or
workers’ compensation, but not both. Neither estoppel nor double-dipping were
concerns in Southerly’s cited case of Mendenhall v. Prop. & Cas. Ins. Co. of
Hartford, 375 S.W.3d 90 (Mo. banc 2012), where the decedent was a farm laborer
not covered by workers’ compensation. Id. at 91 n.1.
3