Holly Todd and Kodey Todd, by and through Next Friend Holly Todd, Plaintiffs/Appellants, v. Missouri United School Insurance Council, Defendant/Respondent.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion Missouri Court of Appeals Eastern District Case Style: Holly Todd and Kodey Todd, by and through Next Friend Holly Todd, Plaintiffs/Appellants, v. Missouri United School Insurance Council, Defendant/Respondent. Case Number: ED87167 Handdown Date: 07/18/2006 Appeal From: Circuit Court of Clark County, Hon. Gary Dial Counsel for Appellant: Seth Shumaker Counsel for Respondent: Margaret A. Heese and Phyleccia B. Reed Opinion Summary: The Todds appeal the trial court's judgment granting Missouri United School Insurance Council's motion for summary judgment and denying the Todds' motion for summary judgment. REVERSED AND REMANDED. Division Two holds: The trial court erred in granting the insurance council's motion for summary judgment because a key provision of the insurance policy at issue was ambiguous and should have been construed in favor of the plaintiff insured. Furthermore, the trial court erred in denying the Todds' motion for summary judgment. Accordingly, the trial court's judgment is reversed and remanded with instructions to enter summary judgment for the Todds. Citation: Opinion Author: Kenneth M. Romines, Judge Opinion Vote: REVERSED AND REMANDED. Gaertner, Sr., P.J., and Draper III, J., concur. Opinion: Introduction Plaintiff-Appellants Holly and Kodey Todd (collectively "the Todds") appeal from the decision of the Circuit Court of

Clark County, the Honorable Gary Dial presiding, after the trial court granted Defendant-Respondent Missouri United School Insurance Council's ("MUSIC") motion for summary judgment and denied the Todd's motion for summary judgment. We reverse and remand. Factual and Procedural Background Our review of the facts in this case, viewed in the light of most favorable to the Todds, reveals that on 1 April 1998, Kodey Todd ("Kodey") was a student attending the elementary school in the Clark County R-I School District ("School District"). On the date in question, James Patterson ("Patterson") was employed as a substitute teacher for the School District, and was assigned to Kodey's classroom. The record also reveals that on this date Patterson assaulted Kodey while serving in his capacity as a substitute teacher for the School District. Patterson subsequently pled guilty to one count of third degree criminal assault and one count of endangering the welfare of a child. On the date of the assault, School District was a member of MUSIC, which is a self-insured pool of Missouri school districts. Accordingly, MUSIC provided liability insurance coverage to the School District under the terms of its 1998 "plan document," which both parties stipulate was in force at the time of the incident.(FN1) On 14 September 1999, the Todds filed suit against Patterson, the School District, and the acting school board members at the time. The Todds' suit contained a claim against Patterson for assault, a claim against the School District for negligent hiring, and a claim against the School District and its board members for negligent supervision. On 16 April 2001, however, the Todds and Patterson entered into an agreement that called for Patterson to stipulate to a judgment against him for $100,000. The settlement further allowed the Todds to seek payment for the judgment from any insurance coverage in force for the benefit of the School District. As a result of this settlement provision, the Todds brought an action against MUSIC seeking payment of the $100,000 judgment against Patterson. In response to the Todds' suit, MUSIC argued that Patterson's actions were not covered by the policy because it explicitly excluded such acts from coverage. MUSIC relied on paragraph 19, subparagraph N, which specifically excludes coverage for "liability of an insured who knowingly committed an unlawful act; ... or who intentionally caused damage, harm or injury...." MUSIC argued that Patterson's assault of Kodey constituted such an "unlawful act," and thus, was not covered by the policy. On the other hand, the Todds argued that the "plan document" was ambiguous in that the policy seemingly provided coverage for such acts in one provision, while excluded it in another. Specifically, the Todds argued that the term "bodily injury" is ambiguous because it is defined at least two different ways in the policy. In support of this argument, the Todds primarily relied on the case of Missouri Property and Casualty Ins. Guaranty Ass'n v. Petrolite

Corp., 918 S.W.2d 869 (Mo. App. E.D. 1996). In Petrolite, this Court held that "[w]hen a contract promises something in one place and takes it away at another place an ambiguity exists." Id. at 872. However, the trial court distinguished Petrolite from this case on the grounds that in Petrolite "the insurance company attempted to avoid liability by stating that it had coverage only for personal injury caused by an 'occurrence' and under the definition section, the 'occurrence' was defined in part as an 'accident.'" In contrast, the trial court noted that this case involves "a policy which provides for coverage at one place in the policy and then excludes coverage under a separate section specifically entitled 'Exclusions.'" The parties then filed cross motions for summary judgment. MUSIC argued that it was entitled to judgment as a matter of law because Section 19(n) excluded Patterson's actions from coverage. The trial court agreed, and held that no genuine issues of material fact existed in the case. The trial court further held that there was "no ambiguity in the coverage agreement," and specifically noted that the policy is "subject to all exclusions, provisions and stipulations in the coverage agreement." Thus, the court found that "Patterson's conduct was clearly not covered under the MUSIC 1998 Plan Document." Accordingly, the court granted MUSIC's motion for summary judgment and denied the Todd's motion. This appeal followed. In its sole claim of error, the Todds argue that the trial court erred in granting summary judgment in favor of MUSIC, as well as erred in denying its own motion for summary judgment, because MUSIC was not entitled to judgment as a matter of law in that relevant provisions of the "plan document" were ambiguous, and thus, should be construed in favor of the insured. We agree. Standard of Review As this case involves our review of the trial court's grant of summary judgment, we must consider the record in the light most favorable to the party against whom judgment was entered. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).(FN2) Facts established by affidavit or other proof in support of a party's motion are taken as true unless contradicted by the non-moving party's response to the summary judgment motion. Id. We accord the non-moving party the benefit of all reasonable inferences from the record below. Id. The propriety of summary judgment is purely an issue of law, and thus, our review is de novo. Id. Summary judgment is appropriate where the moving party establishes that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Id. at 378. Discussion This case asks us to determine whether the insurance contract at issue provided coverage for the actions of a

School District employee who pled guilty to criminal assault and child endangerment involving a student. Because we believe the insurance contract at issue in this case is rife with ambiguities and irregularities, we hold that summary judgment in favor of MUSIC was inappropriate, and reverse the trial court's decision. Furthermore, the trial court also erred in denying the Todd's motion for summary judgment. We note initially that the question of whether an insurance policy is ambiguous is a question of law. Mansion Hills Condominium Ass'n v. American Family Mut. Ins. Co., 62 S.W.3d 633, 638 (Mo. App. E.D. 2001). An ambiguity exists when there is "duplicity, indistinctness, or uncertainty in the meaning of the language" used in the contract. Id. Such language will be considered ambiguous "if it is reasonably open to different constructions." Id. When the language of an insurance policy is unambiguous, however, the general rules of construction are applicable, and the contract must be enforced as written, absent a public policy exception to the contrary. Id. Courts may not create an ambiguity "in order to distort the language of an unambiguous insurance policy." Id. However, where a provision of an insurance policy is ambiguous, it must be construed against the insurer. Id. Furthermore, if a term is specifically defined in an insurance policy, courts normally look to that definition only to determine its meaning. Id. at 638. However, in order for the policy definition to control, "the definition itself must be reasonably clear and unambiguous." Id. Otherwise, an appellate court is free to give a reasonable construction to the term by applying general contract principles and resolving doubts in favor of the insured. Id. In this case, we believe that at least one key term in the "plan document," necessary for the resolution of this case, is ambiguous, and thus, makes a grant of summary judgment for MUSIC inappropriate. In particular, we believe that the plan's use of the term "unlawful act" in excluding coverage was ambiguous, where the precise construction of this term is uncertain. The precise definition of "unlawful act" is critical in this case because MUSIC argues that it is not obligated to provide coverage for Patterson's actions under section 19(n), which limits "liability of an insured who knowingly committed any unlawful act..." (emphasis added). There is no dispute that Patterson is an insured under this policy; however, since "unlawful act" goes undefined we cannot apply such ambiguity to Patterson's conduct. Not surprisingly, at oral argument MUSIC argued that Patterson's actions "probably" constituted an unlawful act.(FN3) Conversely, since the policy did not define "unlawful act," it is unclear whether this provision excluded only felonies, or whether it excluded misdemeanors as well. In this case, since Patterson's crimes were misdemeanors, they were arguably not excluded by Section 19(n). Because we believe that the term "unlawful acts" is reasonably capable of at least two possible interpretations, we hold that it is ambiguous, and thus, cannot be a basis for excluding

Patterson's actions from coverage under the policy. Furthermore, we believe that this term should be construed in favor of the Todds, thus making a grant of summary judgment in their favor appropriate. Accordingly, the trial court's grant of summary judgment in favor of MUSIC on this basis was error, and is reversed and remanded for entry of summary judgment in favor of the Todds. REVERSED AND REMANDED. Footnotes: FN1. It is worth noting that the entire record failed to include a signed and executed copy of the "plan document" at issue in this case. Therefore, this Court was left to assume that the document governing the parties' relationship was the sample "plan document" included in the Legal File. FN2. With regard to the denial of the Todd's motion for summary judgment, we note that as a general rule such an order is not appealable, even if the trial court simultaneously grants summary judgment for the other party. Jones v. Landmark Leasing, Ltd., 957 S.W.2d 369, 373 (Mo. App. E.D. 1997). However, a limited exception exists where the merits of the denied motion are "inextricably intertwined" with the issues in an appealable order. Nodaway Valley Bank v. E.L. Crawford Const., Inc., 126 S.W.3d 820, 824 (Mo. App. W.D. 2004). Because we believe the merits of the Todd's motion for summary judgment are "inextricably intertwined" with the issues involved in MUSIC's motion, we exercise our discretion to review this order. FN3. Likewise, driving too closely, or not driving as far to the right as possible, "probably" are "unlawful" as well. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.