KANSAS CITY - A pedestrian who was struck by a driver in a rental vehicle will not see an arbitration award of $4.1 million following a ruling by the Missouri Court of Appeals, Western District, which affirmed a lower court judge.
In an April 10 decision, a panel of judges affirmed Jackson County Circuit Judge Kenneth R. Garrett III, who last year granted summary judgment to Empire Fire and Marine Insurance Co.
The underlying claim involves pedestrian Rose Forsman, who filed a lawsuit against Anthony Burgess. He hit Forsman in Jackson County on Oct. 14, 2014 while driving a vehicle he rented from Baron BMW in Merriam, Kansas.
At the time, Burgess was driving the rental vehicle while his own was being repaired. He was insured by State Farm Mutual Automobile Insurance Co., and Baron BMW was insured by Empire.
In May 2015, Empire denied liability coverage for the accident, relying on the policy's contingent insurance clause, which stated that it does not insure "rentees" if there is other applicable auto liability insurance coverage.
Burgess and State Farm entered into an agreement with Forsman in February 2016. The agreement provided that she would not go after his personal assets in exchange for all applicable policy limits that provided liability coverage to him.
Burgess's State Farm policy provided $100,000 per person and $300,000 per accident limits, and State Farm tendered the limits to Forsman, the ruling states.
In April 2016, Burgess and Forsman arbitrated her claim for damages and the arbitrator entered more than $4.1 million and post-award interest at 5 percent.
In June 2016, Forsman sought to enforce the award through a petition for equitable garnishment against Empire and Burgess.
In Empire's motion for summary judgment it claimed that Burgess was not a qualified insured and relied on its contingent rentee policy provision that mandates that a rentee is not covered under the policy if the rentee has minimum liability limits at least equal to the minimum limits provided by the policy.
It also argued that Kansas law should be applied because Kansas had the most "significant" relationship to the policy.
Burgess and Forsman, on the other hand, argued for the application of Missouri law because the accident occurred in that state. Under Missouri law, the contingent rentee provision would be invalid and Empire would be required to provide liability coverage.
The circuit court ultimately ruled for Empire, finding that Kansas law applied and that the contingent rentee provision is valid.
"The rental car Burgess operated in Missouri was registered and principally garaged in Kansas," the appeals panel held.
"Under the plain meaning of the policy's out-of-state coverage provision, Empire is only required to provide the type of coverage required under Kansas law. Therefore, the policy's out-of-state-coverage provision does not require the application of Missouri law to invalidate Empire's 'contingent rentee' provision."
Judges Gary D. Witt, Lisa White Hardwick and Edward R. Ardini, Jr. participated in the decision.