A follow up on Rule 90 garnishments.
Oct. 2016  |  Bad Faith Update  |  Vol. 2 Iss. 12

The Sauvain Saga

Satisfying The Excess Judgment

The Western District’s recent opinion in Sauvain v. Acceptance Indemnity Insurance Company is the third in a series of appellate opinions documenting this hard fought claim.

This most recent opinion in the saga appears to prevent claimants (such as the plaintiffs in Sauvain) from recovering for a carrier’s breach of its duty to defend or other extra-contractual claims in a Rule 90 garnishment arising from a final equitable garnishment judgment.

The Underlying Case
The Sauvain Saga originated from the attempt of David Bowman, Jr. to purchase a 1998 Ford Contour from USA Cars. After USA Cars transferred possession of the vehicle to Bowman, Jr., Bowman, Jr.’s Contour collided with another car causing the death of John Sauvain, III and severely injuring Brenda Hughes. The Sauvain family and Brenda Hughes filed suit against Bowman, Jr. as a result of the crash.
At the time of the accident, Bowman, Jr. was covered by a personal auto policy issued by USAA. Additionally, Acceptance Indemnity Insurance Company had issued a garage policy to USA Cars which provided coverage to vehicles owned by USA Cars. Acceptance denied that its policy provided coverage for the Ford Contour claiming that ownership had transferred to Bowman, Jr. or his father. The plaintiffs eventually entered into a §537.065 agreement in which USAA agreed to pay its policy limits. The underlying lawsuit then proceeded to trial and a judgment totaling $6,000,000 was entered against Bowman, Jr.
Equitable Garnishment Coverage Action
Once the excess judgment became final, the plaintiffs filed an equitable garnishment action to reach the indemnity limits of the Acceptance Policy. The Circuit Court granted summary judgment to the plaintiffs on the issue of coverage. This finding was reversed and remanded by the Western District in Sauvain I as the court found that an issue of fact regarding the ownership of the Ford Contour was present.
On remand, and after a bench trial, the circuit court again granted judgment in favor of the plaintiffs with respect to the issue of coverage under the Acceptance Policy.
This judgment was affirmed by the Western District in Sauvain II. Acceptance tendered its $100,000 policy limits to the plaintiffs leaving roughly $5,900,000 of the underlying judgment unsatisfied.
Rule 90 Garnishment
In an effort to fully satisfy the remaining judgment, the plaintiffs filed a Rule 90 garnishment in the equitable garnishment action after that judgment became final and sought to collect the remaining excess judgment as damages for Acceptance’s breach of its duty to defend.
The trial court quashed the garnishment on the basis that Acceptance’s breach of its duty to defend had not been adjudicated. The Western District agreed on appeal.
After discussing the differences between a Rule 90 garnishment and an equitable garnishment under R.S.Mo. §379.200, the court noted that neither the judgment in the equitable garnishment nor the underlying judgment determined that Acceptance had breached its duty to defend. This finding, coupled with the Court’s characterization of Rule 90 garnishments as proceedings “designed to enforce rights and obligation set forth in an underlying judgment”, led to the Court’s affirmation of the trial court’s order quashing the Rule 90 garnishment.
Although not addressed by the Western District, an issue may exist regarding the Rule 90 garnishment being pursued in the equitable garnishment action. The excess judgment, which the plaintiffs are attempting to collect, was entered in the underlying lawsuit. It may very well be that the Rule 90 garnishment can be pursued in that action which could lead to a final satisfaction of the underlying judgment.
The Western District opinion appears to be only a procedural hurdle in the plaintiffs’ quest to collect extra-contractual damages against Acceptance. Acceptance’s duty to provide indemnity has already been determined and a finding that Acceptance breached its duty to defend, a much broader duty, should necessarily follow. While the Western District pointed out that Acceptance’s notice and opportunity to defend still awaited adjudication, these issues would have certainly been a defense that either were or should have been raised in the equitable garnishment proceeding in which Acceptance’s duty to provide indemnity was determined.
The most recent opinion in the Sauvain Saga parallels the Western District’s prior opinion in Allen v. Attain, a previous bad faith update topic.
In both cases, the Western District determined that Rule 90 garnishments were not the proper vehicle for asserting and collecting damages for extra-contractual claims against a carrier. Allen v. Attain is currently before the Supreme Court and that decision should provide practitioners with guidance on the scope and impact of differing collection procedures that may ultimately satisfy a client’s excess judgment.
"I've been working on bad faith cases for over 30 years. If you need help, contact me for advice."

- Kirk Presley
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