Riprap and an Anomalous Argument Against Set-off–Bucksaw Resort, LLC v. Mehrtens, 2013 WL 6065091 (Mo. App. W.D. 2013)

In Bucksaw Resort, LLC v. Mehrtens, 2013 WL 6065091 (Mo. App. W.D. 2013), we have a surprising brief submitted on behalf of a party losing on appeal.  Frankly, it’s difficult not to be confused by the brief.

The basic facts involve a claim that an insurance broker failed to procure coverage on the all the requested property, and a claim against the insurers who issued the coverage in question.  Though this author spent quite some time sailing as a youngster, he cannot recall having previously heard the term “riprap”.  Now he has been reliably informed by a footnote in the opinion:

Riprap is a larger rock that is placed on the edge of a waterway to help control erosion.

Evidently, coverage for riprap is uncommon.

Bucksaw, the insured, sued both the insurers and the broker.  The opinion recites:

Bucksaw filed a four-count petition against Federal, XL, and Broker. In the first two counts, Bucksaw asserted breach of contract claims against the two insurance companies. In the third count, Bucksaw asserted a claim of reformation against all three defendants. In the fourth count, Bucksaw asserted a claim of negligence against all three defendants claiming that each defendant had a duty to provide the insurance appropriate for the marina and with coverages represented to Bucksaw, including all structures, improvements, and business interruption.

After filing suit but before trial, Bucksaw settled with both insurance companies. An offer of proof was made outside the presence of the jury to show that the stipulated amounts of the respective settlements were $24,000 paid by XL and $97,100 paid by Federal. After the settlement, both insurance companies were dismissed with prejudice from the lawsuit. Bucksaw then continued its negligent failure to procure insurance suit against Broker.

At trial, the court did not allow evidence of the settlement to be introduced to the jury. The court did allow the Broker to put on evidence to show that the two insurance companies had paid Bucksaw for damages. At the close of Bucksaw’s evidence and again at the close of all evidence, Broker moved for a directed verdict. The trial court denied the motions. The jury entered a verdict in favor of Bucksaw in the amount of $54,000. The trial court entered judgment upon the jury’s verdict for the full amount. Subsequently, Broker filed his motion for judgment notwithstanding the verdict, or, in the alternative, motion to amend the judgment, which the court also denied.

OK; I can see a number of possibilities, including:

  • the insurance covered part of the loss, some other loss allegedly should have been included in coverage for “riprap”, etc., and was not, hence, there is an additional claim against the broker;
  • the settlement with the insurers included some settlement as to matters the insured claimed should have been procured by the broker but were not.

For more on how the insured’s counsel founders on the shoals …

I would think that, in the former case, the settlements should not set-off against the broker’s liability, whereas in the latter case, they should, perhaps in whole or perhaps in part.

Surely a court would want to understand what actually happened–what was the basis of the settlement–in deciding how to proceed.  I want to know, to understand the case.  So I turn to the insured’s brief.  I get to a heading that seems to be responsive:  “III. SETOFF OF AMOUNTS PAID BY CO-DEFENDANTS IS INAPPROPRIATE.”  Excellent.  So, what’s there.  It seems to start off well:

The following is a case almost identical to the one at hand and shows clearly no set off is appropriate: Black & Veatch v. Wellington Syndicate, 302 S.W.3d 114 (Mo. App., 2009)

Damages and Set-off Issues

Now, however, we become completely lost.  The brief simply inserts six paragraphs from the cited opinion–not even indented (yes–I’ve looked at the pdf of the brief).  So, all of a sudden, I’m looking at a discussion of builder’s risk insurance.

OK, I can finally make some sense of what this party’s counsel is trying to say:  set-off is a form of counterclaim or affirmative defense, as to which the party asserting the set-off has the burden of proof.

OK; fine.  Now, what’s the discussion of the facts of this case, so the reader knows what’s going on.  Is there some plausible basis that the settlements did not include coverage as to the disputed matters?  The insured’s brief as to this point ends (includes solely) the quote from some other case.

Hmmm.  Frankly, this is a mess.

The broker’s counsel at least, in reply, seems to reference from the case file evidence that what the insurers settled involved claims covering the same matter also addressed in the claims against the broker:

Unlike in Black & Veatch, the damages Bucksaw was seeking coverage from were the same among all three defendants – damage to the rip rap, fencing, parking lot, pavilion chairs and business interruption loss. (L.F. 15-19, T.I. pp. 46, 48-50, p. 52:25, p. 53:1-13, pp. 87-88, T.II. p. 251:8-12, p. 271: 5-12). Bucksaw’s claim against Mr. Mehrtens was set up as an alternative cause of action. (L.F. 15-19). In the event that the insurance companies were correct in failing to pay Bucksaw for everything it was entitled to, then it was Mr. Mehrtens’ fault for not getting the right insurance that would pay for everything. (T.I. p. 110:12-25). Or put another way, in the words of Mr. Moritz, “If [Bucksaw] had the coverage, why didn’t [the insurance companies] pay for it?” (T.I. p. 111:1-2). We know that the insurance companies did pay for it, and so Mr. Mehrtens is entitled to a credit for the amount of that payment.

It is not entirely surprising that, in the absence of a cogent presentation of the facts favorable to the insured in its brief, the appellate court is persuaded by broker’s counsel on the point, reversing.