 

In the Missouri Court of Appeals
Eastern District

DIVISION FOUR
HONG LU, ) No. ED104I97
)
Appellant, )
)
vs. ) Appeal from the Circuit Court
) of St. Louis County
AUTOMOBILE CLUB INTER- )
INSURANCE EXCHANGE, )
)
and ) Honorable Lawrence J. Permuter, Jr.
)
CRYSTAL GUNCKEL, )
)
Respondents. ) FILED: November 22, 2016
lntroduction

Appellant Hong Lu (“Lu”) appeals the trial court’s grant of summary judgment in favor
of insurer Automobile Club Inter-Insl.lrance Exchangc (“ACIIE”) in her action for equitable
garnishment Lu Was awarded ajudgment against Crystal Gunckel (“Gunckel”) for damages
suffered by Lu while Gunckel was driving her boyfriend’s Ford Focus, which the boyfriend had
recently purchased from his father. On appeal, Lu contends that the trial court erred in granting
summaryjudgment for ACIIE because Gunckel Was an insured under the father’s automobile

insurance poiicy-. Lu alternatively argues that the insurance coverage on the Ford Focus was in

 

 

force on the date of the accident because Section 303.210l required ACHE to give ten days’
notice to the Director of Revenue (the “Director”) before ACIIE could terminate insurance
coverage on the Ford Focus, which did not occur here. The material facts are not genuinely
disputed Because Gunckel was not an insured under the father’s poiicy, and because Section
303.210 did not require ACIIE to give notice of its actions to the Director, the trial court did not
err in granting summary judgment for ACIIE. We affirm.

Factual and Procedural Historv

The dispute centered around ACIIE’s liability on an automobile insurance policy.
Viewed in the fight most favorable to Lu, the record contains the following uncontroverted facts.

ACIIE issued an automobile insurance policy to Thomas Sanders (“Father”)2 and his
wife, who were the named insureds The policy ran from June 3 through December 3, 2014, and
listed Father’s Ford Focus (the “Ford”) as an insured vehicle.

On Novernber 20, 2014, Father sold the Ford to his son, Jonathan Sanders (“Son”).
Father and Son executed the certificate of title originally issued to Father for the Ford, and then
Father permanently relinquished possession of the vehicle to Son.3 Five days later Father
informed ACIIE of the Ford’s sale. ACIIE amended Father’s policy to remove the Ford from the

policy’s declarations page, effective November 20, 2014.4

 

1 Ail statutory references are to RSMo (2000), unless otherwise noted.

2 We use “Falher" and “Son” for Thomas and Jonathan Sanders to provide ciarity. We intend no disrespect

3 ACilE submitted this proposed undisputed material fact: “On November 20, 2014, Thomas T. Sanders sold his
2003 Ford Focus to his son, Jonathan T. Sanders and permanently relinquished possession at that time.” Lu objected
to the authenticity of the underlying exhibit in her response, but did not otherwise dispute ACIIE’s proposed
uncontroverted fact. The trial court subsequently granted leave for ACIIE to file a certified copy of the executed
certificate of title, which ACIIE did, and Lu made no further objections Thus, we treat both the certificate of title
and the fact that Father permanentiy relinquished possession of the Ford as undisputed facts. Rule 74.04(0)(2).

4 Son registered the Ford after the accident, and the State of Missouri issued him a new certificate of title on
December S, 20|4.

 

Six days after the sale, on Novernber 26, Lu was involved in a car accident with Gunckel.
Gunckel was Son’s girlfriend at the time and was driving the Ford with Son’s permission.
Gunckel was not a member of Father’s household5

After the accident, Lu sued Gunckel for the property damage to her vehicle stemming
from the collision and was awarded ajudgment for $15,078. Subsequently, Lu sued ACIIE for
equitable garnishment under Sectlon 379.200. Lu claimed that ACIIE was liable for the damage
caused by Gunckel under Father’s automobile insurance policy. The relevant policy provisions
will be discussed in detail below. Lu and ACIIE filed cross-motions for summary judgment
Without explanation, the trial court granted ACIIE’s motion, denied Lu’s motion, and entered

judgment in favor of ACIIE and against Lu. This appeal follows.

Point on Appeal

in her sole point on appeal, Lu argues that the trial court erred in granting summary
judgment in favor of ACIIE. Lu contends that because Gunckel Was an insured under Father’s
policy at the time of the accident, ACHE insured against Gunckel’s negligence Lu alternatively
asserts that even if the revised terms of the policy no longer covered the Ford, the original
coverage nevertheless was still in place because Section 303.210 required ACHE to continue
coverage on the Ford for ten days after ACIiE notified the Director that the Ford was removed

from Father’s policy, which did not occur here.

 

5 ACIIE supported this fact with an affidavit from Father. In her response to ACllE’s proposed fact, Lu objected
that the issue of whether Gunckel was a member of Father’s household called for a legal conclusion. This objection
was irnproper: “Whether a person lived in another’s household is a question of fact.” Reed v. Am. Standard Ins.,
231 S.W.3d 851, 853 (Mo. App. W.D. 2007). Lu did not otherwise submit evidence to create a dispute as to this
fact. Rulc 74.04(0)(2). Because I_.u failed to create a genuine dispute, we accept as undisputed that Gunckel was not
Father’s household member.

 

Standard of Review

When considering an appeal from a grant of summaryjudgment, our review is essentially
de novo. ITT Commercial Fin. Corn. v. Mid-Am. Marine Supplv Corp., 854 S.W.Zd 371, 376
(Mo. banc 1993). As the trial court’s judgment is founded on the record submitted and the law,
we need not defer to the trial court’s order granting summary judgment I_d. We review the
record in the light most favorable to the party against whom judgment was entered, and the non-
movant receives the benefit of all reasonable inferences from the record. ch We will affirm
where the pleadings, depositions, aftidavits, answers to interrogatories, exhibits, and admissions
establish that no genuine issue of material fact exists and the moving party is entitled to
judgment as a matter of law. Stanbrough v. Vitek Solutions. Inc.. 445 S.W.3d 90, 96 (Mo. App.
E.D. 2014).

Discussion

Under Rule '74,04(0),6 a defending party_here, ACIIE_may establish the right to
judgment as a matter of law by demonstrating: (1) facts negating any one of the elements of the
non~movant’s claim; (2) “that the non-movant, after an adequate period for discovery, has not
been able and will not be able to produce sufficient evidence to allow the trier of fact to find the
existence of any one” of the elements of the non-movant’s claim; or (3) “that there is no genuine
dispute as to the existence of the facts necessary to support movant’s properly pleaded
affirmative defense.” Goerlitz v. Citv of Maryville. 333 S.W.3d 450, 453 (Mo. banc 2011)
(quoting ITT Commercial Fin. Corp., 854 S.W.Zd at 381). “Each of these three methods

individually ‘establishes the right to judgment as a matter of law.”’ I_d.

 

6 All rule references are to Mo. R. Civ. P. (2016).

Once the defending party establishes this prima facie case, the burden shifts to the non-
movant. ITT Commercial Fin. Corp., 854 S.W.2d at 381. At this point, “the non-movant’s only
recourse is to show_by affldavit, depositions, answers to interrogatories, or admissions on
file_that one or more of the material facts shown by the movant to be above any genuine
dispute is, in fact, genuinely disputed.” l_c_l_. (Emphasis in original.) The non-movant may not
rest on mere allegations or denials of fact; the response shall set forth specific facts with
evidentiary support showing that there is a genuine issue for trial. Ld.; Rule 74.04(c)(2).

Here, Lu asserted a claim against ACIIE for equitable garnishment under Section
379.200. ln a Suit for equitable garnishment, the injured party can seek recovery against the
tortfeasor’s insurer. Carroll v. Missouri Intergovernmental Risk Mgmt. Ass’n, 181 S.W.3d 123,
126 (Mo. App. W.D. 2005). “An equitable garnishment action consists of proof that plaintiff has
obtained ajudgment in his favor against an insurance company’s insureds during the policy
period and the injury is covered by the insurance policy.” Peck v. Alliance Gen. Ins. Co.. 998
S.W,Zd 71, 74 (Mo. App. E.D. 1999).

To support the grant of sulnrnaryjudgment, ACIIE argues that the undisputed facts

negated Lu’s equitable-gainishment claim. §e_e Goerlitz, 333 S.W.3d at 453. ACIIE asserts that

 

Father’s policy did not cover Gunckel’s use of the F ord because the evidence is undisputed that
Gunckel was not an insured under Father’s policy at the time of the accident. Thus, because
Father’s policy did not cover Gunckel when the accident occurred, Lu could not assert an
equitable-garnishment claim against ACIIE.

Lu, on the other hand, maintains that Guncl<el was an insured under Father’s policy. But

even if Gunckel was not an insured, Lu argues that ACIIE was still liable because the Motor

 

 

Vehicle Financial Responsibility Law (“MVFRL”)7 required continued coverage on the vehicle
for ten days after ACIIE notified the Director that the F ord was removed from coverage under
Father’s policy. Parties are free to contract as to the terms of an automobile insurance policy, but
only to the extent that the contract complies with the MVFRL. Wilson v. Traders Ins. Co.. 98
S.W.3d 608, 613 (Mo. App. S.D. 2003). Because the accident occurred within six days after
Father sold the Ford to Son, Lu contends that the MVFRL’s required ten-day notice was not met,
so coverage continued on the Ford at the time of the accident.

We first consider whether Gunckel was covered as an insured under the terms of Father’s
policy. l
I. Coverage Under Father’s Policy

The interpretation of an insurance policy is a question of law, which we review de novo.
Dutton v. Am. Familv Mut. Ins. Co.. 454 S.W.3d 319, 322 (Mo. banc 2015). “lnsurance policies
are read as a whole, and the risk insured against is made up of both the general insuring
agreement as well as the exclusions and definitions.” Todd v. Missouri United Sch. lns. Council,
223 S.W.3d 156, 163 (Mo. banc 2007).

The relevant portion of Father’s policy states, “Subject to the Exclusions, we will pay
damages for which any insured is legally liable because of bodily injury or property damage

”8 The facts are uncontroverted that Gunckel was involved in an auto

caused by an auto accident.
accident while driving the Ford and that this accident caused property damage to Lu’S car. lt iS
further undisputed that Gunckel was liable for the property damage to Lu’s car. The remaining

issue for our consideration is whether Gunckel was an insured under Father’s policy.

 

7 Chapter 303, RSMo.

3 The text of Father’s policy included bold-italic terms indicating that those terms were defined by the policy. For
clarity, this opinion omits the policy’s original bold-italic emphasis, as most of the defined terms are not relevant for
our purposes. We quote the policy’s definitions when relevant and use bolded terms for our emphasis.

6

Father’s policy defined insured as:

1. You and a household member:
a. in the use of your insured auto; and
b. In the use of any other auto or trailer.

2. Any person other than those identified in paragraph 1 using your insured

auto with your permission provided the use is within the scope of such
permrsslon.

Our careful review of the record and the express terms of the insurance policy requires us
to reject as meritless Lu’s contention that she falls within the policy’s definition of an insured.
You, as defined in the policy, was the named insured as shown on the declarations page of the
policy and the named insured’s spouse (if domiciled in the same household). The declarations
page on Father’s policy listed only Father and his wife as the named insureds~athe you. An
insured could also include a household member under prong 1, which Father’s policy defines as
“a person who is domiciled in your household.” Whether an individual qualifies as a household
member is a question of fact. Re_ed, 231 S.W.3d at 853. As explained M, it is undisputed that
Gunckel_Son’s girlfr‘iend--was not a member of Father’s householdl Thus, prong 1 of the
definition of an insured offers no support to Gunckel, who does not fall within the terms you or
household member under Father’s policy.

The second prong of the policy’s definition of insured, which potentially provides
insured status to non-household members, also provides.Gunckel no relief because Father sold
the Ford to Son before the accident occurred Father’s policy grants insured status to unrelated

persons and non-household members under this second prong if “any” other person was using

your insured cruio. The policy expressly defines the relevant portion9 of your insured auto as

 

9 The definition also encompasses newly acquired automobiles, trailers, temporary substitute automobiles and
demonstrator autornobiles, none of which are relevant here.

 

any “auto shown in the declarations page, while owned by you.”'° Father sold the Ford to Son
on November 20, 2014, but the accident did not occur until November 26. When the accident
occurred, the Ford was no longer Father’s insured auto as defined by the policy because Father
no longer owned the Ford. Accordingly, prong 2 does not apply.

Lu suggests the existence of a genuine issue of fact by questioning when ownership of
the Ford passed from Father to Son. Lu contends that title to the Ford did not transfer until after
the accident, and that Father owned the Ford and his insurance still applied to the Ford on the
day of the accident Our review of the complete summary-judgment record shows that Lu’s
argument fails because ownership of a vehicle transfers in Missouri upon delivery of a properly
assigned certificate of title when the seller delivers the motor vehicle. Section 301 .21 0.1;
Allstate lns. Co. v. Nw. Nat. Ins. Co., 581 S.W.2d 596, 602 (Mo. App. S.D. 1979).

In its statement of uncontroverted facts, ACHE stated, “On November 20, 2014, Thomas
T. Sanders sold his 2003 Ford to his son, Jonathan T. Sanders and permanently relinquished
possession at that time.” ACIIE’s assertion of fact is supported by ample evidence in the record.
First, the record contains the certificate of title issued to Father for the Ford. The certificate of
title contains the signatures of Father and Son assigning the vehicle to Son, and lists the sale date
as “11-20-2014.” Second, the record contains an affidavit from Father attesting that he sold the
Ford and permanently relinquished possession of the Ford on November 20, 2014. Finally, the
record includes the Bill of Sale (Missouri Department of Revenue For‘rn 1957) and the title

issued to Son after the sale, both of which note the sale date as November 20, 2014. ACIIE’s

 

m Lu argues on appeal that ACHE did not remove the Ford from the declarations page in time, as ACIIE apparently
did not mail the new declarations page (rernoving the Ford) until November 26-the day of the accident Whether
the Ford was listed on the declarations page when the accident occurred is irrelevant, as the facts are not disputed
that Father no longer owned the Ford alter November 20, 2014.

8

 

evidence prima facie established that the sale and transfer of ownership occurred on November
20, 2014.

With this evidence, the burden shifted to Lu to show some evidence demonstrating that a
genuine issue of fact existed with regard to ownership. §e_§ Rule 74.04(0)(2). Lu first asserts
that the sale did not take place untii December 4, because the Bill of Sale (Missouri Department
of Revenue Fortn 1957) was not signed until December 4. But that same Bili of Sale reports the
sale date as November 20, 2014. Lu’s suggestion that title did not transfer until the Department
of Revenue issued a new certificate of title to Son on December 8, 2014, is unavailing Again,
the certificate of title plainly lists the sale date as November 20, 2014. Lu is misguided in her
argument because the Bill of Sale and Son’s new certificate of title are part of the registration
process of Son’s new Ford and not indicia of the date oftransfer. As this Court has clearly
stated, “In the sale of a used vehicle, the operative fact in the transfer of title is the assignment of
title rather than the registration of titie or issuance of a new title certificate.” Schultz v. l\/Iurphy,
596 S.W.2d 51, 53 (Mo. App. E.D. 1980). Son’s registration of the Ford with the Departrnent of
Revenue necessarily occurred after the ownership of the Ford was transferred to him on
November 20, 2014. Lu fails to raise a genuine dispute as to the date of the saie.11

Gunckel was not an insured under Father’s policy because her status and use of the Ford

did not qualify under any definition of insured in the insurance policy. Because Gunckel is not

 

" Lu’s counsel also argues that a genuine issue of fact existed about whether Father gave Guncl-tei implied
permission to use the Ford: Father sold the Ford to Son, and Son gave permission to Gunckel. This argument is
untenable. “As a general rule the insured purporting to give consent must own the insured vehicle, or in any
event have such an interest in it such as the right to possession and control of it as to be in a position to give
permission." Haynes v. Linder, 323 S.W.Zd 505, 510 (Mo. App. K.C. 1959). Again, Father did not own or have
possession of the Ford on the day of the accident In any event, under prong 2, once ownership passed the issue of
Father’s permission became moot because the Ford was no longer Father’s insured auto.

 

an insured under Father’s poiicy, the policy did not cover Gunckel’s negligent driving or the
resulting property damage to Lu’s car.
II. The Applicability of the MVFRL

Because Lu is not an insured under Father’s poiicy, we consider whether coverage
nevertheless continued under the policy on the Ford on the date of the accident under the 4
provisions of the MVFRL. Lu cites Section 303.210 of the MVFRL,12 which requires ten days’
notice to terminate or cancel a certified insurance policy. We start with a brief overview of the
MVFRL for context and then address Lu’s specific argument about Section 303.210.

A. Overview of the MVFRL

“An insurance clause violates public policy and is rendered unenforceable only to the
extent it vioiates the Motor Vehic|e Financial Responsibility Law.” White v. Illinois Founders
_i__ils._@, 52 S.W.3d 597, 599 (Mo. App. E.D. 2001). The i\/IVFRL is, for all practical purposes,
a compulsory insurance law. Halpin v. Am. Familv Mut. lns. Co.. 823 S.W.2d 479, 481 (Mo.
banc 1992). Section 303.025 (Cum. Supp. 2013) provides the baseline rule: “No owner of a
motor vehicie registered in this state, or required to be registered in this state, shali operate,
register or maintain registration of a motor vehicle, or permit another person to operate such
vehicle, unless the owner maintains the financial responsibility which conforms to the
requirements of the laws of this state.” Section 303.025.1 (emphasis added). Further, a non-
owner may not operate an uninsured motor vehicle without maintaining his or her own financial
responsibilityl §

Subsection 2 permits the owner of a motor vehicle to “maintain” financial responsibility

either (l) in a manner provided for in Section 303.160, or (2) with a motor vehicle liability

 

12 Chapter 303, RSMo.

l0

 

policy13 that conforms to the requirements of the laws of Missouri. Section 303.025.2; __Wlit_e, 52
S.W.Bd at 599. “Most owners and operators of vehicles undertake to satisfy the requirement by
purchasing a motor vehicle liability policy.” First Nat. Ins. Co. v. Clark, 899 S.W.2d 520, 522
(Mo. banc 1995). Under a regular motor vehicle liability policy, the insurance company
furnishes an insurance card, which functions as proof that the insured has maintained the
compulsory insurance. §§ Section 303.024 (Cum. Supp. 2013).

In some situations, the Director may require the owner or operator of a vehicle to file
proof of financial responsibility, Section 303.160 provides, “Proof of financial responsibility
when required under this chapter with respect to a motor vehicle or with respect to a person
who is not the owner of a motor vehicle may be given by filing: (l) A certificate of insurance as
provided in section 303. 170 ....”'4 (Emphasis added.) Under Section 303.170, a written
certificate of an insurance carrier certifies that a motor vehicle liability policy exists “for the
benefit of the person required to furnish proof of financial responsibility.” Section 303.170.1
(emphasis added). This certificate from the insurance company creates a “certified” insurance
policy. § Wilson v. Traders lns. Co., 98 S.W.3d 608, 615 (Mo. App. S.D. 2003). The Director
has promulgated regulations requiring this certificate of insurance to be accomplished by filing a
Form SR-22 with the Director. 20 CSR 500~2.300(4)(A).

Form SR-22, certifying that an owner or operator maintains financial responsibility, is
sometimes required for individuals as a condition of license reinstatement after a license
suspension. §_e§ Section 303.042.5 (Cum. Supp. 2013); 20 CSR 500-2.300(4)(A); Dilts v. Dir. of

Revenue, 208 S.W.3d 299, 301-02 (Mo. App. W.D. 2006). Failing to maintain the compulsory

 

insurance subjects the owner (or operator) of a motor vehicle to a license suspension. Section

 

‘3 A “motor vehicle liability policy" is defined in Section 303.190.
14 Section 303.l60 provides additional ways to file proof of financial responsibility that are not relevant here.

ll

 

303.041.1 (Cum. Supp. 2013). The Director may require “an individual to file a Certificate of
insurance as provided in section 303_.170 or some other form of high-risk insurance in order to
terminate the suspension” in “cases involving a motor vehicle accident where one or more parties
involved in the accident were uninsured.” § Section 303.042.5. The Director may require an
individual to file Form SR-22 as a condition of reinstatement after some other types of license
suspensions, such as after a suspension for driving while intoxicated w w 208 S.W.3d at
301~02.

Thus, while the MVFRL mandates compulsory automobile insurance, the filing of a
certificate of insurance_i.e. Form SR-22_witlr the Director is required only in some limited
situations lmpor'tantly, Form SR-22 certifies to the Director that the person has insurance for

the benefit of that person. Section 303.170.1.

B. Applicability of Section 303.210
Finally, we arrive at Section 303.210_the basis for Lu’s claim that the MVFRL required

the continuance of coverage rrnder Father’s policy during Gunckel’s operation of Son’s Ford on
November 26, 2014. Section 303.210 states:
When an insurance carrier has certified a motor vehicle liability policy under
section 303. 170 ora policy under section 303.180, the insurance so certified
shall not be cancelled or terminated until at least ten days after a notice of

cancellation or termination of the insurance so certified shall be filed in the office
of the director of revenue. . .. (Emphasis added.)

Lu asserts that Section 303.210 preempts the terms of Father’s policy because ten days’
notice to the Director was required before ACIIE could terminate coverage on the Ford. Since
Gunckel’s accident occurred six days after Father sold the Ford, the ten-day notice could not
have been satisfied. Lu argues that Father’s insurance coverage, therefore, was still in force at

the time of the accident.

12

 

Lu’s argument fails because the plain language of Section 303.210 only applies to
certified insurance policies. Although Lu maintains that all insurance policies fall within the
notification requirements of Section 303.210 because all insurance policies must be certified, as

explained above, Lu’s all-encompassing position is incorrect. §_e§ supra; Wilson, 98 S.W.3d at

 

615 (observing, “Appellants concede that ‘if the policy had not been certified, i.e., if there had
not been an SR~22 filed, then the policy would have terminated’ and there would have been no
policy coverage on the date of the accident”); 20 CSR 500~2.300(4)(A).

The summary-judgment record is devoid of any evidence suggesting that the policy of
insurance at issue in this case was a certified policy under the legislative dictates of Section
303.210. Lu did not inject the issue of certification by proffering or directing the court to any
evidence that might suggest the existence of a genuine issue of fact as to whether the policy of
insurance under which Lu seeks coverage was a certified policy. Even though our standard of
review requires us to review the record in the light most favorable to Lu and accord Lu the
benefit of all reasonable inferences, there is simply no evidence in the record to support even an
inference that Father’s policy was a certified policy subject to Section 303.210. E M
Commercial Fin. Corp., 854 S.W.2d at 376. Thus, Section 303.210 does not apply here.

Because removing the Ford from coverage under Father’s policy did not Violatc the
MVFRL, we enforce the plain language of the policy. ACIIE did not insure against Gunckel’s
negligent use of Son’s Ford under the plain language of Father’s policy. Based on undisputed
material facts, the trial court properly concluded that ACIlE was entitled to judgment as a matter
of law on Lu’s claim for equitable garnishment Thus, summaryjudgment was proper and Lu’s

point is denied.

13

 

Conclusion

The judgment of the trial court is af`firmed.

twa _/l/r…

KFRT S. ODENWALD, Judge

James M. Dowd, P.J., concurs
Gary M. Gaertner, Jr., J., concurs.

14

 

