Download PDF - Goodmans

opportunity to settle.” The court further held that no amount of the
workers’ compensation payment could be recouped and affirmed an award
of defense costs to the insured relating to an entirely separate claim.
Flipps Nine, Inc. v. Missouri Property and Cas. Ins. Guar. Ass’n., 941 S.W.2d
564 (Mo.App. E.D. 1997). Certain purchasing groups bought insurance from
an insurer that later became insolvent. The purchasing groups maintained
residence in Missouri, but the insureds under the policies did not. Missouri
Property and Casualty Insurance Guaranty Association (MIGA) denied the
later claims of the insureds, arguing that nonresidents were not covered
under the state guaranty statute.
The trial court sustained MIGA’s motion to dismiss the insured’s complaint
because the term “insured,” within the meaning of the applicable statute,
meant those parties against whom a claim is being made and not the
purchasing group. On appeal, the Court of Appeals affirmed and held that
the claims of nonresident insureds are not covered under the applicable
statute. The purchasing group would have been covered, but they were not
filing the claim in the present case.
The trial court sustained the insurer’s motion to dismiss because the term
“insured,” within the meaning of the applicable statute, meant those parties
against whom a claim is being made and not the purchasing group. On
appeal, the Court of Appeals affirmed and held that the claims of
nonresident insureds are not covered under the applicable statute.
Garrett v. Overland Garage & Parts Inc., 882 S.W.2d 188 (Mo. Ct. App. E.D.
1994). The court held that the Missouri Insurance Guaranty Association
(MIGA) prohibits recovery from an insured tortfeasor of an insolvent insurer
for any amount due a compensation carrier as subrogation. The court
looked to the plain meaning of the statute to find that: (1) when a
tortfeasor’s insurer is insolvent, any insurer who has paid a claim that would
usually entitle it to subrogation will not be reimbursed by MIGA; and (2) no
one may recover the subrogation amount from the tortfeasor of the
insolvent insurer. The general right of subrogation of the worker’s
compensation statute is limited to cases where the insurer is solvent.
Havens Steel Co. v. Missouri Property and Cas. Ins. Guar. Ass’n., 956 S.W.2d
906 (Mo. 1997). The Supreme Court held that the state Guaranty Fund
should reimburse the claimant for a settlement because the insurer’s liability
was not limited to unpaid claims by injured third‐party claimants, and instead
extended to unpaid claims of an insolvent carrier’s insured. The Missouri
statute does not draw any distinction between claimants and insureds as to
unpaid claims, and thus the state insurer here was liable for the full amount
of the policy minus a small deductible per covered claim.
Henry Mikel v. Pott Industries/St. Louis Ship, 896 S.W.2d 624 (Mo. 1995).
The Labor and Industrial Relations Commission entered a ruling that the
state Guaranty Fund was liable to the insured for a claim that was unpaid by
insured’s primary (but insolvent) insurer. The Guaranty Fund appealed,
arguing the Commission lacked subject matter jurisdiction to determine
whether the case involves a covered claim and that judicial determination of
the issue was required. The Supreme Court held that the Commission has
only such jurisdiction conferred upon it by statute, which included those
powers necessary to properly discharge its duties under the applicable
worker’s compensation statute. Because the Commission was deciding legal
issues in the course of performing its core function of determining liability,
the Commission had subject matter jurisdiction to decide the issue.