Xiaoyan Gu v. Da Hua Hu, and ACE INA Insurance Company Canada, Defendants/Respondents.

 In the Missouri Court of Appeals
Eastern District

DIVISION FOUR

XIAOYAN GU, ) No. ED100001
)
Plaintiff/Appellant, )
)
vs. ) Appeal from the Circuit Court of
) the City of St. Louis
DA HUA HU, )
) Honorable David L. Dowd
and )
)
ACE INA INSURANCE )
COMPANY CANADA, )
)
Defendants/Respondents. ) Filed: July 29, 2014

I. Introduction

In this equitable garnishment action, Xiaoyan Gu (Plaintiff) appeals the judgment

of the circuit court denying her motion for summary judgment and granting the cross-

motion for summary judgment of Ace Ina Insurance Company Canada (Defendant).1

Plaintiff claims the circuit court‟s judgment is erroneous because Defendant is precluded

from asserting its policy exclusion defense where the issue of the insured‟s coverage was

1
Da Hua Hu is also named as a defendant, but Hu is not involved in this appeal. “Defendant” refers solely to Ace
Ina Insurance Company Canada.
conclusively determined in a prior matter and Plaintiff “stands in the shoes” of the

insured under § 379.200 RSMo (2000).2 We reverse the judgment of the circuit court and

remand for entry of judgment in Plaintiff‟s favor.

II. Factual Background

The events underlying Plaintiff‟s equitable garnishment claim occurred in 2007,

when her husband, Wei Wu (Husband), suffered serious bodily injury in a tractor trailer

accident. Husband and Plaintiff filed suit to recover damages for Husband‟s injuries and

Plaintiff‟s loss of consortium against the involved trucking companies and Da Hua Hu,

the driver of the tractor trailer in which Husband was a passenger. After a bench trial, the

court entered a judgment in favor of Husband and Plaintiff, awarding Husband

$13,803,203.46 and Plaintiff $1,500,000.3

A. Prior Garnishment Action

To collect on the judgment, Plaintiff and Husband jointly filed a § 379.200

equitable garnishment claim against Defendant, the insurer of the accident vehicle.

Notably, Hu (Driver) had not purchased Defendant‟s insurance coverage. Instead, the

insured under Defendant‟s Ontario Garage Automobile Policy (the Policy) was a Volvo

dealership, Performance Equipment, from which Driver had purchased his tractor truck.

2
All statutory references are to the Revised Missouri Statutes 2000, as supplemented, unless otherwise indicated.
3
Before the bench trial on Plaintiff‟s and Husband‟s tort claims, the parties reached a partial settlement pursuant to a
§ 537.065 agreement. As part of the settlement agreement, the parties agreed that if Husband and Plaintiff obtained
a judgment that they would seek to collect any judgment amount from any other insurance companies available and
not against the defendants personally.

2
Performance Equipment had rented Driver the Ryder truck involved in the accident.4 The

Policy, however, provided coverage to additional insureds if that person operated any

automobile in connection with Performance Equipment‟s business as a Volvo dealership.

Before the matter proceeded to a bench trial, Plaintiff voluntarily dismissed her

claim without prejudice. Husband, however, proceeded with his claim on the theory that

Driver was an additional insured under the Policy, meaning that Defendant would be

required to indemnify Driver in the amount of Husband‟s tort judgment. Defendant‟s

defense was that Driver was not entitled to coverage because at the time of the accident,

he was operating the truck in furtherance of his own trucking business, not in connection

with Performance Equipment‟s business. Indeed, it is undisputed that at the time of the

accident, Driver was transporting a trailer of grapes and carrots between California and

Ontario pursuant to a contract between his trucking company and a transportation broker.

On the first day of trial, Defendant raised an affirmative defense that the Policy‟s

carriage-of-goods exclusion precluded coverage and requested leave to amend its

pleadings. That exclusion provided an exception from coverage when the “automobile is

being used . . . for the carrying of goods or materials for compensation.” The trial court

decided to “take [the matter] with trial,” but ultimately denied the motion to amend the

pleadings because such an amendment would prejudice Husband.

Subsequently, the trial court entered judgment in favor of Husband, finding that

Driver was entitled to coverage under the Policy because Driver was operating the tractor

4
Driver‟s truck experienced transmission problems and Performance Equipment rented him the Ryder truck that
was ultimately involved in the accident.

3
trailer in connection with Performance Equipment‟s business since Performance

Equipment rented the Ryder truck for Driver. The trial court entered a judgment against

Defendant in the amount of $11,345,681.38.5

B. Present Garnishment Action

Plaintiff then filed the instant equitable garnishment suit under § 379.200. In her

petition, Plaintiff alleged that the issue of Driver‟s coverage under the Policy had been

fully litigated in the prior garnishment action and that Defendant is collaterally estopped

from re-litigating the issue of coverage for damages. Defendant denied liability, timely

raising the affirmative defense that the Policy‟s carriage-of-goods exclusion precluded

coverage.

Plaintiff moved for summary judgment, asserting that Defendant is collaterally

estopped from re-litigating the issue of Driver‟s coverage and additionally that the

doctrine of res judicata bars Defendant from raising defenses that it failed to raise in the

prior litigation. Defendant countered that the preclusion doctrines are inapplicable.

Defendant also filed a cross-motion for summary judgment, asserting that it is entitled to

assert the Policy‟s carriage-of-goods exclusion and that no genuine dispute of material

fact exists that the exclusion applies to exclude coverage for Plaintiff‟s claim.

The circuit court found that “it would be inequitable to apply collateral estoppel or

res judicata” to prevent Defendant from asserting the Policy‟s carriage-of-goods

exclusion as a defense. The circuit court explained:

5
This judgment amount reflects adjustments for interest and the prior settlement payable to Husband and Plaintiff.
This Court affirmed the trial court‟s judgment. Wu v. Ace Canada, 368 S.W.3d 214 (Mo. App. E.D. 2012).

4
 During the trial of the prior garnishment action the trial court refused to
allow [Defendant] to amend its pleadings to assert the affirmative defense
that the carriage-of-goods exception applied to exclude [Driver‟s] coverage
under the insurance policy. The court did this because to allow the defense
for the first time at trial would have been prejudicial to [Husband] who had
no opportunity to conduct discovery on the issue or otherwise prepare to
meet the defense. The present circumstance differs substantially, as
Plaintiff is not prejudiced by the failure of notice of the defense. Rather,
any unfairness and prejudice would be to [Defendant], whose insurance
policy clearly excluded coverage of the collision in question.

The Court is cognizant of the loss of consortium damages Plaintiff has
sustained and continues to suffer. However, [Defendant] did not cause
those damages and cannot fairly be held liable for payment of those
damages under the circumstances of this case. As noted above, fairness
under the particular facts of the case is the overriding concern. Here, to
disallow litigation of the issue of coverage would be inequitable.

The circuit court further found that the Policy‟s carriage-of-goods exclusion precludes

coverage. Accordingly, the circuit court denied Plaintiff‟s motion, granted Defendant‟s

cross-motion, and entered summary judgment in favor of Defendant.6 Plaintiff appeals.

III. Standard of Review

This Court reviews de novo the circuit court‟s summary judgment decision. ITT

Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.

banc 1993). Summary judgment is proper if the moving party has shown, on the basis of

facts as to which there is no genuine dispute, a right to judgment as a matter of law.

Affirmative Ins. Co. v. Broker, 412 S.W.3d 314, 318 (Mo. App. E.D. 2013). We must

view all the submissible evidence in the light most favorable to the non-moving party.

6
The circuit court also denied Driver‟s motion for summary judgment, which had adopted Plaintiff‟s arguments.
Driver does not appeal the circuit court‟s ruling.

5
ITT Commercial Fin. Corp., 854 S.W.2d at 376. A genuine issue of material fact barring

summary judgment exists if “the record contains competent materials that evidence two

plausible, but contradictory, accounts of the essential facts.” Id. at 382. However,

because the parties do not dispute any material facts, our review focuses on the legal

question whether Defendant was entitled to judgment as a matter of law.

IV. Discussion

Plaintiff‟s sole point is that Defendant is precluded from asserting the Policy‟s

carriage-of-goods exclusion as a defense because the issue of Driver‟s coverage was

conclusively determined in the prior garnishment action and Plaintiff “stands in the

shoes” of Driver under § 379.200. In the argument portion of her brief, Plaintiff explains

that either collateral estoppel or res judicata preclude Defendant from asserting the

Policy‟s carriage-of-goods exclusion in the instant garnishment suit. In essence, Plaintiff

seeks to apply the preclusion doctrines offensively in order to avail herself of the trial

court‟s prior judgment.

A. Collateral Estoppel

We first consider Plaintiff‟s argument that collateral estoppel bars Defendant from

raising the Policy‟s carriage-of-goods exclusion in the present garnishment action. “The

doctrine of collateral estoppel, commonly known as issue preclusion, precludes the same

parties from relitigating issues previously adjudicated between the same parties or those

in privity with them.” Robin Farms, Inc. v. Beeler, 991 S.W.2d 182, 185 (Mo. App.

W.D. 1999). Courts considering whether to apply this doctrine determine whether: (1)

the issue decided in the prior adjudication was identical with the issue presented in the

6
present action; (2) the prior adjudication resulted in a judgment on the merits; (3) the

party against whom collateral estoppel is asserted was a party or in privity with a party to

the prior adjudication; and (4) the party against whom collateral estoppel is asserted had a

full and fair opportunity to litigate the issue in the prior suit. Finley v. St. John’s Mercy

Med. Ctr., 958 S.W.2d 593, 595 (Mo. App. E.D. 1998). Collateral estoppel does not

apply where its application would be inequitable. See James v. Paul, 49 S.W.3d 678, 683

(Mo. banc 2001); Oates v. Safeco Ins. Co. of America, 583 S.W.2d 713, 721 (Mo. banc

1979). The overriding consideration is fairness and the analysis must focus primarily on

principles of equity derived from the facts of each particular case. James, 49 S.W.3d at

688.

Here, we need only consider the fourth element of collateral estoppel to resolve

the applicability of this doctrine. Clearly, Defendant‟s defense was not fully and fairly

litigated in the prior garnishment suit.7 Rather, due to Defendant‟s failure to raise the

defense until the first day of trial, the trial court precluded presentation of that defense

and Defendant was unable to litigate the substantive merits of the Policy‟s carriage-of-

goods exclusion. The present garnishment action, then, would provide Defendant with

the ability to litigate the defense‟s merits, which Defendant was foreclosed from pursuing

in the prior garnishment action. See Restatement (Second) of Judgments § 27 (1982)

(“An issue is not actually litigated if the defendant might have interposed it as an
7
In determining whether a party has had a full and fair opportunity to litigate an issue, this Court considers the
following additional equitable factors, as well as any other factors that may be relevant: (1) did the party against
whom preclusion is asserted have a strong incentive to litigate the prior adjudication; (2) does the second forum
afford the party against whom the preclusion is asserted procedural opportunities not available in the first action; (3)
is the prior judgment, upon which the preclusion is based, inconsistent with one or more prior judgments; and (4)
was the forum in the first action substantially inconvenient to the party against whom preclusion is asserted. Wilkes
v. St. Paul Fire & Marine Ins. Co., 92 S.W.3d 116, 122 (Mo. App. E.D. 2002).

7
affirmative defense but failed to do so[.]”).8 Further, while Plaintiff makes a contrary

allegation that the defense was fully and fairly litigated, this conclusory assertion is

without support in the record or the law.9 Accordingly, we agree with Defendant that

because the defense was never actually litigated, collateral estoppel does not apply to bar

Defendant from raising the Policy‟s carriage-of-goods exclusion in the instant suit.

Likewise, the circuit court did not err by reaching the same conclusion.

B. Res Judicata

Plaintiff also contends that res judicata precludes Defendant from raising the

Policy‟s carriage-of-goods exclusion in the present garnishment action. Res judicata, or

claim preclusion, “bars the same parties or their privities [sic] from relitigating the same

cause of action that has been previously adjudicated by a final judgment on the merits . . .

.” Kinsky v. 154 Land Co., LLC, 371 S.W.3d 108, 112 (Mo. App. E.D. 2012). The

doctrine precludes the parties or privities from later bringing claims arising from the

same set of facts that could or should have been pursued in the prior action. See

Kesterson v. State Farm Fire & Cas. Co., 242 S.W.3d 712, 715-16 (Mo. banc 2008); see

also Vogt v. Emmons, 158 S.W.3d 243, 247 (Mo. App. E.D. 2005) (“The doctrine of res

judicata renders conclusive a judgment in a subsequent action between the same parties

as to all issues which might have been litigated in the first action, not only as to all issues

tried.” (emphasis added)). Accordingly, the doctrine applies “not only to points and
8
We find the Restatement to be persuasive authority with respect to the preclusion doctrines, given the Missouri
Supreme Court‟s repeated reliance on the Restatement (Second) of Judgments in its decisions. See James, 49
S.W.3d at 683; Chesterfield Village, Inc. v. City of Chesterfield, 64 S.W.3d 315, 319 (Mo. banc 2002); Kesterson v.
State Farm Fire & Cas. Co., 242 S.W.3d 712, 717 (Mo. banc 2008).
9
Plaintiff discusses State v. Daniels, 789 S.W.2d 243 (Mo. App. W.D. 1990) and In re Caranchini, 956 S.W.2d 910
(Mo. banc 1997), but does not explain how those cases have any bearing on the present matter.

8
issues upon which the court was required by the pleadings and proof to form an opinion

and pronounce judgment, but to every point properly belonging to the subject matter of

litigation and which the parties, exercising reasonable diligence, might have brought

forward at the time.” King Gen. Contractors, Inc. v. Reorganized Church of Jesus Christ

of Latter Day Saints, 821 S.W.2d 495, 501 (Mo. banc 1991). The purpose of this rule is

to protect individuals from the burden of litigating multiple lawsuits, to promote judicial

economy, and to minimize the possibility of inconsistent decisions. Lauber-Clayton,

LLC v. Novus Props. Co., 407 S.W.3d 612, 618, 619 (Mo. App. E.D. 2013); Kinsky, 371

S.W.3d at 112.

1. Res Judicata Applies to Defenses

At the outset, we address Defendant‟s argument that the doctrine of res judicata is

inapplicable because it does not apply to bar the assertion of a defense. According to

Defendant, the doctrine only applies to bar the reassertion of a claim or cause of action.

In support, Defendant discusses Ste. Genevieve County v. Fox, 688 S.W.2d 392 (Mo.

App. E.D. 1985).10 In that case, the county sued the defendant engineers for negligence

and breach of contract for failure to perform services. Id. at 393. The defendants

counterclaimed, asserting that the county breached the contract first by failing to pay for

services performed. Id. The parties settled the county‟s claims, agreeing to dismiss them

with prejudice and to reserve the defendants‟ right to pursue their counterclaim. Id. The

10
As additional support for this argument, Defendant also cites the definition of res judicata articulated in Robin
Farms, Inc., 991 S.W.2d at 185, which provides that res judicata “operates as a bar to the reassertion of a cause of
action that has been previously adjudicated in a proceeding between the same parties or those in privity with them.”
This is a general definition of res judicata repeated in our case law and does not stand for the proposition that the
doctrine does not operate to bar a defense.

9
defendants then moved for summary judgment, which the circuit court granted. Id. On

the county‟s appeal, the defendants argued that res judicata barred the county from

defending against the counterclaim because the county‟s defense—that the services

defendants actually rendered were not of the quality the contract required—constituted a

cause of action raised in the county‟s original claims. Id. at 395.

The Ste. Genevieve Court disagreed with the defendants‟ characterization of the

county‟s defense as a cause of action and concluded that res judicata did not bar the

defense. Id. In so concluding, the Court implicitly recognized that the county could not

have raised the defense in relation to its claims for negligence and breach of contract,

which the parties had settled. Id. In no way, however, did the Court hold that res

judicata does not apply to defenses that could have been raised in a prior lawsuit. Ste.

Genevieve, therefore, does not provide authority for Defendant‟s proposition that res

judicata applies only to the reassertion of causes of action or claims.

Moreover, Defendant‟s argument that res judicata is inapplicable to defenses

ignores that Missouri has adopted a broad rule of res judicata. In Missouri, res judicata

bars every point and issue properly belonging to the litigation that the parties could have,

exercising reasonable diligence, brought forward at the time. King Gen. Contractors,

Inc., 821 S.W.2d at 501. We believe that this principle unequivocally applies to a

defense that a defendant failed to raise in the prior action for failure to exercise

reasonable diligence. To adopt Defendant‟s interpretation of res judicata would defeat

the intended purposes of the doctrine—to avoid multiplicity of lawsuits and to promote

finality and consistency of judgments. Although we are aware of no Missouri case that

10
has applied res judicata to preclude the assertion of a defense, we note that other

jurisdictions, in recognition of the doctrine‟s purpose, have applied res judicata in this

manner. See, e.g., Gerber v. Holcomb, 219 S.W.3d 914, 918 (Tenn. App. 2006) (party

forfeited opportunity to assert defenses under principles of res judicata where party could

have raised the defenses in a prior litigation); Sprague v. Buhagiar, 539 N.W.2d 587,

588-89 (Mich. App. 1995) (the plaintiff‟s failure to raise defenses and affirmative

defenses in prior proceeding were waived and barred by res judicata in subsequent suit);

State ex rel. Iowa Dep’t of Natural Res. v. Shelley, 512 N.W.2d 579, 580-581 (Iowa App.

1993) (res judicata barred defenses that party failed to raise in prior action); Weiner v.

County of Essex, 620 A.2d 1071, 1081 (N.J. Super. Ct. 1992) (“A defendant‟s decision

not to raise a defense in the trial of a particular action is a waiver of that defense, which

waiver is granted res judicata effect.”); State ex rel. Mart v. Mart, 380 N.W.2d 604, 606

(Minn. App. 1986) (“[A]n affirmative finding of paternity in a judgment and decree of

dissolution is res judicata barring an asserted defense of non-paternity in a subsequent

[child support] action.”). Accordingly, consistent with Missouri‟s broad rule of res

judicata, we conclude that res judicata applies to bar the assertion of a defense properly

belonging to the subject matter of the litigation that a party, exercising reasonable

diligence, could or should have raised in the prior litigation.11

11
Defendant also argues in support of the circuit court‟s reasoning that res judicata is inapplicable based on
principles of equity. However, the circuit court improperly relied on equitable principles in its analysis of the
application of res judicata. While equitable considerations are properly considered in a collateral estoppel analysis,
see James, 49 S.W.3d at 688, we are aware of no Missouri case recognizing equitable principles as a basis for res
judicata and Defendant cites to none.

11
 Here, there is no dispute that the effect of the Policy‟s carriage-of-goods exclusion

was an issue properly belonging to the prior garnishment action. Clearly, Defendant

realized (albeit belatedly) in the prior proceeding that the critical issue before the court

was whether the Policy‟s carriage-of-goods exclusion barred coverage of Husband‟s

claim and precluded him (and consequently Plaintiff) from recovering any insurance

proceeds. As Defendant concedes, there is no dispute that Defendant, had it exercised

reasonable diligence, could have timely raised the Policy‟s carriage-of-goods exclusion in

the prior garnishment action. However, Defendant failed to timely raise the defense in

the prior garnishment action and the trial court precluded Defendant from presenting the

defense. Under these circumstances, where Defendant could have raised the defense had

it exercised reasonable diligence, res judicata may apply to bar Defendant from raising

the defense in the instant action.

2. Four Identities Exist

Our analysis does not end with the conclusion that res judicata applies to bar a

defense. We must consider whether the “four identities” necessary to the application of

res judicata exist in this case. These identities include: (1) identity of the thing sued for;

(2) identity of the cause of action; (3) identity of the persons and parties to the action; and

(4) identity of the quality of the person for or against whom the claim is made. Lauber-

Clayton, LLC, 407 S.W.3d at 618. When these four identities coexist, “res judicata

operates to bar „any claim that was previously litigated between the same parties or those

in privity with them.‟” Id. (citation omitted). Defendant only disputes the existence of

the first three identities.

12
 a. Identity of the Thing Sued For

The first factor is whether the identity of the “thing sued for” in the prior

proceedings is the same as the thing sued for in the subsequent proceeding. Plaintiff

posits that each garnishment action seeks the same thing—a legal determination of

Driver‟s coverage. Defendant asserts that the thing sued for is different because Plaintiff

seeks loss of consortium damages in the present garnishment action, not damages for

severe bodily injury that Husband sought in the prior garnishment action.12 In our view,

both parties confuse the identity of “the thing sued for.” Here, Plaintiff seeks the

identical relief that Husband sought in the prior garnishment action: Garnishment of

insurance proceeds to satisfy a judgment that stems from damages caused by the same

motor vehicle accident. See, e.g., Palmore v. City of Pacific, 393 S.W.3d 657, 666 (Mo.

App. E.D. 2013) (“„[T]he thing sued for‟ in both actions was monetary damages arising

out of the same set of facts.”). Accordingly, the first identity exists because both actions

seek to garnish insurance proceeds to satisfy the same underlying tort judgment.

b. Identity of the Cause of Action

The second factor we consider is whether the cause of action is the same in both

the prior and subsequent action. This Court has defined the identity of the cause of action

as “the underlying facts combined with the law, giving a party a right to a remedy of one

form or another based thereon.” Williams v. Fin. Plaza, Inc., 78 S.W.3d 175, 183 (Mo.

12
While Plaintiff cites no authority in support of her assertion, Defendant relies solely on Maddox v. Truman Med.
Ctr., Inc., 727 S.W.2d 152 (Mo. App. W.D. 1987), in support of its argument. Maddox, however, is not on point
because it does not concern the identity of the “thing sued for” in the context of a res judicata analysis. Rather, that
case simply stands for the principle that a spouse‟s damages for loss of consortium compensate a loss that is
different than the spouse‟s injury. Maddox, 727 S.W.2d at 154.

13
App. W.D. 2002) (citation and quotations omitted). It is not necessary that the causes of

action be identical, but the claims must have arisen out of the “„same act, contract, or

transaction.‟” Chesterfield Village, Inc. v. City of Chesterfield, 64 S.W.3d 315, 318-19

(Mo. banc 2002) (citation omitted); Jordan v. Kansas City, 929 S.W.2d 882, 886 (Mo.

App. W.D. 1996). As such, the focus is on the “factual bases of the claims, not the legal

theories.” Chesterfield Village, Inc., 64 S.W.3d at 319.

Here, there is no serious dispute that both the prior and present equitable

garnishment suits are based on the same set of facts. The operative facts for both

lawsuits are the same. In both actions, proof was required that: (1) a judgment had been

obtained against Driver for the injuries sustained in the 2007 accident and (2) that Driver,

at the time of the accident, was a covered insured under the Policy. See § 379.200.13 The

existence of an underlying judgment arising from the injury caused by the accident and

the issue of Driver‟s coverage for the injury caused would necessarily be litigated in both

cases. No different or new facts were required for Plaintiff to establish her cause of

action.

Defendant, however, argues that because Plaintiff must establish that she obtained

a judgment related to her damages, rather than a judgment related to Husband‟s damages

as in the prior equitable garnishment action, that identity of the cause of action is lacking.

This argument ignores that the appropriate analysis centers on whether the present claim

13
Under the statute, a plaintiff must establish that the plaintiff has obtained a judgment against the insurer‟s insured
for an injury that arose during the policy period and that the insurer‟s policy covers the injury.

14
arises from the same set of facts as the prior action. See Jordan, 929 S.W.2d at 886.14

Certainly, Plaintiff‟s claim is different than Husband‟s prior equitable garnishment suit

because the present garnishment action does not seek to establish a judgment awarding

Husband damages. However, simply because Plaintiff‟s claim emphasizes different

facts, mainly the damages the judgment awarded to her instead of Husband and calls for a

different measure of liability, does not mean that the cause of action is separate. See

Chesterfield Village, Inc., 64 S.W.3d at 319-320; Dreckshage v. Community Fed. Sav. &

Loan Assoc., 641 S.W.2d 831, 833-34 (Mo. App. E.D. 1982) (indicating that claims

based on the same transaction are not to be considered separate even if the claim depends

on “„different shadings of the facts, or would emphasize different elements of the facts, or

would call for different measures of liability or different kinds of relief.‟” (quoting

Restatement (Second) of Judgments § 24, comment c). Accordingly, the second identity

of res judicata exists.

c. Identity of the Parties

The third factor is whether the identity of the person and parties in the prior

adjudication is the same as the identity of the person and parties in the subsequent action.

As noted, res judicata applies to the parties and their privies, meaning that the party in the

instant action need not have actually been a party in the prior action. Palmore, 393

S.W.3d at 667. For privity to exist, as to satisfy the same party identity, the interests of

the party and non-party must be “so closely intertwined that the non-party can fairly be

14
Plaintiff‟s argument, that the cause of action is the same because both claims are equitable garnishment actions
under § 379.200, makes a similar mistake by focusing on the legal theories pleaded and not the facts underlying the
claims.

15
considered to have had his or her day in court.” Stine v. Warford, 18 S.W.3d 601, 605

(Mo. App. W.D. 2000).

Plaintiff argues that this identity exists because she is in privity with both Husband

and Driver. Regarding whether Plaintiff is in privity with Driver, Plaintiff says that as a

judgment creditor of Driver, she “stands in the shoes” of Driver “because the rights of the

injured person bringing an action against the insurer for equitable garnishment are

derivative [of the insured‟s contractual rights under the insurance policy] and can rise no

higher than those of the insured . . . .” Smith v. Progressive Cas. Ins. Co., 61 S.W.3d

280, 283 (Mo. App. E.D. 2001) (citation and quotations omitted). Defendant concedes

that Plaintiff has the same rights as Driver under the Policy, but Defendant asserts,

without citation to authority, that privity is lacking because Driver did not seek

indemnification for loss of consortium damages in the prior suit.

Our Supreme Court applied the same reasoning advanced by Plaintiff in James v.

Paul, 49 S.W.3d at 683-84. In that case, the plaintiff brought a garnishment action

against the insured‟s insurer to satisfy a judgment that arose out of the insured‟s stabbing

of the plaintiff. Id. at 680-82. The issue was whether collateral estoppel applied to

preclude the plaintiff‟s suit, given that a policy exclusion barred coverage for intentional

acts and the insured‟s guilty plea had established that the stabbing was intentional. Id. at

682. In considering whether the plaintiff was in privity with the insured, the Court

explained that as a third-party beneficiary of the insured‟s contractual relationship with

the insurer, the plaintiff “stands in the shoes of the insured” and has no rights greater or

less than the insured. Id. at 683-84. The Court further explained that the insured‟s

16
interest with respect to whether his attack on the plaintiff was intentional was “tightly

aligned with the interest” of the plaintiff. Id. at 684. The Court thus concluded that the

plaintiff was in privity with the insured. Id.15

We believe James controls our analysis in the instant matter. Like the plaintiff in

James, Plaintiff‟s garnishment action stems from the contractual relationship between

Driver and Defendant. Indeed, Plaintiff does not seek to enforce rights outside the terms

of Defendant‟s Policy. Nor does she assert rights greater than Driver‟s under the Policy.

Moreover, under the circumstances of this case, Driver‟s and Plaintiff‟s interests are

closely aligned because Driver, like Plaintiff, has an interest in satisfying the judgment

against him through the insurance proceeds. Therefore, consistent with James, Plaintiff,

as a third-party beneficiary of the Policy, “stands in the shoes” of Driver and is in privity

with Driver. See James, 49 S.W.3d at 683-84.

Defendant‟s argument, that privity is lacking because Driver did not seek

indemnification for Plaintiff‟s judgment in the prior suit, draws a distinction that is

irrelevant to the privity analysis. Clearly, Driver, as a result of his status as a covered

insured under the Policy, has a contractual right to indemnification for damages sustained

in the underlying accident, including Plaintiff‟s damages. That Driver did not pursue

indemnification for Plaintiff‟s damages in the prior suit is of no significance and

Defendant points to no case law in support of its argument. Having concluded that

15
Although the Court articulated this privity analysis in the context of collateral estoppel, we believe that its analysis
applies equally to res judicata. Both doctrines require the party asserting the bar to prove the existence of identity of
party in the prior and subsequent proceedings.

17
privity exists between Driver and Plaintiff, we need not consider whether privity also

exists with Husband. Accordingly, the third identity exists in this case.

d. Identity of the Person For or Against Whom the Claim Is Made

Defendant does not dispute the existence of the fourth factor—that the identity of

the “quality of the person” for or against whom the claim is made is the same in both

suits. See Palmore, 393 S.W.3d 667 (“quality of person” exists where defendants were

identical and were sued in the same capacity in both suits); Jordan, 929 S.W.2d at 887

(“quality of the person” exists if a defendant‟s “status” is the same in both suits). Indeed,

in both the prior and present garnishment actions, Defendant is the named defendant and

the capacity in which Defendant is being sued is the same. Likewise, Plaintiff sued

Defendant in her individual capacity as a judgment creditor in both the prior and present

garnishment suits.

Having determined that all four identities exist and that Defendant could have

raised the Policy‟s carriage-of-goods exclusion in the prior garnishment action, we

conclude that res judicata applies to bar Defendant from raising that defense in the

present garnishment action. The circuit court erred by reaching the opposite conclusion.

3. Claim Splitting

Finally, Defendant argues as it did in the summary judgment proceeding before

the circuit court that if the four identities exist, then Plaintiff improperly split her claim

by voluntarily dismissing it in the prior garnishment action and is now precluded from re-

asserting her claim. Claim splitting generally prevents a plaintiff from suing for part of a

claim in one action and then suing for the remainder of the claim in a subsequent action.

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See, e.g., Chesterfield Village Inc. v. City of Chesterfield, 64 S.W.3d 315 (Mo. banc

2002). If a party could have brought claims in the first action, the prohibition against

claim splitting requires those claims to be merged into and barred by the first judgment.

Twehous Excavating Co., Inc. v. L.L. Lewis Investments, L.L.C., 295 S.W.3d 542, 546

(Mo. App. W.D. 2009). To determine whether claim splitting applies, such that a claim

is barred by a former judgment, courts generally consider “whether the claim arises out of

the same „act, contract or transaction.‟” Chesterfield, 64 S.W.3d at 318-19 (citation

omitted). The penalty for splitting a single cause of action is that an adjudication on the

first suit is a bar to the second suit. Finley v. St. John’s Med. Ctr., 958 S.W.2d 593, 595

(Mo. App. E.D. 1998).

Here, Plaintiff never secured a judgment against Defendant in the prior

garnishment action and instead voluntarily dismissed her claim before Husband received

his judgment against Defendant. Plaintiff later refiled the exact same garnishment claim.

In essence, Plaintiff never sought to sever her claim and never obtained a final judgment

against Defendant as to any part of her claim that would act as a bar to her current suit.

As such, the facts of this case do not implicate the prohibition against claim splitting.

Compare Felling v. Giles, 47 S.W.3d 390 (Mo. App. E.D. 2001) (prohibition against

claim splitting applied where the plaintiff, after final resolution as to some claims,

pursued relief on related claims that had been voluntarily dismissed without prejudice).

Defendant‟s argument that claim splitting applies simply confuses Husband‟s judgment

in the prior equitable garnishment suit as a bar to Plaintiff‟s present equitable

garnishment claim. However, Plaintiff and Husband are separate parties holding

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independent judgments against Driver and separate claims against Defendant. Husband

could not have pursued Plaintiff‟s claim in the prior garnishment action. Therefore,

Husband‟s judgment cannot act as a bar to Plaintiff‟s claim. See Twehous Excavating

Co., Inc, 295 S.W.3d at 546. The claim splitting principles Defendant raises are

inapplicable and Defendant‟s contention that claim splitting bars Plaintiff‟s claim is

without merit. Plaintiff‟s point is granted.

V. Conclusion

For the foregoing reasons, the circuit court‟s judgment is reversed and this matter

is remanded for entry of a judgment in Plaintiff‟s favor consistent with this opinion.

________________________________
Philip M. Hess, Judge

Lisa Van Amburg, P.J. and
Patricia L. Cohen., J. concur.

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