Estate of Max E. Overbey, By Glenna J. Overbey, Personal Representative, and Glenna J. Overbey v. Universal Underwriters Insurance Company

IN THE MISSOURI COURT OF APPEALS
WESTERN DISTRICT

ESTATE OF MAX E. OVERBEY, )
DECEASED, BY GLENNA J. )
OVERBEY, PERSONAL )
REPRESENTATIVE, and GLENNA J. )
OVERBEY, )
) WD84401
Respondents, )
v. ) OPINION FILED:
) April 5, 2022
)
UNIVERSAL UNDERWRITERS )
INSURANCE COMPANY, et al., )
)
Appellants. )

Appeal from the Circuit Court of Clay County, Missouri
The Honorable Timothy J. Flook, Judge

Before Division One: Mark D. Pfeiffer, Presiding Judge, and
Karen King Mitchell and Gary D. Witt, Judges

Universal Underwriters Insurance Company and Zurich American Insurance Company1

(collectively, Universal) appeal the equitable garnishment judgment finding policy coverage for

damages awarded to Max and Glenna Overbey2 on their underlying Missouri Merchandising

Practices Act (MMPA) claim against Chad Franklin and his dealership Chad Franklin National

1
Universal is a subsidiary of Zurich.
2
Max Overbey died on September 8, 2010; his estate, Glenna Overbey, Personal Representative, was
substituted as a party in the underlying action.
Auto Sales North, LLC (NAS) (collectively, Franklin). Universal raises three claims on appeal,

arguing that the trial court erred in granting equitable garnishment to the Overbeys because

(1) Franklin’s conduct underlying the MMPA judgment was not a covered “occurrence” under

Universal’s policies; (2) Franklin’s actions constituted dishonest and/or intentional conduct, which

are both excluded from coverage under the policies; and (3) coverage for punitive damages is

excluded under the policies and violates Missouri public policy. Because the Overbeys failed to

prove that the policies covered Franklin’s conduct, we reverse the trial court’s equitable

garnishment judgment against Universal.3

Background

On September 15, 2007, the Overbeys purchased a Suzuki automobile for their grandson

and his wife from NAS as part of a “Drive for Life” program. The program advertised car

payments as low as $43 per month. The Overbeys understood the program to allow them to

purchase a Suzuki, drive it for six months, return the vehicle to NAS, and select a new vehicle at

the same low monthly rate.

To participate in the program, the Overbeys had to sign a sales contract and documents

obligating them to a high-interest loan to purchase the car, with Franklin agreeing to send them

sufficient funds to reduce their effective payment to only $49 per month. The car was valued at

$19,995, but the sales contract listed the purchase price as $33,995, and the loan amount was listed

as $37,000. Unbeknownst to the Overbeys at the time, the loan amount included a $499.95

document fee, a $599 gap insurance fee, and a $1,400 extended warranty fee for a car they were,

under the terms of the program, to own for only six months. Additionally, the Overbeys paid a

3
To avoid confusion, we refer to the court that issued the judgment being appealed here as “the trial court”;
we refer to the court that heard the underlying MMPA case as “the MMPA court.”

2
$500 membership fee to participate in the program but were promised a $400 gas card as part of

the deal.

The funds Franklin provided were insufficient to keep the Overbeys’ monthly payment at

$49 for the entire six-month period. And, when the Overbeys attempted to trade in their vehicle

after six months, Chad Franklin and NAS disavowed knowledge of the “Drive for Life” program,

thereby obligating the Overbeys to pay the full loan amount of $719 per month.4

The Overbeys sued Chad Franklin and NAS, among others, claiming negligent

misrepresentation, intentional misrepresentation, and MMPA violations. As to their MMPA

claims against Chad Franklin and NAS, the Overbeys alleged,

the actions of [Chad Franklin/NAS] were intentional, deliberate, willful, wanton,
malicious and without just cause or excuse and were outrageous because of [Chad
Franklin/NAS]’s evil motive or reckless indifference to the rights of others, thereby
entitling [the Overbeys] to punitive damages and to deter [Chad Franklin/NAS] and
others from like conduct.

A jury trial was held in August 2010. The Overbeys, their grandson, and his wife testified

to the following.5 The Overbeys, who had limited financial means, wanted a car for their

grandson’s wife to commute to school. They learned about the “Drive for Life” program from a

family friend and from commercials featuring Chad Franklin. Attracted by the promise of low

monthly payments, Max Overbey, his grandson, and his grandson’s wife visited NAS. During

nearly six hours at the dealership, the Overbeys repeatedly explained that they could not afford to

pay more than $20,000. The salesmen continually assured the Overbeys that their monthly

payment would not exceed $49. When the Overbeys expressed concern about the $37,000 figure

on the loan documents, the salesmen assured the Overbeys that those documents were just a

4
Subsequently, Glenna Overbey was able to refinance the vehicle and reduce their monthly payment to $679.
5
Chad Franklin and NAS did not appear or otherwise participate in the MMPA trial, but they were
represented by counsel throughout trial.

3
formality to get into the program.6 During one of these conversations, a salesman told Max

Overbey’s granddaughter-in-law that the car was actually worth $19,995.

For the first several months, the Overbeys paid $49 per month, but the funds provided by

NAS were insufficient to cover the entire six-month period, so the Overbeys’ monthly payment

soon exceeded $49.7 The Overbeys never received the promised $400 gas card. At the conclusion

of the six-month period, Chad Franklin and NAS denied knowledge of the $49/month deal and

informed the Overbeys that they were responsible for the full monthly payment of $719.

The Overbeys introduced evidence of 73 other complaints against NAS filed with the

Consumer Protection Division of the Missouri Attorney General’s Office. Of those 73 complaints,

35 involved complaints about the financing arrangements and raised concerns similar to those

expressed by the Overbeys. The Overbeys also called four witnesses who testified about similar

complaints against NAS. The witnesses testified that NAS “misrepresented a lot of things,”

provided false information, and “lied.”

Although not evidence admitted at the trial, statements made by the Overbeys’ counsel

during closing argument are noteworthy. Counsel argued,

When [Chad Franklin and NAS] used that promotion and they used those ads and
they used that scheme to get people in, they did so and they lied. No way around
it. They lied. They told these people something was going to happen. Six months
later, it didn’t. That, ladies and gentlemen, is a violation of the [MMPA].

Counsel also argued that punitive damages are “to punish [Chad Franklin and NAS] not only for

the lies that they told these people, but the lies they told the 35 other people in that period of time

6
Glenna Overbey testified that, when she went to NAS a few days later, the salesman responded to her
concerns about the loan amount by saying, “These figures mean nothing. They are for our records only. These have
nothing to do with you. These numbers, this contract is for our records only. No one else is involved in this.”
7
Max Overbey testified that NAS sent Glenna Overbey a check for $3,253 to cover the difference between
the promised $49/month payment and the amount due monthly under the loan ($719). At the rate of $719/ month,
$3,253 woud cover fewer than five months of payments.

4
when they were promoting these cars and cooking this scheme up and doing it on a wide range

scale.”

Only the MMPA claims against Chad Franklin and NAS were submitted to the jury; the

remaining counts were dismissed with prejudice. The jury returned verdicts for the Overbeys on

their MMPA claims against both Chad Franklin and NAS and awarded the Overbeys $4,500 in

actual damages and $1 million in punitive damages against Chad Franklin, as well as $76,000 in

actual damages and $250,000 in punitive damages against NAS. The MMPA court initially

entered judgment for the entire amount but later amended its judgment to both reduce the

$1 million punitive damages award against Chad Franklin to $500,000, pursuant to § 510.265,8

and award the Overbeys attorneys’ fees in the amount of $72,000.

Franklin appealed, arguing that the Overbeys failed to make a submissible case against him

and that the reduced amount of punitive damages awarded was still excessive. The Overbeys

appealed from the reduction of the punitive damages award.9 Our Supreme Court affirmed the

judgment below. Est. of Overbey v. Chad Franklin Nat’l Auto Sales N., 361 S.W.3d 364 (Mo.

banc 2012). In doing so, the Supreme Court concluded that the judgment

is fully supported by the evidence that [Chad Franklin and NAS], which was wholly
owned by him when the Overbeys purchased their SUV, committed fraud in falsely
representing to the Overbeys (and making similar representations to others) that
they would owe only $49 per month if they joined a membership program for $500,
but in fact the contract they signed obligated them to pay more than $37,000 over
six years.

Id. at 369.

8
Section 510.265 states, in pertinent part, “No award of punitive damages against any defendant shall exceed
the greater of: (1) Five hundred thousand dollars; or (2) Five times the net amount of the judgment awarded to the
plaintiff against the defendant.” § 510.265.1. All statutory references are to the Revised Statutes of Missouri (Cum.
Supp. 2010).
9
Because the parties challenged the constitutionality of the punitive damages statute, the Supreme Court of
Missouri had exclusive jurisdiction over their appeals. Mo. Const. art. V, § 3.

5
 After being unable to collect their MMPA judgments, the Overbeys filed an eight-count

petition against Universal and others.10 Universal had insured Chad Franklin, NAS, and related

individuals and entities under two consecutive insurance policies—the first from December 1,

2006 to December 1, 2007 (2007 policy) and the second from December 1, 2007 to December 1,

2008 (2008 policy)—both bearing the policy number 260929. Count I (equitable garnishment

against Universal) and Count II (declaratory judgment against Universal) of the Overbeys’ petition

were severed from the remaining counts, and a bench trial was held on those counts.11

For purposes of discovery and trial on Counts I and II, the Overbeys’ case was consolidated

with two other “Drive for Life” cases involving very similar underlying transactions, insurance

policies, and coverage issues—Lewellen v. Universal Underwriters Insurance Company and

Heckadon v. Universal Underwriters Insurance Company. During the bench trial, Glenna

Overbey testified that she “investigated [the ‘Drive for Life’ program] thoroughly before [they]

got involved, and it was told to [them] it was perfectly legal.” She also testified that she had no

idea that Chad Franklin or NAS was trying to injure her or cause her harm.

On March 29, 2017, the trial court issued its “fourth amended findings of fact and

conclusions of law and partial judgment,” which is the judgment being appealed here. The trial

court found the terms “damages,” “occurrence,” and “injury” in the policies to be ambiguous and

concluded that the Overbeys met their burden to establish coverage for the MMPA judgments

against Chad Franklin and NAS. The trial court also concluded that Universal failed to prove that

(1) a policy exclusion applied to the MMPA claims; (2) punitive damages were not recoverable

10
The Overbeys’ petition also named the following defendants: Chad Franklin; NAS; CFS Enterprises, Inc.
d/b/a Legend Suzuki and/or Chad Franklin Suzuki; and Tiffany Franklin (Chad Franklin’s wife).
11
The remaining counts were for fraudulent conveyance (all defendants), MMPA violations (all defendants),
civil conspiracy (all defendants), joint venture or joint enterprise (all defendants), bill in equity (all defendants), and
tortious interference with a business expectancy (Universal).

6
under the policies; and (3) coverage for punitive damages violates Missouri public policy. Having

found that the Overbeys were entitled to equitable garnishment against Universal, the trial court

determined that Count II (declaratory judgment) was inappropriate and, therefore, denied

Count II. The trial court awarded the Overbeys $902,500 with interest from November 18, 2010,

plus costs. It is not clear from the face of the judgment whether the trial court found coverage

under the 2007 policy, the 2008 policy, or both, but there are only slight differences in the key

provisions of the policies and those differences are inconsequential for purposes of this appeal.

Notably, the trial court made no findings regarding whether Franklin’s conduct was intentional,

and the court did not endeavor to discern whether it mattered. In a separate ruling, the trial court

granted summary judgment for Universal on Counts III-VIII.

On January 8, 2021, the Overbeys voluntarily dismissed their claims against the remaining

defendants, and the trial court issued a judgment on April 14, 2021, designating the fourth amended

findings of fact and conclusions of law as to the Overbeys’ equitable garnishment claim as final

for purposes of appeal because “all parties and all claims are disposed of.” Universal appeals. 12

Jurisdiction

We have “an obligation, acting sua sponte if necessary, to determine [our] authority to hear

the appeals that come before [us].” McConnell v. West Bend Mut. Ins. Co., 606 S.W.3d 181, 187

(Mo. App. W.D. 2020) (quoting Maly Com. Realty, Inc. v. Maher, 582 S.W.3d 905, 910 (Mo. App.

W.D. 2019)). “If we lack appellate jurisdiction, the appeal must be dismissed.” Id. “The right to

appeal is purely statutory and, where a statute does not give a right to appeal, no right exists.” Id.

(quoting Wilson v. City of St. Louis, 600 S.W.3d 763, 767 (Mo. banc 2020)). “Although many

12
Following the Overbeys’ voluntary dismissal on January 8, 2021, Universal timely filed a post-judgment
motion, which the court’s April 2021 judgment implicitly denied. Thus, Universal’s notice of appeal first filed on
February 17, 2021, and subsequently amended, was timely.

7
statutes govern the right to appeal, the only statute even potentially applicable to the present case

is section 512.020(5) which provides that ‘final judgments’ are appealable.” Id. (quoting Wilson,

600 S.W.3d at 767).

For purposes of § 512.020(5), a final judgment must satisfy two criteria: (1) “it must be a

judgment (i.e., it must fully resolve at least one claim in a lawsuit and establish all the rights and

liabilities of the parties with respect to that claim)”; and (2) “it must be ‘final,’ either because it

disposes of all claims (or the last claim) in a lawsuit, or because it has been certified for immediate

appeal pursuant to Rule 74.01(b).”13 Wilson, 600 S.W.3d at 771. A judgment may be certified

under Rule 74.01(b) “only if it disposes of a ‘judicial unit’ of claims, meaning it: (a) disposes of

all claims by or against at least one party, or (b) it disposes of one or more claims that are

sufficiently distinct from the claims that remain pending in the circuit court.” Id. “Determining

whether these criteria are met is a question of law and depends on ‘the content, substance, and

effect of the order,’ not the circuit court’s designation.” Id. (quoting Gibson v. Brewer, 952 S.W.2d

239, 244 (Mo. banc 1997)).

Here, Universal appeals the trial court’s judgment granting equitable garnishment to the

Overbeys. The trial court denied the Overbeys’ claim for declaratory judgment and granted

summary judgment in favor of Universal on all of the Overbeys’ remaining claims against

Universal. The Overbeys then voluntarily dismissed the remaining defendants, without prejudice.

Following the voluntary dismissal, the trial court issued its April 14, 2021 judgment designating

its March 29, 2017 “fourth amended findings of fact and conclusions of law and partial judgment,”

as final for purposes of appeal because “all parties and all claims are disposed of.”

13
All rule references are to the Missouri Supreme Court Rules (2020).

8
 The equitable garnishment judgment fully resolved at least one claim in a lawsuit—the

equitable garnishment claim against Universal—and the judgment established all the rights and

liabilities of the parties with respect to that claim. The Overbeys then voluntarily dismissed all

remaining claims against all remaining parties. The equitable garnishment judgment coupled with

the voluntary dismissal makes the equitable garnishment judgment final for purposes of appeal

because no other claims are pending and there is nothing left for the trial court to determine. See

Stewart v. Liberty Mut. Ins. Co., 349 S.W.3d 381, 384 (Mo. App. W.D. 2011) (a previously entered

partial summary judgment on one count became a final judgment when the plaintiff voluntarily

dismissed his remaining counts against Liberty Mutual); Huskey v. Queen City Roofing &

Contracting Co., 523 S.W.3d 610, 613 (Mo. App. S.D. 2017) (the plaintiff was permitted to

voluntarily dismiss the remaining counts and the partial summary judgment “then became a final

judgment because no other claims or parties remain[ed] pending.” (quoting Stewart, 349 S.W.3d

at 384-85)). Having satisfied ourselves that we have appellate jurisdiction, we turn to Universal’s

claims on appeal.

Standard of Review

“In determining whether Universal’s policy affords coverage for the damages awarded [to

the Overbeys], we interpret the insurance policy de novo.” Lewellen v. Universal Underwriters

Ins. Co., 574 S.W.3d 251, 259 (Mo. App. W.D. 2019). We review factual determinations made

by the trial court under the standard set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc

1976). Id. “Thus, we will affirm the circuit court’s judgment ‘unless there is no substantial

evidence to support it or unless it is against the weight of the evidence, it erroneously declares the

law, or it erroneously applies the law.’” Id. (quoting Schmitz v. Great Am. Assurance Co., 337

S.W.3d 700, 705 (Mo. banc 2011)).

9
 Analysis

Universal raises three claims on appeal. Universal argues that the trial court erred in

granting equitable garnishment to the Overbeys because (1) Franklin’s conduct underlying the

MMPA judgment does not constitute a covered “occurrence” under Universal’s policies;

(2) Franklin’s actions constituted dishonest and/or intentional conduct, which are both excluded

from coverage under the policies; and (3) coverage for punitive damage is excluded under the

policies and violates Missouri public policy.

“To establish an equitable garnishment claim, judgment creditors must prove: (1) ‘that

they obtained a judgment in their favor against [the] insured’; (2) ‘that [insurer’s] policies were in

effect when the incident occurred’; and (3) ‘that [insurer’s] policies covered the damages awarded

in the [u]nderlying [j]udgment against [insured].’” McConnell, 606 S.W.3d at 189 (quoting

Kretsinger Real Est. Co. v. Amerisure Ins. Co., 498 S.W.3d 506, 510-11 (Mo. App. W.D. 2016)).

Accordingly, the Overbeys bore the burden to prove that (1) they had judgments in their favor

against Chad Franklin and NAS; (2) Universal’s policies were in effect when the Overbeys

suffered their injuries; and (3) the policies covered the damages awarded against Chad Franklin

and NAS. Here, there is no question that the Overbeys obtained judgments against Chad Franklin

and NAS, who were both insureds under the policies that were in effect when the injuries occurred.

The only question is whether the policies provide coverage for Franklin’s conduct underlying the

MMPA judgment.

“In reviewing the language contained in insurance policies, we apply the meaning of the

terms that ‘would be attached by an ordinary person of average understanding if purchasing

insurance,’” Lewellen, 574 S.W.3d at 259 (quoting Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129,

132 (Mo. banc 2007)), “and we will interpret the contract ‘as to afford coverage rather than defeat’

10
it.” Id. (quoting Universal Underwriters Ins. Co. v. Dean Johnson Ford, Inc., 905 S.W.2d 529,

533 (Mo. App. W.D. 1995)). “Where no ambiguity exists, we will enforce the contract according

to its terms.” Id. “However, if we find an ambiguity within the policy, we will resolve that

ambiguity against the insurer.” Id. “An ambiguity exists when there is duplicity, indistinctness,

or uncertainty in the meaning of the language in the policy. Language is ambiguous if it is

reasonably open to different constructions.” Id. (quoting Swadley v. Shelter Mut. Ins. Co., 513

S.W.3d 355, 357 (Mo. banc 2017)). “The plaintiff must establish coverage under the policy, but

the insurer must establish that an exclusion to coverage applies.” Taylor v. Bar Plan Mut. Ins. Co.,

457 S.W.3d 340, 344 (Mo. banc 2015). Exclusions “are construed strictly against the insurer.” Id.

The relevant portions of the 2007 and 2008 policies are Coverage Part 500, which governs

Garage Operations, as defined in that part, and Coverage Parts 970 and 980, which are umbrella

policies. Coverage Part 500 of the 2007 policy states, in pertinent part: “WE will pay all sums

the INSURED legally must pay as DAMAGES because of INJURY to which this insurance

applies . . . caused by an OCCURRENCE arising out of YOUR GARAGE OPERATIONS . . . .”14

In relevant parts, both policies define “occurrence” as “an accident . . . which results in such

INJURY . . . neither intended nor expected from the standpoint of a reasonably prudent person.”15

14
The 2008 policy uses slightly different language, but the differences are inconsequential here. We have
provided the coverage language for Coverage Part 500. While Coverage Parts 970 and 980 also use slightly different
language, the differences are not functionally significant. In pertinent part, Coverage Parts 970 and 980 of the 2007
policy state: “WE will pay for LOSS, subject to the terms and conditions of the Coverage Part, in excess of:
(1) coverage provided in any UNDERLYING INSURANCE; (b) coverage provided to an INSURED in any other
insurance; (c) in the absence of (a) or (b) the retention shown in the declarations.” “LOSS” means “all sums the
INSURED legally must pay as DAMAGES because of INJURY to which this insurance applies, caused by an
OCCURRENCE.” In relevant part, Coverage Parts 970 and 980 of the 2008 policy state: “WE will pay those sums
the INSURED legally must pay as DAMAGES because of INJURY to which this insurance applies, caused by an
OCCURRENCE . . . .”
15
The policies also exclude coverage for, among other things, (1) “an OCCURRENCE, SUIT or claim arising
out of any dishonest, fraudulent or criminal acts committed by any INSURED”; and (2) “any act committed by or at
the direction of the INSURED with intent to cause harm.”

11
 In both Heckadon and Lewellen, the two cases consolidated with the instant case for

purposes of trial on the issue of insurance coverage, this court found nothing facially vague or

ambiguous in the policy language. Lewellen, 574 S.W.3d at 263-64; Heckadon v. Underwriters

Inc. Co., 586 S.W.3d 789, 800 (Mo. App. W.D. 2019). We concluded that Franklin’s conduct

underlying the MMPA judgments in those cases did not constitute an “occurrence” under the

policies, and we reversed the circuit court’s equitable garnishment judgments. Lewellen, 574

S.W.3d at 264; Heckadon, 586 S.W.3d at 805-06.

As in Lewellen and Heckadon, here the trial court erred in finding that the term

“occurrence” was ambiguous. In both Lewellen and Heckadon, we concluded that the terms of the

policies, including “occurrence,” are not ambiguous, and we are bound by that determination here.

Thus, applying the plain meaning of “occurrence,” “[t]he determinative inquiry . . . is whether the

insured foresaw or expected the injury or damages.” Heckadon, 586 S.W.3d at 801 (quoting

Lewellen, 574 S.W.3d at 262). “However, in reviewing the insured’s foresight of these injuries

we employ an objective standard—whether a reasonably prudent person would foresee this

accident—instead of an analysis of Franklin’s subjective intent or expectation.” Lewellen, 574

S.W.3d at 262. “The question of whether harm was intended ‘can be inferred from facts and

circumstances surrounding an act.’” Heckadon, 586 S.W.3d at 802 (quoting Truck Ins. Exch. v.

Pickering, 642 S.W.2d 113, 116 (Mo. App. W.D. 1982)).

Whether Franklin’s actions are covered by the policies is determined by the facts

established in the underlying MMPA action. See McCormack Baron Mgmt. Servs., Inc. v. Am.

Guar. & Liab. Ins. Co., 989 S.W.2d 168, 173 (Mo. banc 1999) (“The duty to indemnify is

determined by the facts as they are established at trial . . . . The insurer’s duty to pay arises only

after the suit by the third party is successful and the insurer becomes obligated to pay the resulting

12
judgment.” (internal quotations and citations omitted)). “[T]he ‘underlying judgment is conclusive

in a later action on the indemnity contract as to those issues and questions necessarily determined

in the underlying judgment.’” Lewellen, 574 S.W.3d at 262-63 (quoting Allen v. Bryers, 512

S.W.3d 17, 33 (Mo. banc 2016)).

In the underlying MMPA action, the Overbeys introduced evidence that Franklin falsely

inflated the price of the car they purchased; Franklin charged them $33,995 for a car that was worth

$19,995. Franklin then added a $500 membership fee, a $499.95 document fee, a $599 gap

insurance fee, and a $1,400 extended warranty fee. When the Overbeys expressed concern about

the loan amount, Franklin repeatedly told them not to worry about it because the loan amount was

immaterial since the program called for them to return the car in six months, permitting Franklin

to convince the Overbeys that, with the promised funds from NAS, they would be responsible for

only $49 per month. But, when the Overbeys returned to NAS six months later, Chad Franklin

and NAS denied knowledge of the deal and informed the Overbeys that they were responsible for

the full loan amount. Through this evidence, the Overbeys established that Franklin intentionally

lured them into an elaborate and inherently fraudulent scheme that foreseeably caused them

financial harm.

As was the case in both Lewellen and Heckadon, the evidence and arguments offered by

the Overbeys in the underlying MMPA action were not limited to the conduct that harmed them.

To show the scope of Franklin’s deception, the Overbeys introduced testimony from Shelly Land,

an investigator with the Missouri Attorney General’s Office, who testified that her office had

received 73 complaints about Franklin, 35 of which dealt with financing. The Overbeys also

offered the testimony of four other NAS customers who said they had been misled by Franklin or

its agents. The witnesses all characterized Franklin’s actions as dishonest, and one directly

13
accused Franklin of lying. This evidence “show[s] that Franklin repeatedly and intentionally used

deceptive business practices in furtherance of a complex, fraudulent scheme.” Heckadon, 586

S.W.3d at 802. Franklin “targeted financially vulnerable, low income individuals to induce them

to purchase cars at falsely inflated prices, financed by onerous loans based on the fiction that they

would not be obligated to pay those loans.” Id. at 803. Collectively, the evidence offered by the

Overbeys showed that Franklin engaged in a pattern and practice of such behavior, and the injury

they suffered was not isolated and did not result from negligence.

Like the Heckadons, the Overbeys argue that, because the MMPA does not contain a

scienter requirement for civil liability, the underlying MMPA action did not establish that Franklin

acted intentionally or, more particularly, that a reasonably prudent person in Franklin’s position

would have foreseen or expected the harm. However, as this court found in Heckadon,

[e]ven if we were to find that the actual damages awarded did not, in and of itself,
establish intentional acts, the jury’s assessment of punitive damages, and the legal
arguments and evidence . . . that established the right of submission of punitive
damages to the jury, did establish that Franklin’s actions were intentional.

Id. at 803. “It is difficult to envisage a scenario where an affirmative verdict does not incorporate

such a finding.” Id.

More importantly, it remained the [plaintiffs’] burden to prove that coverage
applied[, i.e.,] that the acts of Franklin were a covered occurrence. Through the
evidence, pleadings, and argument they presented in the [o]riginal MMPA [a]ction,
the [plaintiffs] have asserted repeatedly that Franklin acted intentionally[,] and they
presented no substantial evidence to the contrary at the bench trial.

Id. The same is true in this case. Thus, the evidence presented in the MMPA trial demonstrated

that the Overbeys’ injuries were objectively foreseeable and expected.

As was the case in Lewellen, the punitive damages instruction provided to the jury at the

MMPA trial was modeled on Missouri Approved Instruction (MAI) 10.01 [2008 Revision]

Outrageous Conduct—Intentional Torts. MAI 10.01 [Revision 2008] provided, in relevant part,

14
 If you find the issues in favor of plaintiff, and if you believe the conduct of
defendant as submitted in Instruction Number _____ . . . was outrageous because
of defendant’s evil motive or reckless indifference to the rights of others, then in
addition to any damages to which you find plaintiff entitled under Instruction
Number _____ . . . , you may award plaintiff an additional amount as punitive
damages in such sum as you believe will serve to punish defendant and to deter
defendant and others from like conduct.

The Overbeys argue that, because the instruction permitted the jury to award punitive damages

based on a finding of evil motive or reckless indifference and the latter is not intentional, the jury’s

verdict does not demonstrate a finding that Franklin acted intentionally. But the Overbeys carry

the burden of proving coverage, i.e., that Franklin’s conduct constituted an “occurrence.”

Heckadon, 586 S.W.3d at 803. The Overbeys have not identified any evidence in the record that

would support a finding that Franklin acted with reckless indifference. Thus, they did not establish

that there was substantial evidence in the record to support the conclusion that Franklin’s conduct

was an “accident . . . which resulted in [an injury that was] neither intended nor expected from the

standpoint of a reasonably prudent person.”

On appeal, the Overbeys argue that the testimony of victims of the “Drive for Life”

promotion regarding Franklin’s conduct was based on hindsight and was not reliable evidence of

Franklin’s intent at the time of the sales. But there is rarely direct evidence of intent and “[t]he

question of whether harm was intended ‘can be inferred from facts and circumstances surrounding

an act.’” Id. at 802 (quoting Truck Ins. Exch., 642 S.W.2d at 116).

It is also relevant that, as noted by this court in Lewellen, at the time of the MMPA trial,

the Notes on Use that accompanied MAI 10.01 limited its use to claims of intentional torts. See

Notes on Use [2008 Revision] to MAI 10.01 (“Where the claim for actual damages is submitted

on negligence as opposed to an intentional tort, MAI 10.01 is not applicable; use MAI 10.02 or

MAI 10.07, whichever is appropriate.”); see Lewellen, 574 S.W.3d at 263. Thus, the instruction

15
submitted to the jury to enable them to award punitive damages was the instruction for intentional

torts. The Overbeys point to the subsequent adoption of MAI 39.01 [New 2014] Verdict Director -

Violations of MMPA, which does not include a scienter component, but MAI 39.01 was adopted

after the MMPA trial and, thus, is not relevant here.

Finally, when the Missouri Supreme Court examined the constitutionality of the state’s

punitive damages statute to uphold the award of punitive damages following the MMPA trial, the

Court concluded that the underlying MMPA judgment

is fully supported by the evidence that [Chad Franklin and NAS] . . . committed
fraud in falsely representing to the Overbeys (and making similar representations
to others) that they would owe only $49 per month if they joined a membership
program for $500, but in fact the contract they signed obligated them to pay more
than $37,000 over six years.

Est. of Overbey, 361 S.W.3d at 369. The Overbeys argue that the Court’s characterization of

Franklin’s conduct as fraudulent does not accurately reflect the jury’s verdicts in the MMPA trial.

For the reasons discussed above, we disagree. The Overbeys also argue that the Court’s factual

findings are not binding in the present proceedings. But we find the Court’s description of the

facts to be relevant to the issues presented in this case.

As for Lewellen and Heckadon, the Overbeys appear to argue both that those cases were

wrongly decided and that they are distinguishable. The Overbeys appear to challenge the

sufficiency of the evidence and the legal reasoning in both cases. We reject the Overbeys’

invitation to overturn those cases and, thus, we will focus on their attempt to distinguish the

holdings in Lewellen and Heckadon.

The Overbeys argue that Lewellen is distinguishable because that case involved a

fraudulent misrepresentation claim in addition to an MMPA claim. And they contend that

Heckadon is distinguishable because Chad Franklin testified in the underlying action and did not

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attempt to explain his actions or show remorse. Also, when Chad Franklin asserted his Fifth

Amendment right not to incriminate himself, the jury was allowed to draw an adverse inference.

We are not persuaded by the Overbeys’ arguments with respect to either Lewellen or

Heckadon. Distinctions based on how evidence came in or other claims brought in those cases

do not change the fact that all three cases involved the same underlying conduct, the same

insurance policies, and the question of coverage for MMPA violations. Nor do the Overbeys’

allegations change the fact that they failed to bear the burden of proving that the substantive

evidence presented in the MMPA trial supported a finding that Franklin’s conduct constituted an

occurrence. The evidence presented and the legal analysis employed in both Lewellen and

Heckadon are similar enough to the present case that the decisions in those cases are highly

relevant to our analysis here.16

As we stated in Heckadon,

[i]t is inconsistent to assert on the one hand that the actions of Franklin merited the
imposition of punitive damages based on evidence that they had defrauded
[numerous] customers with an elaborate and long running scheme and to maintain
that the award of punitive damages did not constitute a finding that Franklin had
acted intentionally.

Heckadon, 586 S.W.3d at 805. The Overbeys “cannot now contend that Franklin’s elaborate

scheme was not dishonest or [that it was] the result of mere negligence[,] and they have presented

no substantial evidence that the events giving rise to the judgment in the [o]riginal MMPA [a]ction

were a covered occurrence (an accident) under the Universal polic[ies].” Id.; see also Lewellen,

574 S.W.3d at 263 (Lewellen “plainly chose[] to advance the theory of an intentional act,” and “it

16
The Overbeys also urge us to follow our per curiam decision in Kates v. Universal Underwriters Insurance
Co., 348 S.W.3d 115 (Mo. App. W.D. 2011), yet another “Drive for Life” case, but Kates is an unpublished decision,
which has no precedential authority. Zygler v. Hawkins Constr., 609 S.W.3d 61, 68 n.3 (Mo. App. E.D. 2020)
(“Unpublished opinions . . . are neither binding nor persuasive precedent in this Court.”).

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was only during the equitable garnishment proceeding, when it became clear that asserting an

intentional tort would harm her interests, that Lewellen reasserted her negligence claim.”).

Because the policy definition of “occurrence” was not ambiguous, because that definition

did not include intentional conduct that foreseeably caused financial harm, and because the

evidence presented in the MMPA action showed that Franklin’s actions were intentional and the

harm was reasonably foreseeable, the Overbeys failed to meet their burden of showing that

Franklin’s conduct met the definition of an occurrence; therefore, Universal’s policies did not

afford coverage for Franklin’s conduct.

Point I is granted.17 Our disposition of Point I makes it unnecessary for us to address

Point II (applicability of policy exclusions) or Point III (insurability of punitive damages).

Conclusion

The judgment finding coverage under Universal’s policies for damages awarded on the

Overbeys’ MMPA claims is reversed.

Karen King Mitchell, Judge

Mark D. Pfeiffer, Presiding Judge, and Gary D. Witt, Judge, concur.

17
As we stated in Heckadon,

[w]e do not go so far as to hold that the assessment of punitive damages is equivalent to a jury
finding of intent in all cases. However, where, as is the case here, the evidence and sole legal theory
enabling the grant of such a proportionally large award in the [underlying] MMPA [a]ction was that
the defendant engaged in a pattern of intentionally fraudulent misconduct, the imposition of liability
(particularly for punitive damages) established that Franklin’s actions were intentional.

Heckadon v. Underwriters Inc. Co., 586 S.W.3d 789, 804 (Mo. App. W.D. 2019).

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