USA – MISSOURI Trends and Developments Contributed by: Aaron French, Katrina Smeltzer and Philip Graham, Sandberg, Phoenix & von Gontard, P.C.
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McCrackin: Using Rule 52.12 (a)(2) to protect the right to defend The setup After a fatal 2019 shooting, the decedent’s family sued several defendants, including the alleged shoot- er. Safeco had issued a homeowners policy to the shooter’s grandmother, where he allegedly lived. The plaintiff offered to settle with Safeco for the liability limit; Safeco declined, citing intentional act exclu- sions. Safeco then filed a federal declaratory judg- ment action to resolve defence and indemnity, but the federal court stayed that case. Safeco moved to intervene in the wrongful death suit solely to request a stay pending the coverage ruling; the trial court denied intervention and entered a USD16.5 million judgment against the insured. Safeco appealed. The holding and why it’s important The Missouri Supreme Court held Safeco had a right to intervene under Rule 52.12 (a)(2) for the limited pur- pose of seeking a stay while coverage is litigated. The Court noted that insurers have two distinct obliga- tions – defence and indemnity – and emphasised that the duty to defend is broader and tied to potential coverage evident from the pleadings and facts known at the outset. Crucially, whether the insurer had the opportunity to control the defence affects the extent to which it may later be bound by the tort result. Stay- ing the tort action while coverage is decided protects that right without forcing the insurer to defend when coverage is questionable.
Navigating Intervention-and-Stay and Bad Faith Pitfalls: Practical Lessons from Recent Missouri Decisions Two recent Missouri decisions – McCrackin v Safeco Insurance Company of America , 701 S.W.3d 868 (Mo. banc 2024) and Escabusa v Safe Auto Insurance Com - pany , 707 S.W.3d 657 (Mo. App. W.D. 2024) – offer a roadmap for navigating coverage disputes alongside active tort litigation. They also show, in practical terms, how diligent documentation and clarity in settlement communications can make or break a bad faith claim. For in-house leaders selecting outside counsel, these cases underscore a simple point: your team needs command of both the procedural tools that protect the insurer’s position and the day-to-day blocking and McCrackin cements an insurer’s right to intervene – solely to ask for a stay – so courts can resolve cover- age in a separate declaratory judgment action first. That protects the insurer’s right to defend and helps avoid being bound by an adverse judgment when cov- erage is genuinely in question. tackling of settlement practice. Why these cases matter now Escabusa , in turn, shows how an insurer can defeat a bad faith failure-to-settle claim when it acts promptly, keeps policy limit offers on the table and documents the lack of a clear, definite offer from the claimant. The record matters – and in Escabusa , the record was decisive and determinative.
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