Rebecca Floyd-Tunnell v. Shelter Mutual Insurance Company

Rebecca Floyd-Tunnell and Doris Floyd ("Appellants") appeal the circuit court's grant of summary judgment in favor of Shelter Mutual Insurance Company ("Shelter") on their claim to recover up to the uninsured motorist ("UM") coverage limits on two insurance policies for the wrongful death of Jerry L. Floyd. The court determined that a partial exclusion in both policies limits Shelter's liability for UM benefits to Missouri's statutory minimum. Because Shelter has already paid the statutory minimum, the court also granted summary judgment in favor of Shelter on Appellants' vexatious refusal to pay claim. On appeal, Appellants contend the partial exclusion does not apply or,

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alternatively, is unenforceable because it renders the policies ambiguous. For reasons explained herein, we affirm. FACTUAL AND PROCEDURAL HISTORY The facts underlying this appeal are undisputed. In October 2011, Jerry Floyd, who was Rebecca Floyd-Tunnell's father and Doris Floyd's husband, died from injuries sustained in an automobile collision. Eric Krugler was driving the other vehicle involved in the collision. The collision occurred when Krugler, traveling on Missouri Highway 38 in Dallas County, negligently crossed the center line and struck the Chevrolet Cavalier that Jerry Floyd was driving. Krugler did not have insurance covering his liability for Floyd's death. At the time of the accident, Jerry and Doris Floyd were the named insureds on three automobile insurance policies issued by Shelter for three vehicles they owned. One policy insured the Cavalier that Jerry Floyd was driving at the time of the collision; the second policy insured their Chevrolet Silverado; and the third policy insured their Toyota Camry.

All three policies provided UM coverage. The policies' insuring agreement for UM coverage states: "If the owner or operator of an uninsured motor vehicle is legally obligated to pay damages, we will pay the uncompensated damages; but this agreement is subject to all conditions, exclusions, and limitations of our liability, stated in this policy."1 The declarations page on each of the policies states that the limit of UM coverage is $100,000 per person. Appellants filed suit against Shelter, seeking the full $100,000 UM coverage limit on each of the three policies, for a total of $300,000. Shelter agreed that Appellants

1 The boldface is in the original policies and indicates the policy defines the terms.

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had sustained damages of at least $400,000 as a result of Jerry Floyd's wrongful death; that Krugler's negligence had caused those damages; and that Krugler's vehicle was an "uninsured motor vehicle" as defined in the three policies. Because those particular facts were not disputed, Shelter agreed to pay and did pay $150,000 to Appellants. Of that payment, $100,000 was paid under the Cavalier policy and $25,000 was paid under each of the Silverado and Camry policies.

The parties agreed that Shelter had paid the full UM coverage limit of $100,000 on the Cavalier policy and that payment under the Cavalier policy was no longer at issue. The parties disputed whether Shelter owed any additional UM coverage under the Silverado and Camry policies. Specifically, Appellants argued that Shelter owed $75,000 more under each of those policies. Appellants asked the court for a judgment against Shelter for $150,000, plus penalties and attorney's fees for Shelter's vexatious refusal to pay.

Shelter filed a motion for summary judgment asserting that the two $25,000 payments satisfied its obligation under the Silverado and Camry policies. Shelter explained that those policies contain a partial exclusion from UM coverage that is applicable when the insured is injured while occupying a vehicle he owns, but which is not the auto described in the policy's declarations page. The language of the applicable partial exclusion in both policies states:

PARTIAL EXCLUSIONS FROM COVERAGE E

In claims involving the situations listed below, our limit of liability under Coverage E [UM coverage] is the minimum dollar amount required by the uninsured motorist insurance law and financial responsibility law of the state of Missouri:

. . . .

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(3) If any part of the damages are sustained while the insured is occupying a motor vehicle owned by any insured, the spouse of any insured, or a resident of any insured's household; unless it is the described auto.

Shelter contended that, because Jerry Floyd was occupying the Cavalier, which he owned, when the accident occurred and the Cavalier is not the "described auto" in the Silverado and Camry policies, the partial exclusion applies to limit its liability for UM coverage under each of those policies to the statutory minimum of $25,000.2 As it had already paid Appellants $25,000 under each of the Silverado and Camry policies, Shelter asserted that it was entitled to summary judgment on Appellants' claim to recover additional benefits under those policies and their claim of vexatious refusal to pay. Appellants filed a cross-motion for summary judgment alleging that the partial exclusion in the Silverado and Camry policies does not apply because Doris Floyd, and not Jerry Floyd, is the insured who is asserting the claim for UM coverage and Doris Floyd was not occupying any vehicle when she sustained her damages due to Jerry Floyd's wrongful death. Alternatively, Appellants argued that the partial exclusion creates an ambiguity because it takes away coverage that is promised in the declarations page of each policy.

The court granted Shelter's motion for summary judgment and denied Appellants' cross-motion. In its judgment, the court found that the partial exclusion in the Silverado and Camry policies limiting Shelter's liability on those policies to the statutory minimum is applicable and unambiguous. Because Shelter had already paid the $25,000

2 The $25,000 minimum for bodily injury to or death of one person in any one accident is set forth in Section 303.030.5, RSMo 2000.

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statutory minimum under both policies, the court also granted summary judgment for Shelter on Appellants' vexatious refusal to pay claim. Appellants appeal.

STANDARD OF REVIEW

Appellate review of summary judgment is essentially de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. at 380.

The interpretation of an insurance policy is also a question of law that we review de novo. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010). In interpreting an insurance policy, we read the policy as a whole to determine the parties' intent. Thiemann v. Columbia Pub. Sch. Dist., 338 S.W.3d 835, 839-40 (Mo. App. 2011). In an insurance contract, "the risk insured against is made up of both the general insuring agreement as well as the exclusions and definitions." Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 163 (Mo. banc 2007). We give the policy language its plain and ordinary meaning. Thiemann, 338 S.W.3d at 840. "'If, giving the language used its plain and ordinary meaning, the intent of the parties is clear and unambiguous, we cannot resort to rules of construction to interpret the contract.'" Id. (citation omitted). "Disagreement over the interpretation of the terms of a contract does not create an ambiguity." Id.

ANALYSIS

In Point I, Appellants contend the partial exclusion in the Silverado and Camry policies does not apply to their claim for UM coverage for Jerry Floyd's wrongful death.

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The partial exclusion provides that Shelter's liability for UM coverage is limited to the statutory minimum amount in the following circumstance:

(3) If any part of the damages are sustained while the insured is occupying a motor vehicle owned by any insured, the spouse of any insured, or a resident of any insured's household; unless it is the described auto.

The policies define "damages" in the context of UM claims to mean "money owed to an insured for bodily injuries, sickness, or disease, sustained by that insured and caused, in whole or in part, by the ownership or use of an uninsured motor vehicle." The policies' definition of "bodily injury" includes a physical injury or a death that directly results from a physical injury. "Occupying" means being in physical contact with a vehicle while in it, getting into it, or getting out of it. Lastly, the policies define the "described auto" as "the vehicle described in the Declarations." Applying these definitions to the partial exclusion, the plain language of the exclusion limits UM coverage where any part of the damages, that is, the money owed to an insured for a death that was sustained by that insured and caused by the ownership or use of an uninsured motor vehicle, is sustained while the insured is in a vehicle that is owned by any insured but is not the vehicle listed on the declarations page.

The dispute in this case centers on to whom the term "the insured" refers in the partial exclusion. If "the insured" refers to Jerry Floyd, then, pursuant to the partial exclusion's plain language, Appellants' damages claim is for money owed for the death of Jerry Floyd caused by Krugler's use of an uninsured motor vehicle, and the damages were sustained while he was in his Cavalier, which was not listed on the declarations page of the Silverado or Camry policies. Appellants concede that, if the term "the

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insured" refers to Jerry Floyd, the circuit court correctly interpreted the partial exclusion as limiting their UM coverage to the statutory minimum. Appellants assert that the term "the insured" refers not to Jerry Floyd, however, but to Doris Floyd, who was also an insured under the policies. They note that the UM coverage agreement in the policies contains a severability clause that says: "The insurance under Coverage E [UM coverage] applies separately to each insured. The presentation of claims by more than one insured will not increase our limit of liability for any one occurrence." In Baker v. DePew, 860 S.W.2d 318, 320 (Mo. banc 1993), the Supreme Court interpreted a similar severability clause to mean that, "when applying the coverage to any particular insured[,] the term 'insured' is deemed to refer only to the insured who is claiming coverage under the policy with respect to the claim then under consideration."

Appellants contend that Doris Floyd is "the insured" claiming coverage under the policies because a cause of action for damages for wrongful death does not belong to the decedent or the decedent's estate but, rather, to the class of persons authorized by Section 537.080.1,3 to bring such actions. Lawrence v. Beverly Manor, 273 S.W.3d 525, 527 (Mo. banc 2009). Therefore, Appellants propose that "the insured" in the partial exclusion refers to Doris Floyd. Because Doris Floyd was not occupying any car when she sustained her damages for Jerry Floyd's wrongful death, Appellants argue that the partial exclusion does not apply to limit her UM coverage under the policies. We disagree.

3 All statutory references are to the Revised Statutes of Missouri 2000, as updated by the Cumulative Supplement 2012.

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That Doris Floyd is among the class of persons authorized by statute to assert a cause of action for Jerry Floyd's wrongful death does not transform her into "the insured" for purposes of determining the extent of the UM coverage for his wrongful death. The language of the insurance policies determines who is "the insured" and the extent of the UM coverage for that insured and that particular occurrence. The insurance policies state that they provide UM coverage for the uncompensated damages that an uninsured motorist is legally obligated to pay. "Damages" are defined, in pertinent part, as "money owed to an insured for bodily injuries . . . sustained by that insured." (Italics added.) The definition of "bodily injury" in the policies includes a physical injury or a death that directly results from a physical injury. The insured who sustained bodily injuries (death) in this case is Jerry Floyd. Thus, Jerry Floyd is "the insured" for purposes of determining the extent of the UM coverage available for his wrongful death under the policies.

Appellants emphasize that Shelter's UM coverage defines "damages" to impose two conditions: "[1] money owed to an insured [2] for bodily injuries, sickness, or disease, sustained by that insured . . ." (Italics and underlining added.) Appellants argue that, if conditions [1] and [2] are read literally (and without reference to other provisions of the Shelter policies), they could never both be satisfied with respect to a Missouri wrongful-death claim, because the person who actually sustains bodily injury (the decedent) is not the person to whom money is "owed" for the death. Instead, Doris Floyd and her daughter Rebecca Floyd-Tunnell are authorized by Section 537.080 to recover all statutorily prescribed damages, as set forth in Section 537.090, for Jerry Floyd's death.

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We are unpersuaded. First, the Shelter policies plainly contemplate that the "damages" recoverable under the UM coverage include payments to persons like Doris Floyd and Rebecca Floyd-Tunnell on account of physical injuries suffered by insured Jerry Floyd. Thus, the policies' "Payments" provision states that "[w]e will pay any amount due under [the UM coverage] to . . . [a]ny person legally authorized to maintain and settle a claim for the insured's death, if our payment is for damages resulting from the insured's death." The "Limits of Liability" provision similarly specifies that the policies' UM coverage limits "appl[y] to all claims made by others resulting from that insured's bodily injury, whether direct or derivative in nature."

Thus, while the "Damages" provision -- read in isolation -- may suggest that the policies cover only monies owed directly to an insured, other provisions make it unmistakably clear that the policies cover monies owed to others on account of the death of an insured. As the dissenting opinion explains, allowing non-insureds to recover for the death of an insured caused by an uninsured motorist is consistent with Missouri's UM coverage statute, Section 379.203.1, and with prior Missouri decisions interpreting UM coverage under policies which -- like Shelter's -- contemplate payments to others on account of an insured's injuries. Cobb v. State Sec. Ins. Co., 576 S.W.2d 726, 736-37 (Mo. banc 1979); Arnold v. Am. Fam. Mut. Ins. Co., 987 S.W.2d 537, 541-42 (Mo. App. 1999); Livingston v. Omaha Prop. & Cas. Ins. Co., 927 S.W.2d 444, 446 (Mo. App. 1996); Ashcraft v. Ashcraft, 689 S.W.2d 693, 695 (Mo. App. 1985).

Despite the reference to "money owed to an insured" in the definition of "damages," it is plain -- based on the policies construed as a whole, the governing statutes, and Missouri caselaw -- that Doris Floyd and Rebecca Floyd-Tunnell are

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entitled to recover their damages under Jerry Floyd's uninsured motorist coverage because those damages result from Jerry Floyd's death.4 Appellants' right to recover under the policies is not a function of Doris Floyd's status as a separately named insured; it is solely a function of Jerry Floyd's status as a named insured.5 Doris Floyd's status as a named insured on the same policies is irrelevant.

There is a second reason for rejecting Appellants' reading of the policies: no reasonable person would have expected the policies to be interpreted in that manner. Under a severability clause like the one contained in the Shelter policies, the name of one insured must be consistently substituted everywhere a reference to the "insured" appears. Baker, 860 S.W.2d at 320 ("One simple method of visibly demonstrating the impact of the severability clause is to insert the name of the applicable insured immediately following the term 'insured' in the relevant provisions."). According to Appellants' argument, Doris Floyd is the relevant "insured" in this case, and the "damages" definition must be read to require only that she sustained damages, but not

4 Consistent with this conclusion, Shelter stipulated in the circuit court that the damages subject to Jerry Floyd's uninsured motorist claim were all of the damages recoverable under Section 537.090, including those for the death and loss of Jerry Floyd; the past, present and future pecuniary losses suffered by reason of Jerry Floyd's death; funeral and burial expenses; the loss of household contributions; and the loss of services, consortium, guidance, companionship, comfort, instruction, counsel, training, and support of Jerry Floyd. 5 To hold otherwise would be to require a wrongful death claimant to be a named insured on a decedent's policy as a condition to recovery of the amounts an uninsured motorist is legally obligated to pay on account of a decedent insured's death. Clearly, that is not the law. We also note that, based on Appellants' argument, if Doris Floyd happened to have been riding in the vehicle with Jerry Floyd at the time of the fatal accident, she would have been entitled to recover only the reduced UM coverage limits, since she would have been occupying an owned vehicle, other than the described auto, at the time she sustained her damages. On the other hand, because she was not riding in the vehicle, Appellants argue that she is entitled to recover the full $100,000 limits. Appellants offer no explanation for this anomalous result, and we can conceive of none: whether Doris Floyd was riding with her husband or not, the relevant circumstances surrounding Jerry Floyd's death would remain unchanged.

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that she sustained bodily injuries. On that reading, Jerry Floyd's status as an insured becomes irrelevant. Appellants' argument would have the effect of allowing Doris Floyd to recover under the Shelter policies for any wrongful-death damages to which she was entitled, whether or not the decedent was insured under the policies. We have previously rejected similar attempts to recover under UM coverage for the death of a non-insured, holding that this construction of a policy is simply unreasonable:

The purpose of § 379.203 is to provide coverage to an insured who is injured as a result of the tortious act of a motorist operating an uninsured motor vehicle. As it applies to wrongful death claims, uninsured motorist coverage is intended to provide indemnity for damages resulting from an insured's wrongful death payable to whatever person or persons may be entitled to bring an action under § 537.080. Given this purpose, we do not believe that plaintiff's construction is a reasonable one. We presume that the legislature intended a logical result, not an unreasonable result. The public policy contention has not extended coverage under the parent's insurance policy to a son who was a member of his parent's household and who owned his own vehicle, or to a son who was not a resident of his father's household under his father's uninsured motorist coverage. To accept plaintiff's interpretation, would permit plaintiff to recover under her uninsured motorist policy for the death of any person from whom she is legally entitled to bring a claim under the wrongful death statute, such as the death of her children, any lineal decedents, her brothers and sisters, her parents, or any other descendant. It would provide coverage by plaintiff's insurance company for hazards associated with the operation of the vehicles of all of these individuals, none of whom are insured under her policy. While uninsured motorist coverage is to be given a liberal interpretation, coverage should not be created where there is none.

In a situation such as the one presented here, the legislature contemplated that the survivors of a person killed in an accident with an uninsured motorist would pursue a claim under the decedent's uninsured motorist coverage, rather than the survivors' policy.

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Livingston, 927 S.W.2d at 446 (citations omitted). See also Stewart v. Royal, 343 S.W.3d 736, 742-44 (Mo. App. 2011); Lavender v. State Auto. Mut. Ins. Co., 933 S.W.2d 888, 890-92 (Mo. App. 1996).6 We will not adopt a reading of the Shelter policies that prior decisions have labeled illogical and unreasonable. Kennedy v. Safeco Ins. Co., No. SD32345, 2013 WL 3227500, at *4 (Mo. App. June 24, 2013) ("While ambiguity exists if the term is reasonably open to different constructions, an unreasonable alternative construction will not render the term ambiguous." (Internal quotation marks and citation omitted)); Miller v. Ho Kun Yun, 400 S.W.3d 779, 784 (Mo. App. 2013); Grissom v. First Nat'l Ins. Agency, 371 S.W.3d 869, 874 (Mo. App. 2012).7

Given that Jerry Floyd is the relevant "insured," and that the policies must be construed to cover the damages Appellants suffered as a result of his death, application of the partial exclusion in the Shelter policies is straightforward. Although Appellants may not themselves have been riding in the vehicle at the time of the fatal accident, it is undeniable that some "part of the damages" for which Appellants seek to recover were "sustained while the insured [i.e., Jerry Floyd] [was] occupying a motor vehicle [he] owned," but which was not the "described auto" under either the Silverado or Camry policies. The partial exclusion, therefore, applies to Appellants' claims, and the UM

6 We recognize that, in Lambert v. State Farm Mutual Automobile Insurance Co., 820 S.W.2d 602 (Mo. App. 1991), the court permitted recovery under UM coverage by an insured, for the death of a non-insured person. In that case, however, the relevant insurance policy defined "bodily injury" to mean "bodily injury to a person," without requiring that an insured suffer the bodily injury. Id. at 603. In contrast, multiple provisions of the Shelter policies in this case make it clear that the bodily injuries for which coverage is provided must be sustained by an insured person, even if others may be entitled to recover "damages" stemming from those injuries. 7 Even if the "damages" definition were deemed ambiguous, we would not adopt Appellants' reading of that provision, since it is inconsistent with the expectations of a reasonable insured. Mendota Ins. Co. v. Ware, 348 S.W.3d 68, 74 (Mo. App. 2011); Estrin Constr. Co. v. Aetna Cas. & Sur. Co., 612 S.W.2d 413, 420 (Mo. App. 1981).

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coverage under each policy is limited to the $25,000 that Shelter has already paid. Point I is denied.

In Point II, Appellants contend the partial exclusion renders the policies ambiguous and is, therefore, unenforceable because it takes away the UM coverage limits promised in the declarations page of each policy. Appellants note that the declarations page of the Silverado and Camry policies provide that the UM coverage limits are $100,000 per person and $300,000 per accident. Each declarations page also contains a statement that, for persons who become insureds under the policy solely because they have permission or general consent to use the described auto, the policy provides only the statutory minimum limits, which are $25,000 bodily injury for each person, $50,000 bodily injury for each accident, and $10,000 property damage for each accident. Appellants argue that, because the reference in the declarations page to limiting coverage to the statutory minimum applies to only permissive users, and Shelter emphasizes the importance of the declarations page throughout the policies, the partial exclusion takes away promised UM coverage and renders the policies ambiguous.

"While a broad grant of coverage in one provision that is taken away by a more limited grant in another may be contradictory and inconsistent, the use of definitions and exclusions is not necessarily contradictory or inconsistent." Todd, 223 S.W.3d at 163. "Definitions, exclusions, conditions and endorsements are necessary provisions in insurance policies. If they are clear and unambiguous within the context of the policy as a whole, they are enforceable." Id.

Within the context of each policy as a whole, the partial exclusion in the Silverado and Camry policies is clear and unambiguous. First, we note that Part IV, the section of

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each policy that discusses UM coverage, immediately notifies the policyholder that the coverage is subject to exclusions and limitations. The first sentence in the section reads: "The following coverage is provided under the policy only if it is shown in the Declarations and is subject to all conditions, exclusions, and limitations of our liability, stated in this policy." (Italics added.) Second, the insuring agreement for UM coverage reiterates the existence of exclusions and limitations, as it provides that UM coverage is "subject to all conditions, exclusions, and limitations of our liability, stated in this policy." (Italics added.) The italicized language notifies the policyholder that the exclusions and limitations are found "in the policy" and not merely in the declarations page. Third, the partial exclusion is contained within the UM coverage section and clearly states that, in the situations listed, Shelter's limit of liability for UM coverage is the statutory minimum.8

When the Silverado and Camry policies are read as a whole, the partial exclusion to UM coverage is not susceptible to different interpretations and does not cause the meaning of the policies to be uncertain.9 The policies are not ambiguous and, therefore, the partial exclusion is enforceable. Point II is denied.

CONCLUSION

We affirm the circuit court's grant of summary judgment in favor of Shelter.

8 The fact that the partial exclusions are not listed in the declarations page does not render the policies ambiguous. If that were the case, then every exclusion and limitation applicable to a policy's coverage would have to be listed in the declarations page to be effective. That is not the law in Missouri. 9 The clarity of the UM coverage provisions and partial exclusion in this case is in sharp contrast to the UM coverage and exclusions deemed ambiguous in Rice v. Shelter Mutual Insurance Co., 301 S.W.3d 43 (Mo. banc 2009). In Rice, the UM coverage provision started with a reference to providing coverage up to the limit of liability in the declarations page, followed by provisions excluding coverage in certain circumstances, followed by provisions stating that the exclusion does not apply to UM coverage amounts mandated by statute, followed by provisions stating that the UM coverage that exceeds the statutorily-mandated amount is fully enforceable. Id. at 48. The Court found these provisions to be "entirely inconsistent" and irreconcilable. Id. Unlike in Rice, the Silverado and Camry policies contain no provisions indicating that the UM coverage in excess of the statutory minimum amount is fully enforceable despite the partial exclusion.

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We affirm the circuit court's grant of summary judgment in favor of Shelter.