Auto Club Family Ins. Co. v. Jacobsen
| Decision Date | 06 June 2000 |
| Citation | 19 S.W.3d 178 |
| Parties | (Mo.App. E.D. 2000) . Auto Club Family Insurance Company, and Auto Club Inter-Insurance Exchange, Appellants, v. Richard K. Jacobsen, Respondent. Case Number: ED76973 Missouri Court of Appeals Eastern District Handdown Date: 0 |
| Court | Missouri Court of Appeals |
Appeal From: Circuit Court of St. Louis County, Hon. Patrick Clifford
Counsel for Appellant: Russell F. Watters, T. Michael Ward and Amy L. Klingemann
Counsel for Respondent: Kevin B. Behrndt and Jerry J. Murphy
Opinion Summary: Plaintiffs Auto Club Family Insurance Co. and Auto Club Inter-Insurance Exchange (collectively "Auto Club") appeal summary judgment in favor of the defendant Richard K. Jacobsen. The underlying action was one for a declaratory judgment that Auto Club had no duty to defend Jacobsen against certain causes of action brought against him by his former employer, its parent company, and its franchisor.
REVERSED AND REMANDED.
Division Three holds: The Excess Policy issued to Jacobsen by Auto Club unambiguously provided that Auto Club had no duty to defend Jacobsen against the HAS Holdings suit because such suit was not for "personal injury" or "property damage" or, alternatively, because it arose out of Jacobsen's "business pursuits," which are excluded from the Excess Policy's coverage.
Opinion Vote: REVERSED AND REMANDED. Teitelman, P.J., and Mooney, J., concur.
The plaintiffs, Auto Club Family Insurance Co. and Auto Club Inter-Insurance Exchange (collectively, "Auto Club"), appeal from summary judgment entered in favor of the defendant, Richard K. Jacobsen ("Jacobsen"). The underlying action was one for a declaratory judgment that Auto Club had no duty to defend Jacobsen against certain causes of action brought against him by his former employer, its parent company, and its franchisor. We reverse and remand with instructions.
Jacobsen was hired by St. Louis Car Care, Inc. ("St. Louis Car Care") in 1985. St. Louis Car Care was a franchisee of Jiffy Lube International, Inc. ("Jiffy Lube"), and Jacobsen was hired to lead the development of Jiffy Lube Service Centers in the St. Louis area. Because Jacobsen would acquire confidential information in the course of his employment, he entered into a confidentiality and non-competition agreement with Jiffy Lube.
HAS Holdings, Inc. ("HAS Holdings") is the sole shareholder of Heartland Automotive Service ("Heartland Automotive"), one of the largest franchisees of Jiffy Lube in the United States. In 1995, HAS Holdings purchased substantially all of St. Louis Car Care's assets. Shortly thereafter, Jacobsen became Vice President of Operations of Heartland Automotive and signed confidentiality and non-competition agreements with HAS Holdings, Heartland Automotive and, again, Jiffy Lube.
On June 24, 1998, HAS Holdings, Heartland Automotive, and Jiffy Lube brought a six-count suit against Jacobsen (the "HAS Holdings suit") seeking injunctive relief and damages for breaches of the confidentiality and non-competition agreements (Counts I-III), breach of fiduciary duty (Count IV), violation of the Missouri Trade Secrets Act (Count V), and unfair competition (Count VI). On July 20, 1998, Jacobsen notified Auto Club of the HAS Holdings suit and demanded that Auto Club provide a defense pursuant to a homeowner's policy ("Homeowner's Policy") and a personal catastrophe and excess liability policy ("Excess Policy") issued to Jacobsen by Auto Club. Auto Club denied coverage under both policies, forcing Jacobsen to hire his own attorney.
More than two months later, Auto Club elected to provide Jacobsen's defense against the HAS Holdings suit under a reservation of rights. The attorney hired by Auto Club entered an appearance on October 2, 1998, and met with Jacobsen for the first time to discuss the suit on October 19, 1998. In the meantime, Jacobsen had incurred $52,563.00 in attorney's fees, the reasonableness of which has never been disputed. The HAS Holdings suit settled in April, 1999, to which Auto Club contributed $15,000.00 on behalf of Jacobsen.
Auto Club filed the underlying declaratory judgment action in November, 1998.1 Jacobsen counterclaimed, seeking the $52,563.00 in legal fees he incurred in providing his own defense. Both parties moved for summary judgment. The trial court denied Auto Club's motion and granted Jacobsen's motion, finding that Jacobsen was entitled to a defense of the HAS Holdings suit under the plain language of the Excess Policy or, alternatively, because the relevant provisions of the Excess Policy were ambiguous in that regard and should therefore be construed against the insurer, Auto Club.2 The trial court entered judgment in favor of Jacobsen in the amount of $52,563.00. This appeal by Auto Club follows.3
Summary judgment is appropriate only where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 74.04(c)(3). In the case at bar, the parties do not dispute the material facts, but disagree on the proper construction of the Excess Policy. "Where the underlying facts are not in question, disputes arising from the interpretation and application of insurance contracts are matters of law for the court." Southeast Bakery Feeds, Inc. v. Ranger Ins. Co., 974 S.W.2d 635, 638 (Mo.App.1998).
The particular issue confronting this court is the meaning of the section of the Excess Policy entitled "Defense of Suits Not Covered By Other Insurance" (hereafter referred to as the "Defense of Suits" section). That section provides in part (bold in original, italics added):
DEFENSE OF SUITS NOT COVERED BY OTHER INSURANCE
If primary insurance does not cover personal injury or property damage covered by the policy, we will:
1. defend the insured against a claim or suit for damages. We may investigate and settle any claim or suit that we decide is appropriate.
* * *
Auto Club interprets this provision as follows: "If primary insurance does not cover personal injury or property damage covered by the Excess Policy, we will defend the insured against a claim or suit for personal injury or property damage." Jacobsen disputes this interpretation because, he contends, the italicized terms "the policy" and "damages" are ambiguous. Jacobsen specifically claims an average layperson could construe "the policy" to mean either the Homeowner's Policy or the Excess Policy, and would not interpret "damages" as being limited to "personal injury or property damage." Construing these ambiguities against Auto Club,4 Jacobsen interprets this section to mean, "If primary insurance does not cover personal injury or property damage, we will defend the insured against any claim or suit for damages." Jacobsen's interpretation disregards the scope of coverage of the Excess Policy.
Although the "Defense of Suits" section is not a model of clarity, its terms are not ambiguous as a matter of law. A contractual term is ambiguous only if it is reasonably susceptible of more than one meaning. Jake C. Byers, Inc. v. J.B.C. Investments, 834 S.W.2d 806, 816 (Mo.App.1992). Stated somewhat differently, an ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the contract's terms. Peters v. Employers Mut. Cas. Co., 853 S.W.2d 300, 302 (Mo.banc 1993). To determine whether a term is ambiguous, however, we consider the instrument as a whole. Jake C. Byers, 834 S.W.2d at 816. In other words, we read contractual terms or provisions in the context of their surroundings.
When the term "the policy" is read in conjunction with the sentence in which it appears, it can only reasonably mean "the Excess Policy." Consider how the "Defense of Suits" section would read if "the policy" was construed to mean "the Homeowner's Policy" (primary insurance): "If [the Homeowner's Policy] does not cover personal injury or property damage covered by [the Homeowner's Policy], we will . . ." This construction supposes a situation where the Homeowner's Policy would cover personal injury and property damage while simultaneously not cover the same liabilities--an impossibility. While it may have been advisable for Auto Club to use the term "this policy" rather than "the policy," we do not find the term to be reasonably susceptible of any meaning other than "the Excess Policy."5
We agree the meaning of the term "damages," when viewed in isolation, could extend to more than just "personal injury or property damage." When we consider the term in the context of the sentence in which it appears, however, it is apparent that its meaning is not...
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