American Family Mut. Ins. Co. v. Missouri Power & Light Co.

• Decision Date: 16 December 1974
• Docket Number: No. 58578,58578
• Parties: AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. MISSOURI POWER AND LIGHT COMPANY, a corporation, Respondent.
• Court: Missouri Supreme Court

Page 110

517 S.W.2d 110

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. MISSOURI POWER AND LIGHT COMPANY, a corporation, Respondent.

No. 58578.

Supreme Court of Missouri, En Banc.

Dec. 16, 1974.

Rehearing Denied Jan. 13, 1975.

Howard F. Major, David A. Oliver, Columbia, for appellant.

Frank B. Edwards, Edwards, Seigfreid, Runge & Hodge, Mexico, for respondent.

HENLEY, Judge.

This is an action by American Family Mutual Insurance Company (American Family or appellant), an automobile liability insurer, against Missouri Power and Light Company (Missouri Power), a self-insurer, seeking a judgment declaring that Missouri Power is primarily liable for and obligated to pay part of an amount paid by American Family in settlement of claims against its insured arising out of a collision involving an automobile owned by Missouri Power and driven with its permission by the insured on his personal business. Judgment was for Missouri Power and American Family appealed to the Court of Appeals, St. Louis district, which affirmed. On application of appellant we ordered the case transferred to this court and, after review as authorized by Mo.Const. Art. V, § 10, V.A.M.S., affirm.

The case was submitted to the trial court on the pleadings and a stipulation of facts.

American Family issued its standard policy of automobile liability insurance to George H. Sohns (now deceased) covering his Chevrolet. The policy also provided coverage while Mr. Sohns was driving an unowned car to the extent such car was not covered by 'other valid and collectible insurance.' Mr. Sohns was a district manager of Missouri Power. Missouri Power had qualified as a 'self-insurer' under The Motor Vehicle Safety Responsibility Law, ¹ and required any of its employees who had permission to drive its cars on personal business to obtain public liability insurance covering his operation of the company automobile. While Mr. Sohns was driving one of Missouri Power's cars with its permission on his personal business a collision occurred involving that car and a car driven by Delmar Hilderbrand resulting in personal injuries to Mr. Hilderbrand. Mr. and Mrs. Hilderbrand filed a suit claiming damages for his personal injuries, for her loss of consortium, and for damage to their property alleging that the collision was caused by the negligence of Mr. Shons. As indicated, that suit was settled and a stipulation filed wherein the parties agreed (1) that American Family had paid $25,000 to the Hilderbrands for their damages; (2) that the parties to this suit reserved the right to litigate as between themselves whether Missouri Power, as a self-insurer, is primarily liable for the Hilderbrand damages and American Family liable only for the 'excess' above any amount for which Missouri Power may be obligated; and (3) that if it is finally adjudged that Missouri Power is primarily liable, it will pay to American Family $20,400 as its share of the amount paid in settlement of the Hilderbrand claims.

American Fimily contends that Missouri Power's statutory obligations as a self-insurer constitute 'other valid and collectible insurance' within the meaning of the liability policy issued to Mr. Shons, or, more specifically, within the meaning of the 'excess coverage provision' thereof applicable to the operation of an unowned automobile, so as to make Missouri Power primarily liable for the Hilderbrand damages. The question thus presented is one of first impression in this state.

The sections of the statutes with which we are particularly converned are 303.030, 303.160, 303.190 and 303.220.

Section 303.030 provides the procedures to be followed by the director of revenue relative to the owner and operator of a motor vehicle after involvement in a motor vehicle accident in this state which resulted in death or injury of a person or damage to property in excess of $100. This section also provides for suspension of the license of the operator and registration of the owner unless the owner or operator or both deposit security in a sum determined by the director. It further provides that the suspension provisions shall not be applicable to an operator who is not the owner 'if there was in effect at the time of such accident an automobile liability policy * * * with respect to his operation of motor vehicles not owned by him * * *' (subsection 4, subdivision (2)) or to an owner who has qualified 'as a self-insurer under section 303.220 * * *' (subsection 4, subdivision (4)).

Section 303.220 provides that the director may on applicable issue a certificate of self-insurance under certain conditions to any person in whose name more than 25 motor vehicles are registered.

Section 303.160, subsection 1, subdivision (4), provides that when required by Chapter 303, proof of financial responsibility with respect to a motor vehicle may be made by filing '(a) certificate of self-insurance, as provided in section 303.220, supplemented by an agreement by the self-insurer that, with respect to accidents occurring while the certificate is in force, he will pay the same judgments and in the same amounts that an insurer would have been obligated to pay under an owner's motor vehicle liability policy if it had issued such a policy to said self-insurer.'

As to the judgments and amounts thereof an insurer would be obligated to pay under an owner's motor vehicle liability policy, § 303.190, subsection 2, subdivision (2) provides that such policy (s)hall insure the person named therein and any other person, as insured, using any such motor vehicle * * * with the * * * permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle * * *, subject to limits * * * (of) ten thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, twenty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and two thousand dollars because of injury to or destruction of property of others in any one accident.'

In Winterton v. Van Zandt, 351 S.W.2d 696, 700(1) (Mo.1961) the court said that the provisions of The Motor Vehicle Safety Responsibility Law '* * * are indicative of the public policy of this state to assure financial remuneration * * * for damages sustained through the negligent operation of motor vehicles upon the public highways of this state not only by the owners of such automobiles but also all persons using them with the owners' permission * * *.' See also: City of St. Louis v. Carpenter, 341 S.W.2d 786, 788(2) (Mo.1961).

Although the question persented has not been ruled on by the appellate courts of this state, the courts of at least two other states have. See: The Home Indemnity Company v. Humble Oil and Refining Company, 314 S.W.2d 861 (Tex.Civ.App.1958); Allstate Insurance Company v. Zellars, 452 S.W.2d 539 (Tex.Civ.App.1970), affirmed by Supreme Court of Texas in opinion reported in 462 S.W.2d 550, 552(1) (1970); Southeast Title and Insurance Co. v. Collins, et al., 226 So.2d 247 (Fla.App.1970). Cf. Comorote v. Massey, 110 N.J. Super. 124, 264 A.2d 478, 481(2--3) (1970).

The provisions of our Safety Responsibility Law are almost identical with the Texas Safety-Responsibility Law. In the Home Indemnity case, supra, the Texas Court of Civil Appeals construed and applied the provisions of that state's law to facts essentially the same as these in this case. The court held in that case that a certificate of self-insurance held by Humble Oil did not constitute other valid and collectible insurance within the meaning of an operator's liability policy issued by Home Indemnity to one Cole, its insured, an employee of Humble who was driving its car with its permission on personal business at the time of an accident. The reasoning of that opinion is persuasive. The court said, at 865--866:

'* * * (1) That the legislative intent of the Safety-Responsibility Act was to protect the public from judgment proof negligent drivers by requiring security of owners and operators of motor vehicles following accidents and injuries to others on Texas streets and highways; defendant's agreement as self-insurer with the State being expressly confined to such an obligation; (2) that Humble as owner of the motor vehicle and under its certificate of self-insurance became jointly liable to the injured party along with the negligent driver, employee Cole; Humble conceding that so far as the State of Texas and the injured party are concerned, it would be obligated to pay any judgment which an insurance carrier would be required to pay had a policy of liability insurance been issued by an insurance carrier to it; (3) that there is here no question of common law liability as regards defendant Humble, since it is admitted that the employee Cole was on an independent mission at the time of accident, wholly outside the scope of his employment; but not so, concerning the appellant's (Home Indemnity's) insured whose negligence was such as to render him liable to the injured party at common law for all damages sustained; (4) that Cole as a tort feasor at common law was primarily liable for his negligent driving; and by filing a certificate of self-insurance, the car owner has merely contracted with the State of Texas that he too agrees to compensate an injured party for negligent acts of the driver, if an insurance company would be required to do so, had it issued a policy of liability insurance to the self-insurer. But the owner's or self-insurer's liability is secondary to that of the negligent driver; and had the injured party sued Cole, appellant's insured and this appellee jointly, (because its negligence was secondary only) Humble could have pleaded over against, Cole, the actively negligent party, and could have recovered judgment against him for such sum as was decreed against it....