American Family Mut. Ins. Co. v. Peck

• Decision Date: 23 August 2005
• Docket Number: No. WD 64645.,WD 64645.
• Citation: 169 S.W.3d 563
• Parties: AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Respondent, v. Jerry PECK and Mary Ann Peck, Appellants, Shane Michael Bakalar, Defendant.
• Court: Missouri Supreme Court

Page 563

169 S.W.3d 563

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Respondent, v. Jerry PECK and Mary Ann Peck, Appellants Shane Michael Bakalar, Defendant.

No. WD 64645.

Missouri Court of Appeals, Western District.

August 23, 2005.

Russell Clark Purvis, Kansas City, for Appellant.

Keith Joseph Schieber, St. Joseph, for Respondent.

Shane Michael Bakalar, pro se, for Defendant.

RONALD R. HOLLIGER, Presiding Judge.

Jerry and Mary Ann Peck appeal a trial court declaratory judgment in favor of American Family. The Pecks allege that the trial court erred in declaring that a homeowner's insurance policy issued by American Family did not cover an off road accident involving a three wheel recreational vehicle that caused the death of their son, Devon Peck. We hold (1) that the policy language provides coverage for ATV's that are not subject to motor vehicle registration, (2) ATV registration is not the same as motor vehicle registration, and (3) the vehicle involved in this accident was not subject to motor vehicle registration and was, therefore, covered under the Policy. Accordingly, we reverse.

Facts

On the evening of October 14, 2001, Shane Bakalar was operating a three-wheeled Honda motorized vehicle near North Platte High School in Platte County, Missouri. Devon Lee Peck was a passenger on the vehicle when an accident occurred from which he sustained fatal injuries. At the time of the accident Bakalar was not the owner of the vehicle, but he was insured by a homeowner's insurance policy issued by American Family Mutual Insurance Company (American Family).

The parents of Devon Peck (the Pecks) filed an action for wrongful death against Bakalar in the Circuit Court of Platte County, Missouri. Ultimately judgment was taken against Bakalar in the amount of $500,000 pursuant to Section 537.065, RSMo.

Prior to the entry of judgment against Bakalar, American Family filed a Petition for Declaratory Judgment seeking a judicial determination of whether the homeowner's policy issued to Bakalar provided coverage for the accident. American Family took the position that the policy did not provide coverage because an exclusion to the policy specifically excepted coverage for injuries resulting from the use of any motorized vehicle "subject to motor vehicle registration." American Family argued that the vehicle driven by Bakalar was an all terrain vehicle (ATV) and, therefore, subject to motor vehicle registration under Missouri law.

The Pecks, conversely, disputed that the vehicle was within the statutory definition of an ATV and claimed that the wording of the policy was ambiguous. Alternatively, in the event that the vehicle was an ATV, the Pecks claimed that ATV registration, as required under Missouri law, was categorically different than the exclusion for "motor vehicle registration" found in the policy.

At the hearing, Bakalar testified that the vehicle he was driving the night of the accident did not have a horn, turn signals, rear view mirror, or a speedometer. Bakalar testified that he had only been in possession of the vehicle for approximately 24 hours prior to the accident and that he had driven the vehicle several times on public highways during that time. Testimony was also admitted that the vehicle had a manual transmission, was 50 inches or less in width, and weighed less than 600 pounds. The vehicle had three low-pressure tires with knobby tread that were designed for off-road use.

The trial court found in favor of American Family and the Pecks now appeal.

Discussion

Generally, we review court-tried cases under the standard set forth in Murphy v. Carron and will affirm the judgment unless it is against the weight of the evidence, it is not supported by substantial evidence, or it erroneously declares or applies the law. 536 S.W.2d 30, 32 (Mo. banc 1976). "In a court-tried declaratory judgment action, however, interpretation of an insurance policy is a question of law, and the trial court receives no deference where resolution of the controversy is a question of law." Auto. Club Inter-Ins. Exch. v. Medrano, 83 S.W.3d 632, 637 (Mo.App.2002). The disposition of this case turns on the interpretation of certain exclusionary language from the insurance policy issued to Bakalar. The exclusion excepts liability for bodily injury or property damage resulting from the use of any vehicle "subject to motor vehicle registration." The exclusion and its corresponding exception read in relevant part:

We will not cover bodily injury or property damage arising out of the ownership, supervision, entrustment, maintenance, operation, use, loading or unloading of any type of motor vehicle, motorized land conveyance or trailer, except:

We will provide specific coverage on only the following types owned or operated by or rented or loaned to any insured:

(3) a motorized land conveyance including a motorized bicycle, tricycle or similar type of equipment designed principally for recreational use off public roads, which is not subject to motor vehicle registration and is:

(a) not owned or leased by an insured (Emphasis added). It is undisputed that Bakalar was not the owner of the vehicle involved in the crash. What is in dispute is how to classify the vehicle in question and whether the vehicle was "subject to motor vehicle registration." The policy leaves the term undefined.

American Family argues that the vehicle Bakalar was driving at the time of the accident is clearly within the statutory definition of an ATV, Section 301.010(1), RSMo 2000, and that ATV's are required to be registered with the Department of Revenue. See Section 301.707, RSMo 2000. American Family claims that the statutorily required registration of ATV's renders the vehicle "subject to motor vehicle registration" and, thus, excluded from coverage by the express terms of the policy.

The Pecks argue in response that the vehicle does not qualify as an ATV under the statutory definition. They argue further that, even if it does qualify as an ATV, such vehicles are not specifically removed from coverage by the exclusion and that ATV registration is categorically different than motor vehicle registration under Missouri law.

First we turn to the classification of the instrumentality in question, and then we will discuss whether it was subject to motor vehicle registration.

Classifying the vehicle

The Pecks argue that the three-wheeled vehicle driven by Bakalar, which was controlled with handlebars and equipped with low-pressure, knobby tread, tires "designed specifically for off road use,"¹ is not an ATV. The Pecks then argue by extension that, as a non-ATV, the vehicle is not subject to the ATV registration requirement. See Section 301.707, RSMo 2000. This argument is based on an overly narrow reading of the statutory definition of an ATV; it reads:

"All-terrain vehicle," any motorized vehicle manufactured and used exclusively for off-highway use which is fifty inches or less in width, with an unladen dry weight of six hundred pounds or less, traveling on three, four or more low pressure tires, with a seat designed to be straddled by the operator, and handlebars for steering control[.]

Section 301.010(1), RSMo 2000 (emphasis added). The Pecks aver that since Bakalar testified that he operated the vehicle on a public highway several times, the vehicle necessarily does not fit within the plain meaning of the statutory definition of an ATV because it was not used exclusively² off the highway.

American Family responds that the vehicle in question is clearly an ATV because it falls squarely within the definition being less than 50 inches in width, less than 600 pounds, and is designed for use by a straddled operator who controls it with handlebars. American Family argues, and we agree, that the Pecks' reliance on the statute's peculiar literal wording to support such an argument is absurd because any motorized vehicle, including this one, which lacked rear taillights, a horn or directional signals, can be illegally driven on a public roadway. It would be illogical to allow such flaunting of the law to redefine the nature of the vehicle.³ Practically speaking, however, it ultimately matters little (for the purposes of this case anyway) whether this vehicle fits within the statutory definition of an ATV for at least two reasons: (1) even if it is an ATV, as American Family claims, the vehicle is not "subject to motor vehicle registration" as contemplated by statute and the policy, and (2) if it's not an ATV, the vehicle clearly falls within the term motorized land conveyance from the exception to the exclusion. In other words, ATV or not, the vehicle is not subject to motor vehicle registration. We discuss (1) below; as for (2), it is self evident that this vehicle has a motor and is used on land. The word "conveyance" will be given its plain and ordinary meaning, Mo. Employers Mut. Ins. Co. v. Nichols, 149 S.W.3d 617, 625 (Mo.App.2004), as "[a] means of conveying, esp. a vehicle for transportation." AMERICAN HERITAGE DICTIONARY 304 (3d ed.1993). Thus, the vehicle in question is clearly a "motorized land conveyance."

In sum, the three-wheeled vehicle at issue is not excluded from coverage by its vehicular classification because the policy exclusion does not specifically exempt ATV's and, regardless, the vehicle fits into the term "motorized land conveyance" from the exception to the exclusion. Thus, the only remaining issue is whether bodily injury resulting from the operation of this vehicle was not covered by the policy because the vehicle was "subject to motor vehicle registration." If the vehicle is subject to motor vehicle registration, then the trial court properly found that coverage did not exist.

For ease of analysis, we will assume for the remainder of this discussion that the vehicle is indeed an ATV as American Family claims.

ATV's are not "subject to motor vehicle registration" as contemplated by the policy and Missouri law

The...