American Family Mut. Ins. Co. v. Turner
| Decision Date | 24 September 1991 |
| Docket Number | No. 59327,59327 |
| Citation | 824 S.W.2d 19 |
| Parties | AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff/Appellant, v. Pauline TURNER, et al., Defendant/Respondent. |
| Court | Missouri Court of Appeals |
Sharon E. Wilkes, St. Louis, for plaintiff/appellant.
Gretchen Myers, St. Louis, for defendant/respondent.
American Family Mutual Insurance Company issued an automobile insurance policy to Pauline and Charles Turner, which includes underinsured motorist coverage. Mrs. Turner was involved in an automobile collision in which she allegedly sustained serious injuries.
American Family filed a declaratory judgment action regarding the interpretation of the underinsured motorist coverage. The trial court found the policy to be ambiguous and held the Turners were entitled to coverage in excess of that paid by the other party involved in the collision. In the alternative, the trial court applied a "reasonable expectations" test and reached the same result. American Family appeals; we affirm.
In the underlying action against Daniel Dalton and American Family, the Turners allege that on February 9, 1989, a vehicle driven by Dalton crossed over a median and hit Pauline Turner's vehicle head on. They allege Mrs. Turner sustained damages in excess of $100,000.
Dalton had an automobile insurance policy with a $100,000 limit. His insurer paid the policy limit to the Turners.
The Turners have an automobile insurance policy with American Family. The policy includes underinsured motorist coverage of $100,000 per person and $300,000 per occurrence. The Turners pay a separate premium for this coverage.
American Family claims the $100,000 payment by Dalton's insurer fully offsets American Family's $100,000 obligation under its underinsurance coverage. As a result, it denies any obligation for Mrs. Turner's damages.
The underinsured motorists coverage is set forth in a separate endorsement to the basic seven-page family car policy. The following policy provisions are the focus of the dispute:
We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle.
3. Underinsured motor vehicle means a motor vehicle which is insured by a liability bond or policy at the time of the accident which provides bodily injury liability limits less than the damages an insured person is legally entitled to recover. (emphasis added).
Any amounts payable will be reduced by:
(1) A payment made or amount payable by or on behalf of any person or organization which may be legally liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle. (emphasis added).
American Family's first point on appeal alleges the trial court erred in finding the set-off to be ambiguous. It contends the "policy language at issue is unambiguous and clearly states that the underinsured motorist benefits available are to be reduced by the amount of money the insured receives from or on behalf of the person who may be legally liable for causing injury to the insured." We disagree.
"The interpretation of the meaning of an insurance policy is a question of law." Krombach v. Mayflower Ins. Co., 785 S.W.2d 728, 731 (Mo.App.E.D.1990).
Missouri does not mandate underinsured motorist coverage. It is purely optional and governed by the rules of contract. Hempen v. State Farm Mutual Automobile Ins. Co., 687 S.W.2d 894, 894-95 (Mo.banc 1985); Tegtmeyer v. Snellen, 791 S.W.2d 737, 740 (Mo.App.W.D.1990).
Where an insurance policy is unambiguous, it will be enforced as written absent a statute or public policy requiring coverage. Rodriguez v. General Accident Ins. Co. of America, 808 S.W.2d 379, 382 (Mo.banc 1991). "An ambiguity arises when there is duplicity, indistinctness, or uncertainty in the meaning of the words used in the contract." Id. "In interpreting whether the language used in the policy is ambiguous, the words will be tested in light of the meaning which would normally be understood by the layperson who bought and paid for the policy." Krombach, 785 S.W.2d at 731.
Because an insurance contract is designed to furnish protection, it will be interpreted to grant coverage rather than defeat coverage. Id.
Our supreme court recently upheld the use of set-offs in underinsured motorist policies. Rodriguez, 808 S.W.2d at 382. In Rodriguez, the policy defined "underinsured motor vehicle" as
a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage.
Id. at 381 (emphasis added).
In Rodriguez, the vehicle which collided with the Rodriguezes' vehicle had $50,000 coverage. The Rodriguezes' policy had $50,000 underinsured coverage. The Rodriguezes' policy defined an underinsured motor vehicle as a vehicle whose limits are "less than the limit of liability for this coverage." Because the other vehicle did not have limits "less than" those of Rodriguez, the other driver was "not an underinsured motorist as defined by the Rodriguezes' policy." Id. at 382.
Further, the limit of liability provision of the Rodriguezes' policy provided that "the limit of liability shall be reduced by all sums paid because of the 'bodily injury' by or on behalf of persons or organizations who may be legally responsible." The court found this provision "reinforces this definition of underinsured motorist." Id.
The American Family policy differs from the Rodriguez policy. The Rodriguez policy restricts coverage to persons whose policy limits are "less than the limit of liability for this coverage." The policy here grants underinsured coverage when the other driver's policy "provides bodily injury liability limits less than the damages an insured person is legally entitled to recover." (emphasis added). Thus, under a Rodriguez type policy, if the other motorist pays as much or more to the insured for bodily injury as the insured has underinsured motorist coverage, the insured is not entitled to recover under the underinsured coverage.
However, under the policy here, the insured is entitled to recover "the damages an insured is legally entitled to recover." For example, assume the Turners are "legally entitled to recover" $200,000 for the damages they sustained. Dalton's insurer has paid $100,000 of those damages, leaving unpaid $100,000 of...
To continue reading
Request your trial
-
Hopkins v. American Economy Ins. Co., WD
...Insurance Co. v. Cornejo, 866 S.W.2d 174, 178 (Mo.App.1993). By contrast, the clear policy language in American Family Mutual Insurance Co. v. Turner, 824 S.W.2d 19, 21-22 (Mo.App.1991), differed from Rodriguez, and from the policy in this case. In Turner, the underinsured policy was broade......
-
Cawthon v. State Farm Fire & Cas. Co., 95-1167-CV-W-5.
...are designed to provide protection, they will be liberally interpreted to grant rather than deny coverage. Am. Family Mut. Ins. Co. v. Turner, 824 S.W.2d 19, 21 (Mo.App.1991). This also means that exclusion clauses are to be strictly construed against the insurer. Universal Underwriters Ins......
-
Grobe v. Vantage Credit Union
...policy is unambiguous, it will be enforced as written absent a statute or public policy requiring coverage." Am. Family Mut. Ins. Co. v. Turner, 824 S.W.2d 19, 21 (Mo.Ct.App.1991) (citing Rodriguez v. Gen. Accident Ins. Co. of Am., 808 S.W.2d 379, 382 (Mo.1991) (en banc)). An ambiguity may ......
-
McKinney v. American Standard Ins. Co. of Wisconsin
...636 N.E.2d 169 (Ind.App.1994)("amounts payable" refers to the total bodily damages, not the coverage limit); American Family Mutual Insurance Co. v. Turner, 824 S.W.2d 19 (1991)("amounts payable" means the determined amount of damages sustained reduced by the amount paid by the underinsured......
-
Section 6.38 Set-Off Clauses
...insurance, for loss caused by an accident with an underinsured motor vehicle. (emphasis added). Am. Family Mut. Ins. Co. v. Turner, 824 S.W.2d 19, 20–21 (Mo. App. E.D. 1991). Any amounts payable under Part 6 shall be reduced by all sums: (a) paid because of bodily injury by or on behalf of ......
-
Section 6.31 Underinsured Motor Vehicle
...and, in each case, the practitioner must look at the precise language in the policy. In American Family Mutual Insurance Co. v. Turner, 824 S.W.2d 19 (Mo. App. E.D. 1991), American Family defined underinsured motor vehicle in the following manner: “Underinsured motor vehicle means a motor v......
-
Section 6.29 Damages Recoverable
...of the UIM policy. See, e.g., Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208 (Mo. banc 1992); Am. Family Mut. Ins. Co. v. Turner, 824 S.W.2d 19 (Mo. App. E.D. 1991). Individual policies, however, may be misleading in this regard and must be scrutinized very carefully. An insured may b......
-
Section 6.28 Legally Entitled to Recover
...person is legally entitled to recover from the owner or operator of an underinsured motor vehicle. Am. Family Mut. Ins. Co. v. Turner, 824 S.W.2d 19, 20 (Mo. App. E.D. 1991). Many insurance policies vary the phraseology of “its limits for bodily injury liability is less than the limit of li......