American Standard Ins., Comp. v. Hargrave

• Decision Date: 05 December 2000
• Citation: 34 S.W.3d 88
• Parties: (Mo.banc 2000) . American Standard Insurance Company, Appellant v. Jeanette Hargrave, et al., Respondents Case Number: SC82685 Supreme Court of Missouri Handdown Date:
• Court: Missouri Supreme Court

34 S.W.3d 88 (Mo.banc 2000)

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.

American Standard Insurance Company, Appellant v. Jeanette Hargrave, et al., Respondents

Case Number: SC82685

Supreme Court of Missouri

Handdown Date: 12/05/2000

Appeal From: Circuit Court of Henry County, Hon. William J. Roberts, Judge

Counsel for Appellant: Michael E. McCausland and Jeffrey W. Deane

Counsel for Respondent: Andrew J. Gelbach, Douglas B. Harris and John E. Turner

Opinion Summary:

The Hargraves sought payment for a minor family member's injuries from an auto accident. American Standard Insurance Company denied coverage relying on a household exclusion clause and contending a second insurer had provided the minimum liability payment required by the Missouri Vehicular Financial Responsibility Law. The court granted summary judgment against American Standard.

AFFIRMED.

Court en banc holds:

The MVFRL requires owners to be financially responsible for the vehicles they own and operate. Ms. Hargrave was insured under two owner's policies, both excluding household members, to avoid collusive suits. Halpin v. American Family Insurance Company determined that the MVFRL partially invalidates the household exclusion, so the insurer covers statutory minimum liability. American Standard argued that because another insurer met the MVFRL requirements, its household exclusion should be enforced. But no language in MVFRL restricts the minimum liability payments to a single policy. Labeling the policy "excess insurance" is irrelevant. The partial invalidity of household exclusion under the MVFRL applies to both policies, and both insurers must provide the minimum statutory liability coverage. To the extent Shelter Mutual Insurance Company v. Haney conflicts with this opinion, it should no longer be followed.

Opinion Author: Ronnie L. White, Judge

Opinion Vote: AFFIRMED. Price, C.J., Limbaugh, Holstein, Wolff and Benton, JJ., concur. Covington, J., not participating.

Opinion:

Respondents, Hargraves, sought payment for injuries sustained by a minor family member in an automobile accident. Appellant, American Standard Insurance Company (American Standard), denied coverage contending its household exclusion clause was fully enforceable against the insured's relative because a second insurer, State Farm Insurance Company (State Farm), had provided the minimum liability payment required by the Missouri Vehicular Financial Responsibility Law (MVFRL).¹ The trial court granted summary judgment against American Standard finding that to the extent that James' injuries exceeded the amount paid by State Farm, the excess was recoverable under an excess insurance clause in the American Standard policy up to the $25,000 limit in the MVFRL. We conclude that the partial invalidity of household exclusion clauses created under the MVFRL applies to both polices and both insurers must provide the minimum statutory liability coverage. The trial court's judgment is affirmed.

I.

Respondent, Jeanette Hargrave, was involved in a motor vehicle accident while driving her father's Ford Escort. Mrs. Hargrave and her two children, two-year-old James and six-year-old Shirley, were all injured in the accident, with James suffering severe head injuries. Having received the permission of her father to drive the Escort, Mrs. Hargrave had liability coverage under her father's State Farm owner's policy. Recognizing that its household exclusion clause was partially invalidated by Halpin v. American Family Mutual Insurance Company,² State Farm paid James Hargrave the reduced policy limit coverage of $25,000 as required under the MVFRL.

Mrs. Hargrave also had liability coverage under her husband's vehicle owner's insurance policy issued by American Standard. They denied coverage contending its household exclusion clause was fully enforceable against the insured's relative because the minimum statutory liability coverage required under the MVFRL need only be paid once, by one insurer, in any given accident. American Standard claims that since State Farm had provided the minimum liability payment required by the MVFRL that the "partial invalidity" of household exclusions articulated in Halpin does not apply to their policy.

II.

We review a trial court's granting of summary judgment de novo, and this Court views the record in the light most favorable to the party against whom judgment was entered giving the non-movant the benefit of all reasonable inferences from the record.³ Summary judgment is appropriate if there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.⁴

There is no dispute as to the material facts of this case. At issue is the application of section 303.190⁵ in instances where an insured is covered by multiple vehicle owner liability policies when those policies each contain a household exclusion clause. "Where the language of the statute is unambiguous, courts must give effect to the language used by the legislature."⁶ Courts may not "read into a statute a legislative intent contrary to the intent made evident by the plain language."⁷ "There is no room for construction even when the court may prefer a policy different from that enunciated by the legislature."⁸

The purpose of the MVFRL is to ensure that persons injured on Missouri's highways, whether they be owners, operators, occupants of the insured's vehicle, occupants of other vehicles, or pedestrians, may collect at least minimal damage awards against negligent motor vehicle operators.⁹ Section 303.025.1 requires owners of registered motor vehicles to maintain financial responsibility conforming to Missouri law. The plain language of this statute requires owners of vehicles to be financially responsible not only for the vehicles they own (and register) but for any vehicle they operate. "No owner of a motor vehicle registered in this state . . . shall operate, register or maintain registration of a motor vehicle, . . . unless the owner maintains the financial responsibility which conforms to the requirements of the laws of this state." ¹⁰ (emphasis added). Financial Responsibility is usually shown by a "motor vehicle liability policy which conforms to the requirements of the laws of this state."¹¹ Mr. And Mrs. Hargrave chose to comply with the requirements of Missouri law by purchasing a motor vehicle liability policy.

Section 303.190 provides the limits of liability coverage that such a policy must provide.¹² Since two owner's polices are at issue in this case, only section 303.190.2 is applicable. This section provides:

Such owner's policy of liability insurance: (1) Shall designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied 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 or motor vehicles within the United States of America or the Dominion of Canada, subject to limits, exclusive of interest and costs, with respect to each such motor vehicle, as follows: twenty-five thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, fifty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and ten thousand dollars because of injury to or destruction of property of others in any one accident; and (3) May exclude coverage against loss from liability imposed by law for damages arising out of the use of such motor vehicles by a member of the named insured's household who is a specifically excluded driver in the policy.

III.

As conceded at oral argument, Mrs. Hargrave was insured under two owner's policies at the time of her accident. Each policy contained a "household exclusion clause." The purpose of these exclusions is to prevent the so-called collusive suit where relatives of the insured, who are residing in the insured's household, attempt to collect on a policy when the insured is the negligent party responsible for inflicting the injury.¹³ The Halpin case determined, however, that section 303.190 "effects a partial invalidity" of household exclusion clauses to the extent of the minimal financial responsibility required by the MVFRL.¹⁴ This "partial invalidity" promotes the public policy of providing minimal compensation for those injured on Missouri highways, even in the case where an insured negligently injures a member of his or her immediate family.

American Standard argues that, because the requirements of the MVFRL have been satisfied by State Farm's payment, their household exclusion should be enforced in its entirety. American Standard cites Shelter Mutual Insurance Company v. Haney¹⁵ for this proposition. In Shelter, there were three owner's policies at issue, all three providing liability coverage for the negligent driver of the vehicle. The owner of the vehicle who sustained the injury had given a family member permission to drive the vehicle at the time when the accident occurred. The Shelter Court assumed the Halpin exception would apply to only one policy, but noted in dicta that if Halpin did apply to each policy then each would be responsible for providing the minimum MVFRL required coverage. The court in Shelter misconstrued the decision in Halpin and misapplied section 303.190. To the extent that Shelter conflicts with this opinion it should no longer be followed.

There is no language in section 303.190 that would restrict the minimum liability payments to a single insurance policy. There are no words anywhere in the statutory scheme of the MVFRL that provide that an insured party is to receive only one...