Blum v. Allstate Ins. Co.
| Decision Date | 15 December 2003 |
| Docket Number | No. 4:03CV401 CDP.,4:03CV401 CDP. |
| Court | U.S. District Court — Eastern District of Missouri |
| Parties | Terry E. BLUM, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. |
Kevin A. Sullivan, Deeba and Sauter, St. Louis, MO, for Plaintiff.
David W. Cooper, Brown and James, P.C., St. Louis, MO, for Defendant.
Plaintiff Terry Blum seeks a declaration of his rights under the uninsured motorist provision of an auto insurance policy that his parents purchased from defendant Allstate Insurance Company. He also seeks judgment in the amount of $150,000, plus prejudgment interest on the policy. The parties agreed to try this matter upon the written record, and they have stipulated the facts of this case.
I conclude that Terry Blum may "stack" the uninsured motorist coverage for each of the three automobiles covered by his parents' policy. The policy provisions that prohibit stacking when the insured is injured in an auto other than one of the covered autos violates the public policy of Missouri. I conclude, however, that public policy does not require that Blum recover the full $50,000 coverage on all three automobiles, because the public policy is violated only to the extent the policy attempts to provide less than $25,000 in uninsured motorist coverage. Thus, Blum can recover an initial $50,000 and then can stack an additional $25,000 for each of the other two covered vehicles, for a total award of $100,000. Finally, I find that this award should not be offset by payments Blum collected under another policy issued by Shelby Casualty Insurance Company. I will therefore enter judgment in Blum's favor in the total amount of $109,645.12, which includes prejudgment interest.
The parties stipulated that the following facts apply to this case:
William and Francis Blum owned an automobile insurance policy, Policy Number 1 1027305703-08, issued by defendant Allstate Insurance Company. The policy covered three vehicles that the Blums owned. Each vehicle was insured for $50,000 under the policy provision providing for uninsured motorist coverage.
The Blums' son, plaintiff Terry Blum, was involved in an auto accident on September 7, 2002, in St. Francois County, Missouri. At the time of the accident, Blum lived with his parents. William Blum submitted an affidavit, to which Allstate does not object, claiming that Terry lived with him and his wife for most of his life, and that he expected that Terry would have insurance coverage equal to the coverage he and his wife would have. Terry Blum often used his parents' vehicles. The vehicle in which Terry Blum was a passenger on September 7, 2002, however, was an uninsured automobile—neither owned nor insured by Terry Blum or his parents.
During the accident, Terry Blum was ejected through the windshield of the vehicle. He was airlifted to Barnes Hospital and admitted to the intensive care unit. He was hospitalized for eleven days. Blum sustained a brain injury and other serious and disabling injuries as a result of the accident. Costs for Blum's care and treatment exceed $90,000. Blum's medical expenses, lost wages and other damages exceed $175,000.
Terry Blum had his own car, which was insured by Shelby Casualty Insurance Company, including uninsured motorist coverage in the amount of $25,000. Blum collected $25,000 under the Shelby Casualty policy, and then made a claim under his parents' Allstate policy for $150,000 in uninsured motorist coverage. Allstate denied Terry Blum's claim under the policy, claiming that Blum is entitled, at most, to $25,000 in uninsured motorist benefits— the value of the uninsured motorist coverage for one vehicle under the Allstate policy, offset by the $25,000 Blum received under his Shelby Casualty policy.
At the time of the accident, the Allstate policy was in full force and effect, and it did not exclude Terry E. Blum as a driver with respect to any of the vehicles. The parties do not dispute that Terry Blum was a "resident" under the policy, although he was not a named insured. The Blums paid all policy premiums over the years, including a separate premium for the uninsured motorist coverage on each vehicle.
This case involves the following provisions of the Blums' Allstate policy:
Definitions Used Throughout This Policy
* * * * * *
8. "Resident" means a person who physically resides in your household with the intention to continue residence there...
Uninsured Motorist Coverage
Coverage SS
* * * * * *
1. "Insured Person(s)" means:
(a) you and any resident relative ...
Limits of Liability
* * * * * *
If none of the autos shown on the Policy Declaration is involved in the accident, the highest limits of liability shown on the Policy Declaration for any one auto will apply.
Damages payable under Uninsured Motorist Insurance shall be reduced by all amounts paid or payable by or on behalf of any person or organization that may be legally responsible for the bodily injury...
Allstate Policy at 13 (emphasis in original).
In this diversity action, Missouri law provides the rules for construing the insurance policy at issue. Altru Health Sys. v. American Prot. Ins. Co., 238 F.3d 961, 962 (8th Cir.2001). When interpreting state law, I must first consider any pertinent decisions of the Missouri Supreme Court; if none are available, I will look to the state appellate court decisions and other reliable state law authorities. My task is to determine how the Missouri Supreme Court would decide the issue at hand. See Lindsay Mfg. Co. v. Hartford Accid. & Indem. Co., 118 F.3d 1263, 1267-68 (8th Cir.1997).
Disputes arising from interpretations and application of an insurance policy are matters of law to be determined by the court. McCormack Baron Mgmt. Servs., Inc. v. American Guarantee & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo.1999) (en banc). "Because insurance policies are designed to provide protection, they will be liberally interpreted to grant rather than deny coverage." Cawthon v. State Farm Fire & Cas. Co., 965 F.Supp. 1262, 1264 (W.D.Mo.1997); see also Henges Mfg., LLC v. Amerisure Ins. Co., 5 S.W.3d 544, 545 (Mo.Ct.App.1999).
When an insurance company relies upon a policy exclusion to deny coverage, the burden is on the insurance company to prove applicability of the exclusion clause, which is strictly construed against the insurer. Century Fire Sprinklers, Inc. v. CNA/Transportation Ins. Co., 23 S.W.3d 874, 877 n. 1 (Mo.Ct.App.2000). When the terms of an insurance policy are unambiguous, however, "the rules of construction do not apply, and absent public policy to the contrary, the policy will be enforced as written." Schoettger v. American Nat. Prop. and Cas. Co., 10 S.W.3d 566, 569 (Mo.App.2000).
This particular anti-stacking provision has not been considered by the Missouri courts. Stacking "refers to an insured's ability to obtain multiple insurance coverage benefits for an injury either from more than one policy, as where the insured has two or more separate vehicles under separate policies, or from multiple coverages provided for within a single policy, as when an insured has one policy which covers more than one vehicle." Niswonger v. Farm Bureau Town & Country Ins. Co., 992 S.W.2d 308, 313 (Mo.Ct.App.1999). Allstate argues that Blum may not stack the coverages for the three vehicles, because the policy provides that if none of the covered autos is involved in the accident, then its liability under the uninsured motorist provision is limited to the coverage for one auto—$50,000. Blum argues that this provision limiting recovery violates Missouri public policy and should have no effect.
Missouri requires all automobile insurance policies issued in the state to carry uninsured motorist coverage. Mo.Rev. Stat. § 379.203, the Motor Vehicle Financial Responsibility Law, provides in pertinent part:
No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto ... in not less than the limits for bodily injury or death set forth in section 303.030, RSMo, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom.
Mo.Rev.Stat. § 379.203(1). The limits for bodily injury or death of Mo.Rev.Stat. § 303.030.5 are $25,000 per person, $50,000 per occurrence and for property damage in the amount of $10,000. All policies of liability insurance extend uninsured motorist coverage to "persons insured thereunder." Lair v. American Family Mutual Ins. Co., 789 S.W.2d 30, 33 (Mo.1990) (en banc).
The uninsured motorist coverage mandated by the financial responsibility law is personal in nature—in other words, it provides coverage to the insured person, not to a particular automobile. In Otto v. Farmers Ins. Co., 558 S.W.2d 713, 718 (Mo.Ct.App.1977), the Missouri Court of Appeals cautioned that See also Bernardo v. Northland Ins. Co., 45 F.3d 272, 274 (8th Cir.1995) ().
Policy provisions that seek to limit stacking of uninsured motorist policies will not be enforced if they violate the public policy expressed in the financial...
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