Burger v. Allied Prop. & Cas. Ins. Co.

• Decision Date: 16 May 2016
• Docket Number: No. 15–1979.,15–1979.
• Citation: 822 F.3d 445
• Parties: Lisa BURGER, Plaintiff–Appellant v. ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant–Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

822 F.3d 445

Lisa BURGER, Plaintiff–Appellant

v.ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant–Appellee.

No. 15–1979.

United States Court of Appeals, Eighth Circuit.

Submitted: Jan. 12, 2016.

Filed: May 16, 2016.

Scott Lee Kolker, Saint Louis, MO, for Plaintiff–Appellant.

John Francis Cooney, Kevin E. Myers, Danna McKitrick, Saint Louis, MO, for Defendant–Appellee.

Before LOKEN, GRUENDER, and KELLY, Circuit Judges.

GRUENDER, Circuit Judge.

Lisa Burger sued her insurer, Allied Property and Casualty Insurance Company (“Allied”), after it refused to pay a claim she submitted under her policy's underinsured motorist (“UIM”) endorsement. The district court¹ granted summary judgment in favor of Allied. We affirm.

I.

In December 2012, Burger was injured in a car accident caused by a negligent driver. The tortfeasor driver's insurer settled Burger's claim for $100,000.00, the limit of that driver's policy. Because Burger's damages exceeded this sum, she sought additional coverage under the UIM endorsement in her own insurance policy issued by Allied. Allied denied her claim, and Burger sued Allied in state court for vexatious refusal to pay. Allied removed the action to federal court. Allied then moved for summary judgment, contending that the tortfeasor's car was not an underinsured motor vehicle and that Allied thus properly denied Burger's claim. The district court agreed and granted summary judgment in favor of Allied. Burger now appeals.

II.

When, as here, federal jurisdiction is based on diversity of citizenship, “[s]tate law governs the interpretation of insurance policies.” Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857, 861 (8th Cir.2012). The parties agree that Missouri provides the governing law. Because Missouri law controls, “we are bound by the decisions of the Missouri Supreme Court regarding issues of substantive state law.” Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir.2005). “Decisions by the Missouri Court of Appeals may be used as an indication of how the Missouri Supreme Court may rule, but we are not bound to follow these decisions.” Aerotronics, Inc. v. Pneumo Abex Corp., 62 F.3d 1053, 1068 (8th Cir.1995).

The district court granted summary judgment for Allied because it found that Burger's claim was excluded from coverage under the plain terms of Allied's UIM endorsement. We review the court's grant of summary judgment de novo. Phelps–Roper v. Koster, 815 F.3d 393, 397 (8th Cir.2016). “A grant of summary judgment is proper ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ ” Macklin v. FMC Transp., Inc., 815 F.3d 425, 427 (8th Cir.2016) (quoting Fed.R.Civ.P. 56(a) ).

On appeal, Burger contends that summary judgment was improper because Allied's policy was ambiguous as to the scope and applicability of UIM coverage. Under Missouri law, “[w]hether an insurance policy is ambiguous is a question of law.” Gavan v. Bituminous Cas. Corp., 242 S.W.3d 718, 720 (Mo.2008) (alteration in original) (quoting Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo.2007) ). Ambiguity exists if the terms are “reasonably open to different constructions.” Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo.2007) (quoting Gulf Ins. Co. v. Noble Broadcast, 936 S.W.2d 810, 814 (Mo.1997) ). If the language in an insurance contract is unequivocal, however, the court must afford terms their plain meaning. Harrison v. MFA Mut. Ins. Co., 607 S.W.2d 137, 142 (Mo.1980).

We begin our analysis with the text of the Allied policy. The UIM endorsement states:

INSURING AGREEMENT

A. We will pay compensatory damages which an “insured” is legally entitled to recover from the owner or operator of an “underinsured motor vehicle” because of “bodily injury”:

1. Sustained by an “insured”; and

2. Caused by an accident.

The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the “underinsured motor vehicle”.

The policy thus provides coverage if an insured is injured in a collision with an underinsured motor vehicle. The policy sets off the term “underinsured motor vehicle” in quotes. Later in the same section, the policy defines an underinsured motor vehicle as a land motor vehicle “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.”

Whether the at-fault vehicle has “a limit for bodily injury [that] is less than the limit of liability” under Allied's UIM endorsement may be determined by consulting the endorsement's limit-of-liability section. This section states that the limit of liability is the limit “shown in the Declarations for each person for Underinsured Motorists Coverage.” The declarations page, in turn, provides for $50,000 per person. Read together, then, these provisions indicate that Allied's policy promises UIM coverage only if the insured suffers bodily injury and the vehicle responsible for the accident has a limit of liability that is less than $50,000 per person.

The Missouri Supreme Court determined that a nearly identical UIM policy was unambiguous in Rodriguez v. General Accident Insurance Company of America, 808 S.W.2d 379 (Mo.1991). The endorsement in Rodriguez, like the endorsement at issue here, stated that the insurer would pay damages that the insured was entitled to recover from the owner or operator of an underinsured motor vehicle. Id. at 381. The policy then defined “underinsured motor vehicle” using the same terms in Allied's policy: a land motor vehicle “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 [UIM] coverage.” Id. As in Allied's policy, the limit of liability for such coverage was $50,000. Id. at 380. Because the at-fault driver's policy provided coverage of $50,000, the Missouri Supreme Court determined that the tortfeasor's vehicle was not underinsured. Id. at 382. The court reached this conclusion after describing the definition of an underinsured motorist as “clear.” Id. The court further noted that it was “not permitted to create an ambiguity in order to distort the language of an unambiguous policy.” Id.

Recently, our court relied on Rodriguez to find a very similar UIM provision unambiguous in Owners Insurance Company v. Hughes, 712 F.3d 392 (8th Cir.2013). The Owners policy defined an “underinsured automobile” as one with a limit of liability at least equal to the limit required in Missouri but “less than those stated in the Declarations for Underinsured Motorist Coverage.” Id. at 394. The declarations page, in turn, listed a limit of $100,000. Id. Because the at-fault driver's policy provided exactly $100,000 in coverage, our court concluded that the tortfeasor's car did not meet the policy's unambiguous definition of an underinsured automobile. Id. Based on the Missouri Supreme Court's decision in Rodriguez, we held that the policy provided no UIM coverage for the policy holder's claim. Id. at 395–96.

In line with these decisions, we conclude that the definition of a UIM in Allied's policy is unambiguous. Allied only owed coverage when the tortfeasor met the definition of a UIM by having a policy with a limit of liability that is less than $50,000. The driver who caused the accident that injured Burger had a $100,000 limit of liability, the sum for which Burger settled her claim. Under the plain terms of the policy, then, the other driver did not qualify as underinsured.

On appeal, Burger does not dispute that the tortfeasor failed to qualify under the definition of a UIM. Burger instead asks our court to reverse the grant of summary judgment because, she contends, other provisions in the policy render ambiguous the scope of Allied's UIM coverage. She argues that her case is distinguishable from Rodriguez because other terms in the Allied policy inject ambiguity into what qualifies as an underinsured vehicle. See Seeck, 212 S.W.3d at 133 (explaining that conflicts between UIM policy limits, policy definitions, and the provision of excess coverage in the “other insurance” clause may render an insurance policy ambiguous). For the reasons explained below, we find Burger's arguments unavailing.

Burger first directs our court to the Missouri Court of Appeals's decision in Miller v. Ho Kun Yun, 400 S.W.3d 779 (Mo.Ct.App.2013). In Miller, the court examined similar policy language and found that the policy was ambiguous as to the applicability and scope of UIM coverage. Id. at 785–86, 793. However, our court already has explained that Miller does not undermine the controlling authority of Rodriguez on the ambiguity issue, both because Miller is the decision of an intermediate state appellate court and because Miller “relied on a lack of evidence in the record as to whether the defined policy term ‘underinsured motor vehicle’ was presented in bold type so as to notify the ordinary reader of its technical meaning.” Hughes, 712 F.3d at 396. Here, Allied's policy—like the policy examined by the Missouri Supreme Court in Rodriguez and unlike the policy at issue in Miller —sets off the term “underinsured motor vehicle” in quotes. See Rodriguez, 808 S.W.2d at 381. And Allied, like the insurer in Rodriguez, expressly defined the term “underinsured motor vehicle” in another section of the UIM endorsement. Accordingly, no textual ambiguity exists sufficient to render this case more similar to Miller than Rodriguez.

Second, we see no merit to Burger's contention that the clarity of the UIM endorsement is undermined by the limit of liability for UIM coverage stated on the policy's declarations page. Burger relies on Fanning v. Progressive Northwestern Insurance Co., 412 S.W.3d 360 (Mo.Ct.App.2013), another intermediate appellate court decision, to argue that a policy's declarations page creates...