Cameron Mut. Ins. Co. v. Madden

Citation533 S.W.2d 538
Decision Date09 February 1976
Docket NumberNo. 59123,59123
PartiesCAMERON MUTUAL INSURANCE COMPANY, Plaintiff-Respondent, v. Harry E. MADDEN, Jr., Defendant-Appellant.
CourtUnited States State Supreme Court of Missouri

Max von Erdmannsdorff, North Kansas City, for defendant-appellant.

George T. O'Laughlin, Kansas City, for plaintiff-respondent.

FINCH, Judge.

This is an appeal in a declaratory judgment action wherein plaintiff Cameron Mutual Insurance Company (insurer) sought a declaration of its obligations under its combination automobile policy issued to defendant Madden to cover two automobiles. The precise issue presented is whether the insurance company is liable to Madden under the uninsured motorist and medical payments coverages on the automobile not involved in an accident as well as those on the vehicle which was involved.

The facts are stipulated. Madden owned a 1969 Chevrolet and a 1970 Chevrolet. The declaration page of the policy issued to Madden listed separately the itemized coverages for each of the two vehicles. Included for each car was $500 medical payment coverage (Coverage C) for each of which a premium of $3.19 was charged. In addition, uninsured motorist coverage (Coverage H) was listed for each car in the sum of $10,000 for each person and $20,000 for each accident. A premium of $3.00 was charged for this coverage on each of the cars.

On October 31, 1970, defendant's wife, while driving one of the insured automobiles, collided with one Fields, an uninsured motorist. The collision was caused by Field's negligence. As a result of injuries received in that accident, defendant's wife died.

The parties have stipulated that defendant has incurred monetary damages in excess of $10,000 plus more than $500 in medical expenses. As a result, defendant claims that he is entitled to recover up to a limit of $20,000 under Coverage H ($10,000 for each automobile) and to reimbursed up to $1000 under Coverage C ($500 for each automobile), Insurer, on the other hand, claims that these coverages are not to be 'stacked' and that its liability is limited to a maximum of $10,000 under Coverage H and $500 under Coverage C, which sums it admittedly has already paid to defendant.

The trial court, ruling that there was not to be 'stacking' of these coverages, held that plaintiff insurer was not liable to Madden beyond the $10,000 uninsured motorist coverage and $500 medical payments coverage on the vehicle involved in the collision. On appeal the Missouri Court of Appeals, Kansas City District, reversed, holding that 'stacking' was permissible and that insurer was liable to Madden for damage under its uninsured motorist coverage in an amount not to exceed $20,000 and under its medical payments coverage in an amount not to exceed $1,000. On application for transfer, on grounds which included a contention that the decision of the Kansas City District was in conflict with the opinion of the Missouri Court of Appeals, St. Louis District, in Automobile Club Inter-Insurance Exchange v. Diebold, 511 S.W.2d 135 (Mo.App.1974), we ordered the case transferred. We now decide it as though here on direct appeal. Art. V, § 10, Mo.Const. We reverse and remand with directions.

Uninsured Motorist Coverage

Briefly stated, insurer argues that Madden is limited to a maximum of $10,000 uninsured motorist coverage because: (1) paragraph 4(a) of the Conditions section of the policy clearly and unambiguously limits liability under Coverage H to the specified coverage of $10,000 for each person; (2) paragraph IV(d) of the Insuring section of the policy (referred to by insurer as the separability clause) clearly and unambiguously makes the policy applicable to whichever insured vehicle was involved, thereby eliminating 'stacking' of the two coverages; 1 and (3) such result is not contrary to public policy and does not violate § 379.203, RSMo 1969, as amended by Laws, 1971, p. 398, § 1 and Laws, 1972, p. 1005, S.B. No. 458, § 1. 2

The only instance cited to or located by us in which an appellate court of Missouri previously has considered the right of an insured to 'stack' uninsured motorist coverages on two or more automobiles when provided by a single combination policy, as well as the effect thereon of § 379.203, was in Automobile Club Inter-Insurance Exchange v. Diebold, supra, the decision with which the opinion by the Kansas City District is asserted to conflict. In that case a single policy insured two automobiles. A premium of $3.00 was charged for uninsured motorist coverage on each vehicle listed. The separability clause of the policy stipulated, as here, that the terms of the policy were to apply separately to each automobile where two or more automobiles were insured thereunder. However, unlike the policy in this case, that clause went on to state:

'Regardless of the number of automobiles insured under this policy or other policies issued to the named assured or spouse by the exchange, if the automobile involved in an event making coverage applicable is one described in the declarations, the limit for each and every coverage afforded shall be that stated in the declarations for such automobile and the limits for other automobiles described in the declarations shall not be applicable. If the automobile involved in such event is not one described in the declarations, then the total limit of the exchange's liability shall not exceed the highest applicable limit of liability or benefit for any one automobile described in this or such other policy.'

The court held that the foregoing separability clause was unambiguous and that by its terms Diebold was limited to one uninsured motorist coverage. He attacked the validity of the separability clause on the basis of § 379.203, citing Steinhaeufel v. Reliance Insurance Companies, 495 S.W.2d 463 (Mo.App.1973). 3 The court, while recognizing that in Steinhaeufel it had held that when a state enacts a statute (like § 379.203) which mandates specified minimum uninsured motorist insurance coverage in all automobile liability policies, the insurer may not avoid its statutorily imposed liability by limiting clauses which would reduce its liability below the coverage required by the statute, decided Steinhaeufel to be inapplicable. It did so on the basis that § 379.203 requires only that each policy issued contain a clause providing uninsured motorist coverage with limits of $10,000 for one person and $20,000 for one accident, irrespective of the number of automobiles issued by that policy. The policy issued to Diebold was held to comply with that requirement.

In the more recent case of Galloway v. Farmers Insurance Company, Inc., 523 S.W.2d 339 (Mo.App.1975), the Kansas City District considered the 'stacking' issue in a case involving two separate policies of insurance issued to plaintiff by the same company (rather than a single policy on two automobiles as in Diebold), each of which contained an uninsured motorist provision. Plaintiff Galloway was injured in a collision with an uninsured motor vehicle. He brought suit and recovered judgment for $25,000 for his injuries. He then sought recovery under the two insurance policies issued to him by Farmers, one of which covered the 1969 Chevrolet which he was driving when injured, and the other a 1971 Chevrolet which was not involved in the accident. Each policy contained an uninsured motorist clause with coverage limits of $10,000 for one person and $20,000 for one accident. Plaintiff sought $10,000 on the basis of each of said policies.

Defendant resisted 'stacking' of coverages, relying on Condition 8 of each policy which stated as follows:


With respect to any occurrence, accident or loss to which this and any other insurance policy or policies issued to the insured by the Company also apply, no payment shall be made hereunder which, when added to any amount paid or payable under such other insurance policy or policies, would result in a total payment to the insured or any other person in excess of the highest applicable limit of liability under any one such policy.'

In response, plaintiff asserted that Condition 8, when applied to reduce or eliminate uninsured motorist coverage provided by another policy, was in conflict with § 379.203 and, hence, invalid.

The trial court allowed 'stacking'. The court of appeals affirmed, concluding that public policy as expressed in § 379.203 requires that every automobile liability insurance policy in Missouri contain uninsured motorist coverage in at least the statutory amount, undiminished by provisions such as Condition 8. This was true, said the court, irrespective of whether such separate policies were issued by different insurers or, as in that case, by the same insurer. In so holding, the court said, 523 S.W.2d at 342:

'Defendant next argues that Steinhaeufel is different from the case at bar in that Steinhaeufel involved one policy carried by the host driver and a second policy carried by the injured party, whereas both policies in the present case were issued to and carried by the injured party. Defendant contends that stacking was granted in Steinhaeufel only because the insurance company there attempted to credit against its own liability payments that its insured had received from another source. In further amplification of this contention, defendant argues that an insurer should 'have no right, by virtue of its contract with the insured, to interfere with that insured's separate rights under a different contract' with a different company, but that it does have a right to contractually limit its obligation under its own policies, where more than one. This attempted distinction is without substance. Public policy requires that coverage in the statutory amount under each of the policies stand undiminished by contractual limitation, regardless of whether the policies are issued by the same or different insurers. Numerous cases have...

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