Chamness v. American Family Mut. Ins. Co.

• Citation: 226 S.W.3d 199
• Decision Date: 05 June 2007
• Docket Number: No. ED 88417.,ED 88417.
• Parties: Catherine A. CHAMNESS, Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Respondent.
• Court: Missouri Court of Appeals

226 S.W.3d 199

Catherine A. CHAMNESS, Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Respondent.

No. ED 88417.

Missouri Court of Appeals, Eastern District, Division Two.

June 5, 2007.

Brett J. Hellmann, Rost & Hellmann, LLP, Jefferson City, MO, for appellant.

William P. Lampros, Attorney at Law, St. Louis, MO, for respondents.

GARY M. GAERTNER, SR., Judge.

Appellant, Catherine A. Chamness ("Plaintiff"), appeals from the judgment of the Circuit Court of the City of St. Louis granting summary judgment in favor of Respondent, American Family Mutual Insurance Company ("American Family"). Plaintiff had filed an action seeking underinsured motorist coverage under two insurance policies issued to her and her husband, William Chamness ("Plaintiff's husband"), by American Family for two vehicles. We reverse and remand.

On October 6, 2003, Plaintiff, operating a 1977 Ford F150 ("the Ford") owned by Plaintiff's husband, was involved in an automobile collision with a vehicle driven by Missy Smith ("Smith"). Plaintiff sustained injuries as a result of the collision. Smith was insured by American Standard Insurance Company of Wisconsin ("Smith's insurance company") and had bodily injury liability insurance coverage in the amount of $100,000.00 per person and $300,000.00 per occurrence. Smith's insurance company settled with Plaintiff for the policy limit of $100,000.00.

At the time of Plaintiff and Smith's collision, Plaintiff and Plaintiff's husband were not living together in the same household. Plaintiff and Plaintiff's husband were both insured under two automobile insurance policies issued by American Family. Each policy covered a different vehicle: one policy covered the Ford and the other policy covered a 1988 Nissan Pathfinder. Both policies provide for underinsured motorist insurance coverage for bodily injury in the amount of $100,000.00 per person and $300,000.00 per accident.

The underinsured motorist coverage endorsement in both policies states in relevant part:

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. The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the underinsured motor vehicle.

. . .

ADDITIONAL DEFINITIONS USED IN THIS ENDORSEMENT ONLY

. . .

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 limits of liability of this Underinsured Motorists coverage.

. . .

LIMITS OF LIABILITY

The limits of liability of this coverage as shown in the declarations apply, subject to the following:

1. The limit for each person is the maximum for all damages sustained by all persons as the result of bodily injury to one person in any one accident.

2. Subject to the limit for each person, the limit for each accident is the maximum for bodily injury sustained by two or more persons in any one accident.

We will pay no more than these maximums no matter how many vehicles are described in the declarations, insured persons, claims, claimants or policies or vehicles are involved in the accident.

The limits of liability of this coverage [will] be reduced by:

1. A payment made or amount payable by or on behalf of any person or organization which may be . . . liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle.

. . .

OTHER INSURANCE

If there is other similar insurance on a loss covered by this endorsement we will pay our share according to this policy's proportion of the total limits of all similar insurance. But, any insurance provided under this endorsement for an insured person while occupying a vehicle you do not own is excess over any other similar insurance.

Under the general provisions portion of both policies, the "Two or More Cars Insured" provision states in pertinent part: "The total limit of our liability under all policies issued to you by us shall not exceed the highest limit of liability under any one policy."

The term "you" is defined throughout both policies as: "the policyholder named in the declarations and spouse, if living in the same household." The declarations page to both policies provides that the "policyholder/named insured" is: "Chamness, Catherine A and William."

Plaintiff sought underinsured motorist coverage from American Family under the two insurance policies. After American Family refused coverage, Plaintiff filed the present action for underinsured motorist coverage. Thereafter, American Family filed a motion for summary judgment, asserting that Plaintiff is not entitled to recovery under the underinsured motorist coverage endorsement of either policy because her collision with Smith did not occur with an underinsured motor vehicle, as Smiths' bodily injury liability coverage equaled the underinsured motorist coverage of each of Plaintiff's insurance policies. Plaintiff filed a cross-motion for summary judgment and response to Defendant's motion for summary judgment. In both of these motions, Plaintiff maintains that because of an ambiguity in the policies: (1) she is entitled to underinsured motorist coverage under both policies; (2) she is allowed to stack the $100,000.00 of underinsured motorist coverage provided by each policy; and (3) American Family is not entitled to set-off the amount recovered from Smith's insurance company.

Subsequently, the trial court granted American Family's motion for summary judgment and denied Plaintiff's cross-motion for summary judgment. In its decision, the trial court found that Plaintiff is not entitled to underinsured motorist coverage under either insurance policy because (1) the definition of an underinsured motor vehicle is not met under either policy, and (2) there is no ambiguity in either policy. This appeal by Plaintiff followed.

Our review of a grant of summary judgment is essentially de novo. ITT Commercial Finance v. Mid-Am. Marine, 854 S.W.2d 371, 376 (Mo.banc 1993). We view the record in the light most favorable to the party against whom the trial court rendered judgment. Id. A trial court's judgment will be upheld if there are no genuine issues of material fact and if the moving party is entitled to judgment as a matter of law. Id. at 377.

The interpretation of an insurance policy is a question of law that we review de novo. Seeck v. Geico General Ins. Co., 212 S.W.3d 129, 132 (Mo.banc 2007). When we construe the language of an insurance policy, we apply "the meaning which would be attached by an ordinary person of average understanding if purchasing insurance." Id. (quotation omitted).

An insurance policy is ambiguous where there is duplicity, indistinctness, or uncertainty in the meaning of the language used in the policy. Id. "Language is ambiguous if it is reasonably open to different constructions." Id. (quotation omitted). If we find that an insurance policy's language is ambiguous, we construe it in favor of the insured. Id.

We will first address Plaintiff's second point on appeal.

In her second point on appeal, Plaintiff contends that the trial court erred in granting summary judgment in favor of American Family and that she is entitled to underinsured motorist coverage because of an ambiguity in the insurance policies' language. Plaintiff contends that the language is ambiguous because the second sentence of the other insurance clause, which states, "[b]ut, any insurance provided under this endorsement for an insured person while occupying a vehicle you do not own is excess over any other similar insurance," appears to provide insurance coverage while anti-stacking and set-off provisions in the policies indicate that such coverage is not provided.

In order for Plaintiff's argument to have any merit, we must first determine whether the second sentence of the other insurance clause applies to her. See Niswonger v. Farm Bureau Town & Country, 992 S.W.2d 308, 315 (Mo.App. E.D.1999) (finding that an ambiguity only arises in the special factual situation where the accident occurred while the insured was occupying a non-owned vehicle).

According to the terms of both policies, the second sentence of the other insurance clause applies to Plaintiff only if she was "an insured person while occupying a vehicle you do not own" at the time her accident with Smith occurred. It is undisputed that Plaintiff was an insured person under the definition of each policy and that Plaintiff was occupying a vehicle; however, the parties dispute whether the accident occurred while Plaintiff was occupying a vehicle "you do not own." Specifically, the parties disagree as to whether the policies' definition of "you" is ambiguous.

If a term is defined in an insurance policy, we will normally only look to that definition to determine the term's meaning. Mansion Hills v. American Family Mut., 62 S.W.3d 633, 638 (Mo.App. E.D. 2001). But in order for the policy's definition to control, the definition must be reasonably clear and unambiguous. Id. Otherwise, we are free to give a reasonable construction to the term, by applying general contract principles and resolving doubts in favor of the insured. Id.

We have previously held that when an insurance policy defined "you" as "(a) the `named insured' shown in the [d]eclarations; (b) the spouse if a resident of the same household," the policy definition was clear and unambiguous. State Farm Fire & Cas. Co. v. Berra, 891 S.W.2d 150, 151, 152 (Mo.App. E.D.1995). The relevant facts in that case were: (1) the husband was the only named insured in the declarations; (2) the definition of "you" was placed in the context of a household exclusion clause specifying that liability coverage does not apply to bodily injury to "you;" and (3) it was undisputed that the husband and wife were living in...