Cowin v. Shelter Mut. Ins. Co.

• Decision Date: 05 May 2015
• Docket Number: WD 78020
• Parties: Paul H. Cowin, et al., Appellants, v. Shelter Mutual Insurance Company, et al., Respondents.
• Court: Missouri Court of Appeals

460 S.W.3d 76

Paul H. Cowin, et al., Appellants

v.Shelter Mutual Insurance Company, et al., Respondents.

WD 78020

Missouri Court of Appeals, Western District.

Opinion filed: May 5, 2015

James T. Thompson, Kansas City, for Appellants.

William C. Crawford, for Respondents.

Before Division Two: Lisa White Hardwick, Presiding Judge, Victor C. Howard, Judge and Cynthia L. Martin, Judge

Opinion

VICTOR C. HOWARD, JUDGE

Paul and Doris Cowin brought an equitable garnishment action against Shelter Mutual Insurance Company seeking to satisfy a judgment against its insured, Jonathon Parsons Jr., in their personal injury case arising out of a car accident. On cross-motions for summary judgment, the trial court entered summary judgment in favor of Shelter finding that the Cowins' claim against Mr. Parsons fell outside the coverage of the insurance policy and Shelter owed no duty to pay the claim. On appeal, the Cowins contend that trial court erred in finding no coverage because Mr. Parsons was driving a non-owned auto as defined in the policy. The judgment is affirmed.

Appellate review of the grant of summary judgment is de novo. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment will be upheld on appeal if the movant is entitled to judgment as a matter of law and no genuine issues of material fact exist. Id. at 377. “Summary judgment is frequently used in the context of insurance coverage questions.” Assurance Co. of America v. Secura Ins. Co., 384 S.W.3d 224, 230 (Mo.App.E.D.2012). The facts in this case are not disputed; the issue is one of interpretation of the insurance policy. As with any other contract, the interpretation of an insurance policy, particularly the question of coverage, is a question of law that an appellate court determines de novo. Id.

Paul and Doris Cowin were injured in an automobile accident on February 20, 2009, when a 1987 Western Star log truck owned by Todd Lumber Company and driven by its employee, Jonathon Parsons Jr., struck the rear of the Cowins' automobile. Mr. Parsons was authorized by his employer to use the log truck for business purposes. He did not have authority to use the log truck for personal purposes. He did not need to ask specific permission before using the truck. Mr. Parsons used the log truck for business purposes in excess of 50 times in the nine months prior to the accident without seeking specific permission for those uses. On the day of the accident, Mr. Parsons was using the log truck for business purposes, and he did not seek permission that day to use it. The log truck was insured by an insurance policy through State Farm Mutual Automobile Insurance Company with limits of $100,000 per claim.

At the time of the accident, Mr. Parsons had an automobile insurance policy on his 1999 Ford F250 through Shelter Mutual Insurance Company. The insuring agreement contained in the Shelter policy provided bodily injury coverage of $50,000 each person and $100,000 each accident. It contained the following relevant language:

INSURING AGREEMENT FOR COVERAGES A AND B

Subject to the limits of our liability for these coverages stated in the Declarations , we will pay damages for an insured , if:

(1) that insured is legally obligated to pay those damages; and

(2) the accident that caused those damages arose out of the ownership or use of the described auto or a non-owned auto .

The Shelter policy defined “described auto” in pertinent part as:

Described auto means the vehicle described in the Declarations , but only if a named insured owns that vehicle.

The policy defined “non-owned auto” in pertinent part as:

Non-owned auto means any auto being used , maintained , or occupied with permission , other than ...

(c) an auto that you or any resident of your household has general consent to use .

“General consent” was defined in the policy in pertinent part as:

General consent means the authorization of the owner of an auto of another to use it on one or more occasions without the necessity of obtaining permission for each use. General consent can be expressed or implied.

Shelter denied coverage for the accident.

The Cowins filed a personal injuries suit against Todd Lumber Company and Mr. Parsons. Thereafter, the parties entered into a settlement agreement, and a consent judgment was entered by the Crawford County Circuit Court. The consent judgment was in the amount of $300,000 with execution of the judgment limited to available insurance coverage. State Farm, which insured the log truck, satisfied $200,000 of the judgment; and the Cowins initiated this equitable garnishment action against Shelter seeking to collect the balance of the judgment.

The Cowins and Shelter filed cross-motions for summary judgment. In Shelter's motion, it argued that because the damages sought by the Cowins arose from Mr. Parsons's use of the log truck owned by his employer that was neither the “described auto” or a “non-owned auto” under the policy, those damages were not covered by the policy and it was not obligated to satisfy any portion of the judgment. The Cowins argued, on the other hand, that the damages sought by them arose from Mr. Parsons's use of a non-owned auto as defined by the policy.

The trial court granted Shelter's motion for summary judgment and denied the Cowins' motion. It found that the definitions of non-owned auto and general consent in the Shelter policy were clear and unambiguous and that the Cowins' claim fell outside the coverage of the Shelter policy and Shelter owed no duty to pay the claim in this case. This appeal by the Cowins followed.

In their two points on appeal, the Cowins contend that the trial court erred in finding no coverage under the Shelter policy for their claims against Mr. Parsons. First, they contend that Mr. Parsons was driving an auto that he did not have general consent to use; therefore, it was a covered non-owned auto as defined in the policy. Alternatively, in point two, the Cowins argue that the term “general consent” is ambiguous and should be construed in favor of coverage. Both points are addressed together.

The general rule in interpreting an insurance policy is to give the language of the policy its plain meaning. Floyd–Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215, 217 (Mo. banc 2014). “The entire policy and not just isolated provisions must be considered.” Id. If the policy's language is not ambiguous, the policy must be enforced as written. Id.

“An ambiguity exists where there is duplicity, indistinctness, or uncertainty in the meaning of the language in the policy.” Fanning v. Progressive Northwestern Ins. Co., 412 S.W.3d 360, 364 (Mo.App.W.D.2013) (internal quotes and citation omitted). If an ambiguity exists, the language of the policy is construed against the insurer. Id. In determining whether policy language is ambiguous, it is considered in the light in which it would be understood by the lay person who bought and paid for the policy. Id. “[C]ourts may not unreasonably distort the language of a policy or exercise inventive powers for the purpose of creating an ambiguity where none exists.” Allen v. Continental Western Ins. Co., 436 S.W.3d 548, 554 (Mo. banc 2014) (internal quotes and citation omitted).

Generally, if a term is defined in the insurance policy, a court looks to that definition and nowhere else. Vega v. Shelter Mut. Ins. Co., 162 S.W.3d 144, 147 (Mo.App.W.D.2005). “If a term within an insurance policy is clearly defined, the policy definition controls.” Id. (internal quotes and citation omitted). “If a conflict arises between a technical definition of a term and the meaning of the term which would reasonably be understood by the average lay person, the lay person's definition will be applied, unless it is obvious the technical meaning was intended.” Id. (internal quotes and citation omitted). The fact that the parties disagree on the interpretation of a term in an insurance policy does not render the term ambiguous. Id. at 150.

Under the Shelter policy, coverage is provided for damages arising out the ownership or use of the described auto or a non-owned auto. It is undisputed that the log truck was not the described auto in the Shelter policy. The dispute between the parties is on the question of whether it was a non-owned auto. The policy defines a non-owned auto as any auto used, maintained, or occupied with permission but specifically excludes an auto that the insured has general consent to use. General consent is defined in the policy. It is “the authorization of the owner of an auto of another to use it on one or more occasions without the necessity of obtaining permission for each use. General consent can be expressed or implied.”

The Cowins do not argue that Mr. Parsons was not authorized to use the log truck on one or more occasions without first seeking permission for each use. Instead, they contend that because Mr. Parsons only had permission to use the log truck for limited purposes, i.e. only for business, he did not have general consent to use the log truck.

To support...