Dibben v. Shelter Ins. Co.

• Decision Date: 06 May 2008
• Docket Number: No. WD 68269.,WD 68269.
• Parties: Douglas DIBBEN and Deborah Dibben, Appellants, v. SHELTER INSURANCE COMPANY, Respondent.
• Court: Missouri Court of Appeals

261 S.W.3d 553

Douglas DIBBEN and Deborah Dibben, Appellants, v. SHELTER INSURANCE COMPANY, Respondent.

No. WD 68269.

Missouri Court of Appeals, Western District.

May 6, 2008.

Motion for Rehearing and/or Transfer to Supreme Court Denied July 1, 2008.

Application for Transfer Denied September 30, 2008.

Douglas Patterson and Michelle Lynn Webb Burns, Overland Park, KS, for appellant.

John Lavelle Mullen, Casey Symonds and Nicki Cannizero, Kansas City, Mo., for respondent.

PAUL M. SPINDEN, Presiding Judge.

Douglas and Deborah Dibben appeal the circuit court's summary judgment for Shelter Insurance Company in the Dibbens' lawsuit for breach of contract. The Dibbens charged Shelter with breaching its insurance policy issued during 2000 to insure the Dibbens' residential house near Freeman. The Dibbens averred that, when fire destroyed their house during June 2001, Shelter wrongfully insisted on paying only $164,100, the amount of insurance set out on the policy's declaration page, instead of paying $205,000, the claimed amount of the house's replacement cost. The Dibbens sued for $40,900, the difference between the house's claimed replacement cost and the amount that Shelter paid. Shelter moved for partial summary judgment, which the circuit court granted.

Before considering the merits of the Dibbens' claim on appeal, we determine our jurisdiction. Jurisdiction is an issue because the circuit court granted what it denominated a partial summary judgment. The circuit court did issue a subsequent judgment in which it stated that its prior judgment had "rendered any remaining claims moot and that there are no other pending claims," but it did not certify the judgment for appeal as required by Rule 74.01(b).

According to well-established law, a party may appeal only a final judgment—that is, a judgment that disposes of all claims and leaves nothing for further determination. Penn-America Insurance Company v. The Bar, Inc., 201 S.W.3d 91, 95 (Mo.App.2006). Partial summary judgment is not a final judgment subject to our review because it leaves issues for further determination. Id. Hence, the issue is whether or not the circuit court issued a final judgment in this case.

Although the circuit court denominated its judgment as "Judgment Granting Partial Summary Judgment," the decree disposed of the only claim that the Dibbens asserted in their petition: that the Dibbens were entitled to the difference between the amount it cost to replace their house and the amount Shelter paid out. Because the circuit court's judgment resolved all issues and left nothing for further determination, it is a final judgment.

The Dibbens challenged the judgment on the ground that, because Shelter's policy was ambiguous, the circuit court should have construed the contract in their favor. They complain that, although the policy limited Shelter's liability to the amounts stated in the policy, the "replacement cost" section entitled them to "full replacement cost" regardless of the limitation set out on the policy's declaration page.

Our review of the circuit court's summary judgment is essentially de novo. ITT Commercial Finance Corporation v. Mid-America Marine Supply Corporation, 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is proper only if the parties are not disputing any issue of material fact and if the party seeking summary judgment is entitled to judgment as a matter of law. Rule 74.04(c)(6); ITT Commercial Finance, 854 S.W.2d at 378. In reviewing a summary judgment, we view the evidence in the light most favorable to the nonmoving party and afford this party the benefit of all reasonable inferences. ITT Commercial Finance, 854 S.W.2d at 382. "The key to summary judgment is the undisputed right to judgment as a matter of law; not simply the absence of a fact question." Id. at 380.

The parties do not dispute any material factual issues. Their dispute focuses on the correct interpretation of the insurance contract. Interpretation of an insurance contract is an issue of law, which we review de novo. Missouri Employers Mutual Insurance Company v. Nichols, 149 S.W.3d 617, 625 (Mo.App.2004).

In interpreting an insurance contract, we read it as a whole to determine the parties' intent. Id. We give effect to this intent by enforcing the contract as written, according to the plain and ordinary meaning of its language. Id. In interpreting an insurance contract, we must endeavor to give each provision a reasonable meaning and to avoid an interpretation that renders some provisions useless or redundant. Wildflower Community Association, Inc. v. Rinderknecht, 25 S.W.3d 530, 534 (Mo.App.2000).

A contract is ambiguous when it is duplicitous, indistinct, or uncertain, leaving its interpretation open to differing reasonable constructions. Krombach v. Mayflower Insurance Company, 827 S.W.2d 208, 210 (Mo. banc 1992). When an insurance contract's language is ambiguous, we apply a meaning according to what the insured ordinarily would have understood, and, because the insurer typically is responsible for the ambiguity, we construe ambiguous provisions against the insurer. Id.

The Dibbens sought reimbursement for their destroyed house under the replacement cost section of the policy. It said:

Under Coverage A—Dwelling and Coverage B — Other Structures:

(1) How a loss to the dwelling or other structure will be settled will depend on how the amount of insurance relates to the full replacement cost.

(2) If, at the time of loss, the amount of insurance for the dwelling or other structure in this policy is 80% or more of the full replacement cost, we will pay the full cost to repair or replace the damaged part of the dwelling or other structure, without deduction for depreciation.

(3) If, at the time of loss, the amount of insurance for the dwelling or other structure in this policy is less than 80% of the full replacement cost, we will pay the larger of the following amounts:

(i) the actual cash value of the damaged part of the dwelling or other structure; or

(ii) the full cost to repair or replace the damaged property multiplied by the ratio of the amount of insurance on the dwelling or other structure to 80% of its full replacement cost.

(4) But, we will pay under (2) or (3) no more than the smallest of the following:

(i) the limit of liability in this policy for the dwelling or other structure;

(ii) the cost to replace the damaged dwelling or other structure with equivalent construction for equivalent use on the same premises;

(iii) the amount actually spent for necessary repair or replacement of the damaged dwelling or other structure.¹

The parties agree that the Dibbens correctly sought recovery under Section 2. The plain and ordinary language of Section 2 required Shelter to pay the full cost to replace the Dibbens' house if the amount of insurance was 80 percent of the house's full replacement cost. The Dibbens rely on this section to contend that they are entitled to the full replacement cost of $205,000. Shelter concedes that the full replacement cost for the house was $205,000,² but it maintains that Section 4 capped its liability. Shelter claims that Section 4 limited its liability to the least of three amounts: the limit of liability as set out on the declaration page, or $164,100, as reflected in subsection (i); the replacement cost of like construction on the same premises, as reflected in subsection (ii); and the amount actually spent to repair or replace the damaged dwelling, as reflected in subsection (iii). The insurance contract did not define "amount of insurance" or "limit of liability." The failure to define these terms renders Section 2 and Section 4 of the policy inherently inconsistent.

Well-established law holds that, when a policy does not define a term, a court is free to give the term a reasonable construction. Nichols, 149 S.W.3d at 625. We look to a dictionary for assistance in understanding these terms. Because the dictionary definition of "amount" is "the total number or quantity," WEBSTER'S NEW THIRD INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE UNABRIDGED 72 (1993), we understand "amount of insurance" to mean the total value for which the Dibbens' house was insured under the policy, or $164,100. Because the dictionary definition of "limit" is "a prescribed maximum or minimum amount, quantity or number," id. at 1312, and "liability" is "[a] financial or pecuniary obligation," BLACK'S LAW DICTIONARY 932 (8th ed.1999), we understand "limit of liability" to be the greatest amount that Shelter could be obligated for under the insurance contract. Unclear, however, is whether this amount means the amount on the declaration page, which is $164,100, or the replacement cost to which Section 2 refers. If, as the Dibbens argue, Section 2 overrides the general limit on the...