Dutton v. Am. Family Mut. Ins. Co.

• Decision Date: 21 January 2014
• Docket Number: WD74940
• Parties: ADAM DUTTON, Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Respondent.
• Court: Missouri Court of Appeals

ADAM DUTTON, Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Respondent.

WD74940

Missouri Court of Appeals Wastern District

OPINION FILED: January 21, 2014

Appeal from the Circuit Court of Jackson County, Missouri

The Honorable Marco A. Roldan, Judge

Before: James E. Welsh, Chief Judge, Presiding, and Joseph M. Ellis, Victor C. Howard,

Thomas H. Newton, Lisa White Hardwick, Alok Ahuja, Mark D. Pfeiffer, Karen King

Mitchell, Cynthia L. Martin, Gary D. Witt and Anthony Rex Gabbert, Judges

Adam Dutton ("Dutton") appeals the trial court's ruling in this declaratory judgment action that American Family Mutual Insurance Company ("American Family") is not liable under the terms of its policy for the damages Dutton suffered in an automobile accident caused by American Family's insured, Barbara Hiles ("Hiles"). Because the language of this policy provides for coverage and because both the Missouri Motor Vehicle Financial Responsibility Law ("MVFRL") and Missouri Supreme Court jurisprudence require "stacking" of liability insurance policies up to the state minimumrequirement of coverage of $25,000 per policy on owner's policies where multiple policies apply to a covered incident, the judgment is reversed.

FACTUAL AND PROCEDURAL HISTORY¹

On May 25, 2009, Dutton was injured in a motor vehicle accident with an automobile operated by Hiles. Hiles, in attempting to make a left turn, crossed a lane of traffic and turned into Dutton's lane of traffic causing an accident. As a result of the accident, Dutton suffered serious, permanent injuries as well as significant medical expenses. It is undisputed that Hiles was at fault in the collision.

Dutton filed a personal injury claim against Hiles based on this collision. Hiles was insured by American Family with multiple policies. A dispute arose as to the amount of liability coverage which applied to the damages. Dutton, Hiles, and American Family entered into a settlement agreement as to the issues in the underlying accident. The settlement agreement acknowledged that Hiles was at fault and liable for the collision and that Dutton's damages were equal to or exceeded the amount of liability coverage under the combined American Family policies at issue.

The settlement agreement further acknowledged that at the time of the accident, Hiles was driving a 2007 Nissan Maxima ("Nissan") that she owned and that was insured under a policy with American Family, which provided liability coverage. In addition to the Nissan, Hiles owned a 2003 Ford F-250 pickup truck ("Ford"), which was insured under a separate policy with American Family. The Ford vehicle was not involved in theaccident. The Nissan and Ford policies are identical, and Hiles was the named insured on both policies. Each policy has limits of $25,000 per person/$50,000 per accident.

Pursuant to the settlement agreement, Hiles, through American Family, agreed to pay the $25,000 limits pursuant to the Nissan policy. The parties agreed that there remained a dispute as to the applicable coverage under the Ford policy. The parties further agreed that a declaratory judgment action would be the appropriate method to determine the applicable limits of liability coverage, if any, under the Ford policy for Dutton's injuries. The parties agreed that any further recovery by Dutton would be limited to the limits of liability coverage under the Ford policy as determined in the declaratory judgment action.

Dutton filed his petition against American Family in April 2011, seeking, inter alia, a declaration as to whether the Ford policy provided minimal liability coverage under the MVFRL for the May 25, 2009 accident. Dutton moved for summary judgment. In February 2012, the trial court issued a judgment in favor of American Family, as follows:

(1) while every owner's liability policy issued in Missouri must meet the minimum requirements of the . . . MVFRL, §303.190.2, RSMo, there is no requirement in the MVFRL that each owner's liability policy must provide the minimum limits under the MVRFL when the motor vehicle covered by such owner's policy is not involved in an accident; and (2) the anti-stacking language in the "other insurance" clause in the American Family policy is not ambiguous, is valid, and effectively limits the recovery of Mr. Dutton to the amount paid by American Family on behalf of its insured from the coverage limits of the owner's policy of the vehicle involved in the accident.

Dutton appeals.

Pertinent Policy Language

Both the Nissan and Ford policies contain the following relevant language:²

DEFINITIONS USED THROUGHOUT THIS POLICY

* * * *

3. Car means your insured car, a private passenger car, and a utility car.

* * * *

5. Private passenger car means a four-wheel car of the private passenger type.

* * * *

9. Use means ownership, maintenance, or use.

* * * *

12. We, us and our mean the company providing this insurance [i.e. American Family].

* * * *

13. You and your mean the policyholder named in the declarations and spouse, if living in the same household [i.e. Barbara Hiles].

* * * *

14. Your insured car means:

a. Any car described in the declarations and any private passenger car or utility trailer you replace it with. You must tell us within 30 days of its acquisition.

* * * *

PART I - LIABILITY COVERAGE

* * * *

We will pay compensatory damages an insured person is legally liable for because of bodily injury and property damage due to the use of a car or utility trailer.

* * * *

EXCLUSIONS

This coverage does not apply to:

* * * *

9. Bodily injury or property damage arising out of the use of any vehicle, other than your insured car, which is owned by or furnished or available for regular use by you or any resident of your household.

* * * *

LIMITS OF LIABILITY

The limits of liability shown in the declaration apply, subject to the following:

1. The bodily injury liability 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 occurrence.

* * * *

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

* * * *

OTHER INSURANCE

If there is other auto liability insurance for a loss covered by this part, we will pay our share according to this policy's proportion of the total of all liability limits. But, any insurance provided under this Part for a vehicle you do not own is excess over any other collectible auto liability insurance.

* * * *

PART VI: GENERAL PROVISIONS

3. Two or More Cars Insured. 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.

* * * *

11. Terms of Policy Conformed to Statute. Terms of this policy which are in conflict with the statutes of the state in which this policy is issued are changed to conform to those statutes.

ANALYSIS

Dutton asserts two points on appeal. He first argues that the trial court erred in entering judgment in favor of American Family because every owner's motor vehicle insurance policy must provide minimum limits of liability coverage pursuant to the MVFRL, specifically section 303.190, as well as interpretative case law from theMissouri Supreme Court. Dutton argues in his second point that the trial court erred in entering judgment in favor of American Family because the "other" insurance clause in the Ford policy is ambiguous in that it conflicts with other anti-stacking language in the policy and contains a broad grant of coverage with no limitations or qualifying language and that this ambiguity should be decided in favor of coverage. We agree with Dutton's first point and reverse.

In our analysis, we determine (1) that the insurance policy affords liability coverage in this case, (2) that the MVFRL applies, and (3) that the MVFRL defeats the proffered exclusion and anti-stacking language.

Standard of Review

Our Supreme Court has set forth our standard of review:

Summary judgment is appropriate only when the moving party demonstrates that "there is no genuine dispute as to the facts" and that "the facts as admitted show a legal right to judgment for the movant." The movant bears the burden of establishing both a legal right to judgment and the absence of any genuine issue of material fact required to support the claimed right to judgment. The propriety of summary judgment is purely an issue of law, and this Court's review is essentially de novo. As the trial court's judgment is founded on the record submitted and the law, an appellate court need not defer to the trial court's order granting summary judgment.

Bob DeGeorge Assocs., Inc. v. Hawthorn Bank, 377 S.W.3d 592, 596 (Mo. banc 2012) (quoting ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 380 (Mo. banc 1993)). When reviewing a trial court's grant of summary judgment, this court views the record in the light most favorable to the party against whom judgment was entered. O'Rourke, 325 S.W.3d at 397.

The interpretation of an insurance policy is a question of law that we also determine de novo. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007) (citation omitted).

Coverage

"[T]he insured bears the burden of proving coverage under an insurance policy." Fischer v. First Am. Title Ins. Co., 388 S.W.3d 181, 187 (Mo. App. W.D. 2012) (citation omitted). However, "[i]n general, an insurance policy is a contract to afford protection to an insured and will be interpreted, if reasonably possible, to provide coverage." Shiddell v. Bar Plan Mut., 385 S.W.3d 478, 483 (Mo. App. W.D. 2012) (citation omitted). Here, the Ford owner's policy explicitly provides liability coverage. As noted above, the relevant portion of the Ford policy states:

We will pay compensatory damages an insured person is legally liable for because of bodily injury and property damage due to the use of a car or utility trailer.

Later, in the definitions part of the policy, "car" is...