Famuliner v. Farmers Ins. Co., Inc.

Decision Date21 July 1981
Docket NumberNo. WD,WD
Citation619 S.W.2d 894
PartiesThomas H. FAMULINER, III, Plaintiff-Appellant, v. FARMERS INSURANCE COMPANY, INC., Defendant-Respondent. 31634.
CourtMissouri Court of Appeals

Joseph A. Hamilton, Pleasant Hill, for plaintiff-appellant.

Richard H. Heilbron, Kansas City, for defendant-respondent.

Before PRITCHARD, P. J., and TURNAGE and CLARK, JJ.

CLARK, Judge.

Thomas H. Famuliner, III appeals from summary judgment entered in favor of Farmers Insurance Company on Famuliner's action to recover uninsured motorist benefits. The appeal poses the question of whether, under § 379.203, RSMo 1978, 1 the insurance contract may limit the potential scope of uninsured motorist coverage by a restrictive definition of persons insured under the policy. In this limited context, the question is one of first impression in Missouri.

Famuliner, a resident of the same household with his mother and father, was the owner of a motorcycle and an automobile, each insured by Farmers. Famuliner's parents each owned an automobile separately insured, also by Farmers. On May 18, 1977, Famuliner was operating his motorcycle when he collided with another motorcycle and sustained injuries. Neither the second motorcycle nor its operator was covered by liability insurance. For purposes here, it is assumed that the second motorcycle was an uninsured motor vehicle, as statutorily defined, and that Famuliner was entitled to recover damages from the operator.

Farmers accepted and paid Famuliner's claim pursuant to the uninsured motorist coverage of two policies, one on his automobile and one on the motorcycle, and paid Famuliner a total amount of $20,000. Famuliner, however, also made claim pursuant to the uninsured motorist coverages of his parents' policies contending that by the policy language, coverage extended to Famuliner because he was a relative of each named insured and was resident in the same household.

Under Famuliner's interpretation of the policies, he was entitled to "stack" four policy amounts and recover a total of $40,000. Although it is reasonably apparent from the policy language that Famuliner was not insured under the policies of his mother and father when driving a motor vehicle not insured under either policy, it is his argument that a limitation as to omnibus coverage for uninsured motorist protection is void because contrary to public policy expressed in § 379.203.

Paraphrased, § 379.203 provides that no automobile liability insurance shall be issued unless coverage is provided for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. It is undisputed here that the Farmers' policies at issue did provide uninsured motorist protection, the question being whether Famuliner was an insured entitled to that protection under his parents' policies which did not expressly name him as an insured.

The relevant policy language is that which defines the word "insured" and that which defines the term "relative." Part II of the policy, the section dealing with uninsured motorist coverage, states as follows:

"Insured means (1) the named insured or a relative * * * "

Part II does not define the term "relative" but recites that certain definitions in Part I, including the definition of "Relative," apply to Part II. The Part I definition states:

"Relative means a relative of the named insured who is a resident of the same household, provided neither such relative nor his spouse owns an automobile."

While it is undisputed that Famuliner otherwise qualified as an additional insured under his parents' policies because he was their son and resided in their household, his ownership of his own car and motorcycle disqualified him by the plain language in the policy. The issue therefore posed is whether § 379.203 requires, as a matter of public policy, that resident family members be provided uninsured motorist coverage on vehicles other than those primarily insured irrespective of whether such family members own their own cars with or without their own insurance protection. We conclude that the statute imposes no such requirement.

The concept of mandatory uninsured motorist coverage comprehends that those who purchase automobile liability insurance should be afforded minimum protection as required by the financial responsibility law regardless of whether the offending vehicle is driven by an insured or uninsured operator. Otto v. Farmers Insurance Co., 558 S.W.2d 713 (Mo.App.1977); Webb v. State Farm Mutual Automobile Insurance Co., 479 S.W.2d 148 (Mo.App.1972). In situations of multiple insured vehicles and insured persons, it is assumed that premiums charged are calculated in accordance with increased exposure and, thus, an insured who suffers damages in an accident with an uninsured motorist is entitled to "stack" all policies under which he is insured and collect the benefit under each. Policy restrictions designed to limit uninsured motorist coverage in this respect are unenforceable because against public policy. Cameron Mutual Insurance Co. v. Madden, 533 S.W.2d 538 (Mo. banc 1976).

While interpretation of mandatory uninsured motorist protection has been liberal, in keeping with the perceived public policy of the statute, Missouri courts have declined to create coverage where none was applicable. Harrison v. MFA Mutual Insurance Co., 607 S.W.2d 137, 147 (Mo. banc 1980) and examples there cited. It remains the rule in this state that parties to an insurance contract are free to place such limitations or restrictions on an insurer's liability as they may agree, provided that the limitation violates neither public policy nor statutory obligation. Douthet v. State Farm Mutual Automobile Insurance Co., 546 S.W.2d 156 (Mo. banc 1977); Steinhaeufel v. Reliance Insurance Companies, 495 S.W.2d 463 (Mo.App.1973); Webb v. State Farm Mutual Automobile Insurance Co., supra at 150.

By the definitions in the subject policies, Farmers' contract undertook to insure, in addition to the named insureds, a limited group of persons. Relatives resident in the same household were provided coverage generally to the same extent as the named insureds, but only if such persons and their spouses had no automobiles of their own. Entitlement of resident relatives to benefits under the Farmers' policy was not limited to uninsured motorist protection alone, but extended to all features of the liability insuring agreements. Conversely, relatives who were themselves motor vehicle owners had no protection under the policy. The obvious instruction of the policy conditions is that vehicle owners, including relatives of the named insured, should look to their own insurance as to events associated with ownership and use of their machine. The limitation which Famuliner contends is an assault upon required uninsured motorist coverage is no more repugnant to public policy than any other insurance contract provision required for identification of those who are insured and entitled to benefits.

Section 379.203 contains no requirement that automobile insurance policies provide uninsured motorist protection to any particular class or group of persons whether they be residents of the same household or family members. The statute does require, however, that all policies of liability insurance must also include uninsured motorist coverage to "persons insured thereunder." There is no violation of the statute unless a policy condition limits uninsured motorist protection as to persons who otherwise qualify as insureds for liability purposes. Famuliner was not an insured under his parents' policies and the policy conditions of which he complains do not offend the mandate of § 379.203. 2

While no Missouri case has considered this question, the issue has been litigated in other states having statutes using the same terminology as § 379.203. The results have been consistent and uniform in reaching the conclusion here expressed.

In Farmers Insurance Company of Washington v. Miller, 87 Wash.2d 70, 549 P.2d 9 (1976), the applicable statute required extension of uninsured motorist protection by policies to "persons insured thereunder," the same language which appears in the Missouri statute. Policy language was identical to that in the subject case. The court held that the public policy expressed in the statute did not mandate any particular scope for the definition of who is an insured in a particular automobile policy and denied the contention that a relative who owned his own car and resided in the policyholder's household was obligatorily included for uninsured motorist protection.

To the same effect was Washington v. Travelers Insurance Co., 92 Mich.App. 151, 284 N.W.2d 754 (1979), in which the court explained that the statutory requirement for mandatory uninsured...

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