Floyd-Tunnell v. Shelter Mut. Ins. Co.

• Decision Date: 29 July 2014
• Docket Number: No. SC 93904.,SC 93904.
• Parties: Rebecca FLOYD–TUNNELL, et al., Appellants, v. SHELTER MUTUAL INSURANCE COMPANY, Respondent.
• Court: Missouri Supreme Court

439 S.W.3d 215

Rebecca FLOYD–TUNNELL, et al., Appellants

v.SHELTER MUTUAL INSURANCE COMPANY, Respondent.

No. SC 93904.

Supreme Court of Missouri, En Banc.

July 29, 2014.

Rehearing Denied Sept. 30, 2014.

James E. Corbett, David T. Tunnell and Daniel P. Molloy, Corbett Law Firm PC, Springfield, for Floyd and Floyd–Tunnell,

William Clayton Crawford and James P. Maloney, Foland, Wickens, Eisfelder, Roper & Hofer PC, Kansas City, for Shelter.

Opinion

MARY R. RUSSELL, Chief Justice.

The widow of a man killed in an automobile accident sued the automobile liability insurance carrier seeking uninsured motorist (“UM”) coverage for her husband's wrongful death. The trial court held that the insurer's liability was limited by an “owned-vehicle” partial exclusion in the couple's policies, which limited coverage when an insured was injured while occupying a vehicle owned by the insured but not covered by the policy. The widow appealed, arguing that she was entitled to coverage for the damages she sustained as a result of her husband's death and that the partial exclusion did not apply to her because she was not in the car when the accident occurred. Alternatively, she argues the partial exclusion is ambiguous because it limits coverage granted elsewhere in the policies.

This Court affirms. Although the widow is an insured, she is not entitled to UM coverage because she did not sustain bodily injuries. The insurer provided coverage for the decedent's wrongful death, and the partial exclusion unambiguously limits this coverage.

I. Factual and Procedural Background

Doris Floyd's husband, Jerry, was killed in an automobile accident with an uninsured motorist.¹ At the time of the accident, Jerry and Doris were the named insureds on three automobile liability insurance policies issued by Shelter Mutual Insurance Company for three vehicles they owned. One policy covered the car Jerry was driving when the accident occurred, and the other two policies covered other cars owned by the Floyds. Each policy's declarations page provided that UM coverage was limited to $100,000 per person, but the policies also included an “owned-vehicle” partial exclusion that further limited coverage if the insured was injured while occupying a vehicle owned by the insured but not covered by the policy. The partial exclusion limited coverage to $25,000, the minimum amount required by Missouri's UM statute, section 379.203.²

Doris sued Shelter seeking $100,000 of UM coverage under each policy for a total of $300,000.³ Shelter paid $150,000: $100,000 under the policy on the vehicle Jerry was driving when the accident occurred, and $25,000 under each of the other two policies. The parties agreed that Shelter had paid the full amount of UM coverage available under the first policy, but Doris argued that Shelter owed $75,000 under each of the other two policies.

Both parties moved for summary judgment. Doris claimed that she was entitled to UM coverage for the damages she sustained from her husband's wrongful death, and the partial exclusion did not apply to her because she was not in the car when the accident occurred. In the alternative, Doris argued that the partial exclusion rendered the policies ambiguous because it limited coverage granted elsewhere in each policy. Shelter argued that the partial exclusion applied to Doris's claim and unambiguously limited its liability to $25,000 under each policy. The trial court ruled that the partial exclusion applied and was unambiguous and granted Shelter's motion for summary judgment. Doris appeals.⁴

II. Standard of Review

Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 380 (Mo. banc 1993). Because the propriety of summary judgment is an issue of law, this Court's review is de novo. Id. at 376. The interpretation of an insurance policy and the determination whether coverage and exclusion provisions are ambiguous are also questions of law that this Court reviews de novo. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010).

III. Analysis

The issue in this case is whether the partial exclusion limits Shelter's liability under two of the policies to $25,000 per policy. The general rule in interpreting an insurance policy is to give the language its plain meaning. Allen v. Cont'l W. Ins. Co., 436 S.W.3d 548, 554 (Mo. banc 2014). The entire policy and not just isolated provisions must be considered. Id. If the policy's language is unambiguous, it must be enforced as written. Rodriguez v. Gen. Acc. Ins. Co. of Am., 808 S.W.2d 379, 382 (Mo. banc 1991).

A. The Policy Language

The UM coverage provisions in the Floyds' policies are identical and provide, in relevant part:

PART IV—COVERAGE E—UNINSURED MOTOR VEHICLE LIABILITY COVERAGE

The following coverage is provided under this policy only if it is shown in the Declarations and is subject to all conditions, exclusions, and limitations of our liability, stated in this policy.

INSURING AGREEMENT FOR COVERAGE E

If the owner or operator of an uninsured motor vehicle is legally obligated to pay damages, we will pay the uncompensated damages; but this agreement is subject to all conditions, exclusions, and limitations of our liability, stated in this policy.

DEFINITIONS

(4) Bodily injury means:

(a) A physical injury;

(b) A sickness or disease of the body;

(c) The physical pain and physical suffering that directly results from (a) or (b), above; or

(d) A death that directly results from (a) or (b), above.⁵

ADDITIONAL DEFINITIONS USED IN COVERAGE E

In Coverage E:

(1) Damages means money owed to an insured for bodily injuries, sickness, or disease, sustained by that insured and caused, in whole or in part, by the ownership or use of an uninsured motor vehicle.

LIMITS OF OUR LIABILITY UNDER COVERAGE E

The limits of our liability under Coverage E are stated in the Declarations and are subject to the following limitations:

...

(2) The limit shown in the Declarations for “each person” is the limit of our liability for all uncompensated damages of one insured. This limit applies to all claims made by others resulting from that insured's bodily injury, whether direct or derivative in nature.

PARTIAL EXCLUSION FROM COVERAGE E

In claims involving the situations listed below, our limit of liability under Coverage E is the minimum dollar amount required by the uninsured motorist insurance law and financial responsibility law of the state of Missouri:

...

(3) If any part of the damages are sustained while the insured is occupying a motor vehicle owned by any insured, the spouse of any insured, or a resident of any insured's household; unless it is the described auto.

B. Discussion

The policies' insuring agreement for UM coverage states that Shelter will provide coverage if an uninsured motorist is legally obligated to pay “damages.” The term “damages” is defined as “money owed to an insured for bodily injuries, sickness or disease, sustained by that insured” and caused by an uninsured motorist. The policies define “bodily injury” to include physical injury or a death that directly results from a physical injury. Applying these definitions to the insuring agreement, the policies' plain language provides UM coverage for money owed to an insured for bodily injury or death sustained by the insured and caused by an uninsured motorist.

The amount of UM coverage is subject to the limitations and exclusions stated in the policies. Each policy limits Shelter's liability for UM coverage to $100,000 per person, but the policies contain an “owned-vehicle” partial exclusion that further limits Shelter's liability to $25,000. The “owned-vehicle” partial exclusion applies when any part of the “damages” (i.e., the money owed to an insured for bodily injury sustained by that insured) are sustained while the insured is occupying a vehicle owned by the insured but not covered by the policy.

Doris' first argument raises the question of whether the term “the insured” in these provisions refers to Jerry or Doris. Shelter acknowledged that the policies covered Jerry for his wrongful death, but there was limited coverage under two of the policies because the accident occurred while Jerry was occupying a car he owned, but it was not the vehicle covered by those policies. Doris concedes that, if “the insured” refers to Jerry, the partial exclusion limits coverage under the other two policies. She claims, however, that she is entitled to UM coverage and that Shelter is liable for the policies' full UM coverage limits because the partial exclusion does not apply to her. Doris notes that damages for wrongful death do not belong to the decedent or the decedent's estate but rather to the class of persons authorized by section 537.080 to bring the wrongful death claim. Lawrence v. Beverly Manor, 273 S.W.3d 525, 527 (Mo. banc 2009). As Jerry's widow, Doris sustained damages as result of his wrongful death. Doris contends that the policies provide coverage to her for these damages, and because she was not in the car when the accident occurred, the partial exclusion does not limit this coverage.

This Court starts with the language of the policies to determine who qualifies as an insured and whether that person is entitled to coverage. See Steele v. Shelter Mut. Ins. Co., 400 S.W.3d 295, 297 (Mo. banc 2013). It is undisputed that both Jerry and Doris qualified as insureds because they are named as insureds on each policy's declarations page. The UM coverage provisions also include a severability clause, which provides that the UM coverage applies separately to each insured. This type of clause has been construed to mean that, when applying the coverage to any particular insured, the term “the insured” is deemed to refer only to the insured who is claiming coverage under the policy. Baker v. DePew, 860 S.W.2d 318, 320 (Mo. banc 1993). “One simple method of visibly demonstrating the impact of...