Geneser v. State Farm Mut. Auto. Ins. Co., WD

• Decision Date: 17 October 1989
• Docket Number: No. WD,WD
• Citation: 787 S.W.2d 288
• Parties: Lois Lorraine GENESER, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent. 41601.
• Court: Missouri Court of Appeals

Page 288

787 S.W.2d 288

Lois Lorraine GENESER, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent.

No. WD 41601.

Missouri Court of Appeals,

Western District.

Oct. 17, 1989.

Motion for Rehearing and/or Transfer to Supreme Court

Denied Nov. 28, 1990.

Application to Transfer Denied May 15, 1990.

S.W. Longan, III, Patricia L. Lear-Johnson, Kansas City, for appellant.

Patrick C. Cena; Phillip B. Grubaugh, Kansas City, for respondent.

Before CLARK, P.J., and LOWENSTEIN and BERREY, JJ.

LOWENSTEIN, Judge.

The single issue in this case is will the courts override policy language and declare public policy to allow the "stacking" of multiple insurance policies which contain optional underinsured motorist coverage clauses which contain "other insurance" provisions. Basically, a motorist can purchase underinsurance coverage from his insurance company to pay for losses incurred because another negligent driver's insurance is insufficient to cover this or her actual loss. The trial court dismissed Geneser's petition for declaratory judgment, and disallowed stacking.

Harry Geneser was killed in an accident while driving a vehicle owned by his son and insured by American Family Mutual Insurance Company. The American Family policy had an underinsured provision for $100,000 in coverage, with an "other insurance" clause relating to the existence of similar under-insurance coverage in other applicable policies. Harry, and his widow Lorraine, had a policy with the respondent, with $100,000 in underinsurance coverage on their car. The respondent's policy had an underinsured clause similar to the American Family policy which made it excess to another policy and bound State Farm to pay on an amount that exceeded the primary coverage of the other party. ¹

The tortfeasor who was insured for the statutory minimum of $25,000, confessed judgment for $225,000. American Family paid the $100,000 limit on the underinsured coverage in its policy. State Farm relied on the plain language of its "Other Insurance" provision to deny payment since its policy did not exceed the coverage and payment from American Family.

Section 379.203, RSMo 1986 requires liability carriers to put a provision in their contracts to pay $25,000 if the person who injured the insured does not have insurance. See § 303.030. In Cameron Mutual Ins. Co. v. Madden, 533 S.W.2d 538 (Mo. banc 1976), our supreme court held the public policy as declared in § 379.203 mandates where an insured has separate policies containing uninsured motorist clauses, effect shall be given to both coverages without reduction and limited to recovery of damages suffered. Id. at 544-45. In Hines v. Government Employees Ins. Co., 656 S.W.2d 262 (Mo. banc 1983), the court explained the reasons behind the allowance of stacking in case of several policies containing uninsurance coverage but with language making that policy excess or containing other insurance exclusions.

Cameron Mutual implies from § 379.203 a limitation on the freedom of contract between an insurance company and its customers. The General Assembly, of course, is free to place restrictions on the power to contract.

Cameron Mutual was based on public policy implied from the governing statute. We made an exception to the normal rule of freedom to contract because of this public policy. The implied restriction, however, should not go further than is strictly necessary to serve the statutory policy.

Id. at 265.

What the appellant asserts is the same declaration of public policy overriding policy language and allowing stacking in uninsured cases, Bergtholdt v. Farmers Insurance Co., Inc., 691 S.W.2d 357, 359 (Mo.App.1985), be applied to underinsured cases. She acknowledges the legislature has not mandated underinsured motorist coverage in Missouri policies, but says the same public policy consideration applies to underinsured cases. She says both uninsured and underinsured insurance are designed to protect individuals from financially irresponsible motorists.

Reluctantly, the appellant's argument is rejected. The rationale behind the language in Hines, supra, controls. The general assembly makes the insurer provide and the insured pay for a minimum $25,000 worth of insurance in case negligent fellow motorists don't have insurance. If a motorist wants more coverage to protect against underinsured tortfeasors that coverage is optional. If that extra underinsured coverage contains "other" insurance or "excess" exclusionary language there is no brooding state public policy to strike down the exclusions and permit stacking. Despite the appellant's citation to Cook v. Pedigo, 714 S.W.2d 949 (Mo.App.1986), that case does not benefit her argument. In Cook, the sole question was whether a tortfeasor who carried less than the $25,000 statutory minimum for liability insurance was an "uninsured" motorist, § 303.030 supra. The tortfeasor had only a $20,000 policy, so the injured plaintiff attempted to collect under his policy under the uninsured motorist provision. The court rejected this argument using the following language which Geneser interprets as authority to exhibit a public policy to allow stacking in underinsured factual situations, the same as in uninsured situations.

Section 370.203.1 requires that all automobile liability insurance policies issued in Missouri must provide uninsured motorist protection in an amount "not less than" the minimum liability...