Haggard Hauling & Rigging Co., Inc. v. Stonewall Ins. Co., WD

Citation852 S.W.2d 396
Decision Date27 April 1993
Docket NumberNo. WD,WD
PartiesHAGGARD HAULING & RIGGING CO., INC., Appellant, v. STONEWALL INSURANCE COMPANY, Respondent. 45938.
CourtCourt of Appeal of Missouri (US)

Norman E. Beal, Kansas City, for appellant.

Gary A. Schafersman, Niewald, Waldeck & Brown, Kansas City, for respondent.

Before BRECKENRIDGE, P.J., and SHANGLER and KENNEDY, JJ.

BRECKENRIDGE, Presiding Judge.

Haggard Hauling & Rigging Co., Inc. appeals from the trial court's order granting Stonewall Insurance Company's motion for summary judgment.

Haggard raises five points on appeal alleging that the trial court erred in granting Stonewall summary judgment because: (1) genuine issues of material fact existed; (2) the policy provided coverage for Haggard's defense of a lawsuit and the amount Haggard paid to settle the lawsuit; (3) Endorsement No. 3 (the Following Form Endorsement) did not preclude coverage by converting the policy to a pure excess policy; (4) the policy included coverage for loss of business revenues in its coverage for loss of use; and (5) the policy was ambiguous and should have been construed in the light most favorable to the insured.

The judgment is affirmed.

Haggard purchased an umbrella liability insurance policy from Stonewall which covered occurrences during the period of March 1, 1984 to March 1, 1985. Haggard was required to maintain certain underlying insurance in accordance with the Schedule of Underlying Insurance. Haggard maintained a cargo liability policy and a general liability policy during the term of the Stonewall policy.

On or about August 14, 1984, Haggard was moving a five-color printing press owned by Harmony Printing Company and damaged it. Harmony demanded remuneration for damage to the printing press and for business Harmony lost due to its inability to use the damaged press. Haggard's cargo liability carrier provided coverage for the physical damage to the press and settled that portion of Harmony's claim. Although the cargo liability policy covered actual physical damage to the press, it did not cover loss of business revenues. Harmony filed suit against Haggard to recover for the loss of business revenues. Harmony sought to recover $93,081. Haggard's general liability insurance policy did not cover Harmony's loss of business revenues because such policy only covered property damage that occurred "on premises owned or rented" by Haggard.

Haggard tendered the defense of the lawsuit to Stonewall and requested that Stonewall indemnify Haggard under the terms of the umbrella liability policy. In a letter dated September 3, 1987, Stonewall declined defense of the action. Pursuant to Stonewall's decision, Haggard retained defense counsel and a settlement was negotiated. Haggard filed this case to recover the amount it was forced to expend in the defense and settlement of the Harmony lawsuit.

Stonewall filed its motion for summary judgment. Haggard did not file a cross-motion for summary judgment. The trial court granted Stonewall's motion for summary judgment and Haggard appeals from that order.

When reviewing the trial court's ruling on a motion for summary judgment, an appellate court must examine the record in the light most favorable to the non-moving party and grant that party all reasonable inferences which may be drawn from the evidence. Maryland Cas. Co. v. Martinez, 812 S.W.2d 876, 879 (Mo.App.1991). This court must affirm the trial court's judgment if it can be sustained under any theory. Ernst v. Ford Motor Co., 813 S.W.2d 910, 915 (Mo.App.1991). Summary judgment is appropriate when the prevailing party has shown that he or she is entitled to judgment as a matter of law and there is no genuine dispute of the material facts required to support that right to judgment. Martinez, 812 S.W.2d at 879. Summary judgment is appropriate when an insurance policy is clear and unambiguous. Id. at 880. The moving party bears the burden of proving a right to judgment as a matter of law and the absence of a genuine dispute about the material facts supporting such judgment. Rule 74.04(c). It is no longer necessary for the moving party to show entitlement to summary judgment by unassailable proof. Herron v. Whiteside, 782 S.W.2d 414, 415 (Mo.App.1989).

Although Haggard sets forth five Points Relied On prior to the argument portion of its brief, Haggard does not organize its argument accordingly. In its argument, Haggard raises one Point Relied On and four subpoints identified with letters. In response to Haggard's arguments, Stonewall devised its own Points Relied On system. To avoid confusion, this court will address the arguments without identifying them according to Points Relied On.

The trial court sustained Stonewall's motion for summary judgment, finding that Endorsement No. 3 of the umbrella insurance policy precluded coverage for Haggard's loss. Haggard argues that the court erred because the plain language of the policy provided coverage and a right to defense for Haggard and Endorsement No. 3 does not negate coverage. Endorsement No. 3 reads as follows:

In consideration of the premium charged, it is agreed that unless coverage is provided by the underlying insurance at the full limits of liability as shown on the schedule of underlying insurance and not otherwise specifically excluded by endorsement hereon, this policy shall not apply to:

2. Property damage, as defined in insuring agreement II. C.

3. Liability assumed by the insured under any contract or agreement.

The two provisions Haggard relies on as providing coverage for its loss are the "Conditions" section and the Defense Coverage Endorsement. The applicable portion of the "Conditions" section of the policy reads as follows:

5. Limits of Liability

A. The company shall only be liable for ultimate net loss in excess of either:

(i) the applicable limits of liability of the policies of underlying insurance set forth in the Schedule of Underlying Insurance; or

(ii) as respects an occurrence not covered by such underlying insurance, but covered under this policy; or where an occurrence covered by such underlying insurance but in recoverable amounts less than the self insured retention set forth in Item 3(c) of the Declarations, the amount of ultimate net loss set forth in Item 3(c) of the Declarations as "Self Insured Retention."

(emphasis added).

The pertinent part of the Defense Coverage Endorsement reads as follows:

It is agreed that the policy to which this endorsement is attached is amended to include the following additional insuring agreement:

Defense, settlement, supplementary payments.

As respects occurrences covered under this policy, but not covered under the underlying insurance or under any other collectible insurance, the company shall:

(a) Defend in his name and behalf any suit against the insured alleging liability insured under the provisions of this policy and seeking damages on account thereof: Even if such suit is groundless, false or fraudulent; but the company shall have the right to make such investigation and negotiation and settlement of any claim or suit as may be deemed expedient by the company....

(emphasis added).

When construing an insurance policy, the court must apply general contract construction rules because insurance policies are contracts. Herpel v. Farmers Ins. Co., Inc., 795 S.W.2d 508, 510 (Mo.App.1990). A policy is only subject to being construed under contractual rules of construction if it is ambiguous. American Family Mut. Ins. Co. v. Ward, 789 S.W.2d 791, 795 (Mo. banc 1990). Whether or not the language of an insurance contract is ambiguous is a question of law. West v. Jacobs, 790 S.W.2d 475, 480 (Mo.App.1990). When a contract is unambiguous, it is the trial court's responsibility to state its meaning. Id. An insurance policy that is unambiguous will be enforced as written and does not require application of the rules of construction. Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208, 210 (Mo. banc 1992). An ambiguity exists when there is duplicity, indistinctness or uncertainty in the meaning of the language used in the policy. Id. If the language of the policy is ambiguous and reasonably open to different constructions then the language will be interpreted in the manner that would ordinarily be understood by the lay person who bought and paid for the policy. Id. Ambiguous provisions of an insurance policy will be construed against the insurer. Id.

Haggard first asserts that the policy is not ambiguous. It argues that the policy provides primary coverage for the loss claimed by Harmony and that Endorsement No. 3 does not convert the policy to an excess policy. 1 Haggard interprets the "Conditions" section of the policy and the Defense Coverage Endorsement as providing coverage for occurrences not covered by the underlying insurance. Haggard relies on the phrase "as respects occurrences covered under this policy, but not covered under the underlying insurance" as an expression of intent to provide coverage for occurrences not covered by the underlying insurance. Haggard claims that the plain meaning of this language is that the policy contemplates primary coverage for occurrences rather than only providing excess coverage.

Words or phrases in an insurance contract must be interpreted by the court in the context of the policy as a whole and are not to be considered in isolation. First Nat. Bank v. Farmers New World Life Ins. Co., 455 S.W.2d 517, 523 (Mo.App.1970). Although the language Haggard relies on supports its argument when viewed in isolation, if read in context, the meaning is otherwise. The "Conditions" section and the Defense Coverage Endorsement both include language stating that coverage is only afforded if it is provided under the Stonewall policy. Neither section is intended to bestow primary coverage not otherwise provided for in the policy.

Haggard then argues that Endorsement No. 3 only requires it to maintain the underlying...

To continue reading

Request your trial
31 cases
  • Munroe v. Cont'l W. Ins. Co.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • November 7, 2013
    ...51, 84 L.Ed. 20 (1939). The form does not say it must be returned in order to have UIM coverage. See Haggard Hauling & Rigging Co. v. Stonewall Ins. Co., 852 S.W.2d 396, 401 (Mo.App.1993) (“The rule requiring that an insurance policy be construed favorably to an insured in cases of ambiguit......
  • Transit Cas. Co. in Receivership v. Certain Underwriters at Lloyd's of London
    • United States
    • Missouri Court of Appeals
    • January 20, 1998
    ...that its language is reasonably susceptible to different meanings that a court must construe the agreement. Haggard Hauling v. Stonewall Ins., 852 S.W.2d 396, 399 (Mo.App. W.D.1993). In construing a reinsurance treaty, the words used therein will be given their ordinary meaning, unless it p......
  • Munroe v. Cont'l W. Ins. Co.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • November 7, 2013
    ...308 U.S. 39, 51 (1939). The form does not say it must be returned in order to have UIM coverage. See Haggard Hauling & Rigging Co. v. Stonewall Ins. Co., 852 S.W.2d 396, 401 (Mo. App. 1993) ("The rule requiring that an insurance policy be construed favorably to an insured in cases of ambigu......
  • Auto Owners Ins. v. Sugar Creek Mem. Post
    • United States
    • Missouri Court of Appeals
    • September 30, 2003
    ...Id. Whether or not the language of an insurance contract is ambiguous is a question of law. Haggard Hauling & Rigging Co. v. Stonewall Ins. Co., 852 S.W.2d 396, 399 (Mo.App. W.D.1993). If we find no ambiguity, we will enforce the insurance policy according to its terms. Melton, 75 S.W.3d at......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT