Harnden v. Continental Ins. Co., 11883

Decision Date21 January 1981
Docket NumberNo. 11883,11883
PartiesBilly Joe HARNDEN et al., Plaintiffs-Appellants, v. The CONTINENTAL INSURANCE COMPANY et al., Defendants-Respondents.
CourtMissouri Court of Appeals

Edward J. Hershewe, Glades & Hershewe, Joplin, for plaintiffs-appellants.

John R. Martin, Blanchard, Van Fleet, Martin, Robertson & Dermott, Joplin, for defendants-respondents.

FLANIGAN, Judge.

In 1975 plaintiff Billy Joe Harnden, then a minor, was injured while he was underneath a "bush hog" trying to clear its blades which were entangled with barbed wire. The incident took place on a farm owned by defendant Wilson for whom Billy Joe was working. Wilson carried a "Farmowners Policy" with the Continental Insurance Company ("Continental"). Billy Joe and his parents, the latter on their derivative claim, brought a tort action against Wilson. Wilson defaulted and judgment was entered in favor of Billy Joe for $75,000 and in favor of his parents for $10,000.

Later the instant action was filed by plaintiffs Billy Joe and his parents against defendants Continental and Wilson. To the extent of the limits under the Continental policy, the petition sought payment (see § 379.200 RSMo 1969) of the judgment, then final, which plaintiffs had obtained against Wilson in the tort action. Attached as exhibits and incorporated in the petition were the petition in the tort action, the judgment in the tort action, and the insurance policy.

Apparently service was never obtained upon defendant Wilson. After filing its answer and after discovery had been conducted, Continental filed a motion for summary judgment. The motion recited that it was based upon plaintiffs' petition in the instant action, the exhibits attached thereto, plaintiffs' responses to Continental's requests for admissions, and an attached affidavit. The trial court sustained the motion and entered summary judgment in favor of Continental. Plaintiffs appeal.

Plaintiffs' first point is that the trial court erred in basing its ruling upon special exclusion (d) 1 of the policy because exclusion (d) is "clear and unambiguous when the applicable rules of grammar and punctuation are considered, and plaintiff Billy Joe is not excluded by the terms thereof." Plaintiffs' second point is that the trial court erred in basing its ruling upon special exclusion (d) because exclusion (d) "is ambiguous and it is susceptible of at least one reasonable inference that would uphold coverage." The two points will be considered together.

It is the duty of this court to interpret the insurance policy and to enforce it as it is written and not to remake it. This court may not, under the guise of liberal construction, create an ambiguity where none is present. Construction, in the usual sense, may be resorted to only when the policy language, in its ordinary meaning, is indefinite, ambiguous, or equivocal. Kearbey v. Rel. L. Ins. Co. of Webster Groves, 526 S.W.2d 866, 869(1, 2) (Mo.App.1975). "The meaning of the terms of an insurance policy is ordinarily tested by the common understanding and speech of men." Greer v. Zurich Ins. Co., 441 S.W.2d 15, 27(12) (Md.1969).

Of special significance here are two additional principles of contract construction. The first is: "Taking its words in their ordinary and usual meaning, no substantive clause must be allowed to perish by construction, unless insurmountable obstacles stand in the way of any other course." (Emphasis added.) State Mut. Life Assur. Co. of Worcester v. Dischinger, 263 S.W.2d 394, 401 (Mo.1953). See also Mathews v. Modern Woodmen of America, 236 Mo. 326, 139 S.W. 151, 155 (1911). The second is: "In construing legal writings, generally the punctuation is subordinate to the text and the use of a period or other mark is not controlling upon the question of proper construction where such use would result in an unreasonable or absurd construction." Johnson v. Flex-O-Lite Manufacturing Corporation, 314 S.W.2d 75, 84(10) (Mo.1958). 2 See also 17 Am.Jur.2d Contracts § 279, p. 692.

Coverage G of the policy is entitled "Farmers Comprehensive Personal Liability." Under coverage G Continental agreed with the named insured Wilson "to pay ... all sums which (Wilson) shall become legally obligated to pay as damages because of bodily injury ..." Coverage H is entitled "Personal Medical Payments." Under coverage H Continental agreed with the named insured Wilson "to pay all reasonable expenses incurred ... for necessary medical ... services ... for each person who sustains bodily injury by accident ... while on the premises with the permission of (Wilson)." Both coverage G and coverage H are in Section II of the policy.

The record reflects, and the excellent briefs of both sides seem to agree, that Billy Joe was a "farm employee" and was neither a "residence employee" nor an "insured farm employee" as those terms are defined in the policy.

For the purpose of this opinion the opening portion of exclusion (d) "under Coverage G, to bodily injury to any farm employee, arising out of and in the course of his employment by the insured," will be called the first segment. The next portion of exclusion (d) "and under Coverages G and H to any person, including any residence employee or insured farm employee," will be called the second segment. The remaining portion of exclusion (d) will be called the third segment. The third segment contains two subdivisions, (1) and (2), and the third segment is satisfied if either of those subdivisions is satisfied.

It is the position of plaintiffs that the third segment, in addition to applying to the second segment, also applies to, and thus restricts the operation of, the first segment. Plaintiffs say that the first segment does not stand alone and that it comes into play only if the third segment is satisfied.

It is the position of Continental that the third segment applies only to the second segment and does not apply to the first segment. Continental argues that the first segment is complete unto itself and that the first segment eliminates coverage G, under the circumstances here, because Billy Joe was a farm employee and his injury arose out of and in the course of his employment by Wilson.

Plaintiffs concede, at least tacitly, 3 that if Continental's construction of the policy is valid there is no coverage. Continental concedes that if plaintiffs' construction of the policy is valid, there is coverage because Continental admits that the third segment was not satisfied.

The principal authority upon which plaintiffs rely is Grayson v. Aetna Insurance Company, 308 F.Supp. 922 (D.So.Car.1970). In Grayson, although a different insurer was involved, the exclusion was identical to exclusion (d) here. The injury of plaintiff, a farm employee of the insured, arose out of and in the course of his employment. The court held that the exclusion gave rise to a patent ambiguity and that under South Carolina law a construction will not be adopted that defeats recovery if the policy is reasonably susceptible of a meaning that will permit recovery. The court also held that two affidavits afforded "an additional sustaining ground" for granting summary judgment in favor of plaintiff. One of the affidavits was that of an English professor who advanced the same arguments, based on grammar and punctuation, which plaintiffs advance in the instant case. The other affidavit was that of the insured who testified that he bought the policy to protect himself from liability under the very circumstances which gave rise to plaintiff's injury and that he so notified the insurance agent who, by reason of a South Carolina statute, was the agent of the insurer.

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