Kissinger v. Am. Family Mut. Ins. Co.

• Decision Date: 21 August 2018
• Docket Number: WD 80565,C/w WD 80579
• Citation: Kissinger v. Am. Family Mut. Ins. Co., 563 S.W.3d 765 (Mo. App. 2018)
• Parties: Lori KISSINGER, Roger Kitchen and the Estate of Megan Elizabeth Kitchen, Deceased, Appellants-Respondents, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY and American Standard Insurance Company of Wisconsin, Respondents-Appellants.
• Court: Missouri Court of Appeals

563 S.W.3d 765

Lori KISSINGER, Roger Kitchen and the Estate of Megan Elizabeth Kitchen, Deceased, Appellants-Respondents,

v.AMERICAN FAMILY MUTUAL INSURANCE COMPANY and American Standard Insurance Company of Wisconsin, Respondents-Appellants.

WD 80565

C/w WD 80579

Missouri Court of Appeals, Western District.

OPINION FILED: August 21, 2018

Rehearing Denied September 25, 2018

Application for Transfer to Supreme Court Denied September 25, 2018

MODIFIED September 25, 2018

Christopher P. Sweeny, Kansas City, MO, for appellants-respondents.

John E. Franke and Matthew McKain Clifford, Kansas City, MO, for respondents-appellants.

Before Division Four: Karen King Mitchell, Chief Judge, Presiding, Cynthia L. Martin, Judge and Jeff Harris, Special Judge

Cynthia L. Martin, Judge

Roger Kitchen ("Kitchen") appeals from the trial court's declaratory judgment finding that under Illinois law, the underinsured motorist and medical expense coverages in his insurance policies do not stack and allow the underinsured motorist coverage to be reduced by the full amount of the liability payment by a tortfeasor's insurer. American Family Mutual Insurance Company ("American Family") and American Standard Insurance Company of Wisconsin ("American Standard"), each of whom are a member of the American Family Insurance Group Madison, WI (collectively "the Insurers"), have filed a cross appeal from the same declaratory judgment, challenging the trial court's findings that under Missouri law, the underinsured motorist and medical expense coverages in Lori Kissinger's ("Kissinger") insurance policies do stack and do not allow for a reduction by the amount of the liability payment by a tortfeasor's insurer. We affirm the judgment in favor of the Insurers and against Kitchen. We affirm in part, and reverse and modify in part, the judgment in favor of Kissinger and against the Insurers.

Factual and Procedural History

Kitchen and Kissinger (collectively "Plaintiffs"), who are divorced, are the natural parents of Megan Kitchen ("Megan").¹ On December 12, 2008, Megan suffered fatal injuries in a car accident while riding as a passenger in a vehicle operated by Chad Roberts ("Roberts") and owned by Roberts's parents. The vehicle Roberts was driving at the time of the accident was covered by an automobile insurance policy issued by American Family ("Roberts's policy") that provided $25,000 liability coverage and $2,000 in medical expense coverage. In December 2009, American Family paid the liability coverage of $25,000 and $2,000 medical expense coverage under Roberts's policy into court, and the court divided the policy proceeds equally between Kitchen and Kissinger. In addition to the liability and medical expense coverage provided by Roberts's policy, both Kitchen and Kissinger owned automobile insurance policies at the time of the accident that included underinsured motorist ("UIM") coverage and medical expense coverage.

Kitchen's Automobile Insurance Policies

At the time of the accident, Kitchen resided in Illinois and held four insurance policies issued by American Family and American Standard, as members of the American Family Insurance Group Madison, WI. Kitchen had two American Family automobile insurance policies ("Kitchen's American Family policy 1" and "Kitchen's American Family policy 2," and collectively "Kitchen's American Family policies"), one American Standard motorcycle insurance policy ("Kitchen's American Standard motorcycle policy"), and one American Standard automobile insurance policy ("Kitchen's American Standard automobile policy") (collectively "Kitchen's policies"). All of Kitchen's policies were issued in Illinois. Kitchen's policies each provide: "We will insure you for the coverages and the limits of liability as shown in the declarations of this policy." In the general provisions portion, each of Kitchen's policies includes an anti-stacking provision which provides: "Two or More Cars Insured : The total limit of our liability under all policies issued to you by us shall not exceed the highest limit of liability under any one policy."²

Each of Kitchen's policies includes a UIM coverage endorsement using a policy form dated "7/91." Kitchen's American Family policy 1 provides UIM coverage in the amount of $100,000 per person and $300,000 per accident; Kitchen's American Family policy 2 provides UIM coverage in the amount of $50,000 per person and $100,000 per accident; Kitchen's American Standard motorcycle policy provides UIM coverage in the amount of $25,000 per person and $50,000 per accident; and Kitchen's American Standard automobile policy provides UIM coverage in the amount of $50,000 per person and $100,000 per accident. The UIM coverage endorsement to each of Kitchen's policies is identical, with each providing:

We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle . The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the underinsured motor vehicle .

It is uncontested that Megan is an "insured person" as that term is used in the UIM coverage endorsement in Kitchen's policies.

The UIM coverage endorsement to each of Kitchen's policies contains a limits of liability provision which includes a reduction clause:

The limits of liability of this coverage as shown in the declarations apply, subject to the following:

1. The limit for each person is the maximum for all damages sustained by all persons as the result of bodily injury to one person in any one accident.

....

We will pay no more than these maximums no matter how many vehicles are described in the declarations, insured persons , claims, claimants, or policies or vehicles are involved in the accident.

The limits of liability of this coverage will be reduced by:

1. A payment made or amount payable by or on behalf of any person or organization which may be legally liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle .

....

The UIM coverage endorsement to each of Kitchen's policies also contains an other insurance provision that states:

If there is other similar insurance on a loss covered by this endorsement, we will pay our share according to this policy's proportion of the total limits of all similar insurance. But, any insurance provided under this endorsement for an insured person while occupying a vehicle you do not own is excess over any other similar insurance.

In addition to providing UIM coverage, Kitchen's American Family policies and Kitchen's American Standard automobile policy provide medical expense coverage. Kitchen's American Family policy 1 provides medical expense coverage in the amount of $10,000 per person; Kitchen's American Family policy 2 provides medical expense coverage in the amount of $5,000 per person; and Kitchen's American Standard automobile policy provides medical expense coverage in the amount of $10,000 per person.³ The medical expense coverage provisions in Kitchen's American Family policies and Kitchen's American Standard automobile policy are identical, with each providing that "We will pay reasonable medical expenses for appropriate and necessary medical and funeral services performed within one year of the accident because of an accident related bodily injury to an insured person ." The medical expense coverage provision in Kitchen's American Family policies and Kitchen's American Standard automobile policy contains a limits of liability provision with a reduction clause:

Regardless of the number of vehicles described in the declarations, insured persons , claims or policies, or vehicles involved in the accident, we will pay no more than the limit of liability shown for this coverage in the declarations for each person injured in any one accident.

....

Any amount paid or payable for medical expenses under the ... Underinsured Motorists coverages of this policy shall be deducted from the limits of liability under this Part.

Finally, the medical expense coverage provision in Kitchen's American Family policies and Kitchen's American Standard automobile policy contains an other insurance provision that states:

If there is other auto medical expense insurance for a loss covered by this Part, we will pay our share according to this policy's proportion of the total of all medical expense limits....

Any insurance provided under this Part for an insured person as a pedestrian or while occupying a vehicle you do not own is excess over any other auto medical expense insurance.

Kissinger's Automobile Insurance Policies

At the time of the accident, Kissinger resided in Missouri and owned two American Family automobile insurance policies (collectively "Kissinger's policies"). Both of Kissinger's policies were issued in Missouri. Kissinger's policies provide, "We will insure you for the coverages and the limits of liability as shown in the declarations of this policy." In the general provisions, Kissinger's policies include the following anti-stacking language: "Two or More Cars Insured. The total limit of our liability under all policies issued to you by us shall not exceed the highest limit of liability under any one policy." Kissinger's policies each include a UIM coverage endorsement and each provide medical expense coverage.

The declarations indicate that each of Kissinger's policies provide UIM coverage in the amount of $100,000 per person and $300,000 per accident. The UIM coverage endorsement to each of Kissinger's policies appears on a policy form dated "12/04,"⁴ and provides:

We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle . The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the underinsured motor vehicle .

....

We will pay under this coverage

...