Kyte v. American Family Mut. Ins. Co., WD 60321.

• Decision Date: 10 December 2002
• Docket Number: No. WD 60321.,WD 60321.
• Citation: 92 S.W.3d 295
• Parties: James G. KYTE, Respondent, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellant.
• Court: Missouri Court of Appeals

92 S.W.3d 295

James G. KYTE, Respondent, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellant.

No. WD 60321.

Missouri Court of Appeals, Western District.

December 10, 2002.

Rodney A. Ames, Kansas City, for appellant.

James T. Thompson, Kansas City, for respondent.

Before LISA WHITE HARDWICK, P.J., NEWTON and HOLLIGER, JJ.

LISA WHITE HARDWICK, Judge.

This case involves the interpretation of an automobile insurance policy which provided $250,000 in underinsured motorist (UIM) coverage to James Kyte. When the insurer, American Family Mutual Insurance Company, paid Kyte $150,000 and refused to pay the full policy limits on a UIM claim, Kyte sued for breach of contract. The circuit court granted summary judgment in Kyte's favor and ordered American Family to pay Kyte an additional $100,000 to cover the policy limit. On appeal, American Family claims Kyte was not entitled to full payment because the UIM policy permitted a set-off for $100,000 in other insurance payments Kyte received. We find the circuit court failed to properly apply the set-off provision and, therefore, reverse and remand.

Factual and Procedural History

The facts underlying this appeal are undisputed. On October 28, 1997, Kyte was injured in an automobile accident for which Jasper Mirabile admitted fault. Mirabile entered into a settlement with Kyte and stipulated to damages of $250,000. Mirabile's liability insurer, General Casualty Company of Wisconsin, agreed to pay Kyte its policy limit of $100,000.

Kyte was insured by American Family at the time of the accident. His policy included an endorsement for UIM coverage up to $250,000. Based on Mirabile's stipulation to $250,000 in damages, Kyte demanded payment of the full UIM policy limit from American Family. American Family paid Kyte $150,000, claiming the UIM endorsement allowed a set-off for the $100,000 he received from General Casualty.

Kyte thereafter amended his settlement with Mirabile by increasing the stipulated damages to $350,000. Kyte again demanded that American Family pay the UIM policy limit. American Family refused, stating it was not obligated to pay any more than the $150,000 it had already paid Kyte.

Kyte sued American Family for breach of contract. The parties filed cross-motions for summary judgment on the sole issue of whether American Family was entitled to a set-off of $100,000 (which Kyte received from General Casualty) against the $250,000 UIM policy limits.

The trial court granted Kyte's motion for summary judgment and denied American Family's motion. The judgment ordered American Family to pay Kyte $100,000. The trial court did not provide findings of fact, conclusions of law, or otherwise state grounds for the judgment. American Family appeals.

Issue on Appeal

At issue here is the interpretation of American Family's automobile insurance policy, which provided up to $250,000 in underinsured motorist coverage to Kyte. The policy's "Underinsured Motorist (UIM) Coverage Endorsement" specified that American Family would "pay under this coverage only after the limits of liability under any bodily injury liability bonds or policies have been exhausted by payments of judgments or settlements." The UIM endorsement further stated the "limits of liability for this coverage will be reduced by ... [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."

Based on the language of the endorsement, American Family contends Kyte's UIM claim is subject to the $250,000 policy limit and that any payment under the policy must be reduced by the $100,000 insurance payment Kyte received from Mirabile (through General Casualty) as the person legally responsible for Kyte's injuries. Applying this $100,000 set-off, Kyte was only entitled to receive the $150,000 American Family paid him on the UIM claim. American Family contends the circuit court erred in granting Kyte summary judgment because it did not properly apply the policy's set-off provision. American Family also contends summary judgment was improper because the UIM coverage cannot be considered "excess" insurance in light of the recent enactment of § 379.204 RSMo (2000).

Kyte responds that two provisions in the endorsement create ambiguity about the set-off and indicate the UIM coverage was in addition to "other insurance" paid. According to Kyte, the policy language: "We will pay under this coverage only after the limits of liability under any bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements[,]" is an excess insurance clause which, when read in conjunction with the UIM limits, can only mean that the American Family policy limits begin after payment by the tortfeasor's liability coverage.

Kyte also contends an ambiguity in the application of the set-off arises as a result of the "Other Insurance" clause in the UIM endorsement, which provided:

OTHER INSURANCE

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.

Kyte argues that the "similar insurance" referred to in the first sentence of this clause would be any insurance written to cover bodily injury, including the coverage afforded by General Casualty. With "similar insurance" in the amount of $100,000 from General Casualty and $250,000 from the American Family policy, Kyte asserts the total available insurance is $350,000 and American Family should be obligated to pay 71% of that amount. Kyte's interpretation of the "Other Insurance" clause would require American Family to pay $250,000 as its "proportion of the total limits of all similar insurance."

Applicable Law and Analysis of Policy Language

On appeal from summary judgment, "[o]ur review is essentially de novo." ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.banc 1993). This case was submitted on stipulated facts and involves the interpretation of an insurance contract, which is purely a question of law. Green v. Federated Mut. Ins. Co., 13 S.W.3d 647, 648 (Mo.App. E.D.1999). Accordingly, we owe no deference to the trial court's determination of whether Kyte was entitled to summary judgment as a matter of law. ITT, 854 S.W.2d at 376.

The primary rule in interpretation of contracts is to determine the intent of the parties and give effect to that intent. City of Harrisonville v. Public Water Supply Dist. 49 S.W.3d 225, 230 (Mo.App. W.D.2001). We read the contract as a whole to ascertain the parties' intentions. Id. at 231. Where such intent is expressed in clear and unambiguous language, we will "not resort to construction" of the contract by examining evidence extrinsic to the contract itself. Id. at 230.

The fact that the parties disagree over the interpretation of terms in an insurance policy does not render the language ambiguous. Sanders v. Wallace, 884 S.W.2d 300, 302 (Mo.App. E.D.1994). An ambiguity arises where there is a duplicity, indistinctness, or uncertainty in the meaning of the words used in an insurance contract....