Manner v. Nicholas Brian Schiermeier, Con-Tech Foundations, LLC

• Decision Date: 08 January 2013
• Docket Number: No. SC 92408.,SC 92408.
• Citation: 393 S.W.3d 58
• Parties: Nathaniel James MANNER, Appellant, v. Nicholas Brian SCHIERMEIER, Con–Tech Foundations, LLC, Helmet City, Inc., and Jafrum International, Inc., Defendants, American Family Mutual Insurance Company, and American Standard Insurance Company, Respondents.
• Court: Missouri Supreme Court

393 S.W.3d 58

Nathaniel James MANNER, Appellant,

v.Nicholas Brian SCHIERMEIER, Con–Tech Foundations, LLC, Helmet City, Inc., and Jafrum International, Inc., Defendants,American Family Mutual Insurance Company, and American Standard Insurance Company, Respondents.

No. SC 92408.

Supreme Court of Missouri,

En Banc.

Jan. 8, 2013.

Gretchen Garrison, Maurice B. Graham, Morry S. Cole, Gray, Ritter & Graham PC, St. Louis, for Appellant.

Robert J. Wulff and Mary Anne Lindsey, Evans & Dixon LLC, St. Louis, for Respondents.

LAURA DENVIR STITH, Judge.

Nathaniel Manner appeals the trial court's grant of summary judgment to American Family Mutual Insurance Company and American Standard Insurance Company (the insurers) on Nathaniel's ¹ claim that he is entitled to $400,000 in underinsured motorist coverage under the four policies he holds with those insurers. He alleges that the trial court erred in holding that the policies' owned-vehicle exclusions unambiguously applied to the Yamaha motorcycle that he was riding at the time of the accident. This Court agrees. The insurers chose not to define the term “owned” in the policies. The burden was on the insurers to prove that the owned-vehicle exclusion applied, which they failed to do. This Court rejects the insurers' suggestion that the facts that Nathaniel had an insurable interest and possession of the motorcycle unambiguously showed he “owned” the vehicle as that term is used in the policy. Here, Nathaniel's uncle retained title and still was receiving payments from Nathaniel at the time of the accident. Any ambiguity in the meaning of “owned” vehicle must be construed against the insurer.

Because the insurers fail to show that the owned-vehicle exclusion applies, the question becomes whether Nathaniel may stack the underinsured motorist coverages provided in each of the four policies in determining whether the tortfeasor was underinsured and in determining the amount of underinsured motorist coverage to which he is entitled. This Court finds that the “other insurance” provisions of the four policies permit him to do so. Finally, because his unrecovered damages exceed the total liability limits of the stacked policies, the insurers are not entitled to offset the amount recovered from other tortfeasors against those liability limits. The judgment is reversed, and the case is remanded.

I. STATEMENT OF FACTS

On September 25, 2004, Nathaniel, then 23 years old, suffered extensive bodily injury while riding a Yamaha motorcycle when it was hit by a vehicle driven by Nicholas Schiermeier (the “tortfeasor”). Nathaniel sued the tortfeasor, asserting the latter negligently caused the collision. The tortfeasor's insurance company paid its $100,000 limit of liability to Nathaniel.

The insurer and Nathaniel have agreed for purposes of this suit that the value of his claim for damages is $1.5 million. Nathaniel's $100,000 recovery from the tortfeasor, therefore, left him with $1.4 million in unpaid damages. He sought additional recovery for his injuries under the $100,000 underinsured motorist coverage endorsement of the American Family policy he had purchased for the Yamaha motorcycle and under the $100,000 underinsured motorist coverage endorsements of each of the additional American Family insurance policies he had purchased for his two trucks—a Ford Ranger and a Ford F150. He also sought recovery as an additional insured on the $100,000 American Standard policy his father, James Manner, maintained for a Suzuki motorcycle.²

Both insurers denied coverage under all of these four policies. Nathaniel then joined both insurers as additional defendants, alleging that he was entitled to recover under the underinsured motorist endorsements of all four policies and that their limits could be stacked to provide him with $400,000 in coverage.

The insurers moved for summary judgment, arguing that the policies for the three vehicles other than the Yamaha that Nathaniel was operating at the time of the accident could not apply because the policies covering Nathaniel's two Ford trucks and his father's Suzuki each contained an “owned-vehicle” exclusion that precluded coverage under the underinsured motorist endorsement. These owned-vehicle exclusions state: “This coverage does not apply for bodily injury to a person: ... While occupying, or when struck by, a motor vehicle that is not insured under this policy if it is owned by you or any resident of your household.” (emphasis added). The insurers claimed that Nathaniel owned the Yamaha and that, because it was insured under a different policy than the ones insuring the other three vehicles, this owned-vehicle exclusion precluded coverage under those policies.

Additionally, the insurers claimed that none of the policies' underinsured motorist endorsements applied as to any of the four policies because the tortfeasor's vehicle did not come within the definition of an “underinsured” vehicle as that term in used in those policies. In support, the insurers argued that a vehicle is considered “underinsured” only if the coverage for it is less than the coverage in the insured's policy. Here, because the four policies under which Nathaniel claimed coverage and the tortfeasor's policy each had identical $100,000 limits, the insurers allege the tortfeasor's vehicle cannot be considered “underinsured” and, therefore, Nathaniel is not entitled to recover under any of the underinsured motorist endorsements of any of the four policies.

Nathaniel countered that the insurers did not meet their burden of showing that he owned the Yamaha, nor that he resided in his father's household; therefore, the owned-vehicle exclusion did not apply. Instead, he argued, the policies' “other insurance” clauses permitted him to stack their coverages, and, under Missouri law, it is the total of stacked coverage that must be compared with the tortfeasor's coverage to determine whether the latter is underinsured. Nathaniel cross-moved for summary judgment.

The trial court denied Nathaniel's motion but granted summary judgment in favor of the insurers. Nathaniel appealed. After an opinion by the court of appeals, this Court granted transfer pursuant to art. V, sec. 10 of the Missouri Constitution.

II. STANDARD OF REVIEW

Whether summary judgment is proper is an issue of law that this Court reviews de novo. The Court reviews the record in the light most favorable to the party against whom judgment was entered, without deference to the trial court's findings, and accords the non-movant “the benefit of all reasonable inferences from the record.” ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).

III. STACKING OF THE POLICIES IS PERMITTEDA. The Insurers did not Meet their Burden of Showing that Nathaniel Owned the Yamaha Motorcycle

The four policies all contain $100,000 in underinsured motorist coverage. The insurers claim that the owned-vehicle exclusion to this coverage applies, however, because Nathaniel owned the Yamaha motorcycle he was riding at the time of the accident. The burden of showing that an exclusion to coverage applies is on the insurer. Burns v. Smith, 303 S.W.3d 505, 510 (Mo. banc 2010) (“Missouri also strictly construes exclusionary clauses against the drafter, who also bears the burden of showing the exclusion applies”) (emphasis in original).

The record shows Nathaniel's uncle had agreed to sell him the motorcycle and allowed him to take possession of it. Nathaniel responsibly obtained insurance coverage for the motorcycle before driving it. But, at the time of the accident, Nathaniel still was in the process of paying his uncle for the Yamaha, his uncle still retained title, and he did not yet consider it his own: when police arrived at the accident scene, Nathaniel explained that the motorcycle belonged to his uncle.

The insurers argue that even though Nathaniel did not have title to the vehicle or other indicia of ownership of it, they met their burden by showing that he had possession of and an interest in the Yamaha sufficient to allow him to obtain an insurance policy on it. Insurers cite no authority for their proposition that an insurable interest is equivalent to ownership, and this Court has found none. Such a definition could lead to conflicting claims and confusion because persons other than an owner can have sufficient interest in property to insure it. For example, the uncle who was selling the vehicle also had an insurable interest in it. Indeed, both a rental or leasing company and the person renting or leasing a vehicle or other item have an insurable interest in the car or other item rented and have some possessory interest in it. This does not make the renter the owner of the car, however, at least not in the absence of a contract provision so defining “ownership” for purposes of the contract.

While the insurance policies at issue could have defined “owned,” for purposes of the underinsured motorist endorsement,³ to include all those who have an insurable interest in the vehicle, they did not do so. The insurers chose to use the term “owned” in the policies' underinsured motorist endorsement but not to define it. The term accordingly “will be viewed in the meaning that would ordinarily be understood by the layman who bought and paid for the policy.” Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208, 210 (Mo. banc 1992).

“Owner” is defined generally as “one that has the legal or rightful title whether the possessor or not.” Webster's Third

New International Dictionary

1612 (1961). Additionally, “own” often is defined as “belonging to oneself or itself” or “to have or hold as property or appurtenance: have rightful title to, whether legal or natural: possess.” Id. While the meaning of “owned” may vary in particular circumstances, case law similarly indicates that it usually involves establishing either title, see, e.g., Case v. Universal Underwriters Insurance Company, 534 S.W.2d 635 (Mo...