Miller v. Ho Kun Yun

• Decision Date: 05 March 2013
• Docket Number: No. WD 74890.,WD 74890.
• Citation: 400 S.W.3d 779
• Parties: Dwight MILLER, Respondent, v. HO KUN YUN a/k/a Kun Y Ho, et al., Defendant, American Family Mutual Insurance Company, Appellant.
• Court: Missouri Court of Appeals

400 S.W.3d 779

Dwight MILLER, Respondent,

v. HO KUN YUN a/k/a Kun Y Ho, et al., Defendant,American Family Mutual Insurance Company, Appellant.

No. WD 74890.

Missouri Court of Appeals, Western District.

Feb. 5, 2013.

Application for Transfer Denied March 5, 2013.

Joseph A. Cambiano, Kansas City, MO, for respondent.

David Ryan Frye, Overland Park, KS, for appellant.

Division One: JAMES M. SMART, JR., P.J., LISA WHITE HARDWICK and GARY D. WITT, JJ.

JAMES M. SMART, JR., Judge.

American Family Mutual Insurance Company (“AmFam”) appeals a summary judgment granted to Respondent Dwight Miller. AmFam contends that its auto insurance policy issued to Mr. Miller providing Underinsured Motorist (“UIM”) benefits defines in unambiguous language the term “underinsured motor vehicle” and precludes the payment of UIM benefits in this case. AmFam also argues that application of the policy's “Limits of Liability” language does not justify the decision of the trial court. We affirm the decision of the circuit court.

The Factual Background

The facts are undisputed. Dwight Miller was a passenger in a vehicle driven by his wife and owned by his mother-in-law when the car was involved in a collision with a vehicle recklessly driven by Ho Kun Yun. As a result of the collision, Mr. Miller suffered injuries that the parties agree exceeded $200,000. At the time of the collision, Mr. Yun's vehicle was insured under a policy of insurance issued by Geico Insurance Company that provided bodily injury liability limits of $100,000 per person. Geico did not dispute the liability of its insured and paid the $100,000 limits of its policy to Mr. Miller.

The UIM Endorsement Provisions

The car in which Miller was a passenger was insured under a policy issued by American Family, which provides a UIM benefits endorsement with stated limits of $100,000 per person/$300,000 per accident (as shown on the declarations page of the policy). The AGREEMENT section of the policy states:

We agree with you, in return for your premium payment, to insure you subject to all the terms of this policy. We will insure you for the coverages and the limits of liability as shown in the declarations of this policy.

The UIM endorsement provides, in pertinent part, as follows:

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. ¹

You must notify us of any suit brought to determine the legal liability or damages. Without our written consent we are not bound by any resulting judgment.

We will pay under this coverage only after the limits of liability under all bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements.

....

As used in this endorsement:

....

3. Underinsured motor vehicle means a motor vehicle which is insured by a liability bond or policy at the time of the accident which provides bodily injury liability limits less than the limits of liability of this [UIM] coverage.²

The policy's UIM endorsement also contains certain exclusions from coverage (not relevant here) and has a section entitled “Limits of Liability” that states, in part, as follows:

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 persons as the result of bodily injury to one person in any one accident.

2. Subject to the limit for each person, the limit for each accident is the maximum sustained by two or more persons in any one accident.

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

The limits of liability of this coverage may not be stacked onto the limits of liability of any other underinsured motorist coverage issued by us to you or any member of an insured person's household.

....

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

1. All payments made or amounts payable by or on behalf of all persons or organizations which may be legally liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle.

2. All payments under the Liability coverage of this policy.

3. All payments made or amounts payable because of bodily injury under any workers' compensation or any similar law.

OTHER INSURANCE

If there are any limits of liability remaining after applying the reductions provided for in the “Limits of Liability” section of this endorsement and if there is other underinsured motorist insurance provided by another insurance company on a loss covered by this endorsement, we will pay our share according to this policy's proportion of the total remaining limits of all underinsured motorist insurance provided by other insurance companies. But, any remaining limits of insurance provided under this endorsement for an insured person while occupying a vehicle you do not own is excess over all other underinsured motorist insurance provided by all other insurance companies.In the stipulation of facts submitted to the trial court, the parties quoted certain provisions that are included in the provisions quoted above. In the stipulation which quotes policy language, the terms “bodily injury,” “underinsured motor vehicle,” “insured person,” and “use” are in bold type. In the copy of the entire policy submitted as an exhibit to the trial court, the bolding is not visible.

The Declarations Sheet

On the Declarations sheet, under the heading “Additional Endorsements that Apply to Your Policy,” there is first a rental reimbursement setting forth the amounts allowed. Then beneath that the following appears:

+--------------------------------------------------+
                ¦UNDERINSURED MOTORISTS COVERAGE—BODILY INJURY ONLY¦
                +--------------------------------------------------+
                

+---------------------------------------------+
                ¦$100,000 each person  ¦$300,000 each accident¦
                +---------------------------------------------+
                

The Claim for UIM Benefits

After receiving the $100,000 payment from Geico, Mr. Miller filed a claim with AmFam for UIM benefits provided by the policy. AmFam denied Mr. Miller's claim for benefits, stating that the UIM endorsement did not provide applicable benefits in this instance because Yun (the driver at fault) was not driving an “underinsured motor vehicle” as defined in the policy. Yun's coverage included $100,000 per person in bodily injury liability, the same amount of AmFam's UIM coverage on the vehicle in which Mr. Miller was a passenger. Also, AmFam pointed out that the policy language entitled it to off-set the UIM endorsement policy “limits” by the amount already paid by Geico, meaning that no payment of benefits is required under the policy.

Mr. Miller filed a petition in the circuit court against AmFam seeking payment of $100,000 in unpaid UIM benefits. The parties did not dispute the underlying facts of the case. They disputed only the interpretation of the relevant insurance contract provisions.

The Trial Court Ruling

On January 25, 2012, the court entered summary judgment in favor of Mr. Miller on his claim for UIM benefits against AmFam in the amount of $100,000. The trial court noted that the endorsement requires payment of “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 court stated that the endorsement “connects the recovery to the amount that is recovered against the underinsured driver and is not subject to any other limitation at the point where this language is written in the policy.” The court then noted that the endorsement further provides “we will pay under the coverage only after the limits of liability under all bodily injury liability bonds or other policies have been exhausted by payments of judgments or settlements.” The court then stated:

To the ordinary insured this would imply that American Family would pay its limits in excess of the liability of the third party after those limits are exhausted.

The court next considered the significance of the language in the AGREEMENT portion of the policy and the declarations page. The AGREEMENT section says that “we will insure you for the coverage and the limits of liability as shown in the declarations of the policy.” The declarations sheet shows underinsured motorist coverage of $100,000/$300,000 coverage with no limitations. The court found the only limitation appears “at the very end of the UIM endorsement attached to the end of the policy.” We assume that the court, in mentioning the “only limitation” of the endorsement, was referring to the set-off provisions related in the “limits of liability” section. The court concluded that an insured is promised something at one point and seemingly has it “taken away at another, creating an ambiguity that should be resolved in favor of the insured.” The court thus held there was underinsured motorist coverage in excess of the payments made by Geico to Miller.

AmFam appeals.

Standard of Review

When (as in this case) the facts are undisputed, the interpretation and application of insurance policy provisions involve questions of law that we review de novo. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010). Where, as here, the trial court granted summary judgment, we review the trial court's ruling granting a summary judgment in interpreting the insurance contract de novo. Id. Because the propriety of summary judgment is an issue of law, we do not defer to the trial court's order granting summary judgment. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).

General Principles of Interpretation

This court interprets insurance contracts by...