Niswonger v. Farm Bureau Town & Country Ins. Co. of Missouri, 74460

CourtCourt of Appeal of Missouri (US)
Citation992 S.W.2d 308
Decision Date27 April 1999
Docket NumberNo. 74460,74460
PartiesCharles D. NISWONGER, and Alice Niswonger, Plaintiffs/Respondents, v. FARM BUREAU TOWN & COUNTRY INSURANCE COMPANY OF MISSOURI, Defendant/Appellant.

Page 308

992 S.W.2d 308
Charles D. NISWONGER, and Alice Niswonger, Plaintiffs/Respondents,
v.
FARM BUREAU TOWN & COUNTRY INSURANCE COMPANY OF MISSOURI,
Defendant/Appellant.
No. 74460.
Missouri Court of Appeals,
Eastern District,
Southern Division.
April 27, 1999.
Motion for Rehearing and/or Transfer to
Supreme Court Denied May 26, 1999.
Application for Transfer Denied
June 29, 1999.

Page 309

Stephen C. Wilson, Cape Girardeau, for appellant.

Joseph P. Rice, III, Lisa K. Lang, Dickerson, Rice, Spaeth, Heisserer, Summers & Remley, L.C., Cape Girardeau, for respondents.

Page 310

RICHARD B. TEITELMAN, Judge.

Defendant Farm Bureau Town & Country Insurance Company ("Farm Bureau") appeals from the trial court's grant of summary judgment in favor of plaintiffs Charles and Alice Niswonger which permitted stacking of the underinsured motorist coverages provided in each of the three separate automobile insurance policies issued to plaintiffs by Farm Bureau. On appeal, Farm Bureau contends that the relevant language of the policies clearly and unambiguously prohibits such stacking. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

This case was submitted to the trial court on cross-motions for summary judgment with a Joint Stipulation of Facts.

Charles and Alice Niswonger were married on July 29, 1972. On April 2, 1994, Charles Niswonger, a police officer with the City of Cape Girardeau, was providing a police motorcycle escort to a group of runners engaged in a race on city streets when he was struck by a van driven by William Joyce. Mr. Niswonger was seriously injured in the collision and required hospitalization and therapy for many weeks. His medical bills alone exceeded $300,000. His injuries and medical treatment eventually required amputation of his right leg at the hip. As a result of the injuries he sustained from the accident he is unable to return to his former employment and will require future medical care as well as the use of a wheelchair and/or prostheses for the rest of his life. Mr. Niswonger suffered total damages resulting from the collision in excess of $350,000, and his wife, plaintiff Alice Niswonger, suffered loss of consortium damages in excess of $100,000.

At the time of the accident, Charles Niswonger and his wife had three policies of automobile insurance with Farm Bureau, Nos. 578145, 578146 and 578147, each policy being on a separate vehicle the Niswongers owned. Each such policy contained a separate endorsement ("Endorsement No. 36") for underinsured motorist coverage, with liability limits of $100,000 per person and $300,000 per occurrence. The declaration pages listing the insurance coverage on each of the three insurance policies showed that plaintiffs paid a separate premium for the underinsured motorist (UIM) coverage in each separate policy. The other driver, William Joyce, had automobile liability coverage under a policy issued by his insurer with limits of $50,000 per person and $100,000 per occurrence. The Niswongers settled their claim against Joyce for his policy limits of $50,000.

After thus exhausting the underlying liability coverage of the tortfeasor, the Niswongers made demand upon their own insurance company to pay the sum of $300,000, that sum being the aggregate individual limits of the UIM coverage in their three automobile insurance policies with Farm Bureau. Farm Bureau responded by offering Niswongers $50,000 as full payment of their claims. Farm Bureau took the position that this was all it owed because (1) Farm Bureau was entitled to an offset of $50,000 against their $100,000 policy limits for the amount that the Niswongers had received from the other driver's insurer, and (2) the UIM coverages in plaintiffs' three separate policies could not be stacked. Plaintiffs contended that such an offset was improper and that the UIM coverage in their policies could be stacked.

Plaintiffs' position was based, in part, upon the language of the Farm Bureau insurance policies' Endorsement 36 pertaining to UIM coverage as that endorsement existed prior to April 1, 1994 (hereinafter referred to for ease of reference as the "Original UIM Endorsement"). This endorsement contained the following provision under Limits of Liability:

The limit(s) of liability stated in the declarations (Coverage A) is the maximum amount of coverage under this endorsement regardless of the number of

Page 311

vehicles described in the declarations, persons insured, claims, claimants or insurance policies or vehicles involved in the accident (Conditions, Page 13, Paragraph 5).

Defendant's position, on the other hand, was based, in part, upon a version of Endorsement 36 that purportedly became effective as of and after April 1, 1994. The text of the original UIM Endorsement was changed by Farm Bureau in early 1994, following the decision by the Missouri Court of Appeals in Killpack v. Farm Bureau Town and Country, 861 S.W.2d 608 (Mo.App. W.D.1993). Killpack held that Endorsement 36 in the insurance policy in question was ambiguous, in such a way that Farm Bureau was not entitled to set off the amounts paid by another insurance company to an insured against monies owed by Farm Bureau to that insured under its own underinsured motorist coverage. This led to the amended version of Endorsement 36 (hereinafter referred to for ease of reference as the "Revised UIM Endorsement"). The Revised UIM Endorsement contained, among other changes, the following provision under Limits of Liability:

5. The Limit(s) of Liability set out in the declaration page, is the maximum amount of coverage regardless of the number of motor vehicles described in the declarations, person(s) insured, claims, claimants, motor vehicles involved in the accident or applicable insurance policies or bonds.

The Revised UIM Endorsement was mailed to plaintiffs by Farm Bureau along with policy renewal statements on or about March 10, 1994. Plaintiffs received the Revised UIM Endorsement and renewal statements sometime prior to the accident, which occurred on April 2, 1994. After receiving these items plaintiffs paid the renewal premiums for each of their three vehicle policies, the renewed coverage for which became effective April 1, 1994.

The notification sent by Farm Bureau to the Niswongers regarding the Revised UIM Endorsement contained the following conspicuously highlighted statement, appearing at the top of the Endorsement:

Enclosed is a copy of the new Under Insured Motorist coverage Endorsement 36. We have revised some of the language for clarification purposes but did not change the coverage provided by the endorsement. [emphasis added].

Please place this endorsement in your Automobile Insurance Policy Booklet. It will replace the endorsement described on page 27.

If you have any questions regarding your UIM coverage please contact your agent.

In light of the foregoing language, and based in part on their position that the Revised UIM Endorsement did not change the coverage they had prior to April 1, 1994, the Niswongers made their demand upon Farm Bureau for payment of $300,000. When Farm Bureau declined to pay that amount and the parties were unable to resolve their differences, plaintiffs filed a three-count petition against Farm Bureau. In Count I, plaintiffs sought a declaration that Farm Bureau was not entitled to offset the payment from the underlying liability coverage of the other driver against the limits of the UIM coverage provided by Farm Bureau. Plaintiffs also sought a declaration that they were entitled to stack the UIM coverages of their three policies. In Count II, plaintiffs requested that the court determine their damages. In Count III, plaintiffs stated a claim against Farm Bureau alleging fraudulent misrepresentation, based on the representation appearing at the top of the Revised UIM Endorsement that it "did not change the coverage provided" from that of the Original UIM Endorsement. The parties filed cross motions for summary judgment and stipulated as to most facts.

On April 23, 1998, the trial court entered summary judgment in plaintiffs' favor on

Page 312

Counts I and II. The court first held, on the question of setoff, that Farm Bureau was not entitled to set off the recovery obtained by plaintiffs from the liability coverage of the other driver. In so ruling the court relied on Killpack v. Town and Country Insurance Co., supra, which had held that there was an ambiguity in Farm Bureau's policy preventing any such setoff. Here, although the language in the Revised UIM Endorsement had been changed so as to cure the ambiguity found by this Court in Killpack, the trial court found that the notification sent to the Niswongers appearing at the top of the Revised UIM Endorsement stated that it did not change the coverage, when in fact such coverage was changed. 1 The trial court thus concluded that plaintiffs were entitled to rely on the representation by Farm Bureau that the actual coverage had not been changed; that because Farm Bureau had represented it was not changing the UIM coverages under the policies it was now estopped from claiming otherwise; and that the Niswongers were therefore entitled to sums due under their UIM coverage without setoff for the underlying liability coverage of the other driver. The trial court then went on to hold that plaintiffs were entitled to stack the $100,000 limit of each of the three policies issued to them for a total UIM coverage of $300,000, and accordingly entered judgment for them in that amount. Plaintiffs thereafter dismissed Count III of their petition, and this appeal followed.

In its sole point on appeal, 2 Farm Bureau contends the court erred in holding that the UIM coverage on plaintiffs' three automobile insurance policies could be stacked. Farm Bureau argues that the anti-stacking language contained in both the Original UIM Endorsement, which was in effect prior to April 1, 1994, as well as the Revised UIM Endorsement, which took effect...

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