Rice v. Shelter Mut. Ins. Co.
| Decision Date | 08 December 2009 |
| Docket Number | No. SC 90139.,SC 90139. |
| Citation | 301 S.W.3d 43 |
| Parties | Jason L. RICE, Respondent, v. SHELTER MUTUAL INSURANCE COMPANY, Appellant. |
| Court | Missouri Supreme Court |
Ben T. Schmitt, Lesley Renfro Willson, Schmitt Manz Swanson & Mulhern, Kansas City, MO, for Appellant.
Kirk Rahm, Gayle McVay, Rahm, Rahm & McVay, P.C., Warrenburg, MO, Ed Dougherty, Dougherty; Modin & Holloway, Kansas City, MO, for Respondent.
Leland F. Dempsey, Ashley L. Baird, Dempsey & Kingsland, P.C., Kansas City, MO, for Amicus Curiae.
Shelter Mutual Insurance Company appeals the trial court's entry of summary judgment in favor of Jason Rice in the amount of $525,000 in uninsured motorist coverage under his Shelter policy. (Shelter paid Rice $75,000 prior to this action.) This Court determines that the policy is ambiguous; therefore, under settled Missouri law, the ambiguity must be resolved in favor of coverage for the insured. Judgment affirmed.
Jason Rice was injured on the job while a passenger in a truck driven by Daniel Patterson on Highway 13 in Johnson County. Judy Saimon crossed the centerline, collided with the truck, causing it to overturn and become engulfed in flames. Rice and Patterson suffered burn injuries as a result of the collision. At the time of the accident, Saimon was operating an uninsured motor vehicle.
Prior to the collision, Shelter Mutual Insurance Company issued three automobile insurance policies to Michael and Connie Rice, Jason's parents. Jason Rice was insured within the meaning of the uninsured motorist coverage of the three policies, and the policies were in full force and effect on the date of the accident. The first policy provided coverage of $100,000 per person/$300,000 per accident. The second and third policies provided coverage of $250,000 per person/$500,000 per accident.
The three policies contained the following language:
Part IV — UNINSURED MOTORISTS COVERAGE E — UNINSURED MOTORISTS
. . .
Subject to the limit of our liability stated in this Coverage, we will pay damages for bodily injury sustained by an insured which that insured, or that insured's legal representative, is legally entitled to recover from the owner or operator of an uninsured motor vehicle. The bodily injury must be caused by accident and arise out of the ownership or use of the uninsured motorist vehicle.
. . .
Coverage E does not apply:
. . .
(3) To damages sustained by any insured if benefits are:
(a) payable to, or on behalf of, such insured under any compensation law,1 as a result of the same accident, or
(b) required by any compensation law to be provided to, or on behalf of, such insured as a result of the same accident.
This exclusion does not apply to the amounts of coverage mandated by any uninsured motorist insurance law or financial responsibility law applicable to the accident, but does apply to any amounts exceeding that mandate, and to coverages which are not mandated by such laws.
. . .
If an applicable uninsured motorist insurance law or financial responsibility law renders any provision of this Part of the policy unenforceable, we will provide only the minimum limits mandated by such law. However, if other insurance covers an insured's claim and provides those required minimum limits, the provisions of this policy are fully enforceable.
All provisions of this Part of the policy which exceed the requirements of any applicable uninsured motorist insurance law or financial responsibility law, or are not governed by it, are fully enforceable.
As a result of the collision and injuries Jason Rice sustained, benefits were paid to him pursuant to a workers' compensation claim, which is a "compensation law" as defined in the Shelter policies. On March 16, 2007, Rice, through his attorney, submitted a demand to Shelter for payment of the per person limits of all three policies, totaling $600,000. On April 18, 2007, Shelter declined to pay $600,000, relying on the exclusion language of the uninsured motorist coverage of the three policies. Instead, Shelter offered and paid $25,000 per policy, totaling $75,000 for the three policies, because the policies purported to reduce uninsured motorist coverage to the statutorily mandated minimum under section 379.203.2 Shortly thereafter, Rice filed a claim against Shelter seeking the additional $525,000 plus the prejudgment interest. The trial court granted Rice's motion for summary judgment and awarded him $525,000 plus $34,952.05 in interest, finding as follows:
In construing the EXCLUSIONS section of Coverage E, including the definition of Compensation Law, the Court takes the words and phrases in their plain, ordinary meaning, except as specifically defined within the policy. Farmland Industries, Inc. v. Republic Ins. Co., 941 S.W.2d 505, 508 (Mo. banc 1997).
The exclusionary language provides that if the insured receives benefits for bodily injury from any insurance source, including worker's compensation benefits, FELA benefits, Medicare, Medicaid, Social Security, VA benefits, or even health insurance benefits, the insured is not entitled to uninsured benefits under Coverage E. If all the overlapping exclusionary language contained in the policies is given meaning, then the insured received no perceivable value for the premiums paid for uninsured motorist coverage; and the appearance and reasonable expectation of having purchased Six Hundred Thousand Dollars of uninsured motorist coverage would be illusory. In Cano v. Travelers Ins. Co., 656 S.W.2d 266 (Mo. banc 1983), the Missouri Supreme Court not only held that language in an uninsured motorist policy that purported to reduce the insurer's liability because of the receipt of workers' compensation benefits violated public policy, and the provisions of Mo.Rev. Stat. § 579.203, but also that "[a] construction which may render a portion of the policy illusory should not be indulged in." Cano at 271. The exclusionary language of coverage E in the Shelter policies is so excessively broad as to be void and contrary to the public policy of Missouri.
In finding that the exclusionary language regarding uninsured motorist coverage was so excessively broad as to be void and contrary to the public policy of Missouri, the trial court did not reach the issue of whether the policy was also ambiguous, which was pled as an additional basis to grant the summary judgment motion in favor of Rice. Following a decision by the court of appeals, this Court granted transfer. Mo. Const. art. V, sec. 10.
This Court reviews the trial court's granting of summary judgment de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The interpretation of an insurance policy is a question of law that this Court also determines de novo. Jones v. Mid-Century Ins. Co., 287 S.W.3d 687, 690 (Mo. banc 2009). Because this Court's review is de novo, if the trial court's judgment can be sustained on any ground as a matter of law, even if different than the one posited in the order granting summary judgment, it should be affirmed. ITT Commercial Fin., 854 S.W.2d at 387-88. In construing the terms of an insurance policy, this Court applies the meaning that would be attached by an ordinary person of average understanding if purchasing insurance and resolves ambiguities in favor of the insured. Jones, 287 S.W.3d at 690 ().
Missouri requires the presence of uninsured motorist coverage in the minimum amount of $25,000 per person/$50,000 per occurrence but allows citizens to purchase coverage above that minimum. Section 379.203.1. The purpose of section 379.203 is to establish a minimum level of protection equivalent to the liability coverage the insured would have received had the insured been involved in an accident with an insured tortfeasor. Kuda v. Am. Family Mut. Ins. Co., 790 S.W.2d 464, 467 (Mo. banc 1990).
In this case, the Rices bought three separate policies from Shelter. Jason was insured under each policy purchased. The Rices paid a separate premium for each policy. The premiums paid on all three Shelter policies provided coverage limits in excess of those required by law. The obvious purpose was to provide the Rices protection above the statutory minimum of $25,000 in the event they were injured by negligent operation of an uninsured motor vehicle. Therefore, the analysis begins with the expectation of an ordinary customer who paid premiums for uninsured motorist coverage in excess of the statutory minimum so the customer would be covered to the extent of the coverage purchased. Nevertheless, to determine whether this expectation was reasonable, the law requires a review of the policy language.3
It is settled law that "when analyzing an insurance contract, the entire policy and not just isolated provisions or clauses must be considered." Versaw v. Versaw, 202 S.W.3d 638, 643 (Mo.App. 2006) (citing Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 74, 77 (Mo. banc 1998)). "If an entire policy is analyzed in context and found to be unambiguous, i.e., its language is plain, straightforward, and susceptible of only one meaning, the rules of construction are inapplicable, and absent public policy to the contrary, the contract will be enforced as written." Id. (citing Krombach v. Mayflower Ins. Co. Ltd., 827 S.W.2d 208, 210 (Mo. banc 1992)).
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