Rister v. State Farm Mut. Auto. Ins. Co., 13165

• Decision Date: 01 March 1984
• Docket Number: No. 13165,13165
• Citation: 668 S.W.2d 132
• Parties: Diane RISTER and Kristi Lynn Rister, by her next friend, Diane Rister, and Blake Allen Rister, by his next friend, Diane Rister, Plaintiffs-Respondents, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 132

668 S.W.2d 132

Diane RISTER and Kristi Lynn Rister, by her next friend,

Diane Rister, and Blake Allen Rister, by his next

friend, Diane Rister, Plaintiffs-Respondents, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.

No. 13165.

Missouri Court of Appeals,

Southern District,

Division Three.

March 1, 1984.

Motion for Rehearing or to Transfer

Denied March 26, 1984.

Application to Transfer Denied

May 15, 1984.

Albert C. Lowes, Catherine R. McBride, Buerkle, Lowes, Beeson & Ludwig, Jackson, for defendant-appellant.

Phillip J. Barkett, Jr., Dempster, Fuchs & Barkett, Sikeston, for plaintiffs-respondents.

MAUS, Judge.

Ricky Rister was killed when the pickup truck in which he was a passenger collided with a gasoline transport. The plaintiffs are his widow and minor children. They are insureds under the uninsured motor vehicle provisions of two policies issued by State Farm Mutual Insurance Company (State Farm). The plaintiffs recovered a judgment against State Farm under that coverage in the amount of $40,000. State Farm's appeal presents a unique question. One of the policy definitions of uninsured motor vehicle is a "motor vehicle insured ... for bodily injury liability ... but the insuring company denies coverage or is or has become insolvent." The question is whether or not that definition is applicable when the insurer under a liability policy pertaining to the pickup initially declined coverage, but before the judgment entered into an agreed settlement with the plaintiffs for $35,000.

The following is a summary of the facts presenting that question. Ricky Rister, Bill Rister and George Rutledge were employed by Delta Paint and Drywall Company. On February 22, 1982 they were apparently on their way to work in the pickup owned by Delta and driven by Rutledge. The pickup collided with a gasoline transport owned by Wisdom Oil Company and driven by its employee Jerry Terry.

American Casualty Company as insurer of Delta had in force a liability insurance policy applicable to the pickup. The limits of liability were not disclosed. State Farm, as insurer of Ricky Rister, had in force two policies of automobile insurance. Each policy provided uninsured motor vehicle insurance in the amount of $50,000 upon customary terms. The plaintiffs were insureds under that coverage. By that insurance, State Farm agreed to pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. As noted, the definition of uninsured motor vehicle included a "motor vehicle insured ... for bodily injury liability ... but the insuring company denies coverage or is or has become insolvent."

By their petition, the plaintiffs initially sought a judgment for $5,000,000 for the wrongful death of their decedent against Wisdom Oil Company, Jerry Terry and the defendant ad litem for George Rutledge, deceased. It was the position of American Casualty that the liability coverage of its policy was not applicable to the claims of the plaintiffs because of the "fellow employee" exclusion of its liability coverage. By letter, it so advised the defendant ad litem. Nonetheless, American Casualty provided a defense to the defendant ad litem under a "reservation of rights" as set forth in that letter. By amendment, the plaintiffs added State Farm as a defendant. They sought recovery against State Farm by reason of the uninsured motor vehicle insurance referred to above.

The morning of the trial, before the testimony commenced, the plaintiffs were permitted to dismiss without prejudice as to defendants Wisdom Oil Company and Jerry Terry. The plaintiffs had reached a settlement agreement with them for $125,000. Thereafter, again before the testimony commenced, counsel for the defendant ad litem, employed by American Casualty, made a cryptic announcement. He said, "I want the Court to know on the record that we stand ready now, before this jury is impaneled, to settle and pay at least two times the uninsured motorist coverage for an indemnifying release from Mrs. Rister." In view of subsequent developments, the possible import of this statement need not be considered.

Near the end of the testimony, counsel for the defendant ad litem announced he wanted to make an offer. Counsel for the plaintiffs then moved to dismiss without prejudice as to the defendant ad litem. There was a discussion off the record apparently setting forth the terms of the offer and its acceptance. Then, on the record, counsel for the defendant ad litem made an offer of $35,000 upon agreement by the plaintiffs to indemnify American Casualty for any apportionment claim and any claim by State Farm. The defendant ad litem was then dismissed without prejudice. The case was submitted to the jury against State Farm as the sole defendant under instructions patterned upon MAI 31.11 and 4.11. The jury returned a verdict against State Farm and a determination the plaintiffs' damages were $200,000. The trial court credited that amount with $160,000 and entered judgment against State Farm for $40,000. The plaintiffs' settlement was later approved by the court and they acknowledged the receipt of the $35,000. It is not clear that the documents evidencing the settlement were before the court when the $40,000 judgment was entered. However, the parties have regarded that settlement as completed and it will be so considered by this court. While its impact is obscured by the numerous points raised, by its motions for a directed verdict and after trial motions, State Farm has preserved its basic contention the evidence does not establish "the insuring company denies coverage."

Section 379.203.1 mandates coverage for the protection of insureds "who are legally entitled to recover damages from owners or operators of uninsured motor vehicles." However, that statute does not fully define "uninsured motor vehicles." Nor does it fully declare the terms and conditions upon which uninsured motor vehicle insurance must be extended. In any given case, whether or not uninsured motor vehicle insurance is applicable, in the first instance, is a matter of construction of the insurance contract. Harrison v. MFA Mut. Ins. Co., 607 S.W.2d 137 (Mo. banc 1980). Appropriate rules for guidance in that construction are well established and will not be restated. Kisling v. MFA Mutual Insurance Company, 399 S.W.2d 245 (Mo.App.1966). It is sufficient to observe, "[w]here language in an insurance contract is unequivocal, it is to be given its plain meaning ...." Harrison v. MFA Mutual Ins. Co., supra, at 142. Or stated another way, "An uninsured motor vehicle is one which is not insured. When language is plain, straightforward and suspectible of only one meaning there is no room for judicial construction because there is nothing to construe." Brake v. MFA Mutual Insurance Company, 525 S.W.2d 109, 112 (Mo.App.), cert. denied 423 U.S. 894, 96 S.Ct. 192, 46 L.Ed.2d 126 (1975).

The basic provision of most statutes and policies extends protection to insureds entitled to recover damages from owners or operators of "uninsured motor vehicles" without further definition of those terms. Under such provisions, many cases have dealt with the issue of whether or not such protection is available when a liability policy is applicable to the tort feasor's motor vehicle, but, with or without justification, the liability insurer denies coverage for the claim of an uninsured motor vehicle insured. 18 A.L.R.4th 229, No Consent to Settlement Exclusion Clauses (1982); Annot., Insurance--"Uninsured" Motorist, 26 A.L.R.3d 883 (1969).

More recent statutes and policy provisions, such as the provisions of the State Farm policy in question, by definition include a motor vehicle insured for bodily injury, but the insuring company denies coverage. Such provisions have been construed and applied in reference to several issues raised thereby. The possible distinction between a denial and a disclaimer of coverage has been noted. "To deny coverage is to take the position that for some reason or other the policy does not encompass the particular accident.... A disclaimer of liability usually arises where there is coverage, but because of some action on the part of the insured, the company refuses to respond." Seabaugh v. Sisk, 413 S.W.2d 602, 607 (Mo.App.1967).

While there are decisions to the contrary, under such provisions it is generally held to make no difference whether the withholding of liability coverage results from a denial or a disclaimer. Annot., Insurance--"Uninsured" Motorist, 26 A.L.R.3d 883 (1969); 8C Appleman Insurance Law and Practice § 5076.15 (1981). It has been held that a denial is not established by the inability of the liability insurer to pay because of insolvency. Murray v. Montana Ins. Guaranty Ass'n, 175 Mont. 220, 573 P.2d 196 (1977); Cf. Annot., Insurance--"Uninsured" Motorist, 26 A.L.R.3d 883 (1969). Or, by the fact the amount of liability coverage admittedly does not equal a claimant's damages. Balboa Ins. Co. v. Amity, 301 Pa.Sup. 77, 446 A.2d 1343 (1982). But see Porter v. Empire Fire and Marine Insurance Company, 106 Ariz. 274, 475 P.2d 258 (banc 1970); Vigneault v. Travelers Ins. Co., 118 N.H. 75, 382 A.2d 910 (1978). Or, by the inability of the liability insurer to pay because of the exhaustion of its coverage in the payment of other claims. Lotoszinski v. State Farm Mut. Auto. Ins., 417 Mich. 1, 331 N.W.2d 467 (1982). Or, by the inability to obtain service upon a tort feasor. Weinberg v. State Farm Mut. Auto. Ins. Co., 659 S.W.2d 236 (Mo.App.1983); but see Smith v. Commercial Union Assur. Co., 246 Ga. 50, 268 S.E.2d 632 (1980).

When the liability insurer has expressly denied or disclaimed coverage, it is generally held that a claimant under such uninsured motor vehicle insurance need not prove the denial or disclaimer was valid. State Farm Mutual Automobile Ins. Co. v. Talley, 329 So.2d 52 (Miss.1976); Zurich v. Country...