Seeck v. Geico General Ins. Co.

• Decision Date: 30 January 2007
• Docket Number: No. SC 87995.,SC 87995.
• Citation: Seeck v. Geico General Ins. Co., 212 S.W.3d 129 (Mo. 2007)
• Parties: Tamara SEECK, Appellant, v. GEICO GENERAL INSURANCE CO., Respondent.
• Court: Missouri Supreme Court

212 S.W.3d 129

Tamara SEECK, Appellant, v.GEICO GENERAL INSURANCE CO., Respondent.

No. SC 87995.

Supreme Court of Missouri, En Banc.

January 30, 2007.

Gary A. Growe and Andrew J. Scavotto, St. Louis, for Appellant.

Kevin B. Behrndt, St. Louis, for Respondent.

Leland F. Dempsey, Kansas City, for Amicus Curiae Missouri Association of Trial Attorneys.

Susan Ford Robertson and Emily W. Little, Columbia, for Amicus Curiae Missouri Organization of Defense Lawyers.

LAURA DENVIR STITH, Judge.

Tamara Seeck appeals the trial court's entry of summary judgment in favor of Geico General Insurance Company in Ms. Seeck's suit seeking $50,000 in underinsured motorist coverage under her Geico policy.The trial court held that the policy did not provide coverage.This Court disagrees.Geico's argument that other policy provisions do not appear to provide coverage is not dispositive because the policy's other insurance clause would cause an ordinary insured of average understanding to believe that excess coverage exists where, as here, the insured's injuries exceed the coverage provided by the primary insurance on the occupied motor vehicle.At a minimum, this creates an ambiguity in the policy that, under settled Missouri law, must be resolved in favor of the insured.The judgment is reversed, and the case is remanded.

I.FACTUAL AND PROCEDURAL BACKGROUND

Ms. Seeck sustained serious cervical spine injuries as a passenger in a motor vehicle that was rear-ended by a negligent motorist.Her injuries are permanent, chronic, and progressive.The negligent driver who caused the collision was insured with Farmers Insurance Group.

Farmers tendered a release and settlement agreement resolving Ms. Seeck's claims against Farmers and the negligent driver for $50,000, the full amount of coverage available under the Farmers policy.Ms. Seeck and Farmers signed the release and settlement agreement that included a specific, handwritten clause that expressly reserved her right to seek underinsured motorist benefits from her own insurance carrier, Geico.

Ms. Seeck then filed a claim seeking coverage up to the $50,000 limit provided in the "Underinsured Motorist Coverage"(UMC) policy amendment to her Geico policy.When Geico refused coverage, Ms. Seeck filed the instant suit.The parties stipulated that the policy would pay Ms. Seeck $50,000 if the policy's underinsured motorist coverage applied, but Geico argued it did not apply.After briefing and argument, the trial court entered summary judgment for Geico.Ms. Seeck appealed to the Court of Appeals, Eastern District, which transferred the case to this Court after opinion.¹

II.DISCUSSION

A.Standard of Review

Whether to grant summary judgment is an issue of law that this Court determines de novo.American Std. Ins. Co. v. Hargrave,34 S.W.3d 88, 89(Mo. banc 2000).The interpretation of an insurance policy is a question of law that this Court also determines de novo.Martin v. United States Fid. & Guar. Co.,996 S.W.2d 506, 508(Mo. banc 1999);McCormack Baron Mgt. Servs., Inc. v. American Guarantee & Liab. Ins. Co.,989 S.W.2d 168, 171(Mo. banc 1999).In construing the terms of an insurance policy, this Court applies "the meaning which would be attached by an ordinary person of average understanding if purchasing insurance,"id., and resolves ambiguities in favor of the insured.Martin,996 S.W.2d at 508.

B.Ambiguity of the Geico Policy.

The key issue before the Court is whether the Geico policy is ambiguous."An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language in the policy.Language is ambiguous if it is reasonably open to different constructions."Gulf Ins. Co. v. Noble Broadcast,936 S.W.2d 810, 814(Mo. banc 1997).Absent an ambiguity, an insurance policy must be enforced according to its terms.Rodriguez v. General Accident Ins. Co.,808 S.W.2d 379, 382(Mo. banc 1991).If, however, "policy language is ambiguous, it must be construed against the insurer."Gulf Ins. Co.,936 S.W.2d at 814.

The excess or other insurance clause that Ms. Seeck argues provides coverage declares, in pertinent part:

When an insured is occupying a motor vehicle not owned by the insured . . . this insurance is excess over any other insurance available to the insured and the insurance which applies to the occupied motor vehicle is primary.

This provision expressly states that the Geico policy provides "excess" coverage over "any" other insurance available to the insured and that it is excess to any "primary" coverage provided by insurance that applies to the occupied motor vehicle.Ms. Seeck recovered $50,000 from Farmers under the tortfeasor's insurance policy covering the occupied motor vehicle.She now makes a claim on Geico to provide excess coverage to this primary insurance.

This Court agrees that an "ordinary person of average understanding,"McCormack Baron,989 S.W.2d at 171, would interpret the excess insurance clause to mean that since Ms. Seeck has obtained recovery under the primary Farmers insurance policy applicable to the occupied vehicle but has additional damages, she is entitled to coverage under the excess insurance clause of her own Geico policy.

Geico argues that this Court should not reach this issue, but rather should hold that the tortfeasor's vehicle does not come within the definition of "underinsured motor vehicle" in the Geico policy, which defines an underinsured vehicle as one whose "limit for bodily injury liability is less than the limit of liability for this [the Geico] coverage."Similarly, Geico argues, there should be no coverage because the policy's limit of liability clause provides that recovery under the policy will be reduced by the amounts paid by insurance carried by the party at fault for the accident.²Therefore as both the Farmers and the Geico policy provided $50,000 in insurance coverage, Geico argues, its underinsured motorist coverage never came into effect, the limits of liability provision reduced coverage to nothing, and this Court should not consider the meaning of the excess insurance clause.

Geico's argument is inconsistent with well-settled Missouri law requiring a court not to interpret policy provisions in isolation but rather to evaluate a policy as a whole.See, e.g., Central Sur. & Ins. Corp. v. New Amsterdam Cas. Co.,359 Mo. 430, 222 S.W.2d 76, 78(1949).As this Court held in Lutsky v. Blue Cross Hosp. Serv., Inc.,695 S.W.2d 870, 875(Mo. banc 1985), "[i]f a contract promises something at one point and takes it away at another, there is an ambiguity."

Ware v. Geico General Ins. Co.,84 S.W.3d 99, 102-03(Mo.App. E.D.2002), interpreted the meaning of a Geico policy that is identical in all material respects to the policy in this case.Ware evaluated the excess or other insurance clause, the limit of liability, and the definition of underinsured motor vehicle and concluded that "[a] reasonable layperson in the position of Appellants may have understood the `Other Insurance' provision to provide coverage over and above that furnished by the tortfeasor's insurance."Ware,84 S.W.3d at 102-03.This compelled the inescapable conclusion that reading the policy as a whole "creates an ambiguity."Id. at 103.

Ware is consistent with the many other court of appealscases holding that conflicts between underinsured motorist policy limits, policy definitions, and the provision of excess coverage in an excess or other insurance clause renders an insurance policy ambiguous.SeeGoza v. Hartford Underwriters Ins. Co.,972 S.W.2d 371, 374(Mo.App. E.D.1998);Jackson v. Safeco Ins. Co.,949 S.W.2d 130, 135-36(Mo.App. S.D.1997);Krenski v. Aubuchon,841 S.W.2d 721, 729-31(Mo.App. E.D.1992);Zemelman v. Equity Mut. Ins. Co.,935 S.W.2d 673(Mo.App. W.D.1996).As the court of appeals succinctly stated in Zemelman:

Where there is an "excess" or "other insurance" clause that provides the underinsured coverage is excess over all other collectible insurance at the time of the accident, a court may find that language is ambiguous when read with the limit of liability or the definition of underinsured motorist coverage if the other insurance clause may reasonably be understood to provide coverage over and above that collected from the tortfeasor.

935 S.W.2d at 677-78.This is precisely the case here.

Geico urges that all of these court of appealscases conflict with Rodriguez v. General Accident Ins. Co.,808 S.W.2d 379, 382(Mo. banc 1991), in which this Court held that similar definitional and policy limits clauses unambiguously did not provide coverage.But, as Zemelman noted, in Rodriguez,"only the underinsured motor vehicle definition and the limit of liability language were held unambiguous and the court did not address the issue of an excess insurance clause."Zemelman,935 S.W.2d at 678.Rodriguez, therefore, is not determinative here, for Ms. Seeck's policy also contained the excess insurance clause set out above, and that clause, too, must be construed in determining whether the policy would be interpreted by a person of average understanding to provide coverage.It is this third clause, the excess or other insurance provision, that renders the policy ambiguous.Zemelman,935 S.W.2d at 678("where this third clause exists and is raised as ambiguous . . . an ambiguity arises in the `Other Insurance' clause").

This Court reaffirms the principles set out in Ware, Zemelman, and the other cases cited.Where, as here, an other insurance clause appears to provide coverage but other clauses indicate that such coverage is not provided, then the policy is ambiguous, and the ambiguity will be resolved in favor of coverage for the insured.³

C.The Release of the Tortfeasor Did Not Waive Coverage.

Geico urges that the release and settlement agreement that Ms. Seeck signed, releasing the tortfeasor from all liability, defeats her right to recover because it creates a "circular...