Shields v. Farmers Ins. Co., Inc., 70811

• Decision Date: 08 July 1997
• Docket Number: No. 70811,70811
• Citation: 948 S.W.2d 247
• Parties: Robert A. SHIELDS and Barbara Shields, Plaintiffs/Respondents, v. FARMERS INSURANCE COMPANY, INC., Defendant/Appellant.
• Court: Missouri Court of Appeals

Page 247

948 S.W.2d 247

Robert A. SHIELDS and Barbara Shields, Plaintiffs/Respondents, v. FARMERS INSURANCE COMPANY, INC., Defendant/Appellant.

No. 70811.

Missouri Court of Appeals,

Eastern District,

Division Three.

July 8, 1997.

Dean R. Gallego, Clayton, for defendant/appellant.

Gordon D. Prinster, St. Charles, for plaintiffs/respondents.

CRAHAN, Presiding Judge.

Appellant Farmers Insurance Company ("Farmers") appeals the judgment entered in favor of Respondents Barbara and Robert Shields on their claim for underinsured motorist coverage. We affirm.

The case was submitted to the court on stipulated facts. On June 10, 1993, Mr. Shields ("Husband") was operating an uninsured motorcycle he owned when he was involved in a collision with an automobile owned and operated by Angela Hasse. The accident and resultant bodily injuries suffered by Husband were the direct and proximate result of Ms. Hasse's negligence. Barbara Shields ("Wife") also suffered a loss of consortium. Husband was not negligent.

Given the extent of Husband's injuries and Wife's loss of consortium claim, the Shields would be entitled to a judgment against Ms. Hasse for damages in the amount of $50,000.00. At the time of the accident, Ms. Hasse was insured by a policy of liability insurance with limits of $25,000.00. Her insurance carrier paid the Shields the policy limits and the Shields executed a release in favor of Ms. Hasse.

Although Husband did not maintain any insurance on his motorcycle, Wife did have insurance issued by Farmers on her automobile. Wife's policy provides for underinsured motorist coverage with limits of $50,000.00 per person and $100,000.00 per occurrence. Wife was the sole named insured listed on the declarations page. Farmers does not dispute, however, that Husband is a "family member" and therefore an "insured person" as defined in the policy. Farmers further concedes that, absent any endorsements, nothing in the main body of the policy excludes Husband from recovering under the underinsured motorist coverage provided in the policy under the facts presented. What is at issue is the effect of two endorsements to the policy.

In the main body of the policy, uninsured motorist coverage was provided in Part II, Coverage C. However, the definition of uninsured motor vehicle included both a vehicle not insured by a liability policy at the time of the accident and a vehicle insured by a liability policy with limits less than the limits of uninsured motorist coverage specified in the declarations. Thus, as originally written, Coverage C provided for both uninsured and underinsured motorist coverage.

The first endorsement, E1179j, provides in pertinent part:

Coverage C-1 UNDERinsured Motorist Coverage

For an additional premium it is agreed that underinsured motorist coverage C-1 is added to Part II of your policy.

We will pay all sums which an insured person is legally entitled to recover as damages from the owner or operator of an underinsured motor vehicle because of bodily injury sustained by the insured person.

* * * *

Additional Definitions Used in this Part Only

a. Insured person means:

1. You or a family member.

* * * *

c. Underinsured Motor Vehicle--means a land motor vehicle when:

1. the ownership, maintenance or use is insured or bonded for bodily injury liability at the time of the accident; and

2. its limit for bodily injury liability is less than the amount of the insured persons damages.

* * * *

Under Part II of the policy the provisions that apply to Exclusions and Arbitration remain the same and apply to this endorsement.

* * * *

Preceding the above language and as a part of the same form containing endorsement E1179j is a "Dear Policyholder" letter which includes the following explanation:

In our effort to improve services to our policyholders, we are separating Uninsured and UNDERinsured Motorist Coverage. Until now, Underinsured Motorist has been included under Uninsured Motorist Coverage.

Uninsured Motorist Coverage protects an insured person for bodily injury sustained through the negligence of a person driving an uninsured motor vehicle not owned by you. UNDERinsured Motorist Coverage protects an insured person for bodily injury sustained through the negligence of a person driving an insured motor vehicle not owned by you, where the insured person under your policy is entitled to recover damages in excess of the negligent driver's bodily injury policy limits.

This endorsement is being attached to your policy to provide in detail, Underinsured Motorist Coverage as a separate and distinct coverage. It will not diminish existing coverage under either Uninsured or UNDERinsured Motorist Coverage. If you have questions, please do not hesitate to contact your Farmers Agent.

Although the "Dear Policyholder" letter states that Farmers is "separating" uninsured and underinsured motorist coverage, it is readily apparent that the language of endorsement E1179j in fact adds a new coverage, Coverage C-1, to the coverage provided in Coverage C. Nothing in the endorsement in any way purports to remove or amend in any way the...