State Farm Mut. Auto. Ins. Co. v. MFA Mut. Ins. Co.

• Decision Date: 19 June 1984
• Docket Number: No. 65397,65397
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. MFA MUTUAL INSURANCE COMPANY, Respondent.
• Court: Missouri Supreme Court

Page 276

671 S.W.2d 276

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. MFA MUTUAL INSURANCE COMPANY, Respondent.

No. 65397.

Supreme Court of Missouri,

En Banc.

June 19, 1984.

Ben Ely, Jr., Mark M. Stewart, St. Louis, for appellant.

James E. Godfrey, Samuel T. Vandover, St. Louis, for respondent.

BLACKMAR, Judge.

On May 24, 1980, Dallas Buchanan, a passenger in a vehicle owned by Richard Tuder, was injured in a collision with an uninsured motor vehicle in Monroe County, Illinois. Tuder was insured against liability by plaintiff-appellant State Farm, while Buchanan carried separate liability insurance policies with defendant-respondent MFA insuring his two automobiles. Each of the three insurance policies contained uninsured motorist coverage in the amount of $10,000 as required by the statute then in force, § 379.203, RSMo 1978.

State Farm settled with Buchanan for $9,700 and then brought suit against MFA seeking a declaration that MFA was required to contribute two-thirds of the settlement. It relied on Midwest Mutual Insurance Company v. Aetna Casualty & Surety Company, 565 S.W.2d 711 (Mo.App.1978). MFA argued that Illinois law applied because the accident occurred in Illinois, the uninsured motorist resided in Illinois, and the uninsured vehicle was registered in Illinois. It is apparently conceded that Illinois would not recognize a claim such as State Farm had presented. The trial court found this argument persuasive and dismissed State Farm's claim.

The Court of Appeals, Eastern District affirmed, but on a basis wholly different from that which was briefed and argued. It found that its own opinion in Automobile Club Inter-Insurance Exchange v. Farmers Insurance Company, 646 S.W.2d 838 (Mo.App.1982) controlled. We granted transfer because of the conflict between Midwest Mutual and the result reached by the Court of Appeals in this case. ¹ We reverse and remand for further proceedings.

I.

Missouri law, rather than Illinois law, clearly applies. ² The respondent, MFA, argues that the more "significant contacts" are found in Illinois. Even if this analysis is appropriate, however, the question is not so much one of the number of contacts but rather of their relative significance. This case involves contractual provisions mandated by Missouri statute. The public policy underlying the statute is strong. Cano v. Travelers Insurance Company, 656 S.W.2d 266 (Mo.banc 1983); Hines v. Government Employees Insurance Company, 656 S.W.2d 262 (Mo.banc 1983); Cameron Mutual Insurance Company v. Madden, 533 S.W.2d 538 (Mo.banc 1976). It would be strange indeed if contract obligations imposed by law would change whenever a state line is crossed. In Kennedy v. Dixon, 439 S.W.2d 173 (Mo.banc 1969), we held that the Indiana guest statute should not be applied to limit the liability of a driver residing in Missouri to a guest in his automobile who was also a Missouri resident. The reasons for applying Missouri law in this case are much stronger than in Kennedy. Contract and tort analyses yield the same result. See Restatement (Second) of Conflict of Laws, § 188, 145.

II.

Both parties appear to have modified their initial positions. The respondent initially assumed that Midwest Mutual was controlling and conceded in its brief that "[i]f Missouri law applies to this controversy appellant would be entitled to reimbursement of two-thirds of the sum of $9,700 from Respondent." The Respondent, however, cited the intervening Auto Club decision to the Court of Appeals, and now asserts that one uninsured motorist carrier has no right of contribution against another. It argues, soundly, that its liability is dependent upon a showing that the uninsured motorist was negligent, and goes on to assert that, rather than being bound by another insurer's decision, it is entitled to a jury trial on the issue of negligence. MFA is perfectly entitled to advance its position, in the present posture of the case, without being prejudiced on account of its earlier concession.

Appellant State Farm does not now argue for an absolute right of contribution, simply because of its settlement payment, and concedes that it should have some burden of demonstrating that the settlement was reasonable. We proceed, then, to the decision of the issues tendered by the parties in their most recent submissions.

Auto Club is clearly distinguishable. There a passenger in an uninsured vehicle was injured in a collision with an insured vehicle. The insurer of the driver of the other car settled with the passenger for $20,000, and then sought contribution from the passenger's uninsured motorist carrier based on the proportional negligence which might be found to be attributable to the uninsured host driver. The Court of Appeals rejected the claim for contribution, holding that, in order to support a claim for contribution, "both parties must be under a common liability" and that the right of contribution existed only between joint tortfeasors. The case involved a claim by one insurer which had settled a liability claim, against another insurer whose uninsured coverage would have been available to the injured passenger had the settlement not been made. We are not called upon to approve or disapprove this holding, but simply point out that it involves a problem different from the one before us.

We believe that Midwest Mutual, with the modifications indicated below, represents an approach which is sound and consistent with the policy of our law. Uninsured motorist coverage, as has been pointed out, is required in every Missouri automobile liability policy. Policy provisions designed to limit a particular carrier's coverage are strictly construed against the insurer and frequently found to be...