Strader v. Progressive Ins.

• Decision Date: 31 July 2007
• Docket Number: No. 28044.,28044.
• Parties: Amber STRADER, Plaintiff-Respondent, v. PROGRESSIVE INSURANCE, Defendant-Appellant.
• Court: Missouri Court of Appeals

230 S.W.3d 621

Amber STRADER, Plaintiff-Respondent, v. PROGRESSIVE INSURANCE, Defendant-Appellant.

No. 28044.

Missouri Court of Appeals, Southern District, Division Two.

July 31, 2007.

Motion for Rehearing and Transfer to Supreme Court Denied August 22, 2007.

Application for Transfer Denied September 25, 2007.

Jeffrey P. Hine, Cape Girardeau, for appellant.

Daniel Thomas Moore, Poplar Bluff, for respondent.

JEFFREY W. BATES, Chief Judge.

Progressive Preferred Insurance Company (Progressive) appeals from a judgment requiring it to pay a claim for collision coverage submitted by its insured, Amber Strader (Strader). Progressive had denied the claim based on a policy exclusion. After a bench trial, the court decided the exclusion was ambiguous. On appeal, Progressive contends this decision was erroneous because the policy exclusion was not ambiguous and should have been applied as written to preclude coverage for Strader's claim. This Court agrees. Consequently, the judgment is reversed, and the case is remanded with directions to enter a judgment for Progressive.

In this court-tried case, we must affirm the trial court's judgment unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Rule 84.13(d); Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976); Bacon v. Uhl, 173 S.W.3d 390, 396 (Mo.App.2005).¹ The case was tried below on stipulated facts. The only issue was the applicability of the exclusion upon which Progressive relied. The facts are not in dispute, and we are only concerned with whether the trial court properly interpreted and applied the insurance contract. On appeal, we do not defer to the trial court's determination of that question of law. Auto. Club Inter-Ins. Exch. v. Medrano, 83 S.W.3d 632, 637 (Mo.App.2002). Instead, our standard of review is de novo. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007); Bickerton, Inc. v. Am. States Ins. Co., 898 S.W.2d 595, 601 (Mo. App.1995). The instant controversy arose from the following facts.

In July 2005, Strader was employed by the post office as a rural mail carrier. Progressive issued a policy of personal automobile insurance to Strader that was effective from October 26, 2005, to April 26, 2006. After the policy term commenced, Strader purchased a 2002 GMC Sonoma. When she called her insurance agent to have the Sonoma added to the policy, Strader described it as "a work vehicle." Strader intended to use it for business purposes as a mail delivery vehicle and for her personal automotive needs, such as traveling back and forth to school, carrying groceries, etc. The Sonoma was added to the list of vehicles described in the policy declarations and insured for collision coverage in Part IV of the policy. This coverage part contained the following language:

EXCLUSIONS — READ THE FOLLOWING EXCLUSIONS CAREFULLY. IF AN EXCLUSION APPLIES, COVERAGE WILL NOT BE AFFORDED UNDER THIS PART IV. Coverage under this Part IV does not apply for loss: 1. to a covered vehicle, non-owned vehicle, temporary substitute vehicle, or trailer, while being used to carry persons or property for compensation or a fee, including, but not limited to, delivery of magazines, newspapers, food, or any other products. This exclusion does not apply to shared-expense car pools ....

The Sonoma was a "covered vehicle" within the meaning of this exclusion because, by policy definition, that phrase included any vehicle shown on the Declarations page.

On November 25, 2005, Strader was using the Sonoma to deliver the mail on her rural mail route. As she was driving on a gravel road, a deer ran out in front of the vehicle. When Strader swerved to miss the deer, the Sonoma ran off the left side of the road. It went down a steep drop and collided with some trees and boulders. After the accident, the mail that Strader had been carrying in the Sonoma was loaded into another vehicle so it could be delivered.

Due to the damage sustained in the collision, the Sonoma was a total loss. Its value at that time was $15,875. Strader made a claim under the collision coverage of her policy, but Progressive denied the claim based upon the aforementioned exclusion. Strader filed suit against Progressive, and the parties stipulated to the relevant facts. The only issue was whether the exclusion barred coverage. The trial court ruled in Strader's favor for the following reasons:

The Court finds that the language contained in the exclusion is ambiguous to the extent that it does not specifically include the use of an automobile to perform the services of a rural mail carrier. The Court specifically finds that the vehicle was not being used to carry or transport property for compensation or a fee, as that definition would more closely fit a vehicle being used to deliver goods or property in which a specific remuneration was paid for each delivery and the Court notes that the examples used by the insurance company, i.e., delivery of magazines, newspapers or food, all deal with the ultimate receiver of the magazines, newspapers or food paying a price to the driver for the delivery and that the prices would vary depending upon what was delivered, whereas in the case at bar, the persons receiving the mail do not pay any fee whatsoever and specifically do not pay any fee or compensation to the rural mail carriers, such as [Strader].

The trial court entered judgment for Strader in the amount of $15,875, plus interest and costs. This appeal followed.

Because Progressive was relying upon an exclusion in the policy to deny collision coverage, it bore the burden of proving facts that made the exclusion applicable. Shelter Mut. Ins. Co. v. Ballew, 203 S.W.3d 789, 792 (Mo.App.2006); Bowan ex rel. Bowan v. Gen. Sec. Indemn. Co. of Ariz., 174 S.W.3d 1, 5 (Mo.App.2005). The stipulated facts established that, when the collision occurred, Strader was carrying mail in her vehicle that she was being paid to deliver pursuant to her employment by the Post Office as a rural mail carrier. Progressive argues that these facts invoke the exclusion because it prohibits collision coverage while a covered vehicle is "being used to carry ... property for compensation or a fee...." Strader argues that the exclusion should not be applied to bar coverage because it is ambiguous.

The mere fact that Progressive and Strader disagree about the meaning of the exclusion does not make it ambiguous. H.K. Porter Co., Inc. v. Transit Cas. Co. in Receivership, 215 S.W.3d 134, 145 (Mo. App.2006); Jackson County v. McClain Enter., Inc., 190 S.W.3d 633, 640 (Mo.App. 2006). An ambiguity exists when there is uncertainty, indistinctness or duplicity in the meaning of the policy. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007); Poage v. State Farm Fire & Cas. Co., 203 S.W.3d 781, 783-84 (Mo.App. 2006). If the language used is reasonably open to different interpretations, it is ambiguous. Seeck, 212 S.W.3d at 132. In making that determination, we apply the meaning which would be attached to those terms by an ordinary person of average understanding who purchased the insurance. McCormack Baron Mgmt. Serv., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. banc 1999). To ascertain the common meaning of a term, a court may look to a dictionary definition. Martin v. U.S. Fidelity and Guar. Co., 996 S.W.2d 506, 508 (Mo. banc 1999); Shelter Mut. Ins. Co. v. Ballew, 203 S.W.3d 789, 794-95 (Mo.App.2006); Auto Owners (Mut.) Ins. Co. v. Sugar Creek Mem'l Post No. 3976, 123 S.W.3d 183, 190 (Mo.App. 2003); King v. Cont'l Western Ins. Co., 123 S.W.3d 259, 265 (Mo.App.2003). A word with more than one dictionary meaning is not necessarily ambiguous if the court concludes that, in context, only one meaning that comports with the parties' objectively reasonable expectations is applicable. Auto Owners, 123 S.W.3d at 188; King, 123 S.W.3d at 265; Am. Family Mut. Ins. Co. v. Wemhoff, 972 S.W.2d 402, 405-06 (Mo.App.1998). Furthermore, whether a term is ambiguous is determined in light of the specific factual situation before the court. Am. Family, 972 S.W.2d at 406.

Ambiguous language is construed against the insurer. Martin, 996 S.W.2d at 508. Unambiguous language is enforced as written, absent a public policy exception to the contrary. Mansion Hills Condo. Ass'n v. Am. Family Mut. Ins. Co., 62 S.W.3d 633, 637 (Mo.App.2001). "A court is not permitted to create an ambiguity in order to distort the language of an unambiguous policy, or, in order to enforce a particular construction which it might feel is more appropriate." Rodriguez v. Gen. Acc. Ins. Co. of America, 808 S.W.2d 379, 382 (Mo. banc 1991).

The relevant terms of the exclusion are: (1) loss to a covered vehicle; (2) while being used to carry; (3) property; (4) for compensation or a fee. It is undisputed that the Sonoma was totaled while Strader was carrying mail inside the vehicle that she was being paid to deliver as a rural mail carrier. For the reasons that follow, we believe a person of reasonable intelligence who bought a Progressive policy would understand that these facts come within the terms of the exclusion.

The first element of the exclusion is not in dispute. The parties agree that the Sonoma was damaged in the collision. It qualified as a "covered vehicle" because it was listed in the policy declarations.

The second element of the exclusion involves the phrase, "while being used to carry." In the context at issue here, "carry" means "to move while supporting (as in a vehicle or in one's hands or arms)" or "to convey or transport[.]" WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 343 (1976); BLACK'S LAW DICTIONARY 227 (8th ed.2004). This element was met because the Sonoma was being used to carry mail when the collision occurred.

The third element involves the term, "property." This word has been defined to mean "[a]ny external thing over which the rights of...