Surface v. Ranger Ins. Co.
| Decision Date | 07 July 1975 |
| Docket Number | No. 9598,9598 |
| Citation | 526 S.W.2d 44 |
| Parties | Dianne SURFACE, by and through Georgia Surface, next friend, Plaintiff-Appellant, v. RANGER INSURANCE COMPANY, a corporation, Defendant-Respondent. |
| Court | Missouri Court of Appeals |
Joe C. Welborn, James E. Spain, Briney, Welborn & Spain, Bloomfield, for plaintiff-appellant.
J. Lee Purcell, Hyde, Purcell, Wilhoit & Edmundson, Poplar Bluff, for defendant-respondent.
In this action, plaintiff seeks construction of the 'uninsured motorist' provisions of an automobile liability policy issued by defendant Ranger Insurance Company. The appeal is here upon an agreed statement of facts in lieu of a transcript, as provided by Rule 81.13, V.A.M.R., and therefore the only question before us is whether or not the trial court drew the proper legal conclusion from the facts stipulated. State ex rel. Ciba Pharmaceutical Products, Inc. v. State Tax Commission, 382 S.W.2d 645, 651(1) (Mo. banc 1964); Browning v. City of Poplar Bluff, 370 S.W.2d 179, 182(3) (Mo.App.1963).
Plaintiff is a minor; this action was brought by her mother as next friend pursuant to Rule 52.02. Plaintiff's father purchased an automobile liability policy from the defendant. Plaintiff was not a named insured on the schedule of the policy. The policy contained a section entitled 'Family Protection Against Uninsured Motorists.' The insuring agreements under this section, as material here, read:
'1. Coverage F--Damage for Bodily Injury Caused by Uninsured Automobiles: To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile . . ..
'II. Definitions:
(a) Insured. The unqualified word 'insured' means:
(1) The named insured as stated in the policy and any person designated as named insured in the schedule and, if the named insured is an individual, his spouse if a resident of the same household; provided, if the named insured as stated in the policy is other than an individual or husband and wife who are residents of the same household, the named insured for the purposes of this endorsement shall be only a person so designated in the schedule;
(2) any person while using the automobile, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either.
The insurance applies separately with respect to each named insured . . . and residents of the same household, but neither this provision nor application of the insurance to more than one insured shall operate to increase the limits of the company's liability.'
On March 26, 1972, and while this policy was in force plaintiff was riding as a passenger in a 1965 Ford operated by one Paul Adams. The Ford was involved in a one-car accident; it is admittedly not the vehicle insured under the policy sued on. The plaintiff was a resident of her father's household at the time of the accident. The Ford was an uninsured vehicle at the time plaintiff sustained her injuries.
Plaintiff filed suit in the Circuit Court of Stoddard County, alleging that she was an insured under Coverage 'F' of the defendant's policy because she was a resident of the same household as William G. Surface, the named insured. Defendant denied coverage under the provisions of Coverage 'F' on the ground that plaintiff was not designated as a named insured in the schedule of the policy and was not the spouse of William G. Surface.
Plaintiff had a verdict and judgment against the defendant in the amount of $10,000. Defendant filed an after-trial motion to set aside the verdict and judgment and enter judgment for the defendant on the sole ground that Coverage 'F' insures only William G. Surface or his spouse if a resident of the same household. The trial court granted the motion. It is stipulated here that the only issue presented is whether or not plaintiff is an insured under Coverage 'F' of defendant's policy.
The appellant relies on the familiar principle that whenever the language of an insurance policy is reasonably susceptible of different interpretations, the construction favoring the insured must be adopted. White v. Smith, 440 S.W.2d 497, 511(20) (Mo.App.1969); Sterns v. M.F.A. Mut. Ins. Co., 401 S.W.2d 510, 514(2) (Mo.App.1966). Specifically, the appellant contends for a conflict in two clauses or provisions which she inferentially assumes and argues define the word 'insured' for the purposes of uninsured motorist coverage.
Our attention is first called to that part of section II(a)(1) of Coverage 'F', which reads:
'(a) Insured. The unqualified word 'insured' means:
(1) The named insured as stated in the policy and any person designated as named insured in the schedule and, if the named insured is an individual, his spouse if a resident of the same household;'
Appellant then directs us to the paragraph which is set apart from but immediately follows the 'definitions'. It reads as follows (appellant's emphasis):
'The insurance applies separately with respect to each named insured under this endorsement and residents of the same household, but neither this provision nor the application of the insurance to more than one insured shall operate to increase the limits of the company's liability.'
Counsel for the appellant forthrightly admit they have been unable to find a reported case from any jurisdiction construing the particular language just quoted, but in their brief contend that the paragraph beginning '(t)he insurance applies separately' is part of the 'definitions' section, and in effect expands part II(a)(1) to extend coverage to all members of the named insured's household. The fact that the clause beginning '(t)he insurance applies separately' immediately follows the 'definitions' lends superficial plausibility to the appellant's argument, but we do not agree with her construction of the contract.
The rule that insurance contracts will be construed most strongly against the insurer rests in considerable part upon the notion that such contracts are 'contracts of adhesion', i.e., standardized contracts imposed upon the insured without his having the benefit of any significant negotiation and bargaining. 1 In our opinion, it follows as a corollary premise that each part of an insurance contract should serve a particular purpose; at least our courts have held that every clause in an insurance policy must be given some meaning if it is reasonably possible to do so, and that conflicting provisions in insurance policies should be reconciled if it is possible to do so consistently with the intention of the parties as ascertained from the terms used. Central Surety & Ins. Corp. v. New Amsterdam Cas. Co., 359 Mo. 430, 435, 438, 222 S.W.2d 76, 78(1), 80(6) (banc 1949); Soukop v. Employers' Liability Assur. Corp., 341 Mo. 614, 627--628, 108 S.W.2d 86, 92(8--12), 112 A.L.R. 149, 156 (banc 1937); Brugioni v. Maryland Cas. Co., 382 S.W.2d 707, 712(5, 6) (Mo.1964).
The provisions set out as 'definitions' obviously constitute an 'omnibus clause'. The purpose of such an insuring agreement is to define the classes of persons who are eligible to receive the protection of the policy, and to limit the availability of the insurance to such classes of persons. 1 Long, Law of Liability Insurance, § 3.01 (1975). When sections II(a)(1) and (2) are read together as they appear in the background statement, it becomes apparent that Coverage 'F' is meant to insure (a) the named insured and his spouse, if a resident of the same household; (b) any person designated as a named insured in the schedule, and (c) any permittee of the named insured or his spouse.
The paragraph which follows, beginning '(t)he insurance applies separately', is what is commonly called a 'severability' clause, technically a condition, and is inserted...
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