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

• Decision Date: 27 March 2012
• Docket Number: No. WD 74003.,WD 74003.
• Citation: 368 S.W.3d 174
• Parties: Courtney TAYLOR, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.
• Court: Missouri Court of Appeals

368 S.W.3d 174

Courtney TAYLOR, Respondent,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

No. WD 74003.

Missouri Court of Appeals, Western District.

Feb. 21, 2012.

Motion for Rehearing and/or Transfer to

Supreme Court Denied March 27, 2012.

Application for Transfer

Denied July 3, 2012.

Dale L. Beckerman, Kansas City, MO, for appellant.

John R. Cady, Platte City, MO, for respondent.

Before Special Division: GARY D. WITT, Presiding Judge, ZEL M. FISCHER, Special Judge and KENNETH M. ROMINES, Special Judge.

GARY D. WITT, Presiding Judge.

State Farm Mutual Automobile Insurance Company (“State Farm”) appeals from the trial court's judgment granting Courtney Taylor's (“Taylor”) motion for summary judgment, and denying State Farm's motion for summary judgment. We reverse.

Factual Background

The parties stipulated to the facts below and do not dispute the relevant facts on appeal. Pursuant to the stipulated facts the parties filed cross motions for summary judgment.

On October 31, 2007, Taylor, who was fifteen years old at the time, sustained serious injuries when she was struck, while walking, by a vehicle operated by Donna Scott (“Scott”). The parties stipulated that Taylor's damages equaled or exceeded $135,000. Scott's automobile insurance policy, issued by Chicago First Insurance, provided liability coverage limits of $25,000, and this amount was subsequently paid to Taylor.

At the time of the accident, Taylor was insured under two automobile policies purchased by her parents from State Farm. Both policies provided underinsured motorist coverage (“UIM”) in the amount of $50,000. State Farm paid Taylor $50,000 for UIM coverage under one of the policies, but refused to pay UIM coverage under the second policy based on its contention that the policies precluded “stacking” of benefits pursuant to clear and unambiguous language in the policies.

On October 12, 2010, Taylor filed suit against State Farm in the Circuit Court of Clay County to recover an additional $50,000 based on the UIM coverage provided in the second policy. The parties filed cross motions for summary judgment.

On May 10, 2011, the trial court entered its Judgment granting Taylor's summary judgment motion, and denying State Farm's summary judgment motion. Accordingly, the trial court entered judgment in favor of Taylor in the amount of $50,000. State Farm now appeals.

Further facts are outlined below as relevant in the analysis section.

Standard of Review

This is an appeal from summary judgment, and as such our review is de novo. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The Court “will review the record in the light most favorable to the party against whom judgment was entered.” Id. Granting summary judgment is proper only when there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Id. at 380. “The criteria on appeal for testing the propriety of summary judgment are no different from those which should be employed by the trial court to determine the propriety of sustaining the motion initially.” State ex rel. Outcom, Inc. v. City of Peculiar, 350 S.W.3d 57, 62 (Mo.App. W.D.2011) (internal citation and quotation marks omitted).

Analysis

In its sole Point on appeal, State Farm argues that the trial court erred in entering judgment in favor of Taylor because the Court “permit[ed] Plaintiff to stack underinsured coverage as a pedestrian because the $50,000 of underinsured benefits paid by State Farm fulfilled the obligation of State Farm in that each State Farm policy had underinsured policy limit of $50,000 and [because] each State Farm policy unambiguously stated that the maximum underinsured coverage available was the policy limit of the policy with the highest limit which State Farm paid by its payment of $50,000.”

The interpretation of an insurance policy is a question of law that this Court also determines de novo. Jones v. Mid–Century Ins. Co., 287 S.W.3d 687, 690 (Mo. banc 2009). Because this Court's review is de novo, if the trial court's judgment can be sustained on any ground as a matter of law, even if different than the one posited in the order granting summary judgment, it should be affirmed. ITT Commercial Fin., 854 S.W.2d at 387–88. In construing the terms of an insurance policy, this Court applies the meaning that would be attached by an ordinary person of average understanding if purchasing insurance and resolves ambiguities in favor of the insured. Jones, 287 S.W.3d at 690 (citing Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007) and Martin v. United States Fid. & Guar. Co., 996 S.W.2d 506, 508 (Mo. banc 1999)).

Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43, 46 (Mo. banc 2009) (internal quotation marks omitted.) “However, where insurance policies are unambiguous, they will be enforced as written.” Todd v. Missouri United School Ins. Council, 223 S.W.3d 156, 160 (Mo. banc 2007) (internal citation and quotation marks omitted). “Courts should not interpret policy provisions in isolation but rather evaluate policies as a whole.” Ritchie v. Allied Property & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. banc 2009) (citation omitted).

Taylor received the maximum limits of liability coverage ($25,000) from Scott's Chicago First Insurance based on Scott's undisputed liability in causing the accident and injuring Taylor. Taylor has also recovered the maximum limits of UIM coverage of $50,000 pursuant to the first of the two State Farm policies which covered Taylor. The question before us is whether the trial court erred in concluding that Taylor is entitled to recover an additional $50,000 of UIM coverage from State Farm under the second Policy. ¹

The difference between Uninsured Motorist (“UM”) coverage and UIM coverage in set forth in Niswonger v. Farm Bureau Town & Country Ins. Co. of Missouri:

Though similar, uninsured motorist coverage and underinsured motorist (UIM) coverage are not the same thing. The former refers to coverage intended to provide a source of recovery for insureds who are legally entitled to recover damages for bodily injury caused by the negligent owner or operator of a completely uninsured motor vehicle. UIM coverage, on the other hand, refers to coverage intended to provide a source of recovery for insureds (up to the insurer's liability limit for such coverage) who have been bodily injured by a negligent motorist whose own automobile liability insurance coverage is insufficient to fully pay for the injured person's actual damages ... Both uninsured motorist coverage and UIM coverage are in the nature of floating, personal accident insurance rather than insurance on a particular vehicle, and thus follow the insured individual wherever he goes.992 S.W.2d 308, 313 (Mo.App. E.D.1999) (citations omitted and emphasis original).

The Policy provided for UIM coverage as follows:

UNDERINSURED MOTOR VEHICLE–COVERAGE W

We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured vehicle. The bodily injury must be sustained by an insured and caused by an accident arising out of the operation, maintenance or use of an underinsured motor vehicle.

(Emphasis original.)

It is undisputed that this Policy had a “stated limit[ ] of underinsured motor vehicle coverage in the amount of $50,000.” Furthermore, this Policy contained the following relevant “Limits of Liability” language for “Coverage W”:

5. The most we pay will be the lesser of:

a. the difference between the amount of the insured's damages for bodily injury, and the amount paid to the insured by or for any person or organization who is or may be held legally liable for the bodily injury; or

b. the limits of liability of this coverage.

(Emphasis original.)

Therefore, because the parties stipulated before the trial court that Taylor “sustained at least $135,000 in total damages,” there is no dispute that, if the above clauses were the only relevant language in the Policy, Taylor would be entitled to recover an additional $50,000 pursuant to the second Policy. The disputed issue is whether the additional language below, which was also contained in the Policy, precluded Taylor from recovering under the second Policy as a matter of law:

If There Is Other Underinsured Motor Vehicle Coverage

1. If the insured sustains bodily injury as a pedestrian and other underinsured motor vehicle coverage applies:

a. the total limits of liability under all such coverages shall not exceed that of the coverage with the highest limit of liability; and

b. we are liable only for our share. Our share is that percent of the damages that the limit of liability of this coverage bears to the total of all underinsured motor vehicle coverage applicable to the accident.

(Emphasis original.)

State Farm contends that the above language precluded Taylor from recovering under the second Policy because 1(a) of the Other Underinsured Motor Vehicle Coverage language “tells the reader that where multiple underinsured coverages apply, the total limit of all such coverages ‘shall not exceed’ the limit of the policy with the highest limit.” Accordingly, the dispositive issue is whether the language of 1(a) makes it unambiguous that “stacking” of UIM policies is disallowed under the Policy.

The Missouri Supreme Court has outlined the following applicable principles in Ritchie v. Allied Property & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. banc 2009):

“ ‘Stacking’ refers to an insured's ability to obtain multiple insurance coverage benefits for an injury either from more than one policy, as where the insured has two or more separate vehicles under separate policies, or from multiple coverages provided for within a single policy, as when an insured has one policy which covers more than one vehicle.” Niswonger v. Farm Bureau Town & Country Ins. Co. of Missouri, 992 S.W.2d 308, 313 (Mo.App.1999). Missouri law requires that all...