Vega v. Shelter Mut. Ins. Co.

• Decision Date: 31 May 2005
• Docket Number: No. WD 64135.,WD 64135.
• Citation: 162 S.W.3d 144
• Parties: Chastity VEGA, Respondent, v. SHELTER MUTUAL INSURANCE COMPANY, Appellant.
• Court: Missouri Supreme Court

162 S.W.3d 144

Chastity VEGA, Respondent, v. SHELTER MUTUAL INSURANCE COMPANY, Appellant.

No. WD 64135.

Missouri Court of Appeals, Western District.

March 1, 2005.

Motion for Rehearing and/or Transfer to Supreme Court Denied May 3, 2005.

Application for Transfer Denied May 31, 2005.

James C. Spangler, Sedalia, MO, for appellant.

Mark D. Pfeiffer, Columbia, MO, for respondent.

Before HAROLD L. LOWENSTEIN, Presiding Judge, JAMES M. SMART, JR., Judge and JOSEPH M. ELLIS, Judge.

JOSEPH M. ELLIS, Judge.

Shelter Mutual Insurance Company appeals the trial court's judgment in favor of Chastity Vega for $50,000 in underinsured motorist coverage as a result of an accident in which Ms. Vega was injured.

On June 22, 2001, John and Chastity Vega¹ were husband and wife. John owned a 1988 Chevy S10 pickup, and Chastity owned a 1993 Dodge Shadow. Both vehicles were insured by Shelter. On that day, Chastity was operating her 1993 Dodge Shadow in a southbound direction just outside of Hallsville, Missouri. At the same time, Robert Hartley was traveling northbound when he negligently crossed the centerline and collided with Chastity's vehicle. As a result of the collision, Chastity sustained fractures to her left pelvis, right knee, and left elbow. She also had a significant forehead laceration and additional soft tissue injuries. She incurred medical bills totaling $74,196.96, and it was stipulated that Chastity's damages as a result of the car wreck were in excess of $75,000. Additional facts will be detailed as needed later in this opinion.

Mr. Hartley was insured by State Farm Insurance Company. In light of Mr. Hartley's negligence, State Farm immediately tendered its policy limits of $25,000 to Chastity. On July 2, 2001, counsel for Chastity made demand on Shelter for underinsured motorist coverage of $50,000. On July 6, 2001, Shelter issued a denial of coverage letter for the underinsured motorist coverage requested. Thereafter, Chastity filed the instant action against Shelter in two counts, the first being for breach of contract and the second for negligent misrepresentation.

On March 12, 2004, the case was tried to the court sitting without a jury upon a stipulation as to some facts, as well as testimonial and documentary evidence. On March 31, 2004, the trial court entered its judgment on Count I (breach of contract) in favor of Chastity Vega, awarding her damages in the amount of $50,000 plus interest, at the rate of 9% per annum, from July 6, 2001, until the date the judgment is satisfied. The court ruled in favor of Shelter on Count II (negligent misrepresentation). Shelter brings this appeal from the judgment on Count I.

Shelter presents one point on appeal. It contends the trial court erred in entering judgment in favor of Chastity Vega on Count I of the First Amended Petition because the Shelter policy covering her vehicle did not contain underinsured motorist (hereafter "UIM") coverage and the UIM coverage in John Vega's Shelter policy does not apply when an insured (Chastity, in this case, under the definition in the policy) occupies a motor vehicle other than an "insured auto," which she owns, and Chastity's 1993 Dodge Shadow was not an "insured auto" as defined by the policy.

The issue in this case is whether Chastity's injuries were covered by underinsured motorist coverage on either her 1993 Dodge Shadow or her husband's 1988 Chevy S10. The interpretation of the meaning of an insurance policy is a question of law. Heringer v. American Family Mut. Ins. Co., 140 S.W.3d 100, 102 (Mo.App. W.D.2004). "On appeal, questions of law receive de novo review, giving no deference to the trial court's decision." Boulevard Inv. Co. v. Capitol Indem. Corp., 27 S.W.3d 856, 858 (Mo.App. E.D. 2000).

The general rules for interpretation of contracts apply to insurance policies. If an insurance policy is unambiguous, it is enforced as written absent a statute or public policy requiring coverage. If the language of the policy is ambiguous, it is construed against the insurer. An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of words used in the contract. The language of an insurance policy is ambiguous when it is reasonably and fairly open to different constructions. To test whether the language used in the policy is ambiguous, the language is considered in the light in which it would normally be understood by the lay person who bought and paid for the policy. Where an insurer seeks to avoid coverage under a policy exclusion, it has the burden of proving the applicability of the exclusion.

Generally, if a term is defined in an insurance policy, a court will look to that definition and nowhere else. If a term within an insurance policy is clearly defined, the policy definition controls. If a conflict arises between a technical definition of a term and the meaning of the term which would reasonably be understood by the average lay person, the lay person's definition will be applied, unless it is obvious the technical meaning was intended.

Heringer, 140 S.W.3d at 102-03 (internal citations and quotations omitted).

Initially, we must address a matter disputed by the parties, and that is whether John and Chastity had two insurance policies with Shelter, one on each vehicle, or one policy covering two vehicles. Shelter contends that there were two policies, one on each vehicle. Respondent argues, and the trial court found,² that there was one policy covering two vehicles. The trial court apparently based its finding on (1) Chastity's testimony that she and John only received one copy of Shelter's policy form number A-20-A (albeit they did receive separate Declarations pages and billings), (2) the fact that the policy numbers listed on the Declarations pages were identical except for the last numbers in each, 24-1-3753230-1 and 24-1-3753230-2, and (3) testimony from Shelter agent Holsinger that the first ten numbers of a policy number are known as a "family number," and the last number is a "unit number."³ Respondent further argues that the trial court's determination that there was one policy was a factual finding to which we must defer pursuant to Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976).

The whole issue of one policy or two is a red herring. The parties agree that there was a separate Declarations page for each vehicle, and those pages are part of the record on appeal. Both Declarations pages reflect the policy form number of which it is a part, that being Shelter policy form number A-20-A. That is the printed policy form that was provided to John and Chastity, and it doesn't really matter whether they received one or two copies of the policy form because that policy form contained the insuring agreement that covered both vehicles. The very first sentence on page 1 of policy form A-20-A, appearing immediately after the heading "THE INDEX" and the sub-caption "WHERE CAN YOU FIND IT," states: "Declarations—The insured vehicle, policy period, coverages and amount of insurance you have." Following this on page 1 is the remainder of the index and then the very first paragraph on page 2 provides, in pertinent part:

AGREEMENT

We agree to insure you according to all the terms of this policy,

(1) in reliance on your statements in the Application and in any Application for Change and in the Declarations, made a part hereof, and

(2) based on your payment of the premium.

When you pay the premium, this policy provides the insurance you chose, as shown in the Declarations.⁴

The policy language states in clear and unequivocal terms that the Declarations page is part of the insuring agreement (policy form number A-20-A) and describes (a) the vehicle insured, (b) the term of the policy, (c) what coverages apply to that vehicle, and (d) the amount of insurance. The policy language then goes on to declare that, when the premium is paid, the policy provides the insurance "as shown in the Declarations." There is no ambiguity here; there is no "duplicity, indistinctness, or uncertainty in the meaning of words used in the contract." Heringer, 140 S.W.3d at 103.

"The interpretation of policy terms, which are not ambiguous, is a question of law and, as such, an appellate court is not required to defer to the findings of the trial court." Knipp v. Truck Ins. Exch., 857 S.W.2d 281, 284 (Mo.App. W.D.1993). Since there was a Declarations page for the 1993 Dodge Shadow in Chastity's name and a separate one for the 1988 Chevy S10 in John's name; each of them listed the policy period, coverages, and amount of insurance provided for the respective vehicle; and each contained a different policy number, it is clear that there were two policies of insurance, one on each vehicle. Consequently, the trial court's finding in this case that there was one policy covering two vehicles is contrary to the provisions of the policies themselves and, therefore, was erroneous as a matter of law.

Having determined that there were two separate policies, we next look to the Declarations pages for each to determine whether either or both provided UIM coverage. Review of the coverages for Chastity's Dodge Shadow reveals that she carried bodily injury, property damage, medical payments, uninsured motorist, accidental death, comprehensive, and emergency road service. The policy did not include underinsured motorist coverage.

The policy on John's Chevy S10 pickup, however, included coverage for bodily injury, property damage, medical payments, uninsured motorist, accidental death emergency road service, and underinsured motorist, with limits on the latter of "$50,000 each person, $100,000 each accident." So the ultimate question in the case before us is whether the UIM coverage in John's policy provided coverage to Chastity for the UIM loss she sustained in her 1993 Dodge Shadow on June 22, 2001.

UIM coverage is provided in an endorsement to Shelter policy form number A-20-A. Shelter contends the UIM...