Jaudes v. Progressive Advanced Insurance Co.

Filing 45

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant's Motion for Summary Judgment (Doc. 21 is GRANTED. IT IS FURTHER ORDERED that Plaintiff's Motion for Summary Judgment (Doc. 31 )is DENIED.The Court will issue a separate judgment consistent with this Memorandum and Order. Signed by Magistrate Judge Shirley P. Mensah on 3/28/2014. (JWD)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

JAMES JAUDES,
Plaintiff,
vs.
PROGRESSIVE PREFERRRED
INSURANCE COMPANY,
Defendant.

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Case No. 4:13-CV-1068-SPM

MEMORANDUM AND ORDER
This matter is before the Court on defendant Progressive Preferred Insurance Company’s
(“Progressive’s”) motion for summary judgment and plaintiff James Jaudes’ (“Jaudes’”) crossmotion for summary judgment.1 For the following reasons, the Court will grant Progressive’s
motion for summary judgment and deny Jaudes’ cross-motion for summary judgment.
I.

BACKGROUND
Jaudes was injured on January 28, 2010, when his car collided with a vehicle being

operated by Derick Cook (“Cook”). Cook carried liability insurance with policy limits of
$50,000, and that amount was tendered to Jaudes. Although the total amount of Jaudes’ damages
is unclear from the record, in his Amended Complaint Jaudes asserts that his damages far exceed
the limits of liability insurance tendered by Cook. At the time of the accident, Jaudes was
insured under an auto liability insurance policy issued by Progressive. Progressive’s policy
provided underinsured motor vehicle coverage in the amount of $50,000 per person and

1

Both parties have consented to the jurisdiction of the undersigned Magistrate Judge, pursuant to
28 U.S.C. §636(c)(1). (Doc. 12).
1

$100,000 per occurrence for each of three vehicles owned by Jaudes, including the vehicle
involved in the collision with Cook. Jaudes made demand on Progressive for payment of
$150,000 under the underinsured motorist (“UIM”) provisions. Progressive refused to make
payment, and Jaudes brought this action for breach of contract.2
Progressive moved for summary judgment, arguing that Jaudes is not entitled to coverage
because the definition of underinsured motor vehicle used in its policy is unambiguous and
Cook’s vehicle does not meet the policy’s definition of an underinsured motor vehicle.
Progressive also posits that its policy does not allow Jaudes to stack the three UIM limits of
liability to create a total combined policy limit of $150,000. (Doc. 21, 22). Jaudes filed a crossmotion for summary judgment, contending that he is entitled to judgment as a matter of law in
light of an opinion that was issued by the Missouri Court of Appeals for the Western District just
as the parties were completing their briefing of Progressive’s motion for summary judgment.
More specifically, Jaudes contends that under Fanning v. Progressive Northwestern Insurance
Co., 412 S.W.3d 360 (Mo. Ct. App. 2013), the policy’s definition of underinsured motor vehicle
is rendered ambiguous by the declarations page and other provisions in the policy. Jaudes
further contends that, notwithstanding Progressive’s arguments to the contrary, Missouri law
permits stacking of the three UIM limits in Progressive’s policy.

2

Jaudes initially filed a petition in state court alleging breach of contract arising from
Progressive’s refusal to pay his claim and asserting entitlement to additional damages based on
Progressive’s vexatious refusal to pay. Progressive removed the action to this court on June 6,
2013. In his opposition to Progressive’s summary judgment motion, Jaudes characterized his
claim in this court as one for declaratory relief. (Doc. 24, at p. 2). However, neither Jaudes’
state court petition nor his Amended Complaint before this Court contains a claim for declaratory
relief; they assert only a claim for breach of contract.
2

II.

LEGAL STANDARD FOR SUMMARY JUDGMENT
The standards applicable to summary judgment motions are well settled, and they do not

change when both parties have moved for summary judgment. See Wermager v. Cormorant
Twp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983); Tower Rock Stone Co. v. Quarry & Allied
Workers Local No. 830, 918 F. Supp. 2d 902, 905 (E.D. Mo. 2013). Summary judgment is
proper “if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Hill v. Walker, 737
F.3d 1209, 1216 (8th Cir. 2013). The movant “bears the initial responsibility of informing the
district court of the basis for its motion” and must identify “those portions of [the record] . . .
which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). If the movant does so, the nonmovant must respond by
submitting evidentiary materials that set out “specific facts showing that there is a genuine issue
for trial.” Id. at 324 (quotation marks omitted). “On a motion for summary judgment, ‘facts
must be viewed in the light most favorable to the nonmoving party only if there is a genuine
dispute as to those facts.’” Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (quoting Scott v.
Harris, 550 U.S. 372, 380 (2007) (internal quotation marks omitted)).
Where parties file cross-motions for summary judgment, each summary judgment motion
must be evaluated independently to determine whether a genuine dispute of material fact exists
and whether the movant is entitled to judgment as a matter of law. Husinga v. Federal-Mogul
Ignition Co., 519 F. Supp. 2d 929, 942 (S.D. Iowa 2007). “[T]he filing of cross motions for
summary judgment does not necessarily indicate that there is no dispute as to a material fact, or
have the effect of submitting the cause to a plenary determination on the merits.” Wermager,
716 F.2d at 1214.

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III.

FACTS3
The material facts are not in dispute. On January 28, 2010, Jaudes was involved in a

motor vehicle collision with Derick Cook, in which Jaudes was injured. Jaudes claims that, as a
result of the collision with Cook, Jaudes sustained damages in excess of $50,000.4 At the time of
the accident, Jaudes was insured under an auto liability insurance policy issued by Progressive.
At the time of the accident, Cook’s vehicle was insured with policy limits of $50,000. The
policy limits of $50,000 were tendered to Jaudes.
The car Jaudes was driving at the time of the accident was insured under Progressive
Policy No. 31245848-0, along with two other cars owned by Jaudes. The parties do not dispute
the policy language contained therein.
The “Declarations Page” of the Progressive Policy states:
Auto Insurance Coverage Summary
This is your Declarations Page
***
This coverage summary replaces your prior one. Your insurance policy and any
policy endorsements contain a full explanation of your coverage. The policy
limits shown for a vehicle may not be combined with the limits for the same
coverage on another vehicle. . . .
The declarations page contains an “Outline of Coverage” that lists each of Jaudes’ vehicles. For
each vehicle, there is a line indicating that the coverage includes “Underinsured Motorist” with
“Limits” of “$50,000 each person/$100,000 each accident.” A separate underinsured motorist
premium is listed for each vehicle.

3

These facts are taken from the parties’ statements of undisputed facts. (Docs. 26, 34, 36).

4

Although the precise amount of Jaudes’ damages is unclear, the parties appear to assume in
their briefs that those damages exceeded $50,000. Thus, for purposes of resolving the instant
motions, the Court will assume that Jaudes’ damages exceeded $50,000.
4

The underinsured motorist provisions in the Progressive policy are contained in Part
III(B) and provide in relevant part as follows:
Part III(B) – UNDERINSURED MOTORIST COVERAGE
INSURING AGREEMENT
If you pay the premium for this coverage, we will pay for damages that an
insured person is legally entitled to recover from the owner or operator of an
underinsured motor vehicle because of bodily injury:
1.
sustained by that insured person;
2.
caused by an accident; and
3.
arising out of the ownership, maintenance, or use of an underinsured
motor vehicle.
We will pay under this Part III(B) only after the limits of liability under all
applicable bodily injury liability bonds and policies have been exhausted by
payment of judgments or settlements.
***
ADDITIONAL DEFINITIONS
When used in this Part III(B): . . .
2.

“Underinsured motor vehicle” means a land motor vehicle or trailer of
any type for which the sum of the limits of liability under all bodily injury
liability bonds or policies applicable at the time of the accident is less than
the coverage limit for the Underinsured Motorist Coverage shown on the
declarations page.

***
LIMITS OF LIABILITY
The limit of liability shown on the declarations page for Underinsured Motorist
Coverage will be reduced by all sums:
1.
paid because of bodily injury by or on behalf of any persons or
organizations that may be legally responsible . . .
The limit of liability shown, subject to all applicable reductions, will apply
regardless of the number of:
1.
claims made;
2.
covered autos;
3.
insured persons;
4.
lawsuits brought;
5

5.
6.

vehicles involved in the accident; or
premiums paid

If your declarations page shows a split limit:
1.
The amount shown for “each person” is the most we will pay for all
damages due to bodily injury to one person; and
2.
subject to the “each person” limit, the amount shown for “each accident”
is the most we will pay for all damages due to bodily injury sustained by
two or more persons in any one accident.
These limits are subject to all applicable reductions to the limit of liability set
forth above.
***
If multiple auto policies issued by us are in effect for you, we will pay no more
than the highest limit of liability for this coverage available under any one policy.
OTHER INSURANCE
If there is other applicable underinsured motorist coverage, we will pay only our
share of the damages. Our share is the proportion that our limit of liability bears
to the total of all available coverage limits. However, any insurance we provide
with respect to a vehicle that is not a covered auto will be excess over any other
underinsured motorist coverage.

IV.

DISCUSSION
In its motion for summary judgment, Progressive posits that Jaudes’ breach of contract

claim fails as a matter of law because Jaudes is not entitled to underinsured motorist coverage for
his damages under the terms of the policy. Progressive advances two arguments in support of its
position. First, Progressive contends that the definition of “underinsured motor vehicle” used in
the policy is unambiguous, and that the undisputed facts show that Cook’s vehicle does not meet
that definition because his vehicle’s liability limit is not “less than” the Progressive policy’s
$50,000 UIM limit. Second, Progressive contends that because its policy contains clear and
unambiguous anti-stacking provisions, Cook’s vehicle cannot be shoe-horned into the policy’s
definition of an “underinsured motor vehicle” by construing the policy to permit stacking of the

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three underinsured motorist limits of $50,000 per person, to create a combined policy limit of
$150,000. (Doc. 21, 22).
Under Missouri law, which applies in this diversity case, the rules governing the
interpretation of insurance policies are well settled. A court must apply the general rules of
contract construction when interpreting an insurance policy, because insurance policies are
contracts. See Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. 2007). A court
must give the contract’s terms their plain and ordinary meaning, unless a term is defined in the
policy or is ambiguous. See Farmland Indus. Inc. v. Republic Ins. Co., 941 S.W.2d 505, 508
(Mo. 1997). A court should apply “the meaning which would be attached by an ordinary person
of average understanding if purchasing insurance.” Burns v. Smith, 303 S.W.3d 505, 509 (Mo.
2010).

In addition, “[c]ourts should not interpret policy provisions in isolation but rather

evaluate policies as a whole.” Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo.
2009). Finally, in interpreting an insurance contract, the court must “endeavor to give each
provision a reasonable meaning and to avoid an interpretation that renders some provisions
useless or redundant.” Dibben v. Shelter Ins. Co., 261 S.W.3d 553, 556 (Mo. Ct. App. 2008).
“‘The key is whether the contract language is ambiguous or unambiguous.’” Todd, 223
S.W.3d at 160 (quoting Peters v. Emp’rs Mut. Cas. Co., 853 S.W.2d 300, 302 (Mo. 1993)). A
term is ambiguous only if it is reasonably open to different constructions and there is duplicity,
indistinctness, or uncertainty in the meaning of the language in the policy. Burns, 303 S.W.3d at
509 (citing Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. 2007)). If an insurance
clause “appears to provide coverage but other clauses indicate that such coverage is not
provided, then the policy is ambiguous.” Seeck, 212 S.W.3d at 134. However, a court must not
“unreasonably distort the language of a policy or exercise inventive powers for the purpose of

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creating an ambiguity when none exists.” Todd, 223 S.W.3d at 163. When an ambiguity exists
in an insurance policy, the court must interpret the policy in favor of the insured. Id. at 160. If,
however, the policy is unambiguous, the court must enforce the contract’s terms as written. Id.
Progressive concedes that if stacking were permitted, Cook would be the operator of an
“underinsured motor vehicle,” as that term is defined in the policy; as such, I begin by applying
the foregoing principles to Progressive’s contention that its policy prohibits stacking of the
underinsured motorist coverage provided for Jaudes’ three vehicles.
A.

STACKING

“‘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.’” Ritchie v. Allied Prop.
& Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. 2009) (quoting Niswonger v. Farm Bureau Town &
Country Ins. Co. of Mo., 992 S.W.2d 308, 313 (Mo. Ct. App. 1999)). Because Missouri statutes
do not mandate underinsured motorist coverage, whether underinsured motorist coverage limits
may be stacked is determined by the language of the contract. Id.
The declarations page of Progressive’s policy describes three covered vehicles, each with
“underinsured motorist” coverage of $50,000 each person/$100,000 each accident. Pointing to
various provisions in the policy, Progressive argues that stacking of those amounts is clearly and
unambiguously prohibited by the language of the policy. First, the declarations page itself states,
“The policy limits shown for a vehicle may not be combined with the limits for the same
coverage on another vehicle.” Second, the Progressive Policy’s “Limits of Liability” section
contains the following language, which the parties refer to as an “anti-stacking clause”:

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The limit of liability shown, subject to all applicable reductions, will apply
regardless of the number of:
1.
claims made;
2.
covered autos;
3.
insured persons;
4.
lawsuits brought;
5.
vehicles involved in the accident; or
6.
premiums paid
***
If multiple auto policies issued by us are in effect for you, we will pay no more
than the highest limit of liability for this coverage available under any one policy.
As Progressive correctly points out, Missouri courts have previously held that similar
language prohibits stacking of underinsured motorist coverage. Corrigan v. Progressive Ins.
Co., 411 S.W.3d 306, 312-15 (Mo. Ct. App. 2013) (holding stacking was prohibited by virtually
identical language in another Progressive policy); Rodriguez v. Gen. Accident Ins. Co. of Am.,
808 S.W.2d 379, 383-84 (Mo. 1991) (holding stacking was prohibited by language stating, “The
limit of liability shown in the schedule for this coverage is our maximum limit of liability for all
damages resulting from any one accident. This is the most we will pay regardless of the number
of . . . Vehicles or premiums shown in the Declarations.”); Stewart v. Liberty Mut. Fire Ins. Co.,
349 S.W.3d 381, 385-88 (Mo. Ct. App. 2011) (holding stacking was prohibited by language
stating, “The limit of liability shown in the schedule or in the declarations for each person for
underinsured motorist coverage is our maximum limit of liability for all damages. . . . This is the
most we will pay regardless of the number of . . . Vehicles or premiums shown in the schedule or
in the declarations”).
Progressive further argues that the cases in which Missouri courts have allowed stacking
of underinsured motorist coverages involved situations in which an insured was injured while
occupying a vehicle that he or she did not own or that was otherwise not covered under the

9

policy. In those instances, Missouri courts have held that an ambiguity may exist when an
“Other Insurance” clause describing what happens if the injury occurs in a non-owned or noncovered vehicle is read together with anti-stacking provisions in a policy. The Missouri Supreme
Court’s decision in Ritchie v. Allied Property & Casualty Insurance Co., 307 S.W.3d 132, 13738 (Mo. 2009), is one such example.
In Ritchie, the insureds’ daughter was killed in an accident while occupying a motor
vehicle the insureds did not own. The insureds had a policy providing underinsured motorist
coverage of $100,000 per person for each of the three vehicles they owned. Id. The policy
contained both anti-stacking provisions and a provision entitled “Other Insurance” that stated,
“Any coverage we provide with respect to a vehicle you do not own shall be excess over any
other collectible underinsured motorist coverage.” Id. at 137. The court held that an “ordinary
person of average understanding reasonably could interpret this other insurance provision to
mean that when an injured insured is occupying a non-owned vehicle and there are multiple
underinsured motorist coverages . . . then each of the underinsured motorist coverages are excess
to the other, and, therefore, may be stacked.” Id. at 138 (citation and quotation marks omitted).
It reasoned that the Other Insurance provision suggested “that the policy’s anti-stacking
provisions, which might normally and otherwise apply, do not apply in the special situation
where the insured is injured while occupying a non-owned vehicle.” Id. at 137-38 (quotation
marks omitted). The court resolved the ambiguity in favor of the insureds and found that the
policy permitted stacking. Id. at 138. See also Manner v. Schiermeier, 393 S.W.3d 58, 66 (Mo.
2013) (stating, “here, the second sentence of the ‘other insurance’ clause appears to an ‘ordinary
person of average understanding’ to permit stacking because it states that ‘any coverage we
provide with respect to a vehicle you do not own shall be excess over any other collectible

10

underinsured motorist coverage’”; finding that any inconsistency with anti-stacking language
elsewhere in the policy must be resolved in favor of the insured and in favor of stacking). As
Progressive correctly points out, the undisputed facts of this case make it distinguishable from
the facts of the foregoing cases in which Missouri courts have permitted stacking of underinsured
motor coverages.
In response, Jaudes cites Clark v. American Family Mutual Insurance Co., 92 S.W.3d
198 (Mo. Ct. App. 2002), to support the proposition that there are circumstances in which
Missouri courts will allow stacking even when the case does not involve a plaintiff who was
injured while occupying a non-owned or non-covered vehicle. Jaudes urges this court to find
that, like the “Other Insurance” provisions at issue in Clark, the first two sentences of the “Other
Insurance” clause in Progressive’s policy could be read to override the policy’s anti-stacking
provisions “in situations where there is more than one policy providing underinsured motorist
insurance.”5 (Doc. 24, at p. 17). However, it is undisputed that this case does not present a
situation in which there is “more than one policy providing underinsured motorist insurance.”
That fact makes this case distinguishable from Clark.
In Clark, the plaintiff had two separate insurance policies (each with a separate policy
number and premium), covering two different cars, each with underinsured motorist coverage
limits of $50,000. Clark, 92 S.W.3d at 200. The plaintiff was struck by a vehicle while standing

5

The first two sentences in the “Other Insurance” provision in Progressive’s policy state: “If
there is other applicable underinsured motorist coverage, we will pay only our share of the
damages. Our share is the proportion that our limit of liability bears to the total of all available
coverage limits.” Jaudes does not rely on the last sentence of the Other Insurance clause, which
states, “any insurance we provide with respect to a vehicle that is not a covered auto will be
excess over any other underinsured motorist coverage,” presumably because the collision at issue
here did not involve any insurance provided by Progressive for a “vehicle that is not a covered
auto.”

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at the side of a road (occupying neither of his covered vehicles), and he suffered damages. Id. at
199-200. After the driver of the other vehicle paid his $25,000 in policy limits, the plaintiff
sought coverage under the underinsured motorist provisions of both of his insurance policies.
Each policy contained an anti-stacking clause similar to the one in this case, stating that the limit
of liability under the policy was the maximum that would be paid regardless of the number of
vehicles described in the declarations or policies involved. Id. at 200. However, the “Other
Insurance” clause of each policy’s underinsured motorist coverage endorsement stated, in part:
If there is other similar insurance on a loss covered by this endorsement, we will
pay our share according to this policy’s proportion of the total limits of all similar
insurance.
Id. at 201. The court found that under this clause, although the stated maximum of each
endorsement was $50,000, when each endorsement was considered, the “total limit of all similar
insurance” was $100,000, and “[the insurer’s] proportionate share [was] $50,000 under one
policy and $50,000 under the other.” Id. at 203.
It was critical to the holding in Clark that the insurer had issued two separate insurance
policies and then promised to pay each policy’s share. Under each policy, the other policy
provided “other similar insurance,” making the “total limits of all similar insurance” $100,000.
Each policy contained the insurer’s promise to pay that policy’s share of those total limits, and
enforcement of both promises had the effect of stacking coverage. Jaudes’ reliance on Clark is
misplaced. Here, there is only one policy, with a single underinsured motorist endorsement and
a single promise to pay.
Other than Clark, Jaudes offers no authority or explanation to support his argument that
the “Other Insurance” provision in Progressive’s policy supports stacking in the absence of
multiple insurance policies, and the Court is aware of no such authority. To find ambiguity here,

12

the Court would have to find that the “Other Insurance” clause in Progressive’s policy could
reasonably be read to permit stacking of coverage limits in all circumstances, despite the
multiple clear statements prohibiting stacking of coverage limits elsewhere in the policy. Doing
so would “unreasonably distort the language of a policy” or would require the Court to “exercise
inventive powers for the purpose of creating an ambiguity when none exists;” this the Court may
not do. See Todd, 223 S.W.3d at 163.
In sum, Progressive’s policy does not permit Jaudes to stack the underinsured motorist
coverage limits for his three vehicles; as such, the applicable policy limit is the $50,000 limit for
the vehicle Jaudes was driving at the time of the collision.
B.

DEFINITION OF “UNDERINSURED MOTOR VEHICLE”

In its motion for summary judgment, Progressive argues that Jaudes is not entitled to
coverage under the underinsured motor vehicle provisions of the policy because Cook’s vehicle
does not meet the policy definition of an underinsured motor vehicle. Progressive’s policy
defines an underinsured motor vehicle as a vehicle “for which the sum of the limits of liability
under all bodily injury liability bonds or policies applicable at the time of the accident is less
than the coverage limit for the Underinsured Motorist Coverage shown on the declarations
page.” As discussed above, Cook’s vehicle had a policy limit of $50,000, which is the same as
the UIM coverage limit shown on the declarations page. Progressive contends that the policy
definition should be enforced as written because it is clear and unambiguous and because there
are no other policy provisions that inject ambiguity into the meaning of what is a covered
“underinsured motor vehicle.” In support of this argument, Progressive cites the Missouri
Supreme Court’s opinion in Rodriguez v. General Accident Insurance Co. of America, 808

13

S.W.2d 379 (Mo. 1991), and the Eighth Circuit Court of Appeals’ recent decision in Owners
Insurance Co. v. Hughes, 712 F.3d 392, 394 (8th Cir. 2013).
In Rodriguez, the Missouri Supreme Court analyzed a definition of underinsured motor
vehicle that is substantively similar to the definition in Progressive’s policy. Like Jaudes, the
plaintiff in Rodriguez was injured in an accident with a negligent driver whose insurance
company paid Rodriguez $50,000, the limits of liability of his policy. Rodriguez, 808 S.W.2d at
380. The plaintiffs’ damages exceeded $50,000, and they sought recovery under their own
insurance policy. Id. The face sheet of their policy stated that the plaintiffs had underinsured
motorist coverage with a limit of $50,000, and the insuring agreement provided that the insurer
would pay damages that the insured was entitled to recover from the owner of an “underinsured
motor vehicle.” Id. at 380-81. Much like Progressive’s policy, the policy in Rodriguez defined
“underinsured motor vehicle” as a vehicle whose “limit for bodily injury liability is less than the
limit of liability for this coverage.” Id. at 381. The insurer denied coverage on the ground that
this definition was not satisfied. Id.
The Rodriguez plaintiffs argued that the term “underinsured motorist” was inherently
ambiguous and that they were entitled to a resolution of the ambiguity consistent with their
“objective reasonable expectations.” Id. at 381-82. Specifically, they argued that the court
should interpret the underinsured motorist coverage as excess coverage—in other words,
coverage over and above what the tortfeasor’s policy provided. Id. The Missouri Supreme
Court rejected that argument, stating that the “objective reasonable expectations” doctrine does
not apply unless the court first finds an ambiguity in the contract. Id. at 382. Analyzing the
contractual language, the court stated, “Considering the clarity with which the underinsured
motorist coverage is defined in the policy, we hold that it is neither ambiguous nor misleading.”

14

Id. at 383. Notably, in Rodriguez, the Missouri Supreme Court rejected the Eighth Circuit’s
opinion in Weber v. American Family Mutual Insurance Co., 868 F.2d 286 (8th Cir. 1989), as
“inconsistent with Missouri law.” Rodriguez, 808 S.W.2d at 383. In Weber, the plaintiff argued,
as Jaudes does here, that the insurer’s interpretation of the policy would render underinsured
motorist coverage meaningless because an insured would never reach the limits of liability under
any scenario. See id. at 382-83 & n.1 (citing Weber, 868 F.2d at 288); Doc. 33, at pp. 12-14.
The Eighth Circuit in Weber rejected the plain language of the insurance contract before it and
held that the underinsured motorist coverage was excess above payments from other sources.
Rodriguez, 808 S.W.2d at 382-83 & n.1 (citing Weber, 868 F.2d at 288). The Missouri Supreme
Court stated that Weber was “an example of a court creating ambiguity to distort the language of
an unambiguous policy.” Rodriguez, 808 S.W.2d at 383.
In Owners Insurance Co. v. Hughes, 712 F.3d 392, 394 (8th Cir. 2013), the Eighth
Circuit held that the Missouri Supreme Court has left untouched its holding in Rodriguez. In
rejecting an argument by the plaintiff that the Missouri Supreme Court had relegated the
underinsured motorist language in Rodriguez to dicta, the Eighth Circuit held that the Missouri
Supreme Court’s recent decisions actually confirm the operative holding of Rodriguez. Hughes,
712 F.3d at 395. However, the Eighth Circuit recognized that decisions since Rodriguez make
clear that the fact that a definition is clear and unambiguous does not necessarily end the inquiry
as to the existence of an ambiguity. Id. at 396. It stated, “if other policy provisions inject
ambiguity into the meaning of what is a covered ‘underinsured motor vehicle,’ then Rodriguez
would not compel a finding of no coverage.” Id.
The “excess insurance” provision analyzed by the Missouri Supreme Court in Seeck v.
Geico General Insurance Co., 212 S.W.3d 129, 132 (Mo. 2007), is an example of the type of

15

provision that could, under certain circumstances, inject ambiguity into the meaning of an
otherwise unambiguous definition of an “underinsured motor vehicle.” The plaintiff in Seeck
was injured as a passenger in a vehicle accident and sustained serious and permanent damages.
Id. at 131. The negligent driver who caused the accident was insured, and the plaintiff recovered
$50,000 from that driver’s insurer. Id. She also sought recovery under the underinsured motorist
coverage section of her own policy, which itself had a limit of $50,000. Id. The insurer argued
that no coverage existed because the tortfeasor’s vehicle was not one whose “limit for bodily
injury liability is less than the limit of liability for this coverage” and thus did not fall within the
definition of underinsured motor vehicle. Id. at 132-33. However, the court found an ambiguity
based on the policy’s “excess insurance clause,” which stated:
When an insured is occupying a motor vehicle not owned by the insured . . . this
insurance is excess over any other insurance available to the insured and the
insurance which applies to the occupied motor vehicle is primary.
Id. at 132. The court stated:
Where there is an “excess” or “other insurance” clause that provides the
underinsured coverage is excess over all other collectible insurance at the time of
the accident, a court may find that language is ambiguous when read with the
limit of liability or the definition of underinsured motorist coverage if the other
insurance clause may reasonably be understood to provide coverage over and
above that collected from the tortfeasor.
Id. at 133 (quoting Zemelman v. Equity Mut. Ins. Co., 935 S.W.2d 673, 677-78 (Mo. Ct. App.
1996)). The court resolved the ambiguity in favor of coverage. Id. at 134. See also Chamness v.
Am. Family Mut. Ins. Co., 226 S.W.3d 199, 202-03, 207 (Mo. Ct. App. 2007) (finding ambiguity
based on a definition of underinsured motor vehicle like the one here and an “other insurance”
clause stating, “any insurance provided under this endorsement for an insured person while
occupying a vehicle you do not own is excess over any other similar insurance”; reasoning that
“an ordinary person of average understanding would interpret the second sentence of the other
16

insurance clause to provide coverage over and above any applicable coverage”); Am. Family
Mut. Ins. Co. v. Ragsdale, 213 S.W.3d 51, 56 (Mo. Ct. App. 2006) (same).
Progressive argues that post-Rodriguez decisions such as Seeck, Chamness, and Ragsdale
involve ambiguities not found in Progressive’s policy, or that are otherwise factually
distinguishable. (Doc. 22 at p. 4). I agree. Unlike the insureds in the cases discussed above,
Jaudes is not seeking coverage with respect to a vehicle he does not own, nor does he suggest
that his policy’s “Other Insurance” clause appears to provide excess coverage in his situation.
In response (and in his cross-motion for summary judgment) Jaudes argues that even
though Progressive’s policy may not contain the type of provisions analyzed in Seeck and other
similar cases, there are several other provisions in Progressive’s policy that create ambiguity,
including (1) the declarations page’s unqualified statement that the policy provides underinsured
motorist coverage with a $50,000 per-person limit (in combination with the definition of
declarations page); (2) the Insuring Agreement’s statement that Progressive “will pay for
damages that an insured person is legally entitled to recover from the owner or operator of an
underinsured motor vehicle because of bodily injury . . . . arising out of the ownership,
maintenance, or use of an underinsured motor vehicle”; and (3) the Limits of Liability
section’s statement that the declarations page’s $50,000 limit is “the most we will pay for all
damages due to bodily injury to one person.” Jaudes argues that these ambiguities require the
Court to construe the underinsured motorist coverage in Progressive’s policy as excess
coverage—in other words, coverage over and above what Cook’s policy provided. In support of
his position, Jaudes cites Long v. Shelter Insurance Cos., 351 S.W.3d 692 (Mo. Ct. App. 2011);
Miller v. Ho Kun Yun, 400 S.W.3d 779 (Mo. Ct. App. 2013); and Fanning v. Progressive
Northwestern Insurance Co., 412 S.W.3d 360, 365-66 (Mo. Ct. App. 2013).

17

Long, 351 S.W.3d 692, does not support Jaudes’ position.

Under the “Insuring

Agreement” in Long, the insurer promised to pay “uncompensated damages, subject to the limit
of our liability stated in this coverage” for injuries involving an “underinsured motor vehicle.”
Id. at 697. “Uncompensated damages” was defined as “the portion of the damages that exceeds
the total amount paid or payable to an insured, by or on behalf of, all persons legally obligated to
pay those damages.” Id. (emphasis omitted). “Underinsured motor vehicle” was defined as “a
motor vehicle that is covered by a liability bond or insurance policy applicable to the accident,
but its available limits are less than the full amount owed by the owner or operator of that motor
vehicle for the insured’s damages.” Id. at 698 (emphasis omitted). The court found that the
insuring agreement, read together with these definitions, would lead a reasonable insured to
believe that the insuring agreement provided “excess coverage” over and above amounts paid by
the tortfeasor. Id. at 702-03. Progressive’s policy, in contrast, does not contain a promise to pay
“uncompensated damages” that “exceed[] the total amount paid [by the responsible party],” nor
does it define underinsured motor vehicle in a manner consistent with such a promise. Indeed,
the court in Long explicitly distinguished the definition of “underinsured motor vehicle” in Long
from the definition in Rodriguez (which was much like the definition in Progressive’s policy):
[T]he Rodriguez UIM endorsement specifically tied the definition [of
underinsured motor vehicle] to a comparison of liability policy limits from the
injury-producing vehicle to the UIM endorsement policy limits for the insured’s
separate policy. Here, the ‘underinsured motor vehicle’ definition compared the
liability policy limits from the injury-producing vehicle to the total amount of
damages owed by the negligent driver causing the injuries . . .
Long, 351 S.W.3d at 698 n.7.
Miller, 400 S.W.3d 779, cited by Jaudes, is also distinguishable. In Miller, the court
found that an ambiguity arose when an insuring agreement and declarations page similar to those
contained in Progressive’s policy were considered in combination with a definition of
18

underinsured motor vehicle similar to the definition in Progressive’s policy. Id. at 787-93.
However, as the Eighth Circuit pointed out in Hughes, “the Miller court relied on a lack of
evidence in the record as to whether the defined policy term ‘underinsured motor vehicle’ was
presented in bold type [in the insuring agreement] so as to notify the ordinary reader of its
technical meaning.” Hughes, 712 F.3d at 396 (citing Miller, 400 S.W.3d at 781 n.1); see also
Miller, 400 S.W.3d at 792 (“When terms are clearly bolded, and the insured is clearly informed
about the significance of bolding, the courts will recognize and enforce the definition
specified.”). In contrast, the policy at issue in this case informs the insured that “[d]efined terms
are printed in bold-face type,” and the term “underinsured motor vehicle” is clearly bolded.
(Doc. 34-4, at p. 16).
Moreover, as the Eighth Circuit recognized in Hughes, “to the extent that Miller conflicts
with Rodriguez, [the court is] bound to follow Rodriguez.” Hughes, 712 F.3d at 396. Where, as
here, federal jurisdiction is based on diversity of citizenship, this court is “‘bound by the
decisions of the Missouri Supreme Court regarding issues of substantive state law.’” Id. at 393
(quoting Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir. 2005)). “‘Decisions by
the Missouri Court of Appeals may be used as an indication of how the Missouri Supreme Court
may rule, but [the court is] not bound to follow these decisions.’” Id. (quoting Aerotronics, Inc.
v. Pneumo Abex Corp., 62 F.3d 1053, 1068 (8th Cir. 1995)).
Finally, as Jaudes correctly notes, in Fanning, 412 S.W.3d 360, the Court of Appeals for
the Western District of Missouri recently analyzed language that in almost all respects is
identical to Progressive’s policy language in this case. In Fanning, the court accepted the
arguments advanced by Jaudes in this case. Specifically, the court in Fanning found that
ambiguities arising from three provisions required the court to construe Progressive’s

19

underinsured motorist coverage as excess coverage: (1) the declarations page’s unqualified
statement that the policy provides underinsured motorist coverage with a $50,000 per-person
limit (in combination with the definition of declaration page); (2) the Insuring Agreement’s
promise that Progressive “will pay for damages that an insured person is legally entitled to
recover from the owner or operator of an underinsured motor vehicle because of bodily injury
. . . . arising out of the ownership, maintenance, or use of an underinsured motor vehicle”; and
(3) the Limits of Liability section’s statement that the declarations page’s $50,000 limit is “the
most we will pay.” Id. at 365-68. Jaudes’ reliance on Fanning is unavailing because, for the
reasons detailed below, Fanning conflicts with binding precedent by the Missouri Supreme
Court, which this Court must follow.
1. The Declarations Page and the Definition of “Declarations Page”
The Fanning court reasoned that the declarations page permitted the insured “to form the
reasonable belief” that the insured had obtained underinsured motorist coverage with a maximum
of $50,000 per person, and that the definition of underinsured motor vehicle acted to “nullify” or
“limit” that coverage, creating an ambiguity. Id. at 366. The Fanning court also emphasized that
the declarations page contained “no alert” that the tortfeasor’s liability insurance had to be less
than the amount shown on the declarations page for the coverage to be triggered. Id. In so
doing, the Fanning court suggested that in order to avoid being ambiguous, Progressive’s policy
would need to state on the declarations page the “manner in which the[] maximum limits
[reflected on the declarations page] could be reduced” or “nullified.” Id.
The Fanning court cited no Missouri Supreme Court opinions in support of this position,
and this court has found none. Indeed, as Progressive points out in its brief, the Missouri
Supreme Court has recognized that “essential terms are usually stated in abbreviated form on a

20

declarations page.” Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. 2007)
(emphasis added). There is nothing about the words used either on Progressive’s declarations
page or in Progressive’s definition of the term “declarations page”6 that would lead an ordinary
person of average understanding to believe that the declarations page in Progressive’s policy
contains anything more than an “abbreviated form” of the policy’s “essential terms.” Id. To the
contrary, the declarations page itself states in large, bold letters that it is an “Auto Insurance
Coverage Summary,” and further states, “Your insurance policy and any policy endorsements
contain a full explanation of your coverage.”
In addition, neither the declarations page nor the definition of the term “declarations
page” contains any language that would lead an ordinary person of average understanding to
believe that the promised limit of liability of $50,000 per person was a promise of “excess
coverage” over and above any amount paid by a culpable third party. In sum, I find nothing
ambiguous or misleading about a policy that offers underinsured motorist coverage in a certain
amount on its face sheet and then defines “underinsured motor vehicle” as it is defined here. See
Rodriguez, 808 S.W.2d at 381-83; see also Hughes, 712 F.3d at 394-96 (relying on Rodriguez to
enforce a definition of “underinsured automobile” similar to the one here, despite the fact that the
policy stated on the declarations page that it provided $100,000 in underinsured motorist
coverage).
The Fanning court’s conclusion that Progressive’s policy is ambiguous because the
declarations page contained “no alert that the [underinsured motorist coverage] is gap coverage
rather than excess coverage” appears to be predicated on the assumption that an ordinary insured
purchasing insurance would reasonably expect that a promise of “underinsured motorist”

6

“Declarations Page” is defined in the policy as “the document showing your coverages, limits
of liability, covered autos, premium, and other policy-related information.”
21

coverage on the declarations page includes a promise of coverage that is excess over amounts
paid by the tortfeasor, regardless of the policy’s definitions. See Fanning, 412 S.W.3d at 366.
Although such an expectation might be a reasonable one, Rodriguez expressly prohibits a court
from finding an ambiguity solely by giving effect to the insured’s reasonable expectation. 808
S.W.2d at 381-83. In the absence of any misleading or confusing language contained in the
policy itself, this court must not “unreasonably distort the language of a policy or exercise
inventive powers for the purpose of creating an ambiguity where none exists.” Todd, 223
S.W.2d at 163.
2. The Insuring Agreement
Although the court in Fanning stated that it was holding that “the Insuring Agreement
and Limit of Liability portions of the policy . . . render the definition ambiguous by failing to
include limiting language regarding the coverage,” the Fanning court did not analyze any of the
language of the Insuring Agreement or explain how it created ambiguity. The Fanning court’s
conclusory finding that the Insuring Agreement renders the definition of underinsured motor
vehicle ambiguous is inconsistent with the Missouri Supreme Court’s decision in Rodriguez and
with the plain language of Progressive’s policy. Indeed, the relevant language of the Insuring
Agreement in Rodriguez was substantively identical to the language here: it stated, “We will pay
damages which an ‘insured’ is legally entitled to recover from the owner or operator of an
‘underinsured motor vehicle’ because of bodily injury . . .” 808 S.W.2d at 381. See also
Hughes, 712 F.3d 392 (relying on Rodriguez and enforcing a definition of “underinsured
automobile” similar to the one here in a policy that stated, “We will pay compensatory damages
you are legally entitled to recover from the owner or operator of any underinsured automobile
for bodily injury . . . .”). In the absence of any obvious conflict between the provisions of the

22

Insuring Agreement and the definition of “underinsured motor vehicle,” there is simply no basis
for this Court to defer to the state court of appeals’ decision in Fanning.
3. The Limits of Liability Section’s “Most We Will Pay” Language and Setoff
Provision
In Fanning, the court found that the Limits of Liability and setoff provisions of the
Progressive policy at issue created an ambiguity in the definition of underinsured motor vehicle
because, under the setoff provision, the insurer would never have to pay up to its policy limits.7
Id. at 367-69. Fanning does not control here for two reasons. First, the relevant policy language
in this case is distinguishable from that in Fanning. The Limits of Liability section in Fanning
began with an unqualified statement that “[t]he limit of liability shown on the declarations page
for Underinsured Motorist Coverage is the most we will pay . . .”; the setoff provision came later
in the section. In contrast, the policy at issue in this case contains language both at the beginning
of and throughout the Limits of Liability section that signals to the insured that the policy limits
might be subject to a reduction:
LIMITS OF LIABILITY
The limit of liability shown on the declarations page for Underinsured Motorist
Coverage will be reduced by all sums: . . .
The limit of liability shown, subject to all applicable reductions, will apply . . .
If your declarations page shows a split limit:
1.

The amount shown for “each person” is the most we will pay for all
damages due to bodily injury to one person; and . . .

These limits are subject to all applicable reductions to the limit of liability set
forth above.
(italics added).

7

For purposes of this opinion, the Court assumes that the tortfeasor’s insurance will always pay
some amount if the tortfeasor is an “underinsured” (rather than an uninsured) motorist.
23

Second, to the extent that the policy language here cannot be distinguished from Fanning,
Jaudes’ argument and the court’s holding in Fanning are in conflict with the Missouri Supreme
Court’s decision in Rodriguez. The relevant policy language in Rodriguez was substantively
identical to the language in the policy in Fanning. The policy in Rodriguez provided, “[t]he limit
of liability shown in the schedule for this coverage is our maximum liability . . . This is the most
we will pay . . . However, the limit of liability shall be reduced by all sums paid [on behalf of
the tortfeasor].”

Id. at 381.

The Rodriguez court nevertheless enforced the definition of

“underinsured motor vehicle” and expressly rejected the plaintiffs’ argument that a definition of
underinsured motor vehicle like the one here could not be given effect because, if it were, the
promised $100,000 limit of liability would never be available to the insured. Id. at 382-83.
Similarly, in Hughes, the Eighth Circuit rejected the insured’s argument that an
ambiguity was created because enforcement of a policy definition of underinsured automobile
like the one here would mean that the promised $100,000 limit of liability would never be
available to the insured. See 712 F.3d at 394-95 (citing Rodriguez, 808 S.W.2d 379).
The Missouri Supreme Court’s decisions in Jones v. Mid-Century Ins. Co., 287 S.W.3d
687, 692 (Mo. 2009), and Ritchie v. Allied Property & Casualty Insurance Co., 307 S.W.3d 132,
139-40 (Mo. 2009), which were cited by the Fanning court, are easily distinguishable from the
facts of this case. In both Jones and Ritchie, it was undisputed that the definition of underinsured
motor vehicle was satisfied and that some level of underinsured motor vehicle coverage applied.
Indeed, in Jones, the court found that its holding was not contrary to Rodriguez because “there
was no underinsurance in [Rodriguez].” 287 S.W.3d at 692 n.3. In Hughes, the Eighth Circuit
further clarified that Jones did not affect the holding of Rodriguez where the issue was the

24

enforcement of a definition of underinsured motor vehicle rather than the enforcement of a setoff
provision. Hughes, 712 F.3d at 395.
Here, as in Rodriguez and Hughes, Progressive is not attempting to rely on a setoff
provision; rather, Progressive contends there is no underinsured motorist coverage because the
definition of “underinsured motor vehicle” is not satisfied. In sum, I find that the clear and
unambiguous definition of “underinsured motor vehicle” in Progressive’s policy is not satisfied
and that none of the policy provisions cited by Jaudes create ambiguity regarding that definition.
Thus, Plaintiff is not entitled to coverage under the underinsured motorist provisions of the
policy.
V.

CONCLUSION
For all of the reasons stated above, Progressive has established that it is entitled to

judgment as a matter of law. The undisputed facts and controlling Missouri law establish that
Plaintiff is not entitled to coverage under Progressive’s policy with respect to his accident with
Cook, because: (i) Progressive’s policy unambiguously prohibits stacking of underinsured
motorist coverage; (ii) the policy’s definition of “underinsured motor vehicle” is not ambiguous;
and (iii) Cook’s vehicle does not meet the policy’s definition of “underinsured motor vehicle.”
For these same reasons, Jaudes has failed to establish that he is entitled to judgment as a matter
of law on his claim for breach of contract. The Court will issue a separate judgment consistent
with this Memorandum and Order.
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion for Summary Judgment (Doc. 21)
is GRANTED.

25

IT IS FURTHER ORDERED that Plaintiff’s Motion for Summary Judgment (Doc. 31)
is DENIED.  
The Court will issue a separate judgment consistent with this Memorandum and Order.

/s/Shirley Padmore Mensah
SHIRLEY PADMORE MENSAH
UNITED STATES MAGISTRATE JUDGE
Dated this 28th day of March, 2014.

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