Allstate Indemnity Company v. Rice

Filing 26

ORDERED GRANTING 19 Plaintiff's Motion for Summary Judgment; FURTHER ORDERED DENYING 18 Defendant's Motion for Summary Judgment. Signed on 3/28/13 by District Judge Brian C. Wimes. (Baldwin, Joella)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
ALLSTATE INDEMNITY COMPANY,
Plaintiff,
v.
LEVINA RICE,
Defendant.

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Case No. 4:12-CV-00178-BCW

ORDER
Before the Court are Defendant’s Motion for Summary Judgment (Doc. #18) and
Plaintiff’s Motion for Summary Judgment (Doc. #19). The Court being duly advised of the
premises, having reviewed the parties’ briefs in this matter, for good cause shown, and for the
following reasons, grants Plaintiff’s Motion (Doc. #19) and denies Defendant’s Motion (Doc.
#18).
BACKGROUND
This suit arose out of a single-car accident that occurred on October 10, 2010. Defendant
Rice was injured while riding as a passenger in a 2008 Nissan Altima owned by Sherry and
Timothy Underwood. At the time of the accident, Howard Wiebe, a relative to the Underwoods,
was driving the vehicle with permission. The car was insured by Allstate Fire and Casualty
Insurance Company through an automobile liability policy issued to Sherry and Timothy
Underwood. Defendant has recovered damages from the Underwood’s automobile liability
policy and from Wiebe’s Farmers Insurance Company’s motor vehicle liability policy.
Defendant now seeks to recover damages from the Underwood’s Allstate Indemnity Company
Personal Umbrella Policy. Plaintiff filed this suit requesting the Court declare Wiebe not an
“insured person” under the terms of the Personal Umbrella Policy and to declare Plaintiff has no
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obligation to provide liability coverage to Howard Wiebe for the car accident that led to
Defendant’s injuries.
The parties have agreed the Court’s determination on the instant dispositive motions will
resolve this matter. Plaintiff and Defendant both asserted undisputed or uncontroverted facts. See
Docs. #19, #20. The parties dispute the definition of “insured person” under the insurance
policies at issue and have each filed motions for summary judgment. The Court must determine
if an ambiguity exists regarding the definition of an “insured person,” if Howard Wiebe falls
under that definition, and thus, which party is entitled to judgment as a matter of law.
Missouri law governs the Court’s analysis because the Court applies the substantive law
of the forum state in which it sits when jurisdiction, as here, is based on diversity of citizenship.
See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
LEGAL STANDARD
Summary judgment shall be granted when the moving party demonstrates there exists no
genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.
FED. R. CIV. P. 56(a). Summary judgment is not a disfavored procedural shortcut; instead, it is
“an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy
and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 327
(1986) (internal quotation omitted).
DISCUSSION
General rules for interpreting whether ambiguity exists in contract language are
applicable to insurance contracts. Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 160
(Mo. banc 2007). Determining ambiguity in an insurance policy is a question of law. Id. When
construing an insurance policy’s terms, the Court “applies the meaning which would be attached
by an ordinary person of average understanding if purchasing insurance, and resolves
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ambiguities in favor of the insured.” Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132,
135 (Mo. banc 2009) (citing Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc
2007)). An insurance policy is designed to furnish protection and will, when reasonably possible,
be construed to provide coverage rather than defeat it. Burns v. Smith, 303 S.W.3d 505, 512
(Mo. banc 2010) (citing Farm Bureau Town & Country Ins. Co. of Mo. v. Schmidt, 751 S.W.2d
375, 376 (Mo. banc 1988)).
The Court, when analyzing an insurance contract, must consider the entire policy, not just
isolated provisions or clauses. Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43, 47 (Mo. banc 2009)
(internal quotation omitted). Missouri law holds that where there exists a multicoverage policy,
each coverage may be analyzed as a separate contract of insurance. See Trabue v. Dwelling
House Ins. Co., 121 Mo. 75 (1894) (holding an insurance contract to be divisible to the effect of
having two distinct and separate policies regarding coverage of the dwelling house and coverage
of personal property). This doctrine has also been applied to support the proposition that
coverage against loss from one type of risk is, in effect, a separate contract from coverage against
loss from another type of risk. See Consumer’s Money Order Corp. of Am., Inc. (Mo.) v. New
Hampshire Ins. Co., 386 S.W.2d 674, 677 (Mo. Ct. App. 1964) (discussing the general rule when
a policy may be divisible and severable where it covers several different kinds of risks or
property at different locations).
The parties present two competing definitions of “insured person.” Plaintiff relies upon
the definition in the Personal Umbrella Policy issued by Allstate Indemnity Company and
Defendant points to the definition in the automobile liability policy issued by Allstate Fire and
Casualty Insurance Company. Missouri Courts have found insurance contracts containing
different policies to be divisible and severable but here, the Court’s analysis need not extend this
far.
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Two separately incorporated companies are separate and distinct legal entities. See
Renaissance Leasing, LLC v. Vermeer Mfg. Co., 322 S.W.3d 112, 125 (Mo. banc 2010) (stating
“[e]ach company is a distinct legal entity with the right to own property, sue and be sued,
contract, and acquire and transfer property”); Smith v. City of Lee’s Summit, 450 S.W.2d 485,
489 (Mo. Ct. App. 1970) (holding the Court was not authorized to disregard the separate
corporate and individual entities, rather observed the entities as they legally stood). The only
company named in this suit is Allstate Indemnity Company. The two policies asserted have been
issued by separate entities; therefore the Allstate Indemnity Company Personal Umbrella Policy
is the only policy relevant to the Court’s inquiry.
The language in the Personal Umbrella Policy expressly states “[t]his policy provides
only excess insurance. It does not contribute with any Required Underlying Insurance or other
insurance which applies to an occurrence.” Doc. #20-2 at 12 (emphasis in original). As a result,
the definition of “insured person” from the Personal Umbrella Policy issued by Allstate
Indemnity Company is the only definition relevant to the Court’s interpretation analysis.
Ambiguity in a contract exists where there is “duplicity, indistinctness, or uncertainty in
the meaning of the language in the policy. Language is ambiguous if it is reasonably open to
different constructions.” Burns, 303 S.W.3d at 509 (internal quotations omitted). In considering
if the language is ambiguous, the Court will examine: (a) whether there is uncertainty in the
meaning of the words used in the contract; (b) whether contract terms are reasonably subject to
different interpretations; and (c) “if it is reasonably open to different constructions and the
language used will be viewed in the meaning that would ordinarily be understood by the layman
who bought and paid for the policy.” Ritchie, 307 S.W.3d at 135; Krombach v. Mayflower Ins.
Co., 827 S.W.2d 208, 210 (Mo. banc 1992); see also Am. Home Assurance Co. v. Pope, 591
F.3d 992, 999 (8th Cir. 2010).
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However, the parties’ disagreement regarding the meaning of the policy does not of itself
give rise to an ambiguity. Thornburgh Insulation, Inc. v. J.W. Terrill, Inc., 236 S.W.3d 651, 655
(Mo. Ct. App. 2007). The Court may not distort language of an unambiguous policy to create
ambiguity. Fire Ins. Exch. v. Horner, 368 S.W.3d 214, 217 (Mo. Ct. App. 2012). “If a term
within an insurance policy is clearly defined, the contract definition controls. . . .” Thornburgh
Insulation, Inc., 236 S.W.3d at 655 (internal quotation omitted). The Court need not apply rules
of construction when a policy provision is clear and unambiguous. Fire Ins. Exch., 368 S.W.3d at
217.
The definition of an “insured person” under the Allstate Indemnity Company Personal
Umbrella Policy means “(a) you, and any other person who is named on the Policy Declarations;
(b) any person related to you by blood, marriage or adoption who is a resident of your
household; or (c) any dependent person in your care, if that person is a resident of your
household.” Doc. #20-2 at 11 (emphasis in original). The Court finds no ambiguity in the
definition of “insured person” as set forth in the Personal Umbrella Policy. In applying this
definition, Howard Wiebe is not named in the policy, he is not a resident of the named insureds’
household, nor is he a dependent of the named insureds. Therefore, Howard Wiebe is not an
“insured person” under the Personal Umbrella Policy.
CONCLUSION
The Court finds the Allstate Indemnity Company Personal Umbrella Policy is the only
policy applicable to this matter and finds the policy’s definition of “insured person” is
unambiguous. In applying the stated definition, Howard Wiebe does not constitute an “insured
person.” Thus, the Court shall enforce the insurance policy as written and finds in Plaintiff’s
favor. The Court has carefully considered the parties’ arguments and finds no genuine issue of

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material fact remains in dispute and Plaintiff is entitled to judgment as a matter of law.
Accordingly, it is hereby
ORDERED Plaintiff’s Motion for Summary Judgment (Doc. #19) is GRANTED. It is
further
ORDERED Defendant’s Motion for Summary Judgment (Doc. #18) is DENIED.
IT IS SO ORDERED.

DATED: March 28, 2013
/s/ Brian C. Wimes
JUDGE BRIAN C. WIMES
UNITED STATES DISTRICT COURT

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