Shore v. State Farm Mutual Automobile Insurance Company
ORDER granting 31 Defendant's motion for summary judgment. Signed on 2/27/17 by Chief District Judge Greg Kays. (Strodtman, Tracy)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
STATE FARM MUTUAL AUTOMOBILE )
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This suit concerns the underinsured coverage provisions of three insurance policies issued
to Plaintiff Pamela Shore (“Plaintiff”) by Defendant State Farm Mutual Automobile Insurance
Company (“State Farm”). On December 7, 2011, Plaintiff was involved in a car accident (the
“Accident”) while driving one of her family’s three cars, a 1994 Pontiac Grand Am (the “Grand
Am”). Plaintiff has recovered $250,000 from the other driver’s insurance company, and now
demands payment from her insurance provider, State Farm, pursuant to the underinsured motorist
(“UIM”) coverage included in two of her three car insurance policies. State Farm denied
Plaintiff’s claim, stating that the policy covering the Grand Am did not include underinsured
motorist coverage, and that the policies on her other cars do not provide coverage. Plaintiff then
filed this action, asserting claims for breach of contract and vexatious refusal to pay.
Now before the Court is State Farm’s Motion for Summary Judgment (Doc. 31). The
Court finds the policies are unambiguous and exclude coverage. The motion is GRANTED.
For purposes of deciding this motion, the Court finds the relevant facts to be as follows.
Plaintiff and her husband have three separate car insurance policies with State Farm: one
for the Grand Am involved in the Accident (“Grand Am Policy”),1 one for a 1990 Ford F250
(“Ford Policy”),2 and another for a 1997 Chevrolet Blazer (“Chevrolet Policy”).3 The Ford and
Chevrolet polices expressly include UIM coverage; the Grand Am Policy does not.
On December 7, 2011, Plaintiff was involved in the Accident while driving her 1994
Pontiac Grand Am. She alleges her medical bills exceed $268,000 and her economic losses
exceed $946,000. Plaintiff recovered $250,000 from the insurance company of the other driver
involved in the Accident, Jessica Cannon. She demanded State Farm cover the balance of her
losses, and State Farm denied her claim on the ground that the Grand Am insurance policy did not
contain UIM coverage.
The Ford and Chevrolet policies contain the following language regarding UIM coverage:
We will pay compensatory damages for bodily injury an insured is legally entitled to recover
from the owner or driver of an underinsured motor vehicle. The bodily injury must be:
1. sustained by an insured; and
2. caused by an accident that involves the operation, maintenance, or use of an underinsured
motor vehicle as a motor vehicle.
We will pay only if the full amount of all available limits of all bodily injury liability bonds,
and self-insurance plans that apply to the insured’s bodily injury have been used up by
payment of judgments or settlements, or have been offered to the insured in writing.
Def.’s Ex. C at 24-26 (Doc. 32-3); Def.’s Ex. D at 23-25 (Doc. 32-4) (emphasis in original).
The policies also contain a provision excluding coverage for injuries suffered while
occupying a vehicle owned by the insured (the “Owned-Car Exclusion”).4 But, the policies also
1 Def.’s Ex. B (Doc. 32-2).
2 Def.’s Ex. C (Doc. 32-3).
3 Def.’s Ex. D (Doc. 32-4).
4 THERE IS NO COVERAGE:
contain an exception (the “Insured-Spouse Exception”)5 to the Owned-Vehicle Exclusion for the
individual named on the policy and his or her spouse. The Owned-Vehicle Exclusion and the
Insured-Spouse Exception are the focus of this dispute.6
A moving party is entitled to summary judgment if it “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). Material facts are those “that might affect the outcome of the suit under the
governing law,” and a genuine dispute over a material fact is one “such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). In deciding whether a jury question presents on an element, the court must view the
evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in
its favor. Johnson v. Wells Fargo Bank, N.A., 744 F.3d 539, 541–42 (8th Cir. 2014).
State Farm asserts summary judgment is proper because the Grand Am policy did not
FOR AN INSURED WHO SUSTAINS BODILY INJURY:
a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY YOU OR ANY RESIDENT
RELATIVE IF IT IS NOT YOUR CAR OR A NEWLY ACQUIRED CAR; OR
b. THROUGH BEING STRUCK BY A MOTOR VEHICLE OWNED BY ANY RESIDENT
Def.’s Ex. C at 26 (Doc. 32-3); Def.’s Ex. D at 25 (Doc. 32-4) (emphasis in original).
5 “This exclusion does not apply to the first person shown as a named insured on the Declarations Page and that
named insured’s spouse who resides primarily with that named insured, while occupying or through being struck by a
motor vehicle not owned by one or both of them; . . . .” Id. (emphasis in original).
6 The policies also contain several definitions pertinent to this dispute. Specifically, a “newly acquired car” ceases to
be “newly acquired” at the “end of the 30th calendar day immediately following the date the car is delivered to you.”
Def.’s Ex. B at 8; Def.’s Ex. C at 14; Def.’s Ex. D at 12. As of the date of the Accident, Plaintiff and her husband,
Darryl A. Shore, had insured the Grand Am with State Farm since at least September 16, 2010, and it did not qualify as
a “newly acquired” car. “Your Car’ means the vehicle shown under ‘YOUR CAR’ on the Declarations Page” of the
policy. Def.’s Ex. C at 14; Def.’s Ex. D at 13. The Ford and Chevrolet policies list a 1990 Ford F250 and a 1997
Chevrolet Blazer on each respective Declaration Page under “YOUR CAR.” No vehicle listed on one policy is listed
on the Declaration Page of another policy.
contain UIM coverage, and the UIM clauses in the Ford and Chevrolet policies cannot be
“stacked” 7 to cover Plaintiff’s injuries sustained in the Accident. Plaintiff contends that she
should be covered by the UIM policies in the Ford and Chevrolet policies because UIM coverage
follows the individual, not the vehicle, and the exclusions found in the Ford and Chevrolet policies
do not apply.8
The interpretation of an insurance policy is a question of law, and “[t]he general rules for
interpretation of contracts apply to insurance policies.” Progressive Cas. Ins. Co. v. Morton, 140
F. Supp. 3d 856, 860 (E.D. Mo. 2015) (applying Missouri law); see also McCormack Baron Mgmt.
Servs., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. 1999). “Because Missouri
does not require underinsured motorist coverage, the existence of the coverage and its ability to be
stacked are determined by the insurance contract.” Lang v. Farmers Ins. Co., Inc., No.
4:14-cv-00501-HFS, 2015 WL 12731922, at *3 (W.D. Mo. June 1, 2015) (citing Staufenbiel v.
Amica Mut. Ins. Co., No. 4:13-CV-2571-JAR, 2015 WL 1456987 (E.D. Mo. Mar. 30, 2015)).
“When ‘construing the terms of an insurance policy, this Court applies the meaning which would
be attached by an ordinary person of average understanding if purchasing insurance . . . .’”
Morton, 140 F. Supp. 3d at 860 (quoting Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132,
135 (Mo. 2009)). A court “should not interpret policy provisions in isolation but rather evaluate
policies as a whole,” and “endeavor to give each provision a reasonable meaning and to avoid an
interpretation that renders some provisions useless or redundant.”
Id. at 860-61 (internal
7 “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 Missouri, 992 S.W.2d 308, 313 (Mo. App. 1999)).
8 Plaintiff also asserts that State Farm procedurally waived its argument by failing to reference it in its denial of
coverage letter to Plaintiff. The Court previously found that this argument was without merit in its Order Granting
Defendant’s Second Motion for Leave to Amend Answer (Doc. 39), and will not address the argument again now.
“[A] policy may clearly and explicitly spell out an intention to limit liability to a single
coverage and thus foreclose stacking of medical payments coverage.” Buettner v. State Farm
Auto. Ins. Co., 210 S.W.3d 363, 366 (Mo. App. 2006). But, if the “policy language is ambiguous
[as to stacking], it must be construed against the insurer, and stacking will be allowed.” Id.
(alteration in original) (internal quotations omitted). “[A]mbiguity exists when there is duplicity,
indistinctness, or uncertainty in the meaning of the language in the policy.
ambiguous if it is reasonably open to different constructions.” Seeck v. Geico Gen. Ins. Co., 212
S.W.3d 129, 132 (Mo. 2007).
The Owned-Car Exclusion is unambiguous and bars underinsured motorist
The Ford and Chevrolet policies contain an Owned-Car Exclusion that Plaintiff contends is
ambiguous and should be construed in her favor. They state:
THERE IS NO COVERAGE:
1. FOR AN INSURED WHO SUSTAINS BODILY INJURY:
a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY YOU OR ANY
RESIDENT RELATIVE IF IT IS NOT YOUR CAR OR A NEWLY ACQUIRED
b. THROUGH BEING STRUCK BY A MOTOR VEHICLE OWNED BY ANY
Def.’s Ex. C at 26 (Doc. 32-3); Def.’s Ex. D at 25 (Doc. 32-4) (emphasis in original). The
policies define “Your Car” as the vehicle shown under “YOUR CAR” on the declarations page of
the policy. Def.’s Ex. C at 14; Def.’s Ex. D at 13. A “newly acquired car” ceases to be “newly
acquired” at the “end of the 30th calendar day immediately following the date the car is delivered
to you.” Def.’s Ex. B at 8; Def.’s Ex. C at 14; Def.’s Ex. D at 12 (emphasis in original).
The Missouri Court of Appeals discussed provisions similar—though not identical—to the
Owned-Car Exclusion at issue here in Buettner v. State Farm Mutual Automobile Insurance
Company. The insured in Buettner was a passenger in her truck when it was involved in an
accident with another driver. Buettner, 210 S.W.3d at 365. At the time of the accident, the
insured had three automobile insurance policies with State Farm, all of which included
underinsured motorist coverage. Id. The insured demanded payment from State Farm of the
limits for underinsured motorist coverage under all three policies, including the policy covering
the truck. Id. State Farm refused to pay underinsured motorist benefits under the insured’s other
two policies, and the insured sued. Id. The policies contained the following language:
“THERE IS NO COVERAGE . . . FOR BODILY INJURY TO AN INSURED:
1. WHILE OCCUPYING A MOTOR VEHICLE OWNED OR LEASED BY YOU, YOUR
SPOUSE, OR ANY RELATIVE IF IT IS NOT INSURED FOR THIS COVERAGE
UNDER THIS POLICY[.]”
Id. at 366. The court found this language was unambiguous and did not provide coverage because
the truck was not listed on the declaration page of the insured’s other automobile insurance
policies. Id. At 367-68. Thus, the insured could not recover under the other policies. Id.
The Court finds the exclusion language at issue here to be similarly unambiguous. The
language in the Ford and Chevrolet policies clearly expresses an intention to limit UIM coverage
to injuries occurring while the insured is occupying a car listed on the declarations page or a
Here, the Grand Am does not fall under the definition of “your car” under
the Ford Policy or the Chevrolet Policy because the Grand Am is not listed on the declaration page
of either policy. The Grand Am also does not qualify as a “newly-acquired car” because it has
been owned by Plaintiff for more than thirty days. Thus, under the clear, unambiguous terms of
both the Ford Policy and the Chevrolet Policy exclusions, UIM coverage was not available.9
The Insured-Spouse Exception is not ambiguous and UIM coverage is
unavailable under the terms of the Ford and Chevrolet Policies.
The Ford and Chevrolet policies go on to provide an Insured-Spouse Exception to the
Owned-Car Exclusion. It states:
This exclusion does not apply to the first person shown as a named insured on the
Declarations Page and that named insured’s spouse who resides primarily with that named
insured, while occupying or through being struck by a motor vehicle not owned by one or
both of them; . . . .
Def.’s Ex. C at 24-26 (Doc. 32-3); Def.’s Ex. D at 23-25 (Doc. 32-4) (emphasis in original). The
parties do not dispute that Plaintiff is the “named insured’s spouse who resides primarily with that
named insured.” Plaintiff argues that she was “struck by a motor vehicle not owned by” her or her
husband—the vehicle driven by Jessica Cannon.
State Farm responds that, when read in
conjunction with the exclusion language, the phrase “through being struck by a motor vehicle not
owned by one or both of them” is unambiguous and does not apply to accidents in which the
insured is occupying a car owned by her but not covered by the policy.
The Court agrees with State Farm. Reading this provision as Plaintiff suggests would
nullify the Owned-Car Exclusion for Plaintiff and her husband, thus rendering that provision
meaningless as to them. See Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421,
428 (Mo. 2003) (holding that “each term of a contract is construed to avoid rendering other terms
meaningless” and “a construction that attributes a reasonable meaning to all the provisions of the
agreement is preferred to one that leaves some of the provisions without function or sense.”); see
also Wentzville Park Assocs., L.P. v. American Cas. Ins. Co. of Reading, Pa., 263 S.W.3d 736, 744
9 Plaintiff’s objection that UIM coverage “follows the insured” is also without merit. Where a policy contains an
owned-car exclusion, that exclusion “restricts coverage from ‘following’ [the insured] when she drives a vehicle she
owns but did not choose to cover with the UIM endorsement.” Midwestern Indem. Co. v. Brooks, 779 F.3d 540, 547
(8th Cir. 2015) (applying Missouri law).
(Mo. 2008) (“[T]he rules of construction . . . require a court to avoid construing a contract in a way
which renders other terms and provisions meaningless.”). The insurance contract limits UIM
coverage to the vehicles owned by the insured that have UIM policies, and creates floating10
coverage only where Plaintiff was occupying another’s vehicle or is struck by an underinsured
vehicle while not occupying a vehicle owned by the insured.11 Otherwise, Plaintiff would have
no incentive to purchase underinsurance coverage on any new vehicles she purchased—she need
only own a single underinsurance policy to be covered. See State Farm Mut. Auto. Ins. Co. v. W.
Cas. & Sur. Co., 477 S.W.2d 421, 424 (Mo. 1972) (explaining the purpose of such provisions in
the context of uninsured motorist coverage in automobile liability policies “is to cover occasional
or incidental use of other [cars] without the payment of an additional premium, but to exclude the
habitual use of other cars, which would increase the risk on the insurance company without a
corresponding increase in the premium.”).
Thus, this provision is not reasonably open to
Plaintiff’s suggested interpretation, and the Court finds it is unambiguous in barring UIM coverage
for the Accident.
The terms of Plaintiff’s policies are unambiguous and underinsured motorist coverage was
not available under the Grand Am Policy. Accordingly, Defendant’s Motion for Summary
Judgment (Doc. 31) is GRANTED.
IT IS SO ORDERED.
February 27, 2017
/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT
10 “Floating” coverage follows an individual rather than a particular vehicle. See Niswonger, 992 S.W.2d at 313.
11 For example, Plaintiff would be covered if she were struck by an underinsured vehicle while crossing a street as a
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