Rebecca Floyd-Tunnell v. Shelter Mutual Insurance Company , 439 S.W.3d 215 ( 2014 )

SUPREME COURT OF MISSOURI
en banc
REBECCA FLOYD-TUNNELL, ET AL., )
)
Appellants, )
)
v. ) No. SC93904
)
SHELTER MUTUAL INSURANCE COMPANY, )
)
Respondent. )
)
APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY
The Honorable W. Brent Powell, Judge
Opinion issued July 29, 2014
The widow of a man killed in an automobile accident sued the automobile liability
insurance carrier seeking uninsured motorist (“UM”) coverage for her husband’s
wrongful death. The trial court held that the insurer’s liability was limited by an “owned-
vehicle” partial exclusion in the couple’s policies, which limited coverage when an
insured was injured while occupying a vehicle owned by the insured but not covered by
the policy. The widow appealed, arguing that she was entitled to coverage for the
damages she sustained as a result of her husband’s death and that the partial exclusion did
not apply to her because she was not in the car when the accident occurred.
Alternatively, she argues the partial exclusion is ambiguous because it limits coverage
granted elsewhere in the policies.
1
This Court affirms. Although the widow is an insured, she is not entitled to UM
coverage because she did not sustain bodily injuries. The insurer provided coverage for
the decedent’s wrongful death, and the partial exclusion unambiguously limits this
coverage.
I. Factual and Procedural Background
Doris Floyd’s husband, Jerry, was killed in an automobile accident with an
uninsured motorist. 1 At the time of the accident, Jerry and Doris were the named
insureds on three automobile liability insurance policies issued by Shelter Mutual
Insurance Company for three vehicles they owned. One policy covered the car Jerry was
driving when the accident occurred, and the other two policies covered other cars owned
by the Floyds. Each policy’s declarations page provided that UM coverage was limited
to $100,000 per person, but the policies also included an “owned-vehicle” partial
exclusion that further limited coverage if the insured was injured while occupying a
vehicle owned by the insured but not covered by the policy. The partial exclusion limited
coverage to $25,000, the minimum amount required by Missouri’s UM statute, section
379.203. 2
Doris sued Shelter seeking $100,000 of UM coverage under each policy for a total
of $300,000. 3 Shelter paid $150,000: $100,000 under the policy on the vehicle Jerry was
driving when the accident occurred, and $25,000 under each of the other two policies.
1
Because these individuals share a common surname, they will be referred to by their first
names. No disrespect is intended.
2
All statutory references are to RSMo 2000 unless otherwise indicated.
3
Rebecca Floyd-Tunnell, Jerry’s daughter, is also a party in this case.
2
The parties agreed that Shelter had paid the full amount of UM coverage available under
the first policy, but Doris argued that Shelter owed $75,000 under each of the other two
policies.
Both parties moved for summary judgment. Doris claimed that she was entitled to
UM coverage for the damages she sustained from her husband’s wrongful death, and the
partial exclusion did not apply to her because she was not in the car when the accident
occurred. In the alternative, Doris argued that the partial exclusion rendered the policies
ambiguous because it limited coverage granted elsewhere in each policy. Shelter argued
that the partial exclusion applied to Doris’s claim and unambiguously limited its liability
to $25,000 under each policy. The trial court ruled that the partial exclusion applied and
was unambiguous and granted Shelter’s motion for summary judgment. Doris appeals. 4
II. Standard of Review
Summary judgment is appropriate when there are no genuine issues of material
fact and the moving party is entitled to judgment as a matter of law. ITT Commercial
Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 380 (Mo. banc 1993).
Because the propriety of summary judgment is an issue of law, this Court’s review is de
novo. Id. at 376. The interpretation of an insurance policy and the determination whether
coverage and exclusion provisions are ambiguous are also questions of law that this
Court reviews de novo. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010).
4
This Court granted transfer after opinion by the court of appeals. Mo. Const. art. V, § 10.
3
III. Analysis
The issue in this case is whether the partial exclusion limits Shelter’s liability
under two of the policies to $25,000 per policy. The general rule in interpreting an
insurance policy is to give the language its plain meaning. Allen v. Cont’l W. Ins. Co., ---
S.W.3d ---, No. SC93502, 2014 WL 2191034, at *4 (Mo. banc May 27, 2014). The
entire policy and not just isolated provisions must be considered. Id. If the policy’s
language is unambiguous, it must be enforced as written. Rodriguez v. Gen. Acc. Ins. Co.
of Am., 808 S.W.2d 379, 382 (Mo. banc 1991).
A. The Policy Language
The UM coverage provisions in the Floyds’ policies are identical and provide, in
relevant part:
PART IV—COVERAGE E—UNINSURED MOTOR VEHICLE
LIABILITY COVERAGE
The following coverage is provided under this policy only if it is shown in
the Declarations and is subject to all conditions, exclusions, and limitations
of our liability, stated in this policy.
INSURING AGREEMENT FOR COVERAGE E
If the owner or operator of an uninsured motor vehicle is legally obligated
to pay damages, we will pay the uncompensated damages; but this
agreement is subject to all conditions, exclusions, and limitations of our
liability, stated in this policy.
DEFINITIONS
(4) Bodily injury means:
(a) A physical injury;
(b) A sickness or disease of the body;
(c) The physical pain and physical suffering that directly results from (a) or (b),
above; or
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(d) A death that directly results from (a) or (b), above. 5
ADDITIONAL DEFINITIONS USED IN COVERAGE E
In Coverage E:
(1) Damages means money owed to an insured for bodily injuries, sickness,
or disease, sustained by that insured and caused, in whole or in part, by the
ownership or use of an uninsured motor vehicle.
LIMITS OF OUR LIABILITY UNDER COVERAGE E
The limits of our liability under Coverage E are stated in the Declarations
and are subject to the following limitations:
...
(2)The limit shown in the Declarations for “each person” is the limit of our
liability for all uncompensated damages of one insured. This limit applies
to all claims made by others resulting from that insured’s bodily injury,
whether direct or derivative in nature.
PARTIAL EXCLUSION FROM COVERAGE E
In claims involving the situations listed below, our limit of liability under
Coverage E is the minimum dollar amount required by the uninsured
motorist insurance law and financial responsibility law of the state of
Missouri:
...
(3) If any part of the damages are sustained while the insured is occupying
a motor vehicle owned by any insured, the spouse of any insured, or a
resident of any insured’s household; unless it is the described auto.
B. Discussion
The policies’ insuring agreement for UM coverage states that Shelter will provide
coverage if an uninsured motorist is legally obligated to pay “damages.” The term
“damages” is defined as “money owed to an insured for bodily injuries, sickness or
disease, sustained by that insured” and caused by an uninsured motorist. The policies
define “bodily injury” to include physical injury or a death that directly results from a
5
The definition of “bodily injury” is not set forth in Part IV of the policies but in the policies’
preliminary “Definitions” section, which applies to all parts of each policy.
5
physical injury. Applying these definitions to the insuring agreement, the policies’ plain
language provides UM coverage for money owed to an insured for bodily injury or death
sustained by the insured and caused by an uninsured motorist.
The amount of UM coverage is subject to the limitations and exclusions stated in
the policies. Each policy limits Shelter’s liability for UM coverage to $100,000 per
person, but the policies contain an “owned-vehicle” partial exclusion that further limits
Shelter’s liability to $25,000. The “owned-vehicle” partial exclusion applies when any
part of the “damages” (i.e., the money owed to an insured for bodily injury sustained by
that insured) are sustained while the insured is occupying a vehicle owned by the insured
but not covered by the policy.
Doris’ first argument raises the question of whether the term “the insured” in these
provisions refers to Jerry or Doris. Shelter acknowledged that the policies covered Jerry
for his wrongful death, but there was limited coverage under two of the policies because
the accident occurred while Jerry was occupying a car he owned, but it was not the
vehicle covered by those policies. Doris concedes that, if “the insured” refers to Jerry,
the partial exclusion limits coverage under the other two policies. She claims, however,
that she is entitled to UM coverage and that Shelter is liable for the policies’ full UM
coverage limits because the partial exclusion does not apply to her. Doris notes that
damages for wrongful death do not belong to the decedent or the decedent’s estate but
rather to the class of persons authorized by section 537.080 to bring the wrongful death
claim. Lawrence v. Beverly Manor, 273 S.W.3d 525, 527 (Mo. banc 2009). As Jerry’s
widow, Doris sustained damages as result of his wrongful death. Doris contends that the
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policies provide coverage to her for these damages, and because she was not in the car
when the accident occurred, the partial exclusion does not limit this coverage.
This Court starts with the language of the policies to determine who qualifies as an
insured and whether that person is entitled to coverage. See Steele v. Shelter Mut. Ins.
Co., 400 S.W.3d 295, 297 (Mo. banc 2013). It is undisputed that both Jerry and Doris
qualified as insureds because they are named as insureds on each policy’s declarations
page. The UM coverage provisions also include a severability clause, which provides
that the UM coverage applies separately to each insured. This type of clause has been
construed to mean that, when applying the coverage to any particular insured, the term
“the insured” is deemed to refer only to the insured who is claiming coverage under the
policy. Baker v. DePew, 860 S.W.2d 318, 320 (Mo. banc 1993). “One simple method of
visibly demonstrating the impact of the severability clause is to insert the name of the
applicable insured immediately following the term ‘insured’ in the relevant provisions.”
Id. To determine whether Doris is entitled to coverage, her name should be inserted
immediately following the term “insured” throughout the policies.
Applying this method to Doris’s claim, she would be entitled to coverage for
“money owed to an insured [Doris Floyd] for bodily injury . . . sustained by that insured
[Doris Floyd]” and caused by an uninsured motorist. But that is not what happened here.
Doris is owed money for bodily injuries caused by an uninsured motorist, but she did not
7
sustain those bodily injuries herself. The plain language of the policies denies her
coverage for the damages she sustained as a result of her husband’s death. 6
This result is not contrary to public policy. Missouri law requires every
automobile liability insurance policy to include coverage “for the protection of persons
insured thereunder who are legally entitled to recover damages from owners or operators
of uninsured motor vehicles because of bodily injury, sickness or disease, including
death, resulting therefrom.” Section 379.203 (emphasis added). The purpose of UM
coverage is to take the place of the liability coverage the insured would have received had
he or she been involved in an accident with an insured motorist. Kuda v. Am. Family
Mut. Ins. Co., 790 S.W.2d 464, 467 (Mo. banc 1990). When an insured is killed by an
uninsured motorist, UM coverage “provide[s] indemnity for damages resulting from an
insured’s wrongful death caused by an uninsured motorist, payable to whatever person or
persons may be entitled to bring an action under [section] 537.080, whether spouse, child
or children, parent or parents, or administrator or executor.” Cobb v. State Sec. Ins. Co.,
576 S.W.2d 726, 736 (Mo. banc 1979). That is precisely what happened here. Shelter
6
The dissent argues that this interpretation renders the policies inapplicable to wrongful death
claims because, under Missouri law, the person entitled to recover damages will never be the
person who suffered bodily injury. Read as a whole, the policies provide UM coverage for the
wrongful death of the insured even when applicable law makes the survivors—rather than the
decedent’s estate—the persons entitled to recover damages. This is evidenced by the definition
of “bodily injury,” which includes the insured’s death, as well as the UM coverage payment
provisions, which provide that Shelter “will pay any amount due under Coverage E [UM
coverage] to . . . [a]ny person legally authorized to maintain and settle a claim for the insured’s
death, if our payment is for damages resulting from the insured’s death.” In any event, this Court
need not consider whether the policies provide coverage to Jerry for his wrongful death because
Shelter has already provided coverage. The only question presented by Doris’ first argument is
whether the policies provide coverage to her for Jerry’s wrongful death, and they plainly do not.
8
provided coverage for the wrongful death of its insured, Jerry, and it paid those benefits
to the persons authorized by section 537.080.1 to bring a wrongful death claim. 7
In contrast, the UM coverage mandated by section 379.203 does not include
coverage for damages sustained by an insured as a result of the wrongful death of another
person. It would be unreasonable to interpret section 379.203 to require every
automobile liability insurance policy to provide coverage for damages its insureds are
legally entitled to recover for the wrongful death of another person. This interpretation
would expand the scope of mandatory UM coverage far beyond the purpose of the
statute. It is not meant to provide coverage for injuries associated with persons and
vehicles not insured under the policy.
In cases in which the decedent and his or her statutory beneficiary are both
insureds, “the legislature contemplated that the survivors of a person killed in an accident
with an uninsured motorist would pursue a claim under the decedent’s uninsured motorist
coverage, rather than the survivor’s policy.” Livingston v. Omaha Prop. & Cas. Ins. Co.,
927 S.W.2d 444, 446 (Mo. App. 1996); see also Stewart v. Royal, 343 S.W.3d 736, 743-
44 (Mo. App. 2011); Lavender v. State Auto. Mut. Ins. Co., 933 S.W.2d 888, 892 (Mo.
App. 1996). Here, Shelter provided coverage for Jerry’s death; the only issue is the
amount of coverage due. The plain language of the partial exclusion limits Shelter’s
7
Shelter provided the UM coverage due under the policies to Doris and Rebecca Floyd-Tunnell.
This is consistent with section 537.080.1, which provides that the decedent’s spouse and children
are among the class of persons with first priority to bring a wrongful death claim. It is also
consistent with the policies’ UM coverage payment provisions, quoted supra note 6, which
provide that Shelter will pay UM coverage benefits to the persons entitled to bring an action for
the insured’s wrongful death.
9
liability to $25,000 when the damages are sustained while the insured is occupying a
vehicle that is owned by the insured but is not the vehicle covered by the policy. Because
Jerry died while driving a vehicle he owned, coverage under the other two policies is
limited by the partial exclusion.
Doris next argues that the partial exclusion renders the policies ambiguous
because it reduces coverage below the limits set forth on the declarations pages. 8 The
mere presence of an exclusion does not render an insurance policy ambiguous, however.
Insurance policies customarily include definitions that limit words used in
granting coverage as well as exclusions that exclude from coverage
otherwise covered risks. While a broad grant of coverage in one provision
that is taken away by a more limited grant in another may be contradictory
and inconsistent, the use of definitions and exclusions is not necessarily
contradictory or inconsistent. . . . Definitions, exclusions, conditions and
endorsements are necessary provisions in insurance policies. If they are
clear and unambiguous within the context of the policy as a whole, they are
enforceable.
Todd v. Missouri United Sch. Ins. Council, 223 S.W.3d 156, 162-63 (Mo. banc 2007).
When the policies at issue are read as a whole, the partial exclusion is clear and
unambiguous. At the outset, the policies’ declarations pages do not grant any coverage.
The declarations state the policy’s essential terms in an abbreviated form, and when the
policy is read as a whole, it is clear that a reader must look elsewhere to determine the
8
Doris cites Rice v. Shelter Mutual Insurance Co., 301 S.W.3d 43 (Mo. banc 2009), in which
this Court held that an insurance policy was ambiguous because “it grants coverage in one
provision and limits it in another.” Id. at 49. Doris’ reliance on Rice is erroneous. The policy in
Rice included a partial exclusion limiting UM coverage to the statutory minimum and another
provision making any UM coverage exceeding the statutory minimum fully enforceable. This
Court found these two provisions inconsistent and resolved the inconsistency in favor of the
insured. In the present case, however, nothing in the policies indicates that UM coverage
exceeding the statutory minimum is enforceable notwithstanding the partial exclusion.
10
scope of coverage. See id. at 160; Peters v. Farmers Ins. Co., Inc., 726 S.W.2d 749, 751
(Mo. banc 1987) (“[t]he ‘declarations’ are introductory only and subject to refinement
and definition in the body of the policy”). 9 Part IV of each policy sets forth Coverage E,
the UM coverage, immediately alerting policyholders that: “[t]he following coverage is
provided under the policy only if it is shown in the Declarations and is subject to all
conditions and exclusions, and limitations of our liability stated in this policy” (emphasis
added). The existence of limitations and exclusions is reiterated in the insuring
agreement, which again provides that UM coverage is “subject to all conditions,
exclusions, and limitations of our liability, stated in this policy.” Later in Part IV, under
the heading “Exclusions from Coverage E,” policyholders are clearly and unambiguously
informed that coverage will be limited to $25,000 if the insured was injured while
occupying a vehicle owned by the insured but not covered by the policy,
IV. Conclusion
The judgment is affirmed.
_________________________
Mary R. Russell, Chief Justice
Breckenridge, Fischer, Stith, and
Wilson, JJ., concur; Teitelman, J.,
dissents in separate opinion filed;
Draper, J., concurs in opinion of Teitelman, J.
9
Doris points out that the declarations pages also set forth one of the policies’ partial exclusions,
which applies to persons who become insureds because they have permission or general consent
to use the vehicle covered by the policy. The presence of one exclusion does not transform the
declarations into a promise of coverage or create an expectation that it is the only exclusion—
again, the declarations are introductory and merely summarize the essential terms of the policy.
11
SUPREME COURT OF MISSOURI
en banc
REBECCA FLOYD-TUNNELL, ET AL., )
)
Appellants, )
)
v. ) No. SC93904
)
SHELTER MUTUAL INSURANCE COMPANY, )
)
Respondent. )
)
DISSENTING OPINION
I respectfully dissent. The principal opinion holds that Mrs. Floyd is not entitled
to UM coverage because she did not sustain any bodily injuries and, further, that the
partial exclusion unambiguously limits coverage for two of the policies to the statutory
minimum. This holding is incorrect because Mrs. Floyd is the “insured” and, as such, the
partial exclusion is inapplicable to her.
The extent of Mrs. Floyd’s insurance coverage is a matter of contract.
Consequently, as with any contract, this Court must enforce the Shelter policies
according to their terms. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 131 (Mo. banc
2007). “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.” Rice v. Shelter Mut. Ins. Co.,
301 S.W.3d 43, 46 (Mo. banc 2009). Moreover, when an exclusionary clause is at issue,
the analysis begins with what amounts to a presumption of coverage. This presumption
is embedded in the principle that exclusionary clauses are construed strictly against the
drafter, who also bears the burden of demonstrating the exclusion applies. Manner v.
Schiermeier, 393 S.W.3d 58, 62 (Mo. banc 2013).
A full understanding of the terms of the Shelter policies requires recognition of the
nature of the underlying wrongful death claim. Mrs. Floyd is not seeking insurance
coverage for a physical injury inflicted directly on her. This does not mean, however,
that Mrs. Floyd was not injured. To the contrary, both law and common experience
recognize that Mrs. Floyd was injured grievously by Mr. Floyd’s death through the
actions of an uninsured motorist. Mrs. Floyd’s wrongful death claim is not a derivative
claim based on damages Mr. Floyd could have recovered had he survived. It is, instead,
Mrs. Floyd’s separate and distinct claim allowing her to recover damages for items such
as loss of consortium, companionship and economic support. See Lawrence v. Beverly
Manor, 273 S.W.3d 525, 527 (Mo. banc 2009). Consequently, Mrs. Floyd, both by the
nature of her claim and the plain language of the policies’ severability clause, is, for all
purposes, the relevant “insured.”
With this in mind, the analysis turns to the language of the Shelter policies. As the
principal opinion notes, the UM coverage presupposes that an “insured” suffered
“damages.” The policies provide that “damages” means “money owed to an insured for
bodily injuries … sustained by that insured and caused, in whole or in part, by … an
2
uninsured motor vehicle.” The principal opinion holds that, because Mrs. Floyd did not
sustain any “bodily injuries” herself, she is not entitled to coverage for the damages she
sustained as a result of Mr. Floyd’s death. This interpretation of the policy language
overlooks the fact that, in a wrongful death case, the “insured” seeking recovery of
damages never will be the individual to whom money is “owed … for bodily injuries.”
The conclusion that Mrs. Floyd is not entitled to coverage for the damages she sustained
as a result of Mr. Floyd’s death requires an interpretation of the Shelter policies that
renders the policies inapplicable to wrongful death claims. This conclusion is erroneous
given the plain language of section 379.203.1, RSMo 2000, which provides that no
automobile policy issued in Missouri shall be issued unless coverage is provided “for the
protection of persons insured thereunder who are legally entitled to recover damages
from owners or operators of uninsured motor vehicles because of … death.”
After concluding that Mrs. Floyd was not entitled to UM coverage, the principal
opinion notes that Shelter provided coverage for Mr. Floyd’s wrongful death but properly
limited that coverage pursuant to the policies’ partial exclusion. The partial exclusion
provides that Shelter’s limit of liability is $25,000, “if any part of the damages are
sustained while the insured is occupying a motor vehicle owned by any insured … unless
it is the described auto.” The principal opinion concludes that the partial exclusion
unambiguously applies because Mr. Floyd died while driving a vehicle he owned that
was not the “described auto” covered by the policy.
In this case, the exclusion does not apply because Mr. Floyd is deceased and, as
established above, Mrs. Floyd is the relevant insured. Mrs. Floyd never “occupied a
3
motor vehicle” in sustaining wrongful death damages as a result of Mr. Floyd’s death.
Further, even if Mr. Floyd is considered to be the “insured,” the exclusion is still
inapplicable because Mr. Floyd – the decedent – suffered no compensable damages
because neither he nor his estate is “owed money” for his injuries. As noted, the damages
for Mr. Floyd’s wrongful death are personal to Mrs. Floyd and other statutory
beneficiaries. At best, the partial exclusion is ambiguous and must be construed strictly
against Shelter. Mrs. Floyd is entitled to recover the full amount of the policies that she
and Mr. Floyd purchased.
For the foregoing reasons, I would reverse the judgment.
______________________________________
Richard B. Teitelman, Judge
4