Opinion
No. ED 86973
August 29, 2006
Appeal from the Circuit Court of St. Charles County, Honorable Ted House.
Gary A. Growe and Andrew J. Scavotto, Blumenfeld, Kaplan, and Sandweiss, P.C., St. Louis, MO, for Appellant.
Kevin B. Behrndt and Danna McKitrick, P.C., St. Louis, MO, for Respondent.
Before Mary K. Hoff, P.J., Clifford H. Ahrens, J. and Patricia L. Cohen, J.
OPINION
Tamara Seeck (Seeck) appeals from the trial court's order and judgment granting Geico General Insurance Company's (Geico) Motion for Summary Judgment on Seeck's petition for underinsured motor vehicle (UIM) proceeds provided by the Underinsured Motorist Coverage amendment to Seeck's automobile insurance policy issued by Geico (Policy). We would reverse the trial court's judgment granting summary judgment to Geico; however, in light of the general interest and importance of the issues involved, we transfer the case to the Supreme Court, pursuant to Rule 83.02.
Facts
Viewing the record in the light most favorable to Seeck, the party against whom summary judgment was entered, the undisputed facts are as follows:
On December 10, 1999, Seeck sustained injuries when the vehicle in which she was a passenger was struck from the rear by another motor vehicle driven by Kelli Whitmore (Whitmore). At the time of the collision, Seeck was insured under the Policy, but neither Seeck nor any of her relatives owned the vehicle, and the vehicle was not insured under the Policy. Whitmore was insured by Farmers Insurance Group (Farmers). Farmers paid Seeck $50,000, the limits of liability of Whitmore's insurance policy, as consideration for Seeck's settlement of her personal injury claim against Whitmore. Seeck did not obtain Geico's consent before settling her claim against Whitmore. When she accepted the payment, Seeck signed a typed, written release form, which provided, in pertinent part:
I agree to reimburse and indemnify all released parties for any amounts which any insurance carriers, government entities, hospitals or other persons of or organizations may recover from them in reimbursement for amounts paid to me or on my behalf as a result of this accident by way of contribution, subrogation, indemnity, or otherwise.
The release specifically discharged any further liability of Whitmore, John Whitmore, Jr., and Farmers. The following handwritten words also appeared on the release form:
Release excludes [Seeck's] own underinsured motorist coverage carrier.
Seeck thereafter filed a claim with Geico for $50,000, the maximum amount recoverable for bodily injury under the Policy's UIM provision, which stated:
"Underinsured Motor Vehicle" means a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage.
The Policy's UIM section contained a "Limit of Liability" provision that reduced the $50,000 UIM limit "by all sums . . . paid because of the bodily injury by or on behalf of the persons or organization who may be legally responsible[.]" The Policy's UIM section also contained an "Other Insurance" provision, which stated:
When an insured is occupying a motor vehicle not owned by the insured or a relative and which is not described in the declarations of this policy, this insurance is excess over any other insurance available to the insured and the insurance which applies to the occupied motor vehicle is primary.
Geico declined to pay Seeck's claim, and Seeck filed her petition seeking $50,000 for bodily injury under her Policy's UIM provision. Geico subsequently filed its Motion for Summary Judgment and supporting documentation in which Geico argued that Seeck was not entitled to UIM proceeds under the Policy because: 1) Whitmore's vehicle did not constitute an "underinsured motor vehicle" as defined in the Policy; 2) Seeck had failed to obtain Geico's written consent, pursuant to the terms of the Policy, before settling her claim against Whitmore; and 3) the release executed by Seeck rendered payment under the UIM provision unnecessary in that the release made Geico a third-party beneficiary to the release, which gave Geico the right of subrogation or reimbursement against Whitmore, and created a "financial wash." Seeck filed a response and memorandum of law in opposition to Geico's Motion for Summary Judgment, arguing that the "Limit of Liability" and "Other Insurance" provisions contained in the UIM section of the Policy, read in conjunction, created an ambiguity that reasonably could be interpreted to mean that, under the circumstances, Seeck's UIM coverage was excess to the amount Seeck received from Whitmore. The parties subsequently filed a joint Stipulation, which stated:
COMES NOW [Seeck] and [Geico], by and through their undersigned counsel of record and hereby stipulate to the Court that in the event that the Trial Court denies [Geico's] Motion for Summary Judgment and determines as a apart of that order that [Seeck] is entitled to recover as a matter of law, then the Court shall proceed to enter judgment in favor of [Seeck] and against [Geico] in the sum of $50,000, being the total amount of underinsured motorist benefits at issue in this case.
If the Court determines that summary judgment is inappropriate due to an unresolved question of law or fact, the case will proceed to trial. Both parties believe that the case can be resolved on a summary judgment basis. [Geico] stipulates that [Seeck's] damages would at least equal the amount of insurance coverage in this case. Therefore, the parties are submitting this case to the Trial Court on the issues of law raised in [Geico's] Motion for Summary Judgment.
The parties agree that entry of judgment for either side does not preclude the right to appeal the Court's judgment on the issues raised in the Motion for Summary Judgment.
Following arguments on Geico's Motion for Summary Judgment, the trial court entered its judgment as follows:
Defendant's Motion for Summary Judgment is sustained. Judgment is entered as to all matters in favor of Defendant.
The Court finds that there remain no genuine issues of material fact and that Defendant is entitled to judgment as a matter of law.
This appeal follows.
Standard of Review
Summary judgment is proper where the pleadings and the discovery, exhibits, and affidavits on which the motion relies show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Rule 74.04(c). We view the record of the trial court's grant of a motion for summary judgment in the light most favorable to the party against whom judgment was entered. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Our examination of the submitted record and the applicable law, however, is essentially de novo. Id. We take as true the facts set forth by affidavits or otherwise in support of the moving party's summary judgment motion, unless contradicted by the non-moving party's response to the motion, and accord the non-moving party the benefit of all reasonable inferences from the record. Id. Summary judgment is frequently used in the context of insurance coverage questions because the interpretation of an insurance contract is a question of law.Niswonger v. Farm Bureau Town Country Ins. Co. of Missouri, 992 S.W.2d 308, 312 (Mo.App.E.D. 1999).
Discussion
In her first point on appeal, Seeck argues the trial court erred in granting Geico's Motion for Summary Judgment because the language of the Policy was ambiguous and, because Seeck was injured while she was a passenger in a car she did not own, the UIM proceeds were excess to the limits of liability provided by Whitmore's policy.
Geico counter argues that summary judgment was proper because Whitmore's vehicle was not an "underinsured motor vehicle" as defined by the Policy; thus, the UIM section of the Policy did not apply, and Seeck was not entitled to recover UIM proceeds under the Policy.
Whether the language in an insurance policy is ambiguous is a question of law. Ware v. Geico General Ins. Co., 84 S.W.3d 99, 102 (Mo.App.E.D. 2002); Niswonger, 992 S.W.2d at 316. When interpreting an insurance policy's language, we give the language its plain meaning. Ware, 84 S.W.3d at 102; Niswonger, 992 S.W.2d at 316. Ambiguity arises only when there is duplicity, indistinctness, or uncertainty in the meaning of the words used in the policy. American Family Mutual Ins. Co. v. Ragsdale, No. WD65700, 2006 WL 1888698, at *3 (Mo.App.W.D., July 11, 2006) (motion for rehearing or transfer to the Supreme Court pending). We are not permitted to create an ambiguity in order to distort the language of an unambiguous policy; thus, absent an ambiguity, we will enforce the policy according to its terms. Ware, 84 S.W.3d at 102. A term in an insurance policy is not rendered ambiguous simply because the parties disagree on the interpretation of that term. Id. However, if the language of a policy is reasonably open to different constructions, the language will be deemed ambiguous and the policy will be construed against the insurer. Ragsdale, 2006 WL 1888698, at *3. Ambiguous language is viewed in the meaning that would ordinarily be understood by the layperson who bought and paid for the policy. Id.
Here, the UIM section of Seeck's Policy clearly defined an "underinsured motor vehicle" as a vehicle whose limit for bodily injury liability was "less than the limit of liability for this coverage." The UIM provision of her Policy provided $50,000 in coverage and Whitmore's policy issued by Farmers provided $50,000 in coverage. Although these amounts are equal, this is not the end of our inquiry, as indicated in Ware, 84 S.W.3d at 102, andRagsdale, 2006 WL 1888698, at *3. Seeck argues that an ambiguity in the language of the Policy arises when the "Limit of Liability" provision and the "Other Insurance" provision, which contains the term "excess," are read in conjunction. The "Limit of Liability" provision stated that the UIM coverage available under the Policy would be reduced by all sums paid to Seeck by Whitmore. The "Other Insurance" provision stated that when Seeck was occupying a vehicle that she or a relative did not own and that was not described in the declarations of the Policy, the UIM coverage was "excess over any other insurance available to [Seeck] and the insurance which applies to the occupied motor vehicle is primary." Seeck, the layperson who bought and paid for the policy, contends that the Policy could reasonably be understood to mean that, because she was a passenger in a vehicle not owned by her or a relative, the UIM proceeds were excess, or additional, benefits to be paid to her over and above any payment Seeck received from Farmers and Whitmore for Seeck's injuries.
This Court interpreted identical language in the "other insurance" provision of an underinsured motorist policy issued by Geico in the Ware case. There, we reasoned that the method for calculating Geico's limit of liability was in conflict with the "other insurance" provision because the provision did not explain how the term "excess" applied to the calculation of UIM coverage.Ware, 84 S.W.3d at 103. In accordance with our decision inWare, we find that the term "excess" in the "Other Insurance" provision of the UIM section of the Policy in this case could reasonably be interpreted to mean Seeck was entitled to UIM coverage over and above that available from Whitmore, thus, creating an ambiguity. Ware, 84 S.W.3d at 103; see also Zemelman v. Equity Mutual Ins. Co., 935 S.W.2d 673, 678 (Mo.App.W.D. 1996) (where "other insurance" provision states that UIM coverage is excess over all other collectible insurance and said provision may be reasonably understood by layperson to provide coverage over and above that collected from tortfeasor, courts may find such language ambiguous when read in conjunction with "limit of liability" provision or definition of UIM coverage and construe policy language against insurer).
We are aware of cases, such as Rodriguez v. General Accident Ins. Co. of America, 808 S.W.2d 379 (Mo. banc 1991), Harris v. Shelter Mutual Ins. Co., 141 S.W.3d 56 (Mo.App.W.D. 2004),Melton v. Country Mutual Ins. Co., 75 S.W.3d 321 (Mo.App.E.D. 2002), and Farm Bureau Town Country Ins. Co. of Missouri v. Hughes, 629 S.W.2d 595 (Mo.App.W.D. 1981), which seemingly conflict or do not address consistently the issues raised in this appeal. Because of these differences, and in light of the general interest and importance of these issues, we transfer the case to the Supreme Court, pursuant to Rule 83.02.
Seeck presents two additional points on appeal related to the settlement of her claim against Whitmore. In her second point, Seeck argues the trial court erred in granting Geico's Motion for Summary Judgment because Geico failed to show that it was prejudiced by Seeck's failure to obtain Geico's prior written consent. In her third point, Seeck argues the trial court erred in granting Geico's Motion for Summary Judgment because the release she executed upon settlement with Whitmore and Farmers expressly excluded Geico, expressly preserved Seeck's right to pursue her claim against Geico for UIM benefits, and did not impair Geico's ability to seek subrogation. The trial court granted summary judgment "as to all matters" in favor of Geico and found "that there remain no genuine issues of material fact and that [Geico] is entitled to judgment as a matter of law." Given the stipulation of the parties, as previously noted, and the trial court's determination that there remain no genuine issues of material fact, and because the decision was rendered as a matter of law, we will address the issues in Seeck's second and third points.
The policy's language specifically excluded UIM coverage under the Policy if Seeck or her legal representative settled any claims without Geico's prior written consent. In its Motion for Summary Judgment, Geico argued that the policy exclusion was a matter of contract and that, if Geico was required to pay UIM benefits to Seeck, Geico's right to seek repayment of those benefits through subrogation was impaired. We have noted that the reason for a consent exclusion is to prevent an insured from striking a settlement with a tortfeasor and, thereby, impair the insurer's right to subrogation. Mazzocchio v. Pohlman, 861 S.W.2d 208, 211 (Mo.App.E.D. 1993); Tegtmeyer v. Snellen, 791 S.W.2d 737, 740 (Mo.App.W.D. 1990). Consent exclusions generally will be upheld unless the insurer's consent is unreasonably withheld. Mazzocchio, 861 S.W.2d at 211;Tegtmeyer, 791 S.W.2d at 740. However, before Geico can escape liability under the Policy's exclusionary clause regarding Seeck's violation of the condition of prior written consent, it must appear that Geico was prejudiced. Tegtmeyer, 791 S.W.2d at 740. Based on the limited record before us, we find no evidence presented by Geico showing it was prejudiced by Seeck's settlement of her claims against Whitmore. Further, regarding Seeck's third point, we find nothing in the limited record that demonstrates Geico would be denied the opportunity to collect from Whitmore, through subrogation, any benefits Geico paid to Seeck under the Policy. Points II and III are granted because the trial court erred in granting Geico's Motion for Summary Judgment regarding these claims.
Conclusion
In accordance with this Court's decision in Ware, we find that the term "excess" in the "Other Insurance" provision of the UIM section of the Policy in this case could reasonably be interpreted to mean Seeck was entitled to UIM coverage over and above that available from Whitmore, thus, creating an ambiguity. However, in light of the general interest and importance of the issues presented here, we transfer the case to the Supreme Court, pursuant to Rule 83.02.
Clifford H. Ahrens, Judge, Concurs in result.
Patricia L. Cohen, Judge: Concurs.