United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 10-2271
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Marie DeMeo, *
*
Plaintiff - Appellee, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
State Farm Mutual Automobile *
Insurance Company, *
*
Defendant - Appellant. *
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Submitted: January 12, 2011
Filed: May 4, 2011
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Before WOLLMAN, LOKEN, and SMITH, Circuit Judges.
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LOKEN, Circuit Judge.
Patrick McGinness, driving a pickup truck owned by his adult daughter,
negligently struck and injured pedestrian Marie DeMeo in a marked crosswalk.
DeMeo obtained a $350,000 state-court judgment against McGinness. His daughter’s
insurer, American Family Insurance Company, paid its $100,000 policy limit under
the truck owner’s policy. McGinness was insured under four policies issued for the
four cars he owned by State Farm Mutual Automobile Insurance Company (“State
Farm”). Each policy had a liability limit of $50,000, covered McGinness when
operating a non-owned vehicle such as his daughter’s truck, and included an “anti-
stacking” provision. Relying on that provision, State Farm paid DeMeo the limit of
one policy, $50,000. DeMeo then filed this “Petition for Equitable Garnishment,” see
Mo. Rev. Stat. § 379.200, seeking to recover an additional $150,000, the combined
limits of the other three policies. After State Farm removed the action to federal court,
the district court granted DeMeo’s cross-motion for summary judgment. State Farm
appeals. Reviewing the district court’s interpretation of the insurance contract de
novo, as Missouri law requires, we reverse and remand. Ritchie v. Allied Prop. &
Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. banc 2009) (standard of review).
I.
The primary issue on appeal requires us to interpret two provisions contained
in a subpart of the State Farm policies entitled, “If There Is Other Liability
Coverage.” One is an “anti-stacking” clause, the other an “excess coverage” clause:
1. Policies Issued by Us to You, Your Spouse, or Any Relative
If two or more vehicle liability policies issued by us to you . . . apply to
the same accident, the total limits of liability under all such policies shall
not exceed that of the policy with the highest limit of liability.
* * * * *
3. Temporary Substitute Car, Non-Owned Car, Trailer
If a . . . non-owned car . . . has other vehicle liability coverage on it . . .
then this coverage is excess over such insurance . . . .
State Farm argues on appeal, as it did to the district court, that the anti-stacking clause
in Paragraph 1 unambiguously informed its insured, McGinness, that the total amount
State Farm would pay under all four policies on account of this accident was the
highest limit of liability under any one policy, $50,000.
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Relying on three Missouri appellate decisions,1 the district court concluded that
a layperson could reasonably interpret the excess-coverage provision in Paragraph 3
as “indicat[ing] that McGinness’ three remaining policies provide excess insurance
over and above the other applicable coverage.” As this is “inconsistent with the anti-
stacking clause,” the court held, the State Farm policy is ambiguous, ambiguities must
be construed against the insurer under Missouri law, and therefore DeMeo may stack
the four policies and recover an additional $150,000 from State Farm.
On appeal, State Farm argues the district court committed an error of law in
concluding that the otherwise plain language of the anti-stacking clause (Paragraph
1) is rendered ambiguous by the excess-coverage clause (Paragraph 3). When no
statute or public policy requires coverage, an unambiguous anti-stacking clause “must
be enforced by the courts as written.” Hempen v. State Farm Mut. Auto. Ins. Co., 687
S.W.2d 894, 894 (Mo. banc 1985).
In the cases relied upon by the district court, which involved underinsured
motorist coverages, and in the more recent case of Durbin v. Deitrick, 323 S.W.3d
122, 127 (Mo. App. 2010), which applied those decisions to an insured’s coverage
while driving a non-owned vehicle, the excess-coverage clauses provided that the
coverage in question was excess over “any other collectible” insurance. See Ritchie,
307 S.W.3d at 137; Durbin, 323 S.W.3d at 124; Chamness, 226 S.W.3d at 201 (“any
other similar insurance”); Niswonger, 992 S.W.2d at 315 (“any other similar
insurance”). The courts concluded that this reference to “any” insurance was broad
enough to permit the policies to operate as excess to one another, as well as to other
available insurance. This rendered the anti-stacking clauses ambiguous. See Ritchie,
307 S.W.3d at 138.
1
Ritchie, 307 S.W.3d at 137-38; Chamness v. Am. Family Mut. Ins. Co., 226
S.W.3d 199, 207 (Mo. App. 2007); Niswonger v. Farm Bureau Town & Country Ins.
Co. of Mo., 992 S.W.2d 308, 315 (Mo. App. 1999).
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By contrast, in this case, Paragraph 3’s grant of excess coverage provides that,
“If a . . . non-owned car . . . has other vehicle liability coverage . . . then this coverage
is excess over such insurance.” (Emphasis added). The plain meaning of the modifier
“such” is, “of the type previously mentioned.” New Oxford American Dictionary
1738 (3d ed. 2010); accord. Merriam Webster’s Collegiate Dictionary 1247 (11th ed.
2003); Webster’s Third New International Dictionary 2283 (1983). In other words,
the excess-coverage provision in Paragraph 3 has a specific antecedent -- the non-
owned car’s “other vehicle liability coverage,” here, the daughter’s American Family
policy covering operation of her pickup truck. This is not an open-ended reference
to “any” other insurance. It is specific and definite, like the excess-coverage clauses
in Otto v. State Farm Mut. Auto. Ins. Co., 964 S.W.2d 472, 473-74 (Mo. App. 1998),
and State Farm Mut. Auto. Ins. Co. v. Sommers, 954 S.W.2d 18, 19-20 (Mo. App.
1997). Therefore, Paragraph 3 does not create an ambiguity that permits a court to
ignore the unambiguous anti-stacking clause in Paragraph 1. Under Missouri law, we
may not “create an ambiguity in order to distort the language of an unambiguous
policy.” Rodriguez v. Gen. Accident Ins. Co. of Am., 808 S.W.2d 379, 382 (Mo.
banc. 1991).
DeMeo argues that application of the anti-stacking clause in Paragraph 1 is
ambiguous when the excess-coverage clause in Paragraph 3 also applies because,
unlike the collateral-source clause in Paragraph 2, Paragraph 3 does not begin with the
introductory phrase, “Subject to” Paragraph 1. State Farm responds that the cross-
reference was necessary in Paragraph 2 because, like Paragraph 1, it addresses the
applicable liability limits under the policy, whereas Paragraph 3 “addresses a question
of timing and order of payment, and nothing more.” More importantly, as we have
explained, the word “such” in Paragraph 3 provides a specific cross-reference to
“other vehicle liability coverage” that makes the anti-stacking clause in Paragraph 1
unambiguously applicable to the excess-insurance coverage. Even if the addition of
“Subject to Paragraph 1” would have made Paragraph 3 more clear, the absence of a
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redundant clarifier does not create an ambiguity where none exists. Cf. Lynch v.
Shelter Mut. Ins. Co., 325 S.W.3d 531, 540-41 (Mo. App. 2010).
For these reasons, we reverse the district court’s ruling that DeMeo may stack
the $50,000 liability limits in each of the four State Farm policies.
II.
Missouri’s Motor Vehicle Financial Responsibility Law (MVFRL), Mo. Rev.
Stat. §§ 303.010 et seq., requires that motor-vehicle owners and operators maintain
required levels of financial responsibility. Most people comply by purchasing a motor
vehicle liability policy, either an “owner’s policy” providing liability coverage for
each covered vehicle of at least $25,000 per person and $50,000 per accident, or an
“operator’s policy” providing liability coverage while operating a non-owned vehicle
“subject to the same limits of liability.” Mo. Rev. Stat. §§ 303.190.2 and .3.
Policy provisions are invalid to the extent that they conflict with the minimum
insurance requirements of the MVFRL. Halpin v. Am. Family Mut. Ins. Co., 823
S.W.2d 479, 482-83 (Mo. banc 1992). In her motion for summary judgment, DeMeo
argued that the anti-stacking clauses in the four State Farm policies are invalid to the
extent they preclude State Farm from paying the MVFRL $25,000 minimum for each
policy. Under this alternative theory, DeMeo would be entitled to recover an
additional $75,000, rather than the combined limits of the other three policies. The
district court did not decide the issue because it awarded DeMeo the greater sum. On
appeal, she briefed the issue and urges us to decide it if we reverse the $150,000
judgment, noting that it is an issue of law and no facts are disputed. State Farm, on
the other hand, urges us to remand the issue for an initial decision by the district court,
which is the normal, but non-mandatory, appellate practice. See AAR Int’l, Inc. v.
Nimelias Enters. S.A., 250 F.3d 510, 523 (7th Cir. 2001).
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We have carefully studied this issue in the interest of avoiding unnecessary
litigation expense if it is reasonable to do so. Though it is an issue of law that turns
on statutory construction and contract interpretation, reconciling the applicable
Missouri appellate decisions is far from easy. DeMeo properly relies on American
Standard Ins. Co. v. Hargrave, 34 S.W.3d 88, 91 (Mo. banc. 2000), and Karscig v.
McConville, 303 S.W.3d 499, 504 (Mo. banc. 2010), to support her argument that the
anti-stacking clauses are against Missouri public policy because each of McGinness’s
owner’s policies must provide the minimum MVFRL coverage. In response, State
Farm properly relies on First National Ins. Co. of Am. v. Clark, 899 S.W.2d 520, 523
(Mo. banc 1995), and National Union Fire Ins. Co. of Pittsburgh v. Maune, 277
S.W.3d 754, 760 (Mo. App. 2009), in arguing that, having satisfied its minimum
MVFRL obligation (indeed, State Farm exceeded the minimum by paying $50,000),
it may apply its unambiguous anti-stacking clauses because the MVFRL expressly
provides that “any lawful coverage in excess of or in addition to the coverage
specified for a motor vehicle liability policy . . . shall not be subject to the provisions
of [the MVFRL].” Mo. Rev. Stat. § 303.190.7.
We conclude that the issue, which has not been squarely addressed in any of the
cited cases, is whether a single insurer, having issued four policies to the owner of
four vehicles who then negligently causes an accident while driving a non-owned
vehicle, may enforce its anti-stacking clause after it satisfies the minimum MVFRL
coverage requirement. On balance, we conclude that this unresolved issue of Missouri
law is best decided by the district court in the first instance.
Accordingly, the judgment of the district court is reversed, and the case is
remanded for further proceedings not inconsistent with this opinion.
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