JOHN MICHAEL BESHEARS, Individually, and as Personal Representative of the Estate of SUE ELLEN BESHEARS, Plaintiffs-Respondents v. SHELTER MUTUAL INSURANCE COMPANY

JOHN MICHAEL BESHEARS, )
Individually, and as )
Personal Representative of the Estate of )
SUE ELLEN BESHEARS, )
)
Plaintiffs-Respondents, )
) No. SD32903
v. ) Filed: 7-16-15
)
SHELTER MUTUAL INSURANCE )
COMPANY, )
)
Defendant-Appellant. )

APPEAL FROM THE CIRCUIT COURT OF NEWTON COUNTY

Honorable Gregory Stremel, Associate Circuit Judge

AFFIRMED AS MODIFIED AND REMANDED WITH INSTRUCTIONS

Shelter Mutual Insurance (Shelter) appeals from a judgment ordering it to pay an

additional $100,000 in underinsured motorist (UIM) benefits to John Michael Beshears,

individually, and as personal representative of the estate of Sue Ellen Beshears,

deceased.1 This controversy arose because Shelter claimed that it was entitled to reduce

its limit of liability by the $100,000 recovered from the tortfeasor’s insurer. After the

parties filed cross motions for summary judgment, the trial court denied Shelter’s motion

1
Because John and Sue Ellen share the same surname, we will refer to them
individually by their given names for clarity and collectively as the Beshears.
and granted John’s motion. The court decided that Shelter owed additional UIM benefits

due to an “inherent ambiguity” in its policy.

The material facts are not in dispute. On June 26, 2009, John was the driver and

Sue Ellen was the passenger in their 2009 Toyota Camry. That vehicle was struck by a

1993 Lincoln Town Car driven by Bobby Thomas (Thomas), who ran a stop sign.

Thomas had a State Farm auto liability policy with limits of $50,000 per person and

$100,000 per accident. As a result of the accident, Sue Ellen was killed and John

sustained serious bodily injuries. The parties stipulated that, for purposes of this

litigation, the damages from John’s personal injury claim and Sue Ellen’s wrongful death

claim each exceeded $300,000 and together exceeded $600,000. Following the accident,

John reached a settlement with Thomas that resulted in State Farm paying its $100,000

per accident policy limits ($50,000 for John’s personal injury claim and $50,000 for Sue

Ellen’s wrongful death claim).

At the time of the accident, the Beshears were insured by a policy issued by

Shelter, No. 24-1-4521635-5, which provides UIM coverage. In pertinent part, the “Auto

Policy Declarations” (the Declarations) state: “Underinsured Motorist Cov A Limit

$250,000 Per Person $500,000 Per Accident A-577.7-A $17.00.” The Endorsement

states, in pertinent part:

MISSOURI UNDERINSURED MOTORIST ENDORSEMENT

Endorsement Number Limits of Liability
A-577.7-A Same as Coverage A Limits
A-577.8-A $____Per Person, $____Per Accident
(This coverage applies only when the endorsement number and limits of
liability are stated in the Declarations.)

INSURING AGREEMENT
If:
(a) an insured sustains bodily injury as a result of an accident
involving the use of an underinsured motor vehicle; and

2
 (b) the owner or operator of that underinsured motor vehicle is
legally obligated to pay some or all of the insured’s damages,

we will pay the uncompensated damages, subject to the limit of our
liability stated in this coverage.

No insurance is provided under this coverage until settlements or payment
of judgments have exhausted the limits of all liability bonds and policies
that apply to the insured’s damages.

ADDITIONAL AND REPLACEMENT DEFINITIONS USED IN THIS
ENDORSEMENT

As used in this coverage,
....

(3) Uncompensated damages means the portion of the damages that
exceeds the total amount paid, or payable, to an insured by, or on behalf
of, all persons legally obligated to pay those damages ….

LIMITS OF OUR LIABILITY

The limits of liability for this coverage are stated in the Declarations and
are subject to the following limitations: ….

(4) The limits are reduced by the amount paid, or payable, to the insured
for damages by, or for, all persons who:

(a) are legally liable for the bodily injury to that insured; or

(b) may be held legally liable for the bodily injury to that insured.

(Emphasis in original.)

After State Farm paid the limits of Thomas’ liability policy, John made a claim

against Shelter for UIM coverage. Shelter paid $200,000 to John for his personal injury

claim and $200,000 to John for Sue Ellen’s wrongful death claim. Shelter determined

that $400,000 figure by reducing the stated $500,000 per accident limit to account for the

$100,000 paid to John by State Farm. According to Shelter, subparagraph (4) of the limit

of liability provision in the UIM Endorsement authorizes that $100,000 set-off.

3
 Thereafter, John filed the underlying lawsuit against Shelter. John claimed that he

was entitled to recover the full $500,000 per accident policy limit for UIM coverage from

Shelter. The parties filed cross-motions for summary judgment. John argued that the set-

off provision in Shelter’s UIM Endorsement could not be enforced due to ambiguities in

the policy. The trial court granted John’s motion and denied Shelter’s motion. The court

determined that there was an “inherent ambiguity” in Shelter’s policy, in that “the

Declaration page of the policy clearly indicates there is underinsured motorist coverage

of $250,000 per person/$500,000.00 per accident, with no language in the Declaration

page indicating there would be any off-set.” The court therefore ordered Shelter to pay

the additional $100,000 in UIM benefits. This appeal followed.

Summary judgment is appropriate when 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); ITT

Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 381–82

(Mo. banc 1993).2 The amount of UIM benefits provided by Shelter’s policy to John

involves “the interpretation of an insurance policy, which is a question of law that [an

appellate court] reviews de novo.” Karscig v. McConville, 303 S.W.3d 499, 502 (Mo.

banc 2010); see Rutledge v. Bough, 399 S.W.3d 884, 886 (Mo. App. 2013).

Shelter contends the trial court erred in declaring that the policy provided an

additional $100,000 in UIM coverage because:

The applicable UIM limit is $400,000, which Shelter has paid, in that the
limit of liability stated in the Declarations for UIM Coverage is $500,000,
and in that the policy clearly and unambiguously provides for a reduction,
or “setoff,” of the declared UIM coverage limit equal to the amount paid
by [liability insurer] to the Beshears.

2
All rule references are to Missouri Court Rules (2015). All statutory references
are to RSMo (2000).
4
To support this argument, Shelter cites our opinions in Shelter Mut. Ins. Co. v. Straw,

334 S.W.3d 592 (Mo. App. 2011), and Lynch v. Shelter Mut. Ins. Co., 325 S.W.3d 531

(Mo. App. 2010). Shelter’s argument fails because the set-off analysis used in these

opinions has been overruled sub silentio by our Supreme Court’s later decision in

Manner v. Schiermeier, 393 S.W.3d 58 (Mo. banc 2013).3

Manner’s American Family policies provided him with a total of $300,000 in

UIM coverage. As an additional insured on his father’s American Standard policy,

Manner also had an additional $100,000 of UIM coverage. Manner had $1,500,000 in

total damages. He received $100,000 from the tortfeasor’s insurer. Id. at 60-61. Each of

the insurers claimed it was entitled to reduce its UIM limits by the amount paid by the

tortfeasor. Our Supreme Court held that “because [Manner’s] unrecovered damages

exceed the total liability limits of the stacked policies, the insurers are not entitled to

offset the amount recovered from other tortfeasors against those liability limits.” Id. at

60. We set forth in full the discussion of that issue from Manner:

C. Offset is Not Permitted.

Insurers assert that, because the limits of liability provision in the policies’
underinsured motorist endorsement states that underinsured motorist
coverage will be reduced by a “payment made or amount payable by or on
behalf of any person or organization which may be legally liable, or under
any collectible auto liability insurance, for loss caused by an accident with
an underinsured motor vehicle,” the $100,000 that the tortfeasor’s insurer
paid should offset the amount [Manner] can recover under the
underinsured motorist endorsement.

The Court rejects this argument. The policy promises to pay the listed
limits of liability, not simply the listed limits of liability reduced by the

3
After Lynch and Straw were decided by our district, the Western District
reached the opposite conclusion about whether there was an ambiguity in Shelter’s policy
concerning the UIM set-off provision. See Long v. Shelter Ins. Cos., 351 S.W.3d 692,
702-05 (Mo. App. 2011); Wasson v. Shelter Mut. Ins. Co., 358 S.W.3d 113, 121-26
(Mo. App. 2012). The analysis of the set-off issue in Long and Wasson is consistent
with the rationale adopted by our Supreme Court in Manner.
5
 amount paid by the tortfeasor. Insurers’ construction of the policy would
permit the policy to promise to pay the full limits of liability and yet these
limits never would be paid as the amount of liability promised always
would be reduced by the recovery from the other driver.8
8
This is because, if the amount recoverable under the
insurance policy always is reduced by the amount collected
by the tortfeasor, an insured never could recover the entire
liability limit set out in the underinsured motorist
endorsement because, by definition, an underinsured
motorist is someone who paid something toward the
insured’s damages, although not enough to satisfy those
damages nor enough to exceed the insured’s underinsured
motorist limits.

As Ritchie noted, this conflict at best creates an ambiguity that must be
resolved in favor of coverage up to the amount listed in the limits of
liability section if “after deducting the amounts already paid, damages
equaling or exceeding those limits are still outstanding.” Ritchie, 307
S.W.3d at 140.

Here, [Manner’s] damages were $1.5 million. Reducing those damages by
the $100,000 paid by the tortfeasor leaves a remaining $1.4 million in
damages, which far exceeds the $400,000 he can recover under the
policies. The full limits of the limits of liability, therefore, are recoverable.

Id. at 66. Manner now controls the analysis of the set-off issue and is dispositive here.4

As the trial court correctly determined, there is an inherent ambiguity in the UIM

coverage of Shelter’s policy for the reason explained in Manner. Because the parties

stipulated that the damages for John’s personal injury claim and Sue Ellen’s wrongful

death claim each exceeded $300,000, there is at least $100,000 in uncompensated

damages that can be recovered from Shelter’s UIM coverage. Shelter’s point is denied.

That being said, there is one other matter requiring our attention. As noted above,

the trial court’s judgment ordered that $50,000 of Shelter’s UIM coverage be paid to John

as personal representative of Sue Ellen’s estate. As Shelter correctly argues in its brief,

the right to recover UIM benefits for Sue Ellen’s death accrues to the statutory

4
To the extent Lynch and Straw conflict with Manner, our opinions in those
cases should no longer be followed.
6
beneficiaries listed in § 537.080, rather than to her estate. See Sullivan v. Carlisle, 851

S.W.2d 510, 513 (Mo. banc 1993). Therefore, the trial court’s judgment is affirmed as

modified. We affirm that part of the judgment ordering Shelter to pay $50,000 in UIM

benefits to John for his personal injury claim. We affirm the trial court’s decision that

Shelter must pay an additional $50,000 in UIM benefits for Sue Ellen’s wrongful death

claim, but the judgment must be modified to pay that additional sum to John in his

capacity as a representative of the class of persons entitled to recover for Sue Ellen’s

wrongful death pursuant to § 537.080. The cause is remanded for entry of an amended

judgment in conformity with this opinion.

JEFFREY W. BATES, P.J. – OPINION AUTHOR

DON E. BURRELL, J. – CONCUR

MARY W. SHEFFIELD, J. – CONCUR

7