In the Missouri Court of Appeals
Eastern District
DIVISION ONE
OWNERS INSURANCE COMPANY, ) No. ED103652
)
Appellant, ) Appeal from the Circuit Court
) of the City of St. Louis
vs. ) 1422-CC10222
)
GARY PARKISON AND JUDITH ) Honorable David L. Dowd
PARKISON, Individually, and JOHN VEST as )
Class Representative for the Estate of )
Betty Vest, )
)
Respondents. ) Filed: January 31, 2017
Owners Insurance Company (“Appellant”) appeals the trial court’s grant of summary
judgment in favor of Gary Parkison and Judith Parkison, individually, and John Vest, as class
representative for the estate of Betty Vest (“Respondents”) on Appellant’s declaratory judgment
action brought to determine coverage under a garage liability insurance policy issued by
Appellant. We affirm.
I. BACKGROUND
A. The Events Giving Rise to Appellant’s Claim
While the parties dispute the interpretation of the relevant insurance policy, they do not
dispute the underlying facts, which are as follows. In June 2013, Bill Grant Ford Inc., a car
dealership, provided a 1998 Ford Taurus, which it owned, to John Sconce for use as a temporary
substitute vehicle while his vehicle was undergoing repairs.
On June 29, 2013, Sconce’s son, Jesse, 1 was driving the Taurus northbound on Missouri
Route 123 when he allowed the vehicle to travel across the centerline and collide into a vehicle
traveling southbound on the same route. Gary Parkison was driving the other vehicle involved, a
Ford Fusion; Judith Parkison and Betty Vest were passengers in the car. The Parkisons and Vest
were injured in the accident, and Vest died as a result of her injuries. The Missouri Highway
Patrol’s investigation determined Jesse was at fault in the collision. Two passengers in the
Taurus were also injured.
B. Insurance Policies Relevant to this Appeal
At the time of the collision, Jesse was insured under an automobile liability policy issued
by Progressive Insurance Company (“the Progressive policy”), which provided bodily injury
coverage to Jesse with limits of $25,000 per person and $50,000 per occurrence.
Additionally, the Taurus was insured under a garage liability insurance policy issued to
Bill Grant Ford from Appellant (“the Owners policy”). The parties agree Jesse met the definition
of a “garage customer,” and thus qualified as an “insured person” under the Owners policy. The
Owners policy contained a declaration page which set the limit of the bodily injury liability
coverage under the Garage Liability portion of the policy at $1,000,000 per occurrence. 2
The terms of the Garage Liability part are set out in a thirty-one page form, divided into
the following “Sections”:
Section I - Definitions
Section II - Coverage (defining the scope of coverages, and setting out
the “Exclusions” applicable to each coverage)
Section III - Who is an Insured
Section IV - Limits of Insurance
Section V - Deductible
1
Because Jesse shares the same last name as his father, we will refer to Jesse by his first name for clarity and ease of
reference. No disrespect is intended.
2
The Owners policy contains two “parts” – the “Garage Liability” part and the “Dealer’s Blanket” part. Because
the Dealer’s Blanket part is not relevant to this appeal, it will not be discussed and all further discussion of the
policy concerns the Garage Liability part.
2
Section VI - What You Must Do After an Accident, Occurrence or Loss
Section VII - General Conditions (including sixteen subsections, one of
which is “Other Insurance”)
The Garage Liability policy form is supplemented by fifteen pages containing ten
endorsements, the last of which is the subject of this appeal. Form 89880, titled “Missouri
Amendatory Endorsement – Garage Liability,” contains an amendment to the “Other Insurance”
section, and includes the clause that Appellant contends precludes coverage in this case and
which is italicized below, along with other relevant language.
MISSOURI AMENDATORY ENDORSEMENT – GARAGE LIABILITY
It is agreed:
1. Under SECTION VII – GENERAL CONDITIONS, E. OTHER
INSURANCE, condition 4. is deleted and replaced with the following:
4. This provision governs the relationship of this policy with insurance
policies issued by insurance companies other than us. It does not define
our limit of liability to pay any coverage provided by this policy and shall
not be constructed to increase any limit of liability described under
SECTION IV – LIMITS OF INSURANCE. 3
This insurance shall be, with respect to any auto to which this insurance
applies:
a. Primary insurance for any auto owned by you except when such auto
is in the care, custody or control of a garage customer. When any auto
owned by you is in the care, custody or control of a garage customer:
(1) No damages are collectible under this policy if there is other
collectible insurance, whether primary, excess or contingent,
available to the garage customer and the limits of such insurance are
sufficient to pay damages up to the amount of the applicable financial
responsibility limit.4
(2) If there is no other collectible insurance available to the garage
customer, damages are collectible under this policy only up to the
amount required by the applicable financial responsibility limit.
b. Excess insurance over any other collectible insurance for any auto
you do not own.
(emphasis added and omitted).
3
For ease of reference, this section of italicized language will be referred to as “introductory sentences” throughout
this opinion.
4
Initially, the parties disputed the proper label of this clause. However, both parties now agree that it is not the label
that is dispositive, but the interpretation of the clause. For purposes of this appeal only, we will simply refer to it as
the “Other Insurance Clause.”
3
The above provision in the Missouri Amendatory Endorsement is followed by an
amendment to Section IV – Limits of Insurance, which states:
4. Under SECTION IV – LIMITS OF INSURANCE, COVERAGE A (Auto), 5.
is deleted and replaced by the following:
5. The limit of insurance shown in the Declarations for this coverage is the
most we shall pay for all claims of one or more persons in any one
occurrence regardless of:
a. The number of insureds;
b. The number of persons injured;
c. The number of autos…;
…
g. Whether this policy applies as primary or excess insurance.
(emphasis omitted).
C. Claims Asserted and Relevant Procedural Posture
Following the collision between the Taurus driven by Jesse and the Fusion driven by
Gary Parkison, Respondents claimed coverage for their damages under both the Progressive
policy and the Owners policy. The two passengers in the Taurus also asserted claims. Acting
through counsel, Progressive and Appellant tendered an offer to all claimants collectively
(including Respondents) to settle all claims for a total of $100,000 with the division of those
proceeds to be agreed upon by all claimants. The total amount of the offer consisted of the
$50,000 per-occurrence limits of the Progressive policy, plus the $50,000 per-occurrence limits
acknowledged by Appellant to be provided by its policy as required by Missouri’s Motor Vehicle
Financial Responsibility Law (“MVFRL”).
Subsequently, the passengers in the Taurus settled their claims for negotiated shares of
the $100,000 offer, releasing Jesse, Bill Grant Ford, Progressive, and Appellant. Respondents
also entered into a “Settlement Agreement and Release” with Appellant, under which, (1)
Respondents each received their negotiated shares of the $100,000 offer; and (2) Respondents
released Jesse, Bill Grant Ford, and Progressive, but by express agreement, Respondents and
4
Appellant retained the right to pursue, via declaratory judgment, a portion of coverage under the
Owners policy which was disputed by the parties.
Pursuant to the settlement agreement, Appellant then filed a petition for declaratory
judgment against Respondents. Citing the Other Insurance Clause in the Owners policy,
Appellant requested a judicial declaration that it owed no further coverage under the Owners
policy because, (1) Jesse was a garage customer with other valid and collectible insurance
sufficient to meet the MVFRL requirements; and (2) Appellant had already paid its obligation to
Respondents under the MVFRL. Respondents then filed an answer and counterclaim arguing
that, inter alia, Jesse was entitled to $1,000,000 in coverage under the Owners policy because the
Other Insurance Clause only applies to disputes between Appellant and other insurers, which is
not the case here.
Thereafter, both parties moved for summary judgment, each citing the Owners policy in
support of their respective positions. On October 21, 2015, the trial court granted Respondent’s
motion for summary judgment, and denied Appellant’s motion. In its judgment, the trial court
found that the Other Insurance Clause expressly and unambiguously limited its application to
disputes between insurance companies, and did not apply to disputes involving garage
customers. Therefore, the court explained, although Jesse was insured under the Progressive
policy at the time of the collision, the Other Insurance Clause in the Owners policy did not
preclude coverage in this case. In reaching its decision, the trial court found the Other Insurance
Clause was limited by the two introductory sentences, and found it significant that the provision
was not placed in the limits of liability section, the definition of who was an insured, or the
exclusions section. This appeal followed.
5
II. DISCUSSION
In its sole point on appeal, Appellant asserts the trial court erred in granting summary
judgment in favor of Respondents because the Owners policy issued to Bill Grant Ford
unambiguously excluded garage customers from coverage. We disagree.
A. Standard of Review and General Law Relating to the Interpretation of an Insurance
Policy
A trial court’s decision to grant summary judgment is an issue of law this Court reviews
de novo, and we will affirm such decision if it is proper under any legal theory supported by the
record. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010); Seeck v. Geico General Ins. Co.,
212 S.W.3d 129, 132 (Mo. banc 2007). Summary judgment is proper only if there are no
genuine issues of material fact and the movant is entitled to judgment as a matter of law.
Nationwide Insurance Company of America v. Thomas, 487 S.W.3d 9, 12 (Mo. App. E.D. 2016).
When the underlying facts are undisputed, controversies regarding the interpretation and
application of insurance contracts are matters of law. Id. Whether an insurance policy is
ambiguous is also a question of law this Court reviews de novo. Id.; Seeck, 212 S.W.3d at 132.
The central issue to this appeal is whether the Owners policy is ambiguous. If an
insurance policy is unambiguous, it must be enforced according to its terms. Thomas, 487
S.W.3d at 12. However, if the policy language is ambiguous, the ambiguity must be construed
against the insurer as the drafter of the contract. Id. In construing terms of an insurance policy,
we apply “the meaning which would be attached by an ordinary person of average understanding
if purchasing insurance….” Id. (quoting Seeck, 212 S.W.3d at 132). An insurance policy is
ambiguous if its language is reasonably open to different interpretations. Seeck, 212 S.W.3d at
132. Further, an ambiguity exists if there is duplicity, indistinctiveness, or uncertainty in the
meaning of the policy’s language. Id.; Burns, 303 S.W.3d at 509. When interpreting specific
6
policy provisions, we are required to evaluate the policy as a whole, rather than viewing each
provision in isolation. Seeck, 212 S.W.3d at 133.
B. Analysis of Appellant’s Claim
We initially note that although certain case law will be instructive to our analysis of the
Owners policy at issue in this case, none are dispositive in the absence of identical policy
language. See Long v. Shelter Ins. Companies, 351 S.W.3d 692, 702 (Mo. App. W.D. 2011).
The parties have not cited, and our research has not revealed, a case dealing with an other
insurance clause preceded by introductory language similar to that present in the policy at issue
in this case. Thus, we must begin our analysis with the language of the Owners policy.
MISSOURI AMENDATORY ENDORSEMENT – GARAGE LIABILITY
It is agreed:
1. Under SECTION VII – GENERAL CONDITIONS, E. OTHER
INSURANCE, condition 4. is deleted and replaced with the following:
4. This provision governs the relationship of this policy with insurance
policies issued by insurance companies other than us. It does not define
our limit of liability to pay any coverage provided by this policy and shall
not be constructed to increase any limit of liability described under
SECTION IV – LIMITS OF INSURANCE.
This insurance shall be, with respect to any auto to which this insurance
applies:
a. Primary insurance for any auto owned by you except when such auto
is in the care, custody or control of a garage customer. When any auto
owned by you is in the care, custody or control of a garage customer:
(1) No damages are collectible under this policy if there is other
collectible insurance, whether primary, excess or contingent,
available to the garage customer and the limits of such insurance are
sufficient to pay damages up to the amount of the applicable financial
responsibility limit.
(2) If there is no other collectible insurance available to the garage
customer, damages are collectible under this policy only up to the
amount required by the applicable financial responsibility limit.
b. Excess insurance over any other collectible insurance for any auto
you do not own.
…
4. Under SECTION IV – LIMITS OF INSURANCE, COVERAGE A (Auto), 5.
is deleted and replaced by the following:
7
5. The limit of insurance shown in the Declarations for this coverage is the
most we shall pay for all claims of one or more persons in any one
occurrence regardless of:
a. The number of insureds;
b. The number of persons injured;
c. The number of autos…;
…
g. Whether this policy applies as primary or excess insurance.
(emphasis added and omitted).
Here, Appellant argues the Other Insurance Clause unambiguously “eliminates liability
coverage for a garage customer when the garage customer has other valid and collectible
automobile liability insurance.” Appellant reads the Other Insurance Clause as a “no liability” or
“escape” clause, which excludes from coverage a garage customer when the garage customer has
other insurance available to him. Appellant asserts the first introductory sentence does not limit
the clause’s application to disputes between insurance companies. Rather, according to
Appellant, the first sentence explains that the existence of an insurance policy issued by an
insurance company other than Appellant is an “essential predicate” before the Other Insurance
Clause is triggered. Further, Appellant contends the second introductory sentence merely
reinforces that the Other Insurance Clause is an exclusion rather than a limit on liability.
In contrast, Respondents assert that the two introductory sentences limit the application
of the Other Insurance Clause to “define the rights of the insurer when multiple insurers cover
the loss and they are debating their relative rights and obligations,” and thus does not apply to
this case. Additionally, Respondents suggest the second introductory sentence should be read
consistently with the second provision of the Missouri Amendatory Endorsement which restates
the only limits of liability are those which are presented in Section IV and do not change
regardless of whether the Owners policy applies as primary or excess coverage. Respondents
alternatively argue the Owners policy is, at least, ambiguous because of the context of the Other
Insurance Clause and the two introductory sentences, and the ambiguity must be construed
8
against the insurer. For the reasons stated below, we agree the Owners policy is ambiguous and
affirm on those grounds. 5
An ordinary person of average understanding may have understood the Other Insurance
Clause as applying solely to disputes between insurance companies. See Thomas, 487 S.W.3d at
12. This interpretation is supported by the rule of construction that provisions in an insurance
policy shall not be read in isolation, but must be read in context, as it gives effect to the two
introductory sentences preceding the Other Insurance Clause. See Seeck, 212 S.W.3d at 133.
In Seeck, the Missouri Supreme Court held that the existence of an other insurance clause
does not always render a policy ambiguous, but rather, such a clause can be enforceable if not
contradicted or rendered ambiguous by other clauses in the contract. Id. at 134 n.3. In this case,
however, the alleged exclusionary language in the Other Insurance Clause found in the Missouri
Amendatory Endorsement is contradicted and rendered ambiguous not only by other clauses of
the Owners policy which do not reference or direct a reader to the Other Insurance Clause, but
also by language in the Missouri Amendatory Endorsement section itself – the two introductory
sentences. Again, the two introductory sentences provide: “This provision governs the
relationship of this policy with insurance policies issued by insurance companies other than us.
It does not define our limit of liability to pay any coverage provided by this policy and shall not
be construed to increase any limit of liability described under SECTION IV – LIMITS OF
INSURANCE.” These two introductory sentences contradict the general applicability of this
provision for which Appellant advocates.
5
The trial court granted summary judgment on the grounds that the Other Insurance Clause expressly and
unambiguously limited its application to disputes between insurance companies, and thus did not apply to this case.
Consequently, the court did not reach the grounds upon which we affirm. However, as previously stated, we will
affirm the trial court’s decision to grant summary judgment if it is proper under any legal theory supported by the
record. Burns, 303 S.W.3d at 509.
9
Moreover, in Windsor Ins. Co. v. Lucas, this Court upheld a step-down provision where
the limit was alluded to in both the definitions section and the limits of liability section of the
policy. 24 S.W.3d 151, 153-55 (Mo. App. E.D. 2000). The Windsor Court recognized:
[T]here is no prohibition under Missouri law for an insurance contract to set forth
the maximum amount the insurer will pay in one part, then stipulate the
circumstances under which the insurer may lower the maximum amount it will pay,
so long as all considered sections contain plain and unambiguous terms, and reading
them together does not create an ambiguity.
Id. at 154.
Regarding the Owners policy, it is reading the Other Insurance Clause within the whole
Missouri Amendatory Endorsement section that does create the ambiguity. See id.; see also
Seeck, 212 S.W.3d at 133-34, 134 n.3. The limiting introductory sentences along with the
absence of any reference to the Other Insurance Clause in other sections of the Owners policy,
especially those sections which the average insured is more likely to examine for an exclusion or
limit of liability, exacerbates the ambiguity created by interpreting the Other Insurance Clause as
an exclusion or limit of liability applicable to disputes involving garage customers. See Seeck,
212 S.W.3d at 134 n.3 (an other insurance clause can be enforceable if not contradicted or
rendered ambiguous by other clauses in the contract); see also Simmons v. Farmers Insurance
Company, Inc., 479 S.W.3d 671, 676 (Mo. App. E.D. 2015). All of these considerations,
together, weigh in favor of the limited application advanced by Respondents.
On the other hand, an ordinary person of average understanding could also interpret the
Other Insurance Clause as a “no liability” or “escape” clause, precluding coverage for garage
customers under certain circumstances. See Thomas, 487 S.W.3d at 12. Such a reading was
approved by Missouri Courts in Todd v. Missouri United School Ins. Council, 223 S.W.3d 156
(Mo. banc 2007), and Naeger v. Farmers Ins. Co., Inc., 436 S.W.3d 654 (Mo. App. E.D. 2014).
Those cases support the proposition that the existence of exclusions does not automatically
10
render a policy ambiguous or cause conflict with a policy’s limits of liability, because
exclusionary provisions exclude particular risks from coverage altogether, whereas, the limit of
liability provisions limit the extent of the insurer’s liability when a certain risk is actually
covered. Todd, 223 S.W.3d at 162-63; Naeger, 436 S.W.3d at 661.
Although we find this could be a reasonable interpretation, the two introductory
sentences of the Other Insurance Clause in the Owners policy – language which was not present
in the insurance policies at issue in Todd and Naeger – prevent a straightforward application of
those cases. The interpretation advanced by Appellant would resolve the ambiguity created
when reading the alleged exclusionary language in the Other Insurance Clause in conjunction
with the second introductory sentence, which provides: “[This provision] does not define our
limit of liability to pay any coverage provided by this policy and shall not be construed to
increase any limit of liability described under SECTION IV – LIMITS OF INSURANCE.”
However, this construction fails to address the inconsistency of the language of the first
introductory sentence, which states: “This provision governs the relationship of this policy with
insurance policies issued by insurance companies other than us.”
In support of its position that the Other Insurance Clause is an enforceable “no liability”
clause, Appellant also cites State Farm Mut. Auto. Ins. Co. v. Western Cas. & Sur. Co., 477
S.W.2d 421 (Mo. banc 1972). In that case, the Missouri Supreme Court enforced an other
insurance exclusion where the insured paid a reduced premium rate in exchange for the insurer
taking on a lower risk by excluding garage customers with other insurance. Id. at 426-27.
Though the provision used some similar language as the Owners policy, it did not include the
two introductory sentences creating the ambiguity in this case. Id. at 426. Additionally,
Appellant has failed to point to evidence of an agreement for Bill Grant Ford to pay a reduced
premium in exchange for Appellant taking on reduced risk, which was central to the State Farm
11
Court’s holding enforcing that provision, but merely speculates that the premium calculation
necessarily took into account limits on coverage. See id. at 427.
By definition, the existence of the two reasonable interpretations of the Owners policy set
out above renders it ambiguous. See Seeck, 212 S.W.3d at 132. Appellant argues, and Missouri
case law reaffirms, that we may not read the Other Insurance Clause in isolation, but must review
the “whole policy to determine whether there is contradictory language that would cause
confusion and ambiguity in the mind of the average policy holder.” Miller v. Ho Kun Yun, 400
S.W.3d 779, 786 (Mo. App. W.D. 2013) (quotations omitted); see also Seeck, 212 S.W.3d at
133. However, this Court concludes that it is reading the Other Insurance Clause in context of its
surrounding language that results in duplicity and uncertainty in the terms of the Owners policy
and the coverage thereunder, thus creating the ambiguity here. See Burns, 303 S.W.3d at 509;
Seeck, 212 S.W.3d at 132-33.
It is well-settled that Missouri courts apply the doctrine of contra proferentum 6 more
rigorously when reviewing insurance contracts. Burns, 303 S.W.3d at 509-10. As the Burns
Court reiterated:
An insurance policy, being a contract designated to furnish protection, will, if
reasonably possible, be construed so as to accomplish that object and not to defeat
it. Hence, if the terms are susceptible of two possible interpretations and there is
room for construction, provisions limiting, cutting down, or avoiding liability on
the coverage made in the policy are construed most strongly against the insurer.
Id. at 512 (quotations omitted). Moreover, Appellant, as the drafter of the insurance contract,
was in the better position to remove ambiguity in its meaning. See id.; see also Seeck, 212
S.W.3d at 134 n.3 (it is the insurer’s responsibility to include clear and unambiguous language in
its policy).
6
This doctrine provides that an ambiguous contract provision “is construed most strongly against the person who
selected the language.” Burns, 303 S.W.3d at 509 n.1 (quotations omitted).
12
For these reasons, we must construe the ambiguity in the Owners policy against
Appellant, and limit the Other Insurance Clause’s application to disputes between insurance
companies. In order to give effect to the meaning an average layperson would reasonably
understand of the existing Other Insurance Clause, this Court limits its applicability and
determines that it does not apply to the case at bar. See Burns, 303 S.W.3d at 512-13. This
Court refuses to ignore the limiting introductory sentences of the Other Insurance Clause, and
seeks to give effect to those sentences as well as the Missouri Amendatory Endorsement section
as a whole which deals with governing the rights and obligations between Appellant and other
insurers. See Southeast Bakery Feeds, Inc. v. Ranger Ins. Co., 974 S.W.2d 635, 638 (Mo. App.
E.D. 1998) (an interpretation of an insurance policy which entirely nullifies one provision should
not be adopted if the policy is susceptible to an interpretation which gives effect to all its
provisions).
Based on the foregoing, the trial court did not err in granting summary judgment in favor
of Respondents. Point denied.
III. CONCLUSION
The trial court’s grant of summary judgment in favor of Respondents is affirmed.
ROBERT M. CLAYTON III, Presiding Judge
Mary K. Hoff, J., and
Lisa P. Page, J., concur.
13