TIM JOHNSON v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

TIM JOHNSON, )
)
Appellant, )
)
vs. ) No. SD36368
)
STATE FARM MUTUAL ) Filed: May 5, 2020
AUTOMOBILE INSURANCE )
COMPANY, )
)
Respondent. )

APPEAL FROM THE CIRCUIT COURT OF GREENE COUNTY

Honorable Judge Michael J. Cordonnier

AFFIRMED

Tim Johnson ("Johnson") appeals the trial court's grant of summary

judgment in favor of State Farm Mutual Automobile Insurance Company ("State

Farm") upholding an owned-vehicle uninsured motorist ("UM") exclusion clause

in two automobile insurance policies covering vehicles not involved in the

accident. We affirm the trial court under the precedent set in Floyd-Tunnell v.

Shelter Mutual Insurance Co., 439 S.W.3d 215 (Mo. banc 2014).

Factual and Procedural Background

Appellant Johnson was involved in an automobile collision with an

uninsured motorist and sustained bodily injuries including a neck injury
resulting in two surgeries. At the time of the collision, Johnson was insured

under three separate policies issued by State Farm. In the summary judgment

record before the trial court, both parties agreed there were two policies with

State Farm, one listing the 2011 Toyota Tacoma ("2011 policy") (the vehicle

involved in the collision) and the other policy listing a 2017 Toyota Tacoma

("2017 policy"). However, during oral argument before this Court the parties

agreed there was a third policy involving a motor home ("motor home policy")

that "[i]n all material respects [] is identical to the two State Farm policies that

are part of the record on appeal."1 With the exceptions of the vehicles listed on

the Declarations Pages and the differences in the premiums, the language of the

three policies is substantially identical and we will consider all three policies in

our analysis of the legal issues.

Each of the policies stated UM limits of $100,000 per person and

$300,000 per accident. Following the accident, State Farm paid Johnson the

UM policy limit of $100,000 under the 2011 policy. State Farm also paid

$25,000 in UM coverage under the 2017 policy and $25,000 in UM coverage

under the motor home policy, claiming an owned-vehicle exclusion under the

policies permitted it to reduce the amount of coverage. Neither the 2017 Tacoma

nor the motor home were involved in the collision.

Johnson brought suit against State Farm asserting breach of contract and

vexatious refusal to pay for failing to pay the UM policy limit of $100,000 apiece

under the 2017 policy and the motor home policy. Johnson filed a motion for

1This Court was not furnished with a copy of the motor home policy and relies on the
representations by the parties of what is contained within the motor home policy.

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partial summary judgment arguing the exclusion did not apply, was ambiguous,

and conflicted with public policy and Missouri law. State Farm filed a motion for

summary judgment stating the exclusion did apply and the UM coverage was

thereby reduced from $100,000 to $25,000.2 The trial court denied Johnson's

motion for partial summary judgment and granted State Farm's motion for

summary judgment. Johnson appeals.3

Standard of Review

We review a grant of summary judgment de novo. Dutton v. American

Family Mut. Ins. Co., 454 S.W.3d 319, 321 (Mo. banc 2015). We consider the

record in the light most favorable to the party against whom the judgment was

entered and give the non-movant the benefit of all reasonable inferences from the

record. Id. at 321-22 (citing ITT Commercial Fin. Corp. v. Mid-Am.

Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993)). We will uphold

a ruling on summary judgment only if there is "no genuine dispute of material

fact and the movant is entitled to judgment as a matter of law." Missouri Pros.

Att'ys & Cir. Att'ys Ret. Sys. v. Pemiscot Cty., 256 S.W.3d 98, 102 (Mo.

banc 2008). Our interpretation of an insurance policy and our determination of

"whether coverage and exclusion provisions are ambiguous" are questions of law

we review de novo. Floyd-Tunnell, 439 S.W.3d at 217. When construing the

policy, we apply the meaning an "ordinary person of average understanding"

2 Missouri law requires uninsured motorist coverage in the "minimum amount of $25,000 per
person/$50,000 per occurrence[.]" Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43, 46 (Mo.
banc 2009) (citing § 379.203); see also Missouri's "Motor Vehicle Financial Responsibility Law"
§§ 303.030 et seq. All statutory citations are to RSMo. (2016).
3 See § 512.020. The trial court's grant of summary judgment disposed of all claims by Johnson

against State Farm. See Rule 74.01(b). All Rule references are to Missouri Court Rules (2019).

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would attach to the policy if purchasing insurance, and we resolve ambiguities in

the insured's favor. Dutton, 454 S.W.3d at 322.

Analysis

As the parties agree, there is no genuine dispute of material fact, and the

only issue remaining is whether State Farm is entitled to judgment as a matter of

law. In four points, Johnson challenges the trial court's grant of summary

judgment in State Farm's favor.

In point 1, Johnson argues the owned-vehicle exclusion reducing the UM

coverage does not apply to him because he "was occupying a 'your car' at the time

of the collision[.]" Point 2 argues there was ambiguity in the language of the

exclusion which must be resolved in Johnson's favor. In point 3, Johnson argues

there are "irreconcilable conflicts" between the exclusion and other provisions of

the policies relating to the "amount and/or availability of UM coverage" which

must be resolved in Johnson's favor. In point 4, Johnson argues the owned-

vehicle exclusion is void as against public policy and Missouri law.

The Policy Language

The policies covering the vehicles not involved in the collision list Johnson

and his wife as the "NAMED INSURED[.]" Each policy's Declarations Page lists

one vehicle under the YOUR CAR heading.

The Declarations Page further states:

EXCEPTIONS, POLICY BOOKLET & ENDORSEMENTS (See policy
booklet & individual endorsements for coverage details).

YOUR POLICY CONSISTS OF THIS DECLARATIONS PAGE, THE
POLICY BOOKLET – FORM 9825A, AND ANY ENDORSEMENTS
THAT APPLY, INCLUDING THOSE ISSUED TO YOU WITH ANY
SUBSEQUENT RENEWAL NOTICE.

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CREDITOR – STATE FARM BANK, PO BOX 5961, MADISON WI
53705-0961.
6087C STATUTORY NOTICE.
6128CP AMENDATORY ENDORSEMENT.
6925A AMENDATORY ENDORSEMENT.

The policy booklet states:

THIS POLICY

1. This policy consists of:
a. the most recently issued Declarations Page;
b. the policy booklet version shown on that Declarations Page; and
c. any endorsements that apply, including those listed on that
Declarations Page as well as those issued in connection with any
subsequent renewal of this policy.

....

DEFINITIONS

....

Your Car means the vehicle shown under
"YOUR CAR" on the Declarations Page.

....

6128CP AMENDATORY ENDORSEMENT

This endorsement is part of the policy. Except for the changes this
endorsement makes, all other provisions of the policy remain the
same and apply to this endorsement.

....

4. UNINSURED MOTOR VEHICLE COVERAGE

Exclusions

The following exclusion is added:

THERE IS NO COVERAGE TO THE EXTENT THE UNINSURED
MOTOR VEHICLE COVERAGE LIMITS OF THIS POLICY EXCEED
THE UNINSURED MOTOR VEHICLE COVERAGE LIMITS
REQUIRED BY THE MISSOURI FINANCIAL RESPONSIBILITY
LAW FOR AN INSURED WHO SUSTAINS BODILY INJURY:

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 a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY
YOU IF IT IS NOT YOUR CAR OR A NEWLY ACQUIRED
CAR;[4]

Point One

In his first point, Johnson asserts State Farm was not entitled to judgment

as a matter of law because the owned-vehicle exclusion reducing the amount of

UM coverage does not apply to Johnson since he was occupying a "YOUR CAR"

at the time of the collision.

The general rules for contract interpretation apply to insurance contracts,

and the "key is whether the contract language is ambiguous or unambiguous."

Todd v. Missouri United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. banc

2007) (internal quotation and citation omitted). Unambiguous insurance

policies must be enforced according to their terms. Lawson v. Progressive

Cas. Ins. Co., 527 S.W.3d 198, 201 (Mo. App. E.D. 2017). "Insurance policies

are read as a whole, and the risk insured against is made up of both the general

insuring agreement as well as the exclusions and definitions." Todd, 223 S.W.3d

at 163.

Here, the exclusion in all of Johnson's policies stated it applied to an

insured who sustained bodily injury "WHILE OCCUPYING A MOTOR

VEHICLE OWNED BY YOU IF IT IS NOT YOUR CAR[.]" "Your car" was

defined in the policy as "the vehicle shown under 'YOUR CAR' on the

Declarations Page." Johnson argues that as long as he was occupying a "YOUR

CAR" as listed on the Declarations Page of any of his State Farm policies, then

4 The policy states: "[d]efined words and phrases are printed in boldface italics."

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the exclusion does not apply. The Declarations Page listed only one vehicle under

the heading "YOUR CAR" in each policy: (1) the 2011 Toyota Tacoma; (2) the

2017 Toyota Tacoma; or (3) the motor home. But Johnson was occupying only

the 2011 Toyota Tacoma, not the 2017 Toyota Tacoma or the motor home, at the

time of his collision. Therefore, the exclusion in both the 2017 policy and the

motor home policy applied because, in the collision, he was "OCCUPYING A

MOTOR VEHICLE OWNED BY [Johnson]"—the 2011 Toyota Tacoma—not the

2017 Toyota Tacoma or the motor home.

We are bound to enforce unambiguous policy language as written, Floyd-

Tunnell, 439 S.W.3d at 217, therefore, the owned-vehicle exclusion applied to

limit Johnson's recovery. The policies define "YOUR CAR" to refer to "the

vehicle" (singular) shown on the Declarations Page (again, singular). "Courts

may not unreasonably distort the language of a policy or exercise inventive

powers for the purpose of creating an ambiguity where none exists." Todd, 223

S.W.3d at 163. Point 1 is denied.

Points Two & Three

In his second and third points, Johnson argues the trial court erred in

granting summary judgment in State Farm's favor because of ambiguities that

ought to be resolved in Johnson's favor. Specifically, in point 2, Johnson argues

the exclusion's reference to "uninsured motor vehicle coverage limits required by

Missouri financial responsibility law" is ambiguous as to the amount of coverage

available to Johnson. In point 3, Johnson argues there are "irreconcilable

conflicts" between the exclusion and other UM provisions in the 2017 policy and

the motor home policy thereby creating ambiguity in the amount of UM coverage

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available under the policies. Both of Johnson's arguments have been effectively

foreclosed by the Supreme Court of Missouri's decision in Floyd-Tunnell,

which found no ambiguity in similar policy language. 439 S.W.3d at 221.

In Floyd-Tunnell, the Court considered the following language from an

automobile insurance policy's owned-vehicle partial exclusion:

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.

Id. at 218 (emphasis added).

The Court described the partial exclusion's "plain language" as limiting the

insurer's liability to $25,000 when the insured is "occupying a vehicle that is

owned by the insured but is not the vehicle covered by the policy." Id. at 221.

Even though the exclusion reduced the coverage amount from the limits listed on

each policy's Declarations Page, the Court found the "mere presence of an

exclusion does not render an insurance policy ambiguous[.]" Id. Instead, the

partial exclusion was "clear and unambiguous" when the policies were "read as a

whole[.]" Id.

This Court is compelled to follow the precedent set forth by our Supreme

Court. See Chavez v. Cedar Fair, LP, 450 S.W.3d 291, 298 (Mo. banc 2014).

In Floyd-Tunnell, the Court found the "plain language" of an owned-vehicle

exclusion limited the insurer's liability to $25,000 even though the language of

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the exclusion itself did not reference a dollar amount but instead referred to the

minimum amount "required by the uninsured motorist insurance law and

financial responsibility law of the state of Missouri[.]" 439 S.W.3d at 218, 221.

Similarly, here, the 2017 policy's exclusion and the motor home policy's exclusion

limited coverage when the policy's coverage "EXCEED[S] THE UNINSURED

MOTOR VEHICLE COVERAGE LIMITS REQUIRED BY THE MISSOURI

FINANCIAL RESPONSIBILITY LAW[.]" Johnson's argument that the policies'

reference to an "undefined technical phrase" renders both policies ambiguous is

unavailing in light of Floyd-Tunnell, where the Court found similar policy

language to be clear and unambiguous. Id. at 221.

In the same manner, we must also reject Johnson's argument that conflicts

between the exclusion and other provisions in the 2017 policy and the motor

home policy render the policies ambiguous. As in Floyd-Tunnell, the 2017

policy and the motor home policy's Declarations Pages do not "grant any

coverage," but instead, "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 scope of coverage." Id. In this case, the 2017 policy

and the motor home policy's Declarations Pages inform the reader that the

policies consist of the Declarations Page, the policy booklet, Form 9825A and

"ANY ENDORSEMENTS THAT APPLY[.]" The policies then list two

"AMENDATORY ENDORSEMENT[S,]" one of which contains the exclusion at

issue here. As long as "[d]efinitions, exclusions, conditions and endorsements"

are "clear and unambiguous within the context of the policy as a whole, they are

enforceable." Id. (quoting Todd, 223 S.W.3d at 163). We are compelled to find

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the exclusions in the 2017 policy and the motor home policy clear and

unambiguous when considered in light of a reading of the entire policies. Points

2 and 3 are denied.

Point 4

In point 4, Johnson argues the court erred in granting summary judgment

in favor of State Farm because the policies' owned-vehicle exclusion reduced the

amount of UM coverage available to Johnson and is therefore void as against

public policy and Missouri law.

"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." Id. at 220. The Court has rejected an insurer's attempt to

completely bar an insured from receiving UM coverage, finding this type of

exclusion "contrary to the public policy of § 379.203 and invalid." Shepherd v.

American States Ins. Co., 671 S.W.2d 777, 780 (Mo. banc 1984). Here,

however, State Farm is not attempting to completely bar Johnson from UM

coverage in the 2017 policy and the motor home policy. Rather, State Farm has

provided Johnson with the full amount of UM coverage pursuant to the 2011

policy, and also provided Johnson, under the 2017 policy and the motor home

policy, with the minimum amount of coverage required by Missouri law. Cf.,

Blumer v. Automobile Club Inter-Ins. Exchange, 340 S.W.3d 214, 220

(Mo. App. W.D. 2011) (finding an owned-vehicle exclusion invalid "to the extent

of the limits required by the Motor Vehicle Financial Responsibility Law"). Just

as the Court in Floyd-Tunnell rejected an interpretation of an insurance policy

that would "expand the scope of mandatory UM coverage far beyond the purpose

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of the statute[,]" 439 S.W.3d at 220, we reject Johnson's argument that reducing

the UM coverage by the owned-vehicle exclusion violates public policy. Point 4 is

denied.

Conclusion

The trial court's judgment in favor of State Farm is affirmed.

MARY W. SHEFFIELD, J. – OPINION AUTHOR

JEFFREY W. BATES, C.J. – CONCURS

DON E. BURRELL, J. – CONCURS

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