Peters v. Farmers Insurance Co.

BLACKMAR, Judge.

Michelle Merritt, a minor, was seriously injured in a collision between a motorcycle, on which she was a passenger, and an automobile. The driver of the motorcycle whose negligence was alleged to have caused the accident was an uninsured motorist. Michelle sued the family insurance carrier, and her mother, Benita Peters, also sued the insurer for expenses and loss of services. The insurer claimed that its total liability to both plaintiffs could not exceed the “each person” dollar limitations stated in its policies. The circuit court held that each plaintiff could recover such damages as she could establish, for an aggregate recovery of up to the “each occurrence” limits of each policy. The court of appeals reversed by a divided vote, and Judge Pritchard certified the case to this Court, asserting that the majority opinion conflicted with Cano v. Travelers Insurance Co., 656 S.W.2d 266 (Mo. banc 1983). We do not believe that there is conflict and reverse, finding that the stated limits apply to all claims resulting from Michelle’s injuries.

Two automobile insurance policies are involved, one issued to Billy J. Peters, Michelle’s stepfather, and one issued to Billy J. Peters and Benita Peters. Michelle is an insured under both policies because she is a relative of the named insured, resides in the household of the named insured, and does not own a motor vehicle. Benita is also an insured under both policies.

By reason of § 379.203, RSMo 1986, each policy must provide uninsured motorist coverage. The minimum amount of coverage required is set forth in § 303.030.5, RSMo 1986, which provides in pertinent part as follows:

[Ejvery such policy ... is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than twenty-five thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, to a limit of not less than fifty thousand dollars because of bodily injury to or death of two or more persons in any one accident,....

The company concedes that the coverage of the two policies may be stacked so that each plaintiff may collect under both policies. It however argues that its maximum liability under each policy is $25,000; thus $50,000 would be the full extent of its possible exposure. The plaintiffs, on the other hand, contend that Michelle may recover up to $25,000 under both policies, for a total possible recovery of $50,000, and that Benita may also receive for her damages, up to that amount. Under the plaintiffs’ theory, the company’s maximum liability would be $100,000.

The limitation provisions of the policies are identical, and read as follows: (Part II, Coverage C)

LIMITS OF LIABILITY
(a) The limits of the Company’s liability, unless otherwise stated in the Declarations, shall be the limits of bodily injury liability required by any motor vehicle financial responsibility law of the state, province or territory in which the named insured resides. In the event there is no such applicable motor vehicle financial responsibility law, the limit of the Company’s liability shall be $5,000 on account *751of bodily injury sustained by one insured as a result of any one accident and subject to the above provision respecting one insured, shall be $10,000 on account of bodily injury sustained by two or more insureds as the result of any one accident. Insurance applies separately to each insured, but the inclusion of more than one insured shall not increase the limits of the Company’s liability.

The $5000 figure is archaic, by reason of the 1981 amendments to § 303.080.5, which raised the minimum figure to $25,000. The provision just quoted recognizes that coverage is governed by law and adopts the statutory figure. The company argues that, by the language of this clause, the limitation provisions apply to the claims of all persons on account of bodily injuries to Michelle, which are the only injuries involved in this case.

The plaintiffs argue that the language is ambiguous. They point first to the declarations of the policy as follows:

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They next rely on the following language from the first paragraph of Part II, Coverage C:

To pay all sums which the owner or operator of an uninsured motor vehicle would be legally responsible to pay as damages to the insured because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured motor vehicle; ....

Even though the plaintiffs rely on Cano v. Travelers Insurance Co., supra, the cases are not the same. In Cano, we found that the following language was ambiguous:

1. The limit of liability stated in the declarations as applicable to “each person” is the limit of The Travelers’ liability for all damages because of bodily injury sustained by one person as a result of any one accident and, subject to the above provision respecting “each person”, the limit of liability stated in the declarations as applicable to “each accident” is the total limit of The Travelers’ liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident. (Emphasis added).

Cano, 656 S.W.2d at 268.

The policies now before us do not present the problem of nouns and modifiers which led us to hold that Cano contained ambiguous language. . What we now must decide is whether the present policy language is reasonably susceptible to a construction such as the plaintiffs would place on it.

We do not believe that the policy language is ambiguous. This language must be read as a whole. There would be a problem if benefits clearly conferred at one point were sought to be taken away or cut down at another, but that situation is not present here. The insuring clause and the limitation clause are close together in the policy; both coming under the heading “Part II, Coverage C/Benefits for Bodily Injury Caused by Uninsured Motorists”. The “declarations" are introductory only and subject to refinement and definition in the body of the policy. The “applies separately” clause of the limits of liability provision specifically excludes “the limits of the Company’s liability” from its application.

The first paragraph of Part II, Coverage C bears a superficial resemblance to the language which we found ambiguous in Cano, but there is a significant difference. *752In Cano, the policy referred to “damages because of bodily injury sustained by one person.” We held that “sustained” could be read as applying either to “damages” or to “bodily injury,” and opted for the construction favorable to the insured. The present language reads, “damages to the insured because of bodily injury sustained by the insured.” This language does not admit of the Cano construction, and imposes no obstacle to the application of the limits of liability clause.

The pertinent part of the limits of liability clause consists of two sentences. The one which controls in this situation is the first one, which adopts the provisions of the state’s financial responsibility law. The terms of that law are quoted above, and clearly do not require the company to provide more than $25,000 coverage for the claims of all insured arising out of bodily injuries to any one insured. The second sentence of the clause applies by its terms only when there is no legal requirement for uninsured motorist coverage and so, by literal reading, has no application here. The phrase, “bodily injury sustained by one insured,” moreover, is clear and unambiguous.

We find no indication that the insurer, in the policy language, held out or suggested coverage in excess of that required by the statutory limits. There is no conflict with Cano. Our conclusion is consistent with Integrity Insurance Company v. Naleway, 719 S.W.2d 24 (Mo.App.1986) and with Lumley v. Farmers Insurance Company, Inc., 716 S.W.2d 455 (Mo.App.1986).

The judgments are reversed and the case is remanded for further proceedings consistent with this opinion.

DONNELLY, WELLIVER and ROBERTSON, JJ., concur. BILLINGS, J., dissents in separate opinion filed. HIGGINS, C.J., and RENDLEN, J., dissent and concur in separate dissenting opinion of BILLINGS, J.