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Appellant suffered extensive injuries while riding a motorcycle that was hit by a vehicle driven by Tortfeasor. Appellanat recovered $100,000 from Tortfeasor's insurance company, which left Appellant with $1.4 million in unpaid damages. Appellant sought additional recovery under the underinsured motorist coverage endorsement of the American Family policy he had purchased for the motorcycle and under the underinsured motorist coverage endorsements of each of the additional American Family insurance policies he had purchased for his two trucks. He also sought recovery as an additional insured on the American Standard policy his father maintained for a motorcycle. Both insurers denied coverage under all of these four policies. Appellant then joined both insurers as additional defendants, claiming he was entitled to $400,000 in underinsured motorist coverage under the four policies. The trial court granted summary judgment in favor of the insurers, holding that the policies' owned-vehicle exclusions unambiguously applied to the motorcycle he was riding at the time of the accident. The Supreme Court reversed, holding (1) Tortfeasor's vehicle was an underinsured motor vehicle; (2) the insurers failed to show that the owned-vehicle exclusion applied; and (3) the "other insurance" clause permitted stacking of the underinsured motorist coverage, and offset was not permitted.Receive FREE Daily Opinion Summaries by Email
SUPREME COURT OF MISSOURI
NATHANIEL JAMES MANNER,
NICHOLAS BRIAN SCHIERMEIER,
CON-TECH FOUNDATIONS, LLC,
HELMET CITY, INC., and JAFRUM
AMERICAN FAMILY MUTUAL
INSURANCE COMPANY, and
Appeal from the Circuit Court of St. Charles County
The Honorable Nancy L. Schneider, Judge
Opinion issued January 8, 2013
Nathaniel Manner appeals the trial court’s grant of summary judgment to
American Family Mutual Insurance Company and American Standard Insurance
Company (the insurers) on Nathaniel’s 1 claim that he is entitled to $400,000 in
underinsured motorist coverage under the four policies he holds with those insurers. He
To avoid confusion, the appellant hereinafter is referred to as Nathaniel to distinguish
him from the other members of the Manner family.
alleges that the trial court erred in holding that the policies’ owned-vehicle exclusions
unambiguously applied to the Yamaha motorcycle that he was riding at the time of the
accident. This Court agrees. The insurers chose not to define the term “owned” in the
policies. The burden was on the insurers to prove that the owned-vehicle exclusion
applied, which they failed to do. This Court rejects the insurers’ suggestion that the facts
that Nathaniel had an insurable interest and possession of the motorcycle unambiguously
showed he “owned” the vehicle as that term is used in the policy. Here, Nathaniel’s
uncle retained title and still was receiving payments from Nathaniel at the time of the
accident. Any ambiguity in the meaning of “owned” vehicle must be construed against
Because the insurers fail to show that the owned-vehicle exclusion applies, the
question becomes whether Nathaniel may stack the underinsured motorist coverages
provided in each of the four policies in determining whether the tortfeasor was
underinsured and in determining the amount of underinsured motorist coverage to which
he is entitled. This Court finds that the “other insurance” provisions of the four policies
permit him to do so. Finally, because his 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. The judgment is reversed, and the
case is remanded.
STATEMENT OF FACTS
On September 25, 2004, Nathaniel, then 23 years old, suffered extensive bodily
injury while riding a Yamaha motorcycle when it was hit by a vehicle driven by Nicholas
Schiermeier (the “tortfeasor”).
Nathaniel sued the tortfeasor, asserting the latter
negligently caused the collision. The tortfeasor’s insurance company paid its $100,000
limit of liability to Nathaniel.
The insurer and Nathaniel have agreed for purposes of this suit that the value of
his claim for damages is $1.5 million. Nathaniel’s $100,000 recovery from the tortfeasor,
therefore, left him with $1.4 million in unpaid damages. He sought additional recovery
for his injuries under the $100,000 underinsured motorist coverage endorsement of the
American Family policy he had purchased for the Yamaha motorcycle and under the
$100,000 underinsured motorist coverage endorsements of each of the additional
American Family insurance policies he had purchased for his two trucks – a Ford Ranger
and a Ford F150. He also sought recovery as an additional insured on the $100,000
American Standard policy his father, James Manner, maintained for a Suzuki
Both insurers denied coverage under all of these four policies. Nathaniel then
joined both insurers as additional defendants, alleging that he was entitled to recover
under the underinsured motorist endorsements of all four policies and that their limits
could be stacked to provide him with $400,000 in coverage.
The insurers moved for summary judgment, arguing that the policies for the three
vehicles other than the Yamaha that Nathaniel was operating at the time of the accident
The Suzuki policy provides underinsured motorist coverage to James Manner and a
“relative,” defined as someone related to James by blood, marriage or adoption, unless
either is injured when occupying a vehicle owned by James or “any resident of his
household” but not insured by the policy.
could not apply because the policies covering Nathaniel’s two Ford trucks and his
father’s Suzuki each contained an “owned-vehicle” exclusion that precluded coverage
under the underinsured motorist endorsement. These owned-vehicle exclusions state:
“This coverage does not apply for bodily injury to a person: … While occupying, or
when struck by, a motor vehicle that is not insured under this policy if it is owned by you
or any resident of your household.” (emphasis added). The insurers claimed that
Nathaniel owned the Yamaha and that, because it was insured under a different policy
than the ones insuring the other three vehicles, this owned-vehicle exclusion precluded
coverage under those policies.
Additionally, the insurers claimed that none of the policies’ underinsured motorist
endorsements applied as to any of the four policies because the tortfeasor’s vehicle did
not come within the definition of an “underinsured” vehicle as that term in used in those
policies. In support, the insurers argued that a vehicle is considered “underinsured” only
if the coverage for it is less than the coverage in the insured’s policy. Here, because the
four policies under which Nathaniel claimed coverage and the tortfeasor’s policy each
had identical $100,000 limits, the insurers allege the tortfeasor’s vehicle cannot be
considered “underinsured” and, therefore, Nathaniel is not entitled to recover under any
of the underinsured motorist endorsements of any of the four policies.
Nathaniel countered that the insurers did not meet their burden of showing that he
owned the Yamaha, nor that he resided in his father’s household; therefore, the ownedvehicle exclusion did not apply. Instead, he argued, the policies’ “other insurance”
clauses permitted him to stack their coverages, and, under Missouri law, it is the total of
stacked coverage that must be compared with the tortfeasor’s coverage to determine
whether the latter is underinsured. Nathaniel cross-moved for summary judgment.
The trial court denied Nathaniel’s motion but granted summary judgment in favor
of the insurers. Nathaniel appealed. After an opinion by the court of appeals, this Court
granted transfer pursuant to art. V, sec. 10 of the Missouri Constitution.
STANDARD OF REVIEW
Whether summary judgment is proper is an issue of law that this Court reviews de
novo. The Court reviews the record in the light most favorable to the party against whom
judgment was entered, without deference to the trial court’s findings, and accords the
non-movant “the benefit of all reasonable inferences from the record.” ITT Commercial
Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).
STACKING OF THE POLICIES IS PERMITTED
The Insurers did not Meet their Burden of Showing that Nathaniel
Owned the Yamaha Motorcycle
The four policies all contain $100,000 in underinsured motorist coverage. The
insurers claim that the owned-vehicle exclusion to this coverage applies, however,
because Nathaniel owned the Yamaha motorcycle he was riding at the time of the
accident. The burden of showing that an exclusion to coverage applies is on the insurer.
Burns v. State, 303 S.W.3d 505, 510 (Mo. banc. 2010) (“Missouri also strictly construes
exclusionary clauses against the drafter, who also bears the burden of showing the
exclusion applies”) (emphasis in original).
The record shows Nathaniel’s uncle had agreed to sell him the motorcycle and
allowed him to take possession of it. Nathaniel responsibly obtained insurance coverage
for the motorcycle before driving it. But, at the time of the accident, Nathaniel still was
in the process of paying his uncle for the Yamaha, his uncle still retained title, and he did
not yet consider it his own: when police arrived at the accident scene, Nathaniel
explained that the motorcycle belonged to his uncle.
The insurers argue that even though Nathaniel did not have title to the vehicle or
other indicia of ownership of it, they met their burden by showing that he had possession
of and an interest in the Yamaha sufficient to allow him to obtain an insurance policy on
it. Insurers cite no authority for their proposition that an insurable interest is equivalent
to ownership, and this Court has found none. Such a definition could lead to conflicting
claims and confusion because persons other than an owner can have sufficient interest in
property to insure it. For example, the uncle who was selling the vehicle also had an
insurable interest in it. Indeed, both a rental or leasing company and the person renting or
leasing a vehicle or other item have an insurable interest in the car or other item rented
and have some possessory interest in it. This does not make the renter the owner of the
car, however, at least not in the absence of a contract provision so defining “ownership”
for purposes of the contract.
While the insurance policies at issue could have defined “owned,” for purposes of
the underinsured motorist endorsement, 3 to include all those who have an insurable
As to uninsured motorist coverage, this Court long has held that “§ 379.203 mandated
uninsured motorist coverage and that the parties were not free to enter into a contract
which had the effect of diminishing the coverage the statute required.” Shepherd v.
American States Ins. Co., 671 S.W.2d 777, 778 (Mo. banc 1984).
interest in the vehicle, they did not do so. The insurers chose to use the term “owned” in
the policies’ underinsured motorist endorsement but not to define it.
accordingly “will be viewed in the meaning that would ordinarily be understood by the
layman who bought and paid for the policy.” Krombach v. Mayflower Ins. Co., Ltd., 827
S.W.2d 208, 210 (Mo. banc 1992).
“Owner” is defined generally as “one that has the legal or rightful title whether the
possessor or not.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1612 (1961).
Additionally, “own” often is defined as “belonging to oneself or itself” or “to have or
hold as property or appurtenance: have rightful title to, whether legal or natural: possess.”
Id. While the meaning of “owned” may vary in particular circumstances, case law
similarly indicates that it usually involves establishing either title, see, e.g., Case v.
Universal Underwriters Insurance Company, 534 S.W.2d 635 (Mo. App. 1976) (title
establishes a rebuttable presumption of ownership), or the power to “voluntarily destroy,
encumber, sell, or otherwise dispose” of the property, see, e.g., Lightner v. Farmers Ins.
Co., Inc., 789 S.W.2d 487 (Mo. banc 1990) (finding ownership on this basis). No case or
dictionary has been identified that defines “ownership” and “possession of an insurable
interest” as equivalencies.
The insurers had the burden of showing that the term “owned” in the endorsement
unambiguously included Nathaniel’s situation. At best, the term is ambiguous as used in
the policy, and any ambiguity will be interpreted in favor of the insured. See Burns, 303
S.W.3d at 509 (multiple meanings for a term suggest that the word itself is ambiguous if
not defined). The insurer failed to meet its burden of showing that the owned-vehicle
The “Other Insurance” Provisions Permit Stacking To Determine the
Existence and Amount of Underinsured Motorist Coverage
All four policies under which Nathaniel claims coverage define an “underinsured
motor vehicle” as “a motor vehicle which is insured by a liability bond or policy at the
time of the accident which provides bodily injury liability limits less than the limits of
liability of this Underinsured Motorists coverage.” (Emphasis added). The burden is on
the insured to show coverage is provided under this provision. Shelter Mut. Ins. Co. v.
Ballew, 203 S.W.3d 789, 792 (Mo. banc 2006); Martin v. Prier Brass Mfg. Co., 710
S.W.2d 466, 470 (Mo. App. 1986).
The insurers argue that the four $100,000 policies covering Nathaniel should be
compared individually with the coverage provided by the tortfeasor’s policy to determine
whether the latter’s vehicle was underinsured. If this is done, the insurers argue, then as
each policy provides the same $100,000 limit as did the tortfeasor’s policy, the tortfeasor
was not underinsured under any of the policies, none of the underinsured motorist
endorsements apply and there are no policy coverages to stack.
The insurers’ argument explicitly was rejected by this Court in Seeck v. Geico
Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007). There, as here, the insurer argued that
this Court should find that “the tortfeasor’s vehicle does not come within the definition of
‘underinsured motor vehicle’ in the [insurer’s] policy” because the limits of liability of
Because of the Court’s resolution of the owned-vehicle exclusion issue, it will not
address the additional arguments made by insurers that were premised on a determination
that this exclusion did apply.
both policies were the same if stacking was not permitted. Id. at 132-33. This Court held
that to so hold was inconsistent with the long-standing policy of this Court to consider
policy provisions as a whole rather than to look at them seriatim, as the insurer
effectively requested. Id. at 133.
This Court further explicated this long-standing policy in Ritchie v. Allied Prop. &
Cas. Ins. Co., 307 S.W.3d 132 (Mo. banc 2009), in rejecting a similar argument:
Missouri has long followed the rule that an insurance policy must be
read as a whole, not provision by provision. Although insurers often seek to
have courts interpret each provision independently, that is not consistent
with Missouri’s longstanding approach. Seeck is only the latest case to
apply this rule to a situation such as this where the other insurance clause
appears to provide coverage that the limitation of liability clause is argued
to prohibit; any resulting ambiguity will be construed against the insurer.
Ritchie, id. at 138 n. 5.
Numerous court of appeals cases have followed similar reasoning, 5 and this Court
reaffirms this principle here. In determining what coverage is provided for purposes of
determining the applicability of underinsured motorist coverage, a court first must
determine whether the policy permits coverage from multiple policies to be stacked. If
so, then the coverage provided by the policies is their stacked amount, not the amount
each would provide if considered separately, and it is the stacked amount that must be
compared against the insurance coverage of the tortfeasor.
This approach is consistent with the fact that one of the purposes of underinsured
motorist coverage is to provide the insured with the coverage the insured purchased when
See, e.g., Chamness v. American Family Mutual Ins. Col, 226 S.W.3d 199, 205 (Mo.
App. 2007); American Family Ins. Co. v. Ragsdale, 213 S.W.3d 51, 54-55 (Mo. App.
the excess amount is necessary to cover damages. When insurance policies permit
stacking, such as Nathaniel argues is the case here, the coverage contracted for is the total
of the policy limits when stacked.
Here, it is conceded that if the policies are stacked, the tortfeasor is underinsured.
Accordingly, this Court turns to whether the policies permit stacking.
insurance policies refers to:
An insured’s ability to obtain multiple insurance coverage benefits for an
injury either from more than one policy, as where the insured has two or
more separate vehicles under separate policies, or from multiple coverages
provided for within a single policy, as when an insured has one policy
which covers more than one vehicle.
Ritchie, 307 S.W.3d at 135.
As applied here, this definition means that, if the underinsured motorist
endorsements of Nathaniel’s policies permit stacking, then he can recover the sum total
of the policy limits of the stacked policies, here $400,000, up to the amount of damages
remaining after recovery from the tortfeasor. If stacking is not permitted, he will be
limited to the $100,000 amount of recovery of each policy considered singly because
each policy contains an identical $100,000 limit of liability.
The insurers argue that stacking is prohibited by a “Two or More Cars Insured”
clause in each policy, which provides:
The total limit of our liability under all policies issued to you by us shall
not exceed the highest limit of liability under any one policy. When this
policy insures two or more cars, the coverages apply separately to each car.
Here, each vehicle was insured under its own policy, and therefore the second clause of
2007); American Economy Ins. Co. v. Cornejo, 866 S.W.2d 174, 178 (Mo. App. 1993).
this “Two or More Cars Insured” provision does not apply. 6
The insurers claim,
however, that the first clause of the “Two or More Cars Insured” provision expressly
precludes stacking the liability limits of the four policies.
The insurers’ argument ignores the fact that the underinsured motorist
endorsements to each policy also each contain an “other insurance” clause providing:
If there is other similar insurance on a loss covered by this endorsement, we
will pay our share according to this policy’s proportion of the total limits of
all similar insurance. But, any insurance provided under this endorsement
for an insured person while occupying a vehicle you do not own is excess
over any other similar insurance.
This Court’s analysis of a similar “other insurance” clause in Ritchie is dispositive
here. In Ritchie, the insurer claimed that stacking was precluded by a clause stating that
the limit of liability shown on the declarations page was the maximum the insurer would
pay regardless of the number of claims or premiums. But, this Court noted, this was
inconsistent with the policy’s “other insurance” clause, which stated:
If there is other applicable underinsured motorists coverage available under
one or more policies or provisions of coverage:
(2) Any coverage we provide with respect to a vehicle you do not
own shall be excess over any other collectible underinsured motorist
Ritchie, 307 S.W.3d. at 136-37.
As just noted, it is well-settled in Missouri that “courts should not interpret policy
provision in isolation but rather evaluate policies as a whole.” Ritchie, id. at 137.
Each policy also has a similar clause stating that coverage for two or more motorcycles
must be considered separately, but for the reasons noted above, Nathaniel does not come
Conflicts and inconsistencies between different policy provisions, with one seeming to
deny coverage but the other seeming to grant it, will render a policy ambiguous, and such
an ambiguity will be interpreted in favor of the insured. Id.
Applying those principles to the case before it, Ritchie held that even if when read
in isolation the “limits of liability” clause precluded stacking in certain other situations,
when read together with the other insurance clause, an “ordinary person of average
understanding” reasonably could conclude that the “other insurance” clause set out an
exception to this anti-stacking provision “in the special situation where the insured is
injured while occupying a non-owned vehicle.” Ritchie, id. at 137, quoting Niswonger v.
Farm Bureau Town & Country Ins. Co. of Mo., 992 S.W.2d 308, 315 (Mo. App. 1999).
Accord, McCormack Baron Mang. Servs. Inc. v. American Guarantee & Liability Ins.
Co., 989 S.W.2d 168, 171 (Mo. banc 2011).
More specifically, Ritchie said, an insured reasonably could interpret the words of
the “other insurance” clause stating “Any coverage we provide with respect to a vehicle
you do not own shall be excess over any other collectible underinsured motorist
coverage” to mean that “when an injured insured is occupying a non-owned vehicle and
there are multiple underinsured motorist coverages, as it is conceded there are here, then
each of the underinsured motorist coverages are excess to the other, and, therefore, may
be stacked.” Ritchie, 307 S.W.3d. at 137-38.
Ritchie found that this made the insurance policy ambiguous as to whether
stacking was permitted in the case of underinsured motorist coverage and, therefore,
within the definition of “owned;” therefore, that provision also is inapplicable.
permitted the insured to stack these coverages. 7
Similarly, here, the second sentence of the “other insurance” clause appears to an
“ordinary person of average understanding” to permit stacking because it states that “any
coverage we provide with respect to a vehicle you do not own shall be excess over any
other collectible underinsured motorist coverage.” To the extent that this is inconsistent
with other provisions of the policy such as the “Two or More Cars Insured” provision, the
resulting ambiguity must be resolved in favor of the insured. See, e.g., Seeck, 212 S.W.3d
at133-34. Stacking is permitted under the four policies.
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 Nathaniel can recover under the
underinsured motorist endorsement.
Accord, Chamness, 226 S.W.3d at 203-08 (when the same “Two or More Cars
Insured” provision and the same “other insurance” provision are read together they create
an ambiguity that must be resolved in favor of coverage); Ragsdale, 213 S.W.3d at 55-57
(finding the excess insurance clause of the “other insurance” provision ambiguous when
read with the anti-stacking provision, the court permitted stacking); Niswonger, 992
S.W.2d at 313 (accord).
Murray v. American Family Mutual Insurance, 429 F.3d 757 (8th Cir. 2005), relied
on by the insurers to support precluding stacking, did not consider the second sentence of
the “other insurance” clause, which this Court finds dispositive. In any event, Murray
was decided before Ritchie, which is the governing Missouri law.
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 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 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, Nathaniel’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. 9
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.
The insurers also argue that the full amount of any insurance Nathaniel recovered by
settling his suit against both the manufacturer and seller of the helmet should be
deducted. They cite no authority that underinsured motorist coverage should be offset by
products liability insurance that is not related to vehicles at all, and this Court rejects the
suggestion that insureds basically must show that they had no opportunity to sue for tort
damages unrelated to underinsured motorist coverage in order to recover on their
underinsured motorist coverage. Underinsured motorist coverage, like uninsured
motorist coverage, refers to vehicle coverage. In any event, for the reasons just noted,
offset would not be permitted.
The trial court erred in granting summary judgment to the insurers. This Court
finds that the tortfeasor’s vehicle was an underinsured motor vehicle, the insurers failed
to show that the owned-vehicle exclusion applies, the “other insurance” clause permits
stacking of underinsured motorist coverage and offset is not permitted. The judgment is
reversed, and the case is remanded.
LAURA DENVIR STITH, JUDGE
Teitelman, C.J., Russell, Breckenridge and Fischer,
JJ., concur. Draper and Wilson, JJ., not participating.