Goza v. Hartford Underwriters Insurance Co.

972 S.W.2d 371, 1998 Mo. App. LEXIS 725, 1998 WL 169332

• Court: Missouri Court of Appeals
• Decided: April 14, 1998
• Docket: 73153
• Status: Published

Opinions

RICHARD B. TEITELMAN, Judge.

Hartford Underwriters Insurance Company (“Hartford”) appeals the trial court’s judgment entered in favor of the insured, Margaret I. Goza (“Goza”), on her claim for underinsured motorists coverage. We affirm.

This case was submitted to the trial court on stipulated facts. In September of 1993 Goza sustained injuries in an accident when the vehicle she was operating collided head-on with a vehicle operated by Scott Sylcox (“Sylcox”) when his vehicle entered her lane of traffic. Sylcox had coverage under a liability policy issued by his automobile insurer with limits of $100,000 per person and $300,-000 per occurrence. Goza had coverage under a policy issued by Hartford, which provided underinsured motorist (UIM) coverage with limits of $100,000 per person and $300,-000 per accident. Goza’s damages from the accident exceeded $200,000. Goza brought an action against Sylcox and Hartford for damages resulting from the collision. She settled with Sylcox for his policy limits of $100,000. Hartford then denied payment to Goza. The issue is whether Goza is entitled to coverage for her damages under the UIM provisions of the Hartford policy.

The UIM provisions of the policy provide, in relevant part, as follows:

C. Underinsured motor vehicle means a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage.

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LIMIT OF LIABILITY

A. The limit of liability shown in the Declarations for each person for Underin-sured Motorists Coverage is our maximum limit of liability for all damages, ... arising out of bodily injury sustained by any one person in any one accident....

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However, the limit of liability shall be reduced by all sums paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible. This includes all sums paid under Part A of this policy.

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OTHER INSURANCE

If there is other applicable similar insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance.

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The trial court held that the “Other Insurance” clause, noted above, created an ambiguity in the UIM provisions which required those provisions to be construed in favor of coverage for Goza.

We review this matter purely as a question of law. The interpretation of the meaning of an insurance policy is a question of law. Buck v. American Family Mutual Ins. Co., 921 S.W.2d 96, 98 (Mo.App.E.D.1996). And in a case tried on stipulated facts, the only issue on appeal is whether the court drew the proper legal conclusions from those facts. State Farm Mutual Automobile Insurance Co. v. Sommers, 954 S.W.2d 18 (Mo.App. E.D.1997).

There is no dispute that the definition of “underinsured motor vehicle” in the Hartford policy noted above, as well as the accompanying “Limit of Liability” language, are virtually identical to the same UIM provisions which were at issue and found to be unambiguous in Rodriguez v. General Accident Insurance Company, 808 S.W.2d 379, 381 (Mo. banc 1991).

In Rodriguez, our Supreme Court held that the insurance policy clearly stated that an underinsured vehicle is one whose limits for bodily injury liability are “less than the limit of liability for this coverage.” Id. at 382. The Rodriguez court found that the tortfeasor’s vehicle was therefore not an un-derinsured vehicle, because the policy limits on that vehicle’s liability coverage were equal to the underinsured coverage limits on Rodriguez’s vehicle. Id.

Similarly here, the liability limits of the coverage on the tortfeasor’s vehicle were $100,000, an amount equal to the liability limit of Hartford’s policy issued to Goza for underinsured motorist coverage. Since Rodriguez is controlling on this issue, we must find the policy terms regarding definition of underinsured and Limit of Liability to be unambiguous.

Here, however, just as in Zemelman v. Equity Mutual Ins. Co., 935 S.W.2d 673 (Mo. App.W.D. 1996), Goza asserts an additional alleged ambiguity which was not discussed in the Rodriguez case. Goza argues that an ambiguity entitling her to UIM coverage arises from the last sentence of the Other Insurance clause in her policy with Hartford. That clause, which is identical to the one at issue and held to be ambiguous in Zemel-man, reads as follows:

“[I]f there is other applicable similar insurance we will pay only your share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance.”[Emphasis Added]

In Zemelman the court reasoned that since underinsured motorist coverage can reasonably be interpreted as providing “coverage for a vehicle that you do not own,” the above-noted language could reasonably be interpreted as providing underinsured coverage which is in excess to amounts recovered from the tortfeasor. Zemelman at 677. Thus, the court held, where there is such an “excess” or “Other Insurance” clause which provides that underinsured coverage is excess to all other collectible insurance at the time of the accident, a court may find that such language creates an ambiguity in the policy when read in conjunction with the conflicting language as to definition of under-insured motorist coverage and “Limit of Liability”, if the Other Insurance clause may reasonably be understood to provide coverage over and above that collected from the tortfeasor. Zemelman, at 677-78.

With respect to the issue raised by this appeal, we note that the analysis of Zemel-man has also been found persuasive, and adopted, by the Southern District of this Court. Jackson v. Safeco Insurance Company of America, 949 S.W.2d 130, 135-36 (Mo.App. S.D.1997).

Courts may not create an ambiguity in order to distort the language of an unambiguous insurance policy. Rodriguez, supra at 382. But where provisions of an insurance policy are ambiguous, they are construed against the insurer. Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208, 210 (Mo.banc 1992). An ambiguity arises when there is duplicity, indistinctness or uncertainty in the meaning of the words used in the insurance contract. Id. Language is ambiguous if it is reasonably open to different constructions, and the language used will be viewed in the meaning that would ordinarily be understood by the layman who bought and paid for the policy. Id.

Hartford argues that Zemelman and Jackson were “wrongly decided” and that the Other Insurance clause here at issue, whether read separately or read together with the definition of underinsured motor vehicle and Limit of Liability clause, is not truly ambiguous.

We disagree. In Krenski v. Aubuchon, 841 S.W.2d 721 (Mo.App. E.D.1992), the policy there at issue contained the following Other Insurance language, which is quite similar to the Other Insurance provision in this ease:

Underinsured motor vehicles coverage shall be excess over all bodily injury bonds and insurance policies applicable at the time of the accident.

Krenski, at 729.

The court in Krenski held that that language, when read in conjunction with the policy’s Limits of Liability subsection, created an ambiguity such that an “average lay person could be left with the impression that coverage is provided over and above that furnished by the tortfeasor’s insurance.” Id. at 731.

Hartford also contends that the tortfeasor here did not meet the policy’s definition of “underinsured” and consequently Goza is not entitled to UIM benefits. It is true that because the tortfeasor’s policy paid Goza the limits of its liability coverage of the tortfea-sor, $100,000, an amount equal to the liability limit of Hartford’s policy issued to Goza for underinsured motorist coverage, the tortfea-sor therefore clearly was not operating an “underinsured motor vehicle” as that term is defined in the Hartford policy.

From there, Hartford then proceeds to argue that the definition of underinsured is the sole determinative issue in this case, and hence that the question of whether the Other Insurance clause gives rise to an ambiguity in the policy’s UIM provisions should not even be reached or considered. Hartford states in its brief: “Simply put, there is no need to determine whether the ‘Other Insurance’ provisions may be ambiguous, because Sylcox was not an owner or operator of an underinsured motor vehicle, and, therefore, underinsured motorists benefits are not payable to Goza.”

This argument begs the question on the ultimate issue of ambiguity. Obviously, if we were to limit our inquiry only to the question of whether Goza’s claim comports with the policy’s definition of “underinsured motor vehicle” and simply ignore altogether the existence of the Other Insurance clause, then of course Hartford’s position would prevail. But Hartford has offered us no persuasive reason why the UIM provisions here at issue should be viewed separately or in isolation rather than read together.

Further, we think an objective examination of the “excess” language of the Other Insurance clause suggests not just that this language might reasonably be interpreted by an average lay person to mean underinsured coverage was excess to amounts recovered from the tortfeasor, but also to mean that this language prevailed over the preceding and apparently conflicting language contained in the policy’s definition of underin-sured and Limits of Liability sections.

Thus, we believe the trial court correctly concluded that whether the definition of “un-derinsured motor vehicle” is met is not a threshold issue in determining whether Goza is entitled to UIM benefits. Just as in Zem-elman, where the definition of underinsured was identical to the one in Hartford’s policy and was found to be unambiguous, so here too, the insured can still be entitled to UIM benefits even though that definition is not met if the policy’s UIM provisions when read together give rise to such an ambiguity.

Finally, Hartford suggests that support for its position can be found in the recent case of State Farm Mutual Automobile Insurance Co. v. Sommers, 954 S.W.2d 18 (Mo.App.E.D.1997), where an insured sought underinsured motorist benefits based on an alleged ambiguity in the policy and we upheld the trial court’s judgment in favor of State Farm.

Sommers, however, is distinguishable from the case now before us. The court in Som-mers found that Zemelman v. Equity Mutual Ins. Co., supra, Jackson v. Safeco Ins. Co. of America, supra, and Krenski v. Aubuchon, supra, had no application to the case before it. Sommers, at 19. The court there held that, whereas the “Other Insurance” clauses in Zemelman, Jackson and Krenski all contained language which “could reasonably be interpreted to provide coverage in excess of all other applicable coverage”, the language in the comparable clause of Som-mers’ policy was significantly different, in a way that made it unambiguous and not subject to such an interpretation. Id. Sommers thus had a sound basis for holding that the provisions at issue there were significantly distinguishable from those in Zemelman and Jackson. The same cannot be said for this case.

The judgment of the trial court is affirmed.

CRAHAN, C.J., dissents in separate opinion. GERALD M. SMITH, Senior Judge, concurs in result in separate concurring opinion.