Trantham v. Old Republic Insurance Co.

797 S.W.2d 771, 1990 Mo. App. LEXIS 1337
CourtMissouri Court of Appeals
DecidedSeptember 4, 1990
Docket57284
StatusPublished
Cited by9 cases

This text of 797 S.W.2d 771 (Trantham v. Old Republic Insurance Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trantham v. Old Republic Insurance Co., 797 S.W.2d 771, 1990 Mo. App. LEXIS 1337 (Mo. Ct. App. 1990).

Opinion

SMITH, Judge.

Third party plaintiff, Willard Trantham, (hereinafter referred to as plaintiff or Trantham), appeals from a summary judgment holding that third party defendant, Old Republic Insurance Company, is liable under its insurance policy for a maximum of $25,000 for injuries sustained by plaintiff. We affirm.

Plaintiff was a passenger in a rental truck driven by James Farrow which overturned injuring plaintiff. Farrow’s personal insurance carrier was State Farm. The rental truck was owned by Ryder Truck Rental Company and covered by an insurance policy issued by Old Republic. State Farm was requested by Farrow to provide him a defense and coverage. State Farm then filed this action for declaratory judgment as to its liability. Trantham was joined as a defendant. He filed a eross-claim against Farrow for his injuries and a third party claim against Old Republic. In the third party claim he asserted that the limit of Old Republic’s liability was $1,000,-000 for plaintiff’s injuries. Old Republic sought and the trial court granted a summary judgment that Old Republic’s maximum liability to Trantham was $25,000. The trial court also denied Trantham’s motion for summary judgment and subsequently entered an order that there was no just reason to delay appeal. Rule 74.01. The only issue before us is the limit of liability provided by the Old Republic policy. 1

The policy issued by Old Republic listed the “Ryder System, Inc. and its affiliated or subsidiary companies” as the “Named insured.” The policy defined “insured” as “any person or organization qualifying as an insured in the ‘Persons Insured’ provision of the applicable insurance coverage. The insurance afforded applies separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the company’s liability.” The bodily injury liability coverage section defines an “insured” as “any other person while using an owned automobile or a hired automobile with the permission of the named insured ...” Under the policy Farrow was an insured. The basic limit of liability of the policy was $1,000,000.

There were two additional endorsements to the policy in effect at the time of the accident. Endorsement 7 provided in pertinent part:

RECEIPT BASIS — DRIVERLESS CARS

It is agreed that such automobile liability insurance as is afforded by the policy, including the Exclusions and Conditions *773 applicable thereto, for bodily injury liability and for property damage liability applies to any one or more persons or organizations leasing/renting an automobile from any named insured subject to the following provisions:
1. Unless the lease/rental agreement states in writing that such lessee/renter is to be provided with automobile liability insurance by such named insured, no insurance shall be afforded under this policy to such lessee/renter, his agents or employees, or to any persons or organizations legally responsible for the use of the vehicles so leased/rented by such lessee/renter.
2. In addition to the other terms of this policy, the insurance afforded to such lessee/renter, his agents or employees, or to any person or organizations legally responsible for the use of an automobile so leased/rented by such lessee/renter shall also be subject to the terms, including the limit or limits of liability, conditions, restrictions, and limitations in the lease/rental agreements, providing the coverage afforded under this policy is not thereby enlarged or extended.

Endorsement 6 provided in pertinent part:

LIMITS OF LIABILITY
Regardless of the number of (1) Insureds under this policy, (2) persons or organizations who sustain bodily injury or property damage, (3) claims made or suits brought on account of bodily injury or property damage or (4) automobiles or units of mobile equipment to which this policy applies, the Company’s liability is limited as follows:
Bodily Injury Liability and Property Damage Liability:
(a) The limit of liability stated in the Schedule of this endorsement as applicable to “each occurrence” is the total limit of the Company’s liability for all damages because of bodily injury or property damage as a result of any one occurrence, provided that with respect to any occurrence for which notice of this policy is given in lieu of security or when this policy is certified as proof of financial responsibility for the future under the provisions of the motor vehicle financial responsibility law of any state or province such limit of liability shall be applied to provide the separate limits required by such law for bodily injury liability and property damage liability to the extent of the coverage required by such law, but the separate application of such limit shall not increase the total limit of the Company’s liability.

It is to be noted that under endorsement 7 unless the contract between Ryder and the lessee states that Ryder is providing automobile liability insurance then none is provided under the policy. The insurance provided is limited to that set forth in the rental agreement.

Ryder’s rental agreement with Farrow provided in pertinent part:

LIABILITY INSURANCE. The Truck is covered by a liability insurance policy which provides coverage to Customer against bodily injury and property damage claims with split (per person, per accident) limits of liability up to the requirements of the state financial responsibility law of the state in which an accident may occur or $10,000/$20,000 bodily injury and $10,000 property damage if no financial responsibility law applies. Customer agrees to indemnify and hold Ryder harmless from damages and liability in excess of or excluded from Ryder’s liability insurance coverage arising out of or resulting from the operation of the Truck.

There is no dispute that the Missouri financial responsibility law requirements were $25,000 and that the accident occurred in Missouri. Plaintiff relies upon two cases to support his contention that the coverage provided by the master policy cannot be reduced by the rental agreement i.e.: Weathers v. Royal Indemnity Co., 577 S.W.2d 623 (Mo. banc 1979) and Allstate Insurance Co. v. Sullivan, 643 *774 S.W.2d 21 (Mo.App.1982). Both of those cases involved an attempt to reduce the coverage granted by the master policy by provisions in the rental agreement involving use or operation of the vehicle. In both cases it was held that these attempts contravened the public policy of the state because they purported to restrict liability coverage required by the Financial Responsibility Law of Missouri. 2

Sullivan, in a footnote, dealt with an attempt in the rental agreement to limit liability to that provided by the financial responsibility act. Sullivan, supra, ftnt. 3. That attempt was rejected because the court was dealing with the Allstate policy not the rental agreement.

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Cite This Page — Counsel Stack

Bluebook (online)
797 S.W.2d 771, 1990 Mo. App. LEXIS 1337, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trantham-v-old-republic-insurance-co-moctapp-1990.