AMCO Insurance Company v. Judith Williams

United States Court of Appeals
For the Eighth Circuit
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No. 16-2723
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AMCO Insurance Company
lllllllllllllllllllll Plaintiff - Appellee
v.
Judith Williams; Robert Williams
lllllllllllllllllllll Defendants - Appellants
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Appeal from United States District Court
for the Western District of Missouri - Springfield
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Submitted: February 7, 2017
Filed: March 16, 2017
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Before SMITH1, BENTON, and SHEPHERD, Circuit Judges.
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BENTON, Circuit Judge.
Kelly D. Williams died when her car was hit by Dylan A. Meyer’s vehicle.
After settling with Meyer’s insurance company, Appellants Judith and Robert
Williams—Kelly’s parents and sole survivors—submitted a claim for underinsured
1
The Honorable Lavenski R. Smith became Chief Judge of the United States
Court of Appeals for the Eighth Circuit on March 11, 2017.
motorist (UIM) coverage. AMCO Insurance Company sued, seeking a declaration of
no coverage under Kelly’s auto policy. Both parties moved for summary judgment.
The district court2 granted AMCO’s motion. Having jurisdiction under 28 U.S.C. §
1291, this court affirms.
I.
Meyer’s insurance had a limit of $250,000, all paid to the Williamses. Because
the damages exceed this amount, the Williamses sought $100,000 in UIM coverage
under Williams’ auto policy with AMCO.
The policy’s Declarations page lists a UIM limit of $100,000 per person and
$300,000 per accident. The Underinsured Motorists Coverage–Missouri Endorsement
says:
UNDERINSURED MOTORISTS COVERAGE
INSURING AGREEMENT
A. We will pay compensatory damages which an “insured” is legally
entitled to recover from the owner or operator of an
“underinsured motor vehicle” because of “bodily injury”:
1. Sustained by an “insured”; and
2. Caused by an accident.
The owner’s or operator’s liability for these damages must arise
out of the ownership, maintenance or use of the “underinsured
motor vehicle”.
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C. “Underinsured motor vehicle” means a land motor vehicle or
trailer of any type to which a bodily injury liability bond or policy
2
The Honorable Brian C. Wimes, United States District Judge for the Western
District of Missouri.
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applies at the time of the accident but its limit for bodily injury
liability is less than the limit of liability for this coverage. . . .
(emphasis added).
The “Limit of Liability” section in the same Endorsement says:
LIMIT OF LIABILITY
A. The limit of liability shown in the Declarations for each person for
Underinsured Motorists Coverage is our maximum limit of
liability for all damages, including damages for care, loss of
services or death, arising out of “bodily injury” sustained by any
one person in any one accident. Subject to this limit for each
person, the limit of liability shown in the Declarations for each
accident for Underinsured Motorists Coverage is our maximum
limit of liability for all damages for “bodily injury” resulting from
any one accident.
This is the most we will pay regardless of the number of:
1. “Insureds”;
2. Claims made;
3. Vehicles shown in the Declarations; or
4. Vehicles involved in the accident. A vehicle and attached
“trailer” are considered one vehicle. Therefore the Limit of
Liability will not be increased for an accident involving a
vehicle which has an attached “trailer”.
****
D. We will not make a duplicate payment under this coverage for any
element of loss for which payment has been made by or on behalf
of persons or organizations who may be legally responsible.
E. Any amount otherwise payable for damages under this coverage
shall be reduced by all sums paid because of bodily injury by or
on behalf of persons or organizations who may be legally
responsible. This includes all sums paid under Part A of the
policy.
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The Williamses moved for summary judgment, arguing the policy is ambiguous
and provides UIM coverage. AMCO cross-moved, asserting no coverage because
Meyer’s vehicle was not an “underinsured motor vehicle.” Relying on the Missouri
Supreme Court’s decision in Rodriguez v. General Accident Insurance Company, 808
S.W.2d 379 (Mo. banc 1991), the district court granted summary judgment for
AMCO.
“This court reviews de novo a grant of summary judgment, viewing the record
most favorably to the nonmoving party and drawing all reasonable inferences for that
party.” Munroe v. Cont’l W. Ins. Co., 735 F.3d 783, 786 (8th Cir. 2013), citing
Chambers v. Pennycook, 641 F.3d 898, 904 (8th Cir. 2011). “Interpretation of an
insurance policy is a matter of state law.” Progressive N. Ins. Co. v. McDonough,
608 F.3d 388, 390 (8th Cir. 2010), quoting Stan Koch & Sons Trucking, Inc. v. Great
W. Cas. Co., 517 F.3d 1032, 1039 (8th Cir. 2008). The parties agree Missouri law
applies. This court is “bound by the decisions of the Missouri Supreme Court
regarding issues of substantive state law.” Owners Ins. Co. v. Hughes, 712 F.3d 392,
393 (8th Cir. 2013), quoting Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531
(8th Cir. 2005).
II.
The Williamses argue the policy is ambiguous and must be construed in their
favor. “Under Missouri law, courts apply the general rules of contract construction
when interpreting an insurance policy.” Munroe, 735 F.3d at 786, citing Todd v.
Missouri United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. banc 2007). “The key
is whether the [policy] language is ambiguous or unambiguous.” Peters v. Emp’rs
Mut. Cas. Co., 853 S.W.2d 300, 302 (Mo. banc 1993). “If the policy is unambiguous,
it will be enforced as written, absent statutory or policy considerations.” Munroe, 735
F.3d at 786, citing Rodriguez, 808 S.W.2d at 382. “If ambiguity exists, the court
interprets the policy in favor of the insured.” Id., citing Todd, 223 S.W.3d at 160.
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“An ambiguity exists when there is duplicity, indistinctness, or uncertainty in
the meaning of the language in the policy. Language is ambiguous if it is reasonably
open to different constructions.” Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc
2010), quoting Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007).
“[C]onstruing the terms of an insurance policy,” courts should apply “the meaning
which would be attached by an ordinary person of average understanding if
purchasing insurance.” Id., quoting Seeck, 212 S.W.3d at 132. “Courts should not
interpret policy provisions in isolation but rather evaluate policies as a whole.”
Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. banc 2009).
Courts “must endeavor to give each provision a reasonable meaning and to avoid an
interpretation that renders some provisions useless or redundant.” Dibben v. Shelter
Ins. Co., 261 S.W.3d 553, 556 (Mo. App. 2008).
This case is controlled by Rodriguez v. General Accident Insurance Company
of America, 808 S.W.2d 379 (Mo. banc 1991). There, the tortfeasor’s vehicle had a
$50,000 liability policy. Id. at 380. After collecting the $50,000, the insured sought
the balance of damages under her policy’s UIM coverage which had a $50,000 limit
per vehicle. Id. The company declined, emphasizing the policy’s definition of
“underinsured motor vehicle.” Id. at 381. The insured sued, claiming the policy was
ambiguous and must be construed in favor of coverage. Id.
The court rejected the insured’s arguments, finding the “contract between [the
company] and the [insured] clearly states that an underinsured motor vehicle is a
vehicle whose limits for bodily injury liability are ‘less than the limit of liability for
this coverage.’” Id. at 382. The court held, “Since [the tortfeasor’s] coverage is equal
to the limit of liability under the [insured’s] policy, [the tortfeasor] was not an
underinsured motorist as defined by the [] policy.” Id.
The definition of “underinsured motor vehicle” in Rodriguez is identical to the
definition here. The same analysis applies. Williams’ policy provides that “[AMCO]
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will pay compensatory damages which the ‘insured’ is legally entitled to recover from
the owner or operator of an ‘underinsured motor vehicle’ because of ‘bodily injury.’”
The issue is whether Meyer’s vehicle was an “underinsured motor vehicle.” The
policy defines “underinsured motor vehicle” as:
[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.
(emphasis added). The policy “clearly states that an underinsured motor vehicle is a
vehicle whose limits for bodily injury liability are ‘less than the limit of liability for
this coverage.’” Id. at 382. It is undisputed that Meyer’s bodily-injury liability limit
is $250,000, and the policy’s UIM liability limit is $100,000. Because the bodily-
injury liability limit for Meyer’s vehicle is greater than the policy’s UIM liability
limit, Meyer’s vehicle is not an “underinsured motor vehicle.” Id. See Hughes, 712
F.3d at 396 (relying on Rodriguez and finding no UIM coverage because the
tortfeasor’s vehicle was not an “underinsured automobile”).
III.
The Williamses argue Rodriguez is inapplicable because the policy is
ambiguous. They contend the definition of “underinsured motor vehicle” conflicts
with the Declarations page, Insuring Agreement section, Limit of Liability section,
and Other Insurance clause.
A.
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The Williamses think that the definition of “underinsured motor vehicle”
conflicts with the Declarations page, which lists a UIM limit of liability of $100,000
but has no other limitations or exclusions. This reads the Declarations page in
isolation, contrary to Missouri law requiring courts to interpret policies “as a whole,”
Ritchie, 307 S.W.3d at 135 and “avoid an interpretation that renders some provisions
useless or redundant.” Dibben, 261 S.W.3d at 556. “The essential terms [of a policy]
are usually stated in abbreviated form on a declarations page.” Todd, 223 S.W.3d at
160. The district court properly found no ambiguity between the Declarations page,
which states “in abbreviated form” the UIM limit, and the UIM Endorsement which
limits coverage to cases where the tortfeasor’s bodily-injury liability limit is less than
the UIM liability limit. See Hughes, 712 F.3d at 396 (relying on Rodriguez to enforce
a definition of “underinsured automobile” despite the policy’s Declarations page that
provided $100,000 in UIM coverage).
B.
The Williamses claim the definition of “underinsured motor vehicle” conflicts
with the Insuring Agreement section by ignoring the promise to “pay compensatory
damages which an ‘insured’ is legally entitled to recover from the owner or operator
of an ‘underinsured motor vehicle’ because of ‘bodily injury.’” Like the Declarations
argument, this claim fails to read the policy as a whole, ignoring other policy language
that limits UIM coverage. See Ritchie, 307 S.W.3d at 135; Dibben, 261 S.W.3d at
556.
C.
The Williamses assert that the policy’s Limit of Liability section creates an
ambiguity because its “set-off” provisions make the UIM coverage illusory. However,
the two Missouri Supreme Court cases they invoke are inapposite. See Jones v.
Mid-Century Ins. Co., 287 S.W.3d 687 (Mo. banc 2009); Ritchie, 307 S.W.3d 132.
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In Jones, it was undisputed that the tortfeasor’s vehicle was an underinsured motor
vehicle. Ritchie did not involve the definition of “underinsured motor vehicle,” thus,
neither case considered the issue here.
This court has considered and rejected this argument:
Burger argues that [the limit-of-liability] provision renders the extent of
UIM coverage ambiguous because the policy first states that Allied will
contribute $50,000 and then later indicates that it will pay only the
difference between that $50,000 figure and the amount of money
contributed by an underinsured tortfeasor. See Jones v. Mid–Century
Ins. Co., 287 S.W.3d 687, 690 (Mo. 2009) (“[I]f a contract promises
something at one point and takes it away at another, there is an
ambiguity.” (quoting Seeck, 212 S.W.3d at 133)). This argument misses
the mark. Even if the policy did contain inconsistent statements about the
amount of coverage due once coverage has been triggered, such
inconsistency would be immaterial to the question at issue here: whether
the policy provides for coverage at all. As we explained in Hughes,
disputes about the amount Allied must contribute simply do not “inject
ambiguity into the meaning of what is a covered ‘underinsured motor
vehicle’” so as to render the UIM definition unclear. 712 F.3d at 396
(emphasis added). Nothing in Allied’s UIM limit-of-liability section
undermines the requirement that a tortfeasor’s vehicle first must qualify
as underinsured in order to trigger UIM coverage.
Burger v. Allied Prop. & Cas. Ins. Co., 822 F.3d 445, 450 (8th Cir. 2016) (emphasis
added).
Although Rodriguez did not address this precise issue, the court examined
ambiguity arguments about the set-off provision—“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.” Rodriguez, 808 S.W.2d at 381. The
provision, the court stated, reinforced, rather than made ambiguous, the definition of
“underinsured motor vehicle:”
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The effect of this provision is to set-off the $50,000 paid by [the
tortfeasor’s] insurer against the $50,000 coverage provided by the
[insureds’ company]. The underinsured motorist coverage, therefore, is
not excess coverage as the [insureds] argue. Instead, that coverage
provides a total amount of protection to be paid to the [insureds] if other
persons legally responsible for [the] injuries have lesser liability limits
than those provided under the [insureds’] underinsured motorist
coverage.
Id. at 382.
Here, the set-off provision—“[a]ny amount otherwise payable for damages
under this coverage shall be reduced by all sums paid because of bodily injury by or
on behalf of persons or organizations who may be legally responsible”—also
reinforces that UIM coverage is not “excess coverage” but rather provides protection
if other persons legally responsible have lesser liability limits.
The set-off provision does not render the policy ambiguous.
D.
The Williamses claim the definition of “underinsured motor vehicle” creates an
ambiguity by contradicting the Other Insurance clause. The Williamses did not raise
this argument in the district court. This court will not consider it on appeal. See
Satcher v. Univ. of Ark. at Pine Bluff Bd. of Trs., 558 F.3d 731, 735 (8th Cir. 2009)
(“[F]ailure to oppose a basis for summary judgment constitutes waiver of that
argument.”); Smith v. City of Des Moines, Iowa, 99 F.3d 1466, 1473 (8th Cir. 1996)
(“We will not reverse a grant of summary judgment on the basis of an argument not
presented below.”).
IV.
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The Williamses attempt to discredit Rodriguez, stating, “Numerous cases since
Rodriguez have considered policies defining an ‘underinsured motor vehicle’ as one
with liability limits less than the insured’s UIM limits, yet because of ambiguities in
the policies the insureds were entitled to collect the UIM coverage even though they
had collected the same amount as or limits greater than the UIM coverage from the
tortfeasor.” Yet the cases they cite are all appellate decisions. Although “[d]ecisions
by the Missouri Court of Appeals may be used as an indication of how the Missouri
Supreme Court may rule,” this court is “not bound to follow these decisions.” Burger,
822 F.3d at 447, quoting Aerotronics, Inc. v. Pneumo Abex Corp., 62 F.3d 1053,
1068 (8th Cir. 1995). Rather, this court is “bound by the decisions of the Missouri
Supreme Court regarding issues of substantive state law.” Hughes, 710 F.3d at 393.
The Williamses recognize Rodriguez “is the only Missouri Supreme Court case
that directly addresses the definition of ‘underinsured motor vehicle’” at issue here,
and that “Rodriguez has not been overruled by the Supreme Court” despite “numerous
opportunities to revisit” it. This court has relied on Rodriguez to find similar UIM
provisions unambiguous. See Burger, 822 F.3d 445; Hughes, 712 F.3d 392.
“Considering the clarity with which the underinsured motorist coverage is defined in
the policy,” the district court did not err in finding the policy “is neither ambiguous
nor misleading.” Rodriguez, 808 S.W.2d at 383.
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The judgment is affirmed.
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