TIM JOHNSON v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

TIM JOHNSON, )
)
Appellant, )
)
vs. ) No. SD36368
)
STATE FARM MUTUAL ) Filed: May 5, 2020
AUTOMOBILE INSURANCE )
COMPANY, )
)
Respondent. )
APPEAL FROM THE CIRCUIT COURT OF GREENE COUNTY
Honorable Judge Michael J. Cordonnier
AFFIRMED
Tim Johnson ("Johnson") appeals the trial court's grant of summary
judgment in favor of State Farm Mutual Automobile Insurance Company ("State
Farm") upholding an owned-vehicle uninsured motorist ("UM") exclusion clause
in two automobile insurance policies covering vehicles not involved in the
accident. We affirm the trial court under the precedent set in Floyd-Tunnell v.
Shelter Mutual Insurance Co., 439 S.W.3d 215 (Mo. banc 2014).
Factual and Procedural Background
Appellant Johnson was involved in an automobile collision with an
uninsured motorist and sustained bodily injuries including a neck injury
resulting in two surgeries. At the time of the collision, Johnson was insured
under three separate policies issued by State Farm. In the summary judgment
record before the trial court, both parties agreed there were two policies with
State Farm, one listing the 2011 Toyota Tacoma ("2011 policy") (the vehicle
involved in the collision) and the other policy listing a 2017 Toyota Tacoma
("2017 policy"). However, during oral argument before this Court the parties
agreed there was a third policy involving a motor home ("motor home policy")
that "[i]n all material respects [] is identical to the two State Farm policies that
are part of the record on appeal."1 With the exceptions of the vehicles listed on
the Declarations Pages and the differences in the premiums, the language of the
three policies is substantially identical and we will consider all three policies in
our analysis of the legal issues.
Each of the policies stated UM limits of $100,000 per person and
$300,000 per accident. Following the accident, State Farm paid Johnson the
UM policy limit of $100,000 under the 2011 policy. State Farm also paid
$25,000 in UM coverage under the 2017 policy and $25,000 in UM coverage
under the motor home policy, claiming an owned-vehicle exclusion under the
policies permitted it to reduce the amount of coverage. Neither the 2017 Tacoma
nor the motor home were involved in the collision.
Johnson brought suit against State Farm asserting breach of contract and
vexatious refusal to pay for failing to pay the UM policy limit of $100,000 apiece
under the 2017 policy and the motor home policy. Johnson filed a motion for
1This Court was not furnished with a copy of the motor home policy and relies on the
representations by the parties of what is contained within the motor home policy.
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partial summary judgment arguing the exclusion did not apply, was ambiguous,
and conflicted with public policy and Missouri law. State Farm filed a motion for
summary judgment stating the exclusion did apply and the UM coverage was
thereby reduced from $100,000 to $25,000.2 The trial court denied Johnson's
motion for partial summary judgment and granted State Farm's motion for
summary judgment. Johnson appeals.3
Standard of Review
We review a grant of summary judgment de novo. Dutton v. American
Family Mut. Ins. Co., 454 S.W.3d 319, 321 (Mo. banc 2015). We consider the
record in the light most favorable to the party against whom the judgment was
entered and give the non-movant the benefit of all reasonable inferences from the
record. Id. at 321-22 (citing ITT Commercial Fin. Corp. v. Mid-Am.
Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993)). We will uphold
a ruling on summary judgment only if there is "no genuine dispute of material
fact and the movant is entitled to judgment as a matter of law." Missouri Pros.
Att'ys & Cir. Att'ys Ret. Sys. v. Pemiscot Cty., 256 S.W.3d 98, 102 (Mo.
banc 2008). Our interpretation of an insurance policy and our determination of
"whether coverage and exclusion provisions are ambiguous" are questions of law
we review de novo. Floyd-Tunnell, 439 S.W.3d at 217. When construing the
policy, we apply the meaning an "ordinary person of average understanding"
2 Missouri law requires uninsured motorist coverage in the "minimum amount of $25,000 per
person/$50,000 per occurrence[.]" Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43, 46 (Mo.
banc 2009) (citing § 379.203); see also Missouri's "Motor Vehicle Financial Responsibility Law"
§§ 303.030 et seq. All statutory citations are to RSMo. (2016).
3 See § 512.020. The trial court's grant of summary judgment disposed of all claims by Johnson
against State Farm. See Rule 74.01(b). All Rule references are to Missouri Court Rules (2019).
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would attach to the policy if purchasing insurance, and we resolve ambiguities in
the insured's favor. Dutton, 454 S.W.3d at 322.
Analysis
As the parties agree, there is no genuine dispute of material fact, and the
only issue remaining is whether State Farm is entitled to judgment as a matter of
law. In four points, Johnson challenges the trial court's grant of summary
judgment in State Farm's favor.
In point 1, Johnson argues the owned-vehicle exclusion reducing the UM
coverage does not apply to him because he "was occupying a 'your car' at the time
of the collision[.]" Point 2 argues there was ambiguity in the language of the
exclusion which must be resolved in Johnson's favor. In point 3, Johnson argues
there are "irreconcilable conflicts" between the exclusion and other provisions of
the policies relating to the "amount and/or availability of UM coverage" which
must be resolved in Johnson's favor. In point 4, Johnson argues the owned-
vehicle exclusion is void as against public policy and Missouri law.
The Policy Language
The policies covering the vehicles not involved in the collision list Johnson
and his wife as the "NAMED INSURED[.]" Each policy's Declarations Page lists
one vehicle under the YOUR CAR heading.
The Declarations Page further states:
EXCEPTIONS, POLICY BOOKLET & ENDORSEMENTS (See policy
booklet & individual endorsements for coverage details).
YOUR POLICY CONSISTS OF THIS DECLARATIONS PAGE, THE
POLICY BOOKLET – FORM 9825A, AND ANY ENDORSEMENTS
THAT APPLY, INCLUDING THOSE ISSUED TO YOU WITH ANY
SUBSEQUENT RENEWAL NOTICE.
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CREDITOR – STATE FARM BANK, PO BOX 5961, MADISON WI
53705-0961.
6087C STATUTORY NOTICE.
6128CP AMENDATORY ENDORSEMENT.
6925A AMENDATORY ENDORSEMENT.
The policy booklet states:
THIS POLICY
1. This policy consists of:
a. the most recently issued Declarations Page;
b. the policy booklet version shown on that Declarations Page; and
c. any endorsements that apply, including those listed on that
Declarations Page as well as those issued in connection with any
subsequent renewal of this policy.
....
DEFINITIONS
....
Your Car means the vehicle shown under
"YOUR CAR" on the Declarations Page.
....
6128CP AMENDATORY ENDORSEMENT
This endorsement is part of the policy. Except for the changes this
endorsement makes, all other provisions of the policy remain the
same and apply to this endorsement.
....
4. UNINSURED MOTOR VEHICLE COVERAGE
Exclusions
The following exclusion is added:
THERE IS NO COVERAGE TO THE EXTENT THE UNINSURED
MOTOR VEHICLE COVERAGE LIMITS OF THIS POLICY EXCEED
THE UNINSURED MOTOR VEHICLE COVERAGE LIMITS
REQUIRED BY THE MISSOURI FINANCIAL RESPONSIBILITY
LAW FOR AN INSURED WHO SUSTAINS BODILY INJURY:
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a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY
YOU IF IT IS NOT YOUR CAR OR A NEWLY ACQUIRED
CAR;[4]
Point One
In his first point, Johnson asserts State Farm was not entitled to judgment
as a matter of law because the owned-vehicle exclusion reducing the amount of
UM coverage does not apply to Johnson since he was occupying a "YOUR CAR"
at the time of the collision.
The general rules for contract interpretation apply to insurance contracts,
and the "key is whether the contract language is ambiguous or unambiguous."
Todd v. Missouri United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. banc
2007) (internal quotation and citation omitted). Unambiguous insurance
policies must be enforced according to their terms. Lawson v. Progressive
Cas. Ins. Co., 527 S.W.3d 198, 201 (Mo. App. E.D. 2017). "Insurance policies
are read as a whole, and the risk insured against is made up of both the general
insuring agreement as well as the exclusions and definitions." Todd, 223 S.W.3d
at 163.
Here, the exclusion in all of Johnson's policies stated it applied to an
insured who sustained bodily injury "WHILE OCCUPYING A MOTOR
VEHICLE OWNED BY YOU IF IT IS NOT YOUR CAR[.]" "Your car" was
defined in the policy as "the vehicle shown under 'YOUR CAR' on the
Declarations Page." Johnson argues that as long as he was occupying a "YOUR
CAR" as listed on the Declarations Page of any of his State Farm policies, then
4 The policy states: "[d]efined words and phrases are printed in boldface italics."
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the exclusion does not apply. The Declarations Page listed only one vehicle under
the heading "YOUR CAR" in each policy: (1) the 2011 Toyota Tacoma; (2) the
2017 Toyota Tacoma; or (3) the motor home. But Johnson was occupying only
the 2011 Toyota Tacoma, not the 2017 Toyota Tacoma or the motor home, at the
time of his collision. Therefore, the exclusion in both the 2017 policy and the
motor home policy applied because, in the collision, he was "OCCUPYING A
MOTOR VEHICLE OWNED BY [Johnson]"—the 2011 Toyota Tacoma—not the
2017 Toyota Tacoma or the motor home.
We are bound to enforce unambiguous policy language as written, Floyd-
Tunnell, 439 S.W.3d at 217, therefore, the owned-vehicle exclusion applied to
limit Johnson's recovery. The policies define "YOUR CAR" to refer to "the
vehicle" (singular) shown on the Declarations Page (again, singular). "Courts
may not unreasonably distort the language of a policy or exercise inventive
powers for the purpose of creating an ambiguity where none exists." Todd, 223
S.W.3d at 163. Point 1 is denied.
Points Two & Three
In his second and third points, Johnson argues the trial court erred in
granting summary judgment in State Farm's favor because of ambiguities that
ought to be resolved in Johnson's favor. Specifically, in point 2, Johnson argues
the exclusion's reference to "uninsured motor vehicle coverage limits required by
Missouri financial responsibility law" is ambiguous as to the amount of coverage
available to Johnson. In point 3, Johnson argues there are "irreconcilable
conflicts" between the exclusion and other UM provisions in the 2017 policy and
the motor home policy thereby creating ambiguity in the amount of UM coverage
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available under the policies. Both of Johnson's arguments have been effectively
foreclosed by the Supreme Court of Missouri's decision in Floyd-Tunnell,
which found no ambiguity in similar policy language. 439 S.W.3d at 221.
In Floyd-Tunnell, the Court considered the following language from an
automobile insurance policy's owned-vehicle partial exclusion:
In claims involving the situations listed below, our limit of liability
under Coverage E is the minimum dollar amount required by the
uninsured motorist insurance law and financial
responsibility law of the state of Missouri:
...
(3) If any part of the damages are sustained while the insured is
occupying a motor vehicle owned by any insured, the spouse of any
insured, or a resident of any insured's household; unless it is the
described auto.
Id. at 218 (emphasis added).
The Court described the partial exclusion's "plain language" as limiting the
insurer's liability to $25,000 when the insured is "occupying a vehicle that is
owned by the insured but is not the vehicle covered by the policy." Id. at 221.
Even though the exclusion reduced the coverage amount from the limits listed on
each policy's Declarations Page, the Court found the "mere presence of an
exclusion does not render an insurance policy ambiguous[.]" Id. Instead, the
partial exclusion was "clear and unambiguous" when the policies were "read as a
whole[.]" Id.
This Court is compelled to follow the precedent set forth by our Supreme
Court. See Chavez v. Cedar Fair, LP, 450 S.W.3d 291, 298 (Mo. banc 2014).
In Floyd-Tunnell, the Court found the "plain language" of an owned-vehicle
exclusion limited the insurer's liability to $25,000 even though the language of
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the exclusion itself did not reference a dollar amount but instead referred to the
minimum amount "required by the uninsured motorist insurance law and
financial responsibility law of the state of Missouri[.]" 439 S.W.3d at 218, 221.
Similarly, here, the 2017 policy's exclusion and the motor home policy's exclusion
limited coverage when the policy's coverage "EXCEED[S] THE UNINSURED
MOTOR VEHICLE COVERAGE LIMITS REQUIRED BY THE MISSOURI
FINANCIAL RESPONSIBILITY LAW[.]" Johnson's argument that the policies'
reference to an "undefined technical phrase" renders both policies ambiguous is
unavailing in light of Floyd-Tunnell, where the Court found similar policy
language to be clear and unambiguous. Id. at 221.
In the same manner, we must also reject Johnson's argument that conflicts
between the exclusion and other provisions in the 2017 policy and the motor
home policy render the policies ambiguous. As in Floyd-Tunnell, the 2017
policy and the motor home policy's Declarations Pages do not "grant any
coverage," but instead, "state the policy's essential terms in an abbreviated form,
and when the policy is read as a whole, it is clear that a reader must look
elsewhere to determine the scope of coverage." Id. In this case, the 2017 policy
and the motor home policy's Declarations Pages inform the reader that the
policies consist of the Declarations Page, the policy booklet, Form 9825A and
"ANY ENDORSEMENTS THAT APPLY[.]" The policies then list two
"AMENDATORY ENDORSEMENT[S,]" one of which contains the exclusion at
issue here. As long as "[d]efinitions, exclusions, conditions and endorsements"
are "clear and unambiguous within the context of the policy as a whole, they are
enforceable." Id. (quoting Todd, 223 S.W.3d at 163). We are compelled to find
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the exclusions in the 2017 policy and the motor home policy clear and
unambiguous when considered in light of a reading of the entire policies. Points
2 and 3 are denied.
Point 4
In point 4, Johnson argues the court erred in granting summary judgment
in favor of State Farm because the policies' owned-vehicle exclusion reduced the
amount of UM coverage available to Johnson and is therefore void as against
public policy and Missouri law.
"The purpose of UM coverage is to take the place of the liability coverage
the insured would have received had he or she been involved in an accident with
an insured motorist." Id. at 220. The Court has rejected an insurer's attempt to
completely bar an insured from receiving UM coverage, finding this type of
exclusion "contrary to the public policy of § 379.203 and invalid." Shepherd v.
American States Ins. Co., 671 S.W.2d 777, 780 (Mo. banc 1984). Here,
however, State Farm is not attempting to completely bar Johnson from UM
coverage in the 2017 policy and the motor home policy. Rather, State Farm has
provided Johnson with the full amount of UM coverage pursuant to the 2011
policy, and also provided Johnson, under the 2017 policy and the motor home
policy, with the minimum amount of coverage required by Missouri law. Cf.,
Blumer v. Automobile Club Inter-Ins. Exchange, 340 S.W.3d 214, 220
(Mo. App. W.D. 2011) (finding an owned-vehicle exclusion invalid "to the extent
of the limits required by the Motor Vehicle Financial Responsibility Law"). Just
as the Court in Floyd-Tunnell rejected an interpretation of an insurance policy
that would "expand the scope of mandatory UM coverage far beyond the purpose
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of the statute[,]" 439 S.W.3d at 220, we reject Johnson's argument that reducing
the UM coverage by the owned-vehicle exclusion violates public policy. Point 4 is
denied.
Conclusion
The trial court's judgment in favor of State Farm is affirmed.
MARY W. SHEFFIELD, J. – OPINION AUTHOR
JEFFREY W. BATES, C.J. – CONCURS
DON E. BURRELL, J. – CONCURS
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