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Hammontree v. Safeco Insurance Co. of Illinois

United States District Court, W.D. Missouri, Southwestern Division

November 21, 2016

JOSEPH W. HAMMONTREE, Plaintiff,
v.
SAFECO INSURANCE CO. OF ILLINOIS, Defendant.

          ORDER

          DOUGLAS HARPOOL UNITED STATES DISTRICT JUDGE.

         Before the Court are the parties' cross Motions for Partial Summary Judgment. (Docs. 21, 28). The issues raised in the motions focus on the interpretation of a pair of insurance agreements, and the question before this Court is whether multiple vehicle coverages within multiple policies may be stacked under the agreements' Underinsured Motorist (“UIM”) coverage provisions.

         BACKGROUND[1]

         On May 3, 2014, Plaintiff, Joseph Hammontree, was involved in an automobile accident with Ada Howard. At the time of the accident, Plaintiff was operating a motorcycle that he owned. As a result of the accident, Plaintiff suffered physical injuries, and his monetary damages arising from those injuries exceed $150, 000. Ada Howard's insurance policy carried a liability limit of $50, 000 per person injured, which has been paid to Plaintiff.

         Joseph and Leonette Hammontree are the named insureds of a motorcycle insurance policy (“Motorcycle Policy”) provided by Defendant, Safeco Insurance Company of Illinois. That policy provides coverage for two motorcycles, one of which is the motorcycle Plaintiff was operating at the time of the accident.

         The policy declarations page for the Motorcycle Policy indicates that each motorcycle has separate, identical coverage. The UIM Bodily Injury coverage limits are: “$100, 000 Each Person[;] $300, 000 Each Accident.”

         The Hammontrees are also the named insureds of an automobile insurance policy (“Auto Policy”) provided by Safeco. That policy covers two other vehicles owned by the Hammontrees. Each vehicle has separate, identical coverage. The Auto Policy's declarations page indicates that the UIM Bodily Injury coverage limits are: “$100, 000 Each Person[;] $300, 000 Each Accident.”

         Under the Auto and Motorcycle Policies, Ada Howard qualified as an underinsured motorist. Safeco paid Plaintiff $100, 000, pursuant to the Motorcycle Policy's UIM coverage. Plaintiff demanded that Safeco stack the UIM coverage for all four vehicles, which would have resulted in Safeco paying a total of $400, 000 to Plaintiff. Safeco refused, citing anti-stacking provisions in both insurance agreements. Plaintiff filed this suit for claims of breach of contract and vexatious refusal to pay. Mo. Rev. Stat. §§ 375.296, 375.420.

         In his arguments in the cross Motions for Partial Summary Judgment, Plaintiff takes the position that the insurance agreements are ambiguous regarding the permissibility of stacking underinsured motorist coverage. Defendant argues that the policies explicitly disallow stacking, that the provisions of this policy are distinguishable from those found to be ambiguous in other cases, and that the Auto Policy provides no UIM coverage due to an exclusion provision. Both Motions for Partial Summary Judgment have been fully briefed and are ripe for decision.

         STANDARD FOR SUMMARY JUDGMENT

         Summary judgment is proper if, viewing the record in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “Where there is no dispute of material fact and reasonable fact finders could not find in favor of the nonmoving party, summary judgment is appropriate.” Quinn v. St. Louis County, 653 F.3d 745, 750 (8th Cir. 2011). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the movant meets the initial step, the burden shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To do so, the moving party must “do more than simply show there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

         ANALYSIS

         Plaintiff seeks to stack the UIM coverage from two of his insurance policies, an Automobile Policy and a Motorcycle Policy. UIM coverage follows the insured, rather than being tied to any one vehicle. Long v. Shelter Ins. Cos., 351 S.W.3d 692, 696 (Mo.Ct.App. 2011). “[I]f the policy language is unambiguous in disallowing stacking, the anti-stacking provisions are enforceable.” Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. 2009) (en banc). “State law governs the interpretation of insurance policies when federal jurisdiction is based on diversity of citizenship.” Jordan v. Safeco Ins. Co. of Ill., 741 F.3d 882, 884 (8th Cir. 2014) (quoting Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857, 861 (8th Cir. 2012)).[2] The interpretation of an insurance policy is a question of law for the Court to decide. Richie, 307 S.W.3d at 135. “[C]ourts should not interpret policy provisions in isolation but rather evaluate policies as a whole.” Id. at 137. Ambiguities are found to exist when there is an apparent conflict or inconsistency between two policy provisions - one claiming to deny coverage when the other appears to grant it. Manner v. Shiermeier, 393 S.W.3d 58, 65 (Mo. 2013) (en banc). The Court must resolve any ambiguities in the policy in favor of the insured. Id. “Questions of contract interpretation are very specific to the policies interpreted, and thus courts must exercise care in applying case holdings that have interpreted policies not identical to the policy at issue.” Jordan, 741 F.3d at 885.

         I. The Auto Policy

         The following Auto Policy provisions are at issue:

         DEFINITIONS

M. “Your covered auto” means:
1. Any vehicle shown in the Declarations.
2. a. Any newly acquired vehicle . . . . Any newly acquired vehicle must be of the following types:
(1) a private passenger auto;
(2) a pickup or van . . ...

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