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Owners Insurance Co. v. Craig

Supreme Court of Missouri, En Banc

April 4, 2017

OWNERS INSURANCE COMPANY, Appellant,
v.
VICKI CRAIG and CHRIS CRAIG, Respondents.

         APPEAL FROM THE CIRCUIT COURT OF GREENE COUNTY The Honorable Jason R. Brown, Judge.

          ZEL M. FISCHER, JUDGE.

         Owners Insurance Company appeals a summary judgment entered in favor of its policyholders Vicki Craig and Chris Craig that denied Owners the right to reduce the amount paid pursuant to its underinsured motorist ("UIM") coverage by the amount paid by the at-fault motorist's liability insurer. Because the policy at issue unambiguously provides for such set-off, the circuit court's judgment is reversed and the case is remanded.

         Factual and Procedural History

         Owners issued the Craigs a policy with UIM coverage.[1] The policy's declarations list "$250, 000 per person" as the UIM "limit, " but the "Limit of Liability" section in the UIM endorsement states:

4. LIMIT OF LIABILITY
a. The Limits of Liability stated in the Declarations for Underinsured
Motorist Coverage are for reference purposes only. Under no circumstances do we have a duty to pay you or any person entitled to Underinsured Motorist Coverage under this policy the entire Limits of Liability stated in the Declarations for this coverage.

         The policy then contains "set-off" provisions:

b. Subject to the Limits of Liability stated in the Declarations for Underinsured Motorist Coverage and paragraph 4.a. above, our payment for Underinsured Motorist Coverage shall not exceed the lowest of:
(1) the amount by which the Underinsured Motorist Coverage Limits of Liability stated in the Declarations exceed the total limits of all bodily injury liability bonds and liability insurance policies available to the owner or operator of the underinsured automobile; or
(2) the amount by which compensatory damages, including but not limited to loss of consortium, because of bodily injury exceed the total limits of all bodily injury liability bonds and liability insurance policies available to the owner or operator of the underinsured automobile.

         This language clearly provides that Owners will pay the declarations' listed limit amount minus what is paid by the underinsured motorist's policy if damages exceed the declarations' listed limit amount, or damages minus what is paid by the underinsured motorist's policy if damages do not exceed the declarations' listed limit amount. As such, these provisions ensure Owners will never be obligated to pay the full amount the declarations list as the UIM "limit."[2]

         With this policy in place, Vicki was injured in an accident when her vehicle was struck by one driven by another motorist; she incurred damages exceeding $300, 000. Because the at-fault motorist was insured under a Shelter Insurance policy with a liability limit of $50, 000, Shelter Insurance paid the Craigs $50, 000. The Craigs then turned to Owners, seeking $250, 000, the declarations' listed UIM limit amount. Instead, Owners paid the Craigs $200, 000, citing the set-off provisions that allowed them to deduct the $50, 000 Shelter Insurance paid on behalf of the at-fault motorist. Owners then sought a declaratory judgment over the disputed $50, 000, and both sides moved for summary judgment with a joint stipulation of facts. The circuit court ruled the policy was ambiguous and entered summary judgment in favor ...


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