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Shelter Mutual Insurance Co. v. Lester

Court of Appeals of Missouri, Southern District, First Division

January 31, 2018



          GARY W. LYNCH, J.

         Shelter Mutual Insurance Company ("Shelter") appeals a summary judgment declaring that under certain insurance policies it must indemnify Daniel Craig ("Insured") for $400, 000 in damages sustained by Jennifer Lester and Abbigail Lester (referred to collectively as "the Lesters"). In two points, Shelter asserts that the judgment was erroneous because the policies unambiguously provide that Shelter's maximum liability is $100, 000. Finding no merit in Shelter's points, we affirm.

         Factual and Procedural Background[1]

         While operating Jennifer Lester's 2003 Ford Expedition ("the motor vehicle"), Insured lost control and crashed ("the accident"). Jennifer Lester and her daughters, Abbigail Lester and Cerea Reed, were riding in the motor vehicle as passengers and, as a result of the accident, the Lesters sustained personal injuries and Cerea Reed lost her life.

         At the time of the accident, the motor vehicle was insured under a policy issued by Cornerstone National Insurance Company ("Cornerstone"), providing liability limits in the amount of $25, 000 per-person/$50, 000 per-accident. Additionally, Insured's parents were the named insureds on four motor vehicles, each of which were insured by a separate Shelter insurance policy (referred to collectively as "the Shelter policies"). As relevant to the accident, the Shelter policies provided bodily injury liability coverage for "[r]elatives" of the named insureds for claims arising from their use of a "non-owned auto" in the amounts of $50, 000 per-person/$100, 000 per-accident. Although the parties agreed that the Shelter policies applied to the accident, they disputed the combined maximum amount of liability coverage. Shelter claimed that the maximum amount was $100, 000, while the Lesters claimed that the amount was not less than $200, 000.

         Thereafter, the Lesters pursued claims for their injuries and the wrongful death of Cerea Reed. The Lesters, Insured, Shelter, and Cornerstone thereafter entered into a settlement agreement pursuant to section 537.065 ("the agreement"). Under the agreement's terms, Cornerstone would pay the Lesters $50, 000; Shelter would pay the Lesters $100, 000; a $1, 500, 000 consent judgment would be entered against Insured in favor of the Lesters (consisting of a $750, 000 judgment for the wrongful death of Cerea Reed, a $461, 250 judgment for the person injuries of Abbigail Lester, and a $288, 750 judgment for the personal injuries to Jennifer Lester) (collectively "the Lester claims"), $150, 000 of which would be satisfied by the payments from Cornerstone and Shelter ("the consent judgment"); the coverage dispute regarding the Shelter Policies would be litigated in a declaratory judgment action filed by Shelter; and any attempt to collect on the balance of the consent judgment would be limited to the extent Shelter remained liable under the Shelter policies.

         Shelter thereafter filed the instant action seeking a declaratory judgment that $100, 000 is "[t]he total amount of combined liability coverage available under [the] Shelter policies to indemnify [Insured.]" Shelter based its argument on a provision, "POLICY TERMS APPLICABLE TO MORE THAN ONE PART OF THE POLICY[, ]" found in each of the Shelter policies, which provides, in pertinent part:

If more than one policy issued by Shelter Mutual Insurance Company or Shelter General Insurance Company provides coverage for a single loss, this policy covers only the proportion of the total amount payable that its limits bear to the total limits of all such policies. The total maximum amount payable under all such policies is the highest limit of any one coverage applicable to the loss.

         ["the OSI clause"].

         Cross-motions for summary judgment followed, and the trial court ultimately granted the Lesters' motion and denied Shelter's competing motion.[2] As relevant here, the trial court ruled that Shelter "failed to meet its burden of proving that the OSI [c]lause applies in this matter[, ]" in that it did not show that there was "a single loss." Alternatively, the trial court ruled that the OSI clause is ambiguous on its face and in light of other provisions in the Shelter policies. The trial court ultimately entered summary judgment against Shelter for $300, 000, having concluded that

the stipulated facts confirm that each Shelter policy provides a face amount of $50, 000 per person/$100, 000 per accident of coverage. Because Shelter has failed to show unambiguous policy language reducing or limiting the [Shelter] policies' stated coverage, all four of the policies ...

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