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Rusher v. Liberty Mutual Insurance Co.

United States District Court, E.D. Missouri, Eastern Division

February 7, 2018

TAMMY RUSHER, Plaintiff,



         This diversity case involving underinsured motorist (“UIM”) coverage is before the Court on Plaintiff's motion for partial summary judgment [Doc. 25], and Defendant's motion for summary judgment [Doc. 22], seeking a determination as to whether Plaintiff is entitled to underinsured motorist coverage under her insurance policy with Defendant. The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). [Doc. 16.] The motions are fully briefed and the matter is ripe for disposition. For the following reasons, the Court will grant Defendant's motion and deny Plaintiff's motion.

         I. Background

         The parties have stipulated that the facts recited here are undisputed for the purposes of summary judgment. Plaintiff Tammy Rusher was injured in a single-vehicle accident while occupying a 2005 Hyundai Elantra owned by Plaintiff and operated by her daughter. The December 7, 2013, accident was caused by her daughter's negligence. LM General Insurance Company issued personal automobile policy No. AOS-248-469875-40 (the “Policy”) to Tammy Schumann (Plaintiff's former name) and Jason Schumann. The policy was in full force and effect at the time of the accident, and provided Plaintiff and the involved Hyundai with the insurance coverage set forth in the policy. Defendant tendered to Plaintiff the $25, 000 in bodily injury liability coverage available under the Policy. Plaintiff demanded UIM coverage from Defendant in the amount of $500, 000, which represented the policy limits. Defendant refused the demand for the stated reason that the vehicle involved in the accident was not an “underinsured motor vehicle” as defined in the Policy. Plaintiff filed this action in Missouri state court for declaratory judgment, breach of contract, and vexatious refusal to pay. Defendant removed the action to this Court based on diversity of citizenship.

         II. Summary Judgment Standard

         The standards applicable to summary judgment motions are well settled, and they do not change when both parties have moved for summary judgment. See Wermager v. Cormorant Twp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983); Tower Rock Stone Co. v. Quarry & Allied Workers Local No. 830, 918 F.Supp.2d 902, 905 (E.D. Mo. 2013). Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Hill v. Walker, 737 F.3d 1209, 1216 (8th Cir. 2013). The movant “bears the initial responsibility of informing the district court of the basis for its motion” and must identify “those portions of [the record] . . . which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant does so, the nonmovant must respond by submitting evidentiary materials that set out “specific facts showing that there is a genuine issue for trial.” Id. at 324 (quotation marks omitted). “On a motion for summary judgment, ‘facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts.'” Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (quoting Scott v. Harris, 550 U.S. 372, 380 (2007) (internal quotation marks omitted)).

         Where parties file cross-motions for summary judgment, each summary judgment motion must be evaluated independently to determine whether a genuine dispute of material fact exists and whether the movant is entitled to judgment as a matter of law. Husinga v. Federal-Mogul Ignition Co., 519 F.Supp.2d 929, 942 (S.D. Iowa 2007). “[T]he filing of cross motions for summary judgment does not necessarily indicate that there is no dispute as to a material fact, or have the effect of submitting the cause to a plenary determination on the merits.” Wermager, 716 F.2d at 1214.

         III. Discussion

         State law governs the interpretation of insurance policies when federal jurisdiction is based on diversity of citizenship. Secura Ins. v. Horizon Plumbing, Inc. 670 F.3d 857, 861 (8th Cir. 2012). Missouri law governs this insurance contract. 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). Decisions by the Missouri Court of Appeals may be used as “an indication of how the Missouri Supreme Court may rule, ” but the Court is not bound to follow these decisions. Id.

         “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 v. Missouri United Sch. Ins. Council, 223 S.W.3d 156, 163 (Mo. 2007) (en banc). In construing the terms of an insurance policy, Missouri courts apply “the meaning an ordinary person of average understanding would attach if purchasing insurance, and resolve[ ] ambiguities in favor of the insured.” Dutton v. Am. Family Mut. Ins. Co., 454 S.W.3d 319, 322 (Mo. 2015). But, “[i]f the policy's language is unambiguous, it must be enforced as written.” Floyd-Tunnell v. Shelter Mut., 439 S.W.3d 215, 217 (Mo. 2014). Ambiguities arise 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. 2010) (citation omitted). Ambiguity also arises where an insurance clause appears to furnish coverage but other provisions signal that such coverage is not provided. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 134 (Mo. 2007) (en banc). However, “[d]efinitions, exclusions, conditions and endorsements are necessary provisions in insurance policies. If they are clear and unambiguous within the context of the policy as a whole, they are enforceable.” Todd, 223 S.W.3d at 163. Finally, a court must not “unreasonably distort the language of a policy or exercise inventive powers for the purpose of creating an ambiguity when none exists.” Todd, 223 S.W.3d at 163; see also Rodriguez v. Gen. Acc. Ins. Co. of Am., 808 S.W.2d 379, 382 (Mo. 1991) (en banc).

         The UIM coverage endorsement of the Policy provides in relevant part as follows:


         A. We will pay compensatory damages which an “insured” is legally entitled to recover from the owner or operator of an “underinsured motor ...

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