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Worley v. Cornerstone National Insurance Co.

Court of Appeals of Missouri, Eastern District, Second Division

June 26, 2018

VERA WORLEY, Appellant,
v.
CORNERSTONE NATIONAL INSURANCE COMPANY, Respondent.

          Appeal from the Circuit Court of Ste. Genevieve County Honorable Wendy W. Horn

          PHILIP M. HESS, JUDGE

         Introduction

         Vera Worley ("Appellant") appeals from the entry of summary judgment in the Circuit Court of Ste. Genevieve County on Appellant's claim for damages under an insurance contract with Cornerstone National Insurance Company ("Respondent") for underinsured motorist ("UIM") coverage. Appellant's sole point of error is the trial court erred by failing to determine she was entitled to the full UIM coverage under her policy. Appellant asserts the UIM limit of liability section of her policy was ambiguous, and therefore should be construed in favor of coverage. We agree with Appellant that due to an ambiguity under Respondent's interpretation of the policy, Appellant is entitled to full UIM coverage. Accordingly, we reverse and remand.

         Factual Background

         The parties stipulated to the following facts. Appellant was walking on Basler Drive in Ste. Genevieve, Missouri, when she was struck by a vehicle driven by Donna Bullard ("Tortfeasor"). As a direct result of the negligence of Tortfeasor, Appellant sustained injuries to her head, lower back, right knee, and left elbow. Consequently, Appellant suffered pain, disability, and anxiety, and incurred medical charges in excess of $100, 000.

         Appellant was personally insured under an insurance policy (the "Policy") with Respondent at the time of the accident. The Policy included $100, 000 of UIM coverage.

         Appellant recovered a settlement from Tortfeasor's insurance carrier for $50, 000 dollars, which represented the limits of liability of Tortfeasor's insurance policy. Appellant then sought recovery from Respondent under the UIM coverage in the Policy

         Respondent determined that it was entitled to a $50, 000 reduction in its policy limit of UIM coverage because Tortfeasor's insurance carrier already paid Appellant $50, 000. This would mean Appellant could only recover $50, 000 under the Policy's UIM coverage.

         Appellant filed a vexatious refusal to pay claim against Respondent. The parties reached a compromise agreement, wherein Appellant agreed to dismiss her vexatious refusal claim, and Respondent agreed to stipulate both that Tortfeasor was an underinsured motorist under the Policy, and Appellant's damages were in excess of $150, 000.

         Both parties filed motions for summary judgment. The parties agreed the only issue presented was whether Appellant is entitled to UIM Policy limit proceeds of $100, 000, or whether Respondent is entitled to a $50, 000 reduction, resulting in a judgment against Respondent of $50, 000.

         Following oral arguments on the parties' motions, the trial court entered judgment in favor of Respondent and ordered Respondent to pay $50, 000 to Appellant. This appeal follows.

         Relevant Law

         An appellate court reviews the trial court's grant of summary judgment de novo. ITT Comm'l Fin. Corp. v. Mid-American Marine Supply Corp., 854 S.W.2d. 371, 376 (Mo. banc 1993). Summary judgment is appropriate when no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. Taylor v. Zoltek Companies, Inc., 18 S.W.3d 541, 543 (Mo. App. E.D. 2000).

         The interpretation of an insurance policy is also a question of law that this Court determines de novo. Seeck v. Geico General Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007). "In construing the terms of an insurance policy, this Court applies 'the meaning which would be attached by an ordinary person of average understanding if purchasing insurance.'" Jones v. Mid-Cent. Ins. Co., 287 S.W.3d 687, 690 (Mo. banc 2009). Furthermore, we resolve ambiguities in favor of the insured. Id.

         "An ambiguity exists 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." Id. at 690 (quoting Seeck, 212 S.W.3d at 132). "Moreover, [i]f a contract promises something at one point and takes it away at another, there is an ambiguity." Id. The reasons why ambiguities are construed in favor of the insured include the following:

(1) insurance is designed to furnish protection to the insured, not defeat it; ambiguous provisions of a policy designed to cut down, restrict, or limit insurance coverage already granted, or which introduce exceptions or exemptions, must be strictly construed against the insurer; and (2) as the drafter of the policy, the insurance company is in the better position to remove the ambiguity from the contract.

Golden Rule Ins. Co. v. R.S., 368 S.W.3d 327, 334 (Mo. App. W.D. 2012) (quoting Pruitt v. Farmers Ins. Co., 950 S.W.2d 659, 664 (Mo. App. S.D. 1997).

         Discussion

         Appellant's sole point on appeal is the trial court erred by failing to determine she was entitled to the full $100, 000 UIM coverage under the Policy. Specifically, Appellant argues the UIM limit of liability section of the Policy was ambiguous and therefore should be construed in her favor. Respondent contends the limit of liability section unambiguously informed Appellant the limit of liability for UIM coverage was subject to a reduction by any and all sums paid by a liable tortfeasor to Appellant.

The limit of liability section states, in relevant part:
B. When two limits of liability are shown in the Declarations for Underinsured Motorist Coverage:
The limit of liability shown in the Declarations[1] for each person for this coverage is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of bodily injury sustained by any one person in any one accident. Subject to this limit for each person, the limit of liability shown in the Declarations for each accident for this coverage is our maximum limit of liability for all damages ...

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