No ambiguity in UIM provisions
When Megan Deaton lost control of the vehicle she was driving and crashed, her passenger, Chelsea Seaton, sustained fatal injuries. Chelsea’s mother, Leslie Seaton, asserted a wrongful death claim against Deaton. Deaton settled the claim for her policy limits.
Seaton then sought underinsured motorist (UIM) coverage under the three automobile policies she maintained with Shelter Mutual Insurance Company. Shelter provided UIM coverage pursuant to one of the policies but denied UIM coverage under the other two policies, asserting that Chelsea was not a defined insured for UIM coverage.
Seaton filed a declaratory judgment action against Shelter, seeking a declaration that UIM coverage existed for Chelsea and alleging breach of contract. Seaton and Shelter filed cross-motions for summary judgment. The court entered summary judgment in favor of Seaton. Shelter appealed.
On appeal, Shelter argued that the lower court erred in granting summary judgment in Seaton’s favor because Chelsea was not an “insured” under the policies’ unambiguous language. Shelter also argued that the court erred in finding that the policies were internally inconsistent.
The UIM endorsements on Shelter’s policies provided that Shelter would pay uncompensated damages, subject to stated limitations, when “an insured sustains bodily injury as a result of an accident involving the use of an underinsured motor vehicle … .” (Emphasis added). Immediately thereafter, the endorsements set forth “additional and replacement definitions.” The policy defined “insured” to be:
(b) any relative; and
(c) any individual occupying the described auto who is listed in the Declarations as an ‘additional listed insured’, if:
(i) that individual does not own a motor vehicle; and
(ii) that individual’s spouse does not own a motor vehicle.
(Emphasis in original.)
The policies stated: “You means any person listed as a named insured in the Declarations … .” Further, Shelter defined a “named insured” as “any person listed in the Declarations under the heading ‘Named Insured.’ It does not include persons listed under other headings unless they are also listed under the heading ‘Named Insured.’” (Emphasis in original.)
According to the supreme court, Chelsea Seaton failed to meet the definition of an insured who was entitled to UIM coverage. First, the court said, Chelsea did not meet the definition of “you” when applying the plain language of the policies’ terms. Second, the policies provided coverage for a “relative.” The term “relative” was defined as “an individual related to you by blood, marriage, or adoption, who is primarily a resident of, and actually living in, your household … . Relative does not mean any individual who owns a motor vehicle … .” Seaton acknowledged that her daughter had owned a motor vehicle.
Finally, the court said, Chelsea did not meet the definition of “insured,” which provided coverage for an “individual occupying the described auto … .”The court noted that it was undisputed that Chelsea was a passenger in Deaton’s vehicle at the time her injuries occurred. She was not an occupant of either vehicle insured by the Shelter policies. Pursuant to the plain language of the policies, Chelsea was not an insured and was not entitled to UIM coverage.
The judgment of the trial court was reversed, and the case was remanded.
Seaton v. Shelter Mutual Insurance Company—Supreme Court of Missouri—June 4, 2019—No. SC 97511.