Take it to the limit
Tim Johnson’s vehicle was involved in a collision with an uninsured motorist and he sustained injuries, including a neck injury that required two surgeries. At the time of the collision, Johnson was insured under three separate policies issued by State Farm Mutual Automobile Insurance Company. A policy issued in 2011 insured the vehicle that was involved in the collision, and a policy issued in 2017 covered another vehicle owned by Johnson. A third policy insured a motor home. The language of the three policies was substantially identical.
Each of the policies provided uninsured motorist limits of $100,000 per person and $300,000 per accident. After the accident, State Farm paid Johnson the $100,000 UM limit under the 2011 policy, $25,000 under the 2017 policy, and $25,000 under the motor home policy. The insurer claimed that an owned vehicle exclusion under the policies permitted it to reduce the amount of coverage.
The owned vehicle exclusion that was added to each policy by endorsement reads:
THERE IS NO COVERAGE TO THE EXTENT THE UNINSURED MOTOR VEHICLE COVERAGE LIMITS OF THIS POLICY EXCEED THE UNINSURED MOTOR VEHICLE COVERAGE LIMITS REQUIRED BY THE MISSOURI FINANCIAL RESPONSIBILITY LAW FOR AN INSURED WHO SUSTAINS BODILY INJURY:
a. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY YOU IF IT IS NOT YOUR CAR OR A NEWLY ACQUIRED CAR;
Johnson brought suit against State Farm asserting breach of contract and vexatious refusal to pay for failing to pay the UM policy limit of $100,000 apiece under the 2017 policy and the motor home policy. Johnson filed a motion for partial summary judgment, arguing that the exclusion did not apply, was ambiguous, and conflicted with public policy and Missouri law. State Farm filed a motion for summary judgment stating that the exclusion did apply and the UM coverage was thereby reduced from $100,000 to $25,000. The court denied Johnson’s motion for partial summary judgment and granted State Farm’s motion for summary judgment. Johnson appealed.
On appeal, Johnson asserted that State Farm was not entitled to judgment as a matter of law because the owned vehicle exclusion reducing the amount of coverage did not apply to Johnson because, at the time of the accident, he was occupying a “your car,” meaning the vehicle shown on the declarations page of the 2011 policy. Johnson argued that so long as he was occupying a “your car” as listed on the declarations page of any of his policies, the exclusion did not apply.
The court pointed out that because Johnson was occupying only the vehicle insured under the 2011 policy, the exclusion in the 2017 policy and the motor home policy applied.
Johnson next argued that the trial court erred in granting summary judgment in State Farm’s favor because of ambiguities that ought to be resolved in Johnson’s favor. Specifically, Johnson argued that the exclusion’s reference to “uninsured motor vehicle coverage limits required by Missouri financial responsibility law” was ambiguous as to the amount of coverage available to Johnson. Johnson further argued there were “irreconcilable conflicts” between the exclusion and other UM provisions in the 2017 policy and the motor home policy, thereby creating ambiguity in the amount of UM coverage available under the policies. The court noted that both of Johnson’s arguments were effectively foreclosed by a state supreme court decision that found no ambiguity in similar policy language.
Finally, Johnson argued that the trial court erred in granting summary judgment in favor of State Farm because the policies’ owned vehicle exclusion reduced the amount of UM coverage available to Johnson and therefore was void as being against public policy and Missouri law.
According to the court, it is against public policy to completely bar an insured from receiving UM coverage. In Johnson’s case, however, State Farm was not attempting to completely bar Johnson from coverage in the 2017 policy and the motor home policy. Rather, State Farm provided Johnson the full amount of UM coverage pursuant to the 2011 policy and under the 2017 and motor home policies provided him the minimum amount of coverage required by Missouri law.
The court affirmed the trial court’s judgment in favor of State Farm.
Johnson v. State Farm Mutual Automobile Insurance Company—Missouri Court of Appeals, Southern District, Division 2—September 1—No. SD36368.