Allstate Indemnity Company v. Levina Rice
2014 U.S. App. LEXIS 11218
| 8th Cir. | 2014Background
- Rice was injured in a 2010 single-vehicle Missouri accident involving the Underwoods’ vehicle.
- The Underwoods were named insureds on an Allstate Fire and Casualty auto policy ($250,000 per person) and Wiebe drove the vehicle as a permissive user.
- Rice settled with the primary insurers for $350,000 total; Allstate Indemnity issued an umbrella policy with $1,000,000 excess and $250,000 underlying requirement.
- Settlement terms included Allstate Indemnity pursuing declaratory relief on coverage for Wiebe under the umbrella policy; Rice released the Underwoods from further claims if Allstate prevailed.
- The district court granted Allstate Indemnity summary judgment, holding Wiebe was not an “insured person” under the umbrella policy; Rice appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wiebe is an insured person under XL coverage | Rice: permissive use falls within covered personal activities of a named insured. | Allstate Indemnity: XL coverage only covers damages an insured person is legally obligated to pay; Wiebe isn’t an insured and no liability established. | No; XL coverage does not extend to Wiebe because he is not an insured person and no legal obligation in damages shown. |
| Interpretation of XL coverage terms relative to permissive use | Umbrella policy broadly covers permissive use as a personal activity of an insured. | Coverage is limited to damages an insured person is legally obligated to pay; permissive-use liability is not automatic. | Ambiguity resolved in Rice's favor; XL covers only legally obligated damages by an insured person, not permissive-use liability of a non-insured user. |
| Effect of the policy’s 'subject to' language on coverage | The general insuring agreement is superseded by permissive-use language, creating coverage for Wiebe. | Subject-to language limits coverage; policy-wide interpretation should not extend to non-insured permissive users. | Ambiguity resolved in Rice's favor; permissive-use provision can broaden coverage beyond the general obligation clause. |
Key Cases Cited
- Hendrix v. Hendrix, 476 S.E.2d 644 (Ga. App. 1996) (illustrates interpretation of umbrella clauses with permissive use)
- Lero v. State Farm Fire & Cas. Co., 359 S.W.3d 74 (Mo. Ct. App. 2011) (permits liberal construction of permissive-use provisions under Missouri law)
- Schmitz v. Great American Assurance Co., 337 S.W.3d 700 (Mo. 2011) (ambiguous policy language construed against insurer)
- Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. 2007) (ambiguity doctrine in Missouri insurance contracts)
- Weathers v. Royal Indem. Co., 577 S.W.2d 623 (Mo. 1979) (permissive-use coverage policy policy aims to extend coverage)
- Murray v. American Family Mut. Ins. Co., 429 F.3d 757 (8th Cir. 2005) (Missouri does not generally impose vicarious liability for owner negligence in vehicle use)