Daughhetee v. State Farm Mutual Automobile Insurance
743 F.3d 1128
| 8th Cir. | 2014Background
- Ronald E. and Melissa L. Daughhetee were injured in a June 2011 truck collision that killed their daughter Allison.
- They settled with the tortfeasor and received the UIM payment up to $500,000 from a State Farm policy covering their Ford F-150.
- They sought UIM payment under a separate State Farm Hyundai policy with identical UIM limits.
- State Farm denied payment under the Hyundai policy due to an anti-stacking “other coverage” provision.
- The district court granted State Farm summary judgment, holding the anti-stacking provision unambiguously precluded stacking.
- The Eighth Circuit affirmed, reviewing de novo the policy interpretation and Missouri law governing contract interpretation of insurance policies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hyundai policy stacking is unambiguously prohibited by the other coverage provision. | Daughhetees argued ambiguity because excess language could permit stacking. | State Farm contends paragraph 1 anti-stacking language unambiguously prohibits stacking. | Hyundai policy unambiguously prohibits UIM stacking. |
| Whether reading the Hyundai policy as a whole creates ambiguity due to excess coverage language. | Policy should be read to favor coverage if ambiguity exists. | Policy must be interpreted by its whole text, not isolated phrases. | Read in its entirety, the policy does not create ambiguity and prohibits stacking. |
| Whether enforcing the anti-stacking provision renders the Hyundai policy illusory. | Hyundai policy becomes illusory if stacking is precluded to the insured’s detriment. | Policy remains non-illusory because Paragraph 1 allows payment of the highest limit. | Policy is not illusory. |
Key Cases Cited
- Niswonger v. Farm Bureau Town & Country Ins. Co. of Mo., 992 S.W.2d 308 (Mo. App. 1999) (ambiguity when non-owned vehicle excess follows anti-stacking provision)
- Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132 (Mo. banc 2009) (ambiguity where excess provision follows anti-stacking language)
- Manner v. Schiermeier, 393 S.W.3d 58 (Mo. banc 2013) (ambiguity when excess language follows anti-stacking provision)
- Chamness v. American Family Mut. Ins. Co., 226 S.W.3d 201 (Mo. App. 2007) (ambiguity with excess coverage after anti-stacking provision)
- Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132 (Mo. banc 2009) (policy read as whole; ambiguity assessment standard)
- DeMeo v. State Farm Mut. Auto. Ins. Co., 639 F.3d 413 (8th Cir. 2011) (antecedent phrase before 'excess' can render unambiguous)
- Buck v. American Family Mut. Ins. Co., 921 S.W.2d 96 (Mo. App. 1996) (offsets/illusory-coverage concerns related to UIM)
- Miller v. Ho Kun Yun, 400 S.W.3d 779 (Mo. App. 2013) (offset and ambiguity considerations in UIM context)