Fanning v. Progressive Northwestern Insurance Co.
2013 Mo. App. LEXIS 1027
| Mo. Ct. App. | 2013Background
- Fanning, riding a motorcycle, was in an accident with Burnham, whose liability was insured by GEICO for $50,000/$100,000.
- GEICO paid its policy limit to Fanning; Burnham’s fault is conceded and Fanning’s damages exceed $100,000.
- Fanning was insured by Progressive for underinsured motorist (UIM) coverage with a declaration of $50,000/$100,000.
- Declarations page shows UIM limits but contains no deductible or trigger/offset information; page 1 defines terms and references declarations page.
- Part III(B) of the Progressive policy provides UIM coverage and an exclusionary offset/limits provision.
- Trial court found the policy ambiguous and granted summary judgment for Fanning; Progressive appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the UIM coverage under the policy ambiguous? | Fanning: policy language creates ambiguity about UIM existence. | Progressive: defined terms are unambiguous; no coverage issue. | Ambiguity exists; coverage construed in insured's favor. |
| Does the declarations page and its definitions create ambiguity about coverage limits and triggers? | Fanning: declarations page misleads; lacks alert to triggers reducing coverage. | Progressive: declarations page accurately reflects limits; no hidden triggers. | Ambiguity arises from declarations page and related definitions; resolved in insured's favor. |
| Does the set-off/limit-of-liability language create ambiguity about applying payments from tortfeasor? | Fanning: set-off language is misleading and would reduce coverage improperly. | Progressive: set-off is straightforward reduction against limits. | Set-off language contributes to ambiguity; held in favor of coverage for insured. |
| Should ambiguities in the policy be interpreted in favor of coverage for the insured? | Fanning: Missouri law requires favoring the insured in ambiguities. | Progressive: apply ordinary rules of contract interpretation. | Ambiguities resolved in favor of coverage; judgment for Fanning affirmed. |
Key Cases Cited
- Miller v. Ho Kun Yun, 400 S.W.3d 779 (Mo. App. W.D. 2013) (declarations page must be analyzed with entire policy; gaps vs. excess coverage)
- Jones v. Mid-Century Ins. Co., 287 S.W.3d 687 (Mo. banc 2009) (set-off provisions can create ambiguity about payment limits)
- Ritchie v. Allied Property & Casualty Ins. Co., 307 S.W.3d 132 (Mo. banc 2009) (set-off ambiguity analyzed; reinforces Miller/Jones framework)
- Wasson v. Shelter Mut. Ins. Co., 358 S.W.3d 113 (Mo. App. W.D. 2011) (ambiguity in terms like ‘uncompensated damages’)
- Rodriguez v. Gen. Accident Ins. Co. of Am., 808 S.W.2d 379 (Mo. banc 1991) (clear definition does not foreclose broader ambiguity in the policy)