Farm Bureau Town & Country Insurance Co. v. American Alternative Insurance Corp.
2011 Mo. App. LEXIS 813
| Mo. Ct. App. | 2011Background
- Darren Day, a volunteer firefighter for the Boone County Fire Protection District, was involved in a fatal crash on February 8, 2002 while driving his own vehicle.
- Day was insured by Farm Bureau under two policies: a $500,000 auto policy and a $1,000,000 umbrella policy; the Fire District had a commercial auto policy with AAIC for $1,000,000.
- Claims from the accident led Farm Bureau to exhaust its auto policy and pay additional sums from the umbrella policy; AAIC paid $80,500 for personal injury claims.
- The Fire District’s policy with AAIC included a non-owned vehicle/volunteer endorsement stating AAIC’s coverage for volunteers is excess over other insurance.
- The underlying settlements totaled $266,632.43; trial judgment authorized AAIC to receive $80,500 but Farm Bureau sought indemnity or contribution; the trial court ruled in favor of AAIC on coverage and causation issues.
- The appellate court reversed, held Day was an insured under AAIC’s policy, that AAIC was excess (not primary), and that the two “other insurance” clauses were mutually repugnant, requiring pro rata sharing between Farm Bureau and AAIC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Day was an AAIC insured under the endorsement | Day fell within the policy extension for volunteers using non-owned autos in the District’s business. | Day was not within Fire District control and not using a Fire District vehicle/business. | Day was an AAIC insured; Farm Bureau point granted. |
| Whether AAIC was the primary insurer and Farm Bureau’s umbrella was excess | AAIC was the primary insurer for Day’s non-owned vehicle. | AAIC’s endorsement makes its coverage excess over other insurance for volunteers. | AAIC was excess; Farm Bureau umbrella denied as primary responsibility. |
| How the loss should be allocated between Farm Bureau and AAIC when both have excess clauses | Mutual repugnancy requires pro rata sharing of the settlement. | Protections limit liability and may be constrained by sovereign-immunity-related caps. | Equal pro rata sharing; AAIC liable to Farm Bureau for $52,816.22. |
Key Cases Cited
- Maryland Casualty Co. v. Huger, 728 S.W.2d 574 (Mo.App. E.D. 1987) (agency/contract principles applied to insurance coverage interpretations)
- Heringer v. Am. Family Mut. Ins. Co., 140 S.W.3d 100 (Mo.App. W.D. 2004) (insurance contract interpretation; ambiguity construed against insurer)
- State Farm Mut. Auto. Ins. Co. v. Univ. Underwriters Ins. Co., 594 S.W.2d 950 (Mo.App. E.D. 1980) (multi-policy coverage issue; emphasis on contract language and other-insurance clauses)
- Planet Ins. Co. v. Ertz, 920 S.W.2d 591 (Mo.App. W.D. 1996) (mutual repugnancy doctrine for other-insurance clauses)
- Smith v. Wausau Underwriters Ins. Co., 977 S.W.2d 291 (Mo.App. W.D. 1998) (mutual repugnancy and pro rata allocation among overlapping policies)
- Rader v. Johnson, 910 S.W.2d 280 (Mo.App. W.D. 1995) (treatment of overlapping other-insurance clauses for pro rata liability)
- Woods v. Kelley, 948 S.W.2d 634 (Mo.App. W.D. 1997) (distinguishes master-servant/respondeat superior doctrine from insurance-coverage interpretation)
- Kunzie v. City of Olivette, 184 S.W.3d 570 (Mo.banc 2006) (sovereign-immunity waiver through purchased insurance)