Jack Maxam v. American Family Mutual Insurance Company
504 S.W.3d 124
| Mo. Ct. App. | 2016Background
- Plaintiff Jack Maxam held an American Family policy covering his 2000 Chevrolet Cavalier Z24 that included underinsured motorist (UIM) coverage.
- Maxam was injured while driving a different vehicle he owned (a 2003 Chevrolet Astro) and settled with the tortfeasor; he then sought UIM benefits under the Cavalier policy.
- American Family denied UIM benefits, relying on an "owned-vehicle" exclusion that excludes coverage for bodily injury sustained in a motor vehicle owned by the insured if that vehicle is not insured for the coverage under the policy.
- Maxam sued for declaratory judgment; the trial court granted summary judgment to American Family. Maxam appealed.
- The appellate court reviewed policy language de novo and focused on whether the exclusion was ambiguous and whether the Missouri Motor Vehicle Financial Responsibility Law (MVFRL) required payment of a $25,000 minimum under the UIM endorsement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy is ambiguous because it grants personal UIM but then excludes certain owned vehicles | Maxam: Grant of UIM is personal and unqualified in the endorsement and declarations, so excluding his owned Astro creates ambiguity that should be construed for the insured | American Family: Policy must be read as a whole; the owned-vehicle exclusion is a clear limitation narrowing the personal UIM grant and is enforceable | Held: Exclusion is clear and unambiguous in context; enforced — no UIM coverage for the Astro |
| Whether the MVFRL requires payment of a $25,000 minimum under the UIM endorsement despite the exclusion | Maxam: Endorsement states payments "shall not be reduced below" the MVFRL minimum; therefore American Family must pay $25,000 | American Family: MVFRL minimums apply to liability and uninsured coverage, not to optional UIM, so no statutory minimum mandates payment here | Held: MVFRL does not mandate a UIM minimum; endorsement language cannot import a $25,000 statutory UIM floor where statute imposes none |
Key Cases Cited
- Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215 (Mo. banc 2014) (policies must be read as a whole; clear owned-vehicle exclusion enforced)
- Dutton v. American Family Mut. Ins. Co., 454 S.W.3d 319 (Mo. banc 2015) (insured-on-one-car language cannot be read to make owner insurer of all cars; exclusions limit coverage)
- Mendota Ins. Co. v. Lawson, 456 S.W.3d 898 (Mo. App. W.D. 2015) (applied Floyd-Tunnell to find owned-vehicle exclusion to UIM clear and enforceable)
- Naeger v. Farmers Ins. Co., 436 S.W.3d 654 (Mo. App. E.D. 2014) (UIM is personal, floating coverage; but contract defines its scope)
- Long v. Shelter Ins. Cos., 351 S.W.3d 692 (Mo. App. W.D. 2011) (UIM follows the person; case law on set-off and gap/excess coverage not dispositive absent identical language)
- Miller v. Ho Kun Yun, 400 S.W.3d 782 (Mo. App. W.D. 2013) (ambiguity found as to extent of coverage in different context; not controlling here)