Maureen Johnson v. Safeco Insurance Company of IL
983 F.3d 323
| 8th Cir. | 2020Background
- Plaintiff Maureen Johnson was seriously injured while driving her employer's van insured by Travelers, which provided $1,000,000 in underinsured motorist (UIM) coverage; the tortfeasor's insurer paid its $25,000 liability limit.
- Johnson and her husband had a Safeco personal auto policy covering three vehicles, each with $250,000 per-person UIM limits; none of those vehicles were involved in the accident.
- State court entered a $5,000,000 judgment against the tortfeasor; Travelers paid Johnson $1,000,000 under its primary UIM coverage.
- Safeco treated its UIM as excess, declined to pay because Johnson already received the highest applicable UIM limit ($1,000,000), and Johnson sued for additional recovery.
- The district court granted summary judgment for Safeco, holding Safeco's policy unambiguously limits aggregate UIM recovery to the highest applicable one-vehicle limit; the Eighth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Safeco's policy effects a set-off or addresses stacking | Johnson: provision operates as an impermissible set-off that reduces Safeco's payment by amounts recovered from Travelers | Safeco: provision governs stacking across separate policies and limits aggregate recovery to the highest applicable limit | Court: this is a stacking/anti-stacking issue, not a set-off; policies are separate |
| Whether the 'Other Insurance' provision is ambiguous about stacking | Johnson: language is susceptible to a reading that allows stacking primary and excess limits (i.e., recover $1,000,000 + $250,000) or that it applies only to Safeco-issued policies | Safeco: provision unambiguously limits combined recovery to the highest one-vehicle limit and applies to other insurers | Court: provision unambiguous; disallows stacking beyond the single highest applicable limit and applies to other insurers |
| Whether 'excess over' language creates an exception permitting stacking when driving a non-owned vehicle | Johnson: 'excess over' could be read as 'on-top-of,' enabling stacking | Safeco: 'excess over' sentence is followed by a cap that reinforces the anti-stacking rule | Court: read in context, 'excess over' does not create a stacking exception; cap controls |
| Whether Safeco's policy is illusory because declarations list per-vehicle limits but later limit recovery | Johnson: initial declarations and Limit of Liability suggest full per-vehicle payment, contradicted by Other Insurance | Safeco: declarations are introductory; Other Insurance specifies how limits apply and Safeco would pay excess up to its limit if primary paid less | Court: coverage not illusory; Safeco would pay difference up to its limits if primary coverage were below the highest applicable limit |
Key Cases Cited
- Gohagan v. Cincinnati Ins. Co., 809 F.3d 1012 (8th Cir. 2016) (interpreting similar policy provisions and anti-stacking language)
- Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132 (Mo. 2009) (explaining potential ambiguity of 'excess over' language and stacking concerns)
- Manner v. Schiermeier, 393 S.W.3d 58 (Mo. 2013) (discussing when excess-language may be read to permit stacking)
- Owners Ins. Co. v. Craig, 514 S.W.3d 614 (Mo. 2017) (scrutinizing set-off language and conflict between coverage promises and offsets)
- Jordan v. Safeco Ins. Co. of Ill., 741 F.3d 882 (8th Cir. 2014) (applying Missouri stacking precedent to 'excess over' language)
- Todd v. Missouri United School Ins. Council, 223 S.W.3d 156 (Mo. 2007) (contract interpretation principles for insurance policies)
- Seaton v. Shelter Mut. Ins. Co., 574 S.W.3d 245 (Mo. 2019) (Missouri en banc rule that unambiguous policy language is enforced as written)