Mendota Insurance Company v. Diane Lawson
2015 Mo. App. LEXIS 320
| Mo. Ct. App. | 2015Background
- On June 3, 2012, Terry Lawson (driver/owner of a 2001 Chevrolet S-10) and Jeffery King (a passenger) died when the Chevrolet overturned. Terry's wife Diane Lawson sued Terry's estate (personal representative Heather Burlingame) for wrongful death and obtained a >$3 million judgment finding Terry negligent.
- Diane Lawson held a personal auto policy with Mendota listing two vehicles (2005 Dodge and 2006 Pontiac) and $25,000/$50,000 liability limits; Terry had a separate Progressive policy for the Chevrolet (Progressive matters were settled separately).
- Mendota sought declaratory judgment that its policy provided no liability coverage for the Chevrolet under the Policy’s owned-auto (non‑owned auto) exclusion and therefore had no duty to defend or indemnify Burlingame; Lawson counterclaimed under Mo. Rev. Stat. § 379.200 for bad faith/ equitable garnishment.
- The parties submitted stipulated facts and cross-motions for summary judgment. The trial court granted Mendota summary judgment, denied Lawson’s and Burlingame’s motions, and dismissed Lawson’s counterclaim.
- On appeal, appellants argued (1) the Policy’s owned-auto exclusion violates the Missouri Motor Vehicle Financial Responsibility Law (MVFRL) because the Chevrolet was involved in an accident, (2) the policy is ambiguous because the insuring agreement grants coverage for "any auto" while the exclusion removes coverage for certain autos, and (3) Lawson’s § 379.200 counterclaim states a claim.
- The Court of Appeals affirmed, holding (a) the insuring agreement’s phrase "any auto" reasonably includes the Chevrolet, (b) Exclusion B (no coverage for vehicles owned by insured other than "your covered auto") is clear and unambiguous and excludes coverage for the Chevrolet, (c) the MVFRL does not override a clear owned-auto exclusion, and (d) Lawson’s § 379.200 claim fails because she has no greater rights than the insured.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Liability insuring agreement ("any auto") provide coverage for the Chevrolet? | Lawson: "any auto" is broad and includes the Chevrolet. | Mendota: "any auto" does not create coverage for vehicles not listed as "your covered auto." | Court: "any auto" in context reasonably covers the Chevrolet; initial coverage exists under the insuring agreement. |
| Does Exclusion B (owned-auto / regular-use exclusion) ambiguously negate coverage granted by "any auto"? | Lawson: exclusion contradicts the insuring grant and is ambiguous. | Mendota: exclusion clearly excludes any vehicle owned by insured other than listed "covered autos." | Court: Exclusion B is clear and unambiguous; it excludes coverage for owned vehicles not listed as covered autos. |
| Does the MVFRL require coverage despite Exclusion B? | Lawson: MVFRL's minimum liability coverage mandates coverage for the Chevrolet. | Mendota: a clear exclusion that removes coverage for owned non-declared vehicles is valid; MVFRL does not compel coverage when policy unambiguously excludes it. | Court: MVFRL does not invalidate a clear owned-auto exclusion; Dutton rationale controls—point denied. |
| Did Lawson plead a viable § 379.200 claim (equitable garnishment/bad faith) given the policy interpretation? | Lawson: Mendota acted in bad faith by defending under reservation and thus is liable under § 379.200. | Mendota: Plaintiff stands in insured's shoes and has no greater rights; if policy excludes coverage, § 379.200 claim fails. | Court: Dismissal affirmed—no coverage, so § 379.200 relief unavailable. |
Key Cases Cited
- Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007) (interpretation of insurance policy is a question of law)
- Blumer v. Auto. Club Inter-Ins. Exch., 340 S.W.3d 214 (Mo. App. W.D. 2011) (policy language is read as a whole and in light of a lay purchaser)
- Fanning v. Progressive N.w. Ins. Co., 412 S.W.3d 360 (Mo. App. W.D. 2013) (unambiguous policies are enforced as written)
- Manner v. Schiermeier, 393 S.W.3d 58 (Mo. banc 2013) (insurer bears burden to prove an exclusion applies on summary judgment)
- Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43 (Mo. banc 2009) (limitations/exclusions are enforceable if clear and unambiguous)
- Allstate Ins. Co. v. Ibrahim, 243 S.W.3d 452 (Mo. App. E.D. 2007) (purpose of non‑owner exclusions is to prevent single‑vehicle premium covering habitual use of other vehicles)
- Payne v. Grinnell Mut. Reinsurance Co., 716 F.3d 487 (8th Cir. 2013) (equitable garnishment plaintiff has no greater rights than insured)