Naeger v. Farmers Insurance Co.
2014 Mo. App. LEXIS 522
| Mo. Ct. App. | 2014Background
- On Oct. 3, 2009, Valerie Naeger was a passenger in a car owned by Mark Gessford and was seriously injured by an underinsured driver; she secured $50,000 from the tortfeasor’s insurer and $190,000 UIM from the vehicle owner’s insurer (Allstate). Naeger claims $700,000 in damages.
- Naeger also held an auto policy with Farmers that included UIM limits of $250,000 per person / $500,000 per occurrence for a different vehicle (her 2002 Honda).
- Farmers’ UIM endorsement contained: (1) a Non‑Owned Vehicle Exclusion barring UIM where the injured person was occupying a vehicle the insured does not own and that is insured for UIM under another policy; and (2) an Other Insurance clause precluding Farmers’ UIM for vehicles other than the insured car when the vehicle’s owner has other applicable UIM coverage.
- Naeger sued Farmers for vexatious refusal to pay, UIM benefits, and breach of contract; Farmers moved for summary judgment on the basis of the two clauses excluding coverage here.
- The trial court granted summary judgment for Farmers, finding the exclusion and Other Insurance clause unambiguous and applicable; the majority of the appellate panel affirmed. A separate judge dissented, arguing the clauses defeat ordinary expectations of floating UIM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Other Insurance clause is ambiguous | Naeger: clause is vague, fails to define phrases and conflicts with UIM grant | Farmers: clause refers to other UIM coverage and is clear in context of the UIM endorsement | Court: not ambiguous; it excludes coverage when the vehicle you occupy is covered by another UIM policy |
| Whether declarations page / Limits of Liability create ambiguity in light of exclusions | Naeger: failure to list exclusions/limits on declarations page and opaque Limits provisions create ambiguity favoring insured | Farmers: limits merely cap liability when coverage applies; exclusions are separate and reconciliable | Court: no ambiguity — exclusions remove coverage before limits apply; limits only calculate liability when coverage exists |
| Whether the clauses violate UIM’s nature or public policy (i.e., whether UIM must "follow the insured") | Naeger: UIM is floating, personal coverage that should follow the insured; vehicle‑based exclusions frustrate that purpose | Farmers: Missouri law does not impose a public‑policy rule requiring UIM to follow the insured; parties’ written contract governs | Court: acknowledges the clauses defeat the floating concept but enforces them because Missouri law permits such contractual limits absent ambiguity |
Key Cases Cited
- ITT Comm. Fin. Corp. v. Mid‑Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (summary judgment standard)
- Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007) (resolve ambiguities in insured’s favor; ordinary‑person interpretation)
- Todd v. Missouri United Sch. Ins. Council, 223 S.W.3d 156 (Mo. banc 2007) (definitions/exclusions reconcileable; ambiguous provisions construed for insured)
- Niswonger v. Farm Bureau Town & Country Ins. Co. of Missouri, 992 S.W.2d 308 (Mo. App. E.D. 1999) (description of UIM as floating personal coverage)
- Long v. Shelter Ins. Companies, 351 S.W.3d 692 (Mo. App. W.D. 2011) (UIM follows insured is persuasive but not mandated by statute)
- Fanning v. Progressive N.W. Ins. Co., 412 S.W.3d 360 (Mo. App. W.D. 2013) (consideration of declarations page when construing policy)