Owners Insurance Company v. Gary Parkison and Judith Parkison, Individually, and John Vest as Class Representative for the Estate of Betty Vest
2017 Mo. App. LEXIS 686
| Mo. Ct. App. | 2017Background
- In June 2013 a dealership-owned 1998 Ford Taurus was loaned to John Sconce; his son Jesse crashed it, killing passenger Betty Vest and injuring Gary and Judith Parkison. Jesse was at fault.
- Jesse had automobile liability coverage under Progressive ($25,000 per person / $50,000 per occurrence). The Taurus was also covered by a garage liability policy issued to Bill Grant Ford by Owners Insurance (Declarations showed $1,000,000 per occurrence for Garage Liability).
- The Owners policy included a Missouri Amendatory Endorsement that replaced the policy’s "Other Insurance" clause with language stating the provision “governs the relationship of this policy with insurance policies issued by insurance companies other than us” and then (among other things) provided that when a dealer-owned auto is in the care, custody or control of a garage customer, no damages are collectible under the Owners policy if the garage customer has other collectible insurance sufficient for MVFRL limits.
- Progressive and Owners jointly tendered $100,000 (Progressive $50,000 + Owners $50,000 to meet MVFRL) and some claimants settled. Respondents (Parkisons and Vest’s estate) accepted payment but reserved declaratory-judgment rights against Owners about additional coverage under the Owners policy.
- Owners sued for declaratory judgment asserting the Other Insurance clause excluded coverage for garage customers with other valid collectible insurance; Respondents argued the clause only governs insurer-to-insurer rights and does not bar garage-customer coverage. Trial court granted summary judgment for Respondents. Owners appealed.
Issues
| Issue | Plaintiff's Argument (Owners) | Defendant's Argument (Respondents) | Held |
|---|---|---|---|
| Whether the Owners policy’s Other Insurance clause unambiguously excludes garage customers from coverage when they have other collectible insurance | The clause is an unambiguous "no-liability/escape" provision that eliminates Owners’ obligation where a garage customer has other collectible insurance sufficient for MVFRL limits | The clause is limited by its two introductory sentences to disputes between insurers and thus does not bar a garage customer’s claim against Owners; alternatively the clause is ambiguous and must be construed against the insurer | The clause is ambiguous as reasonably read two ways; construing ambiguity against the insurer, it is limited to insurer-to-insurer relationships and does not bar coverage here |
Key Cases Cited
- Burns v. Smith, 303 S.W.3d 505 (Mo. banc 2010) (ambiguities in insurance contracts construed against insurer; contra proferentum applied rigorously)
- Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007) (policy provisions must be read in context; other-insurance clauses are not automatically ambiguous)
- Thomas v. Nationwide Ins. Co. of Am., 487 S.W.3d 9 (Mo. App. E.D. 2016) (interpretation of insurance contracts and ambiguity are questions of law; give ordinary person meaning)
- Todd v. Missouri United Sch. Ins. Council, 223 S.W.3d 156 (Mo. banc 2007) (exclusionary provisions can be valid and distinguishable from limits of liability)
- Naeger v. Farmers Ins. Co., Inc., 436 S.W.3d 654 (Mo. App. E.D. 2014) (upholding exclusionary readings of policy language where unambiguous)
- State Farm Mut. Auto. Ins. Co. v. Western Cas. & Sur. Co., 477 S.W.2d 421 (Mo. banc 1972) (upheld other-insurance exclusion where reduced premium reflected agreed reduced risk)
- Windsor Ins. Co. v. Lucas, 24 S.W.3d 151 (Mo. App. E.D. 2000) (policy may specify maximum payment and separately stipulate circumstances that lower payment, if language is unambiguous)