15 F.4th 1204
8th Cir.2021Background:
- Lauren Palazzolo died when her motorcycle collided with an uninsured driver.
- Joseph and Nancy Palazzolo (her parents) held a Safeco automobile policy and an umbrella policy; the auto policy covered named insureds and "any family member who does not own an auto."
- The family sought $3,000,000 in uninsured/underinsured motorist benefits; most claims were later abandoned so the sole issue became whether Lauren qualified for uninsured motorist coverage under the auto policy.
- The auto policy contained a Motorcycle Exclusion: no uninsured motorists coverage for bodily injury sustained by any insured while occupying or operating an "owned motorcycle or moped."
- The district court assumed Lauren was an "insured" but held the Motorcycle Exclusion excluded her accident; the Palazzolos appealed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the phrase "owned motorcycle" in the policy's exclusion is ambiguous and if it excludes Lauren's accident | "Owned motorcycle" is ambiguous: could mean a motorcycle owned by a named insured (Joseph/Nancy), by the injured party (Lauren), or by anyone | It reasonably means a motorcycle owned by any insured (i.e., owned by any person who qualifies as an insured under the policy) | Court: Read in context, the phrase is unambiguous: "owned motorcycle" means a motorcycle owned by any insured; exclusion applies and Lauren's accident is not covered |
Key Cases Cited
- Green Plains Otter Tail, LLC v. Pro-Env't, Inc., 953 F.3d 541 (8th Cir. 2020) (de novo review of district court summary-judgment rulings)
- Torgerson v. Rochester, 643 F.3d 1031 (8th Cir. 2011) (summary-judgment standard)
- Rose v. Midland Nat'l Life Ins. Co., 954 F.3d 1117 (8th Cir. 2020) (apply substantive law of forum state in diversity cases)
- Heringer v. Am. Fam. Mut. Ins. Co., 140 S.W.3d 100 (Mo. Ct. App. 2004) (unambiguous insurance-policy language must be enforced as written)
- Miller v. O’Brien, 168 S.W.3d 109 (Mo. Ct. App. 2005) (definition of ambiguity for insurance policies)
- Blumer v. Auto. Club Inter-Ins. Exch., 340 S.W.3d 214 (Mo. Ct. App. 2011) (read policy as a layperson would understand it)
- Ferguson v. St. Paul Fire & Marine Ins. Co., 597 S.W.3d 249 (Mo. Ct. App. 2019) (start analysis with plain language of the policy)
- Butler v. Mitchell-Hugeback, Inc., 895 S.W.2d 15 (Mo. 1995) (en banc) (cardinal principle: ascertain and effectuate parties' intent in contract interpretation)
- Olson v. Fairview Health Servs., 831 F.3d 1063 (8th Cir. 2016) (avoid construing terms to leave them without operation)