Swadley v. Shelter Mutual Insurance Co., 513 S.W.3d 355

Shelter Mutual issued the Swadleys an auto policy that included underinsured motorist (UIM) coverage with a "$100,000 Per Person" limit listed in the Declarations.
The policy defines "underinsured motor vehicle" to mean a vehicle whose liability coverage is less than the UIM limit shown in the Declarations (i.e., less than $100,000).
Angela Swadley was struck by a Silk Way tractor-trailer; Silk Way had $1,000,000 liability coverage. The Swadleys settled with the driver and Silk Way for $823,874.80.
The Swadleys claimed the policy’s $100,000 UIM coverage from Shelter; Shelter denied coverage because Silk Way’s liability exceeded the $100,000 UIM limit per the policy definition.
The circuit court found the policy ambiguous and awarded the Swadleys $100,000; Shelter appealed to the Missouri Supreme Court.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the policy is ambiguous such that UIM coverage applies despite the definition	Swadleys: policy ambiguous because Declarations promise $100,000 UIM but definition and set-offs prevent Shelter from ever owing that full amount	Shelter: definition unambiguously limits UIM to when tortfeasor coverage is less than $100,000; no ambiguity	Court held no ambiguity as to when UIM applies; definition clearly excludes coverage because tortfeasor had $1,000,000 liability coverage
Whether UIM coverage applies here	Swadleys: UIM should apply to satisfy unmet damages up to $100,000	Shelter: UIM does not apply because tortfeasor’s liability limits exceed the policy’s UIM limit per the definition	Court held UIM does not apply; Swadleys not entitled to $100,000 under the policy

Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007) (summary judgment and insurance-policy interpretation reviewed de novo)
Rodriguez v. Gen. Accident Ins. Co. of Am., 808 S.W.2d 379 (Mo. banc 1991) (similar definition of "underinsured motor vehicle" held to preclude UIM coverage)
Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215 (Mo. banc 2014) (definitions and exclusions that are clear and unambiguous are enforceable)
Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156 (Mo. banc 2007) (policy provisions must be read in context)
Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132 (Mo. banc 2009) (where one section promises coverage and another takes it away, ambiguity may exist)
Jones v. Mid-Century Ins. Co., 287 S.W.3d 687 (Mo. banc 2009) (distinguishing dicta on ambiguity when coverage does not apply)
Wasson v. Shelter Mut. Ins. Co., 358 S.W.3d 113 (Mo. App. 2011) (purpose of UIM coverage explained)