The Midwestern Indemnity Co. v. Malissa Brooks, 2015 U.S. App. LEXIS 3136

Background

On Sept. 19, 2011, Malissa Brooks was struck by a car; the tortfeasor’s estate settled with the Brookses for the tortfeasor’s $50,000 liability limit. The Brookses retained a claim under their Midwestern Indemnity auto policy’s underinsured motorist (UIM) coverage.
The policy is a single insurance policy covering five vehicles; the declarations page shows a $100,000 per-person / $300,000 per-accident UIM limit and a separate premium entry for each of five vehicles.
Brooks sought to "stack" UIM limits (add together the per-vehicle limits) to obtain greater recovery for her injuries; Midwestern paid $100,000 and sued for a declaratory judgment that intra-policy stacking is prohibited.
The Brookses added Midwestern to their state suit; Midwestern removed to federal court asserting complete diversity because the settled estate was a nominal party; the district court agreed and consolidated the actions.
The district court granted Midwestern summary judgment holding the policy’s Limit of Liability language unambiguously forbids stacking; the Eighth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal removal/diversity was proper given a nonconsenting, Missouri defendant (the decedent’s estate)	Estate’s presence and nonconsent preclude removal	Estate is a nominal party after settlement and can be ignored for diversity	Removal and diversity jurisdiction proper; estate was not a real party in interest
Whether the policy permits stacking of UIM limits across multiple covered vehicles	Multiple premium entries and declaration entries imply additional coverage per vehicle; paying multiple premiums should increase available limits	The Limit of Liability clause plainly caps recovery at $100,000 per person per accident “regardless of” number of vehicles or premiums	Policy unambiguously prohibits stacking; per-person limit is $100,000
Whether the declarations page ambiguity overrides the Limit of Liability clause	Declarations suggesting coverage where a premium entry appears creates ambiguity permitting stacking	Declarations are introductory; the detailed Limit of Liability controls and expressly forbids stacking	No ambiguity: read as a whole, the anti-stacking clause governs
Whether paying multiple premiums gives any additional coverage value	Brooks: extra premiums mean more aggregate UIM available or else insurer is overcharging	Midwestern: premiums correspond to coverage for additional owned vehicles and coverage for passengers in those covered autos; policy contains owned-vehicle exclusion and defined coverage scope	Paying multiple premiums does not create stacking; premiums buy coverage breadth (additional covered autos), not multiple per-person limits

Key Cases Cited

Bradley v. Md. Cas. Co., 382 F.2d 415 (8th Cir. 1967) (nominal parties may be ignored for removal)
Slater v. Republic-Vanguard Ins. Co., 650 F.3d 1132 (8th Cir. 2011) (treating nominal parties as irrelevant to diversity)
Wormley v. Wormley, 21 U.S. (8 Wheat.) 421 (1823) (court may ignore formal parties lacking real interest)
Daughhetee v. State Farm Mut. Auto. Ins. Co., 743 F.3d 1128 (8th Cir. 2014) (apply contract-construction rules; ambiguity permits stacking)
Jordan v. Safeco Ins. Co. of Ill., 741 F.3d 882 (8th Cir. 2014) (discussing when policy provisions create ambiguity on stacking)
Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132 (Mo. 2009) (defining "stacking" in Missouri law)
Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215 (Mo. 2014) (declarations are introductory; read policy as a whole)
Allstate Ins. Co. v. Miller, 425 S.W.3d 146 (Mo. Ct. App. 2014) (multiple premiums do not require stacking when policy unambiguously disallows it)