Wasson v. Shelter Mutual Insurance Co.
358 S.W.3d 113
| Mo. Ct. App. | 2011Background
- May 14, 2008 Cynthia Wasson was seriously injured in a collision; Wassons were insured by Shelter with an underinsured motorist (UIM) endorsement.
- The tortfeasor was insured by State Farm; State Farm paid $100,000 on behalf of its insured, exhausting that policy.
- Wassons claimed UIM benefits under Shelter to cover the remaining damages, which exceeded $600,000.
- Shelter paid $150,000 in UIM benefits, arguing that this amount plus the State Farm payment exhausted the UIM coverage via a policy set-off.
- The Wassons filed for declaratory judgment asserting $500,000 of UIM coverage was available; the trial court found ambiguity favoring the insureds and awarded $500,000, with no proper set-off against the policy limit.
- Shelter appealed, and the Western District reversed in part and affirmed in part, holding the UIM limit was $250,000 per declarations and that the set-off may apply only to uncompensated damages, not to the policy limits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| UIM liability limit amount | Wassons: UIM limit is $500,000 per declarations; ambiguity supports $500k. | Shelter: UIM limit is $250,000 per person/$500,000 per accident as stated in declarations; no ambiguity. | Limit is $250,000 per person/$500,000 per accident |
| Set-off against UIM limits | Wassons: provide offset against total damages, not the policy limit; Jones/Ritchie require offset against damages. | Shelter: set-off reduces policy limits by tortfeasor payment. | Set-off is ambiguous; may be applied to uncompensated damages, not to the policy limits; insurer must pay remaining uncompensated damages |
Key Cases Cited
- Jones v. Mid-Century Insurance Co., 287 S.W.3d 687 (Mo. banc 2009) (set-off against total damages, not policy limits)
- Ritchie v. Allied Prop. & Casualty Insurance Co., 307 S.W.3d 132 (Mo. banc 2009) (no set-off from damages when insureds’ damages exceed third-party payments)
- Long v. Shelter Ins. Co., 351 S.W.3d 692 (Mo.App. W.D. 2011) (endorsed interpretation of UIM limits and set-off; ambiguity persists in some contexts)
- Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007) (interpretation of ambiguous insurance terms; de novo review; contra proferentem)
- Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208 (Mo. banc 1992) (ambiguity doctrine in insurance contracts; contra proferentem)
- Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43 (Mo. banc 2009) (context of limits and offset under Shelter policies)