Lead Opinion
Steve and Anita Ritchie sued Allied Property and Casualty Insurance Company seeking $300,000 in underinsured motorist coverage under their Allied policy for the wrongful death of their daughter, Kelsey Ritchie. The trial court held that the Ritchies were entitled to recover this amount, finding the anti-stacking and set-off provisions of the policy unenforceable.
This Court affirms, but on different grounds. Allied’s other insurance provi
I. FACTUAL AND PROCEDURAL BACKGROUND
Steve and Anita Ritchie are the parents of Kelsey Ritchie.
Both Mr. Heath and Mr. Tomblin were underinsured. Mr. Heath’s insurer, OMNI Hartford, provided liability limits of $25,000 per person and $50,000 per accident. Mr. Tomblin’s vehicle was insured by Progressive Insurance Company, with liability limits of $50,000 per person and $100,000 per accident. Because these per accident liability limits had to be shared among the multiple persons injured in the accident, the Ritchies received only $20,000 from Mr. Heath’s insurer and $40,000 from Mr. Tomblin’s insurer toward their $1.8 million damage award. The Rit-chies, therefore, sought recovery from Allied under their underinsured motorist coverage. They asserted that they were entitled to the full $100,000 per person underinsured coverage for each vehicle, for a total of $800,000.
Allied countered that its underinsured motorist policies could not be stacked, thereby permitting only a single recovery of up to $100,000. It further argued that “the maximum per-person recovery under the underinsured motorist coverage policy [of] $100,000” was not just the most it would pay, but was also the most that the Ritchies were entitled to recover in total from all sources. This meant, it argued, that it was entitled to a set-off of the
Believing that such a set-off was improper and that the language of their particular policy entitled them to stack the three underinsured motorist coverages, the Rit-chies filed the instant suit. The trial court found that the anti-stacking and set-off provisions in the policy were “confusing, duplicitous, vague, ambiguous and inconsistent” and unenforceable and that the Ritchies were entitled to recover the full $300,000 of underinsured motorist coverage. Allied appeals. Following a decision by the court of appeals, this Court granted transfer. Mo. Const, art. V, sec. 10.
II. STANDARD OF REVIEW
Interpretation of an insurance policy is a question of law that this Court determines de novo. Seeck v. Geico General Ins. Co., 212 S.W.8d 129, 132 (Mo. banc 2007). “In construing the terms of an insurance policy, this Court applies the meaning which would be attached by an ordinary person of average understanding if purchasing insurance, and resolves ambiguities in favor of the insured.” Id.; Martin v. United States Fid. & Guar. Co.,
III. DISCUSSION
A. The Right to Stack Underinsured Motorist Coverage Is Determined bg the Language of the Policg
“‘Stacking’ refers to an insured’s ability to obtain multiple insurance coverage benefits for an injury either from more than one policy, as where the insured has two or more separate vehicles under separate policies, or from multiple coverages provided for within a single policy, as when an insured has one policy which covers more than one vehicle.” Niswonger v. Farm Bureau Town & Country Ins. Co. of Missouri,
By contrast, and unlike many other states, Missouri statutes do not also mandate underinsured motorist coverage. See 16 WILLISTON ON CONTRACTS, § 49.35 (1th ed. 2009) (contrasting the requirements of various states in regard to underinsured motorist coverage). Consequently, “the existence of the [underin-sured motorist] coverage and its ability to be stacked are determined by the contract entered between the insured and the insurer.” Rodriguez v. Gen. Acc. Ins. Co. of Am.,
INSURING AGREEMENT
A. We will pay compensatory damages which an “insured” is legally entitled to recover from the owner or operator of an “underinsured motor vehicle” because of “bodily injury”
1. Sustained by an “insured;” and
2. Caused by an accident.
[[Image here]]
We will pay under this coverage only if the limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements.
[[Image here]]
B. Ambiguities in Other Insurance and Limit of Liability Clause
The issue before this Court is the amount the Ritchies are owed and how that amount relates to possible conflicts within the other insurance provision and between the other insurance provision and the limit of liability provision. Allied argues that the limit of liability provision prohibits stacking of underinsured motorist coverages, so that the total potential limit of its liability is $100,000. Allied further argues that the policy provisions entitle it tо a $60,000 set-off from this total because the Ritchies already have recovered $60,000 from the tortfeasors’ insurers. Therefore, Allied says, it owes the Ritchies only $40,000.
The Ritchies argue that even if the limit of liability provision could be so interpreted, the other insurance provision creates an exception and permits stacking where, as here, the insured was injured while riding in a non-owned vehicle. To the extent these policy provisions are inconsistent, they create an ambiguity that, under Missouri law, must be construed in favor of the insured. Gulf Ins. Co.,
The pertinent language from the Allied policy on which both parties rely in support of these arguments is as follows:
LIMIT OF LIABILITY
A. The limit of liability shown in the Declarations for each person for Underinsured Motorists coverage is our maximum limit of liability for all damages for case, loss of services, or death arising out of “bodily injury” sustained by any one person in any one accident. Subject to this limit for each person, the limit of liability shown in the Sched*137 ule or in the Declarations for each accident for Underinsured Motorists Coveragе is our maximum limit of liability for all damages for “bodily injury” resulting from any one accident. This is the most we -will pay regardless of the numbers of:
1. “Insureds;”
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident.
B. The limit of liability shall be reduced by all sums: ... [p]aid because of ‘bodily injury’ or by or on behalf of persons organizations who ■ may be legally responsible ...
OTHER INSURANCE
If there is other applicable underin-sured motorists coverage available under one or more policies or provisions of coverage:
1. Any recovery for damages may equal but not exceed the highest applicable limit for any one vehicle under this insurance or other insurance providing coverage on either a primary or excess basis. In addition, if any such coverage is provided on the same basis, either primary or excess, as the coverage we provided under this endorsement, we will pay only our share. Our share is the proportion that our limit of liability bears to the total of all applicable limits for coverage provided on the same basis.
2. Any coverage we provide with respect to a vehicle you do not mm shall be excess over any other collectible underinsured motorist coverage.
(emphasis added in italics).
As the issues of stacking and set-off payments concern different subsections of the Allied policy, this Court will address each separately.
C. The Other Insurance Clause Authorizes Stacking
Considered in isolation, the limit of liability provision and clause (1) of the other insurance provision could be interpreted to prohibit stacking to the extent they state that the “limit of liability shown in the declarations for each person for Underinsured Motorists coverage is our maximum limit of liability” and that any recovery “may equal but not exceed the highest applicable limit for any one vehicle.”
As noted earlier, however, courts should not interpret policy provisions in isolation but rather evaluate policies as a whole. Seeck,
Kelsey was injured while riding in a vehicle not owned by her or her parents. Subsection (2) of the other insurance provision, therefore, is applicable. As just quoted, this means the underinsured coverage under the policy “shall be excess over any other collectible underinsured motorist coverage” when, as in this case, an insured is injured while riding in a non-owned vehicle.
When subsection (2) is read together with the provisions in which Allied relies, the three subsections suggest “that the policy’s anti-stacking provisions, which might normally and otherwise apply, do not apply in the special situation whеre the insured is injured while occupying a non-
Seeck is directly on point. In that case, this Court followed a long line of precedent “holding that conflicts between underin-sured motorist policy limits ... and the provision of excess coverage in an excess or other insurance clause renders an insurance policy ambiguous.”
The Allied other insurance provision reasonably could be interpreted as superseding the limit of liability provision and making coverage available to the insureds through their own additional under-insured motorist coverages with Allied. Niswonger,
This also distinguishes Farm Bureau Town & Country Ins. Co. of Mo. v. Barker,
D. Allied Is Not Entitled to a Set-off
Allied argues that, regardless of whether this Court accepts its argument as to stacking, it is entitled to a $60,000 set-off against the total liability it owes the Ritchies because that is the amount the Ritchies already have collected from the tortfeasors’ insurers.
A nearly identical argument recently was rejected by this Court on similar facts in Jones,
Jones held that such an ambiguity was present in that case because the set-off provision on which the insurer relied conflicted with the clear statement in other portions of the policy that the stated limit of liability was “the most we will pay” and that “we will pay up to the limits of liability shown in the schedule.” Id. at 690-91. Yet because the provision at issue provided underinsured motorist coverage, not uninsured motorist coverage, the insured always would have recovered at least the statutorily required amount of coverage. Therefore, the insurer never would pay out the full amount of its stated limits of liability, making its statements that it would do so misleading.
Jones resolved this conflict by giving an alternative construction to the limit of liability provision that would give meaning to all policy provisions without conflict. It found the statement that underinsured motorist coverage would be “reduced by any amount paid or payable to or for an insured person” simply to mean “that in determining the total damages to which the underinsured motorist coverage will be applied, the amount of money already received from the tortfeasor must be deducted.” Id. at 693. The provision, therefore, precludes a double recovery — one recovers the policy limits only if, after deducting the amounts already paid, damages equaling or exceeding those limits are still outstanding.
This analysis applies directly here. Both the declarations pagе for the policy and the limit of liability provision state that coverage is provided up to $100,000 per person, $300,000 per accident, for each of the three vehicles the Ritchies owned and, in multiple places, states that “this is the most we will pay” and that this limit of liability is the maximum it will pay. Yet, as Allied’s corporate representative conceded below, Allied in fact never will pay out its full amount under its interpretation of “limit of liability” subsection B. It always will be reduced by the amounts already paid, even where, as here, the plaintiffs still had $1.74 million in damages unpaid.
Subsection B does not cure or avoid this coverage language, but, if interpreted as Allied requests, subsection B does conflict with it. And as previously noted, it is
As in Jones, however, an alternative construction can be placed on subsection B giving meaning to all subsections of the policy.
Applying these principles here, the Rit-chies suffered $1.8 million in damages, and received only $60,000 from the tortfeasors. Deducting this $60,000 from the $1.8 million in damages still leaves unsatisfied damages of $1.74 million. This is far more than the policy limits. Accordingly, Allied must pay its full policy limits of $300,000.
IV. CONCLUSION
For all the reasons stated above, the circuit court’s judgment is affirmed.
Notes
. For the sake of clarity, the opinion hereafter will refer to Kelsey individually by her first name and to her parents as "the Ritchies."
. The Ritchies also request that this Court consider particular wording as allowing them to recover $600,000 because there were two uninsured drivers involved in the accident. The Ritchies did not cross-appeal in accordance with Rule 81.04(b), however, and, so, no issue in this regard is presented for the Court to consider on appeal.
.Specifically, Seeck held that ambiguity existed in an insurance policy containing the following other insurance provision:
When an insured is occupying a motor vehicle not owned by the insured ... this insurance is excess over any other insurance available to the insured and the insurance which applies to the occupied motor vehicle is primary.
. While, as Allied notes, Niswonger,
. The dissent suggests that Seeck was wrongly decided and that this Court should read limitation of liability clauses completely independently of other insurance clauses, thereby avoiding the ambiguity present here and in Seeck of one clause seemingly giving coverage whilе another excludes it. As noted above, however, Missouri has long followed the rule that an insurance policy must be read as a whole, not provision by provision. Although insurers often seek to have courts interpret each provision independently, that is not consistent with Missouri's long-standing ap
. See Niswonger
. See also Ragsdale,
. In fact, a prior version of the Allied policy did use language more similar to that in Barker, stating;
A. Any recovery for damages under all such policies or provisions of coverage may equal, but not exceed, the highest applicable limit for any one vehicle under any insurance providing coverage on either a primary or excess basis.
B. Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible insurance providing coverage on a primary basis.
Here, of course, the Ritchies argue that the Allied policies can be stacked because they say they provide excess coverage over other collectible underinsured motorist coverage, not over other primary coverage, so Barker is not on point.
. In support of this argument, Allied cites to Green v. Federated Mut. Ins. Co.,
. The dissent is incorrect in characterizing this opinion as holding that limitation of liability clauses are never enforceable. A policy that plainly states it only will pay the difference between the amount recovered from the underinsured motorist and $100,000 is enforceable. In such a case, the mere fact that $100,000 will never be paid out is not misleading, for the policy never suggests that this is its liability limit and never implies that it may pay out that amount. That is not the case here, however. The policy says it provides $100,000 in underinsured motorist coverage but, in fact, under the insurer’s interpretation of the policy, it will never pay that amount. That creates an ambiguity resolved by giving the language on which the insurer relies an alternative interpretation that will give effect to all of the policy provisions, as the Court holds above and as it held in Jones,
Dissenting Opinion
dissenting opinion.
Steve and Anita Ritchie brought a claim under their Allied insurance policy for the death of their daughter. She was a passenger in a car driven by Noah Heath that collided with a car driven by Adam Tom-blin. Although the Richies obtained a judgment against Mr. Heath and Mr. Tom-blin in the amount of $1.8 million, they only recovered $60,000 because both were underinsured. Accordingly, the Ritchies brought a claim against their insurer Allied for underinsured motorist coverage (UIM). The Ritchies had one policy from Allied that covered each of their three vehicles with a maximum $100,000 of liability for injuries per person. Their policy also had an anti-stacking provision and a limit of liability provision that read:
*142 A. The limit of liability shown in the Declarations for each person for Under-insured Motorists coverage is our maximum limit of liability for all damages for case, loss of services, or death arising out of “bodily injury” sustained by any one person in any one accident ... This is the most we will pay regardless of thе numbers of:
1. “Insureds;”
2. Claims made;
3. Vehicles or premiums shown in the Declarations;
or
4. Vehicles involved in the accident.
B. The limit of liability shall be reduced by all sums: ... [pjaid because of ‘bodily injury’ or by or on behalf of persons organizations who may be legally responsible ...
The majority refuses to give effect to these provisions for two reasons. First, they argue that they conflict with the “other insurance” excess clause in the policy which reads:
Any coverage we provide with respect to a vehicle you do not own shall be excess over any other collectible un-derinsured motorist coverage.
Second, the majority takes issue with the limit of liability language of the policy, arguing that because the UIM policy will never pay out its absolute limit, it is misleading and ambiguous. I disagree with both points. The majority creates ambiguities where none naturally arise. I would enforce the anti-stacking and limit of liability provisions.
I. Ambiguities in Insurance Contracts
An ambiguity arises when there is duplicity, indistinctness or uncertainty in the meaning of the words used in the contract. Nixon v. Life Investors Insurance Co.,
II. The Anti-Stacking and “Other Insurance” Clauses Do Not Conflict and Do Not Create an Ambiguity
An anti-stacking clause and an “other insurance” clause are two distinct insurance policy provisions that address different subject matters.
An anti-stacking clause prohibits the insured from collecting on multiple coverage items or policies from the same insurer for a single accident. In effect, it makes only one policy or coverage amount collectable. See Noll v. Shelter Ins. Companies,
The type of “other insurance” clause here is an excess clause that makes the policy “payable after other policies.” Id. Historically when our courts have addressed the operation of “other insurance,” it was to resolve conflicts between multiple insurers over which insurer must pay in what order.
Only recently, in Seeck v. Geico General Ins. Co.,
The use of an “other insurance” clause and an anti-stacking clause in a policy is neither conflicting nor ambiguous. “ ‘Other insurance’ clauses address rules for determining responsibility if more than one coverage is considered to apply, while stacking addresses whether more than one coverage which would otherwise be applicable should, in fact, he applied at all.” Couch on Insurance, § 169:9 (3d. ed. 2005) [emphasis added]. As other jurisdictions have noted, “other insurance” clauses are “entirely unilluminating in deciding the question of whether more than one policy applies.” Goetz v. American Reliable Ins. Co.,
Here, Allied’s anti-stacking clause applied. Although the Ritchies’ policy covered these vehicles, it allowed recovery of only one limit. Because there were no “other collectible underinsurance policies,” the “other insurance” clause was not triggered. There is no conflict between these two provisions, and both can plainly be read together. This Court should enforce them as written.
III. The Limit of Liability Provision is Enforceable
The majority also argues that because “Allied will never in fact pay out the full amount” of the policy limit, the contract purports to give something (the $100,000 limit) and then take it away (with a set-
[I]f the tortfeasor’s insurer paid $25,000, then the insured would be paid $25,000 on her underinsured motorist coverage; and if the tortfeasor’s insurer paid one dollar then the insured would receive $49,999 from her own coverage. Never could the insured recover the full $50,000 in underinsured motorist benefits ... [which] rendered the coverage meaningless. Rodriguez v. General Acc. Ins. Co. of America,808 S.W.2d 379 , 383 (Mo.1991) (summarizing Weber,868 F.2d at 288 )
This Court explicitly rejected Weber in Rodriguez, saying that this analysis was “inconsistent with Missouri law” and “an example of a court creating an ambiguity in order to distort the language of an unambiguous policy.” Rodriguez,
The majority cites to Jones v. Mid-Century Ins. Co.,
The Jones policy was drafted deficiently. It read:
[T]he most we will pay will be the lesser of:
1. The difference between the amount of an insured person’s damages for bodily injury, and the amount paid to that insured person by or for any person or organization who is or may be held legally liable for the bodily injury; or
2. The limits of liability of this coverage. Id. at 690.
This Court noted that the drafter had omitted the phrase “minus the amount already paid to that insured person” from the end of the second alternative. Id. at 691. Without this phrase, the plain meaning of the Jones policy seemed to promise a full amount. Id. The holding in Jones was specific to the deficient drafting of the policy that created a promise to pay the full amount. Id. It cannot be read as general adoption of a rule prohibiting limits of liability clauses.
IV. Conclusion
The plain meaning of Allied’s policy prohibited stacking of the coverage items and required a set-off for insurance already collected. Mr. Heath’s and Mr. Tomblin’s insurance policies had already paid out $60,000. Allied’s policy guaranteed that it would bring the Ritchies’ total recovery to $100,000. Thus, the proper recovery should be $40,000.
I sympathize with the Ritchies’ loss. Neither $300,000 nor $60,000 will come close to compensating them for that loss. But, the majority’s decision will have effects that reach further than the Ritchies. The majority decision increases by more
By creating ambiguities and enlarging coverage, the majority precludes insurance companies from competing in terms of coverage and price and forces higher insurance cost for all of us.
For the foregoing reasons, I respectfully dissent.
. The clause in Rodriguez read:
LIMIT OF LIABILITY
A. The limit of liability shown in the schedule for this coverage is our maximum limit of liability for all damages resulting from any one accident. This is the most we will pay regardless of the number of:
1. "Insureds";
2. Claims made;
*143 3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident. Rodriguez,808 S.W.2d at 381 .
Another court commenting about the text of the Rodriguez provisions noted, "[i]t is hard to imagine clearer language.” Grinnell Select Ins. Co. v. Baker,
. See e.g. Arditi v. Massachusetts Bonding & Insurance Co.,
. I did not participate in the Seeck decision. Seeck departed from established Missouri law.