BENEDICT v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (2021)

Audrey Elaine Benedict and Don Hank Benedict (collectively the “Benedicts”), appeal the trial court's entry of summary judgment in favor of State Farm Mutual Automobile Insurance Company (“State Farm”), which rejected the Benedicts’ attempt to stack underinsured motor (“UIM”) vehicle coverage under their four State Farm insurance policies (the “Policies”).¹ In one point on appeal, the Benedicts argue that the Policies were ambiguous, and that the trial court therefore erred in granting summary judgment in favor of State Farm. Finding no merit to the Benedicts’ point, we affirm the trial court's judgment.

Factual and Procedural Background

On April 8, 2019, the Benedicts filed a two-count “Petition” against State Farm for breach of contract and vexatious refusal to pay, based on State Farm's alleged failure to pay the Benedicts approximately $75,000 in stacked UIM policy coverage.

On September 26, 2019, the parties filed a “Stipulation of Facts” as follows:

1. On September 30, 2016, plaintiff Audrey Benedict was involved in an automobile accident with a vehicle being driven by Leo J. Mortensen.

2. At the time of said collision, Leo J. Mortensen was 100% at fault for the accident.

3. Don Benedict has a claim for loss of consortium as a result of the accident of September 20 [sic], 2016.

4. The injuries and damages sustained by Audrey Benedict and Don Benedict as a result of the accident which occurred on September 30, 2016, exceed the sum of $400,000.

5. At the time of the accident, Leo J. Mortensen was insured with an insurance policy that provided coverage of $300,000 which has been paid to plaintiffs in settlement of all claims against Mr. Mortensen.

6. The vehicle being operated by Leo J. Mortensen at the time of the collision on September 30, 2016, was an underinsured motorist as defined by the State Farm Mutual Automobile Insurance Company policies in place for plaintiffs.

7. On September 30, 2016, plaintiffs had in place with defendant policy No. 1790538-D27-25E which had underinsured motorist limits in the amount of $25,000.

8. On September 30, 2016, plaintiffs had in place with defendant policy No. 3075493A29-25, which had underinsured motorist limits in the amount of $25,000.

9. On September 30, 2016, plaintiffs had in place with defendant policy No. 2931933824-25 which had underinsured motorist limits in the amount of $25,000.

10. On September 30, 2016, plaintiffs had in place with defendant policy No. 3075492A29-25 which had underinsured motorist limits in the amount of $25,000.

11. Each policy required a separate premium for the underinsured motorist benefit coverage available.

12. True and accurate copies of all four State Farm insurance policies referenced above are attached hereto, marked Exhibits 1, 2, 3, and 4 and incorporated herein by reference.

13. State Farm has paid the underinsured policy limits of $25,000 under policy No. 3075492A29-25.

14. State Farm maintains there is no additional insurance money available under its insurance policies by operation of the following language:

“1. The Underinsured Motor Vehicle Coverage limits are shown on the Declarations Page under ‘Underinsured Motor Vehicle Coverage - Bodily Injury Limits - Each Person Each Accident.’

a. The most we will pay for all damages resulting from bodily injury to any one insured injured in any one accident, including all damages sustained by other insureds as a result of that bodily injury, is the lesser of:

(1) the amount of all damages resulting from that bodily injury reduced by the sum of all payments for damages resulting from that bodily injury made by or on behalf of any person or organization who is or may be held legally liable for that bodily injury; or

(2) the limit shown under “Each Person”.

b. Subject to a. above, the most we will pay for all damages resulting from bodily injury to two or more insureds injured in the same accident is the limit shown under ‘Each Accident’.

2. These Underinsured Motor Vehicle Coverage limits are the most we will pay regardless of the number of:

a. insureds;

b. claims made;

c. vehicles insured; or

d. vehicles involved in the accident.”

“If Other Underinsured Motor Vehicle Coverage Applies

1. If Underinsured Motor Vehicle Coverage provided by this policy and one or more other vehicle policies issued to you or any resident relative by the State Farm Companies apply to the same bodily injury then;

a. the Underinsured Motor Vehicle Coverage limits of such policies will not be added together to determine the most that may be paid; and

b. the maximum amount that may be paid from all such policies combined is the single highest applicable limit provided by any one of the policies. We may choose one or more policies from which to make payment.”

15. Plaintiffs maintain the State Farm policies are ambiguous when comparing the declarations page of the policies, to the rest of the policy language, which refers the insured back to the declarations page to find the coverage limits, in that the quoted language “Bodily Injury Limits” is missing from the applicable section. Symbol “W” of the declarations page, which is referred to in the policy as the governing limits of the underinsured motorist coverage, sample of which is attached hereto, marked Exhibit 5 and is shown on the declarations page of all State Farm policies as follows in pertinent parts:

W Underinsured Motor Vehicle Coverage Limits of Liability East [sic] Person, $25,000; Each Accident, $50,000

The first sentence under the policy language with the heading “UNDERINSURED MOTOR VEHICLE COVERAGE” on page 15 of all the policies reads:

UNDERINSURED MOTOR VEHICLE COVERAGE

This policy provides Underinsured Motor Vehicle Coverage if “W” is shown under “SYMBOLS” on the Declarations Page.”

Exhibit 5 and incorporated herein by reference to the language contained under limits for underinsured motorist coverage as follows:

Limits

“1. The Underinsured Motor Vehicle Coverage limits are shown on the Declarations Page under ‘Underinsured Motor Vehicle Coverage - Bodily Injury Limits - Each Person Each Accident.’

16. The language of each policy hereinabove referenced is identical and the declaration pages are identical as to coverages.

17. Quotations, boldface and italics included herein as they appear in the declaration pages and policy booklet text.

17. [sic] There is no genuine issue of material fact that prevents this court from finding the amount of underinsurance coverage to plaintiffs, if any, under the three other separate policies hereinabove listed from which no payment has previously been made by State Farm.

Thereafter, the parties submitted cross-motions for summary judgment, in which State Farm asserted there was no additional UIM vehicle coverage available under the Policies by operation of the language in the Policies. The Benedicts asserted that the Policies were ambiguous when comparing the declarations page of each policy to the rest of the policy language.

After hearing argument and considering the parties’ cross-motions for summary judgment and memoranda in support thereof, the trial court entered judgment in favor of State Farm finding that

[a]ll four State Farm policies issued to Plaintiffs have Underinsured Motorist (“UIM”) coverage language that clearly and without ambiguity provide that the amount to be paid from all such policies combined for the accident at issue is the highest applicable limit from any one of the policies, which is $25,000. There is no dispute that State Farm has paid the UIM limits of $25,000 to Plaintiffs under one of the four State Farm policies at issue. As such, State Farm has fulfilled all of its obligations to Plaintiffs under all four State Farm policies and is not liable for any amounts above the $25,000 State Farm has already paid.

This appeal followed.

In one point, the Benedicts assert that the trial court erred in granting summary judgment in favor of State Farm and enforcing anti-stacking language in the Policies because the Policies are ambiguous.

Standard of Review

Like with summary judgment, the interpretation of an insurance policy is a question of law that this Court also determines de novo. 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. An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language of the policy. Absent an ambiguity, an insurance policy must be enforced according to its terms. The burden of showing that an exclusion to coverage applies is on the insurer.

Copling v. Am. Family Mut. Ins. Co., S.I., 612 S.W.3d 226, 230 (Mo. App. S.D. 2020) (internal quotations and citations omitted). “The courts should not interpret policy provisions in isolation, but instead should evaluate policies as a whole.” Estate of Hughes v. State Farm Mut. Auto. Ins. Co., 485 S.W.3d 357, 361 (Mo. App. W.D. 2016).

Analysis

The Benedicts argue that the trial court erred in granting summary judgment in favor of State Farm and enforcing anti-stacking language in the Policies because the Policies are ambiguous. The parties stipulate that there is no genuine issue of material fact, and that the question before us is purely a matter of law.

The Benedicts point to language in the “Limits” section of the Policies, which states that the “Underinsured Motor Vehicle Coverage limits are shown on the Declarations Page under ‘Underinsured Motor Vehicle Coverage – Bodily Injury Limits – Each Person, Each Accident.” The Benedicts argue that the term “Bodily Injury Limits” is omitted from the “Underinsured Motor Vehicle Coverage” portion of the declarations page. While the Benedicts are correct that the term “Bodily Injury Limits” is not present at that precise location, the “Underinsured Motor Vehicle Coverage” portion of the declarations page nevertheless sets forth “Limits of Liability” of “$25,000” for “Each Person” and “$50,000” for “Each Accident.” The Benedicts fail to demonstrate how a reasonable insured would be confused or misled—this section clearly indicates that for UIM vehicle coverage, there is a $25,000 liability limit per each person, and a $50,000 liability limit per each accident. See Hughes, 485 S.W.3d at 362.

The Benedicts next attempt to argue that “coverage must be construed against [State Farm] because the Declarations Page also does not address when an insured holds four separate policies[,]” in that there is “[n]o asterisk or note or any type of notice that the four premiums paid for UIM would be severally limited[.]” This line of argument has been rejected by this Court:

The essential terms of an insurance contract are usually stated in abbreviated form on the ‘Declarations’ page of the policy. The rest of the policy often contains terms that limit or narrow the broad coverage stated in the Declarations page, such as definitions, exclusions, endorsements, and other miscellaneous provisions. [ ]Insurance policies are read as a whole, and the risk insured against is made up of both the general insuring agreement as well as the exclusions and definitions.[ ] Such limiting terms do not necessarily render the policy ambiguous so long as any conflicting clauses may be reasonably reconciled with the policy as a whole.[ ] There is no requirement that a limitation or exclusion appear on the declarations page absent policy language stating otherwise.[ ]

Id. at 361 (internal quotations and citations omitted).

The Benedicts also argue that the Policies do “not tell the insured how to deal with the accumulation of injuries,” that “the underinsured motorist benefit can still be allocated or applied horizontally, rather than a vertical stacking in the traditional sense,” and that the Policies fail “to tie stacking language to each accident instead of bodily injury[.]” The anti-stacking provision in the Policies, as applicable here, states:

If Other Underinsured Motor Vehicle Coverage Applies

1. If Underinsured Motor Vehicle Coverage provided by this policy and one or more other vehicle policies issued to you or any resident relative by the State Farm Companies apply to the same bodily injury, then;

a. the Underinsured Motor Vehicle Coverage limits of such policies will not be added together to determine the most that may be paid; and

b. the maximum amount that may be paid from all such policies combined is the single highest applicable limit provided by any one of the policies. We may choose one or more policies from which to make payment.

(Italics in original).

The plain language of the Policies indicates that stacking would not be allowed for UIM coverage. See Naeger v. Farmers Ins. Co., Inc., 436 S.W.3d 654, 660–61 (Mo. App. E.D. 2014). The Benedicts fail to demonstrate how a reasonable insured would be confused or misled as to this fact.

Finally, the Benedicts argue that “State Farm's policy is ambiguous because key sections of the anti-stacking language are in direct conflict with each other.” (Bolding omitted). The Benedicts suggest that a “reasonable insured is left to wonder whether the policies are supposed to be added together or not” because section 1.a. says the coverages cannot be added together, while section 1.b. says “the maximum amount that may be paid from all policies combined[.]” We are not persuaded by this argument. “Courts may not unreasonably distort the language of a policy or exercise inventive powers for the purpose of creating an ambiguity when none exists.” Id. at 661. The import of section 1.a. and b., as relevant here, is that the value among multiple policies is not accumulative, and only one policy—i.e., the policy with the highest coverage limit—would be paid. While the language of the Policies may be imperfect, it was not ambiguous from a fair reading of the Policies’ language.

The Benedicts fail to demonstrate that the Policies are ambiguous, and likewise fail to demonstrate that the trial court erred in entering judgment in favor of State Farm. The Benedicts’ Point I is accordingly denied.

The judgment of the trial court is affirmed.

FOOTNOTES

1.   “ ‘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, 992 S.W.2d 308, 313 (Mo. App. S.D. 1999). “The purpose of underinsured motorist coverage is to provide insurance coverage for insureds who have been bodily injured by a negligent motorist whose own automobile liability insurance coverage is insufficient to pay for the injured person's actual damages.” Wasson v. Shelter Mut. Ins. Co., 358 S.W.3d 113, 117 (Mo. App. W.D. 2011).

WILLIAM W. FRANCIS, JR., J.

NANCY STEFFEN RAHMEYER, P.J. - CONCURS JACK A.L. GOODMAN, J. – CONCURS