Title: Manner v. Schiermeier

State: missouri

Issuer: Missouri Supreme Court

Document:

SUPREME COURT OF MISSOURI 
en banc 
 
 
NATHANIEL JAMES MANNER, 
 
) 
 
 
 
 
 
 
 
) 
 
 
Appellant, 
 
 
 
) 
 
 
 
 
 
 
 
) 
vs. 
 
 
 
 
 
 
) 
No. SC92408 
 
 
 
 
 
 
 
) 
NICHOLAS BRIAN SCHIERMEIER, 
 
) 
CON-TECH FOUNDATIONS, LLC,   
) 
HELMET CITY, INC., and JAFRUM  
) 
INTERNATIONAL, INC., 
 
 
) 
 
 
 
 
 
 
 
) 
 
 
Defendants,  
 
 
) 
 
 
 
 
 
 
 
) 
AMERICAN FAMILY MUTUAL  
 
) 
INSURANCE COMPANY, and  
 
) 
AMERICAN STANDARD 
 
 
) 
INSURANCE COMPANY, 
 
 
) 
 
 
 
 
 
 
 
) 
 
 
Respondents. 
 
Appeal from the Circuit Court of St. Charles County 
The Honorable Nancy L. Schneider, Judge 
 
Opinion issued January 8, 2013 
 
 
Nathaniel Manner appeals the trial court’s grant of summary judgment to 
American Family Mutual Insurance Company and American Standard Insurance 
Company (the insurers) on Nathaniel’s1 claim that he is entitled to $400,000 in 
underinsured motorist coverage under the four policies he holds with those insurers.  He 
                                             
 
1 To avoid confusion, the appellant hereinafter is referred to as Nathaniel to distinguish 
him from the other members of the Manner family. 
alleges that the trial court erred in holding that the policies’ owned-vehicle exclusions 
unambiguously applied to the Yamaha motorcycle that he was riding at the time of the 
accident.  This Court agrees.  The insurers chose not to define the term “owned” in the 
policies.  The burden was on the insurers to prove that the owned-vehicle exclusion 
applied, which they failed to do.  This Court rejects the insurers’ suggestion that the facts 
that Nathaniel had an insurable interest and possession of the motorcycle unambiguously 
showed he “owned” the vehicle as that term is used in the policy.  Here, Nathaniel’s 
uncle retained title and still was receiving payments from Nathaniel at the time of the 
accident.  Any ambiguity in the meaning of “owned” vehicle must be construed against 
the insurer. 
Because the insurers fail to show that the owned-vehicle exclusion applies, the 
question becomes whether Nathaniel may stack the underinsured motorist coverages 
provided in each of the four policies in determining whether the tortfeasor was 
underinsured and in determining the amount of underinsured motorist coverage to which 
he is entitled. This Court finds that the “other insurance” provisions of the four policies 
permit him to do so.  Finally, because his unrecovered damages exceed the total liability 
limits of the stacked policies, the insurers are not entitled to offset the amount recovered 
from other tortfeasors against those liability limits. The judgment is reversed, and the 
case is remanded. 
I.   
STATEMENT OF FACTS 
 
On September 25, 2004, Nathaniel, then 23 years old, suffered extensive bodily 
injury while riding a Yamaha motorcycle when it was hit by a vehicle driven by Nicholas 
Schiermeier (the “tortfeasor”).  Nathaniel sued the tortfeasor, asserting the latter 
negligently caused the collision.  The tortfeasor’s insurance company paid its $100,000 
limit of liability to Nathaniel.  
The insurer and Nathaniel have agreed for purposes of this suit that the value of 
his claim for damages is $1.5 million.  Nathaniel’s $100,000 recovery from the tortfeasor, 
therefore, left him with $1.4 million in unpaid damages.  He sought additional recovery 
for his injuries under the $100,000 underinsured motorist coverage endorsement of the 
American Family policy he had purchased for the Yamaha motorcycle and under the 
$100,000 underinsured motorist coverage endorsements of each of the additional 
American Family insurance policies he had purchased for his two trucks – a Ford Ranger 
and a Ford F150.  He also sought recovery as an additional insured on the $100,000 
American Standard policy his father, James Manner, maintained for a Suzuki 
motorcycle.2   
Both insurers denied coverage under all of these four policies.  Nathaniel then 
joined both insurers as additional defendants, alleging that he was entitled to recover 
under the underinsured motorist endorsements of all four policies and that their limits 
could be stacked to provide him with $400,000 in coverage. 
The insurers moved for summary judgment, arguing that the policies for the three 
vehicles other than the Yamaha that Nathaniel was operating at the time of the accident 
                                             
 
2 The Suzuki policy provides underinsured motorist coverage to James Manner and a 
“relative,” defined as someone related to James by blood, marriage or adoption, unless 
either is injured when occupying a vehicle owned by James or “any resident of his 
household” but not insured by the policy.  
 
3
could not apply because the policies covering Nathaniel’s two Ford trucks and his 
father’s Suzuki each contained an “owned-vehicle” exclusion that precluded coverage 
under the underinsured motorist endorsement.  These owned-vehicle exclusions state: 
“This coverage does not apply for bodily injury to a person: … While occupying, or 
when struck by, a motor vehicle that is not insured under this policy if it is owned by you 
or any resident of your household.” (emphasis added). The insurers claimed that 
Nathaniel owned the Yamaha and that, because it was insured under a different policy 
than the ones insuring the other three vehicles, this owned-vehicle exclusion precluded 
coverage under those policies.   
Additionally, the insurers claimed that none of the policies’ underinsured motorist 
endorsements applied as to any of the four policies because the tortfeasor’s vehicle did 
not come within the definition of an “underinsured” vehicle as that term in used in those 
policies.  In support, the insurers argued that a vehicle is considered “underinsured” only 
if the coverage for it is less than the coverage in the insured’s policy.  Here, because the 
four policies under which Nathaniel claimed coverage and the tortfeasor’s policy each 
had identical $100,000 limits, the insurers allege the tortfeasor’s vehicle cannot be 
considered “underinsured” and, therefore, Nathaniel is not entitled to recover under any 
of the underinsured motorist endorsements of any of the four policies. 
Nathaniel countered that the insurers did not meet their burden of showing that he 
owned the Yamaha, nor that he resided in his father’s household; therefore, the owned-
vehicle exclusion did not apply.  Instead, he argued, the policies’ “other insurance” 
clauses permitted him to stack their coverages, and, under Missouri law, it is the total of 
 
4
stacked coverage that must be compared with the tortfeasor’s coverage to determine 
whether the latter is underinsured.  Nathaniel cross-moved for summary judgment. 
 
The trial court denied Nathaniel’s motion but granted summary judgment in favor 
of the insurers.  Nathaniel appealed.  After an opinion by the court of appeals, this Court 
granted transfer pursuant to art. V, sec. 10 of the Missouri Constitution.     
II.   
STANDARD OF REVIEW 
Whether summary judgment is proper is an issue of law that this Court reviews de 
novo.  The Court reviews the record in the light most favorable to the party against whom 
judgment was entered, without deference to the trial court’s findings, and accords the 
non-movant “the benefit of all reasonable inferences from the record.”  ITT Commercial 
Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). 
III.   STACKING OF THE POLICIES IS PERMITTED 
A. 
The Insurers did not Meet their Burden of Showing that Nathaniel 
Owned the Yamaha Motorcycle  
 
The four policies all contain $100,000 in underinsured motorist coverage.  The 
insurers claim that the owned-vehicle exclusion to this coverage applies, however, 
because Nathaniel owned the Yamaha motorcycle he was riding at the time of the 
accident.  The burden of showing that an exclusion to coverage applies is on the insurer. 
Burns v. State, 303 S.W.3d 505, 510 (Mo. banc. 2010) (“Missouri also strictly construes 
exclusionary clauses against the drafter, who also bears the burden of showing the 
exclusion applies”) (emphasis in original).   
The record shows Nathaniel’s uncle had agreed to sell him the motorcycle and 
 
5
allowed him to take possession of it.  Nathaniel responsibly obtained insurance coverage 
for the motorcycle before driving it.  But, at the time of the accident, Nathaniel still was 
in the process of paying his uncle for the Yamaha, his uncle still retained title, and he did 
not yet consider it his own: when police arrived at the accident scene, Nathaniel 
explained that the motorcycle belonged to his uncle.   
The insurers argue that even though Nathaniel did not have title to the vehicle or 
other indicia of ownership of it, they met their burden by showing that he had possession 
of and an interest in the Yamaha sufficient to allow him to obtain an insurance policy on 
it.  Insurers cite no authority for their proposition that an insurable interest is equivalent 
to ownership, and this Court has found none.  Such a definition could lead to conflicting 
claims and confusion because persons other than an owner can have sufficient interest in 
property to insure it. For example, the uncle who was selling the vehicle also had an 
insurable interest in it.  Indeed, both a rental or leasing company and the person renting or 
leasing a vehicle or other item have an insurable interest in the car or other item rented 
and have some possessory interest in it.  This does not make the renter the owner of the 
car, however, at least not in the absence of a contract provision so defining “ownership” 
for purposes of the contract.  
 
While the insurance policies at issue could have defined “owned,” for purposes of 
the underinsured motorist endorsement,3 to include all those who have an insurable 
                                             
 
3 As to uninsured motorist coverage, this Court long has held that “§ 379.203 mandated 
uninsured motorist coverage and that the parties were not free to enter into a contract 
which had the effect of diminishing the coverage the statute required.” Shepherd v. 
American States Ins. Co., 671 S.W.2d 777, 778 (Mo. banc 1984). 
 
6
interest in the vehicle, they did not do so.  The insurers chose to use the term “owned” in 
the policies’ underinsured motorist endorsement but not to define it.  The term 
accordingly “will be viewed in the meaning that would ordinarily be understood by the 
layman who bought and paid for the policy.”  Krombach v. Mayflower Ins. Co., Ltd., 827 
S.W.2d 208, 210 (Mo. banc 1992).   
“Owner” is defined generally as “one that has the legal or rightful title whether the 
possessor or not.”  WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1612 (1961). 
Additionally, “own” often is defined as “belonging to oneself or itself” or “to have or 
hold as property or appurtenance: have rightful title to, whether legal or natural: possess.”  
Id.  While the meaning of “owned” may vary in particular circumstances, case law 
similarly indicates that it usually involves establishing either title, see, e.g., Case v. 
Universal Underwriters Insurance Company, 534 S.W.2d 635 (Mo. App. 1976) (title 
establishes a rebuttable presumption of ownership), or the power to “voluntarily destroy, 
encumber, sell, or otherwise dispose” of the property, see, e.g., Lightner v. Farmers Ins. 
Co., Inc., 789 S.W.2d 487 (Mo. banc 1990) (finding ownership on this basis).   No case or 
dictionary has been identified that defines “ownership” and “possession of an insurable 
interest” as equivalencies.   
The insurers had the burden of showing that the term “owned” in the endorsement 
unambiguously included Nathaniel’s situation.  At best, the term is ambiguous as used in 
the policy, and any ambiguity will be interpreted in favor of the insured.  See Burns, 303 
S.W.3d at 509 (multiple meanings for a term suggest that the word itself is ambiguous if 
not defined).  The insurer failed to meet its burden of showing that the owned-vehicle 
 
7
exclusion applied.4 
B. 
The “Other Insurance” Provisions Permit Stacking To Determine the 
Existence and Amount of Underinsured Motorist Coverage 
 
All four policies under which Nathaniel claims coverage define an “underinsured 
motor vehicle” as “a motor vehicle which is insured by a liability bond or policy at the 
time of the accident which provides bodily injury liability limits less than the limits of 
liability of this Underinsured Motorists coverage.” (Emphasis added).  The burden is on 
the insured to show coverage is provided under this provision.  Shelter Mut. Ins. Co. v. 
Ballew, 203 S.W.3d 789, 792 (Mo. banc 2006); Martin v. Prier Brass Mfg. Co., 710 
S.W.2d 466, 470 (Mo. App. 1986).   
The insurers argue that the four $100,000 policies covering Nathaniel should be 
compared individually with the coverage provided by the tortfeasor’s policy to determine 
whether the latter’s vehicle was underinsured. If this is done, the insurers argue, then as 
each policy provides the same $100,000 limit as did the tortfeasor’s policy, the tortfeasor 
was not underinsured under any of the policies, none of the underinsured motorist 
endorsements apply and there are no policy coverages to stack.   
The insurers’ argument explicitly was rejected by this Court in Seeck v. Geico 
Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007).  There, as here, the insurer argued that 
this Court should find that “the tortfeasor’s vehicle does not come within the definition of 
‘underinsured motor vehicle’ in the [insurer’s] policy” because the limits of liability of 
                                             
 
4 Because of the Court’s resolution of the owned-vehicle exclusion issue, it will not 
address the additional arguments made by insurers that were premised on a determination 
that this exclusion did apply. 
 
8
both policies were the same if stacking was not permitted.  Id. at 132-33.  This Court held 
that to so hold was inconsistent with the long-standing policy of this Court to consider 
policy provisions as a whole rather than to look at them seriatim, as the insurer 
effectively requested.  Id. at 133.   
This Court further explicated this long-standing policy in Ritchie v. Allied Prop. & 
Cas. Ins. Co., 307 S.W.3d 132 (Mo. banc 2009), in rejecting a similar argument:  
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 longstanding approach.  Seeck is only the latest case to 
apply this rule to a situation such as this where the other insurance clause 
appears to provide coverage that the limitation of liability clause is argued 
to prohibit; any resulting ambiguity will be construed against the insurer. 
  
Ritchie, id. at 138 n. 5.   
Numerous court of appeals cases have followed similar reasoning,5 and this Court 
reaffirms this principle here.  In determining what coverage is provided for purposes of 
determining the applicability of underinsured motorist coverage, a court first must 
determine whether the policy permits coverage from multiple policies to be stacked.  If 
so, then the coverage provided by the policies is their stacked amount, not the amount 
each would provide if considered separately, and it is the stacked amount that must be 
compared against the insurance coverage of the tortfeasor.   
This approach is consistent with the fact that one of the purposes of underinsured 
motorist coverage is to provide the insured with the coverage the insured purchased when 
                                             
 
5 See, e.g., Chamness v. American Family Mutual Ins. Col, 226 S.W.3d 199, 205 (Mo. 
App. 2007); American Family Ins. Co. v. Ragsdale, 213 S.W.3d 51, 54-55 (Mo. App. 
 
9
the excess amount is necessary to cover damages.  When insurance policies permit 
stacking, such as Nathaniel argues is the case here, the coverage contracted for is the total 
of the policy limits when stacked.   
Here, it is conceded that if the policies are stacked, the tortfeasor is underinsured. 
Accordingly, this Court turns to whether the policies permit stacking.  Stacking of 
insurance policies 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. 
 
Ritchie, 307 S.W.3d at 135.   
As applied here, this definition means that, if the underinsured motorist 
endorsements of Nathaniel’s policies permit stacking, then he can recover the sum total 
of the policy limits of the stacked policies, here $400,000, up to the amount of damages 
remaining after recovery from the tortfeasor.  If stacking is not permitted, he will be 
limited to the $100,000 amount of recovery of each policy considered singly because 
each policy contains an identical $100,000 limit of liability. 
 
The insurers argue that stacking is prohibited by a “Two or More Cars Insured” 
clause in each policy, which provides: 
The total limit of our liability under all policies issued to you by us shall 
not exceed the highest limit of liability under any one policy.  When this 
policy insures two or more cars, the coverages apply separately to each car. 
 
Here, each vehicle was insured under its own policy, and therefore the second clause of 
                                                                                                                                                 
 
2007); American Economy Ins. Co. v. Cornejo, 866 S.W.2d 174, 178 (Mo. App. 1993).   
 
10
this “Two or More Cars Insured” provision does not apply.6  The insurers claim, 
however, that the first clause of the “Two or More Cars Insured” provision expressly 
precludes stacking the liability limits of the four policies. 
The insurers’ argument ignores the fact that the underinsured motorist 
endorsements to each policy also each contain an “other insurance” clause providing: 
If there is other similar insurance on a loss covered by this endorsement, we 
will pay our share according to this policy’s proportion of the total limits of 
all similar insurance.  But, any insurance provided under this endorsement 
for an insured person while occupying a vehicle you do not own is excess 
over any other similar insurance.  
 
This Court’s analysis of a similar “other insurance” clause in Ritchie is dispositive 
here.  In Ritchie, the insurer claimed that stacking was precluded by a clause stating that 
the limit of liability shown on the declarations page was the maximum the insurer would 
pay regardless of the number of claims or premiums. But, this Court noted, this was 
inconsistent with the policy’s “other insurance” clause, which stated: 
OTHER INSURANCE 
If there is other applicable underinsured motorists coverage available under 
one or more policies or provisions of coverage: 
. . . .  
(2) Any coverage we provide with respect to a vehicle you do not 
own shall be excess over any other collectible underinsured motorist 
coverage. 
 
Ritchie, 307 S.W.3d. at 136-37.   
 
As just noted, it is well-settled in Missouri that “courts should not interpret policy 
provision in isolation but rather evaluate policies as a whole.”  Ritchie, id. at 137.  
                                             
 
6   Each policy also has a similar clause stating that coverage for two or more motorcycles 
must be considered separately, but for the reasons noted above, Nathaniel does not come 
 
11
Conflicts and inconsistencies between different policy provisions, with one seeming to 
deny coverage but the other seeming to grant it, will render a policy ambiguous, and such 
an ambiguity will be interpreted in favor of the insured.  Id.  
Applying those principles to the case before it, Ritchie held that even if when read 
in isolation the “limits of liability” clause precluded stacking in certain other situations, 
when read together with the other insurance clause, an “ordinary person of average 
understanding” reasonably could conclude that the “other insurance” clause set out an 
exception to this anti-stacking provision “in the special situation where the insured is 
injured while occupying a non-owned vehicle.” Ritchie, id. at 137, quoting Niswonger v. 
Farm Bureau Town & Country Ins. Co. of Mo., 992 S.W.2d 308, 315 (Mo. App. 1999).  
Accord, McCormack Baron Mang. Servs. Inc. v. American Guarantee & Liability Ins. 
Co., 989 S.W.2d 168, 171 (Mo. banc 2011). 
More specifically, Ritchie said, an insured reasonably could interpret the words of 
the “other insurance” clause stating “Any coverage we provide with respect to a vehicle 
you do not own shall be excess over any other collectible underinsured motorist 
coverage” to mean that “when an injured insured is occupying a non-owned vehicle and 
there are multiple underinsured motorist coverages, as it is conceded there are here, then 
each of the underinsured motorist coverages are excess to the other, and, therefore, may 
be stacked.”  Ritchie, 307 S.W.3d. at 137-38.   
Ritchie found that this made the insurance policy ambiguous as to whether 
stacking was permitted in the case of underinsured motorist coverage and, therefore, 
                                                                                                                                                 
 
within the definition of “owned;” therefore, that provision also is inapplicable. 
 
12
permitted the insured to stack these coverages.7  
Similarly, here, the second sentence of the “other insurance” clause appears to an 
“ordinary person of average understanding” to permit stacking because it states that “any 
coverage we provide with respect to a vehicle you do not own shall be excess over any 
other collectible underinsured motorist coverage.”  To the extent that this is inconsistent 
with other provisions of the policy such as the “Two or More Cars Insured” provision, the 
resulting ambiguity must be resolved in favor of the insured.  See, e.g., Seeck, 212 S.W.3d 
at133-34.  Stacking is permitted under the four policies.  
C. 
Offset is Not Permitted.  
 
Insurers assert that, because the limits of liability provision in the policies’ 
underinsured motorist endorsement states that underinsured motorist coverage will be 
reduced by a “payment made or amount payable by or on behalf of any person or 
organization which may be legally liable, or under any collectible auto liability insurance, 
for loss caused by an accident with an underinsured motor vehicle,” the $100,000 that the 
tortfeasor’s insurer paid should offset the amount Nathaniel can recover under the 
underinsured motorist endorsement.   
                                             
 
7   Accord, Chamness, 226 S.W.3d at 203-08 (when the same “Two or More Cars 
Insured” provision and the same “other insurance” provision are read together they create 
an ambiguity that must be resolved in favor of coverage); Ragsdale, 213 S.W.3d at 55-57  
(finding the excess insurance clause of the “other insurance” provision ambiguous when 
read with the anti-stacking provision, the court permitted stacking); Niswonger, 992 
S.W.2d at 313 (accord). 
     Murray v. American Family Mutual Insurance, 429 F.3d 757 (8th Cir. 2005), relied 
on by the insurers to support precluding stacking, did not consider the second sentence of 
the “other insurance” clause, which this Court finds dispositive. In any event, Murray 
was decided before Ritchie, which is the governing Missouri law.   
 
13
The Court rejects this argument.  The policy promises to pay the listed limits of 
liability, not simply the listed limits of liability reduced by the amount paid by the 
tortfeasor.  Insurers’ construction of the policy would permit the policy to promise to pay 
the full limits of liability and yet these limits never would be paid as the amount of 
liability promised always would be reduced by the recovery from the other driver.8  As 
Ritchie noted, this conflict at best creates an ambiguity that must be resolved in favor of 
coverage up to the amount listed in the limits of liability section if “after deducting the 
amounts already paid, damages equaling or exceeding those limits are still outstanding.”  
Ritchie, 307 S.W.3d at 140.  
Here, Nathaniel’s damages were $1.5 million.  Reducing those damages by the 
$100,000 paid by the tortfeasor leaves a remaining $1.4 million in damages, which far 
exceeds the $400,000 he can recover under the policies. The full limits of the limits of 
liability, therefore, are recoverable.9  
                                                                                                                                                 
 
 
8 This is because, if the amount recoverable under the insurance policy always is reduced 
by the amount collected by the tortfeasor, an insured never could recover the entire 
liability limit set out in the underinsured motorist endorsement because, by definition, an 
underinsured motorist is someone who paid something toward the insured’s damages, 
although not enough to satisfy those damages nor enough to exceed the insured’s 
underinsured motorist limits.   
9 The insurers also argue that the full amount of any insurance Nathaniel recovered by 
settling his suit against both the manufacturer and seller of the helmet should be 
deducted.  They cite no authority that underinsured motorist coverage should be offset by 
products liability insurance that is not related to vehicles at all, and this Court rejects the 
suggestion that insureds basically must show that they had no opportunity to sue for tort 
damages unrelated to underinsured motorist coverage in order to recover on their 
underinsured motorist coverage.  Underinsured motorist coverage, like uninsured 
motorist coverage, refers to vehicle coverage.  In any event, for the reasons just noted, 
offset would not be permitted.  
 
14
 
15
IV.   CONCLUSION 
 
The trial court erred in granting summary judgment to the insurers. This Court 
finds that the tortfeasor’s vehicle was an underinsured motor vehicle, the insurers failed 
to show that the owned-vehicle exclusion applies, the “other insurance” clause permits 
stacking of underinsured motorist coverage and offset is not permitted. The judgment is 
reversed, and the case is remanded.   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
_________________________________  
 
 
 
 
 
 
 
     LAURA DENVIR STITH, JUDGE  
 
 
Teitelman, C.J., Russell, Breckenridge and Fischer,  
JJ., concur.  Draper and Wilson, JJ., not participating.