Title: Jason L. Rice, Respondent v. Shelter Mutual Insurance Company, Appellant

State: missouri

Issuer: Missouri Supreme Court

Document:

SUPREME COURT OF MISSOURI 
en banc 
 
 
JASON L. RICE, 
 
 
 
) 
 
 
 
 
 
 
) 
 
 
 
Respondent,  
) 
 
 
 
 
 
 
) 
 
v. 
 
 
 
 
) 
 
No. SC90139 
 
 
 
 
 
 
) 
SHELTER MUTUAL INSURANCE  
) 
COMPANY,  
 
 
 
) 
 
 
 
 
 
 
) 
 
 
 
Appellant. 
 
) 
 
APPEAL FROM THE CIRCUIT COURT OF JOHNSON COUNTY 
Honorable Joseph P. Dandurand, Judge 
 
Opinion issued December 8, 2009. 
 
Shelter Mutual Insurance Company appeals the trial court's entry of summary 
judgment in favor of Jason Rice in the amount of $525,000 in uninsured motorist 
coverage under his Shelter policy.  (Shelter paid Rice $75,000 prior to this action.)  This 
Court determines that the policy is ambiguous; therefore, under settled Missouri law, the 
ambiguity must be resolved in favor of coverage for the insured.  Judgment affirmed.   
I. BACKGROUND 
Jason Rice was injured on the job while a passenger in a truck driven by Daniel 
Patterson on Highway 13 in Johnson County.  Judy Saimon crossed the centerline, 
collided with the truck, causing it to overturn and become engulfed in flames.  Rice and 
Patterson suffered burn injuries as a result of the collision.  At the time of the accident, 
Saimon was operating an uninsured motor vehicle. 
 
Prior to the collision, Shelter Mutual Insurance Company issued three automobile 
insurance policies to Michael and Connie Rice, Jason's parents.  Jason Rice was insured 
within the meaning of the uninsured motorist coverage of the three policies, and the 
policies were in full force and effect on the date of the accident.  The first policy provided 
coverage of $100,000 per person/$300,000 per accident.  The second and third policies 
provided coverage of $250,000 per person/$500,000 per accident.  
 
The three policies contained the following language: 
Part IV – UNINSURED MOTORISTS 
COVERAGE E – UNINSURED MOTORISTS 
 
. . .  
INSURING AGREEMENT FOR COVERAGE E 
Subject to the limit of our liability stated in this Coverage, we will pay 
damages for bodily injury sustained by an insured which that insured, or 
that insured's legal representative, is legally entitled to recover from the 
owner or operator of an uninsured motor vehicle.  The bodily injury must 
be caused by accident and arise out of the ownership or use of the 
uninsured motorist vehicle. 
. . .  
Coverage E does not apply:  
. . .  
(3) 
To damages sustained by any insured if benefits are: 
(a) 
payable to, or on behalf of, such insured under any 
compensation law,1 as a result of the same accident, or  
(b) 
required by any compensation law to be provided to, or on 
behalf of, such insured as a result of the same accident. 
                                             
 
1 The definitions section of the policy provides:  
Compensation law means any law under which benefits are paid to a person as 
compensation for the effects of bodily injury, without regard to fault, because of 
that person's status as an employee or beneficiary.  It includes, but is not limited 
to, workers' compensation laws, disability laws, the Federal Employers' liability 
Act and the Jones Act. 
This exclusion does not apply to the amounts of coverage mandated 
by any uninsured motorist insurance law or financial responsibility 
law applicable to the accident, but does apply to any amounts 
exceeding that mandate, and to coverages which are not mandated 
by such laws. 
. . .  
EFFECT OF UNINSURED MOTORIST INSURANCE LAWS OR 
FINANCIAL RESPONSIBILTY LAWS  
If an applicable uninsured motorist insurance law or financial responsibility 
law renders any provision of this Part of the policy unenforceable, we will 
provide only the minimum limits mandated by such law.  However, if other 
insurance covers an insured's claim and provides those required minimum 
limits, the provisions of this policy are fully enforceable. 
 
All provisions of this Part of the policy which exceed the requirements of 
any applicable uninsured motorist insurance law or financial responsibility 
law, or are not governed by it, are fully enforceable.  
As a result of the collision and injuries Jason Rice sustained, benefits were paid to 
him pursuant to a workers' compensation claim, which is a "compensation law" as 
defined in the Shelter policies.  On March 16, 2007, Rice, through his attorney, submitted 
a demand to Shelter for payment of the per person limits of all three policies, totaling 
$600,000.  On April 18, 2007, Shelter declined to pay $600,000, relying on the exclusion 
language of the uninsured motorist coverage of the three policies.  Instead, Shelter 
offered and paid $25,000 per policy, totaling $75,000 for the three policies, because the 
policies purported to reduce uninsured motorist coverage to the statutorily mandated 
minimum under section 379.203.2  Shortly thereafter, Rice filed a claim against Shelter 
seeking the additional $525,000 plus the prejudgment interest.  The trial court granted 
                                             
 
2  All statutory citations are to RSMo 2000. 
 
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Rice's motion for summary judgment and awarded him $525,000 plus $34,952.05 in 
interest, finding as follows: 
In construing the EXCLUSIONS section of Coverage E, including 
the definition of Compensation Law, the Court takes the words and phrases 
in their plain, ordinary meaning, except as specifically defined within the 
policy.  Farmland Industries, Inc. v Republic Ins. Co., 941 S.W2d 505, 508 
(Mo. banc 1997). 
 
The exclusionary language provides that if the insured receives 
benefits for bodily injury from any insurance source, including worker's 
compensation benefits, FELA benefits, Medicare, Medicaid, Social 
Security, VA benefits, or even health insurance benefits, the insured is not 
entitled to uninsured benefits under Coverage E.  If all the overlapping 
exclusionary language contained in the policies is given meaning, then the 
insured received no perceivable value for the premiums paid for uninsured 
motorist coverage; and the appearance and reasonable expectation of 
having purchased Six Hundred Thousand Dollars of uninsured motorist 
coverage would be illusory.  In Cano v. Travelers Ins. Co., 656 S.W.2d 266 
(Mo. banc 1983), the Missouri Supreme Court not only held that language 
in an uninsured motorist policy that purported to reduce the insurer's 
liability because of the receipt of workers' compensation benefits violated 
public policy, and the provisions of Mo.Rev.Stat. § 579.203, but also that  
"[a] construction which may render a portion of the policy illusory should 
not be indulged in."  Cano at 271.  The exclusionary language of coverage 
E in the Shelter policies is so excessively broad as to be void and contrary 
to the public policy of Missouri.   
 
In finding that the exclusionary language regarding uninsured motorist coverage 
was so excessively broad as to be void and contrary to the public policy of Missouri, the 
trial court did not reach the issue of whether the policy was also ambiguous, which was 
pled as an additional basis to grant the summary judgment motion in favor of Rice.  
Following a decision by the court of appeals, this Court granted transfer.  Mo. Const. art. 
V, sec. 10. 
 
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II. STANDARD OF REVIEW 
This Court reviews the trial court's granting of summary judgment de novo.  ITT 
Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. 
banc 1993).  The interpretation of an insurance policy is a question of law that this Court 
also determines de novo.  Jones v. Mid-Century Ins. Co., 287 S.W.3d 687, 690 (Mo. banc 
2009).  Because this Court's review is de novo, if the trial court's judgment can be 
sustained on any ground as a matter of law, even if different than the one posited in the 
order granting summary judgment, it should be affirmed.  ITT Commercial Fin., 854 
S.W.2d at 387-88.  In construing the terms of an insurance policy, this Court applies the 
meaning that would be attached by an ordinary person of average understanding if 
purchasing insurance and resolves ambiguities in favor of the insured.  Jones, 287 
S.W.3d at 690 (citing Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 
2007) and Martin v. United States Fid. & Guar. Co., 996 S.W.2d 506, 508 (Mo. banc 
1999)). 
III. ANALYSIS 
 
Missouri requires the presence of uninsured motorist coverage in the minimum 
amount of $25,000 per person/$50,000 per occurrence but allows citizens to purchase 
coverage above that minimum.  Section 379.203.1.  The purpose of section 379.203 is to 
establish a minimum level of protection equivalent to the liability coverage the insured 
would have received had the insured been involved in an accident with an insured 
tortfeasor.  Kuda v. Am. Family Mut. Ins. Co., 790 S.W.2d 464, 467 (Mo. banc 1990).   
 
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In this case, the Rices bought three separate policies from Shelter.  Jason was 
insured under each policy purchased.  The Rices paid a separate premium for each policy.  
The premiums paid on all three Shelter policies provided coverage limits in excess of 
those required by law.  The obvious purpose was to provide the Rices protection above 
the statutory minimum of $25,000 in the event they were injured by negligent operation 
of an uninsured motor vehicle.  Therefore, the analysis begins with the expectation of an 
ordinary customer who paid premiums for uninsured motorist coverage in excess of the 
statutory minimum so the customer would be covered to the extent of the coverage 
purchased.  Nevertheless, to determine whether this expectation was reasonable, the law 
requires a review of the policy language.3   
 
It is settled law that "when analyzing an insurance contract, the entire policy and 
not just isolated provisions or clauses must be considered."  Versaw v. Versaw, 202 
S.W.3d 638, 643 (Mo. App. 2006) (citing Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 
74, 77 (Mo. banc 1998)).  "If an entire policy is analyzed in context and found to be 
unambiguous, i.e., its language is plain, straightforward, and susceptible of only one 
meaning, the rules of construction are inapplicable, and absent public policy to the 
                                             
 
3 Rice and amicus curiae urge this Court to find that the public policy as stated in the statutes 
referenced in this opinion and the prior case decisions always provide the insured with the entire 
amount of uninsured motorist coverage purchased, not merely the statutory minimum, regardless 
of any exclusionary provisions.  Because this case is resolved on the basis of well-settled law 
that ambiguous policy language is construed in favor of providing coverage, this Court does not 
address the trial court's finding that the exclusionary language was so excessively broad as to 
render the uninsured motorist coverage illusory, void and against public policy. 
 
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contrary, the contract will be enforced as written."  Id. (citing Krombach v. Mayflower 
Ins. Co. Ltd., 827 S.W.2d 208, 210 (Mo. banc 1992)). 
"Different rules attend if provisions of an insurance policy (when read in the 
context of the policy as a whole) are ambiguous, i.e., there is duplicity, indistinctness, or 
uncertainty in its meaning, and the policy is therefore open to different constructions. If 
ambiguity exists, the policy 'will be interpreted in the manner that would ordinarily be 
understood by the lay person who bought and paid for the policy.'"  Id.  Ambiguous 
policy language must be construed against the insurer.  Krombach, 827 S.W.2d at 210. 
"This rule is especially applicable where insurance is first 'granted' and is then followed 
by provisions limiting or avoiding liability."  Versaw, 202 S.W.3d at 643.   
 
Shelter's policy contains inconsistent provisions – one guaranteeing coverage 
above the minimum coverage mandated by statute and another limiting coverage to the 
minimum amount mandated by section 379.203.  In limiting Rice's compensation to 
$75,000, Shelter relied on the exclusionary language that states: 
Coverage E does not apply: 
. . .  
(3)      To damages sustained by any insured if benefits are: 
(a) 
payable to, or on behalf of, such insured under any 
compensation law, as a result of the same accident, or  
(b) 
required by any compensation law to be provided to, or on 
behalf of, such insured as a result of the same accident. 
This exclusion does not apply to the amounts of coverage mandated 
by any uninsured motorist insurance law or financial responsibility 
law applicable to the accident, but does apply to any amounts 
exceeding that mandate, and to coverages which are not mandated 
by such laws.  
 
(emphasis added). 
 
 
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This section is immediately followed by a section that discusses the effect (if any) 
of uninsured motorist insurance laws or financial responsibility laws.  This provision 
incongruously purports to grant coverage for any amount exceeding the minimum 
required by uninsured motorist statutes:  
EFFECT OF UNINSURED MOTORSIT INSURANCE LAWS OR 
FINANCIAL RESPONSIBILITY LAWS 
If an applicable uninsured motorist insurance law or financial 
responsibility law renders any provision of this Part of the policy 
unenforceable, we will provide only the minimum limits mandated by such 
law.  However, if other insurance covers an insured's claim and provides 
those required minimum limits, the provisions of this policy are fully 
enforceable.   
 
All provisions of this Part of the policy which exceed the requirements of 
any applicable uninsured motorist insurance law or financial responsibility 
law, or are not governed by it, are fully enforceable.  
 
(emphasis added).  
 
In this case, therefore, the uninsured motorist provision starts with a reference to 
providing coverage up to the limit of liability in the declaration provisions, followed by 
provisions to exclude coverage if any benefits are provided to an insured under any 
compensation law, followed by provisions that provide this exclusion does not apply to 
amounts of coverage mandated by any uninsured motorist law, followed by provisions 
that provide "the [uninsured motorist part] of the policy which exceed[s] the requirements 
of any applicable uninsured motorist insurance law or financial responsibility law, or are 
not governed by it, are fully enforceable." 
These provisions are entirely inconsistent and cannot be reconciled.  The policy 
expressly limits coverage to the statutory minimum and yet purports to grant full 
 
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coverage to all provisions that exceed the statutory minimums.  "Missouri law is well-
settled that where one provision of a policy appears to grant coverage and another to take 
it away, an ambiguity exists that will be resolved in favor of coverage."  Jones, 287 
S.W.3d at 689.   
 
This Court recently dealt with ambiguity in an insurance contract in Seeck.  Seeck 
sought coverage under an "excess" or "other" insurance clause that stated, "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."  Seeck, 212 S.W.3d at 132.  The insurer argued 
that Seeck's recovery was limited by a limit of liability clause that reduced the amounts 
paid to the insured by those paid or payable by the party at fault for the accident.  Id.  at 
132-33.  This Court, applying the reasoning of several court of appeals cases with similar 
facts, held that "[w]here, as here, an other insurance clause appears to provide coverage 
but other clauses indicate that such coverage is not provided, then the policy is 
ambiguous, and the ambiguity will be resolved in favor of coverage for the insured."  Id. 
at 134.   
Shortly after Seeck was decided, this Court in Jones again dealt with the issue of 
ambiguity in underinsured motorist provisions of insurance policies.  In Jones, this Court 
examined a policy with apparently inconsistent provisions to determine if an ambiguity 
existed.  287 S.W.3d at 690.  The policy contained several provisions purporting to grant 
underinsured motorist coverage up to $100,000 and one provision limiting liability.  Id.   
The insurer claimed that the limit of liability provision allowed it to subtract money paid 
 
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or payable to the insured by the tortfeasor from the $100,000 limit.  Id. at 691.  This 
Court noted that the insurer's interpretation of the limit of liability provision would render 
the other provisions guaranteeing $100,000 of coverage "inaccurate and misleading."  Id. 
at 692.  This Court rejected the insurer's interpretation of the limiting provision and 
instead held that the provision allowed the insurer to subtract the amount of money paid 
or payable by the tortfeasor from the total damages, not $100,000, thereby reconciling the 
provision with the rest of the policy.  Id. at 693.    
Shelter's policy is analogous to the inconsistent provisions at issue in Jones and 
Seeck because it is grants coverage in one provision and limits it in another.  Even though 
Jones and Seeck deal with underinsured motorist provisions and excess or other insurance 
clauses, not uninsured motorist provisions as in this case, they are illustrative and confirm 
well-settled Missouri law that inconsistent and irreconcilable provisions in an insurance 
policy create an ambiguity that will be resolved in favor of the insured.  See Lutsky v. 
Blue Cross Hosp. Serv., Inc., 695 S.W.2d 870, 875 (Mo. banc 1985); Heald v. Aetna Life 
Ins. Co., 104 S.W.2d 379, 382 (Mo. 1937); Drucker v. W. Indem. Co., 223 S.W. 989, 
991-92 (Mo. App. 1920).   
IV. CONCLUSION 
Accordingly, the policy is ambiguous, and Rice is entitled to the full coverage in 
the amount of $600,000.  Therefore, the trial court's judgment is affirmed.     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
___________________________ 
 
 
 
 
 
 
 
 
Zel M. Fischer, Judge 
 
All concur. 
 
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