Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-14-02016/USCOURTS-ca8-14-02016-0/pdf.json

Parties Involved:
Bradley Brooks
Appellant
Malissa Brooks
Appellant
The Midwestern Indemnity Company
Appellee

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 14-2016

___________________________

The Midwestern Indemnity Company

lllllllllllllllllllll Plaintiff - Appellee

v.

Malissa Brooks; Bradley Brooks

lllllllllllllllllllll Defendants - Appellants

____________

Appeal from United States District Court 

for the Western District of Missouri - Kansas City

____________

 Submitted: January 13, 2015

 Filed: March 2, 2015

____________

Before RILEY, Chief Judge, COLLOTON and KELLY, Circuit Judges.

____________

RILEY, Chief Judge.

Appellate Case: 14-2016 Page: 1 Date Filed: 03/02/2015 Entry ID: 4249262 
Malissa Brooks seeks to “stack”1

 her underinsured motorist (UIM) coverage

limits after a negligent driver struck Brooks as she rode her bicycle. Her insurer,

Midwestern Indemnity Company (Midwestern), moved for summary judgment on the

basis that Brooks’s policy unambiguously prohibits UIM coverage stacking. The

district court2

 agreed and granted summary judgment in Midwestern’s favor. Because

Brooks’s policy clearly forbids stacking, we affirm.3

I. BACKGROUND

A. Facts

On September 19, 2011, Brooks was riding her bicycle when Clyde Lawrence

negligently struck her with his car. Lawrence afterward passed away of unrelated

causes. Brooks and her husband, Bradley Brooks, filed suit in Missouri state court

against Lawrence’s estate (estate), which soon settled for the $50,000 limit of

Lawrence’s auto insurance policy. In this settlement, the Brookses agreed not to seek

additional recovery from Lawrence’s estate, heirs, or insurer, but the Brookses

retained the right to seek recovery from Midwestern.

The Brookses’ auto insurance policy with Midwestern provides UIM bodily

injury coverage for several vehicles. On the declarations page for the UIM

endorsement, the policy states, “Insurance is provided where a premium entry is

1

As relevant here, “‘[s]tacking’ refers to an insured’s ability to obtain multiple

insurance coverage benefits for an injury . . . from multiple coverages provided for

within a single policy, as when an insured has one policy which covers more than one

vehicle.” Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. 2009)

(en banc) (quotation omitted). Although the Brookses sometimes refer to their five

UIM “policies,” there is actually only one policy with multiple covered vehicles.

2

The Honorable Ortrie D. Smith, United States District Judge for the Western

District of Missouri.

3

Our appellate jurisdiction arises under 28 U.S.C. § 1291.

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Appellate Case: 14-2016 Page: 2 Date Filed: 03/02/2015 Entry ID: 4249262 
shown for the coverage.” This page lists “Underinsured Motorist Bodily Injury” with

liability limits of $100,000 per-person and $300,000 per-accident. Next to this, a

premium amount appears for each of five vehicles, indicating the Brookses pay five

UIM premiums for UIM coverage, one for each of the five vehicles. After the

Brookses settled with the Lawrence estate, Midwestern paid the Brookses $100,000,

declaring this per-person limit is the maximum amount for a single application of the

policy’s UIM coverage.

B. Procedure

In March 2013, Midwestern filed suit against the Brookses in federal court,

seeking a judicial declaration that its UIM coverage limits for multiple vehicles do not

stack to multiply the per-person limit. The Brookses moved to dismiss the federal

case, contending their state suit against the estate (which had already been settled, but

not dismissed from the state court’s docket) was a “pending, parallel state proceeding

encompass[ing] the same dispute at issue in” Midwestern’s federal case.

In May 2013, before the district court ruled on this motion, the Brookses

amended their state court complaint to add Midwestern as a defendant. Midwestern

removed that suit to federal court, asserting diversity jurisdiction—both Brookses are

Missouri citizens, and the parties all agree Midwestern is not. Midwestern contended

that, although the estate was a named defendant, the court could ignore its Missouri

citizenship and lack of consent to removal, because the settlement agreement between

the Brookses and the estate extinguished all claims against the estate and Lawrence’s

heirs, leaving the estate with no real interest in the lawsuit. Although the Brookses

contested the removal, the district court agreed with Midwestern, concluding that

when the estate is ignored, complete diversity exists and removal was proper. The

district court thereafter consolidated the two cases into the present action.

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Appellate Case: 14-2016 Page: 3 Date Filed: 03/02/2015 Entry ID: 4249262 
In this consolidated suit, Midwestern and the Brookses filed cross-motions for

summary judgment on the stacking issue. Granting summary judgment in

Midwestern’s favor, the district court determined the plain language of the policy

makes it “quite clear” intra-policy stacking is prohibited and the per-person limit for

any one accident is $100,000.

II. DISCUSSION

A. Diversity Jurisdiction and Removal

The Brookses’ initial argument rests on two facts: first, the estate, also a

defendant, did not consent to removal; second, both the Brookses and the estate, by

virtue of Lawrence’s citizenship, are citizens of Missouri for purposes of diversity, see

28 U.S.C. § 1332(c)(2) (deeming estates to have the same state citizenship as

decedents). The Brookses thus challenge removal and jurisdiction. See 28 U.S.C.

§§ 1332(a)(1) (requiring diversity of citizenship); 1441(a) (requiring federal courts to

have “original jurisdiction” for removal); 1446(b)(2)(A) (requiring all properly joined

and served defendants to “join in or consent to the removal of the action”).

Though we generally must look to all defendants in assessing diversity and

consent to removal, “the presence of nominal or formal or unnecessary parties has no

controlling significance for removal purposes,” Bradley v. Md. Cas. Co., 382 F.2d

415, 419 (8th Cir. 1967), and “may be ignored in determining whether diversity

jurisdiction exists,” Slater v. Republic-Vanguard Ins. Co., 650 F.3d 1132, 1134 (8th

Cir. 2011). In a classic enunciation of this rule, Justice Story wrote for the Supreme

Court: “This Court will not suffer its jurisdiction to be ousted by the mere joinder or

non-joinder of formal parties; but will rather proceed without them, and decide upon

the merits of the case between the parties, who have the real interests before it,

whenever it can be done without prejudice to the rights of others.” Wormley v.

Wormley, 21 U.S. (8 Wheat.) 421, 451 (1823) (emphasis added). A party therefore

“‘may be ignored’” for diversity and removal purposes if that party is not a “‘real

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Appellate Case: 14-2016 Page: 4 Date Filed: 03/02/2015 Entry ID: 4249262 
party in interest.’” Cascades Dev. of Minn., LLC v. Nat’l Specialty Ins., 675 F.3d

1095, 1098 (8th Cir. 2012) (quoting Iowa Pub. Serv. Co. v. Med. Bow Coal Co., 556

F.2d 400, 404 (8th Cir. 1977)).

The Brookses maintain “the Estate . . . was not a nominal party . . . because the

[UIM endorsement] required The Estate’s presence in the litigation.” The Brookses’

only basis for this assertion is policy language requiring them to “exhaust[]” the

underinsured motorist’s liability coverage and prove they are “legally entitled” to

recover from the motorist. Neither policy condition demands the estate’s presence in

the lawsuit, nor would the requirement of such a procedural formality give the estate

any real interest in the dispute between the Brookses and Midwestern.

In Bradley, we addressed whether removal was proper despite the absence of

consent from two third-party defendants when the parties to the third-party action all

stipulated “as to the compromise and settlement of the third-party action.” Bradley,

382 F.2d at 419. As then-Judge Blackmun wrote for the panel, the third-party

defendants, “[f]or all practical purposes, . . . went out of the lawsuit when that

stipulation was executed.” Id. “Their interest in the suit from that point on was a

fragile one,” and were therefore ignored “for removal purposes.” Id.; see also R.C.

Wegman Constr. Co. v. Admiral Ins. Co., 629 F.3d 724, 726 (7th Cir. 2011) (“[A]

party isn’t permitted to destroy federal diversity jurisdiction by naming as a defendant

someone against whom he does not seek relief.” (citing Walden v. Skinner, 101 U.S.

577, 589 (1879))). The situation here is precisely the same: through the settlement,

the Brookses waived all their claims against the estate and its insurer. We agree with

the district court that “once the claims against [the estate] were settled the continuation

of the suit against [it] was a nullity; the addition of Midwestern Indemnity was the

equivalent of taking a new dispute against a new party and placing it in the shell that

was the original suit against [the estate].” Thus, diversity jurisdiction exists and

removal was proper.

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Appellate Case: 14-2016 Page: 5 Date Filed: 03/02/2015 Entry ID: 4249262 
B. Stacking

The Brookses argue the district court erred in reading their policy to limit their

UIM coverage to $100,000, and the Brookses assert they should be permitted to stack

the UIM coverage for their five covered vehicles. We review the district court’s grant

of summary judgment de novo, viewing the record in the light most favorable to the

non-moving party—here, the Brookses. See Moody v. Vozel, 771 F.3d 1093, 1096

(8th Cir. 2014). “The parties and the district court agree Missouri law applies to this

diversity action.” Crain v. State Farm Mut. Auto. Ins. Co., 744 F.3d 582, 583 n.1 (8th

Cir. 2014).

As a matter of public policy, Missouri courts have invalidated “attempts by

insurance companies to prohibit the stacking of uninsured motorist coverage.” Jordan

v. Safeco Ins. Co. of Ill., 741 F.3d 882, 884 (8th Cir. 2014) (emphasis added). But

“[b]ecause Missouri does not require UIM coverage, ‘the existence of the coverage

and its ability to be stacked are determined by the contract entered between the

insured and the insurer.’” Daughhetee v. State Farm Mut. Auto. Ins. Co., 743 F.3d

1128, 1131 (8th Cir. 2014) (quoting Rodriguez v. Gen. Accident Ins. Co. of Am., 808

S.W.2d 379, 383 (Mo. 1991) (en banc)). Consequently, “general rules of contract

construction apply,” and the “key” question is whether the policy unambiguously

prohibits stacking or “is reasonably open to different constructions” as to the

permissibility of stacking. Id. at 1131-32 (quotations omitted). If the former is true,

we must enforce the contract to prohibit stacking; if the latter is true, the policy is

ambiguous and we must construe the policy to permit stacking. See id. at 1132.

The starting point here is the UIM endorsement’s Limit of Liability provision,

which states:

A. The Limit Of Liability shown in the Schedule or in the Declarations

for each person for Underinsured Motorists Coverage is our maximum

limit of liability for all damages, including damages for care, loss of

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Appellate Case: 14-2016 Page: 6 Date Filed: 03/02/2015 Entry ID: 4249262 
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 Schedule or in the Declarations for each

accident for Underinsured Motorists Coverage 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 number of:

1. “Insureds”;

2. Claims made;

3. Vehicles or premiums shown in the Schedule or in the

Declarations; or

4. Vehicles involved in the accident.

(Emphasis added). This language emphasizes that the $100,000 per-person limit

shown on the declarations page is the most Midwestern covers for “‘bodily injury’

sustained by any one person in any one accident.” (Emphasis added). In plain terms,

the provision prohibits any attempt to stack these limits “regardless of the number of

. . . Vehicles or premiums shown . . . in the Declarations.”

Although this anti-stacking limitation is unambiguous, we have also said that

“[i]f a policy has ‘clauses that claim to prohibit stacking and also contain[s] clauses

that appear to authorize stacking,’ coverage is ambiguous and must be resolved in

favor of the insured.” Daughhetee, 743 F.3d at 1132 (emphasis added) (quoting

Jordan, 741 F.3d at 885). We understand the Brookses to argue that elements of the

UIM endorsement’s declarations page “appear to authorize stacking,” id., making the

policy ambiguous on this point.

The declarations page reads, “Insurance is provided where a premium entry is

shown for the coverage.” Because a premium entry is shown for each of five vehicles,

the Brookses maintain they were promised a stack of five UIM coverage limits for any

single accident. In their view, the payment of an additional premium for each

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Appellate Case: 14-2016 Page: 7 Date Filed: 03/02/2015 Entry ID: 4249262 
additional vehicle must signify an increase in the coverage limit; otherwise, the

Brookses believe, Midwestern is improperly charging them more in premiums despite

providing no more coverage. As part of this argument, the Brookses contend that

injuries to Brooks herself would also receive no broader coverage by adding more

“covered autos”—she would be covered in whatever car she drives because UIM

“‘coverage is floating, personal accident insurance that follows the insured individual

wherever [she] goes rather than insurance on a particular vehicle.’” (Quoting Fanning

v. Progressive Nw. Ins. Co., 412 S.W.3d 360, 365 (Mo. Ct. App. 2013)).

In Missouri, “[i]nsurance 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.” Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 163 (Mo.

2007) (en banc). “The declarations state the policy’s essential terms in an abbreviated

form, and when the policy is read as a whole, it is clear that a reader must look

elsewhere to determine the scope of coverage.” Floyd-Tunnell v. Shelter Mut. Ins.

Co., 439 S.W.3d 215, 221 (Mo. 2014) (en banc). “The ‘declarations’ are introductory

only and subject to refinement and definition in the body of the policy.”4

 Peters v.

Farmers Ins. Co., 726 S.W.2d 749, 751 (Mo. 1987) (en banc).

In this case, the declarations page only indicates the vehicles for which

“[i]nsurance is provided,” giving readers no hint whether the indicated limits can be

combined for a single accident. This is not enough, in view of the clear Limit of

Liability provision, to create an ambiguity. The plain language of that anti-stacking

4

At points, the Brookses suggest that to limit UIM coverage to $100,000,

Midwestern would have had to include this limitation on the declarations page. But

Missouri Supreme Court precedent shows a reader cannot rely on a declarations page

to outline the precise scope of coverage. See, e.g., Floyd-Tunnell, 439 S.W.3d at 221. 

There is no requirement that a limitation or exclusion appear on the declarations page

absent policy language stating otherwise. See Naeger v. Farmers Ins. Co., 436 S.W.3d

654, 660 (Mo. Ct. App. 2014).

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Appellate Case: 14-2016 Page: 8 Date Filed: 03/02/2015 Entry ID: 4249262 
provision must be offset by another provision “appear[ing] to authorize stacking,”

Daughhetee, 743 F.3d at 1132 (emphasis added), not simply failing to prohibit it. In

Missouri, a policy is not ambiguous just because its broad statement of coverage is

later cabined by policy definitions or exclusions, see Floyd-Tunnell, 439 S.W.3d at

221, and that is all the Limit of Liability provision does here. Seeing nothing on the

declarations page which can be reasonably read to counter the Limit of Liability

provision’s anti-stacking mandate, we find no ambiguity.5

Nor is our conclusion altered by the Brookses’ proposition that their additional

premiums signify Midwestern is either overcharging them or implicitly promising a

higher coverage limit. Our research has revealed no Missouri case allowing stacking

solely because multiple premiums were paid. In fact, cases from the Missouri Court

of Appeals suggest clear policy language controls even in such situations. See, e.g.,

Allstate Ins. Co. v. Miller, 425 S.W.3d 146, 146 (Mo. Ct. App. 2014) (per curiam)

(“Miller argues that, because she paid two different premiums for underinsured

motorists coverage on two different vehicles in a single policy, she should be entitled

to recover up to the full limit of liability on each vehicle . . . . But because the policy

5

In the final pages of their brief, the Brookses compare the Other Insurance

clause and the facts of this case to those in Jordan, 741 F.3d at 884, and emphasize

that in Jordan, we applied the holding of Ritchie, 307 S.W.3d at 137-39, to read the

policy as permitting stacking. The factual similarities between Jordan and this case

do not imply the same conclusion where the legal issues and material facts are distinct. 

In Jordan, the parties agreed the policy’s Other Insurance clause would make the

policy ambiguous as to stacking and disagreed only as to whether the policy required

the insured to occupy her vehicle—a question not in dispute here. See Jordan, 741

F.3d at 885. To the extent the Brookses contend the Other Insurance clause creates

an ambiguity as to stacking, as in Ritchie, 307 S.W.3d at 138, the clause in the present

case is readily distinguishable. Unlike Ritchie, see id. at 137, the Other Insurance

clause here is expressly “[s]ubject to all other provisions of this policy, including”

specifically “the Limit of Liability provision” prohibiting stacking. With this express

limitation, the Other Insurance clause cannot reasonably be read to authorize stacking.

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Appellate Case: 14-2016 Page: 9 Date Filed: 03/02/2015 Entry ID: 4249262 
expressly and unambiguously disallows stacking, Miller’s claim is without merit.”);

Hall v. Allstate Ins. Co., 407 S.W.3d 603, 610 (Mo. Ct. App. 2012) (“We . . . must

evaluate policies as a whole, and read as a whole, the policy clearly, uniformly, and

unambiguously prohibits stacking of [UIM] coverages, regardless of the number of

cars insured or number of premiums paid.”).

Contrary to the Brookses’ assumptions, each premium does correspond with an

increase in coverage. First, although UIM coverage generally “follows the insured,”

Fanning, 412 S.W.3d at 365, the Brookses’ policy contains an owned vehicle

exclusion, which restricts coverage from “following” Brooks when she drives a

vehicle she owns but did not choose to cover with the UIM endorsement. The added

premiums thus correspond with more owned cars in which Brooks’s injuries are

covered. Second, in addition to covering the named insureds and their family

members, the UIM endorsement also covers bodily injury sustained by “[a]ny other

person ‘occupying’ ‘your covered auto.’” (Emphasis added). Payment for each

additional “covered auto” buys coverage by the UIM endorsement for non-named,

non-family passengers and drivers in that vehicle.

III. CONCLUSION

The Brookses’ UIM coverage in the Midwestern policy makes plain that

stacking is prohibited. We affirm the district court’s well-reasoned opinion and

judgment.

______________________________

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