Opinion ID: 2193425
Heading Depth: 2
Heading Rank: 2

Heading: Ambiguity of the Geico Policy.

Text: The key issue before the Court is whether the Geico policy is ambiguous. An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language in the policy. Language is ambiguous if it is reasonably open to different constructions. Gulf Ins. Co. v. Noble Broadcast, 936 S.W.2d 810, 814 (Mo. banc 1997). Absent an ambiguity, an insurance policy must be enforced according to its terms. Rodriguez v. General Accident Ins. Co., 808 S.W.2d 379, 382 (Mo. banc 1991). If, however, policy language is ambiguous, it must be construed against the insurer. Gulf Ins. Co., 936 S.W.2d at 814. The excess or other insurance clause that Ms. Seeck argues provides coverage declares, in pertinent part: 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. This provision expressly states that the Geico policy provides excess coverage over any other insurance available to the insured and that it is excess to any primary coverage provided by insurance that applies to the occupied motor vehicle. Ms. Seeck recovered $50,000 from Farmers under the tortfeasor's insurance policy covering the occupied motor vehicle. She now makes a claim on Geico to provide excess coverage to this primary insurance. This Court agrees that an ordinary person of average understanding, McCormack Baron, 989 S.W.2d at 171, would interpret the excess insurance clause to mean that since Ms. Seeck has obtained recovery under the primary Farmers insurance policy applicable to the occupied vehicle but has additional damages, she is entitled to coverage under the excess insurance clause of her own Geico policy. Geico argues that this Court should not reach this issue, but rather should hold that the tortfeasor's vehicle does not come within the definition of underinsured motor vehicle in the Geico policy, which defines an underinsured vehicle as one whose limit for bodily injury liability is less than the limit of liability for this [the Geico] coverage. Similarly, Geico argues, there should be no coverage because the policy's limit of liability clause provides that recovery under the policy will be reduced by the amounts paid by insurance carried by the party at fault for the accident. [2] Therefore, as both the Farmers and the Geico policy provided $50,000 in insurance coverage, Geico argues, its underinsured motorist coverage never came into effect, the limits of liability provision reduced coverage to nothing, and this Court should not consider the meaning of the excess insurance clause. Geico's argument is inconsistent with well-settled Missouri law requiring a court not to interpret policy provisions in isolation but rather to evaluate a policy as a whole. See, e.g., Central Sur. & Ins. Corp. v. New Amsterdam Cas. Co., 359 Mo. 430, 222 S.W.2d 76, 78 (1949). As this Court held in Lutsky v. Blue Cross Hosp. Serv., Inc., 695 S.W.2d 870, 875 (Mo. banc 1985), [i]f a contract promises something at one point and takes it away at another, there is an ambiguity. Ware v. Geico General Ins. Co., 84 S.W.3d 99, 102-03 (Mo.App. E.D.2002), interpreted the meaning of a Geico policy that is identical in all material respects to the policy in this case. Ware evaluated the excess or other insurance clause, the limit of liability, and the definition of underinsured motor vehicle and concluded that [a] reasonable layperson in the position of Appellants may have understood the `Other Insurance' provision to provide coverage over and above that furnished by the tortfeasor's insurance. Ware, 84 S.W.3d at 102-03. This compelled the inescapable conclusion that reading the policy as a whole creates an ambiguity. Id. at 103. Ware is consistent with the many other court of appeals cases holding that conflicts between underinsured motorist policy limits, policy definitions, and the provision of excess coverage in an excess or other insurance clause renders an insurance policy ambiguous. See Goza v. Hartford Underwriters Ins. Co., 972 S.W.2d 371, 374 (Mo.App. E.D.1998); Jackson v. Safeco Ins. Co., 949 S.W.2d 130, 135-36 (Mo.App. S.D.1997); Krenski v. Aubuchon, 841 S.W.2d 721, 729-31 (Mo.App. E.D. 1992); Zemelman v. Equity Mut. Ins. Co., 935 S.W.2d 673 (Mo.App. W.D.1996). As the court of appeals succinctly stated in Zemelman : Where there is an excess or other insurance clause that provides the underinsured coverage is excess over all other collectible insurance at the time of the accident, a court may find that language is ambiguous when read with the limit of liability or the definition of underinsured motorist coverage if the other insurance clause may reasonably be understood to provide coverage over and above that collected from the tortfeasor. 935 S.W.2d at 677-78. This is precisely the case here. Geico urges that all of these court of appeals cases conflict with Rodriguez v. General Accident Ins. Co., 808 S.W.2d 379, 382 (Mo. banc 1991), in which this Court held that similar definitional and policy limits clauses unambiguously did not provide coverage. But, as Zemelman noted, in Rodriguez , only the underinsured motor vehicle definition and the limit of liability language were held unambiguous and the court did not address the issue of an excess insurance clause. Zemelman, 935 S.W.2d at 678. Rodriguez , therefore, is not determinative here, for Ms. Seeck's policy also contained the excess insurance clause set out above, and that clause, too, must be construed in determining whether the policy would be interpreted by a person of average understanding to provide coverage. It is this third clause, the excess or other insurance provision, that renders the policy ambiguous. Zemelman, 935 S.W.2d at 678 (where this third clause exists and is raised as ambiguous . . . an ambiguity arises in the `Other Insurance' clause). This Court reaffirms the principles set out in Ware , Zemelman , and the other cases cited. Where, 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. [3]