A light at the end of the Tunnell? The parameters of uninsured motorist coverage in wrongful death cases: Floyd-Tunnell v. Shelter Mutual Insurance Co.

• Author: Wittrig, Edward

1. INTRODUCTION

   From its inception in 1967, the Missouri Uninsured Motorist statute (1) has prompted continual and substantial litigation in an attempt for both insurers and their insureds to determine the statute's proper application and scope." At its core, the statute states that any automobile liability policy must contain a provision that extends a minimum amount of coverage to the insured in the event of injuries resulting from acts by uninsured motorists. (3) Thus, the statute demands that automobile liability policies protect an insured when he or she sustains certain damages that were caused by a legally responsible, yet uninsured, motorist. (4) Beyond demanding uninsured motorist ("UM") coverage in each automobile liability policy, however, the UM statute is largely silent on the exact nature of the requirements of the mandated UM coverage, permissible provisions, allowable exclusions, and, in general, the intended scope of UM coverage in the respective policies. (5)

   As a result, the implementation, application, and interpretation of this important piece of legislation has been left largely to the providence of the Missouri judicial system (6) When faced with litigation surrounding the UM statute, Missouri courts have often broadly interpreted the statute, (7) extending its coverage to a large class of insureds as well as increasing the maximum amount of recovery possible. (8) Additionally, insurers have often struggled to obtain favorable decisions in Missouri courts, especially in cases appealed to the Supreme Court of Missouri, (9) and have failed to establish a concrete boundary that limits the scope and extent of UM coverage. Despite this tendency to define the coverage required by the UM statute broadly, some Missouri courts have imposed limits on the reach of the statute."' In this murky atmosphere regarding the UM statute, the Supreme Court of Missouri decided Floyd-Tunnell v. Shelter Mutual Insurance Co."

   Decisions, such as Floyd-Tunnell, that interpret UM coverage are becoming increasingly important as the cost of injuries (12) in automobile accidents, as well as the population of uninsured drivers, increase. (13) Because uninsured drivers comprise a significant portion of the driving pool in each state, (14) the issue of who qualifies as an insured in UM provisions can often determine whether a claimant is actually able to recover any damages for the injuries sustained in a car accident for which the claimant is not at fault. Judicial decisions that act to extend or limit the application of a policy's UM coverage also have real consequences beyond determining the extent, if any, of possible recovery for individual claimants, as these decisions determine the future costs of premiums as well as future policy language and provisions across the state. After reviewing the relevant case law surrounding the UM statute, this Note will examine the greater ramifications of the Supreme Court of Missouri's decision to limit UM coverage in wrongful death cases to the damages sustained by the insured decedent, rather than for injuries that a coinsured personally endured.

2. FACTS AND HOLDING

   The instant case was the product of a car accident that occurred when a vehicle driven by an uninsured motorist negligently crossed the centerline of Missouri State Highway 38 in Dallas County and struck a Chevrolet Cavalier that was driven by Jerry Floyd. (15) As a result of the head-on collision, Mr. Floyd sustained substantial injuries and was pronounced dead at the scene. (16) Mr. Floyd and his wife, Doris Floyd, had purchased three separate automobile insurance policies from Shelter Mutual Insurance Company ("Shelter") prior to the accident. (17) One of the policies was issued for the Chevrolet Cavalier that was involved in the accident, while the other two policies insured the Floyd's Chevrolet Silverado and Toyota Camry, respectively. (18)

   As required by Missouri law, (19) each of the Floyds' insurance policies contained a provision that allowed coverage for accidents involving uninsured motorists. (20) Each of these respective policies contained the same language and identical provisions regarding UM coverage. Specifically, each of the policies stated that in a collision where an uninsured motor vehicle is legally responsible for the accident and liable for damages sustained by the insured, the insurance company "will pay the uncompensated damages; but this agreement is subject to all conditions, exclusions, and limitations of [its] liability." (21)

   Additionally, each policy in its declarations page stipulated that UM coverage was limited to $100,000 per person. (22) Finally, the policies contained an "owned-vehicle" exclusion. (23) This exclusion capped the insurance company's maximum liability under any individual policy at $25,000 (24) in the event that the insured was injured while driving or operating a vehicle that was not covered by that specific policy, but was still owned by the insured at the time of the claim or covered under a different policy. (25)

   After the accident, Mrs. Floyd filed a claim seeking a total of $300,000, which included the $100,000 limit from each of the separate policies. (26)

   However, Shelter agreed to pay only $150,000 out of the requested amount, asserting that the "owned-vehicle" exclusion applied to the policies of the Floyds' Silverado and Camry. (27) Because Mr. Floyd was injured while driving an owned vehicle that was not covered under the Silverado and Camry policies, Shelter argued that the maximum recovery under the Silverado and Camry plans was $25,000 for each of these two policies. (28) Both parties agreed that Mrs. Floyd was owed the $100,000 limit for the policy that covered the Chevrolet Cavalier that Mr. Floyd was operating at the time of the accident because the amount of damages sustained as a result of Mr. Floyd's wrongful death exceeded the $100,000 policy limit. (29)

   In order to collect the outstanding $150,000 that she believed was due, Mrs. Floyd and her daughter, Rebecca Floyd-Tunnell, filed suit against Shelter, seeking monetary compensation for the outstanding claim, attorney's fees, and penalty fees against Shelter for vexatious refusal to pay. (30) Subsequently, both Mrs. Floyd and Shelter moved for summary judgment on the claim. (31) The Floyds contended that as a named insured, Mrs. Floyd suffered a distinct injury as a result of her husband's death. Therefore, the owned- vehicle exclusion would not apply to Mrs. Floyd, as she was not operating a vehicle at the time of the accident. (32) Further, Mrs. Floyd argued that the owned-vehicle exclusion in the policy itself was vague and ambiguous and should be construed against the insurance company. (33)

   In contrast, Shelter asserted that the exclusion was clearly applicable under the circumstances because Mr. Floyd was the insured that suffered the injury. As Mr. Floyd suffered the injury, the owned-vehicle exclusion applied for the policies for the Silverado and Camry. (34) Therefore, Mrs. Floyd was necessarily limited to recover $25,000 from each of those two policies and could only receive a total of $50,000 from these two insurance contracts.

   The trial court found in favor of Shelter, specifically finding that the "owned-vehicle" provision applied. (35) Plaintiffs appealed the trial court ruling. (36) The Missouri Court of Appeals for the Western District first determined that Mr. Floyd, and not his wife, was the insured that suffered compensable damages under the terms of the policy. (37) The court reached this determination by stating that even though a Missouri statute'* authorized Mrs. Floyd to bring the wrongful death action, Mr. Floyd was the person who suffered damages under the definitions supplied by the insurance contract when it was considered in its entirety. (39) Thus, Mr. Floyd, and not his wife, was the named insured for purposes of recovering damages, and the owned-vehicle exclusion would apply to the Silverado and Camry policies because Mr. Floyd was injured in an owned car not covered by those two policies. (40)

   Additionally, the court rejected the Floyds' claim that Mrs. Floyd was the damaged insured, stating that this exceeded the normal and reasonable expectations of the average insured entering into an insurance contract. (41) Finally, the court rejected the Floyds' claim that the policies were ambiguous due to the fact that the owned-vehicle exclusion deprived the insureds of some of the coverage granted to them on the declarations page, and that any restrictions to the limits delineated on the declarations page did not extend to the owned-vehicle exclusion. (42) The court disagreed with the Floyds' interpretation, determining that when the insurance contract is read as a whole and proper consideration is given to all the terms, "[T]he partial exclusion to UM coverage is not susceptible to different interpretations and does not cause the meaning of the policies to be uncertain." (43) Therefore, the Missouri Court of Appeals for the Western District affirmed the trial court's ruling on the summary judgment motion in favor of Shelter. (44) Mrs. Floyd and her daughter appealed this decision to the Supreme Court of Missouri. (45)

   The Supreme Court of Missouri affirmed the decision of the court of appeals, holding that Mrs. Floyd could not recover under the policies on her own behalf apart from the damages owed to her husband due to his injuries. (46) In so reasoning, the court stated that "[i]t would be unreasonable to interpret section 379.203 to require every automobile liability insurance policy to provide coverage for damages its insureds are legally entitled to recover for the wrongful death of another person." (47) Thus, the court held that UM coverage does not allow the insured to recover on his or her own behalf for damages sustained by the wrongful death of another co-insured, but rather limits recovery for the insured to damages collected as a...