Brazil v. Auto-Owners Insurance Company (Mutual)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MISSOURI

CENTRAL DIVISION

DUSTIN BRAZIL, Individually,

and as Next Friend of J.B.,

and

CONNIE WEYER,

Case No. 2:20-cv-4030-NKL

Plaintiffs/Counterclaim Defendants,

v.

AUTO-OWNERS INSURANCE CO.

(MUTUAL),

Defendant/Counterclaim Plaintiff.

ORDER

Auto-Owners Insurance Co. (Mutual) moves for summary judgment, and Plaintiffs cross-

move for summary judgment, on Plaintiffs’ claims for declaratory judgment against Auto-Owners

and on Auto-Owners’ counterclaim for declaratory judgment against Plaintiffs.

Each motion for summary judgment is granted in part and denied in part.

I. Uncontroverted Facts

A. The Vehicular Collision

On March 22, 2018, a vehicle driven by Amber Metcalf crossed the center lane of a road,

striking head-on a vehicle driven by Jessica Brazil. Ms. Brazil and her minor child Malachi were

killed. Ms. Brazil’s minor child J.B. was injured. Amber Metcalf also was killed in the accident.

B. The Insurance Policy

The parties agree that Amber Metcalf was uninsured at the time of the collision.

The automobile that Ms. Brazil was driving was covered by an Auto-Owners’ insurance

policy (the “Policy”) issued to named insured Advantage Marine. There is no dispute that Ms.

Brazil, Malachi, and J.B were occupancy insureds under the Policy. The dispute between the

parties concerns how much uninsured coverage the policy provides for the collision and those

injured in it.

The Policy’s Missouri Uninsured Motorist Coverage form states, in relevant part, as

follows:

(1) Occupying means being in or on an auto as a passenger or operator, or being

engaged in the immediate act of entering, boarding or alighting from an auto.

. . .

2. COVERAGE

a. We will pay compensatory damages, including but not limited to loss of

consortium, that any person is legally entitled to recover from the owner or

operator of an uninsured auto for bodily injury sustained while occupying an auto

that is covered by SECTION II –LIABILITY COVERAGE of the policy.

. . .

4. LIMIT OF INSURANCE

We will pay compensatory damages, including but not limited to loss of

consortium, for bodily injury up to the Limit of Insurance shown in the

Declarations for Uninsured Motorist Coverage as follows:

a. The limit shown for “each person” is the amount of coverage and the most we

will pay, subject to 4.b. below, for all compensatory damages, including but not

limited to loss of consortium, because of or arising out of bodily injury to one

person in any one occurrence.

b. The limit shown for “each occurrence” is the total amount of coverage and the

most we will pay, subject to 4.a. above, for all compensatory damages, including

but not limited to loss of consortium, because of or arising out of bodily injury to

two or more persons in any one occurrence.1

1 The Policy defines “Occurrence” as “an accident, including continuous or repeated exposure to

substantially the same generally harmful conditions.”

c. If you are an individual and the policy insures more than one of your autos for

Uninsured Motorist Coverage, our Limit of Insurance for only you or your

relatives is as follows:2

(1) The Limit of Insurance for each person shall be the sum of the “each person”

limits shown in the Declarations for each such auto.

(2) The Limit of Insurance for each occurrence shall be the sum of the “each

occurrence” limits shown in the Declarations for each such auto.

d. Except as provided in 4.a., 4.b. and 4.c. above, the Limit of Insurance is not

increased because of the number of:

(1) Autos shown or premiums charged in the Declarations;

(2) Claims made or suits brought;

(3) Persons injured; or

(4) Autos involved in the occurrence.

The Declarations of the Policy states that the “Uninsured Motorist” limits are “$1,000,000 each

person / $1,000,000 each occurrence.”

II. Summary Judgment Standard

“Summary judgment is appropriate when there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law.” Anderson v. Durham D & M, LLC, 606

F.3d 513, 518 (8th Cir. 2010) (citation omitted); Fed. R. Civ. P. 56(a). The Court must enter

summary judgment “against a party who fails to make a showing sufficient to establish the

existence of an element essential to that party’s case, and on which that party will bear the burden

of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “Summary judgment is

proper if, after viewing the evidence and drawing all reasonable inferences in the light most

favorable to the nonmovant, no genuine issue of material fact exists and the movant is entitled to

2 The Policy defines “You” or “your” as “the named insured shown in the Declarations and if an

individual, your spouse who resides in the same household.”

judgment as a matter of law.” Higgins v. Union Pac. R.R. Co., 931 F.3d 664, 669 (8th Cir. 2019)

(quotation marks and citation omitted).

III. Discussion

The parties’ disputes revolve around two questions of policy interpretation. The first

question is whether the uninsured motorist “each person” and “each occurrence” provisions are

ambiguous. The second question is whether the policy is ambiguous as to the amount of the

uninsured motorist limit—as Auto Owners puts it, whether “stacking” is permitted. The Court

considers these issues in turn.

A. Whether the Uninsured Motorist “Each Person” and “Each Occurrence”

Provisions Are Ambiguous

The Policy’s Missouri Uninsured Motorist Coverage form provides, in relevant part, as

follows:

4. LIMIT OF INSURANCE

We will pay compensatory damages, including but not limited to loss of

consortium, for bodily injury up to the Limit of Insurance shown in the

Declarations for Uninsured Motorist Coverage as follows:

a. The limit shown for “each person” is the amount of coverage and the

most we will pay, subject to 4.b. below, for all compensatory damages,

including but not limited to loss of consortium, because of or arising out

of bodily injury to one person in any one occurrence.

b. The limit shown for “each occurrence” is the total amount of coverage

and the most we will pay, subject to 4.a. above, for all compensatory

damages, including but not limited to loss of consortium, because of or

arising out of bodily injury to two or more persons in any one occurrence.

Both the “each person” and “each occurrence” provisions cap recovery at $1 million.

Plaintiffs argue that the “each person” and “each occurrence” limits are ambiguous because

each is “subject to” the other, and therefore it is not clear where “the music stops . . . .” Doc. 24,

p. 15. Defendant argues that the “each person” and “each occurrence” limits are not ambiguous,

that the “subject to” language merely reflects that the provisions “are indeed ‘affected by or

possibly affected by’ one another . . . .” Doc. 20, p. 15.

Interpretation of an insurance policy is a question of law. McCormack Baron Mgt.

Services, Inc. v. Am. Guarantee & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. banc 1999). “In

construing the terms of an insurance policy, th[e] Court applies the meaning which would be

attached by an ordinary person of average understanding if purchasing insurance, and resolves

ambiguities in favor of the insured.” Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo.

banc 2007) (quotation marks and citation omitted); see also Wolfe Auto. Grp., LLC v. Universal

Underwriters Ins. Co., 808 F.3d 729, 731–32 (8th Cir. 2015) (“Absent ambiguity, Missouri courts

will interpret the language of a policy according to its plain meaning as understood by an ordinary

insured of average understanding.”) (citing Piatt v. Ind. Lumbermen’s Mut. Ins. Co., 461 S.W.3d

788, 792 (Mo. banc 2015)). As with any contract,3 an insurance policy’s terms “are read as a

whole to determine the intention of the parties and are given their plain, ordinary, and usual

meaning.” Dunn Indus. Grp., Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428 (Mo. banc 2003).

“Language is ambiguous if it is reasonably open to different constructions.” Seeck, 212

S.W.3d at 132. For example, if “an . . . 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.” Chamness v. Am. Family Mut.

Ins. Co., 226 S.W.3d 199, 204 (Mo. Ct. App. 2007).

Here, 4.a, the “each person” provision, provides that the most Auto-Owners will pay for

damages for bodily injury to one person in any occurrence is $1 million, subject to 4.b. 4.b, the

3 See Capitol Indem. Corp. v. Callis, 963 S.W.2d 247, 249 (Mo. App. W.D. 1997) (noting that the

rules of contract construction apply to insurance policies).

“each occurrence” provision, provides that the most Auto-Owners will pay for damages for bodily

injury to two or more persons in any occurrence is $1 million, subject to 4.a.

Auto-Owners argues that the “subject to” language means only that the two provisions

should be read together. Doc. 27, p. 10. Auto-Owners argues that “one addresses the available

coverage available for any one claimant, and the other addresses the total available coverage for

any one accident.” Doc. 27, p. 9. Auto-Owners further argues that, “[w]hen an accident involves

multiple claimants, each claimant may only collect up to the ‘per person’ limit, even if the ‘per

occurrence’ limit makes the total coverage available for the accident higher than the ‘per person’

limit. Conversely, the ‘per occurrence’ limit sets the total amount of coverage available for any

one accident, even when there are multiple claimants whose separate ‘each person’ limits would

total more than the ‘each occurrence’ limit, if not otherwise limited by the terms of the ‘per

occurrence’ limit.” Id.; see also Doc. 20, p. 16 (“[E]ven in cases in which a policy’s ‘each

occurrence’ limit provides coverage in excess of the ‘each person’ UM limit, each individual

claimant is still subject to the ‘each person’ limit, and cannot recover more than the per person

limit.”). In other words, Auto-Owners argues that the Limit of Insurance provisions merely mean

that, “[i]n cases involving more than one claimant, . . . one person cannot recover more than the

‘each person’ limit, despite the ‘each occurrence’ limit, and multiple persons cannot recover more

than the “each occurrence” limit despite the ‘each person’ limit.” Doc. 27, p. 13.

The first problem with this argument is that it treats the terms “subject to” as synonymous

with the word “despite,” when, in fact, “subject to” and “despite” have opposing meanings. The

term “subject to” conveys dependence (see Merriam-Webster.com Dictionary, Merriam-Webster,

https://www.merriam-webster.com/dictionary/subject%20to (last accessed July 2, 2020) (defining

“subject to” as, inter alia, “affected by or possibly affected by (something)” and “dependent on

something else to happen or be true”); American Heritage Dictionary of the English Language (5th

Ed. 2020) (defining “subject” as, inter alia, “Contingent or dependent: a vacation subject to

changing weather”).4 In contrast, the term “despite” conveys independence of other language.

See Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-

webster.com/dictionary/despite (last accessed July 2, 2020) (defining “despite” as “[i]n spite of;

notwithstanding”).

A more fundamental problem with Auto-Owners’ argument in this case stems from the fact

that the limit for “each person” and for “each occurrence” is the same, $1 million. See Long v.

Shelter Ins. Companies, 351 S.W.3d 692, 700 (Mo. App. W.D. 2011) (holding that terms must be

interpreted in the context of the policy as a whole, rather than in isolation). If Auto-Owners

intended to cap recovery at $1 million for any one occurrence, regardless of how many people

were injured, then the separate “each person” and “each occurrence” provisions would not have

been necessary. In other words, under Auto-Owners’ interpretation of the Policy, the limit of

insurance for any occurrence is $1 million, regardless of how many people are injured. Under

such an interpretation, the “each person” provision is superfluous: regardless of whether one or

more persons are injured, the insurance coverage is capped at $1 million. Yet, Missouri law

requires an insurance policy to “be read to give effect to all its provisions so as to avoid rendering

any provision superfluous.” Seaboldt v. Universal Underwriters Ins. Co., 384 F. App’x 536, 539

(8th Cir. 2010); see State ex rel. Blue Springs Sch. Dist. v. Grate, 576 S.W.3d 262, 271 (Mo. Ct.

App. 2019) (“We aim to give a reasonable meaning to every provision of an insurance policy and

to avoid an interpretation that renders some provisions trivial or superfluous.”) (quotation marks

4 The Court applies to the phrase “subject to” “the meaning [that] would be attached by an ordinary

person of average understanding if purchasing insurance.” Jones v. Mid–Century Ins. Co., 287

S.W.3d 687, 690 (Mo. banc 2009).

and citation omitted); see also Dunn Indus. Grp., 112 S.W.3d at 428 (“A construction that

attributes a reasonable meaning to all the provisions of the agreement is preferred to one that leaves

some of the provisions without function or sense.”). Thus, Auto-Owners’ interpretation, which

would in effect do away with the each-person provision, flies in the face of the basic rules of

contract construction.5

Notably, in the cases that Auto-Owners cites that discuss “subject to” language in limits of

insurance provisions in a policy, the “each occurrence” limit was higher than the “each person”

limit. See American Family Mut. Ins. Co. v. Gardner, 957 S.W.2d 367, 368 (Mo. App. E.D. 1997)

(considering “$100,000 per person and $300,000 per occurrence liability limitation provision[s]”);

Ward v. American Family Ins. Co., 783 S.W.2d 921 (Mo. App. E.D. 1989) (“[T]he Wards were

protected by coverage of $100,000 per person and $200,000 per accident.”); see also Brown v.

Donham, 900 S.W.2d 630, 633-34 (Mo. banc 1995) (discussing “$100,000 per person limit” and

$200,000 “per occurrence limit”). Those cases thus are not instructive here.

Here, the “each occurrence” provision could be reasonably understood by a lay person as

capping the uninsured motorist coverage at $1 million, except as provided in 4.a. See Policy,

Uninsured Motorist form, 4.b. (“The limit shown for ‘each occurrence’ is the total amount of

coverage and the most we will pay, subject to 4.a. above, for all compensatory damages, including

5 The fact that the “each person” and “each occurrence” limits both are $1 million also logically

precludes Auto-Owners’ argument that the “subject to” language comes into play when “the ‘per

occurrence’ limit makes the total coverage available for the accident higher than the ‘per person’

limit”—such is not a possibility under Auto-Owners’ proffered interpretation of the Policy.

Tellingly, Auto-Owners’ acknowledges that, “[h]ad the Policy stated a $1 million per person limit

and a $2 million per occurrence limit, Plaintiffs would have no basis for advancing any ambiguity

argument. Doc. 20, p. 13. Although Auto-Owners argues that “[t]he fact that the two limits are

the same does not compel a contrary conclusion,” it provides no legal or logical support for this

assertion.

but not limited to loss of consortium, because of or arising out of bodily injury to two or more

persons in any one occurrence.”) 4.a, in turn, sets a limit for “each person” at $1 million. A

reasonable person could read 4.a. as providing a $1 million limit for bodily injury to any “one

person in any one occurrence”—that is, to “each person” injured, and not just a single person. See

Policy, Uninsured Motorist form, 4.a. (“The limit shown for “each person” is the amount of

coverage and the most we will pay, subject to 4.b. below, for all compensatory damages, including

but not limited to loss of consortium, because of or arising out of bodily injury to one person in

any one occurrence.”). But 4.a. is subject to 4.b.

The provisions can reasonably be read as contradictory, and yet, each of the provisions

purports to be subordinate to the other. Because it is not clear which of the two “subject to”

provisions trumps the other, the provisions are at a minimum ambiguous. See Gulf Ins. Co. v.

Noble Broadcast, 936 S.W.2d 810,814 (Mo banc. 1997) (“An ambiguity exists when there is

duplicity, indistinctness, or uncertainty in the meaning of the language in the policy.”); see also

Niswonger v. Farm Bureau Town & Country Ins. Co. of Missouri, 992 S.W.2d 308, 318 (Mo. Ct.

App. 1999) (holding that, where there is “misreference and confusion, caused by the insurer’s own

drafting,” the “muddled policy language . . . should be deemed ambiguous because it ‘could

confuse the average lay person’ and leave that person with a misleading impression as to

coverage”) Multiple courts have held circular references and definitions ambiguous. See, e.g.,

Weider Health & Fitness v. AusTex Oil Ltd., No. 17--2089, 2019 WL 1324049, at *2 (S.D.N.Y.

Mar. 25, 2019) (“[T]he crossreferences in these two provisions are circular and ambiguous. [E]ach

provision purports to be more expansive than the other, by wholly including the other.” (quotation

marks and citation omitted)); Coats v. Reliance Standard Life Ins. Co., No. 16-0233, 2019 WL

2435677, at *5 (N.D. Okla. June 11, 2019), appeal dismissed (Sept. 3, 2019) (“[T]he circularity of

the second sentence renders the definition of ‘Covered Monthly Earnings’ ambiguous as to what

‘special compensation’ is excluded.”); Brewington v. State Farm Mut. Auto. Ins. Co., 45 F. Supp.

3d 1215, 1219 (D. Nev. 2014) (“Such circular definitions are inherently ambiguous as they require

additional information outside the definition to actually define the term being defined.”); Sewell v.

Sheet Metal Workers’ Nat’l Pension Fund, No. 16-0117, 2017 WL 7038173, at *19 (D. Neb. Aug.

9, 2017) (“The court finds the terms and definitions in the 1990 Plan are circular, inconsistent, and

ambiguous.”); Barnard v. Advance Pension Plan, No. 06-6265, 2008 WL 4838844, at *7 (D. Or.

Nov. 4, 2008) (“At best, the circularly defined plan term[s] . . . are ambiguous, so that Barnard’s

reasonable interpretations prevail.”); Ostrowiecki v. Aggressor Fleet, Ltd., No. 07-6598, 2008 WL

3914901, at *1 n.3 (E.D. La. Aug. 19, 2008) (“Given the circularity of the Bodily Injury definition,

the Court concludes that this definition is ambiguous. Such ambiguity is to be construed against

the drafter . . . and in favor of coverage.”). A lay person trying to make sense of the contradictory

but mutually subordinate provisions reasonably could conclude that the $1 million each-

occurrence limit gives way to the $1 million each-person limits when more than one person is

injured.

Auto-Owners also seems to argue that interpreting the Policy as providing more than $1

million in coverage for one occurrence “ignores that the Policy’s UM limits are clearly stated on

the Policy’s Declarations to be “$1,000,000/each person/$1,000,000 each occurrence.” However,

under Missouri law, “[w]hen evaluating [an insurance] policy as a whole, [courts] must also follow

the Supreme Court’s repeated dictate that declarations pages ‘do not grant any coverage’ but ‘are

introductory only and subject to refinement and definition in the body of the policy.’” Geico Cas.

Co. v. Clampitt, 521 S.W.3d 290, 293 (Mo. Ct. App. 2017) (citing, inter alia, Floyd-Tunnell v.

Shelter Mut. Ins. Co., 439 S.W.3d 215, 221 (Mo. 2014)); Floyd-Tunnell, 439 S.W. at 221 (“At the

outset, the policies’ declarations pages do not grant any coverage. 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.”). Insofar as there is an

inconsistency between the Policy and the Declarations, the Policy controls.

Because the Limit of Insurance provisions are ambiguous, the Court must interpret them

against Auto-Owners, that is, as providing a $1 million limit per person, as stated in 4.a., despite

the circular “subject to” language in both 4.a. and 4.b. See Ware v. Geico Gen. Ins. Co., 84 S.W.3d

99, 102 (Mo. App. E.D. 2002) (noting that “where a term of an insurance policy is ambiguous, it

is construed against the insurer”). “[I]nsurance is designed to furnish, not defeat, protection to the

insured and the insurance company is in the best position to remove ambiguity from a contract.”

Id. Here, Auto-Owners could easily have removed the ambiguity from the Policy. Its failure to

do so requires declaratory judgment on this point in Plaintiffs’ favor.

B. Whether the Uninsured Motorist Limit Is Ambiguous

Plaintiffs separately argue that the Policy is ambiguous as to the amount of the uninsured

limit available to them. Plaintiffs’ argument is based on 4.d., the uninsured motorist “Limit of

Insurance,” which states:

d. Except as provided in 4.a., 4.b., and 4.c. above, the Limit of Insurance is not

increased because of the number of:

(1) Autos shown or premiums charged in the Declarations;

(2) Claims made or suits brought;

(3) Persons injured; or

(4) Autos involved in the occurrence.

Plaintiffs argue that from 4.d., “an ordinary person of average understanding could reasonably

conclude paragraphs 4.a. and 4.b. each provide that the uninsured ‘each person’ limit of insurance

may be increased because of the number of autos shown or premiums charged in the Declarations,

claims made or suits brought, persons injured, or autos involved in the occurrence.”6 Plaintiffs

acknowledge that there is no language in 4.a. or 4.b. that suggests that the limit of insurance may

be increased because of the number of autos shown, premiums charged in the Declarations, claims

made or suits brought, or autos involved in the occurrence. Plaintiffs merely argue that the fact

that 4.d. indicates that 4.a. and 4.b. provide for exceptions to the anti-stacking provision, and 4.a.

and 4.b. do not provide for those enumerated exceptions, establishes an ambiguity that requires

the Court to permit stacking.

As discussed above, 4.a.sets a $1 million per-person limit and 4.b. sets a $1 million per

occurrence limit—and each provision purports to be “subject to” the other. A reasonable reading

of 4.d. is that it clarifies that, where multiple persons are injured, the Limit of Insurance may be

increased as set forth in 4.a.—that is, up to $1 million per person—which further supports the

Court’s finding above that 4.a. must be construed as providing a $1 million limit per person,

regardless of 4.b.’s arguably subordinate per-occurrence limit.

However, neither 4.a. nor 4.b. provides any exception for “(1) Autos shown or premiums

charged in the Declarations; (2) Claims made or suits brought; . . . or (4) Autos involved in the

occurrence.” In other words, as Plaintiffs acknowledged at oral argument, there is no textual

support for Plaintiff’s argument that 4.d.’s reference to 4.a. and 4.b. suggests that the Limit of

Insurance might be increased for autos shown, premiums charged, claims made or suits brought,

or autos involved in the occurrence.

6 There is no dispute that 4.c. provides for increased limits in certain situations but is not applicable

here.

Plaintiffs acknowledge that Missouri law does not require stacking of uninsured motorist

coverage for occupancy insureds. Doc. 24, p. 19 (“Although occupancy insureds are not entitled

to stack or aggregate uninsured coverage, there is no Missouri law or public policy that prevents

an insurer from selling uninsured coverage that allows stacking or aggregation by occupancy

insureds.”). Without language in the Policy affirmatively permitting stacking of uninsured

motorist coverage for occupancy insureds, Plaintiffs cannot establish an entitlement to stack the

uninsured coverage. Because the Policy does not expressly or by implication provide for stacking

under the circumstances presented in this case, Plaintiffs are not entitled to an increased Limit of

Insurance because of the premiums charged or the number of autos shown or involved in the

occurrence, claims made, or suits brought.

IV. Conclusion

For the foregoing reasons, Defendant’s motion for summary judgment (Doc. 19) is granted

in part and denied in part, and Plaintiffs’ cross-motion for summary judgment (Doc. 23) is granted

in part and denied in part. The Court declares that the Policy is ambiguous as to whether the “each

person” or “each occurrence” limit applies to uninsured motorist coverage, and therefore the Policy

must be construed as providing up to $1 million in coverage for the death of Jessica Brazil, up to

$1 million in coverage for the death of Malachi Brazil, and up to $1 million in coverage for bodily

injuries to J.B, despite any apparently contradictory language in the “each occurrence” provision

(4.b.). The Court further declares that the Policy does not provide for increased uninsured motorist

coverage for occupancy insureds based on the premiums charged or the number of autos shown or

involved in the occurrence, claims made, or suits brought.

s/ Nanette K. Laughrey

NANETTE K. LAUGHREY

United States District Judge

Dated: July 23, 2020

Jefferson City, Missouri