Eastern District Agrees Declarations Do Not Promise Coverage: Geico Cas. Co. v. Clampitt

A favorite argument of claimants looking to expand or increase coverage under an insurance policy in recent years has gone something like this:  Yes, I realize there is a provision in the policy limiting coverage, but I don’t like that limitation and it isn’t spelled out in the declarations, so I think the declarations render the limiting provision ambiguous.  This argument met some success until the Supreme Court of Missouri explained its flaws in Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215 (Mo.banc 2014).  Still, the three districts of the Missouri Court of Appeals seemed slow to respond and follow that holding in Floyd-Tunnell, in many cases failing altogether to acknowledge the decision.  In a decision handed down by the Eastern District on June 20, 2017, however, the court recognized that failure and followed Floyd-Tunnell in an underinsured motorist coverage stacking case.

Aaron Clampitt had an auto policy with Geico Casualty Company with a limit of $50,000 stated in the declarations for UIM coverage.  The policy covered three vehicles owned by Clampitt.  After he was injured in an accident by a tortfeasor with minimum coverage, Geico paid the $50,000 limit.  Clampitt apparently was not satisfied, however, and sought to stack UIM coverage under the Geico policy for each of the three covered vehicles for a total of $150,000 (or $100,000 more than Geico had already paid).  Interestingly, Clampitt conceded the policy’s anti-stacking provisions were themselves unambiguous in light of the oft-cited case of Rodriguez v. General Accid. Ins. Co. of Am., 808 S.W.2d 379 (Mo.banc 1991).  Nonetheless, Clampitt pointed to the fact that the policy’s declarations listed separate premiums for UIM coverage for each of the three covered vehicles.  He argued that when the anti-stacking provisions “are read in conjunction with the declarations page an ambiguity arises.  Specifically, he assert[ed] that because the declarations page show[ed] that he paid a separate premium[] for UIM coverage on each of his three vehicles, the declarations page ‘clearly provides’ that the UIM coverages can be stacked.  He claim[ed] the declarations page promise[d] three UIM coverages and then the anti-stacking provisions [took] two of those coverages away.”  The court disagreed, and it apparently was not a close call.

Citing the Floyd-Tunnel opinion and another Supreme Court decision relying on it, the court noted, “When evaluating the policy as a whole, we 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.  A declarations page states 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.  Following this precedent [referring to Yager v. Shelter Gen. Ins. Co., 460 S.W.3d 68 (Mo.App.2015)], our courts have held that since the declarations page cannot grant coverage, it cannot be used to argue that the insurer has promised something to the insured in the declarations page that is then later taken away by the more complete policy terms.”  Quoting from Yager, the court further explained that Clampitt was “simply mistaken that the coverage summary provided on a policy’s declarations page can create an ambiguity when construed in connection with the policy’s action terms.  Thus, the first problem with Clampitt’s argument is that he simply cannot rely on the declarations page to demonstrate that he was promised or granted the right to stack his UIM coverages.”

Summarizing key principles from Floyd-Tunnell, the court went on to explain, “Moreover, the fact that the declarations page did not expressly prohibit stacking does not create an ambiguity.  In Missouri, a policy is not ambiguous just because its broad statement of coverage in the declarations page is later cabined by policy definitions or exclusions.  As another court put it, the mere fact that a declarations page does not expressly contain anti-stacking language is unremarkable and does not create an ambiguity.  Again, this is because a declarations page is brief by design and does not contain the vast majority of the policy’s limitations.”  The court concluded, “Thus, contrary to Clampitt’s contentions, this is simply not a ‘promise, then take away’ case.  The summary of coverage on the declarations page promised nothing about stacking, and the actual terms of the policy unambiguously prohibited stacking.  Geico could not take away what it never promised.”

Clampitt attempted to support his position by citing to five Court of Appeals cases decided in 2013 or later, three of them after Floyd-Tunnell.  The court first distinguished those cases because they did not deal with stacking issues.  “More important than the factual differences in these cases,” the court explained, however, “is that none of these cases acknowledge or take into account the Supreme Court’s directive that a declarations page is merely an introduction to and summary of the essential terms of coverage, but does not grant coverage.  Thus, not only are these cases not dispositive of the facts of this case, we also find them to be unhelpful even on general principles for interpreting insurance contracts.”  This is fairly harsh language by the court, suggesting it may have been frustrated with prior cases ignoring Supreme Court precedent as if it was not controlling.

Finally, it is noteworthy that, as suggested by the court’s opinion, it probably would not have found an ambiguity with regard to stacking even if it did give weight to Clampitt’s theory that the declarations could lead to an ambiguity.  The court explained, “Second, regardless of how much emphasis we give this declarations page, it is completely silent on the issue of stacking.  It does not say that the UIM coverages can or cannot be stacked.  Stacking is not even mentioned, much less promised.  Nor does the fact that the declarations page shows UIM coverage for each of his three separately listed vehicles, and does not expressly prohibit stacking those three coverages, reasonably lead to the conclusion that they can be stacked.”