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Missouri Court of Appeals Upholds Limitations on Stacking of Uninsured Motorist Coverage

In Johnson v. State Farm Mutual Automobile Insurance Co., the Missouri Court of Appeals, Southern District, enforced insurance policy language to limit the extent of stacking of uninsured motorist coverage (“UM”) under multiple personal auto policies. The decision allows insurers with appropriate exclusionary language to limit “stacking” to the $25,000 limit of the Missouri Motor Vehicle Financial Responsibility Law (“MVFRL”) as to each additional vehicle insured that was not directly involved in the accident.

Plaintiff Tim Johnson appealed the trial court’s granting of summary judgment to State Farm, which limited UM stacking. The State Farm policies contained owned-vehicle exclusions with respect to the UM coverage that provided for no coverage in excess of the amount required by the MVFRL for an insured who sustains a bodily injury while “occupying a motor vehicle owned by you if it is not your car or a newly acquired car.” At issue on appeal was the definition of “your car” in the policy language and whether the owned-vehicle exclusion was applicable in this case.

Johnson owned three vehicles, all of which were insured by State Farm under separate policies that included UM coverage. Each of the policies stated a UM limit of $100,000 per person, and included the above-referenced owned-vehicle exclusion which allowed the insurer to reduce the amount of UM coverage with respect to insured vehicles that were not directly involved in the collision to the amount required under Missouri’s Financial Responsibility Law, or $25,000. Johnson was in one of his three insured vehicles when he was involved in a collision with an uninsured motorist. The insurer provided Johnson with the full limit of UM coverage pursuant to the policy on the vehicle he was driving, $100,000, and the minimum amount of UM coverage required by the MVFRLor  on the other two policies, $25,000 per policy, pursuant to the policies’ owned-vehicle exclusion.

Subsequently, Johnson sued State Farm claiming breach of contract and vexatious refusal to pay for failing to pay the maximum $100,000 UM policy limits stacked by each of  his two insured vehicles that were not involved in the accident. Johnson moved for partial summary judgment arguing that the owned-vehicle exclusion did not apply, was ambiguous, and conflicted with public policy and Missouri law. State Farm filed a motion for summary judgment arguing that the owned-vehicle exclusion did apply and that its $25,000 payment per policy was proper in accordance with the policy’s language and Missouri statutory requirements. The trial court granted State Farm’s motion for summary judgment.

On appeal, Johnson raised similar issues and the appellate court affirmed the lower court’s decision to uphold the owned-vehicle exclusion, limiting the Plaintiff’s recovery to $25,000 per policy for Johnson’s additional insured vehicles that were not involved in the collision.

In his first point on appeal, Johnson claimed that the owned-vehicle exclusion did not apply because the vehicle he was occupying was “your car” as listed on the Declarations Page in any of his three policies at the time of the collision. However, the policies’ Declarations Page listed only one vehicle under “your car” in each policy, and Johnson was only in one “your car” at the time of the crash. The Court, citing the Missouri Supreme Court’s Floyd-Tunnell v. Shelter Mutual Insurance Co. 493 S.W.3d 215 (Mo. banc 2014), upheld the unambiguous policy language as written, finding that Johnson was not in a “your car” as defined by the policy’s language for the two vehicles not involved in the accident and, therefore, the owned-vehicle exclusion applied on those two policies.

Points two and three asserted that the trial court erred in granting summary judgment in the insurer’s favor because of ambiguities in the policies that should be resolved in Johnson’s favor. The Court ruled that both of Johnson’s arguments were effectively foreclosed by Floyd-Tunnel, 493 S.W. 3d at 221, wherein the Missouri Supreme Court found similar policy language clear and unambiguous. 

In his final point on appeal, Johnson argued that the owned-vehicle exclusion reduced the amount of UM coverage available to the insured and was therefore void as against public policy and Missouri law. The court denied Johnson’s point. State Farm provided Johnson with the full amount of UM coverage for the insured vehicle he was occupying during the collision, as well as the MVFRL- required amount of coverage on the other two policies, in accordance with the plain owned-vehicle exclusion language of the policies’ UM coverage.

The Court of Appeals decision in Johnson reaffirms the Missouri judiciary’s commitment to upholding the plain meaning of insurance policy exclusions as written. Moving forward, insurers should consider checking the language of the owned-vehicle exclusions under their policies’ UM clauses and ensure that whatever language is used clearly indicates which vehicle the policy applies to and which vehicles qualify under the owned-vehicle exclusion.  

* Hannah Chanin, Law Clerk in the St. Louis office of Baker Sterchi, assisted in the research and drafting of this post. Chanin is a 3L student at the Washington University St. Louis School of Law.