July 17, 2019

Kent Bevan

In Seaton v. Shelter Mutual Insurance Company, Shelter appealed from an entry of summary judgment in favor of Seaton after the Circuit Court found Seaton was entitled to underinsured motorist (UIM) coverage under three separate insurance policies Seaton maintained with Shelter after the death of her daughter, Chelsea Seaton (hereinafter decedent).

The driver of a vehicle lost control of that vehicle she was driving and crashed, causing her passenger, decedent, to sustained fatal injuries.  Following decedent’s death, Seaton asserted a wrongful death claim against the driver which was settled for driver’s insurance policy limits.  Seaton then sought UIM coverage from Shelter under the three auto policies she maintained.  Shelter provided UIM coverage pursuant to one of the policies but denied UIM coverage under the other two policies, asserting that decedent was not a defined insured for UIM coverage.

Seaton filed a declaratory judgment action against Shelter asking the court to determine that UIM coverage existed for decedent and also alleging breach of contract.  Cross motions for summary judgment were filed by Seaton and Shelter.  The trial court entered judgment in Seaton’s favor and following an opinion issued by the Court of Appeals, the Missouri Supreme Court granted transfer.  The Missouri Organization of Defense Lawyers (MODL) and the Missouri Association of Trial Attorneys (MATA) both filed amicas briefs in support of the respective parties to the appeal.

Shelter set out two reasons it believes the Circuit Court erred in granting summary judgment in Seaton’s favor: first, Shelter claimed the trial court erred because decedent is not an “insured” under the insurance policys’ unambiguous language.  Second, Shelter claims the trial court erred in finding the insurance policies were internally inconsistent.  The endorsements on Shelter’s UIM policies provide that Shelter will pay uncompensated damages subject to stated limits, when an insured sustains bodily injury as a result of an accident involving the use of an underinsured motor vehicle.  The Shelter policies define “insured” to be:

  1. You;
  2. any relative; and
  3. any individual occupying the described auto who is listed in the Declarations as an ‘additional listed insured’, if:
  1. that individual does not own a motor vehicle; and
  2. that individual’s spouse does not own a motor vehicle.

(Emphasis in original).

The Shelter policy states that “You” means any person listed as a named insured in the Declarations.  The policy also defines a “named insured” as “any person” listed in the Declarations under the heading “named insured”.  It does not include persons listed under other headings unless they are also listed under the heading “named insured”.

Decedent was not an insured entitled to UIM coverage because decedent did not meet the definition of “you” when applying the plain language of the insurance policy’s terms.  Decedent was not listed as a named insured on either insurance policy for which Shelter denied coverage.  While the decedent was listed as an “additional listed insured”, the Shelter policies plain language indicates an “additional listed insured” is not the same as a “named insured”.  Because decedent was not listed as a named insured, she did not meet the policy definition of “you”.  Second, the Shelter policies provide UIM coverage for a “relative”.  While Seaton argued that the average lay person would believe decedent to be an insured because she was Seaton’s daughter, the Supreme Court disagreed.  In the Shelter policies, the term “relative” appears in bold letters.  Policy holders are told in the policy that words appearing in bold typeface have specific defined meanings within the terms of the policy and conversely, words not appearing in bold typeface have their common dictionary meaning.  The word “relative” appears in bold type indicating it has a specific defined meaning as “an individual related to you by blood, marriage or adoption, who is primarily a resident and actually living in your household… relative does not mean any individual who owns a motor vehicle…”.  The policy also defines “owns” to mean “that the person referred to holds the legally recognized title to or is a leaseholder of an item of real or personal property, even if there are other owners”.

Decedent had admitted that decedent was listed as a title owner on the certificate of title to a motor vehicle.  The plain language of the policy indicates UIM coverage is not provided for a relative who owns a motor vehicle and Seaton admitted that decedent was the owner of a motor vehicle.  Therefore, decedent did not meet the definition of a “relative” to receive UIM coverage.  Further, decedent did not meet the final definition of “insured” which provides coverage for an “individual occupying the described auto”.  In this case, decedent was without question a passenger in driver’s vehicle at the time of her injuries.  She was not an occupant of either vehicle insured by the Shelter policies.  Therefore, decedent was not an insured and not entitled to UIM coverage.  The Missouri Supreme Court en banc ruled that even if the limits of liability or other insurance provisions would render the policies ambiguous, since decedent does not meet the definition of an insured, the court need not determine whether the limits of liability or other provisions render the policies ambiguous because the policies only extend coverage to insured individuals.

The Missouri Supreme Court reversed the Trial Court’s judgment and remanded the case.