June 17, 2020

By Kent Bevan

In Johnson v. State Farm Mutual Auto Insurance Company, Johnson appealed the trial court’s grant of summary judgment in favor of State Farm, which upheld an owned-vehicle uninsured motorist (UM) exclusion clause in two auto policies covering vehicles not involved in the accident. Johnson was involved in an auto collision with an uninsured motorist and sustained injuries requiring two surgeries. Johnson was insured under three separate policies issued by State Farm. One policy listed a 2011 Toyota Tacoma as the insured vehicle, which was the vehicle involved in the collision. The other policy listed a 2017 Toyota Tacoma. During oral argument before the Missouri Court of Appeals Western District, the parties agreed there was a third policy, involving a motorhome, which was in all material respects identical to the two State Farm policies.

Each of the policies stated UM limits of $100,000 per person and $300,000 per accident. State Farm paid Johnson the UM policy limits of $100,000 under the 2011 policy, paid $25,000 in UM coverage under the 2017 policy and $25,000 in UM coverage under the motorhome policy. State Farm claimed an owned-vehicle exclusion under the policies permitted it to reduce the amount of coverage. The 2017 Tacoma and motorhome were not involved in the collision. Johnson sued State Farm, asserting breach of contract and vexatious refusal to pay in that State Farm did not pay the $100,000 UM policy limits under the 2017 policy or the motorhome policy. Johnson filed for partial summary judgment, arguing the exclusion did not apply, and State Farm filed its own summary judgment motion, stating the exclusion did apply and the UM coverage was thereby reduced from $100,000 to $25,000. The trial court denied Johnson’s motion for partial summary judgment and granted State Farm’s motion, resulting in this appeal.

In point one, Johnson argued the owned-vehicle exclusion reducing the UM coverage did not apply because he was occupying a “your car” at the time of the collision. The court’s opinion discusses various policy provisions, including the definition of “your car,” which is defined in the policy to mean vehicle shown under “your car” on the declarations page of the policy. Point two argued there was an ambiguity in the language of the exclusion, which needed to be resolved in Johnson’s favor. Point three asserted that there are “irreconcilable conflicts” between the exclusion and other provisions of the policies relating to the “amount and/or availability of UM coverage,” which needs to be resolved in Johnson’s favor. In point four, Johnson argued that the owned-vehicle exclusion is void as it is against public policy and Missouri law.

Johnson argued that as long as he was occupying a “your car” as listed on the declarations page of any of his three State Farm policies, then the exclusion did not apply. Johnson was occupying the 2011 Toyota Tacoma at the time of his accident and not the 2017 Toyota Tacoma or the motorhome. The court determined that the policy language was unambiguous and must be applied as stated in the policy.

As to points two and three, the court determined that both of Johnson’s arguments were effectively foreclosed by the Missouri Supreme Court in Floyd-Tunnell v. Shelter Insurance, 439 SW 3rd 215 (Mo banc 2014). The court in this opinion focused on the plan language of the owned-vehicle exclusion, which limited the insurer’s liability.

As to point four, the court found that State Farm was not attempting to completely bar Johnson from UM coverage in the 2017 policy and motorhome policy. Rather, State Farm provided Johnson with the full amount of UM coverage pursuant to the 2011 policy and also provided Johnson under the 2017 policy and the motorhome policy with the minimum amount of coverage required by Missouri law. As such, the court rejected Johnson’s argument that reducing the UM coverage by the owned-vehicle exclusion violates public policy. The appellate court affirmed the trial courts judgment in favor of State Farm.

A version of this article originally appeared in Insurance Journal.