Plaintiff Garner’s son and passenger were killed when the driver of a Silverado collided with a vehicle operated by Garner’s son. The owner of the Silverado was insured by AAA with limits of $500,000.00. AAA paid $250,000 to each set of parents. Garner was insured by AMCO, with UIM limits of $50,000/$100,000.
The “Insuring Agreement” for UIM coverage defined an underinsured motor vehicle as follows: “Underinsured motor vehicle” means a land motor vehicle or “trailer” of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage.” The AMCO policy also provided, in the “Limit of Liability” clause, the following provision, “The Limit of Liability stated in the Declarations for Underinsured Motorist Coverage is for reference purposes only. Under no circumstances do we have a duty to pay you or any person entitled to Underinsured Motorists Coverage under this policy the entire Limits of Liability stated in the Declarations for this coverage. “
On appeal, The Missouri Court of Appeals, Southern District, in Courtney Garner vs AMCO Ins. Co. 670 S.W. 172 minced no words in finding that the definition of a UIM vehicle was clear and ambiguous and similar language had been affirmed in two separate Missouri Supreme Court cases. Swadley v. Shelter Mut. Ins. Co., 513 S.W.3d 355, 357 (Mo. 2017) and Rodriguez v. Gen. Acc. Ins. Co. of Am., 808 S.W.2d 379, 380 (Mo. 1991).
In Garner, Plaintiff appears to have not raised the usual ambiguity arguments as to when UIM coverage applies but did allege the UIM limits were ambiguous due to the operation of RSMO. § 379.204, which provides “Any underinsured motor vehicle coverage with limits of liability less than two times the limits for bodily injury or death pursuant to section 303.020 shall be construed to provide coverage in excess of the liability coverage of any underinsured motor vehicle involved in the accident.” The Appeals Court found §379.204 was not applicable because the Silverado was not an underinsured motor vehicle. Further, its obvious AMCO did not have less than two times the coverage mandated in § 303.020, which is $25,000/50,000.00. AMCO, as noted above, had limits of $50,000/$100,000, so it met the threshold.
The Court went on to hold that section 379.204 does not define an underinsured motor vehicle or specify when the terms of a policy’s underinsured motorist coverage will be triggered. Those issues are governed by the terms of the insurance policy, and in this case, those contractual terms defeat [Garner’s] claim for coverage. Section 379.204, RSMo specifies only how amounts which are otherwise payable under a policy’s underinsured motorist coverage relate to payments received from the negligent driver; it does not specify when such underinsured motorist payments are legally due. The AMCO Policy’s UIM limit was not less than $50,000, so the statute does not apply. Nor is the Silverado an “underinsured motor vehicle” under the statute since the definition of an “underinsured motor vehicle” is determined by the AMCO Policy.
The court’s opinion follows and reinforces the recent Missouri Appellate decisions upholding UIM definitions and set offs.