           In the Missouri Court of Appeals
                   Eastern District
                                         DIVISION ONE

OWNERS INSURANCE COMPANY,                )              No. ED103652
                                         )
       Appellant,                        )              Appeal from the Circuit Court
                                         )              of the City of St. Louis
       vs.                               )              1422-CC10222
                                         )
GARY PARKISON AND JUDITH                 )              Honorable David L. Dowd
PARKISON, Individually, and JOHN VEST as )
Class Representative for the Estate of   )
Betty Vest,                              )
                                         )
       Respondents.                      )              Filed: January 31, 2017

       Owners Insurance Company (“Appellant”) appeals the trial court’s grant of summary

judgment in favor of Gary Parkison and Judith Parkison, individually, and John Vest, as class

representative for the estate of Betty Vest (“Respondents”) on Appellant’s declaratory judgment

action brought to determine coverage under a garage liability insurance policy issued by

Appellant. We affirm.

                                    I.      BACKGROUND

A.     The Events Giving Rise to Appellant’s Claim

       While the parties dispute the interpretation of the relevant insurance policy, they do not

dispute the underlying facts, which are as follows. In June 2013, Bill Grant Ford Inc., a car

dealership, provided a 1998 Ford Taurus, which it owned, to John Sconce for use as a temporary

substitute vehicle while his vehicle was undergoing repairs.
         On June 29, 2013, Sconce’s son, Jesse, 1 was driving the Taurus northbound on Missouri

Route 123 when he allowed the vehicle to travel across the centerline and collide into a vehicle

traveling southbound on the same route. Gary Parkison was driving the other vehicle involved, a

Ford Fusion; Judith Parkison and Betty Vest were passengers in the car. The Parkisons and Vest

were injured in the accident, and Vest died as a result of her injuries. The Missouri Highway

Patrol’s investigation determined Jesse was at fault in the collision. Two passengers in the

Taurus were also injured.

B.       Insurance Policies Relevant to this Appeal

         At the time of the collision, Jesse was insured under an automobile liability policy issued

by Progressive Insurance Company (“the Progressive policy”), which provided bodily injury

coverage to Jesse with limits of $25,000 per person and $50,000 per occurrence.

         Additionally, the Taurus was insured under a garage liability insurance policy issued to

Bill Grant Ford from Appellant (“the Owners policy”). The parties agree Jesse met the definition

of a “garage customer,” and thus qualified as an “insured person” under the Owners policy. The

Owners policy contained a declaration page which set the limit of the bodily injury liability

coverage under the Garage Liability portion of the policy at $1,000,000 per occurrence. 2

         The terms of the Garage Liability part are set out in a thirty-one page form, divided into

the following “Sections”:

         Section I         -         Definitions
         Section II        -         Coverage (defining the scope of coverages, and setting out
                                     the “Exclusions” applicable to each coverage)
         Section III       -         Who is an Insured
         Section IV        -         Limits of Insurance
         Section V         -         Deductible

1
  Because Jesse shares the same last name as his father, we will refer to Jesse by his first name for clarity and ease of
reference. No disrespect is intended.
2
  The Owners policy contains two “parts” – the “Garage Liability” part and the “Dealer’s Blanket” part. Because
the Dealer’s Blanket part is not relevant to this appeal, it will not be discussed and all further discussion of the
policy concerns the Garage Liability part.
                                                           2
         Section VI         -        What You Must Do After an Accident, Occurrence or Loss
         Section VII        -        General Conditions (including sixteen subsections, one of
                                     which is “Other Insurance”)

         The Garage Liability policy form is supplemented by fifteen pages containing ten

endorsements, the last of which is the subject of this appeal. Form 89880, titled “Missouri

Amendatory Endorsement – Garage Liability,” contains an amendment to the “Other Insurance”

section, and includes the clause that Appellant contends precludes coverage in this case and

which is italicized below, along with other relevant language.

         MISSOURI AMENDATORY ENDORSEMENT – GARAGE LIABILITY

         It is agreed:
         1. Under SECTION VII – GENERAL CONDITIONS, E. OTHER
             INSURANCE, condition 4. is deleted and replaced with the following:
                  4. This provision governs the relationship of this policy with insurance
                  policies issued by insurance companies other than us. It does not define
                  our limit of liability to pay any coverage provided by this policy and shall
                  not be constructed to increase any limit of liability described under
                  SECTION IV – LIMITS OF INSURANCE. 3
                  This insurance shall be, with respect to any auto to which this insurance
                  applies:
                     a. Primary insurance for any auto owned by you except when such auto
                     is in the care, custody or control of a garage customer. When any auto
                     owned by you is in the care, custody or control of a garage customer:
                         (1) No damages are collectible under this policy if there is other
                         collectible insurance, whether primary, excess or contingent,
                         available to the garage customer and the limits of such insurance are
                         sufficient to pay damages up to the amount of the applicable financial
                         responsibility limit.4
                         (2) If there is no other collectible insurance available to the garage
                         customer, damages are collectible under this policy only up to the
                         amount required by the applicable financial responsibility limit.
                     b. Excess insurance over any other collectible insurance for any auto
                     you do not own.

(emphasis added and omitted).


3
  For ease of reference, this section of italicized language will be referred to as “introductory sentences” throughout
this opinion.
4
  Initially, the parties disputed the proper label of this clause. However, both parties now agree that it is not the label
that is dispositive, but the interpretation of the clause. For purposes of this appeal only, we will simply refer to it as
the “Other Insurance Clause.”
                                                            3
       The above provision in the Missouri Amendatory Endorsement is followed by an

amendment to Section IV – Limits of Insurance, which states:

       4. Under SECTION IV – LIMITS OF INSURANCE, COVERAGE A (Auto), 5.
          is deleted and replaced by the following:
               5. The limit of insurance shown in the Declarations for this coverage is the
               most we shall pay for all claims of one or more persons in any one
               occurrence regardless of:
                  a. The number of insureds;
                  b. The number of persons injured;
                  c. The number of autos…;
                                                   …
                  g. Whether this policy applies as primary or excess insurance.

(emphasis omitted).

C.     Claims Asserted and Relevant Procedural Posture

       Following the collision between the Taurus driven by Jesse and the Fusion driven by

Gary Parkison, Respondents claimed coverage for their damages under both the Progressive

policy and the Owners policy. The two passengers in the Taurus also asserted claims. Acting

through counsel, Progressive and Appellant tendered an offer to all claimants collectively

(including Respondents) to settle all claims for a total of $100,000 with the division of those

proceeds to be agreed upon by all claimants. The total amount of the offer consisted of the

$50,000 per-occurrence limits of the Progressive policy, plus the $50,000 per-occurrence limits

acknowledged by Appellant to be provided by its policy as required by Missouri’s Motor Vehicle

Financial Responsibility Law (“MVFRL”).

       Subsequently, the passengers in the Taurus settled their claims for negotiated shares of

the $100,000 offer, releasing Jesse, Bill Grant Ford, Progressive, and Appellant. Respondents

also entered into a “Settlement Agreement and Release” with Appellant, under which, (1)

Respondents each received their negotiated shares of the $100,000 offer; and (2) Respondents

released Jesse, Bill Grant Ford, and Progressive, but by express agreement, Respondents and


                                                 4
Appellant retained the right to pursue, via declaratory judgment, a portion of coverage under the

Owners policy which was disputed by the parties.

       Pursuant to the settlement agreement, Appellant then filed a petition for declaratory

judgment against Respondents. Citing the Other Insurance Clause in the Owners policy,

Appellant requested a judicial declaration that it owed no further coverage under the Owners

policy because, (1) Jesse was a garage customer with other valid and collectible insurance

sufficient to meet the MVFRL requirements; and (2) Appellant had already paid its obligation to

Respondents under the MVFRL. Respondents then filed an answer and counterclaim arguing

that, inter alia, Jesse was entitled to $1,000,000 in coverage under the Owners policy because the

Other Insurance Clause only applies to disputes between Appellant and other insurers, which is

not the case here.

       Thereafter, both parties moved for summary judgment, each citing the Owners policy in

support of their respective positions. On October 21, 2015, the trial court granted Respondent’s

motion for summary judgment, and denied Appellant’s motion. In its judgment, the trial court

found that the Other Insurance Clause expressly and unambiguously limited its application to

disputes between insurance companies, and did not apply to disputes involving garage

customers. Therefore, the court explained, although Jesse was insured under the Progressive

policy at the time of the collision, the Other Insurance Clause in the Owners policy did not

preclude coverage in this case. In reaching its decision, the trial court found the Other Insurance

Clause was limited by the two introductory sentences, and found it significant that the provision

was not placed in the limits of liability section, the definition of who was an insured, or the

exclusions section. This appeal followed.




                                                  5
                                       II.    DISCUSSION

       In its sole point on appeal, Appellant asserts the trial court erred in granting summary

judgment in favor of Respondents because the Owners policy issued to Bill Grant Ford

unambiguously excluded garage customers from coverage. We disagree.

A.     Standard of Review and General Law Relating to the Interpretation of an Insurance
       Policy

       A trial court’s decision to grant summary judgment is an issue of law this Court reviews

de novo, and we will affirm such decision if it is proper under any legal theory supported by the

record. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010); Seeck v. Geico General Ins. Co.,

212 S.W.3d 129, 132 (Mo. banc 2007). Summary judgment is proper only if there are no

genuine issues of material fact and the movant is entitled to judgment as a matter of law.

Nationwide Insurance Company of America v. Thomas, 487 S.W.3d 9, 12 (Mo. App. E.D. 2016).

When the underlying facts are undisputed, controversies regarding the interpretation and

application of insurance contracts are matters of law. Id. Whether an insurance policy is

ambiguous is also a question of law this Court reviews de novo. Id.; Seeck, 212 S.W.3d at 132.

        The central issue to this appeal is whether the Owners policy is ambiguous. If an

insurance policy is unambiguous, it must be enforced according to its terms. Thomas, 487

S.W.3d at 12. However, if the policy language is ambiguous, the ambiguity must be construed

against the insurer as the drafter of the contract. Id. In construing terms of an insurance policy,

we apply “the meaning which would be attached by an ordinary person of average understanding

if purchasing insurance….” Id. (quoting Seeck, 212 S.W.3d at 132). An insurance policy is

ambiguous if its language is reasonably open to different interpretations. Seeck, 212 S.W.3d at

132. Further, an ambiguity exists if there is duplicity, indistinctiveness, or uncertainty in the

meaning of the policy’s language. Id.; Burns, 303 S.W.3d at 509. When interpreting specific


                                                  6
policy provisions, we are required to evaluate the policy as a whole, rather than viewing each

provision in isolation. Seeck, 212 S.W.3d at 133.

B.     Analysis of Appellant’s Claim

       We initially note that although certain case law will be instructive to our analysis of the

Owners policy at issue in this case, none are dispositive in the absence of identical policy

language. See Long v. Shelter Ins. Companies, 351 S.W.3d 692, 702 (Mo. App. W.D. 2011).

The parties have not cited, and our research has not revealed, a case dealing with an other

insurance clause preceded by introductory language similar to that present in the policy at issue

in this case. Thus, we must begin our analysis with the language of the Owners policy.

             MISSOURI AMENDATORY ENDORSEMENT – GARAGE LIABILITY

       It is agreed:
       1. Under SECTION VII – GENERAL CONDITIONS, E. OTHER
           INSURANCE, condition 4. is deleted and replaced with the following:
                4. This provision governs the relationship of this policy with insurance
                policies issued by insurance companies other than us. It does not define
                our limit of liability to pay any coverage provided by this policy and shall
                not be constructed to increase any limit of liability described under
                SECTION IV – LIMITS OF INSURANCE.
                This insurance shall be, with respect to any auto to which this insurance
                applies:
                   a. Primary insurance for any auto owned by you except when such auto
                   is in the care, custody or control of a garage customer. When any auto
                   owned by you is in the care, custody or control of a garage customer:
                       (1) No damages are collectible under this policy if there is other
                       collectible insurance, whether primary, excess or contingent,
                       available to the garage customer and the limits of such insurance are
                       sufficient to pay damages up to the amount of the applicable financial
                       responsibility limit.
                       (2) If there is no other collectible insurance available to the garage
                       customer, damages are collectible under this policy only up to the
                       amount required by the applicable financial responsibility limit.
                   b. Excess insurance over any other collectible insurance for any auto
                   you do not own.
                                                  …

       4. Under SECTION IV – LIMITS OF INSURANCE, COVERAGE A (Auto), 5.
          is deleted and replaced by the following:

                                                 7
               5. The limit of insurance shown in the Declarations for this coverage is the
               most we shall pay for all claims of one or more persons in any one
               occurrence regardless of:
                  a. The number of insureds;
                  b. The number of persons injured;
                  c. The number of autos…;
                                                   …
                  g. Whether this policy applies as primary or excess insurance.

(emphasis added and omitted).

       Here, Appellant argues the Other Insurance Clause unambiguously “eliminates liability

coverage for a garage customer when the garage customer has other valid and collectible

automobile liability insurance.” Appellant reads the Other Insurance Clause as a “no liability” or

“escape” clause, which excludes from coverage a garage customer when the garage customer has

other insurance available to him. Appellant asserts the first introductory sentence does not limit

the clause’s application to disputes between insurance companies. Rather, according to

Appellant, the first sentence explains that the existence of an insurance policy issued by an

insurance company other than Appellant is an “essential predicate” before the Other Insurance

Clause is triggered. Further, Appellant contends the second introductory sentence merely

reinforces that the Other Insurance Clause is an exclusion rather than a limit on liability.

       In contrast, Respondents assert that the two introductory sentences limit the application

of the Other Insurance Clause to “define the rights of the insurer when multiple insurers cover

the loss and they are debating their relative rights and obligations,” and thus does not apply to

this case. Additionally, Respondents suggest the second introductory sentence should be read

consistently with the second provision of the Missouri Amendatory Endorsement which restates

the only limits of liability are those which are presented in Section IV and do not change

regardless of whether the Owners policy applies as primary or excess coverage. Respondents

alternatively argue the Owners policy is, at least, ambiguous because of the context of the Other

Insurance Clause and the two introductory sentences, and the ambiguity must be construed
                                               8
against the insurer. For the reasons stated below, we agree the Owners policy is ambiguous and

affirm on those grounds. 5

        An ordinary person of average understanding may have understood the Other Insurance

Clause as applying solely to disputes between insurance companies. See Thomas, 487 S.W.3d at

12. This interpretation is supported by the rule of construction that provisions in an insurance

policy shall not be read in isolation, but must be read in context, as it gives effect to the two

introductory sentences preceding the Other Insurance Clause. See Seeck, 212 S.W.3d at 133.

        In Seeck, the Missouri Supreme Court held that the existence of an other insurance clause

does not always render a policy ambiguous, but rather, such a clause can be enforceable if not

contradicted or rendered ambiguous by other clauses in the contract. Id. at 134 n.3. In this case,

however, the alleged exclusionary language in the Other Insurance Clause found in the Missouri

Amendatory Endorsement is contradicted and rendered ambiguous not only by other clauses of

the Owners policy which do not reference or direct a reader to the Other Insurance Clause, but

also by language in the Missouri Amendatory Endorsement section itself – the two introductory

sentences. Again, the two introductory sentences provide: “This provision governs the

relationship of this policy with insurance policies issued by insurance companies other than us.

It does not define our limit of liability to pay any coverage provided by this policy and shall not

be construed to increase any limit of liability described under SECTION IV – LIMITS OF

INSURANCE.” These two introductory sentences contradict the general applicability of this

provision for which Appellant advocates.




5
  The trial court granted summary judgment on the grounds that the Other Insurance Clause expressly and
unambiguously limited its application to disputes between insurance companies, and thus did not apply to this case.
Consequently, the court did not reach the grounds upon which we affirm. However, as previously stated, we will
affirm the trial court’s decision to grant summary judgment if it is proper under any legal theory supported by the
record. Burns, 303 S.W.3d at 509.
                                                         9
        Moreover, in Windsor Ins. Co. v. Lucas, this Court upheld a step-down provision where

the limit was alluded to in both the definitions section and the limits of liability section of the

policy. 24 S.W.3d 151, 153-55 (Mo. App. E.D. 2000). The Windsor Court recognized:

        [T]here is no prohibition under Missouri law for an insurance contract to set forth
        the maximum amount the insurer will pay in one part, then stipulate the
        circumstances under which the insurer may lower the maximum amount it will pay,
        so long as all considered sections contain plain and unambiguous terms, and reading
        them together does not create an ambiguity.

Id. at 154.

        Regarding the Owners policy, it is reading the Other Insurance Clause within the whole

Missouri Amendatory Endorsement section that does create the ambiguity. See id.; see also

Seeck, 212 S.W.3d at 133-34, 134 n.3. The limiting introductory sentences along with the

absence of any reference to the Other Insurance Clause in other sections of the Owners policy,

especially those sections which the average insured is more likely to examine for an exclusion or

limit of liability, exacerbates the ambiguity created by interpreting the Other Insurance Clause as

an exclusion or limit of liability applicable to disputes involving garage customers. See Seeck,

212 S.W.3d at 134 n.3 (an other insurance clause can be enforceable if not contradicted or

rendered ambiguous by other clauses in the contract); see also Simmons v. Farmers Insurance

Company, Inc., 479 S.W.3d 671, 676 (Mo. App. E.D. 2015). All of these considerations,

together, weigh in favor of the limited application advanced by Respondents.

        On the other hand, an ordinary person of average understanding could also interpret the

Other Insurance Clause as a “no liability” or “escape” clause, precluding coverage for garage

customers under certain circumstances. See Thomas, 487 S.W.3d at 12. Such a reading was

approved by Missouri Courts in Todd v. Missouri United School Ins. Council, 223 S.W.3d 156

(Mo. banc 2007), and Naeger v. Farmers Ins. Co., Inc., 436 S.W.3d 654 (Mo. App. E.D. 2014).

Those cases support the proposition that the existence of exclusions does not automatically

                                                  10
render a policy ambiguous or cause conflict with a policy’s limits of liability, because

exclusionary provisions exclude particular risks from coverage altogether, whereas, the limit of

liability provisions limit the extent of the insurer’s liability when a certain risk is actually

covered. Todd, 223 S.W.3d at 162-63; Naeger, 436 S.W.3d at 661.

        Although we find this could be a reasonable interpretation, the two introductory

sentences of the Other Insurance Clause in the Owners policy – language which was not present

in the insurance policies at issue in Todd and Naeger – prevent a straightforward application of

those cases. The interpretation advanced by Appellant would resolve the ambiguity created

when reading the alleged exclusionary language in the Other Insurance Clause in conjunction

with the second introductory sentence, which provides: “[This provision] does not define our

limit of liability to pay any coverage provided by this policy and shall not be construed to

increase any limit of liability described under SECTION IV – LIMITS OF INSURANCE.”

However, this construction fails to address the inconsistency of the language of the first

introductory sentence, which states: “This provision governs the relationship of this policy with

insurance policies issued by insurance companies other than us.”

        In support of its position that the Other Insurance Clause is an enforceable “no liability”

clause, Appellant also cites State Farm Mut. Auto. Ins. Co. v. Western Cas. & Sur. Co., 477

S.W.2d 421 (Mo. banc 1972). In that case, the Missouri Supreme Court enforced an other

insurance exclusion where the insured paid a reduced premium rate in exchange for the insurer

taking on a lower risk by excluding garage customers with other insurance. Id. at 426-27.

Though the provision used some similar language as the Owners policy, it did not include the

two introductory sentences creating the ambiguity in this case. Id. at 426. Additionally,

Appellant has failed to point to evidence of an agreement for Bill Grant Ford to pay a reduced

premium in exchange for Appellant taking on reduced risk, which was central to the State Farm

                                                   11
Court’s holding enforcing that provision, but merely speculates that the premium calculation

necessarily took into account limits on coverage. See id. at 427.

        By definition, the existence of the two reasonable interpretations of the Owners policy set

out above renders it ambiguous. See Seeck, 212 S.W.3d at 132. Appellant argues, and Missouri

case law reaffirms, that we may not read the Other Insurance Clause in isolation, but must review

the “whole policy to determine whether there is contradictory language that would cause

confusion and ambiguity in the mind of the average policy holder.” Miller v. Ho Kun Yun, 400

S.W.3d 779, 786 (Mo. App. W.D. 2013) (quotations omitted); see also Seeck, 212 S.W.3d at

133. However, this Court concludes that it is reading the Other Insurance Clause in context of its

surrounding language that results in duplicity and uncertainty in the terms of the Owners policy

and the coverage thereunder, thus creating the ambiguity here. See Burns, 303 S.W.3d at 509;

Seeck, 212 S.W.3d at 132-33.

        It is well-settled that Missouri courts apply the doctrine of contra proferentum 6 more

rigorously when reviewing insurance contracts. Burns, 303 S.W.3d at 509-10. As the Burns

Court reiterated:

        An insurance policy, being a contract designated to furnish protection, will, if
        reasonably possible, be construed so as to accomplish that object and not to defeat
        it. Hence, if the terms are susceptible of two possible interpretations and there is
        room for construction, provisions limiting, cutting down, or avoiding liability on
        the coverage made in the policy are construed most strongly against the insurer.

Id. at 512 (quotations omitted). Moreover, Appellant, as the drafter of the insurance contract,

was in the better position to remove ambiguity in its meaning. See id.; see also Seeck, 212

S.W.3d at 134 n.3 (it is the insurer’s responsibility to include clear and unambiguous language in

its policy).



6
 This doctrine provides that an ambiguous contract provision “is construed most strongly against the person who
selected the language.” Burns, 303 S.W.3d at 509 n.1 (quotations omitted).
                                                       12
       For these reasons, we must construe the ambiguity in the Owners policy against

Appellant, and limit the Other Insurance Clause’s application to disputes between insurance

companies. In order to give effect to the meaning an average layperson would reasonably

understand of the existing Other Insurance Clause, this Court limits its applicability and

determines that it does not apply to the case at bar. See Burns, 303 S.W.3d at 512-13. This

Court refuses to ignore the limiting introductory sentences of the Other Insurance Clause, and

seeks to give effect to those sentences as well as the Missouri Amendatory Endorsement section

as a whole which deals with governing the rights and obligations between Appellant and other

insurers. See Southeast Bakery Feeds, Inc. v. Ranger Ins. Co., 974 S.W.2d 635, 638 (Mo. App.

E.D. 1998) (an interpretation of an insurance policy which entirely nullifies one provision should

not be adopted if the policy is susceptible to an interpretation which gives effect to all its

provisions).

       Based on the foregoing, the trial court did not err in granting summary judgment in favor

of Respondents. Point denied.

                                      III.    CONCLUSION

       The trial court’s grant of summary judgment in favor of Respondents is affirmed.




                                                ROBERT M. CLAYTON III, Presiding Judge

Mary K. Hoff, J., and
Lisa P. Page, J., concur.




                                                  13
