8th Circuit Affirms Summary Judgment for Insurer in UIM Coverage Case03/20/2017
After Kelly D. Williams died when her car was hit by Dylan A. Meyer's vehicle, her parents submitted a claim for underinsured motorist (UIM) coverage under Kelly's Personal Auto Policy. The insurance company denied coverage for the UIM claim on the basis that Mr. Meyer's vehicle did not meet the definition of an underinsured motor vehicle as the term is defined under the UIM policy. The insurance company proceeded with filing a declaratory judgment action in federal court seeking a declaration of no coverage under Kelly's auto policy. Kelly's parents filed a separate suit for breach of contract and vexatious refusal in state court. The insurance company removed the state court action to federal court, and the two cases were consolidated. After consolidation, the parties filed competing Motions for Summary Judgment. The Unites States District Court for the Western District of Missouri granted summary judgment for the insurance company. Kelly's parents appealed. On appeal, the 8th Circuit applied Missouri's general rules of contract construction when interpreting the policy. Ultimately, the 8th Circuit concluded that because the bodily-injury liability for Meyer's vehicle was greater than the policy's UIM liability limit, Meyer's vehicle was not an "underinsured motor vehicle." The court rejected Kelly's parents' claims that the policy was ambiguous. Accordingly, the 8th Circuit affirmed the Judgment of the District Court.