In Eldridge v. Columbia Mut. Ins. Co., 2008 WL 4861922 (Mo.App. W.D.), Jennifer Eldridge's son, Gage, was a passenger in a vehicle owned by Gage's father, Joshua, and driven by Victoria Savage, Gage's stepmother, when the vehicle was involved in a collision. Gage Savage died as a result of the collision.
The vehicle was covered under an insurance policy issued to Joshua Savage by American Standard Insurance. Eldridge sought the policy limits from American Standard, though the coverage afforded by that policy was not at issue in this case. Eldridge also sought the policy limits from Columbia Mutual Insurance Company. The Columbia Mutual policy insured a vehicle that was not involved in the accident. The policy showed John Earnest as the named insured and his daughter, Victoria Earnest (whose married name was now Savage) as a driver of the vehicle not involved in the accident. Columbia Mutual refused Eldridge's demand for payment on the grounds that Victoria Savage was not an insured under the policy because she was not driving the vehicle at the time of the accident.
Eldridge filed a wrongful death action against Victoria Savage and acquired a judgment against her. Eldridge and Victoria Savage then entered into an agreement with a restricted partial release, reservation of claim, and covenant not to execute. Victoria Savage agreed to entry of a consent judgment in favor of Eldridge, and Eldridge agreed that she would not execute against the real or personal property of Victoria Savage and that she would seek to satisfy the judgment from the American Standard policy, the Columbia Mutual policy, and any claims or causes of action that she may have against other persons or entities. Joshua Savage also agreed that Eldridge was entitled to all of the proceeds from the American Standard and Columbia Mutual policies. Based on those agreements, the circuit court ordered American Standard to pay its policy limits to Eldridge for the wrongful death of Gage Savage.
Eldridge sought declaratory judgment against Columbia Mutual alleging that Victoria Savage was an insured under the Columbia Mutual policy and that Columbia Mutual had failed to defend its insured in the wrongful death action and had refused to settle for the policy limits. Eldridge and Columbia Mutual filed cross-motions for summary judgment seeking determination of whether coverage was afforded to Victoria Savage under the Columbia Mutual policy. The circuit court denied Eldridge's motion for summary judgment and granted Columbia Mutual's motion. The court found that Columbia Mutual's policy was not ambiguous, that Victoria Savage was not a named insured under the policy and, at the time of the accident, she was driving a vehicle that was not covered by the policy.
The Missouri Court of Appeals explained that the threshold issue before it was whether an ambiguity existed in the policy issued by Columbia Mutual. Eldridge contended that the circuit court erred in granting summary judgment because the term “driver” was undefined in the policy, thereby creating an ambiguity that would lead a reasonable person to assume a “driver” was an insured under the policy.
According to the court, Victoria Savage was not a resident of John Earnest's household at the time of the accident and she was not listed as a named insured on the declarations page of the policy. Rather, she was listed in the policy only as a “driver.” In addition, she was listed as a driver for a vehicle which was a covered vehicle under the policy but was not involved in the accident.
Further, the court disagreed with Eldridge's argument that the term “driver” was unclear because it was not defined in the policy, as the mere lack of definition did not create an ambiguity. Nothing in the policy suggested that its use of the term had any meaning beyond the plain and ordinary dictionary meaning of “driver” and the definitions were consistent with the everyday use of the word with respect to automobiles and didn't create confusion or uncertainty. Further, the court explained, the double listing of John Earnest in the policy, once as the “named insured” and again in another section of the policy set off with horizontal lines and headed by the bolded words “DRIVER(S) SUMMARY,” prevented an understanding that “driver” could have the same meaning as “named insured” under the policy.
While recognizing that Missouri had not directly addressed this issue, the appeals court pointed out that other jurisdictions had recognized that the designation of “driver” on the declarations page of an insurance policy was not without effect. Under similar circumstances to this case, courts had held that the policy's definition of an insured was unambiguous when one party was listed as a named insured on the dec page and another was listed as a driver, a term undefined by the policy, and that the driver designation served as dispositive evidence of permission to use a covered vehicle.
Therefore, the court affirmed the circuit court's judgment in favor of Columbia Mutual because the policy at issue was not ambiguous.