DANIEL (BRENSON) VS. METROPOLITAN DIRECT PROPERTY & CASUALTY INSURANCE COMPANY
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RENDERED: SEPTEMBER 11, 2009; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-002158-MR
BRENSON DANIEL
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE AUDRA J. ECKERLE, JUDGE
ACTION NO. 07-CI-08602
METROPOLITAN DIRECT
PROPERTY AND CASUALTY
INSURANCE COMPANY
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, MOORE AND VANMETER, JUDGES.
MOORE, JUDGE: Brenson Daniel appeals from a judgment of the Jefferson
Circuit Court dismissing his claim for underinsured motorist coverage against
Metropolitan Direct Property & Casualty Insurance Company. Because we find
that the only named insureds under the Metropolitan policy were his parents, that
the policy unambiguously excluded Daniel from coverage under the circumstances
of this case, and that Daniel’s exclusion from coverage does not violate public
policy, we affirm.
On or about April 15, 2007, Robert Grant operated a motor vehicle
that collided with a vehicle operated by Brenson Daniel, allegedly causing injury
through negligence. Daniel owned and was operating a 2004 Chevy Impala at the
time of the accident. He maintained insurance, including underinsured motorist
(UIM) coverage, on the vehicle through Allstate Insurance Company. Grant also
maintained automobile insurance.
At the time of the accident, Daniel, then 25 years old, lived with his
parents, William and Karen Daniel (“Mr. and Mrs. Daniel”). Mr. and Mrs. Daniel
maintained motor vehicle insurance through Metropolitan Direct Property and
Casualty Insurance Company for four vehicles. Although Daniel was listed as a
driver for these vehicles, Daniel’s Chevy Impala was not listed, nor was he
personally listed as a named insured under Mr. and Mrs. Daniel’s Metropolitan
policy.
Mr. and Mrs. Daniel’s Metropolitan policy provided “general
definitions” for words and phrases repeatedly appearing in bold-face type
throughout the policy. The relevant portions of the “general definitions” section
read:
GENERAL DEFINITIONS
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The following words and phrases appear in bold-face
type repeatedly through this policy. They have a special
meaning and are to be given that meaning whenever used
in connection with this policy and any endorsement
which is part of this policy:
....
“RELATIVE” means a person related to you by blood,
marriage or adoption (including a ward or foster child)
and who resides in your household.
“YOU” and “YOUR” mean the person(s) named in the
Declarations of this policy as named insured and the
spouse of such person or persons if a resident of the same
household.
(Emphasis as appearing in policy.)
In addition, Mr. and Mrs. Daniel’s policy consisted of several,
separate components of coverage. These separate components consisted of
“Automobile Liability,” “Personal Injury Protection,” “Automobile Medical
Expense,” and “Uninsured and Underinsured Motorists” coverage; of particular
relevance, each separate component of coverage included its own “additional
definitions,” and qualified these additional definitions by stating that “[t]he
following definitions apply to this coverage only[.]” The relevant portions of the
Automobile Liability coverage read:
AUTOMOBILE LIABILITY
ADDITIONAL DEFINITIONS FOR THIS
COVERAGE
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The following definitions apply to this coverage
only:
....
“INSURED” means:
1. with respect to a covered automobile:
a. you;
b. any relative; or
c. any other person using it within the
scope of your permission.
2. with respect to a non-owned
automobile, you or any relative.
(Emphasis as appearing in policy.)
Notably, the separate component of the Uninsured and Underinsured
Motorists coverage does not have an “additional definition” for the word
“relative.” The relevant portions of the Uninsured and Underinsured Motorists
coverage read:
UNINSURED AND UNDERINSURED MOTORISTS
ADDITIONAL DEFINITIONS FOR THESE
COVERAGES:
The following definitions apply to these coverages
only:
“COVERED AUTOMOBILE” means:
....
4. a motor vehicle, while being operated by you
or a relative with the owner’s permission, which is
not owned by, furnished to, or made available for
the regular use to you or any relative in your
household.
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EXCEPTION: A motor vehicle owned by,
furnished to, or made available for regular use to
any relative in your household is covered when
operated by you.
....
COVERAGE EXCLUSIONS
We do not cover:
....
G. a relative who owns, leases, or has available for their
regular use, a motor vehicle not described in the
Declarations.
(Emphasis as appearing in policy.)
The exclusionary language found in “Coverage Exclusions,” section
“G,” (Exclusion G) above, is the subject of the dispute before this Court.
Daniel has apparently recovered the benefit limits of Grant’s policy as
well as his own, but his demand for UIM benefits from Metropolitan was denied.
Daniel filed his complaint in this litigation on September 4, 2007, alleging
negligence on the part of Grant and breach of contract against Metropolitan. On
January 4, 2008, Grant and Daniel entered into an Agreed Order dismissing the
claim against Grant with prejudice. Metropolitan subsequently moved for
summary judgment arguing that its policy unambiguously excluded coverage of
Daniel and that this exclusion has been previously upheld and does not violate
public policy. Daniel opposed Metropolitan’s motion, contending that the
exclusion was void.
On November 6, 2008, the trial court granted Metropolitan’s motion
and dismissed Daniel’s complaint, holding that the language of Mr. and Mrs.
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Daniel’s policy unambiguously excluded Daniel from being considered an
“insured,” and that the exclusionary language found in “Coverage Exclusions,”
section “G,” above, does not violate public policy. On appeal, Daniel contends
that he does qualify as an “insured” under the Metropolitan policy, that the
language excluding him from coverage under said policy was void, and that it was
error for the trial court to hold otherwise.
“The standard of review on appeal of a summary judgment is whether
the trial court correctly found that there were no genuine issues as to any material
fact and that the moving party was entitled to judgment as a matter of law.”
Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). Construction and
interpretation of a contract are questions of law that are subject to de novo review.
Cinelli v. Ward, 997 S.W.2d 474, 476 (Ky. App. 1998).
Daniel first contends that the trial court erred in holding that the
language of the policy itself unambiguously excluded Daniel from coverage and
that the plain language of the policy actually classifies him as an “insured.” As a
rule, “[w]here the terms of an insurance policy are clear and unambiguous, the
policy will be enforced as written.” Kemper National Insurance Companies v.
Heaven Hill Distilleries, Inc., 82 S.W.3d 869, 873 (Ky. 2002). “It is also the rule
that where an insurance contract is ambiguous or susceptible of different meanings,
it will be construed most strongly against the insurer who prepared it.” Senn's
Adm'x v. Michigan Mut. Liability Co., 267 S.W.2d 526, 527 (Ky. 1954). However,
“[o]nly actual ambiguities, not fanciful ones, are required to be construed against
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the drafter.” Snow v. West American Ins. Co., 161 S.W.3d 338, 341 (Ky. App.
2004.) As such, “terms used in insurance contracts ‘should be given their ordinary
meaning as persons with the ordinary and usual understanding would construe
them.’” Motorists Mutual Insurance Company v. RSJ, Inc., 926 S.W.2d 679, 680
(Ky. App. 1996), quoting City of Louisville v. McDonald, 819 S.W.2d 319, 320
(Ky. App. 1991).
In the Metropolitan policy at issue in this case, the Underinsured
Motorists Coverage component provides that “[Metropolitan] will pay damages for
bodily injury sustained by: (1) [the insured] or a relative, caused by an accident
arising out of the ownership, maintenance, or use of an underinsured motor
vehicle, which [the insured] or a relative are legally entitled to collect from the
owner or driver of an underinsured motor vehicle.” This statement is qualified by
“Exclusion G,” contained in the UIM coverage component, which precludes
coverage for “a relative who owns, leases, or has available for their regular use, a
motor vehicle not described in the Declarations.” Furthermore, the term “relative,”
contained in the policy’s “general definitions” section, “means a person related to
[the named insureds] by blood, marriage or adoption . . . and who resides in [the
named insureds’] household.” Here, the insureds named in the Metropolitan policy
are Mr. and Mrs. Daniel; as their son, Daniel unquestionably qualifies as their
“relative.” Moreover, Daniel sustained his injuries from an underinsured vehicle
while driving a motor vehicle that he owned, had insured under a separate policy,
and which was not described in the declarations of Mr. and Mrs. Daniel’s
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Metropolitan policy. As such, the plain language of the policy clearly excludes
Daniel from its coverage.
In spite of the plain language of the exclusion cited above, Daniel
argues that his status as a “relative” still lends him coverage under the
underinsured component of the Metropolitan policy. According to his
interpretation, the Metropolitan policy classifies all “relatives” as “named
insureds.” Thus, he argues this should render Exclusion G contradictory and void.
In support, Daniel looks beyond any provision contained in the Metropolitan
policy’s underinsured and uninsured motorist coverage component; instead, Daniel
relies entirely upon the definition of the word “relative,” located in the separate
section in the Metropolitan policy regarding automobile liability coverage. There,
the policy states:
AUTOMOBILE LIABILITY
ADDITIONAL DEFINITIONS FOR THIS
COVERAGE
The following definitions apply to this coverage
only:
....
“INSURED” means:
1. with respect to a covered automobile:
a. you;
b. any relative; or
c. any other person using it within the
scope of your permission.
2. with respect to a non-owned
automobile, you or any relative.
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(Emphasis as appearing in policy.)
Here, Daniel’s theory of coverage labors under a misapprehension:
namely that the definition of “insured” encompassing the word “relative,” found in
the section labeled “Automobile Liability,” somehow carries over to the section
labeled “Underinsured and Uninsured Motorists.” This interpretation necessarily
ignores the qualification located conspicuously under the headings of each section:
“The following definitions apply to this coverage only.” As no definition of
“relative” is found in the section labeled “Underinsured and Uninsured Motorists”
at all, let alone one equating a “relative” to a “named insured,” the definition of the
word “relative” as it appears in the “general definitions” section is instead
controlling. “Relative,” as defined in the “general definitions” section of the
policy, does not mean “insured.” Rather, it “means a person related to [the
insured] by blood, marriage or adoption . . . and who resides in [the insured’s]
household.” As such, we see no conflict between the language of Exclusion G in
the UIM coverage section of the Metropolitan policy, and the language defining
the word “relative,” nor do we find this language susceptible to different meanings.
Consequently, we find this language unambiguous. Thus, the policy cannot be
construed to include Daniel as a “named insured,” and the trial court did not err in
this respect.
Next, Daniel contends that even if the language of Exclusion G does
unambiguously preclude coverage for his injuries, Exclusion G is void because it is
against public interest to allow an insurance carrier to exclude from coverage an
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insured’s relative, residing in the insured’s house, who owns a motor vehicle not
described in the declarations in the insured’s policy. We disagree.
This Court previously held that an exclusion substantially similar to
the one at issue in this case was valid as a matter of law. In Brown v. Atlanta
Casualty Company, 875 S.W.2d 103 (Ky. App. 1994), at issue was an exclusion
stating
This coverage does not apply:
(b) to bodily injury sustained by any relative while
occupying any motor vehicle owned by such relative
with respect to the security required by Kentucky
Revised Statutes Chapter 304, subtitle 39, is not in effect.
Id. at 104. This Court enforced the above provision, which denied basic reparation
benefits to an eighteen-year-old driving his own uninsured vehicle. Brown, the
driver, sought recovery from his father’s insurance carrier. The father’s policy
specifically excluded injuries sustained by a relative while occupying an uninsured
vehicle owned by that relative. Brown argued that KRS 304.39-020(3) defines
“basic reparation insured” to include “a relative residing in the same household
with the named insured” and therefore the policy provision could not be enforced.
This Court upheld the exclusion as totally consistent with the public policy
embodied in the MVRA:
We hold that the exclusion is valid as a matter of law.
Kentucky’s Motor Vehicle Reparations Act (Subtitle 39)
(Act) was designed:
“To require owners, registrants and operators of motor
vehicles in the Commonwealth to procure insurance
covering basic reparation benefits and legal liability
arising out of ownership, operation or use of such motor
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vehicles.” KRS 304.39-010(1). A more clear and
emphatic expression of public policy cannot be imagined.
Id.
We noted that this pubic policy was effectuated by KRS 304.39080(5) which provides in relevant part:
[E]very owner of a motor vehicle registered in this
Commonwealth or operated in this Commonwealth by
him or with his permission, shall continuously provide
with respect to the motor vehicle while it is either present
or registered in this Commonwealth, and any other
person may provide with respect to any motor vehicle, by
a contract of insurance or by qualifying as a self-insurer,
security for the payment of basic reparation benefits in
accordance with this subtitle and security for payment of
tort liabilities, arising from maintenance or use of the
motor vehicle.
Id. This Court reasoned that allowing an uninsured motorist driving his own
uninsured vehicle to recover basic reparation benefits from a parent’s policy would
“circumvent the very purpose of the Act.” Id. We refused to strike the challenged
provision of the policy because to do so would undermine the public policy of
requiring “every owner of a motor vehicle registered . . . or operated” in Kentucky
to maintain insurance on such vehicle as security for basic reparation benefits and
tort liability.
The Brown case is distinguishable from the two cases Daniel relies
upon to support his contention that Exclusion G is void: Chaffin v. Kentucky Farm
Bureau Ins. Companies, 789 S.W.2d 754 (Ky. 1990) and Hamilton Mutual
Insurance Company v. United States Fidelity & Guaranty Co., 926 S.W.2d 466
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(Ky. 1996). In Chaffin, “the insurance coverage at issue [was] uninsured motorist
coverage. . . a separate premium was paid for . . . three items of uninsured motorist
coverage; the claimant was a named insured and had a reasonable expectation of
multiple coverage; and the policy provision at issue had the effect of eliminating
all but one item of such coverage.” Id. at 756. The Supreme Court “concluded
that uninsured motorist coverage is personal to the insured; that an insured who
pays separate premiums for multiple items of the same coverage has a reasonable
expectation that such coverage will be afforded; and that it is contrary to public
policy to deprive an insured of purchased coverage, particularly when the offer of
such is mandated by statute.” Id.
Similarly, in Hamilton Mutual Insurance Company, this Court
voided an exclusionary clause which stated:
Exclusions.
A. We do not provide Uninsured or Underinsured
Motorists Coverage for “bodily injury” sustained by any
person:
1. While “occupying,” or when struck by, any motor
vehicle owned by you or any “family member” which is
not insured for this coverage under this policy.
Id. at 468. There, we concluded that considerations regarding uninsured and
underinsured statutes “focus . . . upon the reasonable expectations of an insured
who purchases separate items of coverage. Our Supreme Court has mandated that
UM and UIM coverage is personal to the insured. . . .” Id. at 470.
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In both Chaffin and Hamilton, the named insureds had purchased
uninsured or underinsured liability coverage, but coverage was denied to those
named insureds because of policy language which diminished or eliminated that
purchased coverage, i.e., coverage was excluded based upon whether a car used by
the named insureds was specifically scheduled for coverage under the policy. As
such, the provisions in question were voided because the named insureds had a
reasonable expectation of coverage. However, neither Chaffin nor Hamilton
addressed whether the same provision could validly exclude from an insured’s
policy a relative who owned his own car, insured his own car, and was injured
driving his own car.
More applicable to the case at bar is Brown, where the insured did not
own the vehicle in question, and the injured driver was not the insured. Rather, the
injured driver was the insured’s son, who never insured his own vehicle and then
sought to extend his father’s policy to that car on the basis that he was a relative
still residing at home. This Court rejected Brown’s proposition that public policy
required an insurer to provide uninsured motorist coverage in such circumstances
for a non-owned vehicle never listed on the policy because such an
interpretation of KRS 304.38-020(3)(b) together with
KRS 304.39-050(2) would allow uninsured motorists
driving their own uninsured vehicles to recover BRBs
and thereby circumvent the very purpose of the Act. The
public policy behind the Act is to require insurance, and
to that end uninsured motorists are not given the same
protection as insured motorists.
Brown at 104.
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This case presents a different scenario in that the owner of the vehicle,
Daniel, was insured under his own policy in accordance with KRS 304.39-080(5).
Despite this distinction, Daniel’s interpretation of the Metropolitan policy is
analogous to Brown’s interpretation of KRS 304.39-320. Both interpretations
would allow a motorist, injured while driving his own vehicle, to recover from
another person’s separate policy that excludes that motorist from coverage and
does not contemplate that motorist as an insured. As in Brown, such a result would
circumvent the very purpose of the Act. The public policy behind the Act is to
require insurance, and to that end, if underinsured coverage were provided under
Daniel’s theory, there would be little, if any, incentive for a relative who owns one
or more vehicles, residing with an insured, to insure any of them. To allow Daniel
to recover pursuant to his parents’ underinsured coverage through Metropolitan
would, in effect, hold that public policy allows every person in Kentucky who
owns an automobile to meet their insurance obligation simply by living at a
relative’s house, provided that relative has automobile insurance. Such a result
would be untenable.
Throughout his brief, Daniel invokes the “reasonable expectations”
doctrine which is only applicable where the policy at issue is ambiguous. Simon v.
Continental Ins. Co., 724 S.W.2d 210 (Ky. 1986). As stated above, we find
nothing ambiguous in the policy language relevant to this appeal. In addition,
where the reasonable expectations doctrine does apply, as we stated in Estate of
Swartz v. Metropolitan Property and Casualty Co., 949 S.W.2d 72, 76 (Ky. App.
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1997), “[u]nder controlling Kentucky law, the proper area of inquiry is what [the
insureds] could reasonably expect in light of what they actually paid for, not what
they personally expected or whether those expectations could be ascertained.”
Here, Daniel could not have reasonably anticipated recovery for a claim against his
parents’ Metropolitan policy given that it unambiguously excluded him from
coverage, it did not name him as an insured, and he paid nothing to be covered
under it.
The judgment of the Jefferson Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Timothy R. McCarthy, Esq.
Louisville, Kentucky
David K. Barnes
Kelly M. Stevens
Louisville, Kentucky
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