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Reese v. United States Fire Insurance Co.6/30/2005
any ambiguity in a "fellow employee" exclusion. However, USF also acknowledges that no Missouri case has considered the question of whether the inclusion of language relating to the spouse and children of the injured employee in the "Employee Indemnification and Employer's Liability" exclusion renders the "Fellow Employee" exclusion ambiguous.
USF Business Auto Liability Exclusions
The two relevant exclusions, number four relating to employer's liability and, number five relating to fellow employee's liability, read as follows:
4. EMPLOYEE INDEMNIFICATION AND EMPLOYER'S LIABILITY
"Bodily Injury " to:
a. An employee of the "insured" arising out of and in the course of employment by the "insured"; or
b. The spouse, child, parent, brother or sister of that employee as a consequence of paragraph a. above.
5. FELLOW EMPLOYEE
"Bolidy Injury " to any fellow employee of the "insured" arising out of and in the course of the fellow employee's employment.
"In determining the intent of the parties to a contract, we review the terms of a contract as a whole, not in isolation." Tuttle v. Muenks, 21 S.W.3d 6, 11 (Mo.App. W.D. 2000). Each term of a contract "'is construed to avoid an effect which renders other terms meaningless.'" Id. (quoting Ringstreet Northcrest, Inc. v. Bisanz, 890 S.W.2d 713, 718 (Mo.App. W.D. 1995)).
The "Employee Indemnification and Employer's Liability" exclusion in this case expressly excludes coverage for spouses, children, parents, and siblings of the employee as a consequence of the employee's bodily injury . By contrast, the "Fellow Employee" exclusion does not expressly exclude coverage for spouses, children, parents, and siblings of the employee as a consequence of the employee's bodily injury. Both exclusions appear immediately adjacent to each other in the policy. " here a term is used in one phrase of a policy, its absence in another phrase is significant." Williams v. North River Ins. Co., 579 S.W.2d 410, 412 (Mo.App. S.D. 1979).
An ambiguity exists when the meaning of the language in the policy leads to "duplicity, indistinctness, or uncertainty" or "it is reasonably open to different constructions." Krombach v. Mayflower Ins. Co., 827 S.W.2d 208, 210 (Mo.banc 1992). Ambiguous language must be construed against the insurer. Id. "This rule is especially applicable where insurance is first 'granted' and is then followed by provisions limiting or avoiding liability." Irelan v. Standard Mut. Ass'n of Cassville, 379 S.W.2d 815, 819 (Mo.App. 1964).
At the very least, exclusion number five, when read together with the other language of the policy, is reasonably and fairly open to different constructions. A side-by-side comparison of the adjacent exclusions makes it apparent that exclusion number four, dealing with claims brought against the employer, excludes consequential damage claims by family members, while exclusion number five does not. A reasonable person would find this absence of similar exclusionary language significant. The meaning of policy language is that which would reasonably be given by the ordinary person of average intelligence or common understanding, not in the manner of a painstaking lawyer.
Id. at 818. The conclusion that exclusion number five does not exclude consequential damage claims by family members is a fair and reasonable interpretation of the policy.
In the instant case, there is, at a minimum, an ambiguity as to whether the "Fellow Employee" exclusion prohibits suits by spouses, children, siblings and parents of an injured employee. The specific preclusion of family members' claims
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