Missouri Appeals Court Rules on Uninsured Motorist Issue

Car accidents can be devastating, and in some cases fatal. Unfortunately, families coping with fatal car accidents often have the additional burden of trying to deal with insurance companies. Recently, the Missouri Court of Appeals ruled in a case involving a fatal car accident.

In Lero v. State Farm Fire & Casualty Insurance Co., Plaintiffs Paul and Carolyn Lero filed suit against State Farm seeking compensation under their deceased daughter's uninsured motorist policy, as well as her personal liability umbrella coverage policy. Their daughter, Denise Greene, was killed in an auto accident, and the perpetrator's insurer denied coverage of the $2 million judgment against him. The Leros then sought payment from State Farm. The insurer paid the $50,000 limit assigned to the uninsured motorist policy, and denied payment under the $1 million personal liability policy.

The trial court found in favor of the Leros, holding that State Farm was prevented and estopped from raising additional defenses. Basically, estoppel is a legal doctrine that prevents a party from raising new arguments after they failed to do so initially, thus the Leros argued that since State Farm didn't raise the defenses in their initial denial letter, they are now "estopped" from raising the new defenses - including the defenses that the umbrella policy expressly excluded uninsured motorist coverage, that the only coverage listed on the declarations page of the Umbrella Policy was Coverage-L (personal liability) and that the Leros improperly shifted the burden of proof to State Farm. Consequently, the court ordered State Farm to pay the umbrella policy's $1 million limit, which led to State Farm's appeal.

Missouri Court of Appeals Decision

The Court of Appeals ruled that the Leros did not establish any inconsistency between State Farm's initial denial and its defense that the umbrella policy did not include uninsured motorist coverage. It cited State Farm's denial letter advising the Leros that " under the provisions of the personal liability umbrella policy issued to Denise N. Greene, Policy # 25-BB-N742-4, Ms. Greene did not have any uninsured motorist coverage." Since there was no true difference between the defenses raised, State Farm was able to offer subsequent, yet more specific, defenses stemming from its denial letter.

Moreover, the court stated that allowing the Leros to use the doctrine of estoppel would violate the rule that estoppel "may not be employed to create coverage where it otherwise did not exist" when the policy is clear and unambiguous.

As this case illustrates, complex disputes can arise when interpreting insurance contract language. It is helpful to have an experienced lawyer involved to advise on complicated coverage provisions to ensure you get the compensation you deserve.