Opinion
No. WD 44299.
September 17, 1991.
Appeal from the Circuit Court of Worth County, Missouri, Honorable John Andrews, Judge.
Before Turnage, P.J., Kennedy and Breckenridge, JJ.
State Farm Mutual Automobile Insurance Company brought suit for declaratory judgment against Donald Monday, his wife, Margaret, and Bret Miller for a declaration that State Farm was not obligated to defend Donald Monday under an automobile liability policy. The court entered judgment in favor of the Mondays and Miller and found a family exclusion clause to be void. On this appeal State Farm contends the family exclusion clause is valid. Affirmed.
In October, 1989, Donald Monday was driving an automobile and his wife, Margaret, was a passenger. The automobile was covered by a policy of insurance issued by State Farm which afforded liability coverage for damages which an insured becomes legally liable to pay because of bodily injury and damages to the property of others. The policy identified the named insured as "Monday, Margaret and Donald." The policy identified the automobile which Donald was driving at the time of the accident as the insured vehicle. The policy contained an exclusion to liability coverage for any bodily injury to any insured or any member of an insured's family residing in the insured's household. At the time of the accident Donald and Margaret were married and were living together in the same household.
The accident occurred when the automobile driven by Donald collided with a John Deere tractor being driven by Bret Miller. Margaret filed suit against Miller for personal injuries and Miller filed a third-party petition against Donald seeking contribution and indemnification. The third-party petition action was derivative from Margaret's cause of action for personal injury. MFA Mut. Ins. Co. v. Howard Const. Co. , 608 S.W.2d 535, 538[1-3] (Mo.App. 1980).
Donald tendered the defense of the third-party action to State Farm but the company refused to defend and filed this suit for declaratory judgment to ascertain its liability under the policy.
The trial court held the "family exclusion clause" violated the motor vehicle responsibility law and was therefore void. State Farm contends that the family exclusion clause has been repeatedly upheld, most recently in American Family Mut. Ins. Co. v. Ward , 789 S.W.2d 791 (Mo. banc 1990), and that such exclusion is valid even after the amendments to Chapter 303. Monday contends that the amendments to Chapter 303 dealing with financial responsibility have changed the law and that under such chapter the family exclusion clause is against the public policy of this state.
Ward was decided under the provisions of Chapter 303 prior to the amendments thereto which took effect on July 1, 1987. Thus, that case did not reach the question of the validity of a family exclusion clause under Chapter 303 as it was in effect after July 1, 1987.
Prior to the amendments, Chapter 303 was entitled the Motor Vehicle Safety Responsibility Law. The purpose of that chapter was to ascertain if drivers who had been involved in an accident could respond in damages. In short, the law prior to July 1, 1987, was an after-the-fact proof of financial responsibility. As of July 1, 1987, the title of Chapter 303 was changed to the Motor Vehicle Financial Responsibility Law and the thrust of Chapter 303 became a before-the-fact proof of financial responsibility. Section 303.025, RSMo 1986, effective July 1, 1987, was added to Chapter 303. Section 303.025.1 provides that "[n]o owner of a motor vehicle registered in this state shall operate the vehicle. . ., unless the owner maintains the financial responsibility as required in this section." Subsection 2 provides that "[a] motor vehicle owner shall maintain his financial responsibility in a manner provided for in section 303.160, or with a motor vehicle liability policy which conforms to the requirements of the laws of this state." Section 303.024.1, effective July 1, 1987, requires each insurer issuing a motor vehicle liability policy in this state to furnish an insurance identification card to the insured. That section contains the requirements for the information to be shown on the card.
All sectional references are to RSMo 1986.
Section 303.160.1 provides that proof of financial responsibility may be given by filing a certificate of insurance as provided in § 303.170 and by other methods not applicable here. Section 303.170 provides that proof of financial responsibility may be furnished by filing with the director the written certificate of any insurance carrier certifying that there is in effect a motor vehicle liability policy.
Section 303.190.1 provides:
A "motor vehicle liability policy" as said term is used in this chapter shall mean an owner's or an operator's policy of liability insurance, certified as provided in section 303.170 or section 303.180 as proof of financial responsibility, and issued, except as otherwise provided in section 303.180 by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named therein as insured.
Subsection 2 of that section contains terms which a liability policy must contain.
Sections 303.160, 303.170 and 303.190 were adopted in 1953 and except for some amendments in 1961, 1965, and 1981 retain the same language after the passage of §§ 303.024 and 303.025
The problem in this case becomes the effect which the passage of § 303.024 and § 303.025 have on the remaining sections which have been in effect for some time. Specifically, State Farm argues that § 303.190.1 defines a motor vehicle liability policy as one that is certified according to § 303.170. State Farm argues that the policy in this case was not certified, and that § 303.190 applies only to certified policies, thus subsection 2 of § 303.190 which contains provisions which a policy of liability insurance must contain do not apply to the policy in question here.
Monday and Miller contend that the new sections added in 1987 changes the meaning of Chapter 303 and eliminates the need for a policy to be certified.
Section 303.025 prohibits the owner of a motor vehicle from operating such vehicle or allowing anyone else to operate it unless the owner maintains financial responsibility. That section states that financial responsibility may be maintained as provided in § 303.160, or with a motor vehicle liability policy. By sections 303.160 and 303.170 proof of responsibility may be furnished by filing with the director a written certificate of an insurance carrier certifying that a motor vehicle liability policy is in effect.
By providing that financial responsibility may be furnished by a certified policy as described in § 303.160 and § 303.170, or by a motor vehicle liability policy, the legislature obviously intended to provide two different ways to satisfy the requirement of proof of financial responsibility. One way is by the certified policy, and the other is by a liability policy which is not required to be certified. The statutes now recognize certified policies and policies which are not certified. Financial responsibility may be shown by either a certified policy, or by a motor vehicle liability policy which is not required to be certified.
The provisions added to Chapter 303 in 1987 make it clear that financial responsibility is to be in effect before a vehicle is operated and may be met by carrying a motor vehicle liability policy. To prove that the obligation to procure financial responsibility has been made before a vehicle is operated, the new section requires that an identification card be carried in the vehicle showing that the vehicle is insured by a motor vehicle liability policy. Prior to the adoption of these sections there were no comparable provisions in Chapter 303. Before 1987 that chapter simply required proof of financial responsibility in the event of an accident. The only proof of responsibility allowed was by § 303.160 which required a certificate of insurance as provided in § 303.170 (or § 303.180 for non-residents) or by posting a bond, certificate of deposit or certificate of self insurance. The certificate of insurance in § 303.170 required an insurance company to file a certificate with the Director of Revenue certifying that there was in effect a motor vehicle liability policy. Thus, prior to July 1, 1987, the only proof of financial responsibility by insurance was by a certified policy of insurance.
After July 1, 1987, proof of financial responsibility could still be made by a certified policy, but such proof can also be satisfied by a motor vehicle liability policy which conforms to the laws of this state. This new method does not require an insurance company to certify the policy, but instead requires the company to supply an identification card which confirms the fact of insurance on the vehicle in which the card is carried. This is a method of proof in addition to the certified policy procedure because § 303.025.2 states that financial responsibility may be satisfied by the certified policy procedure of § 303.160 or by obtaining a motor vehicle liability policy. Thus, if a liability policy is obtained there is no necessity to follow the certified policy procedure.
While § 303.025.2 allows financial responsibility to be shown by obtaining a liability policy without requiring the policy to be certified, § 303.190.1 was left intact. That section defines a motor vehicle liability policy as a policy certified as provided in § 303.170 (or § 303.180). It is apparent the legislature overlooked amending § 303.190 when it provided two methods of satisfying responsibility, one of which does not require a certified policy.
In 1A Sutherland Statutory Construction , § 22.35 (4th Ed. 1985), the effect of amendments on the unchanged sections of a statute is considered. It is stated "[b]ut where an unaltered section and the amendment cannot be reconciled, the provisions of the amendatory act, which is the last expression of the will of the legislature, must prevail." The definition in § 303.190.1 of a motor vehicle liability policy as being a policy which is certified contradicts § 303.025.2 which allows proof of responsibility by obtaining a motor vehicle liability policy which is not certified. To resolve this conflict, the provision of § 303.025, which is the last expression of the will of the legislature, must prevail over § 303.190.1.
In Bank of Belton v. State Banking Bd . , 554 S.W.2d 451, 457 (Mo.App. 1977), this court held that the reason of the law must be given effect over the letter of the law by maxims of construction which allow a court to insert or delete words to avoid absurdity and to give meaning to a statute.
To give full meaning to § 303.025.2 which allows financial responsibility to be met with a motor vehicle liability policy which is not certified, it is necessary to delete from § 303.190 the words "certified as provided in § 303.170 or § 303.180." By eliminating the definition of a liability policy as being one which is certified, full effect may be given to § 303.025.2 which allows financial responsibility to be shown by a liability policy without the necessity of certification.
The above discussion disposes of one prong in the problem. The other prong is whether family exclusion clauses are viable under Chapter 303 as effective July 1, 1987. As pointed out above, § 303.025.2 allows proof of financial responsibility "with a motor vehicle liability policy which conforms to the requirements of the laws of this state." Section 303.190.2(2) requires an owner's policy of liability insurance to insure the insured person, and those using the vehicle with permission, against loss from liability imposed by law for damages arising out of the ownership, maintenance or use of the vehicle.
With the abolishment of interspousal immunity in S.A.V. v. K.G.V ., 708 S.W.2d 651 (Mo. banc 1986), Margaret would have a cause of action against Donald for her personal injuries. Likewise a derivative cause of action from her cause of action would lie in this case by Miller against Donald. The policy here which contains a family exclusion clause does not comply with § 303.190.2(2) because such policy does not insure against loss from liability arising out of the use of the vehicle for a cause of action allowed by law. For that reason the family exclusion clause here is contrary to the public policy of this state and is void.
The court in American Standard Ins. Co. v. Dolphin , 801 S.W.2d 413, 416 (Mo.App. 1990), held that a passenger exclusion clause is contrary to the public policy of this state as expressed in § 303.190.2(2) regardless of whether the policy had been certified or not. The result in this case is consistent with the holding in that case. This court holds that § 303.190.2(2) expresses the public policy of this state. The family exclusion clause denies coverage for liability which the law recognizes and is therefore void as against the public policy of this state.
The judgment declaring that State Farm is obligated to defend Donald is affirmed.