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Kissinger v. Am. Family Mut. Ins. Co. - 563 S.W.3d 765 (Mo. Ct. App. 2018)


The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties. In determining which state has the most significant relationship to the contract, a court considers (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. However, when determining the validity of an insurance contract and the rights created thereby, the most important factor to consider is the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy. The principal location of the insured risk is in the state where it will be during at least the major portion of the insurance period, so in the case of an automobile liability policy, the principal location of the insured risk is where the automobile will be garaged at least during most of the period in question.


Kitchen and Kissinger (collectively "Plaintiffs"), who are divorced, are the natural parents of Megan Kitchen ("Megan"). On December 12, 2008, Megan suffered fatal injuries in a car accident while riding as a passenger in a vehicle operated by Chad Roberts ("Roberts") and owned by Roberts's parents. The vehicle Roberts was driving at the time of the accident was covered by an automobile insurance policy issued by American Family ("Roberts's policy") that provided $25,000 liability coverage and $2,000 in medical expense coverage. In December 2009, American Family paid the liability coverage of $25,000 and $2,000 medical expense coverage under Roberts's policy into court, and the court divided the policy proceeds equally between Kitchen and Kissinger. In addition to the liability and medical expense coverage provided by Roberts's policy, both Kitchen and Kissinger owned automobile insurance policies at the time of the accident that included underinsured motorist ("UIM") coverage and medical expense coverage.

Kitchen appealed from the trial court's declaratory judgment finding that under Illinois law, the underinsured motorist and medical expense coverages in his insurance policies do not stack and allow the underinsured motorist coverage to be reduced by the full amount of the liability payment by a tortfeasor's insurer. American Family Mutual Insurance Company ("American Family") and American Standard Insurance Company of Wisconsin ("American Standard"), each of whom are a member of the American Family Insurance Group Madison, WI (collectively "the Insurers"), have filed a cross appeal from the same declaratory judgment, challenging the trial court's findings that under Missouri law, the underinsured motorist and medical expense coverages in Lori Kissinger's ("Kissinger") insurance policies do stack and do not allow for a reduction by the amount of the liability payment by a tortfeasor's insurer. 


Did Illinois and Missouri law, respectively, govern the interpretation of Kitchen's and Kissinger's automobile insurance policies as to UIM and medical expense coverage?




The court held that Illinois law governed the interpretation of automobile insurance policies as to UIM and medical expense coverage because the insured vehicles were garaged in Illinois as to Kitchen's policies; Missouri law governed Kissinger's policies. Other insurance provisions did not render an anti-stacking provision ambiguous under Illinois law because a reference to "other similar insurance" could not reasonably include the same insurer's policies. Pursuant to 215 ILCS 5/143a-2(4), the UIM benefit was offset by the entire amount of liability coverage paid into court by another insurer, although that amount was divided with another party. The anti-stacking provisions of other policies were unambiguous as to UIM coverage because other insurance provisions referred specifically to UIM coverage provided by other insurance companies, but ambiguity existed as to medical expense coverage because such specificity was absent. As to Kissinger, those policies must be construed against the insurers to mean that "in determining the total damages to which the underinsured motorist coverage will be applied, the amount of money already received by the tortfeasor must be deducted." The amount of uncompensated damages exceeded the limit of Kissinger's UIM coverage, and the insurer was liable for full limit of that coverage, $100.000, without reduction.

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