Decision: Philips v. St Paul Marine & Fire

August 28th. The Kansas Supreme Court has issued its decision in Phillips v. St Paul Marine and Fire Insurance Company (No. 97,806), a coverage dispute. In a unanimous opinion, written by Justice Carol Beier, the Court held that the plain wording of KSA 40-284(c) meant that the Wyandotte County Government’s opt out of certain coverage limits carried over between one policy term and another, even though that new term was non-contiguous.

Douglas Phillips, an employee of the Unified Government of Wyandotte County and Kansas City, Kansas (Unified Government) was driving a Unified Government vehicle and was involved in an accident with a juvenile in 2003. He pursued a lawsuit for underinsured motorist benefits (UIM) against St Paul which was the insurer used by the Unified Government. In 1999 the Unified Government had taken out a policy with St Paul and opted out of (rejected) the statutorily required UIM benefits of $500,000. This policy was not renewed, but in 2003 the Unified Government again used St Paul for its insurance. This time no explicit opt out was lodged, though the Unified Government and the insurer used the same terms as previously.

Phillips was covered under the 2003 policy and argued that in the absence of the express rejection of the minimum UIM benefits that they reasserted themselves. He prevailed in the District Court which also awarded him attorneys fees. The Court of Appeals reversed, but on a split panel.

In its ruling the Kansas Supreme Court rejected Phillips argument. Noting that the statute in question states that ‘valid UIM rejection forms will remain in force and effect for “any subsequent policy” with the same insurer unless the insured requests a change in writing’. As a result, the statute was clear and unambiguous and therefore the rejection of the higher UIM benefits remained at the time of the accident.

The Court therefore held that Summary Judgment should be issued against Phillips and reversed his award of attorney’s fees.


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