Archive for the ‘Insurance’ Category

Decision: Philips v. St Paul Marine & Fire

September 1, 2009

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.


Decision: Polson v. Farmers Insurance Co.

February 8, 2009

January 30th. The Kansas Supreme Court has issued its opinion in Polson and Fallis v. Farmers Insurance Company (No. 99,908), a case covering insurance benefits of deceased persons and their estates. In a unanimous opinion, written by Justice Luckert, the Court affirmed a summary judgment issued by the District Court in favor of the insurance company. The Court determined that the provisions of the Kansas Uniform Simultaneous Death Act (KUSDA) do not override those of the Kansas Automobile Injury Reparations Act (KAIRA), and that in any case if they did they could not be construed to allow the estates of two people who died simultaneously to receive the survivors benefits from an insurance policyeach person would have received had they lived.

Timothy and Michelle Polson, married but with no children, were killed in a car accident. There is no evidence to suggest either of them survived the other: both were pronounced dead at the scene. Their car insurance policy contained a clause as mandated under the KAIRA that survivors benefits be paid to a spouse or children in the event of death. Michelle and Timothy’s parents (John Polson, Pauline Fallis) each applied to Farmers Insurance Company for the $10,800 in survivors benefits. Farmers refused the claim on the grounds that neither parent was part of the qualified survivor classes (spouse or child). Polson and Fallis sued, seeking summary judgment and attorney’s fees, arguing that each of their children would have been entitled to the other’s survivor benefits and that the benefit should be incorporated into their estates. Farmers’ sought and received summary judgment against this. Polson and Fallis appealed. Their core legal theory is that because the KUSDA states that where death order cannot be ascertained each individual is held to have predeceased the other, each in turn for the purposes of survivors benefits should be seen as surviving the other.

In affirming the District Court the Kansas Supreme Court makes several rulings of note. First, it holds that the KUSDA as a statute of general application does not overrule the language in the subject-specific KAIRA which states that to claim survivors benefits the claimant must establish that they survived. Secondly it holds that in a case like this the automatic presumption under the KUSDA of each person predeceasing the other does not create an equivalent assumption of survival in situations where survival is the factor in the law. Thirdly, the Court rules that in any case survivors benefits on an insurance policy do not match any of the categories of property that the KUSDA is narrowly defined to apply to, since they are non-transferable.

The Court also rejected Polson and Fallis’ application for attorney fees which are required under Kansas law when an insurance company loses a case, since in this one Farmers prevailed.