Bussman v. Safeco Ins. Co. of Am.

• Citation: 298 Kan. 700,317 P.3d 70
• Decision Date: 24 January 2014
• Docket Number: No. 103,020.,103,020.
• Parties: Connie BUSSMAN, Appellant/Cross-appellee, v. SAFECO INSURANCE COMPANY OF AMERICA, Appellee/Cross-appellant.
• Court: United States State Supreme Court of Kansas

298 Kan. 700

317 P.3d 70

Connie BUSSMAN, Appellant/Cross-appellee,

v.SAFECO INSURANCE COMPANY OF AMERICA, Appellee/Cross-appellant.

No. 103,020.

Supreme Court of Kansas.

Jan. 24, 2014.

Syllabus by the Court

1. In preparing its insurance policy contracts, an insurer has a duty to make the meaning clear to the insured, and if it fails to do so, the insurer and not the insured must suffer. Where the terms of a policy of insurance are ambiguous, obscure, or susceptible to more than one construction, the construction most favorable to the insured must prevail.

2. Under K.S.A. 60–216(a) and (c), the purpose of a pretrial conference is to eliminate the element of surprise from trials and to simplify the issues and procedure by effecting full disclosure to all parties of the anticipated evidence and the contested issues, both factual and legal, and to consider other matters that may aid in the disposition of the action. Generally, a trial court should not entertain an issue or claim that is omitted from the pretrial order. Rather, the pretrial order controls the course of the action unless modified to prevent manifest injustice pursuant to K.S.A. 60–216(e).

3. Except in a proceeding to determine costs, a defending party's rejected settlement offer to allow judgment to be taken against that defending party is not admissible evidence of the defending party's liability.

4. One of the exceptions to the requirement that an automobile liability insurance policy issued in Kansas must include uninsured motorist (UM) and underinsured motorist (UIM) coverage is the provision in K.S.A. 40–284(e)(4) that permits any insurer to provide for the exclusion or limitation of such UM or UIM coverage to the extent that workers compensation benefits apply. If a workers compensation claimant is permitted to apply for the reimbursement of future medical expenses through the workers compensation proceeding, then workers compensation benefits apply to those future medical expenses within the meaning of K.S.A. 40–284(e)(4), and any insurer may exclude or limit the recovery of those future medical expenses under its UM or UIM coverage.

5. The language of K.S.A. 40–908 gives fair notice to any insurance company that issues any policy that insures any property in this state against fire, tornado, lightning, or hail that in all actions in which judgment is rendered against the insurance company on such a policy that the court shall allow the plaintiff reasonable attorney fees for services in such action, including proceedings upon appeal, and that those fees will be recovered and collected as a part of the costs of the action. A claim by the plaintiff in the petition and in the pretrial order that the plaintiff is seeking court costs that are reimbursable by statute constitutes a claim for attorney fees under K.S.A. 40–908.

6. An appellate court must first attempt to ascertain legislative intent through the statutory language enacted, giving common words their ordinary meanings. When a statute is plain and unambiguous, an appellate court should not speculate about the legislative intent behind that clear language and it should refrain from reading something into the statute that is not readily found in its words. Even where a court believes that the legislature has omitted a vital provision in a statute that precludes the intended result, if that omitted provision cannot be found under any reasonable interpretation of the language actually used, then the remedy lies solely with the legislature.

7. Notwithstanding any public policy considerations and regardless of what one might speculate that the legislature meant to do, the plain language of K.S.A. 40–908 says that the trial court shall allow the plaintiff reasonable attorney fees as part of the costs in all actions in which judgment is rendered against any insurance company on any policy given to insure any property in this state against loss by fire, tornado, lightning, or hail. If a loss is covered by a policy which includes coverage for any property against fire, tornado, lightning, or hail, then K.S.A. 40–908 applies regardless of which peril may have caused the covered loss and regardless of whether the covered loss resulted from a property damage claim or a bodily injury claim.

Fred J. Spigarelli, of Spigarelli, Spigarelli & Hayes, of Pittsburg, argued the cause, and Angela Trimble, of the same firm, was with him on the briefs for appellant/cross-appellee.

Paul P. Hasty, Jr., of Hasty & Associates, LLC, of Overland Park, argued the cause and was on the briefs for appellee/cross-appellant.

Derek S. Casey, of Triplett, Woolf & Garretson, LLC, of Wichita, and Jacob S. Graybill and N. Russell Hazlewood, of Graybill & Hazlewood LLC, of Wichita, were on the brief for amicus curiae The Kansas Association of Justice.

Timothy J. Finnerty and Bradley J. Raple, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Wichita, were on the brief for amicus curiae Kansas Association of Defense Counsel.

The opinion of the court was delivered by JOHNSON, J.:

Connie Bussman was driving a vehicle owned by her employer, Community National Bank (CNB), when she was injured in an accident that was caused by an underinsured motorist. Bussman settled with the underinsured tortfeasor for policy limits and then claimed underinsured motorist (UIM) benefits under CNB's commercial insurance package policy that included commercial automobile coverage, which Bussman believed had been issued by Safeco Insurance Company of America (Safeco), the same carrier that insured the underinsured tortfeasor. After Safeco denied Bussman's claim, a jury found that the underinsured motorist was 100 percent at fault for the accident and awarded Bussman damages, including future medical expenses. The district court denied Safeco's posttrial motion for judgment based upon its claim that it did not issue CNB's insurance policy. The district court granted Safeco's motion for credit against the verdict in part but declined to give Safeco credit for future medical expenses. The district court also denied Bussman's motion for attorney fees under K.S.A. 40–256 and K.S.A. 40–908.

Bussman appealed and Safeco cross-appealed to the Court of Appeals. The Court of Appeals affirmed the district court's judgment on each of Safeco's claims of error. The Court of Appeals also affirmed the districtcourt's denial of Bussman's request for attorney fees under K.S.A. 40–256 but found that Bussman was entitled to attorney fees under K.S.A. 40–908 in Bussman v. Safeco Ins. Co. of America, No. 103,020, ––– Kan.App.2d ––––, 2010 WL 5185785 (Kan.App.2010) (unpublished opinion).

Safeco petitioned this court for review, arguing that the Court of Appeals erred in holding that (1) Safeco had waived its right to claim that Bussman named the wrong defendant in her lawsuit; (2) Bussman's claim for future medical expenses under CNB's commercial insurance package policy was not duplicative of her workers compensation award; (3) Bussman was entitled to a jury instruction on future medical expenses, (4) Bussman was entitled to attorney fees under K.S.A. 40–908; and (5) Bussman's pretrial request for costs was sufficient to give Safeco notice of her intent to seek attorney fees under K.S.A. 40–908. We granted Safeco's petition and allowed both the Kansas Association of Defense Counsel and The Kansas Association of Justice to file amicus curiae briefs. We have jurisdiction pursuant to K.S.A. 60–2101(b).

Factual and Procedural Background

On August 1, 2005, while within the scope of her employment and while driving a vehicle owned and insured by her employer, CNB, Bussman was injured in a two-vehicle automobile accident. Carol Barth was driving the other vehicle, which was insured by Safeco.

Bussman settled her claim against Barth by accepting Safeco's tender of Barth's $50,000 liability policy limit. She also filed a workers compensation claim against CNB, and the administrative law judge (ALJ) awarded her temporary total disability and permanent partial disability compensation. The ALJ's award also provided: “Future medical will be considered upon proper application.”

Believing that Safeco had also issued CNB's commercial insurance package policy, Bussman made a claim against that company for UIM benefits. When a settlement could not be reached, Bussman filed a lawsuit against Safeco. The pretrial order did not indicate that the identity of the company that issued CNB's UIM policy was a disputed issue.

Prior to the jury trial, Safeco filed a motion for partial summary judgment, arguing that it was entitled to judgment as a matter of law on Bussman's future medical expenses claim because Bussman had been awarded future medical expenses in her workers compensation case. The district court denied the motion based upon the fact that Bussman had not yet recovered future medical expenses in the workers compensation case.

On the first day of the jury trial, Safeco specifically asserted for the first time that Safeco had not issued CNB's insurance policy and, therefore, Bussman had sued the wrong insurance company. The district court ruled that if the jury rendered a judgment adverse to Safeco, the court would consider this issue after the trial.

During the jury instruction conference, Safeco objected to an instruction informing the jury that it could award Bussman damages for future medical expenses based upon its argument that Bussman had already been awarded future medical expenses in her workers compensation case. Alternatively, Safeco argued that Bussman had presented insufficient evidence upon which a jury could find that there would be any future medical expenses. The district court overruled Safeco's objections to instructing the jury on future medical expenses.

The jury found the underinsured motorist, Barth, 100 percent at fault and awarded Bussman a total of $115,505.96 in damages, including a $20,000 award for future medical expenses. After the...