Davis v. Hughes

• Court: Kansas Supreme Court
• Writing for the Court: McFARLAND; PRAGER
• Citation: Davis v. Hughes, 229 Kan. 91, 622 P.2d 641 (Kan. 1981)
• Decision Date: 17 January 1981
• Docket Number: No. 52060,52060
• Parties: , 23 A.L.R.4th 94 Cleta Rose DAVIS and Royal E. Davis, Appellees, v. Danny HUGHES, Ron West, and Western Casualty & Surety Company, Appellants.

Page 641

622 P.2d 641

229 Kan. 91, 23 A.L.R.4th 94

Cleta Rose DAVIS and Royal E. Davis, Appellees, v. Danny HUGHES, Ron West, and Western Casualty & Surety Company, Appellants.

No. 52060.

Supreme Court of Kansas.

Jan. 17, 1981.

Syllabus by the Court

1. The uninsured motorist statute, K.S.A. 40-284, is remedial in nature and should be liberally construed to provide a broad protection to an insured against all damages resulting from bodily injuries sustained by the insured and caused by the acts of an uninsured motorist.

2. Insurance policy provisions which purport to condition, limit, or dilute the broad, unqualified uninsured motorist coverage mandated by K.S.A. 40-284 are void and unenforceable.

3. Where more than one insurance policy provides uninsured motorist coverage with respect to damages sustained in a single accident caused by fault on the part of an uninsured motorist, the insured injured party may "stack" coverages up to but not more than the full amount of the damages sustained.

4. Where two vehicles are insured in a single policy with separate premiums paid for each vehicle, an injured insured may "stack" the two uninsured motorist coverages up to the limit of his damages and a policy provision purporting to prevent such "stacking" is void and unenforceable.

5. Endorsements in automobile insurance policies excluding the "stacking" of personal injury protection benefits are authorized by K.S.A.1979 Supp. 40-3108(a ) and are valid whether two vehicles are insured in the same or separate policies.

6. The general rule of statutory construction is that a statute will operate prospectively unless its language clearly indicates that the legislature intended that it operate retrospectively. This rule is normally applied when an amendment to an existing statute or a new statute is enacted which creates a new liability not existing before under the law or which changes the substantive rights of the parties.

7. The general rule of statutory construction is modified where the statutory change is merely procedural or remedial in nature and does not prejudicially affect the substantive rights of the parties.

8. K.S.A.1976 Supp. 40-3113(e ), which directed that personal injury protection benefits are to be deducted from any recovery of uninsured motorist coverage, is substantive in nature, and its repeal can only operate prospectively in the absence of any statutory language indicating a contrary legislative intent.

Barry E. Warren, of Wallace, Saunders, Austin, Brown & Enochs, Overland Park, argued the cause, and Barton Brown was with him on the brief for the appellants.

Jay D. Thomas, of Barnett & Lerner, Chartered, Kansas City, Kansas, argued the cause and was on the brief for the appellees.

McFARLAND, Justice:

This is an appeal by Western Casualty & Surety Company from an order of the district court: (1) authorizing the stacking of benefits of three uninsured motorist coverages; (2) authorizing the stacking of personal injury protection (PIP) benefits of three coverages; and (3) retrospectively applying the repeal of K.S.A.1976 Supp. 40-3113(e ) relative to the setoff of paid PIP benefits from uninsured motorist benefits due.

The appeal is before us upon an agreed statement of the case pursuant to Supreme Court Rule No. 3.05. The agreed facts are summarized as follows:

The case arises out of an automobile accident which occurred January 6, 1975. The injured plaintiff, Cleta Rose Davis, was a passenger in a 1972 Oldsmobile Toronado being operated by her husband and plaintiff, Royal E. Davis. The accident occurred in Kansas City, Kansas, when the vehicle operated by Davis was hit by an automobile operated by one of the defendants, Danny Hughes, at or near the intersection of K-32 and 32nd Street. At the time of the accident the automobile was owned by defendant Ron West. Likewise, at the time of the accident the driver of the West vehicle, Danny Hughes, was an uninsured motorist within the meaning of K.S.A. 40-284. As a result of the automobile accident, plaintiff Cleta Rose Davis incurred medical expenses in excess of $7,000 and at the time of the trial on September 26, 1978, was unable to return to her employment as a licensed practical nurse.

At the time of the accident there were two insurance policies in force and effect which are directly involved in the current litigation. Both policies were issued by Western Casualty & Surety Company (Western). The first policy was issued to Royal E. Davis. As originally issued, said policy covered two vehicles, to wit: (1) a 1969 Ford 1/2-ton pickup; and (2) a 1971 Maverick 4-door sedan, wherein separate premiums were charged for each vehicle and so recorded on the declaration page of said policy. On or about October 2, 1974, Royal E. Davis caused a 1972 Toronado automobile to be added to the policy and the 1971 Maverick to be eliminated therefrom. In addition, Linda Sue Davis, a daughter of the plaintiffs, was added as an insured. The aforementioned policy insuring the two vehicles provided for uninsured motorist benefits in the amount of $15,000 per person and PIP benefits in the amount of the required statutory minimum. A separate premium was charged to each vehicle under said policy for the various coverages afforded each vehicle. The policy period for this policy was August 1, 1974, to August 1, 1975.

The second insurance policy involved was issued to Michael R. Gillette. Said policy provided coverage in the amount of $15,000 per person for uninsured motorist benefits and the statutory minimum for PIP benefits. At the time of the accident involving Cleta Rose Davis, Michael R. Gillette was married to the daughter of Mrs. Davis and was residing at the same address with Cleta Rose and Royal E. Davis. The Gillette policy insured one motor vehicle and was in full force and effect.

Following the accident, plaintiff Cleta Rose Davis submitted claims for medical bills pursuant to the PIP provisions of the Davis policy, which claims have been paid up to the $2,000 limit of coverage.

In addition, Cleta Rose Davis applied for disability benefits (wage loss) pursuant to the PIP provisions of the Davis policy. The total amount of disability benefits received by Cleta Rose was $6,320.60 and was calculated on the basis of 52 weeks. The period covered began on April 1, 1975, and concluded on March 29, 1976. No PIP benefits have been applied for pursuant to the Gillette policy and no benefits have been paid pursuant to said policy, but said benefits have been claimed as a part of this lawsuit.

The action herein was commenced on January 5, 1977. The trial court ultimately entered judgment in favor of Cleta Rose Davis and against defendant Danny Hughes in the amount of $55,000. The court further held: (1) The three uninsured motorist coverages (two in the Davis policy and one in the Gillette policy) could be stacked; (2) the three PIP coverages could be stacked; and (3) the repeal of K.S.A.1976 Supp. 40-3113(e ) should operate retrospectively. Western appeals the trial court's determinations relative to insurance coverage.

We turn now to resolution of the issues raised. The first issue relates to stacking of uninsured motorist benefits. The first point therein is whether such stacking of benefits is permitted under a single policy which insures two vehicles. The Davis and Gillette policies each provide:

"CONDITIONS

"5. Limits of Liability: Regardless of the number of automobiles to which this policy applies:

"Coverage K: (uninsured motorist) The limit of liability for coverage K stated in the declarations as applicable to 'each person' is the limit of The Western's liability for all damages because of bodily injury sustained by one person as the result of any one accident and, subject to the above provision respecting each person, the limit of liability stated in the declarations as applicable to 'each accident' is the total limit of The Western's liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident."

Western concedes that Kansas courts have generally allowed stacking of uninsured motorist coverage. However, as noted by Western, no Kansas appellate case has dealt with the issue of whether, under mandatory uninsured motorist coverage, stacking is permitted under one policy insuring two vehicles.

Western relies heavily on Sturdy v. Allied Mutual Ins. Co., 203 Kan. 783, 457 P.2d 34 (1969). The following excerpt from Sturdy at 785, 457 P.2d 34, places Sturdy in proper context:

"Many of the cases present different factual situations and some turn on the question whether various policy limitations and exclusions amount to restriction of mandatory statutory coverage. We have no such question as the coverage here is a voluntary type, the insurance contract having been executed prior to the effective date of our recently enacted uninsured motorist law (K.S.A.1968 Supp. 40-284, et seq.)."

The facts in Sturdy involve an injured plaintiff owning two vehicles insured under one policy. The plaintiff contended he could stack each of the two coverages of $10,000. The insurance company contended he could not stack the two coverages by virtue of an "other insurance" clause. This court held that the second coverage in the same policy was not "other insurance." In permitting the stacking of coverage this court held:

"It must be borne in mind the purpose of uninsured motorist insurance is to provide compensation for personal injury to the innocent victim of the uninsured motorist. As to the named insured the coverage is a contract benefit for which he has paid. Here the damage to the insured has been determined and he now seeks indemnity for it. He is not seeking any windfall as a result of his injury but he is seeking full indemnity based on payment of two separate premiums. Applying traditional rules of construction we think he is entitled to that coverage. Of the two constructions which could...