Gowing v. Great Plains Mut. Ins. Co.

• Decision Date: 10 April 1971
• Docket Number: No. 45931,45931
• Citation: 207 Kan. 78,483 P.2d 1072
• Parties: Tommy L. GOWING, Appellant, v. GREAT PLAINS MUTUAL INSURANCE COMPANY, Inc., Appellee.
• Court: Kansas Supreme Court

Page 1072

483 P.2d 1072

207 Kan. 78

Tommy L. GOWING, Appellant, v. GREAT PLAINS MUTUAL INSURANCE COMPANY, Inc., Appellee.

No. 45931 Supreme Court of Kansas.

April 10, 1971.

Rehearing Denied May 12, 1971.

Syllabus by the Court

1. Where provisions of an insurance policy are ambiguous or conflicting, the policy is to be construed strictly against the insurer and in favor of the insured.

2. In determining the intention of the parties to a contract of insurance, the test is not what the insurer intends the printed language to mean, but rather what a reasonable person placed in the position of the insured would have understood the words to mean.

3. Inasmuch as the insurer prepares the contract of insurance, the burden is placed upon it to establish facts which bring the case within any exceptions contained in the policy.

4. Where an insurer intends to limit or restrict the coverage under its policy, it should use language which clearly reveals its stated purpose.

5. The record is examined in an action brought by an insured against his insurance carrier to recover attorney fees expended by the insured in defending a damage suit filed against him, and under the circumstances and for the reasons set forth in the opinion it is held the trial court erred in entering summary judgment in favor of the defendant insurer.

John T. Flannagan, of Payne & Jones, Chartered, Olathe, argued the cause, and Keith Martin, Olathe, was with him on the brief, for appellant.

Edward B. Soule, of Glenn, Cornish & Leuenberger, Topeka, argued the cause and was on the brief, for appellee.

FONTRON, Justice:

The plaintiff, Tommy L. Gowing, seeks to recover attorney fees he incurred in defending an action brought against him for damages resulting from personal injury. Summary judgment was entered in favor of the defendant, Great Plains Mutual Insurance Company, Inc., and Gowing has appealed. The plaintiff will sometimes be referred to as Gowing, or insured, while the defendant will often be designated as Great Plains, or insurer.

The facts are not complicated. On December 14, 1965, an altercation took place between Gowing and a party by the name of Cawby on the latter's farm. Subsequently Cawby filed suit against Gowing for personal injuries allegedly sustained in the affray. In his petition, Mr. Cawby charged Mr. Gowing with an unprovoked, willful, malicious, vicious and violent assault and battery which was renewed after he, Cawby, had left his own land and was on his way to obtain medical attention. In response to Cawby's charges, Gowing pleaded self defense, and judgment in the assault and battery action was eventually entered in Gowing's favor.

Prior to the affray, Gowing had procured a policy of insurance with Great Plains, wherein that company agreed, in Section II thereof, 'To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage and the Cpmpany shall defend any suit against the Insured alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent * * *' (Emphasis supplied.) Gowing has maintained throughout the course of this litigation that under this provision of the policy Great Plains was obligated to provide for his defense against the Cawby lawsuit.

On the other hand, Great Plains contends it had no duty to defend Gowing in the damage action because of an exclusionary provision reading as follows: 'Section II of this Policy Does Not Apply: * * * to bodily injury or property damage caused intentionally by or at the direction of the Insured * * *' (Emphasis supplied.) The insurer has taken the position that Cawby's lawsuit charged Gowing with an intentional injury which was expressly excepted from the policy's coverage.

Three points are made by the plaintiff. We shall discuss but one of them, since in our view, it will control the disposition of this appeal. Slightly paraphrased, the decisive point raised by Gowing is this: The language of the policy with respect to the insurer's duty to defend is ambiguous; hence the policy should be strictly construed against the insurer; when so construed, the policy imposed an obligation on Great Plains to defend the personal injury action against Gowing.

In recent years, the so-called adhesion contract has been the subject of much learned dissertation on the part of jurists and legal savants. Typical of the adhesion contract, and one of its most prominent examples, is the insurance contract or policy, which possesses the distinctive characteristic of unequal bargaining strength or bargaining status between seller and purchaser, or the insurer and the insured. (See Stewart v. Preferred Fire Ins. Co., 206 Kan. 247, 249, 477 P.2d 966.)

The terms of today's standard insurance policy are predetermined by the insurance carrier itself and, long in advance of the individual insurance sale, those terms have been incorporated into the insurance package presented to the prospective buyer. The free give and take of the open market place does not prevail in the insurance industry. The buyer's freedom of choice in selecting a policy is severely limited; if he desires casualty insurance he must normally accept the printed policy with the usual printed provisions-else he can leave it.

Under such circumstances, concerning which we are not inclined to be critical, the law, in its concern for even-handed fairness, has attempted to minimize the imbalance between insurer and insured, so far as that is possible, by means of a rule that in the event of ambiguity or conflict in the policy provisions a policy of insurance is to be construed strictly against the insurer and in favor of the insured. The rule has been consistently applied in this jurisdiction for many years. (See cases compiled in 3 Hatcher's Kansas Digest (Rev.Ed.) Insurance, § 42.)

The premise on which this rule is based was given expression in Gray v. Zurich Insurance Co., 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168, where the facts were identical to those in this case, with the single exception that the action filed there against the insured had resulted in a judgment against him:

'Although courts have long followed the basic precept that they would look to the words of the contract to find the meaning which the parties expected from them, they have also applied the doctrine of the adhesion contract to insurance policies, holding that in view of the disparate bargaining status of the parties we must ascertain that meaning of the contract which the insured would reasonably expect.' (pp. 269, 270, 54 Cal.Rptr. p. 107, 419 P.2d p. 171.)

This salutary principle pertains to the exclusionary provisions as well as to the other terms of the insurance contract. In Buchanan v. Employers Mutual Liability Ins. Co., 201 Kan. 666, 443 P.2d 681, this court held that inasmuch as the insurer prepares the policy, the burden is upon him to establish facts which bring the case within the exceptions set forth in the policy. (See, also, Southards v. Central Plains Ins. Co., 201 Kan. 499, 441 P.2d 808.)

In similar vein the federal court in Prickett v. Hawkeye-Security Insurance Company, 10 Cir., 282 F.2d 294, stated that if an insurer intends to restrict its coverage it must use language clearly stating its purpose and that this rule of construction applies with particular force to provisions which attempt to exclude liability coverage under certain conditions.

This court, also, has said that where an insurance company desires to limit its liability under a policy, it should employ such language as will clearly and distinctly reveal its stated purpose. (Miller v. Farmers Mutual Automobile Ins. Co., 179 Kan. 50, 55, 292 P.2d 711; Chicago, R. I. & Pac. Rld. Co. v. Aetna Ins. Co., 180 Kan. 730, 737, 308 P.2d 119.) Unclear and obscure clauses in a policy of insurance should not be permitted to defeat the coverage which is reasonably to be expected by the insured. (Sturdy v. Allied Mutual Ins. Co., 203 Kan. 783, 793, 457 P.2d 34.)

Viewing the instant policy in the light of these time-tested principles, we cannot say that the extent of the obligation resting on Great Plains to defend its insured is wholly clear or free from doubt. The policy issued to Gowing is a 'FARMOWNERS POLICY.' It consists of two pages and is in substance what we assume might be termed a comprehensive policy, insuring Gowing's property against certain perils and Gowing himself against liability. The coverage with which we are here concerned is contained on page two, which is captioned FARMERS COMPREHENSIVE PERSONAL LIABILITY FORM. Under this caption there is the heading 'INSURING AGREEMENTS' and immediately following is 'Section I, Coverage age G-Farmers Comprehensive Personal Liability', in black but smaller capital letters. Under this particular coverage the insurer makes two proposals: (1) To pay on behalf of the insured such sums as the insured shall legally become obligated to pay as damages for bodily injury or property damage and (2) to defend any lawsuit against the insured alleging such bodily injury or property damage and seeking damages payable under the terms of the policy, even if the allegations are groundless, false or fraudulent.

We believe the average man, in reading the foregoing provisions in their entirety, would conclude, and be fully justified in so doing, that he was buying a defense to whatever lawsuit might be filed against him seeking damages to person or to property. The language positioned at the top of the page is broad and sweeping in its scope. It would tend to lead a reasonably naive insurance customer to expect that a defense would be provided against personal injury actions filed against him, whether the alleged injury be calculated or unintentional.

This court follows the general rule that in determining the...