E.H. v. Auto. Club Inter-Insurance Exch.
| Decision Date | 26 July 2019 |
| Docket Number | No. 120,358,120,358 |
| Citation | 447 P.3d 382 |
| Parties | E.H., a minor, BY AND THROUGH Melissa J. HEMENWAY, her mother and natural guardian, Appellee, v. AUTOMOBILE CLUB INTER-INSURANCE EXCHANGE, Appellant. |
| Court | Kansas Court of Appeals |
Robert J. Luder and Lesley Renfro Willson, of Luder & Weist, LLC, of Overland Park, for appellant.
Thomas B. Diehl, of Ralston, Pope & Diehl, LLC, of Topeka, for appellee.
Before Schroeder, P.J., Green and Powell, JJ.
E.H., a minor, was a passenger in her parents' automobile when it was involved in a three-car accident. E.H., her mother and father, and her two siblings all filed claims against the tortfeasor's (at-fault driver's) insurance. Because the tortfeasor's insurance was insufficient to cover their injuries, E.H. and her father sought underinsured motorist (UIM) coverage from their insurance carrier, Automobile Club Inter-Insurance Exchange (ACIIE). A dispute arose between E.H. and ACIIE as to the amount of UIM coverage available to E.H.; E.H. filed suit, and the district court declared the maximum amount of UIM coverage available to E.H. was the $50,000 per person limit minus the $12,000 she received from the tortfeasor for a total of $38,000. ACIIE now seeks interlocutory review of this ruling, arguing the district court erred because under its policy and K.S.A. 40-284(b), only $10,000 in UIM coverage remains available for E.H.
For the reasons we more fully explain below, we find that the district court erred in its calculation of the amount of UIM coverage to which E.H. is entitled and hold that E.H. is entitled to up to $35,000 in UIM insurance coverage. We therefore reverse the district court and remand.
According to the uncontroverted facts, on January 8, 2016, E.H.'s father, Paul, was driving the family's van with his wife, Melissa, and their minor children—E.H., J.H., and I.H.—as passengers. The accident occurred when Raphael Sherman drove his vehicle through a red light and collided with a truck driven by Mario Madero. Sherman's collision caused Madero's truck to slide across the lanes of the highway and into the driver's side of Paul's van.
It is undisputed that Sherman was primarily at fault for the collision and the resulting bodily injuries to E.H. and her family. A passenger in Madero's truck, Denisse Lopez, died from her injuries, and all the occupants of E.H.'s family's van suffered bodily injuries to some extent. Sherman's insurance policy with GEICO provided bodily injury coverage limits of $25,000 per person and $50,000 per accident.
Paul and Melissa had an insurance policy with ACIIE. Under the policy, Paul and Melissa were named insureds and E.H. was an " ‘insured person.’ " The policy had bodily injury coverage with limits of $50,000 per person and $100,000 per accident. The UIM coverage had limits of $50,000 per person and $100,000 per accident. It is not disputed by the parties that E.H. is entitled to some UIM coverage under the ACIIE policy and Kansas law.
After the filing of multiple claims, the injured parties in the accident agreed to a settlement with GEICO that divided Sherman's per accident limit of $50,000 between the claimants as follows. The Lopez heirs-at-law received $25,000. Paul received $10,000; Melissa received $500; I.H. received $200; J.H. received $2,300; and E.H. received $12,000. E.H. provided ACIIE with notice of the settlement under K.S.A. 40-284(f).
Later, Paul filed a claim with ACIIE for UIM benefits, and ACIIE paid Paul $40,000 on his claim. E.H. then filed a demand on ACIIE, claiming that she was entitled to $38,000 in UIM benefits. Melissa, I.H., and J.H. did not file claims for UIM benefits. ACIIE disputed the amount of UIM coverage available to E.H., which eventually resulted in E.H. filing a petition in the district court, claiming that ACIIE was in breach of contract and owed her $38,000 under the policy, plus interest, damages, and attorney fees. ACIIE answered and filed a counterclaim seeking declaratory judgment from the district court setting forth E.H.'s rights and its obligations under the policy.
Subsequently, the parties filed cross-motions for summary judgment on ACIIE's counterclaim. E.H. claimed she was entitled to $38,000 in UIM coverage based on the difference between her $12,000 pro rata share from the GEICO settlement and the $50,000 per person UIM limit. In response, ACIIE claimed the policy actually only had a total of $50,000 per accident UIM coverage available to all insureds. ACIIE relied on the following policy language:
According to ACIIE, the policy provided its insureds with a maximum $50,000 UIM per accident limit based on subtracting GEICO's $50,000 per accident liability limit from its $100,000 UIM per accident limit. ACIIE argued that because Paul had already received $40,000 of UIM benefits, E.H. was entitled to only $10,000 in remaining UIM coverage. In response, E.H. argued ACIIE's limitation was void and unenforceable under K.S.A. 40-284(e).
After hearing argument, the district court granted E.H.'s motion and denied ACIIE's motion for summary judgment on the counterclaim. Relying on O'Donoghue v. Farm Bureau Mut. Ins. Co. , 275 Kan. 430, 66 P.3d 822 (2003), the district court held E.H. was entitled to recover "the difference between her pro rata share of the primary liability [from GEICO] settlement and her total amount of damages up to the $50,000 per person UIM limit." Subject to E.H.'s ability to prove actual damages, the district court concluded she was entitled to receive up to $38,000 in available UIM coverage.
ACIIE timely appeals.
ACIIE's interlocutory appeal is properly before us pursuant to the district court's certification in accordance with K.S.A. 2018 Supp. 60-254(b).
It is undisputed by the parties that the interpretation of the clear language of an insurance policy raises a question of law subject to de novo review. See Nationwide Mutual Ins. Co. v. Briggs , 298 Kan. 873, 876, 317 P.3d 770 (2014). Additionally, "[a] de novo standard applies to an appellate court's review of a summary judgment order when judgment is based upon uncontroverted facts and depends upon statutory interpretation." Polson v. Farmers Ins. Co. , 288 Kan. 165, Syl. ¶ 1, 200 P.3d 1266 (2009).
State ex rel. Schmidt v. City of Wichita , 303 Kan. 650, 659, 367 P.3d 282 (2016).
K.S.A. 40-284(b) requires Kansas motorists to have UIM insurance coverage:
"Any uninsured motorist coverage shall include an underinsured motorist provision which enables the insured or the insured's legal representative to recover from the insurer the amount of damages for bodily injury or death to which the insured is legally entitled from the owner or operator of another motor vehicle with coverage limits equal to the limits of liability provided by such uninsured motorist coverage to the extent such coverage exceeds the limits of the bodily injury coverage carried by the owner or operator of the other motor vehicle."
In O'Donoghue , our Supreme Court found:
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