Hammerman v. Southwestern Ins. Group, 48513

• Decision Date: 08 July 1977
• Docket Number: No. 48513,48513
• Parties: Paul HAMMERMAN, Appellee, v. SOUTHWESTERN INSURANCE GROUP, Appellant.
• Court: Kansas Court of Appeals

Page 1

571 P.2d 1

1 Kan.App.2d 445

Paul HAMMERMAN, Appellee, v. SOUTHWESTERN INSURANCE GROUP, Appellant.

No. 48513.

Court of Appeals of Kansas.

July 8, 1977.

Syllabus by the Court

1. Uninsured motorist insurance is in the nature of a contract of indemnity as opposed to liability insurance. It does not protect the insured against liability but rather insures him against loss by a limited group of tortfeasors.

2. The rights and duties as between an injured insured and his uninsured motorist insurance carrier are determined by contract law, and the liability of the uninsured motorist insurance carrier is determined by the legal liability of the uninsured motorist under tort law.

3. In a direct action by an injured party against his own uninsured motorist carrier in which the injured party seeks damages for personal injuries sustained in an accident caused by a negligent uninsured motorist, the policy provisions providing uninsured motorist coverage determine the amount of the judgment that can be entered against the insurance carrier if the policy limits equal or exceed the coverage required under the applicable statute.

4. The record is examined in an action wherein the trial court ruled "stacking" or "pyramiding" of uninsured motorist coverage was not an issue in the case and entered judgment in the full amount of the jury verdict with knowledge the verdict was in excess of the uninsured motorist coverage available to plaintiff in this case, and for reasons appearing in the opinion it is held the court erred.

Ralph Foster and Robert A. Vohs, Wichita, for appellant.

John C. Frank and Raymond W. Baker, Wichita, for appellee.

Before SPENCER, P. J., and ABBOTT and SWINEHART, JJ.

ABBOTT, Judge:

This action was brought by the plaintiff-appellee against plaintiff's own uninsured motorist insurance carrier for injuries he sustained in an automobile accident as a result of the negligence of an uninsured motorist. The jury returned a verdict against the uninsured motorist insurance carrier in the amount of $125,000. The jury verdict was approved by the trial judge and judgment entered against the uninsured motorist insurance carrier for the full amount of the jury verdict.

Appellant, Southwestern Insurance Group, as the uninsured motorist insurance carrier has appealed, and basically raises the question of whether or not the trial judge should have limited the judgment to the amount of uninsured motorist coverage available to plaintiff.

This case arose out of an automobile accident in Wichita on March 1, 1972. The plaintiff, Paul Hammerman, received serious permanent injuries in the accident. The negligent, uninsured driver of the other vehicle involved in the accident had disappeared prior to this lawsuit's being filed. Plaintiff chose to sue his own uninsured motorist insurance carrier direct, as he is permitted to do in Kansas.

Prior to trial, an issue arose as to whether or not plaintiff was entitled to "stack" or "pyramid" the coverage as a result of a separate premium paid for uninsured motorist coverage. The pretrial order set forth this issue in detail as the only issue of law to be determined by the court. Simply stated, the issue was whether there was $10,000 or $20,000 of coverage available to plaintiff.

The trial judge determined prior to trial that he would not permit stacking. During the trial, the parties were informed by the judge:

" . . . due to the fact that I have made the ruling that there will be no stacking in this case, that irrespective of what verdict the jury brings in, if it is more than $10,000.00, I will, based on my ruling that there will be no stacking in this case, reduce that jury's verdict to the sum of $10,000.00. I'll do it on my own initiative, my own motion due to the fact that I have said there will be no stacking."

After the trial judge ruled there would be no stacking, defendant offered to pay $10,000 which plaintiff refused and the case proceeded to trial. Prior to trial, defendant withdrew the $10,000 offer. Neither party was permitted to present evidence or argue the amount of insurance available. The jury deliberated less than one hour and delivered a verdict in the full amount of the prayer.

The trial judge commented prior to the verdict that he would not direct a verdict for $10,000, as it would only necessitate a new trial if the Supreme Court should later determine "stacking" was permissible. The trial judge further stated that by permitting a jury verdict the Supreme Court could modify the judgment up to the maximum "stacked" policy limits without having to remand for a new trial. After the jury verdict, the judge reversed his position and ruled the question of "stacking" or "pyramiding" was not before him and set aside his previous order that the policy could not be stacked. He then entered judgment in the full amount of the verdict. The trial judge, on appellant's motion for a new trial hearing, asked counsel for the plaintiff to stipulate that he did not intend to seek recovery of more than defendant's policy limits in this case. Counsel for plaintiff so agreed after making it abundantly clear that plaintiff would file a separate action alleging bad faith and other grounds for damages against his uninsured motorist insurance carrier.

Appellant claims error in that the trial judge (1) failed to follow the pretrial order and decide the legal issue of whether plaintiff was entitled to "stack" insurance coverage, (2) failed to reduce the jury's verdict to $10,000 pursuant to the court's ruling prior to impanelling the jury that "stacking" would not be allowed, (3) ruled "stacking" was not an issue for decision before the court, (4) entered judgment for $125,000 when the facts of this case would limit recovery to a maximum of $20,000 if stacking is proper, (5) failed to direct a verdict for $10,000 after ruling "stacking" would not be allowed.

Appellee contends defendant was not prejudiced by entry of judgment against it in the full amount of the verdict because defendant agreed the jury should determine all issues of liability and damage, because plaintiff stipulated he could not collect more than $20,000 in this case, and because plaintiff stated he would file a separate action in an effort to collect the balance. Appellee further contends the trial court's reversal of its ruling that stacking would not be permitted did not alter the theory on which the case was tried and therefore did not prejudice the defendant.

Kansas allows an injured party seeking recovery for personal injuries under uninsured motorist coverage three options, provided the insured complies with policy provisions consistent with K.S.A. 40-284. First, as in this case, the insured may file an action directly against his uninsured motorist liability carrier; second, the insured may also join the uninsured motorist as an additional party defendant; or third, the insured may choose to sue the uninsured motorist only. (Winner v. Ratzlaff, 211 Kan. 59, 505 P.2d 606.)

In Winner, supra, the court mentioned that in each of the three options a party could "litigate all of the issues of liability and damages." This leads appellee to conclude that in all uninsured motorist actions the insured is entitled to a judgment against the insurance carrier in the full amount of the verdict. We cannot agree with appellee.

Uninsured motorist coverage is not issued on, purchased for, or furnished to protect an uninsured motorist. It is a contract benefit for an insured motorist. Uninsured motorist coverage does not, and was never intended to, afford the insured motorist...