McNemee v. Farmers Ins. Group, 51713

• Decision Date: 14 June 1980
• Docket Number: No. 51713,51713
• Citation: 612 P.2d 645,228 Kan. 211
• Parties: Donald R. McNEMEE, Appellant, v. FARMERS INSURANCE GROUP, and Farmers Insurance Co., Inc., and Mid-Century Insurance Co., Appellees.
• Court: Kansas Supreme Court

Page 645

612 P.2d 645

228 Kan. 211

Donald R. McNEMEE, Appellant, v. FARMERS INSURANCE GROUP, and Farmers Insurance Co., Inc., and Mid-Century Insurance Co., Appellees.

No. 51713.

Supreme Court of Kansas.

June 14, 1980.

Syllabus by the Court

1. Any insurer may exclude benefits required by the Kansas Automobile Injury Reparations Act: For injury sustained by the named insured and relatives residing in the same household while occupying another motor vehicle owned by the named insured and not insured under the policy, or for injury sustained by any person operating the insured motor vehicle without the expressed or implied consent of the insured. K.S.A. 1979 Supp. 40-3108(a ).

2. To obtain insurance loss payments on duplicate coverages is often referred to as "stacking," and the word stacking refers to the ability of an insured to recover under two or more endorsements for a single loss suffered by the insured.

3. Under the facts and circumstances of this case, when three automobile insurance policies were issued to a named insured covering three different vehicles and the insured was injured while driving one of the vehicles, he is not entitled to "stack" personal injury protection (PIP) benefits. If, as in the present case, the additional policies cover nonoccupied vehicles and the policies contain the exclusion authorized by K.S.A. 1979 Supp. 40-3108(a ), the insured is limited to recovery of the amount of PIP benefits provided for in the policy which covered the vehicle occupied by him at the time of his injuries.

Muriel Andreopoulos, Kansas City, argued the cause, and James Yates, Kansas City, was with her on the brief for appellant.

W. Terry Fitzgerald, of McAnany, Van Cleave & Phillips, P. A., Kansas City, argued the cause and was on the brief for appellees.

FROMME, Justice:

This is a direct appeal by plaintiff, Donald R. McNemee, from an order of the district court upholding an exclusion in policies covering nonoccupied vehicles as authorized by K.S.A. 1979 Supp. 40-3108(a ). The exclusion precludes "stacking" medical personal injury protection (PIP) benefits.

To obtain insurance loss payments on duplicate coverages is often referred to as "stacking," and the word stacking refers to the ability of an insured to recover under two or more endorsements for a single loss suffered by the insured.

The facts of this case were stipulated by the parties. Highly summarized they are as follows: The plaintiff-insured owned three vehicles, a 1972 Ford van, a 1972 Chevrolet carry-all, and a 1972 Pontiac automobile. Plaintiff obtained three separate insurance policies. All policies contained identical PIP endorsements. Plaintiff was involved in an accident while driving the 1972 Ford van. The van was insured by the Truck Insurance Exchange. Plaintiff filed a claim and was paid the maximum $2,000.00 under the coverage provided in the policy for PIP medical expenses. The total medical expenses incurred by plaintiff totaled over $17,000.00. The plaintiff filed this action to collect PIP medical payments on the two other policies covering the nonoccupied vehicles, the 1972 Chevrolet carry-all and the 1972 Pontiac automobile. The trial court denied recovery and upheld an exclusion in the policies which precluded duplicate payments of PIP benefits.

The plaintiff-appellant, who is the named insured in all three policies, reasons that he paid premiums on all three policies, although no specific premium was charged for PIP medical coverage, and he should be entitled to payments under all policies. His medical expenses exceeded the total of the coverages under all three policies. The plaintiff's argument is based upon the reasoning in the following analogous cases which involve the uninsured motorist coverage mandated by K.S.A. 40-284. Sturdy v. Allied Mutual Ins. Co., 203 Kan. 783, 457 P.2d 34 (1969); Clayton v. Alliance Mutual Casualty Co., 212 Kan. 640, 512 P.2d 507, reh. denied 213 Kan. 84, 515 P.2d 1115 (1973); Forrester v. State Farm Mutual Automobile Ins. Co., 213 Kan. 442, 517 P.2d 173 (1973); Van Hoozer v. Farmers Insurance Exchange, 219 Kan. 595, 549 P.2d 1354 (1976); Welch v. Hartford Casualty Ins. Co., 221 Kan. 344, 559 P.2d 362 (1977).

On the other hand, the insurance companies in supporting the court's decision rely on a policy exclusion contained in each PIP endorsement attached to the three policies, and which reads:

"Exclusions

"This coverage does not apply:

"(a) to bodily injury sustained by the named insured or any relative while occupying any motor vehicle owned by the named insured which is not an insured motor vehicle ;" Emphasis supplied.

In a subsequent paragraph in this endorsement appear certain definitions; included is the following:

" '(I)nsured motor vehicle' means a motor vehicle of which the named insured is the owner and with respect to which (a) the bodily injury liability insurance of the policy applies and for which a specific premium is charged, and (b) the named insured is required or has elected to maintain security required under the Kansas Automobile Injury Reparations Act;" Emphasis supplied.

The defendant companies point to K.S.A. 1979 Supp. 40-3108(a ) which authorizes this and other exclusions as follows:

"Any insurer may exclude benefits required by subsection (f ) of section 7 (40-3107) of this act: (a ) For injury sustained by the named insured and relatives residing in the same household while occupying another motor vehicle owned by the named insured and not insured under the policy, or for injury sustained by any person operating the insured motor vehicle without the expressed or implied consent of the insured."

As to uninsured motorist coverage this court has held, when an injured person fits the definition of "insured" in more than one policy he may "stack" one uninsured motorist endorsement upon another and recover from each successively until the total of the limits of liability of all endorsements is exhausted or until the damages have been compensated. Welch v. Hartford Casualty Ins. Co., 221 Kan. 344, 559 P.2d 362.

It is apparent that the policy exclusion with which we are concerned in the present case was inserted in the endorsement to prevent the "stacking" of coverages and that the exclusion is authorized by the statute. The question in this case is whether "stacking" of PIP medical benefits is permitted. We hold that it is not. Any insurer may exclude benefits required by the Kansas Automobile Injury Reparations Act: For injury sustained by the named insured and relatives residing in the same household while occupying another motor vehicle owned by the named insured and not insured under the policy, or for injury sustained by any person operating the insured motor vehicle without the expressed or implied consent of the insured. When, as in the present case, the exclusion has been inserted in a PIP endorsement, the exclusion is binding on the parties. The exclusion is authorized by statute and governs the extent of personal injury protection benefits recoverable when inserted in an insurance contract.

We are not alone, for many states requiring personal injury protection benefits do not permit "stacking." See State Farm Mut....