Miner v. Farm Bureau Mut. Ins. Co., Inc.

• Decision Date: 20 November 1992
• Docket Number: Nos. 66959,67651,s. 66959
• Citation: 841 P.2d 1093,17 Kan.App.2d 598
• Parties: Cathy R. MINER, Appellee, v. FARM BUREAU MUTUAL INSURANCE COMPANY, INC., Appellant.
• Court: Kansas Court of Appeals

Page 1093

841 P.2d 1093

17 Kan.App.2d 598

Cathy R. MINER, Appellee, v. FARM BUREAU MUTUAL INSURANCE COMPANY, INC., Appellant.

Nos. 66959, 67651.

Court of Appeals of Kansas.

Nov. 20, 1992.

Review Denied Feb. 4, 1993.

Syllabus by the Court

1. K.S.A. 40-3110 is construed and applied.

2. An insurer does not become liable for the payment of personal injury protection benefits until it has received from the insured notice of the claim and reasonable proof of the loss along with the amount of expenses and loss incurred which are covered by the policy.

3. An insurer may require the notice of loss to be in writing and to be made as soon as practicable by the insured after the accident resulting in the loss.

4. If an insured's entire claim is not submitted at one time, payment for only the losses claimed is due within 30 days, with any part or all of the remainder of the claim being payable upon the submitting of supporting written notice by the insured.

5. The language of K.S.A. 40-3110(a) and (b) states the legislative intent that an insured must not only notify the insurer of the existence of the injury and possible claim, but also must notify the insurer of each benefit loss sustained and provide reasonable proof of the accrual of that loss, before any liability attaches on the part of the insurer.

6. The purpose of requiring an insured to notify the insurer of the claimed benefits is to insure prompt payment for loss and avoid the necessity and delay of litigation.

7. The filing of a petition for recovery of benefits claimed under a policy of insurance does not satisfy the statutory and policy requirements of notice of loss which the insured must give to the insurer.

8. An insured must provide the statutorily required notice of the benefits claimed and provide supporting documentation evidencing the losses incurred before he or she can bring action against the insurer on those claims.

9. If the insured has not given the insurer written notice of the benefit claimed, along with reasonable proof of the loss, the amount of the loss, and the expenses incurred which are covered by the terms of the policy issued, no cause of action has arisen and suit may not be brought regarding that particular benefit loss.

10. The filing of a petition would be the last step taken by an insured after the statutory notice has been given and the insurer has refused to make payment on the loss benefit submitted in compliance with K.S.A. 40-3110.

11. An insured may not submit notice of claim with support documentation regarding amounts owed and then, after the insurer relies on it and pays that amount, claim error and file an action against the insurer claiming underpayment of the claim.

12. An insured who has not made claim against the insurer for substitution and rehabilitation benefits under the personal injury protection provisions of the insurance policy prior to the filing of an action to collect those benefits is not entitled to collect the claimed benefits.

13. It has long been the law of Kansas that every contracting party has the duty to learn and know the contents of a contract before he or she signs and delivers it. Only where there is a mutual mistake as to the contents and meaning of the contract is this rule inapplicable.

14. It is error for a trial court to instruct a jury on the allowance of substitution and rehabilitation benefits when the insured had never made claim for such benefits and the award of such benefits was not before the court.

15. When the provisions of an insurance policy are clear and understandable and no issue was raised or evidence presented at trial that the policy is ambiguous, it is the duty of the court to instruct the jury to enforce the policy contract as it is written.

16. It is not a function of the trial court to create an ambiguity in the terms of an insurance contract requiring an interpretation favorable to the insured when no ambiguity existed.

17. Interest payments authorized by K.S.A. 40-3110(b) for unpaid personal injury protection benefits are a matter of judicial discretion subject to being overruled only when there is an abuse of discretion.

18. Under the facts of this case, after consideration of the entire record and the erroneous bases upon which the trial court entered judgment and against which interest was assessed, it is held the trial court abused its discretion in assessing statutory interest against the insurer.

19. K.S.A. 40-3111(b) provides for the trial court to assess attorney fees against the insurer when "the court finds that the insurer or self-insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment."

20. Whether there was just cause to refuse payment and, therefore, justification for denial of attorney fees is in the trial court's sound discretion.

21. Costs and expenses do not ordinarily include attorney fees. The allowance of attorney fees is dependent upon express statutory authority.

22. Under the facts of this case, the trial court was without authority to include litigation expenses in its award of attorney fees to the insured.

23. Under the facts of this case, considering the totality of the circumstances and the several erroneous bases upon which the trial court addressed the allowance of attorney fees, it is held the trial court abused its discretion in assessing attorney fees against the insurer.

Larry R. Mears and Ellen J. Richardson of Larry R. Mears, Chartered, Atchison, for appellant.

Richard P. Senecal of Duncan, Senecal and Bednar, Chartered, Atchison, for appellee.

Before GERNON, P.J., DAVIS, J., and RICHARD W. WAHL, District Judge Retired, assigned.

RICHARD W. WAHL, District Judge Retired, assigned:

This decision considers the consolidated appeals filed by Farm Bureau Mutual Insurance Company, Inc. (Farm Bureau). In Case No. 66,959, the appeal is from numerous alleged trial errors and the jury's verdict finding Farm Bureau liable for additional personal injury protection (PIP) benefits in the form of additional wage loss benefits, substitution benefits, and rehabilitation benefits. In Case No. 67,651, the appeal is from the trial court's judgment granting interest on the judgment, future medical benefits, and attorney fees and expenses to Cathy R. Miner.

On or about August 6, 1988, Miner and her husband, Bob Miner, were injured in a one-car accident when a deer ran in front of the vehicle Miner was driving, causing her to swerve and hit an embankment. Although not treated on the night of the accident, Miner later began having shooting pains in the neck and severe headaches. She sought treatment from Dr. Farr, a chiropractor, but was later referred to her family physician, Dr. Eplee, for continued treatment. During the course of the next few years, Miner was referred to many doctors and programs for treatment.

On September 4, 1988, Miner sent an application to Farm Bureau for loss of wages and medical benefits under the PIP provision of her automobile policy. Although Miner was self-employed at the time, managing the Whiskey Creek Tavern, she notified Farm Bureau that her monthly salary was $1,000. Miner was informed that Farm Bureau would pay 85% of the cost of replacing Miner but needed verification of what the person was paid and a letter from Miner's doctor verifying that she was medically disabled from the accident and unable to work. Thereafter, Miner submitted, as documentation of her wage loss, an affidavit signed by Miner and Mary Navinsky, Miner's mother, to show that Navinsky was hired to replace Miner at the tavern at $5 per hour or $300 per week. Miner continued to send Farm Bureau statements showing Navinsky's work hours on a regular basis as evidence of wage loss. Farm Bureau paid lost wages to Miner based on the hours turned in at the statutory rate of 85% of the $5 per hour claimed to be paid to Navinsky. Farm Bureau continued to pay Miner's medical expenses and wage loss until it was informed by Dr. Kelly that Miner had no work restrictions and could work. Based on Dr. Kelly's report, Farm Bureau sent Miner a letter advising her that her wage loss benefits would be terminated as of July 7, 1989. Farm Bureau resumed paying wage loss benefits on September 5, 1989, after receiving a letter from Dr. Eplee stating Miner had suffered a relapse. Finally, based on the opinions of Drs. Kelly, Maeda, Shriwise, Eplee, and Reddy, Farm Bureau terminated the wage loss benefits a second time in November of 1989.

On April 27, 1990, Miner filed suit against Farm Bureau, claiming Farm Bureau refused to pay PIP benefits for medical expenses, wage loss, substitution services, and rehabilitation services pursuant to Miner's policy with Farm Bureau. A trial by jury resulted in a verdict against Farm Bureau in the amounts of $26,000 for wage loss, $4,500 for rehabilitation benefits, and $2,700 for substitution services, for a total verdict of $33,200. No amount was allowed for medical expenses. Thereafter, the trial court denied Farm Bureau's motion for judgment notwithstanding the verdict or in the alternative for a new trial and granted Miner's motion for interest, attorney fees, and clarification of future medical expenses. On July 31, 1991, Farm Bureau timely appealed from all judgments entered against it by the jury and trial court. After the first appeal was filed, the trial court denied Farm Bureau's motion for reconsideration of attorney fees. Farm Bureau appealed that denial also, and the appeals are consolidated before this court.

Farm Bureau argues it was error for the trial court to deny its motion for directed verdict and allow Miner's claims for additional PIP benefits to go to the jury because the claims were based on the company's failure to pay those benefits while Miner failed to establish a right to claim the additional benefits. Farm Bureau further argues the trial court erroneously allowed Miner to present her Exhibit No. 35, a letter from Bob Miner...