State Farm Mut. Auto Ins. Co. v. Cummings
| Decision Date | 28 July 1989 |
| Docket Number | No. 63062,63062 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff/Appellee, v. James A. CUMMINGS, Defendant; Clarence Vest and Charles C. Pinnell, Defendants/Third-Party Plaintiffs. Lisa VEST, Angie Vest, and Vivian Vest Pinnell, Defendants/Third-Party Plaintiffs/Appellants, v. Carlene G. PURCELL, Third-Party Defendant. |
| Court | Kansas Court of Appeals |
Syllabus by the Court
1. The provisions of the Kansas Uninsured Motorist Statutes, K.S.A. 40-284 et seq., are mandatory and must be considered to be a part of every insurance policy written in this state. Any attempt by an insurer to diminish the statutorily mandated uninsured motorist protection provided by the statute is void and contrary to public policy.
2. To the extent that it does not conflict with or attempt to diminish statutorily mandated coverage, the policy of insurance itself is controlling as to the parties.
3. No effort to dilute or diminish the statutorily required coverage will be permitted, nor will the liability of the insurance 4. Where either the owner or the driver of a vehicle is covered by the minimum insurance limits required by law, the vehicle is not "uninsured" within the meaning of the Kansas uninsured motorist statutes, and the injured parties are not permitted access to the uninsured motorist coverage in their own policies.
carrier be extended beyond the risk and extent of liability for which it has bargained.
5. A two-prong test must be applied to determine whether underinsured motorist coverage is available: (1) The opposing party's liability coverage must be below the claimant's own liability coverage; and (2) the claimant must have damages exceeding the opposing party's liability coverage.
6. Under the facts of this case it is held: (1) Where the operator of a vehicle involved in a collision had the required minimum liability coverage, the vehicle was not "uninsured" even though the owner of the vehicle had no insurance coverage available, and (2) where the liability limits of the policy covering the injured parties did not exceed the liability coverage of the opposing party, no underinsured motorist benefits were available even though the damages of the injured parties exceeded the liability coverage of the opposing party.
Michael L. Hodges, Mission, for defendants/third-party plaintiffs/appellants.
Monti L. Belot, of Hall, Levy, Lively, DeVore, Belot & Bell, Coffeyville, for plaintiff/appellee.
Before ABBOTT, C.J., and RULON and LEWIS, JJ.
This appeal is from a decision holding that appellants Lisa Vest, Angie Vest, and Vivian Vest Pinnell were not entitled to uninsured or underinsured motorist coverage under their insurance policy.
The decision by the trial court is based on facts stipulated to by the parties. The facts are not particularly complicated and indicate that on February 4, 1985, a collision occurred between a vehicle owned by Vivian Vest Pinnell and driven by Charles Pinnell, in which Lisa Vest, Angie Vest, and Bradley Vest were occupants, and a vehicle driven by Carlene Purcell and owned by James Cummings, which shall be referred to in this opinion as the offending vehicle. As a result of the collision, Bradley Vest was killed and the other occupants of the Pinnell vehicle were seriously injured. The parties stipulated that the accident was 50% the fault of Purcell in operating the offending vehicle, and 50% the fault of Cummings, based upon his negligent entrustment of the vehicle to Purcell.
At the time of the accident, Purcell was insured by a State Farm Mutual Automobile Insurance Company policy owned by her parents, which provided liability coverage of $50,000 per person and $100,000 per accident. Cummings had no liability insurance and no coverage of any kind available for recovery by the injured parties.
The parties stipulated that Lisa Vest, Angie Vest, Charles Pinnell, and Vivian Vest Pinnell were the insureds under an insurance policy owned by Vivian and also issued by State Farm. The policy provided liability coverage of $50,000 per person and $100,000 per accident as well as uninsured motorist coverage of $50,000 per person and $100,000 per accident.
The parties further stipulated that each of the injured parties had settled with Purcell's insurance carrier for amounts less than their actual damages because of inadequate policy limits.
The present action was initiated by State Farm essentially to determine whether it would be responsible to appellants for uninsured or underinsured motorist coverage. Based on the stipulated facts, the trial court held there was no uninsured or underinsured motorist coverage available. This appeal followed.
There are two issues presented to this court on appeal: (1) Did the trial court err in ruling, as a matter of law, that the uninsured motorist provisions of the State Farm policy issued to Vivian Vest Pinnell did not provide coverage to the injured parties? (2) Did the trial court err in ruling
that, as a matter of law, the underinsured provisions of the State Farm policy did not afford coverage to the injured parties?
Appellants argue they should have access to the uninsured motorist coverage afforded by their policy. While the driver of the offending vehicle may have been insured, the owner of that vehicle was not, and therefore the vehicle must be considered "uninsured" as to the owner. The issue to be determined is whether uninsured motorist coverage is available to the injured parties in this circumstance. This appears to be a question of first impression in Kansas, although, as will be pointed out, it has been considered by many of our sister courts.
The resolution of the issue presented involves the interpretation of the Kansas uninsured motorist statutes and of the insurance policy issued by State Farm which provides the uninsured motorist coverage. The basic Kansas uninsured motorist statute is found at K.S.A.1988 Supp. 40-284. (Although the uninsured motorist statutes have been amended since the date of the accident, the statutory language pertinent to our decision has not been changed.) K.S.A.1988 Supp. 40-284 reads in pertinent part:
"(a) No automobile liability insurance policy covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, unless the policy contains or has endorsed thereon, a provision with coverage limits equal to the limits of liability coverage for bodily injury or death in such automobile liability insurance policy sold to the named insured for payment of part or all sums which the insured or the insured's legal representative shall be legally entitled to recover as damages from the uninsured owner or operator of a motor vehicle because of bodily injury, sickness or disease, including death, resulting therefrom, sustained by the insured, caused by accident and arising out of ownership, maintenance or use of such motor vehicle, or providing for such payment irrespective of legal liability of the insured or any other person or organization."
The provisions of the statute quoted above are mandatory insofar as they stipulate what insurance policies in this state must contain. The provisions of the statute are to be considered a part of every automobile policy in this state. Simpson v. KFB Insurance Co., Inc., 209 Kan. 620, 626, 498 P.2d 71 (1972). Any attempt by an insurer to diminish the statutorily mandated uninsured motorist protection is void and contrary to public policy. Clayton v. Alliance Mutual Casualty Co., 213 Kan. 84, 85, 515 P.2d 1115 (1973).
The policy itself must also be examined and, to the extent that it does not conflict with or attempt to diminish or omit the statutorily mandated coverage, it would be controlling as between the parties. We cannot permit any effort to dilute the statutory coverage from what is mandated and we should not enlarge it beyond the scope of that for which the parties contracted. "That the Legislature requires an uninsured motorists provision in every policy, unless expressly waived by the insured, added to the fact that a premium is collected for such protection, must result in a policyholder receiving what he has paid for on each policy, up to the amount of his damages." Clayton, 213 Kan. at 85, 515 P.2d 1115.
In this case, the uninsured motorist provision of the State Farm insurance policy in effect read as follows:
The question of whether uninsured motorist coverage is available when the driver of an offending vehicle is insured and the owner is not is one in which there exists a significant split of authority in this country. Some of those authorities are reviewed in an annotation in 24 A.L.R.4th 63.
Our research has shown that in the states of Washington, Missouri, and Florida (although Florida has decisions which apparently hold both ways) a vehicle is considered to be "uninsured" within the meaning of the uninsured motorist clause where the owner of that vehicle has no insurance even though the individual driving the vehicle at the time of the accident is fully insured. Cases using this rationale include: Allstate Insurance Company v. Chastain, 251 So.2d 354 (Fla.Dist.App.1971); Heafner v. Safeco Nat. Ins. Co., Etc., 613 S.W.2d 478 (Mo.App.1981), 24 A.L.R.4th 58; Finney v. Farmers Insurance, 92 Wash.2d...
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