Justia Kansas Supreme Court Opinion Summaries

In a dispute between Timothy Towne and the Unified School District No. 259, the Supreme Court of the State of Kansas reversed the lower courts' rulings, finding that self-insured school districts are not exempt from regulation under the Kansas Insurance Code. Towne, an employee of the school district, was injured in a car accident and received benefits from the school district's self-funded medical benefit plan. After Towne recovered funds from a third party, the school district required him to reimburse the plan. Towne claimed that the plan's subrogation clause, which allowed for this reimbursement, was unenforceable under Kansas regulations. The district court and Court of Appeals held that the school district's plan was exempt from the Kansas Insurance Code, thereby making the subrogation clause enforceable. However, the Supreme Court reversed, holding that the medical benefit plan offered by the school district is a "health benefit plan" and the school district is a "health insurer" under Kansas law, making the school district subject to the anti-subrogation regulation. The case was remanded for further proceedings. View "Towne v. U.S.D. 259" on Justia Law

The Supreme Court affirmed the decision of the court of appeals panel reversing the judgment of the district court against Key Insurance Company in this garnishment action brought by Nancy Granados seeking pay under the liability insurance policy Key had issued to John Wilson, holding the court of appeals made the correct conclusion.John Wilson struck a car while he was driving under the influence and killed the driver. The driver's wife, Granados, brought a wrongful death lawsuit against Wilson. The district court entered a judgment against Wilson for nearly $3.5 million. Granados then filed this garnishment action seeking payment from Key under the automobile liability insurance policy it had issued to Wilson and under which Key limited tis coverage for bodily injuries caused by Wilson to $50,000 in the aggregate. Granados argued that, despite the policy limits, Key's negligent and bad-faith handling of Wilson's claim rendered it liable for the entire judgment. The trial court agreed and entered judgment against Key. The court of appeals reversed. The Supreme Court affirmed, holding that Granados failed to meet her burden to prove that Key's handling of the claim caused the judgment exceeding policy limits. View "Granados v. Wilson " on Justia Law

The Supreme Court reinstated the district court's award granting Plaintiff substitution benefits after a court of appeals panel held that married persons cannot be a provider or recipient of substitution services to each other, holding that Plaintiff was entitled to substitution benefits for the amount he promised to pay his wife for what she did resulting from Plaintiff's automobile accident.Insurer insured Plaintiff when he was injured in an automobile accident. When Plaintiff returned from the rehabilitation hospital, he and his wife agreed she would provide caregiver services for $25 a day. Plaintiff sought payment for personal injury protection (PIP) substitution benefits available to him under his policy, but Insurer refused. Litigation ensued, and the district court granted judgment for Plaintiff. The court of appeals reversed, concluding that an injured person's spouse is excluded from providing substitution services. The Supreme Court reversed, holding (1) Kan. Stat. Ann. 40-3103(w) does not expressly preclude Plaintiff's wife from providing substitution services simply because of her marital relationship with Plaintiff; (2) Plaintiff incurred an obligation to pay his wife by entering into a contract with her to perform specific services for him that she would not otherwise have performed while Plaintiff convalesced; and (3) Plaintiff was entitled to PIP substitution benefits. View "Williams v. Geico General Insurance Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the district court’s garnishment order in favor of a judgment creditor and her insurer, holding that the insurer demonstrated prejudice as a matter of law from its lack of notice of suit.The policy in this case contained a requirement that the insured inform the insurer of a lawsuit arising out of an otherwise covered automobile accident. After the judgment creditor and her insurer obtained the garnishment order, the court of appeals affirmed. The Supreme Court reversed, holding that the stipulated facts established that the insured breached his notice-of-suit duty under the insurance policy and that the insurer was prejudiced by that breach. View "Geer v. Eby" on Justia Law

The Supreme Court reversed the decision of the Court of Appeals affirming the decision of the district court granting summary judgment to The Bar Plan Mutual Insurance Company on Daniel Becker’s insurance coverage dispute with the company, holding that the lower courts erroneously relied upon certain caselaw in granting summary judgment and that, under the correct caselaw, questions of fact remained that were inappropriate for summary judgment.Specifically, the Court held (1) the lower courts erred in relying on the “expansion of coverage” rule in concluding that Becker was asking for the coverage to be expanded beyond the insurance contract’s terms and that that courts should instead have continued their analysis to see if estoppel was appropriate to apply to the facts under the “reservation of rights” rule; and (2) because several genuine issues of material fact remained on the issue of estoppel, this case must be remanded for further proceedings. View "Becker v. Bar Plan Mutual Insurance Co." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the district court ordering Devin Wilson to pay Kenneth Risley a jury award in favor of Risley, holding that the district court did not err in determining that the assignment provision in Kan. Stat. Ann. 40-3113a(c) did not divest Risley of the right to recover his medical expenses from the tortfeasor.A jury found Wilson liable in tort for injuring Risley in an automobile accident and awarded Risley the cost of his medical expenses in addition to other compensation. Risley had previously been paid for his medical expenses under the personal injury protection (PIP) coverage of his automobile insurance policy. The jury entered judgment on the entire amount of damages as awarded by the jury. On appeal, Wilson argued that Risley had no right to sue for the medical expenses because the cause of action for those medical expenses had been statutorily assigned pursuant to section 40-3113a(c) to Risley’s PIP insurance carrier. The court of appeals affirmed. The Supreme Court affirmed, holding that Risley was entitled to the full damages as awarded by the jury, including any medical expenses that were duplicative of the PIP benefits Risley received from his PIP insurance carrier. View "McCullough v. Wilson" on Justia Law

Tenth-grader Jesus Rodriguez was injured while traveling to a soccer match in the bed of a pickup truck driven by a fellow student and teammate. Mutual of Omaha Insurance Company had issued a policy to the Kansas State High School Activities Association, which administered various extracurricular activities in the state. Rodriguez’s mother (Plaintiff) filed a claim with Mutual of Omaha. Mutual of Omaha denied the claim, reasoning that the travel during which Rodriguez was injured did not qualify as covered under the policy. Plaintiff sued the school district, Mutual of Omaha, and other defendants. The district judge held that Mutual of Omaha should be dismissed as a defendant in the case because Rodriguez’s travel was neither authorized by the school district nor subject to reimbursement, the two requirements for “covered travel” under the definition in the Mutual of Omaha policy. The court of appeals affirmed, holding that the travel involved in this case did not qualify as subject to reimbursement, and thus there was no coverage under the policy. The Supreme Court reversed, holding that the travel during which Rodriguez was injured was “authorized” and “subject to reimbursement,” and therefore, there was coverage under the policy language. View "Rodriguez v. United Sch. Dist. No. 500" on Justia Law

Plaintiff was injured from an automobile accident. A hospital toxicology report indicated that Plaintiff had a blood alcohol concentration of .25 two hours after the accident. Plaintiff submitted a claim to American Family Life Assurance Company of Columbus (AFLAC) pursuant to his hospital intensive care policy. AFLAC denied the claim under the policy’s intoxication exclusion, relying in part on the hospital toxicology report. Plaintiff filed suit seeking coverage under the policy. AFLAC moved to admit a copy of the toxicology report. Plaintiff objected, citing a lack of foundation. The district court sustained Plaintiff’s objection. After a trial, the district court concluded that Plaintiff was entitled to coverage under the policy because AFLAC failed to prove that Plaintiff’s accident was in consequence of his intoxication. The court of appeals reversed. The Supreme Court reversed the court of appeals and affirmed in part and reversed in part the district court, holding (1) the court of appeals erred in determining that AFLAC had satisfied the appropriate foundation requirements to admit the hospital’s toxicology report; (2) AFLAC failed to meet its burden of establishing that Plaintiff’s claim was excluded under the policy; and (3) the district court erred in determining that AFLAC’s denial of coverage was without just cause or excuse. View "Wiles v. Am. Family Life Assurance Co." on Justia Law

Dick McClary submitted an application for health insurance to Golden Rule Insurance Company that failed to disclose proposed insured Patti Denney’s preexisting condition. Golden Rule issued a policy covering Denney, but later denied coverage for a proposed surgery based on the fact that the conditions documented in Denney’s medical records were not disclosed in her insurance application. The Kansas Insurance Department imposed sanctions on Golden Rule for unfair claim settlement practices, concluding that Golden Rule had wrongfully denied Denney coverage for a medically necessary procedure. The district court affirmed. The court of appeals reversed, concluding that McClary was not acting as Golden Rule’s soliciting agent when he submitted Denney’s health insurance application. The Supreme Court (1) reversed the court of appeals’ decision on the agency question, as substantial evidence supported the conclusion that McClary had the actual authority to solicit and submit applications directly to Golden Rule; and (2) reversed the Department and the district court on their ruling that Golden Rule violated Kan. Stat. Ann. 40-2404(9)(f) but affirmed the finding of a violation of subsection (d); and (3) affirmed the Department’s remedy. View "Golden Rule Ins. Co. v. Tomlinson" on Justia Law

Nationwide Mutual Insurance Company issued an automobile insurance policy, which included uninsured motorist coverage, to Melvin Briggs. After Nationwide sent Briggs a notice of nonrenewal of the policy, Briggs was involved in a collision with an uninsured motorist. Briggs's children filed a claim under the Nationwide policy for uninsured motorist benefits, which Nationwide denied. Nationwide subsequently sued Briggs’s children, seeking a declaratory judgment that it had nonrenewed Briggs’s policy before the automobile accident. The U.S. district court granted summary judgment for Nationwide, concluding that it had complied with statutory and policy requirements for notice of nonrenewal. On appeal, the Tenth Circuit Court of Appeals certified a question of law to the Kansas Supreme Court, which answered the certified question as follows: Notice to nonrenew an insurance policy that complies with the procedure set out in Kan. Stat. Ann. 40-3118(b) and a consistent provision in the policy itself is sufficient to force a lapse of coverage, regardless of whether a proper substantive basis for nonrenewal exists under Kan. Stat. Ann. 40-276a(a) and consistent policy language. View "Nationwide Mut. Ins. Co. v. Briggs" on Justia Law