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MASTON v. HARPER9/3/1993
Susan Harper, defendant, appeals the district court's entry of judgment for $5,000 in favor of Nancy Maston, plaintiff, for the subrogation interest of plaintiff's uninsured motorist carrier, Shelter General Insurance Company (Shelter), defendant.
The facts are undisputed and are as follows:
In December 1989, Harper, with the vehicle she was driving, struck and injured plaintiff. Plaintiff eventually sued Harper in negligence and also named Shelter, her uninsured motorist carrier, as a defendant. Harper's motor vehicle liability insurance carrier, West General Insurance Company, Inc., (West General), had been declared insolvent and ordered liquidated in a legal action brought by the State Insurance Commissioner. Plaintiff's uninsured motorist benefits through Shelter were limited to $50,000 per person per accident. Harper's policy limits with West General had been $25,000 per person per accident.
Harper moved the district court for a stay of plaintiff's lawsuit or, in the alternative, for summary judgment. Harper argued that
under the court-ordered liquidation of West General, all claims against the defunct insurance carrier were stayed pending further court order. If the stay was not granted, Harper contended she was entitled to judgment as a matter of law pursuant to the Kansas Insurance Guaranty Association Act (Act), K.S.A. 40-2901 et seq. Harper maintained that under K.S.A. 40-2910(a), when the claimant's uninsured motorist policy limits are greater than those which had been provided by the defendant's insolvent liability carrier, the Kansas insurance guaranty association was not liable to the claimant. Furthermore, Harper contended the uninsured motorist carrier has no right of subrogation against her for any benefits paid to the claimant.
The district court denied both motions and later entered judgment for plaintiff against Harper. Plaintiff and Shelter had reached a settlement agreement pursuant to which Shelter paid $45,100 to plaintiff under her uninsured motorist coverage. Shelter was thus asserting a subrogation right against Harper for the amount Shelter paid to plaintiff over the $25,000 West General policy limit. But because Harper and plaintiff stipulated that plaintiff was entitled to $30,000 in damages from Harper, the court concluded Shelter, through subrogation, was entitled to only $5,000, the difference between Harper's policy limit and the amount she owed plaintiff in damages. Accordingly, the court entered judgment in favor of plaintiff for the amount of this subrogation interest.
Harper's motor vehicle liability insurer is insolvent, making her an uninsured motorist. Consequently, plaintiff, pursuant to the Act, was required to first seek reimbursement for her injuries from her own uninsured motorist carrier, Shelter.
"Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim shall be required to exhaust first his right under such policy. Any amount payable on a covered claim under this act shall be reduced by the amount of any recovery under such insurance policy." K.S.A. 40-2910(a).
"`Covered claim' means an unpaid claim, including one for unearned premiums, which arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this act applies issued by an insurer, if such insurer becomes an insolvent insurer after the effective date of this act and (1) the claimant or insured is a resident of this state at the time of the insured event; or (2) the property from which the claim
arises is
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