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LARSON v. BATH11/30/1990
Wayne C. Larson appeals the summary judgment in favor of Continental Insurance Company (Continental), which denied Larson's claim for underinsured motorist coverage for an accident.
We reverse.
The facts are essentially uncontroverted. Larson was involved in an auto accident with another vehicle driven by Shawn Bath, a minor. Larson was driving a vehicle owned by his employer, Missouri-Kansas-Texas Railroad Company (Katy), and was acting
within the scope of his employment, Continental insured the Katy vehicle.
Katy's agent, Mel Compton, negotiated the coverage and purchase of Katy's insurance with a broker by telephone. The policy in question provided $1,000,000 liability coverage. Endorsement 4 listed uninsured/underinsured motorist coverage (UM) for Kansas resident insureds at $50,000. The policy also mentioned Form A1303 as an attachment. This form was Continental's Kansas UM coverage limit rejection acknowledgement form and was used by Continental as evidence of an insured's rejection of higher UM limits pursuant to K.S.A. 1989 Supp. 40-284. No form A1303 signed by a Katy representative was ever attached to the policy.
The Bath family policy had $50,000 liability limits. Continental intervened in plaintiff's personal injury suit and moved for summary judgment, claiming Katy had rejected UM coverage above $50,000. Larson also moved for summary judgment, claiming the rejection of UM coverage equal to the liability limit was insufficient under K.S.A. 1989 Supp. 40-284(c) and, thus, UM coverage of $1,000,000 was available.
The court granted Continental's motion for summary judgment, ruling the rejection of higher UM limits was adequate.
K.S.A. 1989 Supp. 40-284(c) provides that the insured named in the policy may reject, in writing, the UM coverage mandated by 40-284(a). The purpose of UM coverage is to compensate an innocent victim who is injured by an uninsured or underinsured driver; the UM statute should be liberally construed to fulfill that intended purpose Stewart v. Capps, 14 Kan. App. 2d 356, 357, 789 P.2d 563 (1990).
The question presented in this case of first impression is easy to state: What kind of "writing" is required to evidence rejection of higher UM coverage by the named insured? And while every state except Michigan has an uninsured motorist statute, the statutory schemes are vastly different and in some cases are amended almost annually. As a result, we recognize cases from other jurisdictions have limited value.
Typically, the evolution of the rejection option for higher UM coverage changes from (1) insured has the right to reject, to (2) insured has the right to reject in writing, to (3) insured has the right to reject in writing and the rejection must be on a form prescribed by the state insurance commissioner. It would appear
that litigation on the issue in California, Florida, and Louisiana has led to the statutory changes.
We align ourselves with the rationale of those courts> which have expressed public policy goals similar to Kansas. It seems to us these courts> express a rationale most consistent with statements by our Supreme Court that the UM statute is to be liberally construed. E.g., Van Hoozer v. Farmers Insurance Exchange, 219 Kan. 595, Syl. 2, 549 P.2d 1354 (1976). See Widiss, Uninsured Motorist Coverage, 40 J.K.B.A. 199, 227-30 (1971). Because the rejection provisions detract from the public policy goals of protecting innocent victims, the rejection provisions are narrowly and strictly construed by these same courts>. See, e.g., Patrick v. Cherokee Ins. Co., 354 Pa. Super. 427, 512 A.2d 24 (1986); Employers C
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