Case Name: Tommy L. Gowing, Appellant, v. Great Plains Mutual Insurance Company, Inc., Appellee
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1971-04-10
Citations: 207 Kan. 78
Docket Number: No. 45,931
Parties: Tommy L. Gowing, Appellant, v. Great Plains Mutual Insurance Company, Inc., Appellee.
Judges: Price, C. J., and Kaul, J., join in the foregoing dissenting opinion.
Reporter: Kansas Reports
Volume: 207
Pages: 78–86

Head Matter:
No. 45,931
Tommy L. Gowing, Appellant, v. Great Plains Mutual Insurance Company, Inc., Appellee.
(483 P. 2d 1072)
Opinion filed April 10, 1971.
John T. Flannagan, of Payne & Jones, Chartered, of Olathe, argued the cause, and Keith Martin, of the same firm, was with him on the brief for the appellant.
Edward B. Soule, of Glenn, Cornish & Leuenberger, of Topeka, argued the cause and was on the brief for the appellee.

Opinion:
The opinion of the court was delivered by
Fontron, J.:
The plaintiff, Tommy L. Gowing, seeks to recover attorney fees he incurred in defending an action brought against him for damages resulting from personal injury. Summary judgment was entered in favor of the defendant, Great Plains Mutual Insurance Company, Inc., and Gowing has appealed. The plaintiff will sometimes be referred to as Gowing, or insured, while the defendant will often be designated as Great Plains, or insurer. The facts are not complicated. On December 14, 1965, an altercation took place between Gowing and a party by the name of Cawby on the latter's farm. Subsequently Cawby filed suit against Gowing for personal injuries allegedly sustained in the affray. In his petition, Mr. Cawby charged Mr. Gowing with an unprovoked, willful, malicious, vicious and violent assault and battery which was renewed after he, Cawby, had left his own land and was on his way to obtain medical attention. In response to Cawby's charges, Gowing pleaded self defense, and judgment in the assault and battery action was eventually entered in Gowing's favor.
Prior to the affray, Gowing had procured a policy of insurance with Great Plains, wherein that company agreed, in Section II thereof, "To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage and the Company shall defend any suit against the Insured alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent . . (Emphasis supplied.) Gowing has maintained throughout the course of this litigation that under this provision of the policy Great Plains was obligated to provide for his defense against the Cawby lawsuit.
On the other hand, Great Plains contends it had no duty to defend Gowing in the damage action because of an exclusionary provision reading as follows: "Section II of this Policy Does Not Apply: . to bodily injury or property damage caused intentionally by or at the direction of the Insured . . ." (Emphasis supplied.) The insurer has taken the position that Cawby's lawsuit charged Gowing with an intentional injury which was expressly excepted from the policy's coverage.
Three points are made by the plaintiff. We shall discuss but one of them, since in our view, it will control the disposition of this appeal. Slightly paraphrased, the decisive point raised by Gowing is this: The language of the policy with respect to the insurer's duty to defend is ambiguous; hence the policy should be strictly construed against the insurer; when so construed, the policy imposed an obligation on Great Plains to defend the personal injury action against Gowing.
In recent years, the so-called adhension contract has been the subject of much learned dissertation on the part of jurists and legal savants. Typical of the adhesion contract, and one of its most prominent examples, is the insurance contract or policy, which possesses the distinctive characteristic of unequal bargaining strength or bargaining status between seller and purchaser, or the insurer and the insured. (See Stewart v. Preferred Fire Ins. Co., 206 Kan. 247, 249, 477 P. 2d 966.)
The terms of today's standard insurance policy are predetermined by the insurance carrier itself and, long in advance of the individual insurance sale, those terms have been incorporated into the insurance package presented to the prospective buyer. The free give and take of the open market place does not prevail in the insurance industry. The buyer's freedom of choice in selecting a policy is severely limited; if he desires casualty insurance he must normally accept the printed policy with the usual printed provisions — else he can leave it.
Under such circumstances, concerning which we are not inclined to be critical, the law, in its concern for even-handed fairness, has attempted to minimize the imbalance between insurer and insured, so far as that is possible, by means of a rule that in the event of ambiguity or conflict in the policy provisions a policy of insurance is to be construed strictly against the insurer and in favor of the insured. The rule has been consistently applied in this jurisdiction for many years. (See cases compiled in 3 Hatcher's Kansas Digest [Rev. Ed.] Insurance, § 42.)
The premise on which this rule is based was given expression in Gray v. Zurich Insurance Co., 65 C. 2d 263; 54 Cal. Rptr. 104, 419 P. 2d 168, where the facts were identical to those in this case, with the single exception that the action filed there against the insured had resulted in a judgment against him:
"Although courts have long followed the basic precept that they would look to the words of the contract to find the meaning which the parties expected from them, they have also applied the doctrine of tire adhesion contract to insurance policies, holding that in view of the disparate bargaining status of the parties we must ascertain that meaning of the contract which the insured would reasonably expect." (pp. 269, 270.)
This salutary principle pertains to the exclusionary provisions as well as to the other terms of the insurance contract. In Buchanan v. Employers Mutual Liability Ins. Co., 201 Kan. 666, 443 P. 2d 681, this court held that inasmuch as the insurer prepares the policy, the burden is upon him to establish facts which bring the case within the exceptions set forth in the policy. (See, also, Southards v. Central Plains Ins. Co., 201 Kan. 499, 441 P. 2d 808.)
In similar vein the federal court in Prickett v. Hawkeye-Security Insurance Company, 282 F. 2d 294, stated that if an insurer intends to restrict its coverage it must use language clearly stating its purpose and that this rule of construction applies with particular force to provisions which attempt to exclude liability coverage under certain conditions.
This court, also, has said that where an insurance company desires to limit its liability under a policy, it should employ such language as will clearly and distinctly reveal its stated purpose. (Miller v. Farmers Mutual Automobile Ins. Co., 179 Kan. 50, 55, 292 P. 2d 711; Chicago, R. I. & Pac. Rld. Co. v. Aetna Ins. Co., 180 Kan. 730, 737, 308 P. 2d 119.) Unclear and obscure clauses in a policy of insurance should not be permitted to defeat the coverage which is reasonably to be expected by the insured. (Sturdy v. Allied Mutual Ins. Co., 203 Kan. 783, 793, 457 P. 2d 34.)
Viewing the instant policy in the light of these time-tested principles, we cannot say that the extent of the obligation resting on Great Plains to defend its insured is wholly clear or free from doubt. The policy issued to Gowing is a "Farmowners Policy." It consists of two pages and is in substance what we assume might be termed a comprehensive policy, insuring Gowing's property against certain perils and Gowing himself against liability. The coverage with which we are here concerned is contained on page two, which is captioned Farmers Comprehensive Personal Liability Form. Under this caption there is the heading "Insuring Agreements" and immediately following is "Section I, Coverage G — Farmers Comprehensive Personal Liability", in black but smaller capital letters. Under this particular coverage the insurer makes two proposals : (1) To pay on behalf of the insured such sums as the insured shall legally become obligated to pay as damages for bodily injury or property damage and (2) to defend any lawsuit against the insured alleging such bodily injury or property damage and seeking damages payable under the terms of the policy, even if the allegations are groundless, false or fraudulent.
We believe the average man, in reading the foregoing provisions in their entirety, would conclude, and be fully justified in so doing, that he was buying a defense to whatever lawsuit might be filed against him seeking damages to person or to property. The language positioned at the top of the page is broad and sweeping in its scope. It would tend to lead a reasonably naive insurance customer to expect that a defense would be provided against personal injury actions filed against him, whether the alleged injury be calculated or unintentional.
This court follows the general rule that in determining the intention of the parties to a contract of insurance, the test is not what the insurer intends the printed words of the policy to mean, but rather what a reasonable person placed in the position of the insured would have understood the words to mean. (Casey v. Aetna Casualty & Surety Co., 205 Kan. 495, 499, 470 P. 2d 821; Kansas Farm Bureau Ins. Co. v. Cool, 205 Kan. 567, 572, 471 P. 2d 352, and cases cited therein.)
In contrast to the prominence accorded the insuring agreement found under Coverage G at the top of page two, the exclusionary clause on which the insurer relies is placed inconspicuously in a long paragraph near the bottom of the same page. Although the lengthy paragraph covers a number of exclusions as to coverage— both casualty and liability — they are strung together in continuous sequence without break, subparagraph or indentation. The exclusion is, in fact, not as readily apparent or as prominently placed as the insuring agreement. Hence we are not disposed to say that the insurer's grandly stated promise to defend is clearly and expressly limited to lawsuits based on unintentional torts.
Furthermore, it has been held that the exclusionary clause, itself, lacks clarity. In Gray v. Zurich Insurance Co., supra, on which the plaintiff places great reliance, and whose rationale he urges us to adopt, the California court had this to say:
"A further uncertainty lurks in the exclusionary clause itself. It alludes to damage caused 'intentionally by or at the direction of the insured.' Yet an act of the insured may carry out his 'intention' and also cause unintended harm. When set next to the words 'at the direction of the insured' the word 'intentionally' might mean to the layman collusive, wilful or planned action beyond the classical notion of intentional tort. This built-in ambiguity has caused debate and refined definition in many courts; in any event, the word surely cannot be 'plain and clear' to the layman." (p. 273.)
In line with what the court points out in Gray, the distinction between an intentional injury and an unintended injury resulting from an intentional act has been recognized by various authorities. (See Walters v. American Ins. Co., 185 C. A. 2d 776, 8 Cal. Rptr. 665; Smith v. Moran, 61 Ill. App. 2d 157, 209 N. E. 2d 18; Baldinger v. Consolidated Mut. Ins. Co., 11 N. Y. 2d 1026, 183 N. E. 2d 908; Putman v. Zeluff, 372 Mich. 553, 127 N. W. 2d 374.)
We conclude that the instant policy does not meet the tests of clarity and precision laid down by many of our precedents. Ambiguity exists with respect to the duty owed by the insurer to defend personal injury actions instituted against its insured. The policy, being ambiguous in this respect, is to be construed most favorably to the insured and against the insurer. Such being the required construction, we hold that Great Plains was obligated under the insuring agreement found in Coverage G of the policy to defend Cawby's lawsuit against its insured, despite the exclusionary clause in question.
The judgment of the lower court is reversed with directions to set aside the summary judgment entered in the defendant's favor and to proceed in accordance with the views expressed in this opinion. In this connection we observe that, by stipulation of the parties, the question of whether notice was given the insurer as provided by the policy was not before the court when it acted on defendant's motion for summary judgment. Hence, that question remains before the trial court for determination.