Opinion ID: 2621632
Heading Depth: 1
Heading Rank: 2

Heading: Should this Court Reverse the Four-to-Three Decision in Marquis v. State Farm ?

Text: Utica urges this court to reverse the four-to-three decision in Marquis. Utica notes that a comprehensive argument for why the decision should be reversed was presented in the concurring and dissenting opinion, which was written by Justice Larson. Chief Justice McFarland and Justice Six joined in the concurring and dissenting opinion. See Marquis, 265 Kan. at 335-40. Utica builds upon the dissent and argues that the authority underlying the majority's rationale has been further weakened and a significant conflict has developed in Kansas cases. As the dissent in Marquis noted, the authority cited in Upland has been distinguished almost out of existence or significantly limited in application. Marquis, 265 Kan. at 336. This trend has continued. See Calvin v. Janbar Enterprises, Inc., 856 So. 2d 88, 91 (La. App. 2003) (questioning Smith v. USAA Cas. Ins. Co., 532 So. 2d 1171, 1174 [La. App. 1988], one of the cases supporting the majority); Society for Christian Activities, Inc. v. Markel Ins. Co., 440 Mass. 1006, 795 N.E.2d 545 (2003) (distinguishing Barnstable County Mut. Fire Ins. Co. v. Lally, 374 Mass. 602, 606, 373 N.E.2d 966 [1978], another case supporting the majority); Allstate Ins. Co. v. Moraca, 244 N.J. Super. 5, 12, 581 A.2d 510 (1990) (distinguishing McDonald v. Home Ins. Co., 97 N.J. Super. 501, 235 A.2d 480 [1967], cited by majority because of difference in language of exclusionary clause); Scarfi v. Aetna Cas. & Sur. Co., 233 N.J. Super. 509, 516-19, 559 A.2d 459 (1989) (distinguishing and disagreeing with McDonald); Mt. Vernon Ins. Co. v. Creative Housing Ltd., 88 N.Y.2d 347, 351, 645 N.Y.S.2d 433, 668 N.E.2d 404 (1996) (limiting Lalomia v. Bankers & Shippers Insurance Company, 35 App. Div. 2d 114, 312 N.Y.S.2d 1018 [1970], to its facts); New Hampshire Ins. Co. v. Jefferson Ins. Co. of New York, 213 App. Div. 2d 325, 329, 624 N.Y.S.2d 392 (1995) (same). It is clear that what was the majority rule in 1998 when Marquis was decided continues to be the majority rule today. See Annot., Construction and Effect of Provision Excluding Liability for Automobile-Related Injuries or Damage from Coverage of Homeowner's or Personal Liability Policy, 6 A.L.R.4th 555. Utica also argues, as noted by Justice Larson in his dissent, that the Upland rule has been disregarded to some extent by the Court of Appeals. The dissenting opinion in Marquis cited United Services Auto. Ass'n v. Morgan, 23 Kan. App. 2d 987, 939 P.2d 959, rev. denied 262 Kan. 969 (1997) (intentional act of insured causally connected to use of car, automobile exclusion of homeowner's policy applies, Upland not mentioned); Newton v. Nicholas, 20 Kan. App. 2d 335, 887 P.2d 1158, rev. denied 257 Kan. 1093 (1995) ( Upland not mentioned, negligent acts were failure to inspect and secure water tank on truck, directly connected to use, no coverage); and Farmers Ins. Co. v. Rosen, 17 Kan. App. 2d 468, 839 P.2d 71, rev. denied 252 Kan. 1091 (1992) (negligent instruction claimed, Upland distinguished, theory of liability test ignored, no coverage found). 265 Kan. at 340. Utica points out two other Court of Appeals decisions which ignored or declined to extend the theory of liability approach: Bush v. Beal, 26 Kan. App. 2d 183, 987 P.2d 1103, rev. denied 268 Kan. 885 (1999), and State Farm Mut. Auto. Ins. Co. v. Cummings, 13 Kan. App. 2d 630, 637, 778 P.2d 370, rev. denied 245 Kan. 786 (1989). Finally, Utica argues that this court's decision in First Financial Ins. Co. v. Bugg, 265 Kan. 690, 962 P.2d 515 (1998), issued just more than 1 month after Marquis, is irreconcilable with Marquis and Upland. In his dissenting opinion in Brumley v. Lee, 265 Kan. 810, 831, 963 P.2d 1224 (1998), Justice Six opined that the Upland rule had not been consistently followed in Kansas, citing Bugg. See State Farm Ins. Co. v. Gerrity, 25 Kan. App. 2d 643, 646, 968 P.2d 270 (1998), rev. denied 267 Kan. 887 (1999) (theories of liability are irrelevant when injuries occur from intentional acts; Marquis and Upland involved negligence claims). In her response to Utica's petition for review, Crist argues that this case is not the proper vehicle for overturning Marquis since Utica denied coverage and refused to defend Hunan. According to Crist, an insurance carrier wishing to overturn Marquis should recognize its duty to tender a defense, subject to a reservation of rights, while filing a declaratory judgment action which would allow sufficient facts to be developed to allow this court to decide whether Marquis should be reconsidered. In a related argument, Crist contends that under the doctrine of stare decisis, this court should not change settled principles of law simply because there is a change in the composition of the court. Crist argues the importance of stare decisis is that it gives parties the ability to predict the legal consequences of their actions. We agree. In reaching the holding in Marquis, the majority impliedly relied upon the doctrine of stare decisis, noting that the law in Kansas was clearly established at the time the insurance contract was entered into. With the additional precedent of Marquis in 1998 and the passage of the additional time, stare decisis considerations are even stronger. In Samsel v. Wheeler Transport Services, Inc., 246 Kan. 336, 356, 789 P.2d 541 (1990), overruled on other grounds Bair v. Peck, 248 Kan. 824, 844, 811 P.2d 1176 (1991), we discussed the basis for the doctrine of stare decisis and its importance: It is recognized under the doctrine of stare decisis that, once a point of law has been established by a court, that point of law will generally be followed by the same court and all courts of lower rank in subsequent cases where the same legal issue is raised. Stare decisis operates to promote system-wide stability and continuity by ensuring the survival of decisions that have been previously approved by a court. . . . The application of stare decisis ensures stability and continuity  demonstrating a continuing legitimacy of judicial review. Judicial adherence to constitutional precedent ensures that all branches of government, including the judicial branch, are bound by law. . . . The general American doctrine as applied to courts of last resort is that a court is not inexorably bound by its own precedents but will follow the rule of law which it has established in earlier cases, unless clearly convinced that the rule was originally erroneous or is no longer sound because of changing conditions and that more good than harm will come by departing from precedent. [Citation omitted.] Although Utica cites additional authority in support of the dissent in Marquis, it does not make a new argument or point to any factor not considered and rejected by the majority in Marquis. There is no changing condition requiring us to abandon the prior authority of Marquis. In addition, more harm than good is likely to come from a departure from precedent on this issue. We are mindful that [c]onsiderations in favor of stare decisis are at their acme in cases involving property and contract rights, where reliance interests are involved. Payne v. Tennessee, 501 U.S. 808, 828, 115 L. Ed. 2d 720, 111 S. Ct. 2597 (1991). For many years the law in Kansas has been clear that an insurance exclusion for damage or injury arising from an automobile will not exclude a claim based upon negligent supervision. Insurers have been clearly advised that if they wish to have such an exclusion, the policy should include clear language stating an exclusion such as was used in the homeowner's policy at issue in Marquis. Insureds and insurers alike have relied upon Marquis and Upland. As such we decline to overrule such precedent.