Opinion ID: 174629
Heading Depth: 4
Heading Rank: 1

Heading: The Travelers Policy

Text: We address this policy first because its subrogation provision is unambiguous. As quoted supra note 5, the relevant sentence of the subrogation provision states, The Travelers shall be entitled to priority of recovery against any such third party (including interest) to the extent payment has been made to the Insured, plus attorney's fees, expenses or costs incurred by The Travelers. The quoted passage is unambiguous in that it accords priority to Travelers and Travelers alone. It does not describe a possible class to which Travelers may belong or a group of insurers or interested parties. The policy, as a true excess policy that references the primary insurance, acknowledges the presence of other insurers, but in the face of this recognition, states simply that Travelers is entitled to priority. National Union argues that a separate sentence within the same paragraph imposes on KCPL a duty to cooperate in recovery proceedings that Travelers initiates, and, therefore, the entire subrogation provision is triggered only if Travelers itself initiates recovery proceedings. We reject this argument for two reasons. First, the policy uses the terms it initiates not Travelers initiates. This use of the pronoun it is imprecise, and the sentence containing these terms can just as easily be read to mean insureds initiates. More importantly, however, we reject National Union's argument as an unnatural reading of the subrogation provision. The subrogation provision sets out rights for Travelers and imposes duties upon KCPL. The separate sentences of the subrogation provision largely stand alone. The only explicit internal reference among the sentences of the subrogation provision is the term such third parties found within the actual sentence granting Travelers a right of subrogation. There is no referencing language in any other sentences suggesting a limitation to proceedings initiated by any particular party. National Union's proffered interpretation, then, takes a qualifying term from one sentence dealing with the imposition of a duty upon KCPL and applies that qualifying term in a separate sentence dealing with the grant of a right to Travelers. There is no sensible explanation nor textual basis for doing so. We also note that National Union's suggested, unnatural reading lacks any reasonable basis in insurance practice. National Union cites no authority suggesting lay persons in general or insurers specifically might read a qualifying term from a cooperation clause into a separate sentence granting a subrogation right. In short, National Union's efforts do not dissuade us from our conclusion that the Travelers policy is unambiguous regarding subrogation and grants sole priority to Travelers.