Opinion ID: 2585528
Heading Depth: 1
Heading Rank: 4

Heading: Is KaMMCO's Excess Limits Endorsement Ambiguous?

Text: The interpretation of an insurance contract is a question of law over which an appellate court has de novo review. The appellate court is not bound by the district court's interpretation. First Financial Ins. Co. v. Bugg, 265 Kan. 690, 694, 962 P.2d 515 (1998). KaMMCO contends that the trial court erred when it found that the KaMMCO policy was ambiguous and should be construed as Dr. Marshall has contended. We agree with KaMMCO and reverse. If the language in an insurance policy is clear and unambiguous, it must be construed in its plain, ordinary, and popular sense and according to the sense and meaning of the terms used. Bugg, 265 Kan. at 694. An insurance policy is ambiguous when it contains language of doubtful or conflicting meaning based on a reasonable construction of the policy's language. Jones v. Reliable Security, Inc., 29 Kan. App. 2d 617, 626-27, 28 P.3d 1051, rev. denied 272 Kan. 1418 (2001). An ambiguity does not exist merely because the parties disagree on the interpretation of the language. 29 Kan. App. 2d at 627. To determine whether an insurance contract is ambiguous, the court must not consider what the insurer intends the language to mean. Instead, the court must view the language as to what a reasonably prudent insured would understand the language to mean. Bugg, 265 Kan. at 694. This does not mean that the policy should be construed according to the insured's uninformed expectations of the policy's coverage. Jones, 29 Kan. App. 2d at 627. Courts should not strain to find an ambiguity when common sense shows there is none. Bugg, 265 Kan. at 694. The court must consider the terms of an insurance policy as a whole, without fragmenting the various provisions and endorsements. 265 Kan. at 697. As a general rule, exceptions, limitations, and exclusions to insurance policies are narrowly construed. The insurer assumes the duty to define limitations to an insured's coverage in clear and explicit terms. To restrict or limit coverage, an insurer must use clear and unambiguous language. Otherwise, the insurance policy will be construed in favor of the insured. Marquis v. State Farm Fire & Cas. Co., 265 Kan. 317, 327, 961 P.2d 1213 (1998). Although the trial court found the excess limits endorsement to be ambiguous, its opinion does not address the precise ambiguity in the policy's language. Instead, the trial court's conclusion reiterates its conclusion regarding the application of K.S.A. 40-3402. The court stated: When the Court looked at the document in total, the Court came away with the same conclusion as advanced by Dr. Marshall's counsel, and that is, how do we have a policy that complies with the statute, if in fact [its] retroactive date is the same date as the date of [its] effective date. It just simply doesn't compute. Nevertheless, this court can interpret the insurance policy without regard to the trial court's interpretation. See Bugg, 265 Kan. at 694. The pertinent part of the policy endorsement states: