Court Opinion

ID: 7922417
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:26:27.18731+00
Date Added: 2024-06-11T16:33:07.009828
License: Public Domain

Davis, J.,
dissenting: I disagree with the majority analysis that the legislation affecting self-insurers and UM/UIM coverage supports the conclusion that the legislature intended to treat self-insurers and insurers differently. In reaching its conclusion, the majority first reasons that the legislature, when enacting K.S.A. 40-284, used specific language which refers to an “automobile liability insurance policy”; second, the legislature defined insurer and self-insurer differently without stating that self-insurers were equivalent to insurers; third, the statutory language implies a narrow definition of liability and limits the requirements for self-insurers; and fourth, the UM/UIM statute was placed in the general statutes pertaining to insurers rather dian in the KAIRA.
Although there are no Kansas appellate court decisions on this issue, the parties acknowledge that authority exists in other jurisdictions for both sides of the issue. I believe this court should look at those jurisdictions which have recognized similar purposes for insurance laws as Kansas. I note that Kansas appellate courts have been consistent in stating the purpose of Kansas insurance laws and equally consistent on how those laws should be construed. In DeWitt v. Young, 229 Kan. 474, 478, 625 P.2d 478 (1981), this court stated:
*985“The legislative purpose mandating motor vehicle liability insurance for every motor vehicle driven on Kansas public highways is again expressed in K.S.A. 1980 Supp. 40-3118(a), and also in K.S.A. 40-284 which requires uninsured motorist coverage to protect an insured who is injured by an uninsured owner or operator of a vehicle.”
In Winner v. Ratzlaff, 211 Kan. 59, Syl. ¶¶ 1, 2, 505 P.2d 606 (1973), this court recognized that the purpose of legislation mandating the offer of uninsured motorist coverage is to fill the gap inherent in motor vehicle financial responsibility and compulsory insurance legislation. The Winner court stated this coverage is intended to provide recompense to innocent persons who are damaged through the wrongful conduct of motorists who, because they are uninsured and not financially responsible, cannot be made to respond in damages. Remedial statutes mandating the offer of uninsured motorist coverage should be liberally construed to provide the intended protection.
Probably the best discussion of this issue is found in Cowell v. Allstate Insurance Co., 175 Vt. 61, 69-71, 819 A.2d 727 (2003). I note that Vermont is similar to Kansas in that it has a financial responsibility law and a separate uninsured motorist law. The Vermont Supreme Court held that these two statutes must be considered together. In Cowell, the Vermont court reviewed decisions from many jurisdictions on this issue and then concluded:
“First, the Legislature intended self insurance to operate on an equal footing with traditional liability insurance. Second, requiring Bell Atlantic to provide UIM benefits to injured workers is not inconsistent with the purpose of the Workers’ Compensation Act and our precedents interpreting it. Third, the Legislature’s intent to create universal UIM coverage should not be defeated by an employer’s choice to self insure. . . .
....
“. . . Bell Atlantic asks this Court to construe the statute to exclude self insurers because § 941(f) refers to a ‘policy of insurance and self insurers do not issue ‘policies.’ To conclude Bell Atlantic’s interpretation of § 941(f) is the correct one, we would have to agree that the Legislature intended § 941(f) to exclude from its protection all motorists insured through self-insurance plans or surety bonds. That construction of § 941(f) is incompatible with the Legislature’s intent to equate self insurance with a commercial insurance policy. . . . Bell Atlantic has not offered any rationale for making the distinction between commercial insurers and self insurers that it suggests here, and we cannot discern one from the *986statutory language. Consequently, we conclude that § 941(f) directs mandatory UM/UIM coverage in all forms of motor vehicle insurance, including self insurance, so that all motorists have minimum protection from financially irresponsible drivers.” 175 Vt. at 69-71.
In AT&SF Ry. Co. v. Stonewall Ins. Co., 275 Kan, 698, 71 P.3d 1097 (2003), this court was faced with multiple issues. One of the issues was whether AT&SF Ry. Co.’s (Santa Fe) self-insured retentions constituted “other insurance” that had to be exhausted before excess insurers might be liable. Santa Fe argued its self-insured retentions did not satisfy the policy requirements of “other valid and collectable insurance.” We disagreed and concluded that the self-insured retentions were other insurance under the policy and, thus, were primary insurance. 275 Kan. at 753. We could not ignore the stated terms of the policies or the reality of self-insured retentions as primary insurance where the expectation and intent is to provide excess coverage. 275 Kan. at 754. We also concluded that under the facts of that case, Santa Fe’s self-insured retentions constituted primary coverage for noise-induced hearing loss claims and, as such, were other insurance under the excess policies. Santa Fe was, therefore, required to exhaust the self-insured retentions before it could seek recovery under those policies. 275 Kan. 698, Syl. ¶ 7.
Clearly, this court treated self-insured retentions as insurance and placed a self-insurer in the same position as one who had purchased an insurance policy. Therefore, the answer to the second certified question is yes, in Kansas a self-insurer is required to provide uninsured motorist benefits to the occupants of its motor vehicles.

Are plaintiffs’ claims barred by the exclusive remedy provision of the Workers Compensation ActP

When addressing this issue, we must be mindful of the well-established rule in Kansas applicable to uninsured motorist claims. This court consistently has held that uninsured and underinsured motorist statutes are remedial in nature and should be liberally construed to provide broad protection. See, e.g., Kilner v. State Farm Mut. Auto. Ins. Co., 252 Kan. 675, Syl. ¶ 2, 847 P.2d 1292 *987(1993). Likewise, this court has always held that the purpose of the uninsured motorist legislation was to fill the gap in motor vehicle financial responsibility laws and provide a method for innocent persons damaged through the wrongful conduct of uninsured motorists who cannot be made to respond for the damages they caused. See 252 Kan. 675, Syl. ¶ 1.
The first place the majority should look when considering SBC’s argument is the workers compensation statute. The exclusive remedy set forth in the statute applies to “personal injury by accident” (K.S.A. 44-501[a]) — a tort action. This court has held that an uninsured motorist or underinsured motorist claim is not a tort action but a contract action. See Van Hoozer v. Farmers Insurance Exchange, 219 Kan. 595, 610-11, 549 P.2d 1354 (1976). For that reason alone, K.S.A. 44-501(b) does not bar plaintiffs’ claim. This distinction has been noted and adopted by the Supreme Court of South Carolina in Wright v. Smallwood, 308 S.C. 471, 472, 475, 419 S.E.2d 219 (1992).
A review of K.S.A. 40-284 shows that the Kansas Legislature did not contemplate the workers compensation exclusive remedy rule prohibiting uninsured motorist claims. K.S.A. 40-284(e)(4) allows uninsured motorist carriers to exclude or limit coverage to the extent workers compensation benefits apply. The legislature allows insurers to limit their liability to avoid duplicate payments going to an injured party by the K.S.A. 40-284(e)(4) exclusion/limitation of workers compensation benefits. This exclusion/limitation was addressed by this court in Kilner, 252 Kan. 675, Syl. ¶ 4:
“K.S.A. 1992 Supp. 40-284(e)(4) allows an insurer to exclude or limit its uninsured and underinsured motorist coverage to the extent that duplicative workers compensation benefits apply. The legislature intended K.S.A. Supp. 40-284(e)(4) to permit an insured to recover uriderinsured motorist benefits which are not duplicative of workers compensation benefits. Any other result negates the legislature’s intent to require underinsured motorist coverage protection.”
The coordination of the UM/UIM and workers compensation statutes protects against double recovery by the worker but does not allow insurers to avoid uninsured motorist coverage in its entirety where an injured employee has suffered damages greater than the workers compensation benefits that may have been paid.
*988Finally, on more than one occasion this court has addressed K.S.A. 40-284(e)(4) and the issue of duplicative benefits and the amount of uninsured motorist coverage available to an injured employee who has received workers compensation benefits. See Fisher v. State Farm Mut. Auto. Ins. Co., 264 Kan. 111, 955 P.2d 622 (1998); Kilner, 252 Kan. 675. In neither of those cases did this court suggest that an injured employee who had suffered damages greater than the workers compensation benefits would be barred from recovering uninsured motorist or underinsured motorist benefits. The answer to the first certified question is no. Under the facts of this case, plaintiffs’ claims were not barred by the exclusive remedy provision of the Workers Compensation Act.
Allegrucci, J., joins in the foregoing dissent.