Court Opinion

ID: 9570319
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:22:18.357091+00
Date Added: 2024-06-11T12:05:44.143803
License: Public Domain

Lockett, J.,
concurring and dissenting: I concur with the majority opinion which affirms the judgment for loss of the insured’s personal property. The logic of the majority reversing the award of attorney fees under K.S.A. 40-256 requires me to dissent.
The majority states that just cause or excuse is to be determined as of the time a claim is denied, judging the circumstances as they would appear to a reasonably prudent man having a duty to investigate in good faith and determine the facts of the controversy. It asserts that even if it is a question of first impression novelty of the question alone does not constitute just cause for denial of a claim.
The majority ignores the record and the evidence which caused the trial court to determine that Alliance did not have just cause or excuse to refuse to pay the loss.
The loss occurred June 7, 1983. Friedman notified both the authorities and insurance agency of the loss on that day. Alliance did not commence an inquiry into the claim until September 22 when it took Friedman’s statement. Alliance notified Friedman that the loss was not covered by its policy by a letter dated September 23. Alliance based its decision to deny coverage on a review of court decisions listed in F.C.& S. Bulletins (1-80).
By letter of September 28, Hiebert Insurance Associates, Inc., indicated that it had reviewed the court decisions contained in the bulletins and determined that the loss was covered. Alliance was urged to reconsider its decision.
Because Alliance had not taken action on his claim, Friedman filed a complaint with the Insurance Commissioner’s office, which then contacted Alliance. Alliance answered the inquiry from the Commissioner’s office stating that it had denied coverage based on its review of court decisions in F.C.& S. Bulletins (1-80). After reviewing Alliance’s answer, the Insurance Commissioner’s office determined that Alliance had failed to diligently investigate the claim and that Alliance should not rely on the cases stated in the bulletins to deny coverage. It notified Alliance of its finding by letter dated November 18, 1983.
The first paragraph of the letter states:
“Thank you for your report and prompt reply in answer to the insured’s complaint on the above subject file. As a passing remark to the comments which *241follow, a review of the file information in this matter does not provide the same degree of responsiveness in the investigation. Notice to both the authorities and agency was given on the occurrence date of June 7, but the file does not reflect any positive investigation activity until David Friedman’s statement was obtained in late September. Neither does the report address contractual aspects associated with the circumstances preceding the occurrence, and their relationship to the loss.”
The letter stated the facts in this case. It then noted that the bulletin Alliance relied on to deny coverage stated “that courts construe these provisions favoring coverage whenever reasonably possible.” Next the letter contained a review of 26 cases which considered the issue. There were 18 cases dealing with automobile coverage forms. Of these 18 cases, 15 determined that the loss was covered. Under homeowner/property-style insurance forms, eight decisions were cited, five of which found that there was coverage. The letter then stated:
“However, as previously mentioned, we do not feel that an examination of the above reference material considers all of the factors that are present in the subject case. Not only are none of the quoted cases on point, neither does any of the current information address the terms, conditions, and provisions that are found in the present homeowners contract.”
Finally, the letter listed other bulletins for Alliance to review.
Alliance still denied coverage. The policy holder was required to file a lawsuit to recover his loss. Both the trial court and the Court of Appeals found that under the facts of this case Alliance’s denial of coverage was not justified under the law.
If this court has the right to weigh the facts and retry the case, then Alliance wins because there is no higher state trial court. If we are bound by the rules of appellate review contained in the majority opinion, the decisions of the trial court and the Court of Appeals must be affirmed.
I must respectfully dissent.