The opinion of the court was delivered by
Fletcher Bell, Commissioner of Insurance, as Administrator of
the Kansas Health Care Stabilization Fund (Commissioner),
the State of Kansas, as Trustee for the Kansas Health Care
Stabilization Fund, and The Kansas Health Care Stabilization Fund
(Fund), plaintiffs, appeal from an adverse judgment of the
Shawnee County District Court in a declaratory judgment action.
The district court granted summary judgment to the defendants and
held that the Fund provided defendant Stephen J. Bazzano, D.O.,
excess coverage in the pending malpractice claims of the
defendants Jessica M. Simon and Hattie Fillenwarth. We affirm.
The facts pertinent to this appeal are essentially undisputed.
The defendant, Dr. Bazzano, is a resident of Missouri and a
doctor of osteopathic medicine who is licensed to practice in
both Kansas and Missouri. Defendant conducts his Kansas practice
from a clinic in Galena, Cherokee County, Kansas. From 1976 to
April 1, 1986, Dr. Bazzano maintained individual malpractice
insurance with Professional Mutual Insurance Company (PMIC), in
the form of an "occurrence" policy. The policy was renewed
annually, with the last renewal for the period from April 1, 1985
to April 1, 1986. While the policy was in effect, PMIC filed a
"Notice of Basic Coverage," collected the annual premium
surcharge from Dr. Bazzano, and sent the surcharge and other
relevant information to the Fund. The Commissioner and the Fund
apparently made no objection to the type of policy, or the method
of reporting and payment of the surcharge by PMIC and Dr.
Bazzano, during the ten years the policy was in effect.
Dr. Bazzano admits he practiced in Kansas from April 1, 1986,
to July 16, 1987, without obtaining a malpractice insurance
policy that complied with the mandatory provisions of the Health
Care Provider Insurance Availability Act (Act), K.S.A. 40-3401
et seq. Effective July 16, 1987, Dr. Bazzano obtained a "claims
made" policy from Professional Mutual Insurance Company Risk
Retention Group and paid the annual premium surcharge to the
The issues in this case arise from a malpractice suit filed in
Cherokee County, Kansas, on July 16, 1987, by Jessica M. Simon, a
minor, and her mother, Hattie Fillenwarth, both of whom are
joined as defendants in this case. The suit was based primarily
upon Dr. Bazzano's alleged failure to run laboratory tests and
correctly diagnose and treat 3-month-old Jessica on March 28,
1986, which resulted in the child having temporary and permanent
disability. Dr. Bazzano was first notified of the potential claim
for malpractice by the attorneys for Simon and Fillenwarth on
June 5, 1987.
On November 3, 1988, Commissioner Bell filed a petition in
Shawnee County District Court for declaratory judgment against
Dr. Bazzano, Simon, and Fillenwarth, contending that Dr. Bazzano
had no excess liability coverage from the Fund from April 1,
1986, to July 16, 1987, "because he did not maintain professional
liability insurance coverage as required by the Health Care
Provider Insurance Availability Act." Dr. Bazzano denied the
allegation in his answer, filed December 6, 1988, and in addition
asserted the affirmative defenses of waiver and estoppel. On
April 3, 1989, Dr. Bazzano and the defendants Simon and
Fillenwarth filed separate motions for summary judgment asserting
there was excess liability coverage. On April 4, 1989, the
plaintiffs filed a counter motion for summary judgment asserting
the Fund had no liability.
On May 10, 1989, the district court granted Dr. Bazzano's
motion for summary judgment and denied the motion filed by
plaintiffs. The court held that PMIC's issuance of an occurrence
policy rather than a claims made policy did not relieve the Fund
of liability under Missouri Medical Ins. Co. v. Wong,
234 Kan. 811, 676 P.2d 113 (1984). In Wong, the court held that under
the Act a medical malpractice "policy which insures a health care
provider practicing in Kansas must be construed to provide claims
made coverage, notwithstanding the policy, as written, is an
occurrence form policy." Syl. ¶ 3. The court here also found that
the Fund was not relieved of liability because the Fund's
coverage continues when basic coverage continues, and the basic
coverage continued by operation of law due to the insurer's
failure to give a cancellation notice to the Commissioner (K.S.A.
40-3402). The plaintiffs have appealed. Plaintiffs state the
issue on appeal as being whether "[t]he court erred in granting
defendants' motions for summary judgment and denying plaintiffs'
motion for summary judgment since Dr. Bazzano did not have the
mandatory professional liability insurance required by the Health
Care Stablization Act [sic], K.S.A. 40-3401, et seq." The
resolution of this issue involves the following:
a) Whether defendant Dr. Bazzano had basic coverage
as required under the Act when the parties'
malpractice claim was made.
b) If basic coverage existed, whether Dr. Bazzano's
failure to pay the annual premium surcharge relieves
the Fund of liability.
c) Whether plaintiffs are estopped from asserting
Dr. Bazzano's noncompliance with the surcharge
The issue and arguments raised by the plaintiffs require the
interpretation and application of certain provisions of the Act.
Before addressing the arguments asserted, we deem it appropriate
to reiterate certain general principles applicable to statutory
"The fundamental rule of statutory construction is
that the purpose and intent of the legislature
governs when the intent can be ascertained from the
statute. In construing statutes, the legislative
intention is to be determined from a general
consideration of the entire act. Effect must be
given, if possible, to the entire act and every part
thereof. To this end, it is the duty of the court, as
far as practicable, to reconcile the different
provisions so as to make them consistent, harmonious,
and sensible." Harris Enterprises, Inc. v. Moore,
241 Kan. 59, Syl. ¶ 1, 734 P.2d 1083 (1987).
"In determining legislative intent, courts> are not
bound to an examination of the language alone but may
properly look into the causes which impel the
statute's adoption, the objective sought to be
attained, the statute's historical background and the
effect the statute may have under the various
constructions suggested." In re Petition of City of
Moran, 238 Kan. 513, Syl. ¶ 2, 713 P.2d 451 (1986).
"When a statute is plain and unambiguous the court
must give effect to the intention of the legislature
as expressed, rather than determine what the law
should or should not be." Randall v. Seemann,
228 Kan. 395, Syl. ¶ 1, 613 P.2d 1376 (1980).
"Interpretation of a statute is a question of law,
and it is the function of the court to interpret a
statute to give it the effect intended by the
legislature." Director of Taxation v. Kansas Krude
Oil Reclaiming Co., 236 Kan. 450, 455, 691 P.2d 1303
The plaintiffs first contend that Dr. Bazzano is not covered by
the Fund because he had no basic coverage pursuant to the Act at
the time the claim was made on June 5, 1987. It appears to be
conceded that Dr. Bazzano had basic coverage during the PMIC
policy period from April 1, 1985, to April 1, 1986. Even though
the policy issued was an "occurrence" policy rather than
a "claims made" policy as specified by K.S.A. 40-3402(a), the Act
provides that the policy is deemed and construed to include the
statutory basic coverage. In the instant case the alleged
malpractice occurred March 28, 1986, at a time when all ...