Mary Frasher, administrator of Steven G. Frasher's estate,
appeals the district court's decision granting summary
judgment to Life Investors Insurance Company of America. The
trial court held that a Missouri statute barring suicide as a
defense to paying life insurance benefits did not apply in this
case and that there was no coverage under the terms of a policy
issued by Life Investors. We reverse and remand.
On January 12, 1988, Steven G. Frasher made an installment
purchase of a vehicle from John Wallace Dodge, Inc., (Dodge) a
car dealer in Overland Park, Kansas. Dodge is a Delaware
corporation authorized to do business in Kansas. Frasher was a
resident of Missouri. He applied for and received credit life
insurance available under a group credit life policy issued to
Dodge. Dodge acted as an agent for Life Investors pursuant to a
contract between the two formed in 1982. The master policy,
delivered to Dodge in Kansas, allowed Dodge to solicit debtors to
purchase the insurance and provided for a percentage commission
to Dodge on each policy of insurance sold. Each debtor received a
certificate of insurance that was first sent to Dodge by Life
Investors and then mailed to the debtor by Dodge.
The coverage was decreasing term insurance amortized evenly
over 60 months, the term of the installment purchase contract.
Premiums were paid monthly by Frasher to Dodge, which then
forwarded them to Life Investors. Dodge was the designated
beneficiary of the policy.
Frasher died of an apparent self-inflicted gunshot wound.
Dodge's assignee of the installment purchase agreement, Chrysler
Credit Corporation, repossessed and sold the vehicle. Policy
proceeds, if owed, were to be paid to Frasher's estate. However,
Life Investors tendered only premiums paid, contending the
following policy exclusion was applicable: "SUICIDE: If an
Insured Obligor or spouse dies by self destruction within one
year from the Effective Date of coverage, whether sane or insane
and while the Certificate is in force, the death benefits payable
hereunder shall be limited to the amount of the premium paid."
Frasher's estate brought this lawsuit, asserting Missouri law
was applicable and precludes suicide as a policy defense.
Appellant relies upon this statute:
"In all suits upon policies of insurance on life
hereafter issued by any company doing business in
this state, to a citizen of this state, it shall be
no defense that the insured committed suicide, unless
it shall be shown to
the satisfaction of the court or jury trying the
cause, that the insured contemplated suicide at the
time he made his application for the policy, and any
stipulation in the policy to the contrary shall be
void." Mo. Rev. Stat. § 376.620 (1986).
The trial court, in granting summary judgment for Life Investors
determined that, absent a valid choice of law provision in the
policy, Kansas law would govern as the place of the making of the
contract. The court also found that, even assuming the choice of
law provision in the policy pointed to Missouri law, the Missouri
statute did not apply because the policy was not "`issued . . .
to a Missouri resident.'"
There are general rules regarding the construction of insurance
policies this court must follow. "The construction and effect of
insurance contracts are questions of law to be determined by the
court." Farm Bureau Mut. Ins. Co. v. Horinek, 233 Kan. 175,
177, 660 P.2d 1374 (1983). The construction given the insurance
policy should give effect to the parties' intent. The test is
what a reasonable person in the position of the insured would
understand the policy to mean. 233 Kan. at 179-80.
For choice of law purposes where the issue is contract
construction, Kansas applies the rule of lex loci contractus,
i.e., the place of the making. Fagan v. John Hancock Mutual
Life Insurance Company, 200 F. Supp. 142 (D. Kan. 1961). In
group life policies, "[i]t is generally held that such contracts
are made where the master policy and the individual certificate
are delivered." 200 F. Supp. at 143. In the instant case, the
master policy was delivered to Dodge in Kansas; thereafter, the
car agency delivered the individual certificate to Frasher.
Whether Frasher's certificate was mailed to him in Missouri or
delivered to him at the car agency's office in Kansas is not
In Simms v. Metropolitan Life Ins. Co., 9 Kan. App. 2d 640,
644, 685 P.2d 321 (1984), the court held: "As a matter of
conflict of laws doctrine we find the majority rule to be that
the interpretation of a group insurance contract is governed by
the law of the state where the master policy is delivered." In
the instant case, this would result in enforcement of the suicide
clause within the policy. However, this ...