Paulette and Ricki Winters appeal from a declaratory judgment
which construed a Farm Bureau Mutual Insurance Company (Farm
Bureau) automobile liability insurance policy's limits of
In January 1988, a two-vehicle automobile collision occurred in
Linn County. One vehicle was owned by George Sutterby and
driven by Curtis Sutterby. The other vehicle was owned and
occupied by Paulette and Ricki Winters. The Sutterby vehicle was
insured by Farm Bureau.
As a result of the collision, both Paulette and Ricki suffered
bodily injuries. Paulette claims to have incurred expenses in
excess of $100,000 for bodily injuries. Ricki claims to have
incurred expenses of approximately $12,000. The Farm Bureau
policy's stated liability limits are $100,000 for "each person"
and $300,000 for "each occurrence." The controversy presented
concerns whether Farm Bureau's liability for Paulette's claim is
limited to $100,000 or whether Paulette and Ricki combined could
realize up to $300,000.
Farm Bureau filed a petition for declaratory judgment in
Johnson County District Court and moved for summary judgment. The
court found that the insurance contract was not ambiguous and
limited Farm Bureau's liability for Paulette and Ricki
individually to a maximum recovery of $100,000. Ricki and
Paulette timely appeal. The Sutterbys filed no answer to the
petition for declaratory judgment and are not parties to this
The question before us is whether the district court erred in
finding the insurance contract unambiguous and limiting Farm
Bureau's liability coverage to $100,000 for Paulette and Ricki
Our scope of review of a written contract is broad. "Regardless
of the construction of the written contract made by the trial
court, on appeal a contract may be construed and its legal effect
determined by the appellate court." Patrons Mut. Ins. Ass'n v.
Harmon, 240 Kan. 707, 713, 732 P.2d 741 (1987); Kansas Gas &
Electric Co. v. Kansas Power & Light Co., 12 Kan. App. 2d 546,
551, 751 P.2d 146, rev. denied 243 Kan. 779 (1988). "This court
can review the negotiated agreement and decide its legal effect.
Regardless of the construction the district court gave the
agreement, this court may independently construe the contract and
determine its legal significance." NEA-Goodland v. U.S.D. No.
352, 13 Kan. App. 2d 558, 562, 775 P.2d 675, rev. denied
245 Kan. 785 (1989).
The fact that summary judgment was entered by the district
court is of no consequence. On a motion for summary judgment,
both the district court and the appellate courts> are required to
resolve all facts and draw all inferences in favor of the party
against whom the ruling is sought. Bacon v. Mercy Hosp. of Ft.
Scott, 243 Kan. 303, 306, 756 P.2d 416 (1988). In this case,
there are no conflicting facts or inferences. The issue raised is
purely a question of law over which this court's review is
unlimited. Hutchinson Nat'l Bank & Tr. Co. v. Brown,
12 Kan. App. 2d 673, 674, 753 P.2d 1299, rev. denied 243 Kan. 778
The following language from the Farm Bureau insurance contract
is the source of the debate:
"LIMITS OF LIABILITY
"The limits of liability shown in the declarations
apply subject to the following:
"1. The bodily injury liability limit for `each
person' is the maximum for bodily injury
sustained by one person in any one occurrence;
"2. The bodily injury liability limit for `each
occurrence' is the maximum limit of liability
for bodily injury sustained by two or more
persons in any one occurrence."
The policy declarations recite a limit of $100,000 for each
person and $300,000 for each occurrence.
It is the Winters' contention that the policy is patently
ambiguous, allowing $100,000 for injuries to one person in one
occurrence, but also allowing $300,000 for injuries to two people
in one occurrence. They argue that the two clauses are separate,
and nothing in the policy ties them together. In support of their
position, the Winters cite two Kansas cases which discuss the
construction and interpretation of insurance contracts.
"`In determining the intention of the parties to a
contract of insurance, the test is not what the
insurer intends the printed language to mean, but
rather what a reasonable person placed in the
position of the insured would have understood the
words to mean.'
. . . .
"`Where provisions of an insurance policy are
ambiguous or conflicting, the policy is to be
construed strictly against the insurer and in favor
of the insured.'
"`Where an insurer intends to limit or restrict the
coverage under its policy, it should use language
which clearly reveals its stated purpose.' [Citation
omitted.]" Alliance Life Ins. Co. v. Ulysses
Volunteer Fireman's Relief Assn., 215 Kan. 937,
947-48, 529 P.2d 171 (1974).
"It is a ...