Appeal from Douglas District Court; MICHAEL J. MALONE, judge.
1. If the language of an insurance policy is clear and unambiguous, it must be construed in its plain, ordinary, and popular sense and according to the sense and meaning of the terms used.
2. An insurance policy is ambiguous when it contains language of doubtful or conflicting meaning based on a reasonable construction of the policy's language. An ambiguity does not exist merely because the parties disagree on the interpretation of the language.
3. An insurer assumes the duty to define limitations to an insured's coverage in clear and explicit terms. To restrict or limit coverage, an insurer must use clear and unambiguous language. If the terms of a policy of insurance are ambiguous or obscure or susceptible of more than one construction, the construction most favorable to the insured must prevail.
4. Unclear and obscure clauses in a policy of insurance should not be allowed to defeat the coverage reasonably to be expected by the insured.
5. The term "use" in a coverage clause of an automobile liability policy is given broad, general, and comprehensive meaning effecting broad coverage. It includes any exercise of control over the vehicle regardless of its purpose, extent, or duration.
6. Under the facts of this case, a vehicle rented by the insured was an "insured vehicle" and coverage extended to the driver of the rental vehicle, where, at the time of the accident, the insured was a passenger in the vehicle and the driver was driving the rental vehicle at the direction of the insured. Because the insured was "using" the vehicle at the time of accident, liability coverage extended to the driver of vehicle who was an "insured person" using the "insured car."
The opinion of the court was delivered by: Caplinger, J.
Before CAPLINGER, P.J., ELLIOTT, J., and BUKATY, S.J.
Defendant/appellant Farmers Insurance Company (Farmers) appeals the district court's ruling finding Farmers estopped from denying coverage to the unlisted driver of a rental car rented by its insured. The individuals injured in the car accident, the intervenors/appellees, filed a cross-appeal challenging the district court's ruling that the insured's policy with Farmers did not provide liability coverage for the driver's negligence.
Factual and Procedural Background
What should have been an enjoyable weekend spent among friends instead spawned nearly 7 years of litigation, culminating in this appeal. On September 29, 2000, Sandra ("Sandy") Taylor, now Taylor-Pahl, rented a passenger van from Thrifty Rent-A-Car in Kansas City and invited a group of friends to drive to a football game in Boulder, Colorado. She designated Theodore "Ted" Pahl as an additional driver on the rental agreement and declined to purchase the insurance.
The group included Sandy, Ted, Emily Hatchett, Daniel Weber, Heather Weber, and Jennifer Lund. They all agreed to take turns driving.
Ted drove the first leg, and Sandy drove the second. Emily took the wheel in Colby, Kansas.
According to the Kansas Highway Patrol's accident report, Emily lost control of the van at approximately 11:40 p.m. while attempting to avoid a tumbleweed. The van veered left, right, and then into a ditch where it rolled several times before coming to rest. Three of the passengers were ejected; Emily was trapped inside. All sustained significant injuries.
At the time of the accident, Sandy owned a vehicle insured by Farmers. Emily owned a vehicle insured by Kemper American Motorists Insurance Company, d/b/a Hedges (Kemper).
Kemper tendered Emily's policy limits of $300,000, which the Douglas County District Court divided pursuant to a stipulated allocation order. The allocations were made with the understanding plaintiffs suffered injuries in excess of $300,000.
Farmers, without any reservation of rights, paid Thrifty $20,420 for the damaged van, and Sandy paid the $300 deductible required by her Farmers policy. Farmers also paid the cost of Sandy's defense in a civil suit initiated against her by Daniel and Heather Weber.
Each of the passengers--Sandy, Ted, Dan, Heather, and Jennifer--filed personal injury suits against Emily seeking damages for their medical expenses. The Webers' suit, as noted above, also named Sandy as a defendant. These suits have been consolidated and stayed in the Douglas County District Court pending resolution of this action.
Farmers denied coverage for any of the injuries, and refused to participate in the suits against Emily. It specifically denied that its policy with Sandy extended liability coverage to Emily. Farmers informed Kemper that Emily's policy with Kemper was ...