Appeal from Johnson District Court; GERALD T. ELLIOTT, judge.
BY THE COURT
1. Under Kansas rules for choosing which state's law applies in a contract dispute, the law of the state where the contract was made applies when determining the parties' substantial obligations, while the law of the state where the contract is to be performed applies on questions regarding the manner of contract performance.
2. In a general-liability insurance contract, the insurer's duty to defend against claims covered by the policy goes to the substance of the insurer's contractual obligations and is therefore determined under the law of the state where the contract was made.
3. On the facts of this case and under the applicable law of Missouri, the insurer had a duty to defend against negligence and negligent-misrepresentation claims in the underlying lawsuit.
Jennifer M. Hill, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, for appellants.
Christopher J. Sherman and Tyler Peters, of Payne & Jones, Chartered, of Overland Park, for appellee.
Before LEBEN, P.J., BUSER and ATCHESON, JJ.
Universal Underwriters Insurance Company (" Universal Underwriters" ) and Zurich American Insurance Company (" Zurich" ), collectively " the insurers," appeal the district court's determination that the insurers had the duty to defend an insured against claims made against the insured in a lawsuit. The district court held that the insurers were obligated to defend Central Power Systems & Services, Inc. (" Central Power" ) in litigation instigated [49 Kan.App.2d 959] by a customer of Central Power. That customer had alleged that Central Power had been negligent and had made negligent misrepresentations regarding the way products Central Power provided would operate. Applying Missouri law, the district court found that the claims asserted against Central Power for negligence and negligent misrepresentation triggered the insurers' duty to defend under the insurance coverage provided to Central Power.
The insurers contend that the district court erred in three ways: (1) by applying Missouri law; (2) by finding the policy covered negligence and negligent-misrepresentation litigation; and (3) by finding no exclusion in the policy that extinguished the insurers' duty to defend Central Power on these claims. But we find no error:
o Missouri law applies because the insurance contract was made in Missouri when the last act needed for creation of the insurance contract--delivery of the insurance policy--took place at Central Power's Missouri business location.
o Under Missouri law, claims for negligence and negligent misrepresentation have been held covered under similar insurance policies.
o Under Missouri law, exclusions apply only when their language clearly and unambiguously precludes coverage, and no exclusion cited here by the insurers does so.
Because the court below appropriately applied Missouri law, and because the plain language of the policy covers and does not exclude coverage for negligence and negligent misrepresentation, we affirm the district court.
Factual and Procedural Background
As part of a single insurance policy, Central Power purchased general-liability coverage (Part 950), personal umbrella coverage (Part 970), and general umbrella coverage (Part 980) from the insurers in July 2005. The contracts were finalized when Universal mailed ...