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Evergreen Recycle, L.L.C. v. Indiana Lumbermens Mutual Insurance Co.

Court of Appeals of Kansas

May 1, 2015

EVERGREEN RECYCLE, L.L.C., Appellee/Cross-appellant,
ECK AGENCY, INC., Appellee/Cross-appellant,

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Appeal from Sedgwick District Court; WILLIAM SIOUX WOOLLEY, judge.



1. In an appeal from the district court's ruling on a summary judgment motion, an appellate court considers the motion de novo and applies the same standards by which district courts consider summary judgment motions.

2. Under Kansas law, insurance companies have a duty to define any limitations on coverage in clear and explicit terms. Exceptions, limitations, and exclusions to insurance policies require a narrow construction.

3. Forfeitures of insurance policies are disfavored in Kansas and should be permitted only when expressed in clear and unmistakable terms. An insurance company bears the burden of proof on any affirmative defense asserted to avoid liability under an insurance policy.

4. Under K.S.A. 40-2,120(b), an insurance company may rescind an insurance contract if an insured makes fraudulent material misrepresentations when applying for an insurance policy. Fraud is never presumed but must be shown by clear and convincing evidence.

5. In order to establish fraudulent misrepresentation in an action to rescind an insurance contract, a party must establish: (1) there was an untrue statement of fact made by the insured or an omission of material fact; (2) the insured knew the statement was untrue; (3) the insured made the statement with the intent to deceive or recklessly with disregard for the truth; (4) the insurer justifiably relied on the statement; and (5) the false statement actually contributed to the contingency or event on which the policy is to become due and payable.

6. An exclusion under an insurance policy is an affirmative defense that must be specifically pleaded. Affirmative defenses not included in a responsive pleading are waived.

7. A wrongdoer should not be allowed to recover insurance proceeds from a loss resulting from its own illegal acts. But when faced with a motion for partial summary judgment, the opposing party to the motion must first establish that there is a material fact linking the wrongdoer's illegal acts to the extent of the loss.

8. An increase in hazard exclusion may bar recovery under an insurance policy if it can be shown that the insured changed the nature of its business or the use of its property which led to an increased hazard. But it is the insurer's burden to come forth with evidence to prove that defense in response to a summary judgment motion.

9. In determining whether coverage is precluded under the insured's failure to provide prompt notice of loss, the insurer must also prove it suffered actual and substantial prejudice as a result of the delayed notice.

10. Generally, an exclusion for neglect is based on a situation where the insured failed to exercise proper diligence at the time of or following a fire to save property from destruction.

11. Under K.S.A. 2014 Supp. 60-256, a court may enter summary judgment in favor of the nonmoving party on its own motion where there remains no genuine issue as to any material fact in the record.

12. Once an insurer has denied coverage, the insured has no obligation to continue to provide information to the insurance company.

13. The affirmative defense of failure to cooperate requires proof that the insured had an unreasonable and willful pattern of refusing to answer material and relevant questions or supply material and relevant documents.

14. An insurance policy is to be read in its entirety, construing its terms collectively in a way that gives effect to the intention of the parties. A court should not strain to find an ambiguity or make another contract for the parties; rather, it should enforce the contract as written.

15. The obligation of an insurance company is governed by the provisions of the policy and its endorsements. Words used in an insurance policy are to be read and understood in their ordinary and usual meaning. An insurance company prepares its own policies and is responsible for any proper consequences of not making the policy clear and understandable. Where an ambiguity exists in the policy, the rules of construction favor the policyholder.

16. Reformation is an equitable remedy which provides the court with a tool to reform a contract to express the true intention of the parties, but it is an extraordinary remedy and should be exercised only with great caution.

17. Kansas courts have a reluctance to reform written contracts when there is no evidence of fraud, mistake, duress, undue influence, unconscionability, or evidence that the contract as written will cause harsh or unreasonable results. When reformation of a policy is sought on the ground of mistake, and without fraud, it is necessary to establish mutuality of mistake by clear and convincing evidence.

18. A definite agreement must have been reached to allow reformation of a contract. The courts should not reform a contract unless there was a prior agreement to which the contract as written can be reformed.

19. Mutual mistake in a contract must be pleaded with particularity.

20. In a case in which many of the relevant facts were established in summary judgment proceedings, it is appropriate for the district court to issue preliminary instructions to the jury before opening statements. If there is no objection to the district court's preliminary comments at trial, there should be no reversal unless the comments amount to clear error.

21. Under K.S.A. 2014 Supp. 60-251(c), a party must object to the trial court's giving or failing to give a jury instruction before the jury retires. The party must state clearly what matter is objectionable and give the legal grounds for the objection. If there is no objection, the appellate court must limit review to a determination of whether the instruction was clearly erroneous and whether the error affects substantial rights.

22. Review of a district court's ruling on a motion in limine is similar to that of a decision regarding an evidentiary ruling. Once the district court determines that the evidence will be inadmissible at trial, the court also must find that a pretrial ruling is justified because the mere offer or mention of the evidence during trial may cause unfair prejudice, confuse the issues, or mislead the jury; the consideration of the issue during trial might unduly interrupt and delay the trial; or a ruling in advance of trial may limit issues and save the parties time, effort, and cost in trial preparation.

23. When the trial court grants a motion in limine to exclude evidence at trial, the party limited by the motion must make a sufficient proffer of the excluded evidence to preserve the issue for appeal. Without a proffer, the issue is not preserved for appeal.

24. Citations to the record are vital when an appellant is complaining about specific rulings at trial regarding the admission of evidence. Supreme Court Rule 6.02(a)(5) (2014 Kan. Ct. R. Annot 41) requires " a pinpoint reference to the location in the record on appeal where the issue was raised and ruled on." Without proper citations to the record, the party has not met its burden to show reversible error.

Kevin M. McMaster and Jennifer M. Hill, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, for appellant/cross-appellee.

N. Russell Hazlewood and Jacob S. Graybill, of Graybill & Hazlewood, LLC, of Wichita, for appellee/cross-appellant Evergreen Recycle, L.L.C.

Gerald L. Green, of Gilliland & Hayes, LLC, of Hutchinson, for appellee/cross-appellant Eck Agency, Inc.

Before HILL, P.J.,MCANANY, J., and LARSON, S.J.


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[51 Kan.App.2d 463] Mcanany, J.:

Indiana Lumbermens Mutual Insurance Company (Lumbermens) appeals from the judgment awarded to Evergreen Pallet, L.L.C. and Evergreen Recycle, L.L.C. (Evergreen) in the amount of $231,000 based on Evergreen's claim that Lumbermens improperly failed to pay a claim for losses associated with a fire in a commercial mulch pile owned and maintained by Evergreen. On appeal, Lumbermens contends the district court erred in granting various motions for summary judgment, in interpreting the amount of coverage provided under the policy, and in various trial rulings.

Evergreen sued Lumbermens after Lumbermens refused to pay Evergreen's claim. Evergreen had purchased the insurance policy through its agent, Eck Agency, Inc. During discovery, Lumbermens asserted various affirmative defenses that it claimed excused its duty to pay for Evergreen's property loss.

Lumbermens filed a third-party petition against Eck Agency seeking indemnity in the event that Eck Agency was found to be Lumbermens' agent and if Lumbermens was found liable to Evergreen. After discovery and the pretrial conference, Eck Agency moved for summary judgment. The district court granted the motion and dismissed Eck Agency from the lawsuit.

Before trial, the district court ruled on 10 motions for summary judgment or motions for partial summary judgment. The district court granted multiple motions for partial summary judgment in favor of Evergreen, finding that Lumbermens had failed to present sufficient evidence of genuine issues of material fact on many of its affirmative defenses. Lumbermens twice moved for summary

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judgment, once shortly after the lawsuit was filed and again after the close of discovery.

The case proceeded to a jury trial on the sole issue of whether the notice requirement under the policy, i.e., " prompt notice," was met by Evergreen. After a 13-day jury trial, the jury returned a verdict in Evergreen's favor for $235,000. After reducing the judgment by the deductible, the court entered judgment for Evergreen in the amount of $231,000.

[51 Kan.App.2d 464] Lumbermens appeals, asserting the various points of error broadly categorized above. After carefully reviewing each of Lumbermens' points of error, we affirm. Evergreen filed a cross-appeal, but our disposition of the issues raised by Lumbermens renders the cross-appeal moot.


Jeff Ralls is the owner of Evergreen Pallet, L.L.C. and Evergreen Recycle, L.L.C. Ralls started in the pallet business in 2000, and Evergreen Pallet is in the business of manufacturing and refurbishing pallets. Third-party defendant Eck Agency assisted Evergreen in acquiring an insurance policy from Lumbermens.

In January 2008, Ralls acquired the business premises of a defunct recycling business. The prior owner of the recycling business had been previously shut down by the Kansas Department of Health and Environment (KDHE) for failing to maintain the site according to KDHE regulations. On those premises, Ralls began Evergreen Recycle. The business of Evergreen Recycle primarily involves turning wood waste into mulch and turning other organic waste into compost.

Due to the prior owner's violation of regulations, the KDHE met with Evergreen representatives soon after Ralls purchased the business. The KDHE identified specific problems and began working with Ralls to clean up the property and bring it within compliance of the codes. The KDHE required that Evergreen post a bond, and the amount of the bond decreased over time as the facility came into compliance of the codes.

In a letter dated January 14, 2008, Sedgwick County Fire Marshal Tim Millspaugh informed Ralls of the fire codes applicable to the outside storage of combustible material as relevant to the mulch recycling business. The code limits the size of mulch piles to 25 feet in height, 150 feet in width, and 250 feet in length. Over 1 year later, in February 2009, Ralls was still working with the Fire Marshal to make improvements and achieve compliance with all of the fire codes.

In May 2008, Evergreen Recycle was added as an additional insured to Evergreen's policy with Lumbermens. At the time Evergreen [51 Kan.App.2d 465] Recycle was added to the policy, Ralls initially declined additional coverage for the mulch piles that were located on the property. Several months later, Cheri Ricke, working for Eck Agency, helped Ralls inquire about adding mulch coverage to the existing policy. Ralls reported to Ricke on the phone that there were four piles of mulch and assigned a value to each pile. In an August 21, 2008, email providing the information to Lumbermens' senior underwriter Nancy Curran, Ricke stated:

" Insured has more mulch now [than] what he started with when first discussed. He has 4 piles at the 53rd St location about a 1/4 [mile] from the building and approx 30 yds apart except for biggest pile and it is farther from the others.
" He would like you to quote: #1 $70,000--10,000 cubic yd
#2 $7,000
#3 $20,000
#4 $20,000
" Please let me know if we can do this and an annual premium."

Curran responded: " Using a $2 rate $117,000 = $2340 AP annually."

In September 2008, Lumbermens issued insurance on the mulch in the limits requested by Eck Agency with a $2,340 annual premium. The amounts representing the four piles were combined and added to the declarations sheet on the policy as " stock in open" for coverage in the combined amount of $117,000. The policy did not require Evergreen to keep the mulch in four separate piles.

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During a KDHE inspection on February 12, 2009, employees of KDHE and Evergreen Recycling first discovered wisps of smoke coming from a small spot on the top of its shredded, dried mulch pile. Ralls thought at first that it was just a hot spot that could be easily extinguished. But after the employees dug into the pile, they determined it was bigger than originally thought and included tunnels of glowing material. Ralls called the fire department because he was concerned about the number of embers he was finding in the pile.

The fire department arrived and assisted Evergreen in its efforts to cool and extinguish the smoldering mulch. The mulch pile that caught fire was in violation of the size of piles allowed by the fire codes, which required that piles should not exceed 25 feet in [51 Kan.App.2d 466] height, 150 feet in width, and 250 feet in length. Ralls estimated the size of the mulch pile at the time the fire started at approximately 20 yards (60 feet) high, 100 yards (300 feet) wide, and 150 yards (450 feet) long. Ralls admitted the size of the pile was in violation of the fire code.

On the day the fire was discovered, Ralls called insurance agent Michael Eck, an employee of Eck Agency, to report the fire. Eck was at Evergreen's office picking up a check when he received Ralls' call. Eck could see the smoke and the fire trucks. Ralls was unsure if he wanted to make a claim for the fire loss at that time, and he did not believe he had to make an immediate decision on whether to file a claim.

The fire burned from February 12, 2009, until early March. The fire was deep inside the pile and apparently originated near the bottom of the pile of mulch. The fire department did not monitor the fire around the clock but instead devised a plan to help Evergreen fight the fire. The fire department allowed Ralls to monitor the fire overnight and returned as needed during daytime hours to put more water on the mulch pile. The fire department fought the fire by hauling water onto the hot spots and by putting a foam concentrate on the materials that allowed the water to soak into the wood.

Evergreen continued to disassemble the pile, soak the material with water as it was removed, place the wet material in windrows, resoak any smoldering material, and call the fire department for assistance if necessary. Evergreen rented water trucks so that it could continue to soak the pile of mulch as needed. Evergreen also rented a bulldozer and two four-wheel loaders to assist in its efforts to extinguish the fire. Evergreen employees drove over the pile with a bulldozer to compress the mulch and smother the fire. Evergreen employees and volunteers worked around the clock to soak and monitor the smoldering pile and the windrows. Fire Marshal Millspaugh testified that it appeared to him that Evergreen was making a good faith effort to extinguish the fire.

The KDHE inspectors made regular visits to the fire scene while the fire suppression effort was in progress. The inspectors prepared written reports describing the size of the pile and the efforts being [51 Kan.App.2d 467] made to suppress the fire. They took over 170 photographs during the course of the fire, memorializing the scene from the date when smoke was first discovered and ending when the fire was extinguished. Evergreen employees also took photographs and made video recordings of the mulch pile and the fire suppression activities.

On February 25, 2009, the large pile of mulch had been largely deconstructed and placed in windrows. The fire was mostly out, although there were " small smolders" in the windrows for another 10 to 14 days. After the fire had been extinguished, selling the remaining windrowed mulch was not an option because it was charred, mixed with dirt, and smelled bad.

Also on February 25, 2009, a neighbor came to Evergreen and threatened to file a class action lawsuit. The man claimed he and others had incurred damages resulting from the smoke from the mulch fire. He complained that many of the homes in the area smelled like the smoke. Ralls reported the neighbor's complaint to Eck Agency, and Eck Agency immediately reported the threatened lawsuit to Lumbermens' claim department. Eck followed his telephone call with a letter dated March 10, 2009, in which he said that the insured had a mulch pile that

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caught fire due to internal combustion on February 12, 2009. In the letter, Eck provided the written details of the threatened lawsuit and the potential for a claim.

On March 11, 2009, Lumbermens' casualty claims manager, Geoff Lamb, began an investigation of Evergreen's mulch fire. Lamb assigned the investigation to Lisa Lillemoe. He instructed her to confirm the source of the mulch fire, interview Ralls, call the fire department, obtain a fire report, and interview KDHE Bureau of Air Director John Stark. Later that day, Lillemoe interviewed Stark, who witnessed the fire the day it was discovered, and he stated that it " was obvious that the fire was accidental."

According to Ralls, the residue of the fire, including a substantial amount of mulch that was charred by the fire and/or damaged by the water, was piled in windrows that remained on Evergreen's premises for more than a year after the fire was extinguished. During that time, Lumbermens never requested to inspect the scene [51 Kan.App.2d 468] of the fire or view the damaged property. In addition, Lumbermens never requested samples of the damaged material that remained after the fire.

At first, Ralls was unsure whether he wanted to make an insurance claim. Ralls testified that he was hesitant to make a claim because he did not want his premiums to rise or his policy to be canceled. Ricke, an employee of Eck agency, advised Ralls that his policy would probably be canceled if he chose to make a claim. Ralls eventually made the decision to file a claim because his losses were higher than anticipated. On March 20, 2009, Eck Agency faxed Lumbermens a form property loss notice for Evergreen's damaged stock, stating: " Combustion caused fire damaging mulch piles. Coverage listed as Stock in Open for $117,000."

On March 24, 2009, Lumbermens assigned the loss to its property claims adjuster, Randall Thompson. Thompson spoke to Ralls about the circumstances surrounding the fire. Ralls told Thompson that he had reported the fire to Eck Agency on the day that it started, and Michael Eck saw the fire on that date. Thompson noted that Eck had looked at the damage, and he stated he would follow up with Eck to discuss coverage issues, the extent of the damages, and to inquire about the delay in reporting the fire to Lumbermens. Thompson made an additional note memorializing that conversation that said: " The insured continued to move the pile around to help extinguish the fire and they continued to produce mulch and put on top of the pile." Evergreen denies that new mulch was added to the pile. Ralls reported the value of the mulch pile to be $240,000 with 50% of the pile destroyed. Thompson noted he was setting the reserve at the policy limit of $117,000.

On April 7, 2009, Ralls called Lumbermens to inquire about the status of Evergreen's claim. He was directed to Lamb, who requested that Ralls complete a worksheet. On the completed worksheet, Ralls claimed a loss of 60,000 cubic yards of mulch.

On April 13, 2009, Thompson called Ralls and asked for clarification as to how Ralls arrived at his values. Thompson noted in his claim log that Ralls would " gather his documentation and present" it to Thompson for review. Ralls followed up with Thompson by sending a schedule explaining Evergreen's calculation of the [51 Kan.App.2d 469] loss. After receiving Ralls' explanation, Thompson put the document in his claim file and made no further comment.

On April 29, 2009, Thompson took a recorded statement from Eck. Eck told Thompson that any delay in reporting the loss was due to the fact that Ralls did not know whether he wanted to make a claim for the loss. The next day, Thompson called Ralls and told him that Lumbermens was continuing its investigation. Thompson told Ralls that the delay was attributed in part due to Evergreen's delay in reporting the claim.

On May 6, 2009, Ralls called Lumbermens and was directed to Lumbermens' vice president of claims, Ray Campisi. Campisi told Ralls that Lumbermens had some difficulty with the claim and the delay in reporting. Ralls informed Campisi that part of the delay was due to the fact that he was busy putting out the fire and dealing with the follow-up activities. In addition, Ralls assumed that Eck Agency had reported the fire to Lumbermens.

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Campisi advised Ralls that this " information is contrary to what [Lumbermens] has been told up to this point." On May 8, 2009, Lumbermens sent a reservation of rights letter to Evergreen. The letter highlighted some of Lumbermens' concerns about the fire and about Evergreen's claim. Evergreen did not respond to the letter.

On May 26, 2009, Thompson advised Eck Agency and Evergreen that Lumbermens had decided to deny Evergreen's claim. In a May 27, 2009, letter explaining its decision to deny the claim, Lumbermens noted that it believed that Evergreen had breached the policy conditions. Lumbermens outlined four grounds for the denial: (1) late notice; (2) failure to protect the property; (3) failure to exhibit damaged property; and (4) neglect. Thompson's letter concluded:

" From the information provided to us [Lumbermens] was not advised of this loss until approximately six weeks after the loss occurred. The scene was altered and four separate mulch piles were combined into one unit prior to notice to [Lumbermens]. In addition, newly produced mulch was added to the burning pile prior to notice to [Lumbermens] which has destroyed [Lumbermens'] ability to investigate the cause of the loss or to determine the extent of the damages.
" These findings indicate that this loss is not covered by the terms of the above mentioned policy as the policy conditions have been breached. Therefore, no payment will be made for this loss."

[51 Kan.App.2d 470] On May 27, 2009, Thompson spoke with Eck about the denial of the claim. Thompsons' notes from the call indicated that Eck " implied that we were declining [coverage] because of fraud and we were questioning his integrity. I advised that the reason for the denial was not for fraud but violation of policy conditions including late notice." Thompson also informed Eck that the denial was based in part on the inability to determine the extent of the loss. On that same date, Campisi spoke with Ralls. According to Campisi's notes, Ralls disagreed with Lumbermens' decision and wanted to debate his efforts to contain the fire. Campisi pointed to Ralls' failure to report the fire in a timely manner. Campisi stated: " I advised that if he was still in disagreement after discussing with his agent, he may wish to consult an attorney for direction."

On August 7, 2009, Evergreen filed suit against Lumbermens alleging breach of contract. Evergreen asserted that Lumbermens denied its claim for the loss of the mulch " without just cause or excuse." Evergreen requested judgment in the amount of $186,200, together with interest, and further demanded reasonable attorney fees under K.S.A. 40-256. In response, Lumbermens denied that it breached or failed to comply with the terms of the insurance contract.

During discovery, Lumbermens asserted a number of affirmative defenses under the policy as defenses to Evergreen's breach of contract claim. Evergreen filed several motions for partial summary judgment based on each of the policy defenses asserted by Lumbermens. All of Lumbermens' affirmative defenses--other than its assertion that Evergreen failed to give prompt notice of loss--were dismissed prior to trial in a series of rulings on Evergreen's motions for partial summary judgment. In ruling on Evergreen's fifth motion for partial summary judgment, the district court also ruled that the policy limits available to Evergreen totaled $237,000, rather than the $117,000 previously thought, because the mulch was considered both " stock" and " stock in open." The policy had coverage limits for both " stock" and " stock in open."

During discovery, Evergreen asserted that it complied with the prompt notice of loss provision of the policy by informing Eck [51 Kan.App.2d 471] Agency about the loss on the day the fire started. In his deposition, Ralls testified that he thought giving notice to Eck Agency was sufficient to comply with the notice provision:

" Q. When is it you claim you gave notice of loss of this fire to Indiana Lumbermens?
" A. The day it happened.
" Q. How did you give notice of loss the day it happened?
" A. I called Michael Eck.
" Q. What did you tell him?

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" A. I said we got a fire on the mulch pile. I thought I would let you know we are going to be here [awhile] and I will keep you updated on how things go.
" Q. Did you tell him to report it to the insurance company?
" A. I didn't think I had to. We have been dealing with him for years. I have had multiple claims. It is the process we have taken many times when we have a claim. We call him, he takes care of it."

Evergreen's position that notice to Michael Eck was sufficient prompted Lumbermens to file a third-party petition to add Eck Agency as a third-party defendant. Lumbermens contended that Eck Agency breached its brokerage agreement with Lumbermens, which precluded Eck Agency from accepting Evergreen's notice of the fire loss as binding notice on Lumbermens. Eck Agency moved for summary judgment on March 28, 2012. The district court granted Eck Agency's motion on May 15, 2013.

The case proceeded to trial on March 5, 2013. But after voir dire and opening statements, both parties moved for a mistrial. Evergreen argued that Lumbermens violated the motion in limine and " injected legal issues that have been decided by the Court" in its ruling on the summary judgment motions. After an extensive conference with counsel, the court declared a mistrial. In its ruling, the court noted that multiple orders were outstanding on the various dispositive motions the parties had filed leading up to trial. The court entered six journal entries on the dispositive motions between April 8, 2013, and April 29, 2013.

In April 2013, the sole issue of whether Evergreen provided prompt notice of loss was tried to a jury. After a 13-day trial, the jury found that Evergreen provided Lumbermens with prompt notice of loss. The jury determined that Evergreen had suffered damages of $180,000 for mulch loss; $50,000 for debris removal; and [51 Kan.App.2d 472] $5,000 for emergency removal expense. Total damages equaled $235,000. After applying the $4,000 deductible, the court entered judgment for Evergreen in the amount of $231,000.

Lumbermens appealed from the judgment. Evergreen filed a cross-appeal.

Issues of Summary Judgment

Lumbermens first challenges several of the district court's rulings raised in the various summary judgment motions. In our de novo review of the rulings on the motions for summary judgment, we apply the same summary judgment standards as did the district court. Osterhaus v. Toth, 291 Kan. 759, 768, 249 P.3d 888 (2011). Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. We resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the summary judgment was sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. We must deny the motion if reasonable minds could differ as to the conclusions drawn from the evidence. See Stanley Bank v. Parish, 298 Kan. 755, 759, 317 P.3d 750 (2014).

An issue of fact is not genuine unless it has legal controlling force as to the controlling issue. A disputed question of fact which is immaterial to the issue does not preclude summary judgment. In other words, if the disputed fact, however resolved, could not affect the judgment, it does not present a " genuine issue" for purposes of summary judgment. Northern Natural Gas Co. v. ONEOK Field Services Co., 296 Kan. 906, 935, 296 P.3d 1106 (2013).

In reviewing the issues regarding Lumbermens' claim that exclusions to the policy rendered the coverage void, we keep in mind that under Kansas law, exclusions to insurance policies are construed narrowly. This court has stated:

[51 Kan.App.2d 473] " 'It is the general rule that exceptions, limitations and exclusions to insuring

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agreements require a narrow construction on the theory that the insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations on that coverage in clear and explicit terms.' Upland Mutual Insurance, Inc. v. Noel, 214 Kan. 145, 149, 519 P.2d 737 (1974). The exclusion must be given its plain, ordinary meaning. Central Security Mut. Ins. Co v. DePinto, 235 Kan. 331, 333, 681 P.2d 15 (1984)." Pink Cadillac Bar & Grill, Inc. v. USF & G Co., 22 Kan.App.2d 944, 952, 925 P.2d 452 (1996), rev. denied 261 Kan. 1086 (1997).

A. Material misrepresentations exclusion

Lumbermens raised various affirmative defenses in its answer to Evergreen's claim that Lumbermens should pay for damages resulting from the mulch pile. One of those defenses was that the insurance policy was void because Kansas law precludes coverage when an insured misrepresents material issues when obtaining coverage. See K.S.A. 40-2,120(b) ( policy of property or casualty insurance may be canceled if the policy was issued because of a material misrepresentation). In a motion for partial summary judgment, Evergreen sought a ...

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