United States District Court, D. Kansas
MEMORANDUM AND ORDER
W. Lungstrum, United States District Judge
matter comes before the court on the motion by plaintiff
American National Property and Casualty Company
(“ANPAC”) for summary judgment on its claim for a
declaration that it has paid defendant Sear, its insured, the
amount due under its policy for underinsured motorist (UIM)
benefits (Doc. # 14). For the reasons set forth below, the
Court grants the motion and awards judgment
in favor of plaintiff ANPAC.
purposes of this motion, the parties have agreed to the
following uncontroverted facts. Michael Sear died after his
automobile collided with another automobile in Missouri. Dana
Sear, decedent's spouse, filed suit in Missouri state
court, individually and as plaintiff ad litem for decedent,
against the other driver. For the purpose of this motion, the
parties have stipulated that the other driver is liable for
the alleged damages and that the damages exceed $250, 000.
The other driver's insurer paid its policy limit of $100,
000 to settle the Missouri suit.
Sear was insured at the time of the accident under a policy
issued by ANPAC that included a $250, 000 UIM limit.
Defendant Sear demanded payment of the $250, 000 UIM limit
from ANPAC, but ANPAC agreed to pay and did pay only $150,
000 in UIM benefits, based on a policy provision that
provided an offset for the other driver's $100, 000
liability coverage limit. ANPAC subsequently filed this
declaratory judgment action against Ms. Sear (based on
diversity jurisdiction), by which it seeks a declaration to
the effect that it is entitled to the offset and that
therefore it is not liable under the policy for the
additional $100, 000 sought by Ms. Sear. By the present
motion, ANPAC seeks summary judgment on that claim for
parties agree to the relevant facts here. Thus, the Court
will grant the motion if ANPAC is entitled to judgment as a
matter of law. See Fed. R. Civ. P. 56(a).
Court has previously set out the relevant principles for the
interpretation of an insurance policy under Kansas
Under Kansas law, the construction and interpretation of an
insurance policy is a question of law to be determined by the
court. If the relevant facts are undisputed, the court may
determine whether they are within the terms of the policy. An
insurance contract must be construed in a way that gives
effect to the parties' intent. If the language in the
insurance policy is unambiguous, the court cannot remake the
contract, it must be enforced as made. Unambiguous language
is to be taken in its plain, ordinary, and popular sense. If
the language in the policy is ambiguous, the policy terms are
construed in favor of the insured. In Brumley, the
Kansas Supreme Court set out its test for ambiguity
To be ambiguous, a contract must contain provisions of
language of doubtful or conflicting meaning, as gleaned from
a natural and reasonable interpretation of its language.
Ambiguity in a written contract does not appear until the
application of pertinent rules of interpretation to the face
of the instrument leaves it genuinely uncertain which one of
two or more meaning is the proper meaning.
See Fidelity & Deposit Co. of Md. v. Hartford Cas.
Ins. Co., 189 F.Supp.2d 1212, 1215-16 (D. Kan. 2002)
(Lungstrum, J.) (footnote and internal citations and
quotations omitted) (quoting Brumley v. Lee, 265
Kan. 819 (1998)). Moreover, in construing an insurance
policy, a court considers the instrument as a whole, and
“[i]nsurance policy language is tested by what a
reasonably prudent insured would understand the language to
mean.” See Iron Horse Auto, Inc. v. Lititz Mut.
Ins. Co., 283 Kan. 834, 839 (2007).
policy's offset provision on which ANPAC relies states as
Coverage for losses caused by an underinsured
motorist shall be limited to the difference between
the Underinsured Motorist Coverage limits
provided in this Part and the coverage limits provided in any
applicable bodily injury liability bond or
(Emphasis in original.) As applied in this case, UIM coverage
would be limited to $150, 000-the difference between the
$250, 000 UIM limit in the policy and the $100, 000 coverage
limit in the other driver's policy. This provision
unambiguously provides for such an offset. Ms. Sear has not
offered any alternative interpretation of this provision;
indeed, Ms. Sear does not dispute that, if ...