United States District Court, D. Kansas
MEMORANDUM AND ORDER
L. TEETER, UNITED STATES DISTRICT JUDGE.
Justin Antrim brings this action against Defendant Standard
Security Life Insurance Company of New York for breach of
contract and attorneys' fees and costs related to
Defendant's denial of coverage for certain expenses
incurred by Plaintiff. Doc. 1. Defendant moves to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing
that the complaint fails to state a claim for relief because
the plain and unambiguous language of Plaintiff's
insurance policy excludes coverage for the expenses at issue.
Docs. 7-8. Because the Court finds that the relevant policy
provisions are ambiguous regarding whether the expenses
incurred by Plaintiff are excluded, the Court denies
Defendant's motion to dismiss.
following background accepts as true Plaintiff's
well-pleaded factual allegations. Plaintiff purchased a Short
Term Medical Expense Insurance Policy (“Policy”)
from Defendant with an effective date of March 2, 2017. Doc.
1 ¶ 6; Doc. 8-1. During the term of the Policy, on or
about June 19, 2017, Plaintiff sought treatment from a
dentist at the Stockton Dental Center in Stockton, Kansas.
Doc. 1 ¶ 7. During the visit, the dentist informed
Plaintiff that he would need a root canal. Id. at
¶ 8. Because she was unable to perform the procedure due
to a large abscess in the injured tooth, the doctor
prescribed Plaintiff medication for the infection; however,
the infection worsened, requiring Plaintiff to be
hospitalized at the Hays Medical Center (“HMC”).
Id. at ¶¶ 8-11. After receiving treatment
at HMC, Plaintiff was transferred to Wesley Medical Center
(“WMC”) in Wichita, Kansas, where he underwent
surgery on his tooth. Id. at ¶¶ 12-13, 15.
Plaintiff incurred a total of $86, 487.32 in expenses in
connection with his hospital admissions and surgery.
Id. at ¶¶ 18-19.
subsequently sought coverage under the Policy for these
expenses. Defendant denied Plaintiff coverage, and Plaintiff
brought this action for breach of contract and attorneys'
fees and costs pursuant to K.S.A. § 40-256. Doc. 1
Rule 12(b)(6), to survive a motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). The plaintiff's claim is
facially plausible if he pleads sufficient factual content to
allow the court “to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. The plausibility standard requires “more
than a sheer possibility that a defendant has acted
unlawfully” but “is not akin to a
‘probability requirement.'” Id.
“Where a complaint pleads facts that are ‘merely
consistent with' a defendant's liability, it
‘stops short of the line between possibility and
plausibility of entitlement to relief.'”
Id. (quoting Twombly, 550 U.S. at 557).
standard results in two principles that underlie a
court's analysis. Id. First, “the tenet
that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal
conclusions.” Id. Stated differently, though
the court must accept well-pleaded factual allegations as
true, it is “not bound to accept as true a legal
conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
“Second, only a complaint that states a plausible claim
for relief survives a motion to dismiss.”
Iqbal, 556 U.S. at 679. “[W]here the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has
alleged-but it has not ‘show[n]'-‘that the
pleader is entitled to relief.'” Id.
(quoting Fed.R.Civ.P. 8(a)(2)). “In keeping with these
[two] principles, a court considering a motion to dismiss can
choose to begin by identifying pleadings that, because they
are no more than conclusions, are not entitled to the
assumption of truth.” Id. “When there
are well-pleaded factual allegations, a court should assume
their veracity and then determine whether they plausibly give
rise to an entitlement to relief.” Id.
alleges the Policy covers the expenses he incurred in
connection with his hospital admissions and surgery and
brings claims for (1) breach of contract and (2)
attorneys' fees and costs under K.S.A. § 40-256
related to Defendant's denial of coverage. Doc. 1.
Defendant moves to dismiss pursuant to Rule 12(b)(6), arguing
that Plaintiff fails to state a claim for breach of contract
because the Policy expressly excludes coverage for the
expenses Plaintiff seeks to recover. Doc. 8 at 8-11.
Defendant also maintains that, because Plaintiff fails to
state a claim for breach of contract, Plaintiff necessarily
cannot establish a claim for attorneys' fees and costs
pursuant to K.S.A. § 40-256. Id. at 11. For the
following reasons, the Court finds that the plain language of
the relevant provisions of the Policy are ambiguous regarding
whether the expenses incurred by Plaintiff are excluded from
coverage and, accordingly, denies Defendant's motion to
Breach of Contract
of the complaint alleges a claim for breach of contract.
Because Plaintiff invokes the Court's jurisdiction under
28 U.S.C. § 1332, the Court applies the substantive law
of the forum state. See State Farm Mut. Auto. Ins. Co. v.
Blystra, 86 F.3d 1007, 1010 (10th Cir. 1996) (holding
that a federal court sitting in diversity is bound to apply
the substantive law of the state in which it sits). To prove
a claim for breach of contract under Kansas law, a plaintiff
must show: “(1) the existence of a contract between the
parties; (2) sufficient consideration to support the
contract; (3) the plaintiff's performance or willingness
to perform in compliance with the contract; (4) the
defendant's breach of the contract; and (5) damages to
the plaintiff caused by the breach.” Stechschulte
v. Jennings, 298 P.3d 1083, 1098 (Kan. 2013). In its
motion to dismiss, Defendant essentially contends that
Plaintiff cannot establish the fourth element of his prima
facie case-i.e., a breach of the Policy-because under the
Policy's plain and unambiguous language the expenses
incurred by Plaintiff are excluded from coverage and,
therefore, Defendant did not breach the Policy by denying
coverage. Doc. 8 at 8-11.
law provides that, like any other written contract, the
language of an insurance policy is construed to give effect
to the intention of the parties. Catholic Diocese of
Dodge City v. Raymer, 840 P.2d 456, 459 (Kan. 1992). If
the terms of the contract are unambiguous, the court
considers only the plain language of the contract without
applying rules of construction. Osterhaus v. Toth,
249 P.3d 888, 896 (Kan. 2011). Upon a finding of ambiguity,
however, the court may look outside the contract to extrinsic
or parol evidence in interpreting the contract's
language. Waste Connections of Kan., Inc. v. Ritchie
Corp., 298 P.3d 250, 264 (Kan. 2013).
question of whether a written contract is ambiguous is one of
law for the court. Simpson v. City of Topeka, 383
P.3d 165, 177 (Kan. App. 2016). “Typically, the words
used in a contract should be given their common or customary
meaning.” Id. Ambiguity exists where
“‘the face of the instrument leaves it genuinely
uncertain which one of two or more meanings is the proper
meaning.'” Id. (quoting Raymer,
840 P.2d at 459). Put simply, an ambiguous contract contains
“‘provisions or language of doubtful or
conflicting meaning.'” Id. (quoting
Simon v. Nat'l Farmers Org., Inc., 829 P.2d 884,
888 (Kan. 1992)). “The test to determine whether an
insurance contract is ambiguous is not what the insurer
intends the language to mean, but what a reasonably prudent
insured would understand the language to mean.”
First Fin. Ins. Co. v. Bugg, 962 P.2d 515, 519 (Kan.
1998). Because an insurer prepares its own contracts, it has
a duty to make the meaning clear and, where the terms of an
insurance policy are “ambiguous or uncertain,
conflicting, or susceptible of more than one construction,