398 P.3d 198
Kan. Ct. App.2017Background
- July 2011 head-on collision in Kansas: Cherity Kerns and her minor son injured; Matthew Tucker (deceased) and vehicle owner Brandon Anderson uninsured.
- The Kernses had an Alliance Indemnity auto policy (paid $100,000 UM to Cherity); Cherity’s employer had a Federal Insurance policy (coverage disputed). Kernses obtained default judgments against tortfeasors but sought additional UM stacking and coverage in Missouri state court.
- While Missouri litigation was pending, Alliance filed a declaratory judgment action in Kansas (Aug 2014) to determine its UM coverage and applicability of Kansas anti-stacking law; the Kernses defended and moved to dismiss.
- Kansas district court denied dismissal and granted Alliance summary judgment; the Kansas Court of Appeals later vacated and dismissed the Kansas action as moot after a Missouri court ruled Alliance owed no additional UM benefits.
- The Kernses sought attorney fees in Kansas under (1) the UDJA (K.S.A. 60-1703/60-1711), (2) K.S.A. 40-908 (attorney fees for judgments on property-loss policies), and (3) the Alliance policy; the district court denied fees and the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UDJA (K.S.A. 60-1711) permits awarding attorney fees as "costs" for defending a declaratory judgment action | Kernses: "Costs" includes attorney fees; they successfully defended Alliance's DJ action and are entitled to fees | Alliance: UDJA does not authorize attorney fees; Kansas law requires explicit statutory authority | Held: UDJA does not authorize attorney fees; "costs" excludes attorney fees absent express statute; denial affirmed |
| Whether K.S.A. 40-908 authorizes fees where no judgment was rendered against insurer for property loss by hail, etc. | Kernses: Alliance policy included other-than-collision coverages (hail), so 40-908 entitles them to fees for prevailing in suit connected to that policy | Alliance: No judgment was rendered against it on such a covered loss; dismissal without prejudice is not a judgment and no recovery exceeded any pre-suit tender | Held: 40-908 applies only where a judgment is rendered against insurer for covered property loss and exceeds any pre-suit tender; no such judgment here — fees denied |
| Whether the Alliance policy contractually obligated Alliance to pay the Kernses’ defense fees for the declaratory judgment action | Kernses: Policy’s supplementary payments and cooperation/request provisions (similar to Upland Mutual) create contractual basis to recover expenses | Alliance: The DJ concerned first-party UM coverage, not a duty to defend third-party claims under the liability insuring agreement; no "request" to defend existed under that part of the policy | Held: Policy did not obligate Alliance to pay fees for this dispute; Upland Mutual is distinguishable because it involved duty-to-defend language |
| Whether appellate fees should be awarded under Supreme Court Rule 7.07 | Kernses: moved for appellate fees | Alliance: moved for appellate fees under Rule 7.07(c) | Held: Kernses’ motion denied; Alliance awarded $6,908 in appellate attorney fees |
Key Cases Cited
- Upland Mut. Ins. Co. v. Noel, 214 Kan. 145 (Kansas 1974) (insurer’s DJ seeking declaration on duty to defend supports recovery of attorney fees when policy obligates insurer to pay expenses at insurer’s request)
- Hamilton v. State Farm Fire & Cas. Co., 263 Kan. 875 (Kansas 1998) (K.S.A. 40-908 awards attorney fees where insured obtains judgment for covered loss exceeding any pre-suit tender)
- Bussman v. Safeco Ins. Co. of Am., 298 Kan. 700 (Kansas 2014) (reiterating requirement that K.S.A. 40-908 requires a judgment rendered against insurer for covered property loss)
- Legislative Coordinating Council v. Stanley, 264 Kan. 690 (Kansas 1998) (holding that "costs" do not include attorney fees absent express statutory authority)
- Iron Horse Auto, Inc. v. Lititz Mut. Ins., 283 Kan. 834 (Kansas 2007) (principles for interpreting insurance policies: read as whole and construe ambiguities against insurer)