Brennan v. Kansas Insurance Guaranty Ass'n
293 Kan. 446
| Kan. | 2011Background
- Brennan sued Dr. Thode for medical malpractice seeking $2.5 million; Thode's policy was $200,000 with an $800,000 stabilizing fund.
- PHICO Insurance; insolvent in 2002, triggering KIGA coverage obligations under the Guaranty Act.
- Brennan received $500,000 in medical reimbursements from his health policy, creating potential offset against KIGA liability.
- 2005 amendment authorized KIGA to offset its liability with health insurance payments; applied retroactively to claims not paid by 2005.
- District court held the 2005 retroactive amendment unconstitutional; Brennan and KIGA later stipulated to avoid procedural defenses in 2007.
- District court entered judgment for Brennan against KIGA for $200,000; retroactive offset rejected; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactive application and due process | Brennan contends retroactive offset violates due process by extinguishing vested rights. | KIGA argues amendment clarifies and expands offset rights, not depriving vested rights. | Retroactive offset violates due process; severable portion applies to preamendment statute. |
| Whether pre-amendment law allowed offset of health insurance benefits | Brennan asserts pre-amendment law did not permit offset for health insurance. | KIGA contends original statute permitted offset; 2005 amendment clarified/expanded it. | Pre-amendment statute did not authorize offset; Brennan entitled to judgment without offset. |
| Vested rights analysis | Brennan possessed a vested right to payment absence offset after PHICO insolvency. | KIGA argues amendment did not strip vested rights or that remedial status allowed retroactivity. | Brennan had a vested right; retroactive amendment violated due process. |
Key Cases Cited
- Hetzel v. Clarkin, 244 Kan. 698 (Kan. 1989) (offsets for uninsured motorist coverage; statutory purpose to avoid windfalls)
- Sands v. Pa. Ins. Guaranty Ass'n, 283 Pa. Super. 217 (Pa. Super. 1980) (offset of medical insurance benefits analyzed under guaranty statute)
- Bell v. Slezak, 812 A.2d 566 (Pa. 2002) (offset allowed under Pennsylvania statute identical to amendment)
- Resolution Trust Corp. v. Fleischer, 892 P.2d 497 (Kan. 1995) (vested rights and retroactive legislation in bankruptcy context)
- Owen Lumber Co. v. Chartrand, 73 P.3d 753 (Kan. 2003) (retroactive remedies and vesting under Kansas law)
- Fleten Truck Line v. State Bd. of Tax Appeals, 327 P.2d 836 (Kan. 1958) (severability test for unconstitutional provisions in statutes)
- Trees Oil Co. v. Kansas Corp. Comm'n, 105 P.3d 1269 (Kan. 2005) (statutory interpretation and intent in amendments)