Wiles v. American Family Life Assurance Co.
302 Kan. 66
Kan.2015Background
- On March 20, 2009 Jeremy Wiles crashed his truck, suffered catastrophic spinal injuries, and was treated at University of Kansas Hospital; an ER toxicology report later indicated a .25 BAC within two hours of the accident.
- Wiles filed an AFLAC hospital intensive care benefits claim; AFLAC denied coverage citing the policy's intoxication exclusion and relying on the hospital toxicology report and a law‑enforcement report noting alcohol as a contributing factor.
- AFLAC denied the claim without interviewing Wiles, police, or medical staff beyond requesting the hospital toxicology report.
- At bench trial the district court excluded the hospital toxicology report for lack of foundation (no witness could identify who drew the blood or personally attest protocol was followed), found AFLAC failed to prove the loss resulted from intoxication, and awarded Wiles attorney fees under K.S.A. 40‑256.
- The Court of Appeals reversed, concluding the toxicology report was admissible and that AFLAC had just cause to deny the claim. The Kansas Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of hospital toxicology report (Divine foundation) | Wiles: report inadmissible—no witness with personal knowledge of the blood draw or marking/chain of custody. | AFLAC: hospital staff testimony about regular procedures sufficed to meet Divine foundational requirements despite unknown blood‑drawer. | Reversed Court of Appeals; affirmed district court—AFLAC failed to satisfy Divine because no witness had personal knowledge and sample lacked required initials/identification. |
| Admission under business‑records exception (K.S.A. 2008 Supp. 60‑460(m)) | Wiles: circumstances surrounding preparation untrustworthy (protocol breach and no recollection of draw). | AFLAC: report is regular hospital record and thus admissible as a business record. | District court did not abuse discretion—trustworthiness lacking due to breach of hospital protocol and inability to verify preparation. |
| Whether policy exclusion applies (loss "in consequence of" intoxication) | Wiles: evidence (his limited admission and crash facts) insufficient to prove causation; exclusion not shown. | AFLAC: evidence (toxicology if admitted; officer's conclusion; Wiles' admission) supports that intoxication caused the crash. | Affirmed district court—without the toxicology report AFLAC failed to prove the accident was in consequence of intoxication; factual finding supported by substantial competent evidence. |
| Award of attorney fees under K.S.A. 40‑256 | Wiles: AFLAC unreasonably denied claim without adequate investigation; fees appropriate. | AFLAC: it had just cause/excuse and conducted reasonable investigation (obtained tox report); good‑faith controversy existed. | Reversed district court—award of fees was an abuse of discretion because a good‑faith controversy existed and the insurer's investigation, although imperfect, supported a reasonable denial. |
Key Cases Cited
- Divine v. Groshong, 235 Kan. 127 (foundational requirements for admissibility of blood tests in civil cases)
- City of Overland Park v. Cunningham, 253 Kan. 765 (standard for review of trial court evidentiary rulings)
- Hurlbut v. Conoco, Inc., 253 Kan. 515 (trial court role in admitting business records)
- State v. Davis, 41 Kan. App. 2d 1034 (contrast case on blood‑draw foundation where drawer was identified/testified)
- Alliance Life Ins. Co. v. Ulysses Volunteer Fireman's Relief Assn., 215 Kan. 937 (insurer bears burden to prove exclusion applies)
- Evans v. Provident Life & Accident Ins. Co., 249 Kan. 248 (standard for "just cause or excuse" and insurer's duty to investigate)