In this diversity action based on Kansas law, Natalie Long seeks uninsured motorist benefits for her children, who were severely injured in a one-car accident. The uninsured teen driver, a friend of Long’s children, did not have permission to drive the truck involved in the accident.
After the district court dismissed Long’s claims against the vehicle owner’s insurance company (St. Paul Fire and Marine Insurance), Long added her own insurance company (American Standard Insurance Company of Wisconsin) as a defendant. American Standard subsequently moved for summary judgment, lost, and decided to settle Long’s claims. Despite the settlement, Long continues to seek additional uninsured motorist (UM) benefits from St. Paul.
On appeal, Long challenges the dismissal of her claims against St. Paul. She contends the Kansas uninsured motorist statute, Kan. Stat. Ann. § 40-284(a) (2007), requires the St. Paul policy to provide UM coverage for her children. She also asserts that even if the statute does not require UM coverage, the language of the St. Paul policy itself provides coverage. According to Long, because St. Paul de
We conclude the truck was not an uninsured vehicle for purposes of the St. Paul policy, under either the Kansas Statute or the pokey’s relevant language. Exercising jurisdiction under 28 U.S.C. § 1291, we therefore AFFIRM the district court’s entry of judgment in favor of St. Paul.
I. Background
A. The Accident
The accident occurred when a group of underage teenagers were joyriding in a pickup truck. The truck belonged to a construction company owned by the fífteen-year-old driver’s father. Even though he was unlicensed, the driver’s parents would occasionally allow him to drive the truck to and from school, work, and home. On the day of the accident, however, his parents specifically instructed him not to use the vehicle. St. Paul insured the truck under a general liability insurance policy it issued to the father’s construction company.
At the time of the accident, Long’s children, Charles Rhoten, Jr. (C.J.) and Jennifer Rhoten, were riding in the truck’s bed. The driver lost control of the truck while turning onto a dirt road, and the vehicle swerved into a ditch and rolled, landing on its side. C.J. and Jennifer were ejected from the truck bed and suffered serious injuries. Tragically, C.J. died from his wounds.
B. The St. Paul Policy
The St. Paul policy insured the general liabilities of the construction company owned by the driver’s father, including liabilities arising from the use of “covered autos.” The policy’s coverage limit for a single car accident was $1,000,000. Neither party disputes the truck involved in the accident was a “covered auto” under the policy.
In the “Auto Liability Protection” portion of the policy, under a heading entitled ‘Who is Protected Under This Agreement,” the policy stated:
Any permitted user. Any person or organization to whom you’ve given permission to use a covered auto you own, rent, lease, hire or borrow is a protected person.
ApltApp. at 65. Pursuant to this provision, St. Paul denied liability coverage for the driver’s operation of the pickup truck on the day of the accident. In its letter to the teen driver’s parents denying liability coverage, St. Paul stated, “[the driver] admits to have previously taken the keys to the vehicle he was driving ... without the knowledge or permission of you, as his parents, or anyone associated with [the construction company].” Doc. 29, Amended Compl., Ex. B. Based on these facts, St. Paul concluded the driver “was not a permissive user and therefore no coverage is provided to him under the ... automobile policy.” Id.
But St. Paul’s denial of liability coverage did not answer whether the policy’s UM coverage was triggered by the accident or whether the coverage would be available to C.J. and Jennifer. Indeed, the denial of liability coverage undergirds Long’s argument that the UM coverage applies.
In general, under the UM coverage, St. Paul agreed to “pay all sums any protected person is legally entitled to recover from the owner or driver of an uninsured or underinsured vehicle.” Aplt.App. at 79. Both C.J. and Jennifer were potentially “protected persons” under this UM coverage because they were riding in a “covered auto.”
Id.
at 81. But even assuming C.J.
The policy defines “uninsured vehicle” as including a vehicle “for which an insurance or bonding company denies coverage.” Id. at 80. Thus, Long argues St. Paul’s denial of liability coverage for the accident made the truck an uninsured vehicle such that C.J. and Jennifer could recover UM benefits.
C. Legal Proceedings
Several months after the accident, Natalie Long — C.J. and Jennifer’s mother — obtained counsel and sent a demand letter to St. Paul. St. Paul denied UM coverage.
In its letter denying UM coverage, St. Paul stated, “We have previously denied coverage responsibility for any claims against the liability of the driver of the vehicle at issue, because that person was not a permitted driver.... However, that denial of coverage did not mean that the vehicle itself was an uninsured vehicle.... ” Doc. 29, Amended Compl., Ex. H. St. Paul went on to explain that it was “not denying that there is coverage for this vehicle. We have denied coverage for the driver who caused the accident. Kansas law recognizes this difference.” Id.
Long disagreed with St. Paul’s interpretation of Kansas law, as well as its interpretation of the policy’s UM provisions, and filed suit. In due course, Long moved for summary judgment, arguing Kansas law mandated UM coverage for her children on the facts presented, and even if such coverage was not statutorily mandated, the St. Paul policy nevertheless provided it.
See Long v. St. Paul Fire & Marine Ins. Co.,
Subsequently, Long added her own insurer, American Standard, as a defendant. Long’s policy with American Standard included C.J. and Jennifer as insured parties, and Long sought UM coverage under that policy on behalf of her children. American Standard moved for summary judgment, but this time the district court ruled in favor of Long, holding that the American Standard policy did not unambiguously deny coverage under the facts of the case.
Long v. Am. Standard Ins. Co. of Wis.,
Despite this recovery, Long appeals, claiming the district court erred in granting judgment on the pleadings and dismissing her claims against St. Paul. 2
We review the district court’s grant of judgment on the pleadings and its dismissal of Long’s claims under the same de novo standard.
Corder v. Lewis Palmer Sch. Dist. No. 38,
First, we ask whether the Kansas uninsured motorist statute mandates coverage under the facts presented. If so, the case ends there — “[t]he provisions of the statute are to be considered a part of every automobile policy in this state.”
State Farm, Mut. Auto. Ins. Co. v. Cummings,
A. The Kansas UM Statute
Kansas law requires car insurance to protect against accidents caused by uninsured motorists:
No automobile liability insurance policy ... shall be delivered or issued [in Kansas] ... unless the policy contains ... a provision ... in such automobile liability insurance policy sold to the named insured for payment of part or all sums which the insured or the insured’s legal representative shall be legally entitled to recover as damages from the uninsured oumer or operator of a motor vehicle
Kan. Stat. Ann. § 40-284(a) (emphasis added). According to the Kansas Supreme Court, “[t]he purpose of K.S.A. 40-284 is to provide the individual who is covered by the standard automobile liability policy with a right against his or her own insurer equal to that the insured would have against the uninsured ... tortfeasor.”
O’Donoghue v. Farm Bureau Mut. Ins. Co.,
Long argues the statute must be liberally construed in favor of coverage and should be read to require St. Paul to cover her children’s injuries. Some Kansas cases appear to support this contention since “the uninsured and underinsured motorist statutes should be liberally construed to provide broad protection to the insured.”
Jones v. Auto. Club Inter-Ins. Exch.,
As an initial matter, § 40-284(a) does not require that a
tortfeasor’s
insurance policy protect an innocent accident victim — it only requires that the
injured person’s
policy provide UM coverage. Indeed, the language of § 40-284(a) mandates UM coverage only “in such automobile insurance policy
sold to the named insured.”
(emphasis added). We therefore look not to the St. Paul policy covering the pickup truck, but to the American Standard policy that insured Long and her children from injuries caused by uninsured motorists. The district court concluded that unlike the St. Paul Policy— which, under the facts of this case, clearly “excluded coverage for non-permissive users” — the American Standard policy did not unambiguously deny coverage for Long’s children.
See Long,
Moreover, Kansas courts have not construed the statute to mandate that a vehicle owner’s insurance policy provide UM coverage for nonpermissive users of the owner’s insured vehicles or passengers of nonpermissive users.
3
The Kansas Supreme Court faced an insurance dispute similar to this one in
Farmers Insurance Co. v. Schiller,
It is unclear who drove the truck that night — Schiller or the friend — but someone wrecked it, and Schiller sustained personal injuries. The owner’s insurer, Farmers, filed an action for declaratory judgment to determine whether it was required to cover Schiller, though neither he nor his friend had permission to drive the truck.
Schiller argued that because Farmers denied him personal injury benefits, § 40-284(a) mandated that he receive UM coverage. The Kansas Supreme Court disagreed. It held, “[t]he uninsured motorist statute was not enacted to provide coverage for everyone.... [A] guest passenger of [an] unauthorized user, which passenger does not fall within the definition of ‘insured’ contained in the [vehicle owner’s] policy, is not within the coverage mandat
In a later case,
Hilyard v. Cleanvater,
Long argues
Hilyard
has little prece-dential value because the Kansas Court of Appeals purported to limit
Hilyard
to its particular facts.
See Cummings,
Second, although
Cummings
revisited the holding of
Hilyard,
it ultimately arrived at a similar conclusion: “[A]n offending vehicle is not to be considered as ‘uninsured’ when the driver [or owner] of that vehicle is covered by the requisite minimum liability coverage.”
Cummings,
Schiller
and
Hilyard
thus establish that the Kansas statute does not mandate UM coverage for Long’s children under the St. Paul policy. The teen driver here, like the driver in
Schiller,
was not permitted to drive the truck at the time of the accident, and Long does not argue otherwise. Consequently, as “guest passenger[s] of the unauthorized user,” Long’s children are not entitled to UM benefits from St. Paul under § 40-284(a).
Schiller,
Moreover, as in
Hilyard,
the mere fact that St. Paul denied liability coverage to the driver does not mean it is simultaneously required to provide UM coverage for passengers. The teen driver — but for the nonpermissive user provision in the St. Paul policy — was insured under that same policy. As the Kansas Supreme Court stated, the UM statute “does not contemplate” the situation at hand — where the driver is insured but, because of a legitimate policy exclusion, the claimant charac
The Kansas legislature has not modified the UM statute to abrogate the
Schiller
and
Hilyard
decisions, and we must presume it agrees with their holdings.
Halsey,
B. The Policy Language
Because we conclude § 40-284(a) does not mandate UM coverage under the facts presented, we must advance to the second stage of the two-part UM analysis: an examination of the St. Paul policy itself.
Long asserts that even if the Kansas UM statute is inapplicable, “the St. Paul policy afforded coverage greater than the statutorily mandated minimum coverage.” Aplt. Br. at 16-17. This argument proceeds in three parts: (1) St. Paul, an insurance company, denied coverage for the accident under the nonpermissive user exclusion, (2) the policy broadly defines “uninsured vehicle” as one “for which an insurance or bonding company denies coverage,” and (3) therefore, the St. Paul UM coverage is applicable to this ease. The crux of the argument is part two — St. Paul’s definition of “uninsured vehicle.”
Under Kansas law, we must interpret the St. Paul policy to “give effect to the intention of the parties.”
Brumley v. Lee,
Here, a reasonably prudent insured— i.e., someone standing in the shoes of the pickup truck owner insured by St. Paul— would not understand the policy to cover passengers of a nonpermissive driver.
First and foremost, the policy’s Auto Liability Protection section explicitly contained a nonpermissive user exclusion. Only those with “permission to use a covered auto” were protected under the policy. No one disputes the driver had been forbidden to drive the truck on the day of the accident, and a reasonably prudent insured would not expect to pay premiums to cover injuries sustained by a joyrider and his friends. Furthermore, because the purpose of UM coverage is to provide an innocent victim a “right against his or her
own insurer,”
a reasonable insured would not expect St. Paul to foot the bill for a stranger to the insurance policy.
See O’Donoghue,
Third, Long’s argument contradicts itself. She asserts that the pickup truck was a “covered auto” under the St. Paul policy — allowing her to recover UM benefits for her children’s injuries — and yet was also an uninsured vehicle within the meaning of the same policy, such that its UM provisions were triggered. As one court noted in construing similar terms under Kansas law, “[i]t seems anomalous that an ‘insured’ automobile could at the same time be an ‘uninsured’ automobile
under that same policy.” Chance v. Farm Bureau Mut. Ins. Co.,
To avoid this contradiction, Long relies on
Richert v. McHone,
In
Richert,
the plaintiff was involved in a two-car accident. The other driver, McHone, carried an insurance policy that covered the accident, but the car he was driving was owned by his mother, who had failed to purchase car insurance. Though McHone’s insurance company paid out its per-person limit for the accident, Richert sued his own insurance company to recover additional benefits under his policy’s UM provisions. He claimed McHone’s car was “uninsured” because its owner— McHone’s mother — did not carry car insurance. Richert’s claim was not based upon § 40-284(a); rather, he argued his insurance policy “provided broader coverage than the minimum required by Kansas statutes.”
Richert,
The court held that UM coverage was unavailable under Richert’s policy because McHone, the driver of the purportedly uninsured vehicle, was insured. In doing so, the court refused to draw an artificial distinction between an insured driver and an insured vehicle: “bodily injury liability coverage protects the living, breathing persons whose negligence caused the vehicle to injure another. It is inaccurate to say that a vehicle is insured or uninsured; the negligent person is either insured or uninsured.” Id. at 771.
Long ignores that the outcome in
Ric-hert
was to deny coverage because the plaintiffs definition of “uninsured vehicle” in that case was too clever by half. She instead focuses on a passage in the opinion which states, “where there is no bodily injury liability coverage
available to pay for the insured’s injuries,
the insured may claim uninsured motorists benefits.”
Id.
(emphasis added). Long claims that, because there was no bodily injury coverage
But this reading of
Richert
conflicts with the holding in
Schiller,
where liability benefits would have been available to the claimant if the driver had permission to use the vehicle at the time of the accident. Yet the Kansas Supreme Court upheld the insurance company’s denial of coverage under the relevant policy language. The court explained that under the policy at issue, “[ijnsurance coverage is not present ... when the vehicle is being operated by a third party without the express or implied permission of the insured.”
Schiller,
In Schiller, as here, coverage was “available,” but was denied pursuant to a valid clause in the relevant insurance policy. 5 Richert thus does not affect Schiller, nor does it change our conclusion that a reasonable insured would not expect UM coverage to be available to Long under the St. Paul policy. 6
As a final note, our interpretation of the St. Paul policy makes sense from the standpoint of the bargain a reasonable insured would make in purchasing car insurance. A reasonable insured would likely refuse to pay additional policy premiums to protect nonpermissive users and their passengers. And if a reasonable insured would not make such a bargain, then the insurer has not been paid to bear the additional risk. As the Kansas Supreme Court stated, “to impose further liability would impose a risk upon the insurers that had not been bargained for and for which the insurer had not been compensated.”
Halsey,
III. Conclusion
For the foregoing reasons, we AFFIRM the decision of the district court dismissing Long’s claims and granting judgment on the pleadings for St. Paul.
Notes
. The district court partially granted Long's summary judgment motion, holding that St. Paul could not deny UM coverage based on a separate “unauthorized use” exclusion in the policy.
See Long,
. In addition to appealing the dismissal of her claims against St. Paul, Long also appeals the district court’s denial of her motion for summary judgment on those claims. In general, "the denial of a motion for summary judgment is not a final order and is therefore usually not appealable.”
Utah Animal Rights Coal. v. Salt Lake County,
. Again, this says nothing regarding the coverage potentially provided by the passenger’s automobile insurance policy. As one treatise has noted, "[pjersons who are either named insureds or family members residing with a named insured ... are afforded relatively comprehensive protection by the provisions used in most uninsured motorist insurance coverages.” 1 Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured Motorist Insurance § 4.2 at 69 (Rev.3d ed.2005). Thus, UM coverage is generally available when named insureds are “operating or are passengers in a motor vehicle, as well as when they are engaged in any other activity such as walking, riding a bicycle, driving a hay wagon, or even sitting on a front porch.” Id. at 70.
. A more recent case from the Kansas Court of Appeals cited
Hilyard
for the same proposition of law we apply here: "The [uninsured motorist] statute does not cover a situation where the uninsured owner or operator owns an automobile liability policy."
Loveless v. Am. Family Mut. Ins. Co.,
. As noted above, C.J. and Jennifer were at least potentially covered by their
own
insurer as a matter of law. After the district court determined that the specific language of the American Standard policy did not unambiguously deny UM coverage for Long's children,
Long,
. Two leading treatises support our interpretation of the St. Paul policy and the relevant Kansas case law. One concludes that non-permissive user clauses are often "upheld as [] reasonable coverage restriction[s],” and are often enforced when applied to a policy’s UM coverage, absent "unusual situations” such as car jackings and other violent behavior by the nonpermissive user. 1 Uninsured and Underinsured Motorist Insurance § 5.6 at 311-12, § 4.18 at 171-72 & n. 35. Another commentator states a general rule that, when an insurance policy contains a nonpermissive user exception, "a passenger in an automobile being operated without the permission of the owner is not an occupant of an insured automobile and cannot recover uninsured motorist coverage benefits under the owner's policy.” 2 Irvin E. Schermer & William Schermer, Automobile Liability Insurance 4th § 22:3 (2008).