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No. 101,562 IN THE COURT OF APPEALS OF THE STATE OF KANSAS SCOTT OCHS, Appellant, v. FEDERATED MUTUAL INSURANCE COMPANY, Appellee. SYLLABUS BY THE COURT

1. When the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate.

2. Where there is no factual dispute, appellate review of an order regarding summary judgment is de novo.

3. The interpretation of a statute is a question of law that affords an appellate court unlimited review.

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4. The interpretation of an insurance contract is a question of law over which an appellate court has unlimited review.

5. A corporation is generally bound by contracts entered into by its duly authorized officers or agents acting within the scope of their authority.

6. K.S.A. 40-284(c) requires that rejection of underinsured motorist coverage be in writing signed by the named insured or an authorized representative of the named insured.

7. The provisions of K.S.A. 40-284(c) are to be narrowly and strictly construed. 8. An insurance agreement is a contract subject to agreement of the parties, and its terms, including definitions, will control so long as not in conflict with statutes or public policy.

9. An insurance agreement that defines "automobile" more broadly than K.S.A. 40-298 is not in conflict with the statute but, instead, is less restrictive.

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10. K.S.A. 40-284 specifically provides that a written rejection applies to any subsequent policy issued by the same insurer for motor vehicles owned by the named insured unless the insured makes a subsequent written request for additional coverage.

11. An issue not briefed by an appellant is deemed waived or abandoned.

12. Where an insurance contract is not ambiguous, the courts will not make another contract for the parties but will enforce the contract as written.

13. It is not the intent of the insured as to what the language of a policy means, it is what a reasonably prudent insured would understand the language to mean.

14. Under the uncontroverted facts of this case: (1) Alderson's approval and signature on the coverage option form was authorized by Ramsey Oil and constituted a binding election in compliance with K.S.A. 40-284(c); (2) Ramsey

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Oil's propane truck was an automobile as defined in the Federated Mutual insurance policy and that definition controls and is not precluded by the more limited definition of an automobile in K.S.A. 40-298; (3) the written rejection of underinsured motorist coverage by Ramsey Oil in conjunction with a previous automobile policy issued by Federated Mutual controls because the insured named in the policy has made no subsequent request in writing for additional coverage; and (4) a reasonably prudent insured would have understood the provisions of the option form to be an election to accept a lower limit for underinsured motorist coverage than the limit equal to the bodily injury liability limit of the policy.

Appeal from Rice District Court; HANNELORE KITTS, judge. Opinion filed January 8, 2010. Affirmed.

Matthew L. Bretz, Mitchell W. Rice, and Chelsea S. Boldra, of Bretz Law Offices, LLC, of Hutchinson, for appellant.

Richard W. James and Dustin L. DeVaughn, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, for appellee.

Before GREENE, P.J., MALONE, J., and KNUDSON, S.J.

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KNUDSON, J.: Scott Ochs appeals the trial court's grant of summary judgment in favor of Federated Mutual Insurance Company (Federated Mutual) that denied Ochs' claim for underinsured motorist coverage for a motor vehicle accident. Ochs also appeals the trial court's denial of his motion for summary judgment. The facts are not in dispute.

Ochs was driving a propane truck for his employer, Ramsey Oil Hutchinson, Inc. (Ramsey Oil), on July 12, 2004, when he was seriously injured in a motor vehicle accident involving an alleged negligent third party, Loren L. Hayden. Subsequently, Ochs reached a monetary settlement with Hayden's insured, State Farm Insurance, in the amount of $50,000.

Ochs had a personal automobile policy with Farm Bureau Insurance Company, with which he settled his underinsured motorist claim in the amount of $50,000.

Ochs then filed this action against Federated Mutual, the automobile liability insurance company for his employer Ramsey Oil, seeking additional underinsured motorist benefits. On the day of the accident, Ramsey Oil's policy with Federated Mutual was policy 9181626, with a liability limit of $1,000,000. The issue before the trial court was whether the Federated Mutual policy provided

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underinsured motorist benefits of $1,000,000 as contended by Ochs or $50,000 as contended by Federated Mutual.

Federated Mutual had been Ramsey Oil's automobile liability insurance carrier from at least April 1, 1999. On May 20, 1999, Ramsey Oil's president and sole stockholder, Loren Alderson, signed a document provided by Federated Mutual entitled KANSAS COMMERICAL AUTO COVERGE OPTION FORM selecting the lower amounts of uninsured and underinsured motorist coverage than that equal to the bodily injury limit of liability amount. Alderson chose to limit underinsured motorist benefits for directors, officers, partners, owners, and qualifying family members of the named insured to $500,000 and for other persons qualifying as an insured to $50,000. Alderson acknowledged:

"I have been given the opportunity to purchase Uninsured Motorists Coverage (including Underinsured Motorists Protection) equal to my limit of liability for bodily injury or death, and instead I select the lower $50,000 limit.

"I understand and agree that this rejection of higher limit of Uninsured Motorists and Underinsured Motorists Coverage shall be applicable unless I subsequently request such coverage in writing."

The option form stated the applicant or policy holder was "Ramsey Oil Hutchinson, Inc.," and that the election applied to "All Covered Automobiles." 6

The policy number on the option form was 9181578, consistent with Ramsey Oil's automobile liability policy in effect at the time.

Both parties filed motions for summary judgment. The trial court granted Federated Mutual's motion, concluding the option form met the requirements of K.S.A. 40-284(c) and was executed by an authorized employee of Ramsey Oil. Ochs has filed a timely appeal. Before us, the parties agree summary judgment was a proper remedy. They disagree as to whom summary judgment should have been granted.

Our Standard of Review

When the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. Miller v. Westport Ins. Corp., 288 Kan. 27, 32, 200 P.3d 419 (2009). Where there is no factual dispute, appellate review of an order regarding summary judgment is de novo. Central Natural Resources v. Davis Operating Co., 288 Kan. 234, 240, 201 P.3d 680 (2009).

The interpretation of a statute is a question of law that affords an appellate court unlimited review. See Mitchell v. Liberty Mut. Ins. Co., 271 Kan. 684, 690, 7

24 P.3d 711 (2001). The interpretation of an insurance contract is likewise a question of law over which an appellate court has unlimited review. Marshall v. Kansas Med. Mut. Ins. Co., 276 Kan. 97, 111, 73 P.3d 120 (2003).

Statutory Requirements For Underinsured Motorist Coverage

K.S.A. 40-284 provides:

"(a) No automobile liability insurance policy covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, unless the policy contains or has endorsed thereon, a provision with coverage limits equal to the limits of liability coverage for bodily injury or death 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 owner or operator of a motor vehicle because of bodily injury, sickness or disease, including death, resulting therefrom, sustained by the insured, caused by accident and arising out of ownership, maintenance or use of such motor vehicle, or providing for such payment irrespective of legal liability of the insured or any other person or organization. No insurer shall be required to offer, provide or make available coverage conforming to this section in connection with any excess policy, umbrella

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policy or any other policy which does not provide primary motor vehicle insurance for liabilities arising out of the ownership, maintenance, operation or use of a specifically insured motor vehicle.

"(b) Any uninsured motorist coverage shall include an underinsured motorist provision which enables the insured or the insured's legal representative to recover from the insurer the amount of damages for bodily injury or death to which the insured is legally entitled from the owner or operator of another motor vehicle with coverage limits equal to the limits of liability provided by such uninsured motorist coverage to the extent such coverage exceeds the limits of the bodily injury coverage carried by the owner or operator of the other motor vehicle.

"(c) The insured named in the policy shall have the right to reject, in writing, the uninsured motorist coverage required by subsections (a) and (b) which is in excess of the limits for bodily injury or death set forth in K.S.A. 40-3107 and amendments thereto. A rejection by an insured named in the policy of the uninsured motorist coverage shall be a rejection on behalf of all parties insured by the policy. Unless the insured named in the policy requests such coverage in writing, such coverage need not be provided in any subsequent policy issued by the same insurer for motor vehicles owned by the named insured, including, but not limited to, supplemental, renewal, reinstated, transferred or substitute policies where the named insured had rejected the

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coverage in connection with a policy previously issued to the insured by the same insurer." (Emphasis added.)

K.S.A. 40-3107(e) provides that every motor vehicle liability insurance policy issued to owners who are Kansas residents must contain liability limits for each covered vehicle of no less than $25,000 because of bodily injury or death of one person in any one accident, or no less than $50,000 because of bodily injury or death of two or more persons in any one accident.

Under these statutes, then, an insurer must provide underinsured motorist coverage equal to the amount of liability coverage provided in the policy unless the insured rejects in writing coverage in excess of the amounts provided in K.S.A. 40-3107(e). In this case, Federated Mutual was required to provide Ramsey Oil with underinsured motorist coverage of $1,000,000 unless the option form signed by Alderson is held to be valid.

Discussion of Issues Presented By Ochs

(1)

Does Loren Alderson's failure to indicate his corporate capacity an authority as an agent on the face of the option form render the limitation of underinsured motorist coverage ineffective?

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A corporation is generally bound by contracts entered into by its duly authorized officers or agents acting within the scope of their authority. Executive Financial Services, Inc. v. Loyd, 238 Kan. 663, Syl.

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