Alliance Indemnity Co. v. Kerns

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NOT DESIGNATED FOR PUBLICATION

No. 112,871

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

ALLIANCE INDEMNITY COMPANY,
Appellee,

v.

WILLIAM KERNS and CHERITY KERNS,
Appellants.


MEMORANDUM OPINION

Appeal from Johnson District Court; PAUL C. GURNEY, judge. Opinion filed November 20, 2015.
Vacated and remanded with directions.

Kathryn M. O'Shea, of Hasty & Associates, L.L.C., of Overland Park, and Edward C. Gillette, of
Gillette Law Firm, P.A., of Mission, for appellants.

Mark B. Schaffer, of Frischer & Schaffer, Chtd., of Overland Park, for appellee.

Before ATCHESON, P.J., SCHROEDER, J., and HEBERT, S.J.

Per Curiam: This is a declaratory judgment action coming to us from the Johnson
County District Court in which Alliance Indemnity Company sought a ruling on the
stacking of uninsured motorist coverage under an insurance policy it had issued to
William and Cherity Kerns. Because that precise issue has been decided in a civil suit the
Kernses filed against Alliance and others in the Jackson County, Missouri, Circuit Court,
we find this action to be moot. We, therefore, vacate the district court's ruling and remand
with directions to dismiss the action without prejudice.

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Given the odd circumstances of this litigation, we need not recount the factual and
procedural history in detail. An overview suffices. In July 2011, Cherity Kerns was
severely injured in a motor vehicle collision in Coffey County, Kansas. The Kernses
obtained substantial default judgments in Johnson County against both the owner and the
driver of the other vehicle, neither of whom had automobile liability insurance.

The Kernses then filed suit in Jackson County, Missouri, against Alliance and
several other entities asserting the defendants' liability for some or all of the default
judgment on various theories. In that case, the Kernses argued they should be permitted
to recover more than the stated limit of uninsured motorist coverage under their policy
with Alliance because they had insured multiple vehicles. This is commonly known as
stacking coverage. Alliance responded to the Missouri suit, raising various defenses
including lack of personal jurisdiction. Alliance also asserted Kansas law governs the
interpretation of the insurance policy issued to the Kernses and precludes stacking.
Alliance had already tendered the stated limit of uninsured motorist coverage in partial
satisfaction of the default judgment.

After the Kernses sued in Jackson County, Alliance filed this declaratory judgment
action under K.S.A. 60-1701, et seq., in Johnson County asking for a judicial
construction of the insurance policy's uninsured motorist coverage. The Kernses duly
responded in this action. Alliance then asked the Jackson County Circuit Court to stay
that part of the Kernses' Missouri action related to the uninsured motorist coverage,
specifically to allow the Johnson County District Court to decide the issue. The circuit
court agreed to do so.

In this case, the Johnson County District Court filed a detailed journal entry
granting summary judgment to Alliance, finding K.S.A. 40-284(d) and the related
caselaw preclude the stacking of uninsured motorist coverage. The district court cited
Eidemiller v. State Farm Mut. Auto. Ins. Co., 261 Kan. 711, 724, 933 P.2d 748 (1997),
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and Farmers Ins. Co. v. Jokan, 30 Kan. App. 2d 1213, 1217, 1221, 57 P.3d 24 (2002),
rev. denied 275 Kan. 963 (2003), among other decisions, in support of its ruling. The
Kernses have appealed and argue simply that the district court should not have
entertained a declaratory judgment action to decide an issue already before another court
in another suit. That is an intriguing issue. But we need not consider or resolve it because
developments in the Missouri suit have overtaken the declaratory judgment action.

In May 2015, the Jackson County Circuit Court issued a brief ruling holding: (1)
under Missouri choice-of-law principles, Kansas law governs the interpretation of the
policy Alliance issued to the Kernses; and (2) K.S.A. 40-284(d) "prohibits the stacking of
uninsured motorist coverage." Thus, the circuit court, apparently without a request from
the parties, lifted the stay to address the coverage issue. The circuit court decision, though
terse, plainly resolves the question in favor of Alliance based on an independent review
of substantive Kansas law. In other words, the Jackson County Circuit Court did not rely
on, defer to, or otherwise consider the declaration of rights the Johnson County District
Court made in this case in arriving at its own determination of Kansas law on stacking.

Under this set of circumstances, the issue presented in the declaratory judgment
action has now become moot by virtue of the ruling on precisely the same issue in the
Missouri suit. The Missouri ruling rendered the very purpose of the declaratory judgment
action in securing a determination of the stacking question superfluous.

Declaratory judgment actions are not intended to address legal questions that have
become moot as between the parties. See State ex rel. Morrison v. Sebelius, 285 Kan.
875, Syl. ¶ 15, 179 P.3d 366 (2008) (A court will consider neither issues that have
become moot nor issues that have yet to ripen into a "fixed and final shape."); 285 Kan.
at 897 ("[A]ctual cases and controversies are still required" in suits seeking declaratory
relief.); Santa Rosa KM Assocs. v. Principal Life Ins. Co., 41 Kan. App. 2d 840, 858, 206
P.3d 40 (2009) (purpose of declaratory judgments "is to settle actual controversies"), rev.
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denied 290 Kan. 1095 (2010). There may have been an actual legal controversy between
the Kernses and Alliance over the scope of the policy's uninsured motorist coverage when
Alliance filed this declaratory judgment action. But that ceased to be true with the ruling
of the Jackson County Circuit Court. The circuit court ruling resolves the issue between
the parties. That makes this action moot. The underlying legal question prompting the
declaratory judgment action has otherwise been answered in an independent, preexisting
proceeding between the parties. As a result, the parties legally stand where they would
have had this action never been filed. So we have before us what now amounts to an
impertinent exercise.

We, therefore, vacate the ruling of the district court and remand with directions
that the district court dismiss this action without prejudice.