Opinion
CIVIL ACTION No. 06-2256-CM.
August 5, 2009
MEMORANDUM AND ORDER
Plaintiff Continental Casualty Company ("plaintiff") brings this action for declaratory judgment against defendant MultiService Corporation ("defendant"). On June 23, 2009, the court denied plaintiff's partial motion for summary judgment with respect to its duty to indemnify (Doc. 188). Plaintiff requests that the court reconsider its June 23, 2009 Order (Doc. 194).
I. Factual Background
A detailed factual background has been set forth in the court's prior order and will not be unnecessarily repeated here.
In its summary judgment motion, plaintiff contended that it was entitled to summary judgment on the issue of indemnity, arguing that Exclusion (p) of the applicable insurance policy precludes coverage for the tortious interference claim. As the insurer, plaintiff had the burden to establish that Exclusion (p) precludes coverage of the tort claim. Upland Mut. Ins., Inc. v. Noel, 519 P.2d 737, 741 (Kan. 1974). Plaintiff argued that Exclusion (p) precludes coverage because the antitrust and tortious interference claims arise from the same alleged conduct. Defendant argued that under Kansas law, it is the theory of liability rather than the cause of the injury that governs coverage. To support its argument, defendant relied upon Crist v. Hunan Palace, Inc., 89 P.3d 573 (Kan. 2004), Marquis v. State Farm Fire Cas. Co., 961 P.2d 1213, 1221 (Kan. 1998), and Upland. In its summary judgment briefing and in its motion for reconsideration, plaintiff contends that Crist, Marquis, and Upland are limited to a narrow line of cases involving negligent entrustment, supervision, hiring, and retention claims. Plaintiff argues that the court's June 23, 2009 Order improperly expanded this line of cases to policy language and facts never contemplated by the Kansas Supreme Court.
II. Standards for Judgment
III. DiscussionPage 3
5960See Servants of the Paraclete v. Does 204 F.3d 10051012Priddy v. Massanari2001 WL 1155268Sithon Maritime Co. v. Holiday Mansion177 F.R.D. 504505Id. Upland Upland Upland Marquis 961 P.2d at 1221 Upland Marquis Crist Catholic Diocese of Dodge City v. Raymer840 P.2d 456840 P.2d at 461Upland Catholic Diocese Id.
The Upland rule has received much criticism and, as plaintiff correctly notes, courts have sometimes ignored it. The dissent in Marquis recognized that the cases relied on in Upland have not fared well and that many states have limited the rule. 961 P.2d at 1225-27 ("Kansas appears to be completely out of step with all the holdings around the United States. . . . The overwhelming majority of states, in determining coverage, look to the underlying cause of the injury rather than the specific theory of liability alleged."). In 1989, the Kansas Court of Appeals stated that it did not "believe the Supreme Court intended for its decision in Upland Mutual to apply . . . to cases which do not involve exclusion clauses under homeowner's liability policies." State Farm Mut. Auto. Ins. Co. v. Cummings, 778 P.2d 370, 376 (Kan.Ct.App. 1989), abrogated on other grounds by Cashman v. Cherry, 13 P.3d 1265 (Kan. 2000)). In 1992, the Tenth Circuit, without addressing the Upland rule, relied on the factual allegations, not the alleged theories of liability, when determining that a policy exclusion barred coverage. Bendis v. Fed. Ins. Co., 958 F.2d 960, 963 (10th Cir. 1991). The Kansas Court of Appeals also attempted to limit the rule in State Farm Ins. Cos. v. Gerrity, 968 P.2d 270 (Kan.Ct.App. 1998), when it found that "in ignoring the negligence claims made by the plaintiff in First Financial Ins. Co. v. Bugg, 265 Kan. 690, 706-07, 962 P.2d 515 (1998), our Supreme Court reasoned that theories of liability are irrelevant when injuries occur from intentional acts." 968 P2d at 272-73. And as recent as 2000, the Kansas District Court noted that
[s]ince under Marquis, the rule in Upland applies to negligent entrustment case[s], along with claims based on negligent hiring, retention, or supervision, it is not clearly settled that Kansas would look to the theory of liability in [cases which do not] fall into the categories of claims listed in Marquis.Atchison, Topeka Santa Fe Ry. Co. v. Stonewall Ins. Co., No. 94CV1464, 2000 WL 34001583, at *15 (Kan. Dist. Ct. July 24, 2000).
Despite the criticism and suggested limitations on Upland's application, the Kansas Supreme Court continues to apply Upland and has declined to expressly limit the rule to homeowners policies and/or negligent entrustment, supervision, hiring, and retention claims. Crist, 89 P.3d at 579-80. Since other courts have expressed confusion over, opined on, and ignored the Upland rule, the Kansas Supreme Court has had the opportunity to clarify the application of the Upland rule or limit it to certain types of claims, but has not done so. This court recognizes that the Kansas courts may limit the Upland rule to negligent claims or certain types of insurance policies in the future, but based on the Kansas Supreme Court's refusal to do so thus far, this court finds that, in Kansas, it is the theory of liability, as opposed to the alleged injury, that determines whether an insurance exclusion applies.
After considering the parties' briefs on plaintiff's motion to reconsider, the court finds that plaintiff has not presented any instances of manifest error or mistake warranting reconsideration of the court's prior ruling. Odessa Ford, LLC v. T.E.N. Invs., Inc., No. 07-2161-KHV, 2009 WL 1617465, at *2 (D. Kan. June 9, 2009) (stating that a motion to reconsider should generally be denied unless it clearly demonstrates manifest error of law).
IT IS THEREFORE ORDERED that Plaintiff Continental Casualty Company's Motion for Reconsideration of June 23, 2009 Order (Doc. 118) (Doc. 194) is denied.