Kansas Supreme Court Decisions, January 27, 2023

27 Jan 2023 9:50 AM | Anonymous member (Administrator)

Appeal No. 123,684: Nancy Granados v. John Wilson and Key Insurance Company

Appeal No. 123,684 archived oral argument

 Following a fatal car crash, the Wyandotte County District Court entered judgment against Wilson in a wrongful-death suit brought by the deceased's widow, Granados. To collect on that judgment, Granados filed a garnishment action seeking payment from Key Insurance Company under the automobile liability insurance policy it had issued Wilson. The district court entered judgment in favor of Granados for $3,481,901.29, but a panel of the Court of Appeals reversed the district court's decision, finding Key Insurance Company's conduct had not caused the judgment against Wilson. In a unanimous decision written by Justice K.J. Wall, with Justice Dan Biles not participating, the Court clarified that under decades of Supreme Court precedent, insurers have an implied contractual duty to act in good faith and with reasonable care under the circumstances when handling claims against its insureds. The Court held the Court of Appeals panel erred by attempting to define the insurer's legal duty in a more fact-specific, particularized manner—in this instance, by attempting to define the contours of an insurer's purported legal duty to settle under Kansas law. However, after determining Granados had not met her burden of showing that Key Insurance Company's bad faith and negligence had caused the judgment against Wilson, the court affirmed the panel's decision, albeit under a different rationale, and remanded the case to the district court with directions to enter judgment in favor of Key Insurance Company.

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