Stds of Review: Insurance Policy, Contract Interpretation

From Stamper v. Hyden, COA, Published, 2/18/2011

The interpretation of an insurance contract is generally reserved for the court as a matter of law. Stone v. Kentucky Farm Bureau Mut. Ins. Co., 34 S.W.3d 809, 810 (Ky. App. 2000). “The words employed in insurance policies, if clear and unambiguous, should be given their plain and ordinary meaning.” Nationwide Mut. Ins. Co. v. Nolan, 10 S.W.3d 129, 131 (Ky. 1999). However, if the court determines that contractual language is susceptible to two reasonable interpretations, it must resolve the ambiguity in favor of the insured. St. Paul Fire & Marine Ins. Co. v. Powell-Walton-Milward, Inc., 870 S.W.2d 223, 227 (Ky. 1994). “An ambiguity may either appear on the face of the policy or . . . when a provision is applied to a particular claim.” Id.

From Lake Cumberland Resort Community Association vs. Auto Owners Insurance Co., COA, NPO, 5/18/2012

Summary judgment is proper where there exists no material issue of fact and the movant is entitled to judgment as a matter of law. Kentucky Rule(s) of Civil Procedure (CR) 56. The interpretation of an insurance policy is a question of law that we review de novo. K.M.R. v. Foremost Ins. Group, 171 S.W.3d 751 (2005) citing Cinelli v. Ward, 997 S.W.2d 474 (Ky.App.1998). In undertaking our review, we are mindful of two cardinal principles:

(1) the contract should be liberally construed and all doubts resolved in favor of the insureds; and (2) exceptions and exclusions should be strictly construed to make insurance effective.

Kentucky Farm Bureau Mutual Ins. Co. v. McKinney, 831 S.W.2d 164 (Ky.1992), quoting Grimes v. Nationwide Mutual Ins. Co., 705 S.W.2d 926 (Ky.App.1985) and Tankersley v. Gilkey, 414 S.W.2d 589 (Ky.1967). However, where the terms of the policy are clear and unambiguous, we must accord them their “plain and ordinary meaning.” Nationwide Mutual Ins. Co. v. Nolan, 10 S.W.3d 129, 131-32 (Ky.1999). The material facts of this case are undisputed. Therefore, we must determine from an examination of the provisions of the insurance policy whether Auto Owners is entitled to judgment as a matter of law.





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