Ferguson v. Phx. Assurance Co - 189 Kan. 459, 370 P.2d 379 (1962)

Rule:

Where a rule of evidence is imposed by a provision in an insurance policy, the assertion of such rule by the insurance carrier, beyond the reasonable requirements necessary to prevent fraudulent claims against it in proof of the substantive conditions imposed by the policy, contravenes the public policy of Kansas. This becomes apparent when the statement of the rule in the policy itself, or its assertion by the insurance carrier, is designed to prevent recovery on an obviously justifiable claim.

Facts:

Appellant Phoenix Assurance Company of New York disputed a claim of appellee Forrest D. Ferguson, the insured store owner, for the recovery of money stolen from the store safe. In a lawsuit brought by appellee for recovery under its insurance policy, appellant contended that evidence of forced entry on both the exterior and interior doors of the safe was required for coverage under a policy provision. Despite the provision, the trial court found for appellee and allowed full recovery for the stolen money. On appeal, appellant argued that the loss was clearly excluded in the policy.

Issue:

Under the circumstances, could the appellee insured recover under the insurance policy, notwithstanding the provision requiring evidence of forced entry on both the exterior and interior doors of the safe?

Answer:

Yes.

Conclusion:

The Court affirmed the decision of the trial court because the purpose of the policy provision was to establish the use of actual force and violence in entering the safe and assist in the avoidance of fraudulent claims. Because the facts admitted at trial established the use of force and violence, the Court found the technical policy provision was designed to defeat just claims under the policy and contravened the public policy of the state.