Sometimes the black letter law passed by the legislature is unclear. The legislature can’t anticipate every possible fact scenario when they pass a law, so it lay to the courts to interpret the law and give guidance to what it means. This interpretation is called case law. When the court decides a certain meeting to the law it essentially answers a legal question. Lawyers and other courts then can rely on that ruling when they have a similar issue in their case.The following case answers the question above.
Earth Scientists v. U.S. Fidelity & Guaranty Co., 619 F.Supp. 1465 (D. Kan. 1985).
This case addresses the following issue:
Does the Kansas Uniform Trade Practices Act provide the plaintiff with a private cause of action for damages?
This case explored the issue of whether the Kansas Uniform Trade Practices Act (“KUTPA”) provided the plaintiff with a private cause of action for damages. In exploring this issue, the court concluded that the KUTPA did not provide a private cause of action and nowhere in the Act was there a section for the recovery of monetary damages. Id. at 1469-71.
This lawsuit arose out of the alleged breach of an insurance policy entered into by the plaintiff, a corporation involved in the oil and gas drilling business, with the defendant, an insurance company, to insure the plaintiff’s drilling rig for collapse. Id. at 1467. Prior to purchasing the insurance policy, the plaintiff had specifically requested coverage for collapse or overturn of the company’s drilling rigs. Id. As a result, the defendant recommended that the plaintiff purchase a certain insurance policy that would cover mast collapse and the plaintiff purchased that insurance policy. Id. at 1467-68. Furthermore, on December 13, 1983, the insured rig fell over and was damaged. Id. at 1468. One month later, the defendant formally denied coverage of the incident. Id. Unhappy with the defendant’s failure to pay the claim, the plaintiff contacted the Kansas State Insurance Commissioner’s Office. Id. On March 1, the office reprimanded the defendant for denying liability when liability was “reasonably clear.” Id. On April 11, the defendant offered plaintiff a sum between $32,500 and $35,000 to settle the claim. Id. Plaintiff rejected the offer and filed this lawsuit. Id. One of the plaintiff’s arguments was that the defendant violated the KUTPA. Id.
The defendant argued that the court should dismiss the plaintiff’s claim for violation of the KUTPA because the Act did not provide a private cause of action for the plaintiff. Id. After reviewing the KUTPA, the court held that the plaintiff’s claim for monetary damages should be dismissed based on the following reasons. Id. First, the court concluded that the overriding goal of the KUTPA was to provide the public with the benefits that flowed from a well regulated insurance industry. Id. Second, the court concluded that the KUTPA was clear in assigning all the power under the Act in the Commissioner of Insurance. Id. Some of these powers included: examining and investigating every person engaged in the business of insurance; suspending or revoking an insurer’s license; and compensating an injured party by requiring the insurer to refund any withheld money. Id. at 1469. Additionally, the court noted that nowhere in the Act was there a section for the recovery of monetary damages. Id.
In addressing whether the Kansas Supreme Court would ever expand KUTPA to imply a private cause of action, the court determined that there would never be such expansion. Id. at 1470. In determining there would never be a private cause of action, the court referenced a Kansas case which outlined the only two remedies available to the plaintiff: (1) he or she may file suit for breach of the insurance contract; and/or (2) he or she may report the insurance company to the Insurance Commissioner who may proceed under the Act. Id.
In sum, the court concluded that the KUTPA did not provide a private cause of action; therefore, the plaintiff received no monetary damages and his claim for violation of the KUTPA was dismissed. Id. at 1469-71.