Bad Faith Insurance Complaint - Kansas

PETITION — INSURANCE BAD FAITH AND BREACH OF CONTRACT — KANSAS

TABLE OF CONTENTS

1. Caption
2. Parties, Jurisdiction, and Venue
3. Background Facts
4. Count I — Breach of Insurance Contract
5. Count II — Breach of the Implied Duty of Good Faith and Fair Dealing
6. Count III — Third-Party Bad Faith / Excess Judgment (If Applicable)
7. Count IV — Statutory Attorney Fees Under K.S.A. 40-256 / 40-908
8. Damages
9. Prayer for Relief
10. Demand for Trial by Jury
11. Reservation of Rights
12. Signature and Service Blocks
13. Verification
14. Kansas Practice Notes
15. Sources and References

1. CAPTION

STATE OF KANSAS

IN THE DISTRICT COURT OF [COUNTY NAME] COUNTY, KANSAS

CIVIL DEPARTMENT — Chapter 60

Case No.: [________________________________]

Division: [____]

PETITION (BAD FAITH / BREACH OF INSURANCE CONTRACT)

COMES NOW Plaintiff, by and through undersigned counsel, and for cause of action against Defendant alleges and states as follows:

2. PARTIES, JURISDICTION, AND VENUE

1.1. Plaintiff [PLAINTIFF NAME] ("Plaintiff" or "Insured") is a resident and citizen of [COUNTY] County, Kansas.

1.2. Defendant [INSURER NAME] ("Defendant" or "Insurer") is a [domestic / foreign] insurance company organized under the laws of [STATE] and authorized to transact insurance business in Kansas. Defendant may be served through the Commissioner of Insurance pursuant to K.S.A. 40-218 at the Kansas Insurance Department, 1300 SW Arrowhead Road, Topeka, Kansas 66604, or through its registered agent [REGISTERED AGENT NAME AND ADDRESS].

1.3. The amount in controversy exceeds $[____________], exclusive of interest and costs, vesting subject-matter jurisdiction in the District Court of Kansas under K.S.A. 20-301 and K.S.A. 60-101 et seq.

1.4. A substantial part of the events giving rise to the claims occurred in [COUNTY] County, Kansas, where the policy was delivered, premiums were paid, and/or the insured loss occurred. Venue is proper under K.S.A. 60-604.

3. BACKGROUND FACTS

A. The Insurance Policy

2.1. On or about [DATE], Defendant issued to Plaintiff Policy No. [POLICY NUMBER] (the "Policy"), a [type of policy: homeowner's / commercial property / auto / disability / health / life / liability] insurance policy with effective dates of [__/__/____] through [__/__/____] and policy limits of $[____________].

2.2. Plaintiff timely paid all premiums due and complied with all conditions precedent under the Policy.

2.3. The Policy was in full force and effect at all times material to this Petition.

B. The Loss and Claim

2.4. On or about [DATE OF LOSS], Plaintiff sustained a covered loss as defined by the Policy, specifically: [DESCRIBE LOSS — e.g., fire damage to insured dwelling; auto collision; disability onset; theft] (the "Loss").

2.5. Plaintiff promptly reported the Loss to Defendant on [DATE REPORTED], and Defendant assigned Claim No. [CLAIM NUMBER].

2.6. Plaintiff fully cooperated with Defendant's investigation, including submitting a sworn proof of loss on [DATE], providing requested documentation, attending an examination under oath (if required), and making the property/records available for inspection.

C. Defendant's Handling of the Claim

2.7. Despite Plaintiff's full cooperation and the existence of a covered loss, Defendant [denied / underpaid / unreasonably delayed / failed to investigate] the claim on or about [DATE].

2.8. Defendant's stated reason for the [denial / underpayment / delay] was: [QUOTE INSURER'S STATED BASIS]. That stated basis is pretextual, contrary to the policy language, and unsupported by any reasonable investigation.

2.9. Defendant's claim handling violated K.A.R. 40-1-34 and the standards of K.S.A. 40-2404(9), including but not limited to:

• ☐ Failing to acknowledge claim communications promptly (K.A.R. 40-1-34(9)(b));
• ☐ Failing to adopt and implement reasonable standards for prompt investigation (K.A.R. 40-1-34(9)(c));
• ☐ Refusing to pay without conducting a reasonable investigation (K.A.R. 40-1-34(9)(d));
• ☐ Failing to affirm or deny coverage within a reasonable time after proof of loss (K.A.R. 40-1-34(9)(e));
• ☐ Not attempting in good faith to effectuate prompt, fair, and equitable settlement when liability had become reasonably clear (K.A.R. 40-1-34(9)(f));
• ☐ Compelling Plaintiff to institute litigation by offering substantially less than the amount ultimately recoverable (K.A.R. 40-1-34(9)(g));
• ☐ Failing to provide a reasonable explanation of the basis in the policy and applicable law for denial (K.A.R. 40-1-34(9)(n)).

2.10. Plaintiff has performed all conditions precedent or such conditions have been waived or excused.

4. COUNT I — BREACH OF INSURANCE CONTRACT

3.1. Plaintiff incorporates Paragraphs 1.1 through 2.10 as if fully set forth herein.

3.2. The Policy is a valid and enforceable contract between Plaintiff and Defendant.

3.3. Plaintiff performed all material obligations under the Policy, including timely payment of premiums and submission of a sworn proof of loss.

3.4. The Loss is a covered occurrence under the express terms of the Policy.

3.5. Defendant breached the Policy by [refusing to pay benefits owed / underpaying the claim / failing to defend / failing to indemnify] the covered Loss.

3.6. As a direct and proximate result of Defendant's breach, Plaintiff has sustained damages in an amount equal to the unpaid policy benefits, plus consequential damages reasonably foreseeable to the parties at contract formation, in an amount to be proven at trial but exceeding $[____________].

5. COUNT II — BREACH OF THE IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING

4.1. Plaintiff incorporates Paragraphs 1.1 through 3.6 as if fully set forth herein.

4.2. Every contract in Kansas, including every insurance contract, contains an implied covenant of good faith and fair dealing. Bonanza, Inc. v. McLean, 242 Kan. 209, 222 (1987); Restatement (Second) of Contracts § 205.

4.3. Defendant breached the implied covenant of good faith and fair dealing through, among other acts and omissions:

• conducting a sham, biased, or results-driven investigation;
• ignoring evidence favorable to coverage and elevating evidence unfavorable to coverage;
• misrepresenting policy terms and the basis for denial;
• failing to communicate timely with Plaintiff;
• engaging in the K.A.R. 40-1-34 / K.S.A. 40-2404(9) practices identified in Paragraph 2.9;
• refusing to pay an amount that was reasonably clear under the Policy.

4.4. Defendant's breach of the implied covenant proximately caused Plaintiff additional contractual damages, including the unpaid benefits and reasonably foreseeable consequential damages.

6. COUNT III — THIRD-PARTY BAD FAITH / EXCESS JUDGMENT (If Applicable)

5.1. Plaintiff incorporates the prior paragraphs as if fully set forth herein.

5.2. The Policy is a liability insurance policy that vested Defendant with the exclusive right to control investigation, defense, and settlement of claims against Plaintiff/the Insured, and prohibited Plaintiff/the Insured from settling without Defendant's consent.

5.3. On or about [DATE], [CLAIMANT NAME] (the "Underlying Claimant") asserted a claim against Plaintiff/the Insured for damages arising from [DESCRIBE OCCURRENCE].

5.4. The Underlying Claimant made a settlement demand within policy limits in the amount of $[____________] on [DATE], supported by [evidence], when liability and damages exceeded the policy limit.

5.5. Defendant unreasonably refused to settle within policy limits despite the substantial likelihood of an excess verdict, in violation of its duty under Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79 (1990), to give the interests of the insured at least equal consideration to its own.

5.6. On or about [DATE], judgment was entered against Plaintiff/the Insured in the amount of $[____________], exceeding the $[____________] policy limit by $[____________].

5.7. Defendant's bad-faith refusal to settle proximately caused the excess judgment and Plaintiff's exposure thereunder. Defendant is liable for the entire judgment, including the amount in excess of policy limits.

7. COUNT IV — STATUTORY ATTORNEY FEES UNDER K.S.A. 40-256 / 40-908

6.1. Plaintiff incorporates the prior paragraphs as if fully set forth herein.

6.2. Defendant refused to pay the full amount of Plaintiff's loss without just cause or excuse within the meaning of K.S.A. 40-256. The denial was frivolous, unfounded, and patently without any reasonable foundation; no bona fide controversy as to coverage or amount existed.

6.3. [For fire / tornado / lightning / hail policies only:] In addition or in the alternative, Plaintiff is entitled to attorney fees as a matter of right under K.S.A. 40-908 upon any judgment against Defendant on the Policy.

6.4. Plaintiff is therefore entitled to a reasonable attorney fee, recoverable as part of the costs, including fees on appeal.

8. DAMAGES

7.1. Contract damages: Unpaid policy benefits in the amount of $[____________], plus prejudgment interest under K.S.A. 16-201.

7.2. Consequential damages: Reasonably foreseeable damages flowing from the breach, including but not limited to [lost wages, additional living expenses, business interruption, mitigation costs, increased borrowing costs, additional medical expenses], in an amount to be proven at trial.

7.3. Excess judgment damages (Count III only): The amount by which the underlying judgment exceeded the policy limit, plus post-judgment interest.

7.4. Statutory attorney fees and costs: Pursuant to K.S.A. 40-256 and/or 40-908.

7.5. Punitive damages (independent tort only): If discovery establishes an independent tort committed with willful or wanton conduct, fraud, or malice, Plaintiff will move under K.S.A. 60-3703 for leave to amend to add a claim for punitive damages.

9. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully prays that the Court enter judgment against Defendant as follows:

• A. For compensatory damages on Count I (breach of contract) in an amount in excess of $[____________];
• B. For consequential damages on Count II in an amount to be proven at trial;
• C. For excess-judgment damages on Count III (if applicable);
• D. For statutory attorney fees and costs under K.S.A. 40-256 and/or 40-908;
• E. For prejudgment and post-judgment interest at the statutory rate;
• F. For leave to amend to assert punitive damages upon a proper showing under K.S.A. 60-3703; and
• G. For such other and further relief as the Court deems just and equitable.

10. DEMAND FOR TRIAL BY JURY

Plaintiff demands trial by jury on all issues so triable as a matter of right pursuant to K.S.A. 60-238 and Section 5 of the Kansas Bill of Rights.

11. RESERVATION OF RIGHTS

Plaintiff reserves the right to amend this Petition pursuant to K.S.A. 60-215 to add additional counts (including punitive damages upon a proper showing under K.S.A. 60-3703), additional parties, or additional facts as discovery may reveal.

12. SIGNATURE AND SERVICE BLOCKS

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], Kansas Sup. Ct. No. [####]

Counsel for Plaintiff

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [____________]

Email: [____________]

13. VERIFICATION

STATE OF KANSAS

COUNTY OF [COUNTY] } ss.

I, [PLAINTIFF NAME], of lawful age, being first duly sworn upon oath, depose and state that I am the Plaintiff in the above-captioned action; that I have read the foregoing Petition; and that the statements contained therein are true to the best of my knowledge, information, and belief.

[________________________________]

[PLAINTIFF NAME]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public

(My Commission Expires: [____________])

14. KANSAS PRACTICE NOTES

• No first-party bad-faith tort. Spencer v. Aetna Life & Cas. Ins. Co., 227 Kan. 914, 611 P.2d 149 (1980), squarely holds that Kansas does NOT recognize an independent tort of bad faith in the first-party setting. Recovery is limited to breach of contract, the implied covenant of good faith and fair dealing (sounding in contract), and statutory attorney fees under K.S.A. 40-256 and/or 40-908. Emotional-distress and punitive damages are unavailable absent an independent tort (e.g., fraud, IIED, conversion).
• Third-party bad faith IS recognized. Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79 (1990), holds that a liability insurer may be liable for an excess judgment if it fails to give its insured's interests at least equal consideration to its own when evaluating settlement. Such claims are assignable.
• K.S.A. 40-2404 — no private right of action. The Unfair Trade Practices Act is enforced by the Kansas Insurance Commissioner only. Earth Scientists v. U.S. Fid. & Guar. Co., 619 F. Supp. 1465 (D. Kan. 1985); Jahnke v. Blue Cross & Blue Shield of Kansas, 51 Kan. App. 2d 678, 353 P.3d 455 (2015). Plead its violations as evidentiary facts supporting "without just cause or excuse" under § 40-256.
• K.S.A. 40-256 standard. Attorney fees are awarded only when the refusal was "without just cause or excuse" — i.e., frivolous, unfounded, and "patently without any reasonable foundation." Spivey v. Safeco Ins. Co., 254 Kan. 237, 865 P.2d 182 (1993). A bona fide legal or factual controversy defeats fee shifting. The statute also bars fees when a pre-suit tender equals or exceeds the judgment.
• K.S.A. 40-908 — fire/tornado/lightning/hail. Fees are mandatory upon any judgment against the insurer on a covered property policy, subject to the same pre-suit-tender exception.
• Statute of limitations. Written contract: 5 years (K.S.A. 60-511(1)). Liability created by statute: 3 years (K.S.A. 60-512). Tort: 2 years (K.S.A. 60-513).
• Punitive damages. K.S.A. 60-3703 prohibits pleading a punitive amount in the original petition; a separate post-verdict proceeding under K.S.A. 60-3702 is required, and the cap is the lesser of defendant's annual gross income or $5 million (with limited exceptions).
• Service on insurers. K.S.A. 40-218 authorizes service on foreign insurers through the Commissioner of Insurance.
• Pleading style. Kansas civil actions are styled "Petition" (not "Complaint"); Kansas follows notice pleading under K.S.A. 60-208(a).
• Regulatory complaint. A parallel complaint may be filed with the Kansas Insurance Department (insurance.kansas.gov) at no cost; KID can investigate K.S.A. 40-2404 / K.A.R. 40-1-34 violations and impose administrative penalties.

15. SOURCES AND REFERENCES

• K.S.A. 40-256 (attorney fees on policies) — https://ksrevisor.gov/statutes/chapters/ch40/040_002_0056.html
• K.S.A. 40-908 (attorney fees — property fire/tornado/hail/lightning) — https://www.ksrevisor.gov/statutes/chapters/ch40/040_009_0008.html
• K.S.A. 40-2401 et seq. (Unfair Trade Practices Act) — https://ksrevisor.gov/statutes/chapters/ch40/040_024_0001.html
• K.A.R. 40-1-34 (Unfair Claims Settlement Practices Regulation) — https://insurance.ks.gov/documents/department/regulations-adopted/article-1/40-1-34-attachment1.pdf
• K.S.A. 60-208, 60-215, 60-238, 60-3702, 60-3703 — https://ksrevisor.gov/statutes/ksa_ch60.html
• Spencer v. Aetna Life & Cas. Ins. Co., 227 Kan. 914, 611 P.2d 149 (1980) — https://law.justia.com/cases/kansas/supreme-court/1980/51946-0.html
• Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79 (1990)
• Spivey v. Safeco Ins. Co., 254 Kan. 237, 865 P.2d 182 (1993)
• Bonanza, Inc. v. McLean, 242 Kan. 209, 747 P.2d 792 (1987)
• Jahnke v. Blue Cross & Blue Shield of Kansas, Inc., 51 Kan. App. 2d 678, 353 P.3d 455 (2015)
• Kansas Insurance Department — Consumer Complaints — https://insurance.kansas.gov/complaint/

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Kansas law (Spencer v. Aetna) does NOT recognize a first-party bad-faith tort; first-party claims sound in contract with statutory fee-shifting under K.S.A. 40-256/40-908. A Kansas-licensed attorney must review and customize this document before filing. Verify all citations and current statutory text before use.