## Facts

- Forrest D. Ferguson operated a Rexall drug store in Council Grove, Kansas, insured under a storekeepers burglary and robbery policy issued by Phoenix Assurance Company of New York.
- The policy covered loss by “safe burglary” of money within the premises and separately limited coverage for certain burglary losses of money to $50.
- Burglars forcibly entered the store by prying open the front door, leaving tool marks and causing $70 in damage.
- Burglars stole narcotics valued at $32.59 and took $433.76 in cash from a safe located inside the store.
- The safe had an outer combination-lock door and an inner key-lock door; both were locked before the burglary.
- The burglars opened the outer door by manipulating the combination, leaving no visible marks on the exterior of the outer door.
- The burglars punched out the lock on the inner door, leaving visible tool marks and evidence of force on the exterior of the inner door.
- Phoenix paid for premises damage, the narcotics loss, and $50 toward the safe cash loss, but refused to pay the remaining $383.76 based on a policy definition requiring visible marks of force “upon the exterior of ... all ... doors” of the safe.

## Issues

1. Whether a policy requirement that force-and-violence entry into a safe leave “visible marks ... upon the exterior of ... all ... doors” is a condition of coverage barring recovery when the outer door has no marks.
2. Whether the clause is instead an evidentiary requirement that cannot be asserted to defeat recovery on an otherwise clearly justifiable safe-burglary claim.
3. Whether enforcing the clause as Phoenix urged would contravene Kansas public policy by exceeding reasonable anti-fraud needs.

## Decision

- The Kansas Supreme Court affirmed judgment for Ferguson for the disputed balance of the safe cash loss and affirmed the attorney-fee award.
- The court construed the “visible marks” language as imposing a rule of evidence to prove force-and-violence safe entry, not as an absolute coverage prerequisite in the circumstances presented.
- The court held Phoenix’s reliance on the absence of marks on the outer door, despite clear force marks on the inner door and undisputed burglary, exceeded reasonable anti-fraud purposes and violated Kansas public policy.

## Legal Principles

- A burglary policy provision requiring visible tool marks of force and violence on the exterior of safe doors is generally treated as an evidentiary requirement directed to proof of a genuine burglary.
- An insurer may contract for evidentiary proof to deter fraud, but the insurer’s assertion of such a rule cannot exceed reasonable requirements necessary to prevent fraudulent claims.
- When enforcement of an evidentiary requirement is used to prevent recovery on an obviously justifiable claim, its assertion contravenes Kansas public policy and will not be permitted.
- General rules construing insurance language against the insurer apply chiefly where contract language is of doubtful meaning; here the result rested primarily on public-policy limits on overreaching evidentiary demands.

## Conclusion

Because the burglary and forceful entry into the safe were clearly established by visible marks on the inner safe door and other undisputed circumstances, Phoenix could not avoid coverage by insisting on visible marks on the outer door; the insured recovered the remaining cash loss and attorney’s fees.


Ferguson v. Phoenix Assurance Co. of N.Y., 189 Kan. 459, 370 P.2d 379 (Kan. 1962)