govinfo:USCOURTS-ksd-2_24-cv-02097-4

IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF KANSAS 
 
LM INSURANCE CORPORATION, 
 
 Plaintiff, 
 
 v. 
 
SMART FRAMING CONSTRUCTION LLC, 
et al., 
 
 Defendants, 
 
 
 
 
 

 
MEMORANDUM AND ORDER 
Plaintiff LM Insurance Corporation (“LM”) brings this declaratory judgment action 
against Defendants Smart Framing Construction LLC and Angel Gutierrez Castillo (“Castillo”), 
seeking a determination that a workers’ compensation insurance policy LM issued to Smart 
Framing Construction LLC does not provide coverage for a workers’ compensation claim made 
by Castillo. Neither Smart Framing Construction LLC nor Castillo responded to the Complaint, 
and the Clerk entered default against them on June 27, 2024,1 and July 18, 2024,2 respectively. 
Shortly thereafter, National Liability & Fire Insurance Company (“National Liability”) 
moved to intervene as a party defendant.3 National Liability issued a workers’ compensation and 
employers’ liability policy to Fastframe Construction LLC (“Fastframe”), the general contractor 
on the project where Castillo suffered the injury giving rise to the workers’ compensation claim 
at issue in this case. National Liability sought to intervene because, if LM’s workers’ 
compensation insurance policy does not cover Castillo’s claim, Fastframe, as the general 
 
1 Doc. 10. 
2 Doc. 13. 
3 Doc. 14. 

2 
contractor on the project, may be treated as Castillo’s “statutory employer” under the Kansas 
Workers’ Compensation Act, potentially triggering National Liability’s coverage obligations.4 
Magistrate Judge Angel D. Mitchell granted National Liability’s motion to intervene on 
September 10, 2024.5 
This matter is now before the Court on LM’s Motion for Summary Judgment (Doc. 75) 
and National Liability’s Motion for Summary Judgment (Doc. 77). The motions are fully 
briefed, and the Court is prepared to rule. For the reasons explained below, the Court grants 
LM’s motion and denies National Liability’s motion. 
I. Summary Judgment Standard 
Summary judgment is appropriate if the moving party demonstrates that there is no 
genuine dispute as to any material fact and that it is entitled to judgment as a matter of law.6 In 
applying this standard, the Court views the evidence and all reasonable inferences therefrom in 
the light most favorable to the non-moving party.7 “There is no genuine issue of material fact 
unless the evidence, construed in the light most favorable to the non-moving party, is such that a 
reasonable jury could return a verdict for the non-moving party.”8 A fact is “material” if, under 
the applicable substantive law, it is “essential to the proper disposition of the claim.”9 An issue 
 
4 K.S.A. § 44-503 “extends the application of the Kansas Workers Compensation Act to certain individuals 
or entities who are not the immediate employers of the injured workers, but rather are ‘statutory employers.’” 
Robinett v. Haskell Co., 12 P.3d 411, 414 (Kan. 2000). Under the Act, when “payment of compensation is not 
secured or is otherwise unavailable or in effect, then the principal [contractor] shall be liable for the payment of 
compensation.” K.S.A. § 44-503(g). 
5 Doc. 17. 
6 Fed. R. Civ. P. 56(a); see also Grynberg v. Total, 538 F.3d 1336, 1346 (10th Cir. 2008). 
7 City of Herriman v. Bell, 590 F.3d 1176, 1181 (10th Cir. 2010). 
8 Bones v. Honeywell Int’l, Inc., 366 F.3d 869, 875 (10th Cir. 2004). 
9 Wright ex rel. Trust Co. of Kan. v. Abbott Labs., Inc., 259 F.3d 1226, 1231–32 (10th Cir. 2001) (citing 
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998)). 

3 
of fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the 
non-moving party.”10 
The moving party initially must show the absence of a genuine issue of material fact and 
entitlement to judgment as a matter of law.11 Once the movant has met this initial burden, the 
burden shifts to the non-moving party to “set forth specific facts showing that there is a genuine 
issue for trial.”12 The non-moving party may not simply rest upon its pleadings to satisfy its 
burden.13 Rather, the non-moving party must “set forth specific facts that would be admissible in 
evidence in the event of trial from which a rational trier of fact could find for the non-movant.”14 
To accomplish this, the facts “must be identified by reference to an affidavit, a deposition 
transcript or a specific exhibit incorporated therein.”15 The non-moving party cannot avoid 
summary judgment by repeating conclusory opinions, allegations unsupported by specific facts, 
or speculation.16 
“Where, as here, the parties file cross motions for summary judgment, we are entitled to 
assume that no evidence needs to be considered other than that filed by the parties, but summary 
judgment is nevertheless inappropriate if disputes remain as to material facts.”17 Cross summary 
 
10 Thomas v. Metro. Life Ins., 631 F.3d 1153, 1160 (10th Cir. 2011) (quoting Anderson v. Liberty Lobby, 
Inc., 477 U.S. 242, 248 (1986)). 
11 Spaulding v. United Transp. Union, 279 F.3d 901, 904 (10th Cir. 2002) (citing Celotex Corp. v. Catrett, 
477 U.S. 317, 323–24 (1986)). 
12 Anderson, 477 U.S. at 256. 
13 Id.; accord Eck v. Parke, Davis & Co., 256 F.3d 1013, 1017 (10th Cir. 2001). 
14 Mitchell v. City of Moore, 218 F.3d 1190, 1197–98 (10th Cir. 2000) (quoting Adler, 144 F.3d at 671). 
15 Adams v. Am. Guar. & Liab. Ins., 233 F.3d 1242, 1246 (10th Cir. 2000). 
16 Argo v. Blue Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1199 (10th Cir. 2006). 
17 James Barlow Fam. Ltd. P’ship v. David M. Munson, Inc., 132 F.3d 1316, 1319 (10th Cir. 1997). 

4 
judgment motions should be evaluated as two separate motions.18 Just because the Court denies 
one does not require that it grant the other.19 
Finally, summary judgment is not a “disfavored procedural shortcut;” on the contrary, it 
is an important procedure “designed ‘to secure the just, speedy and inexpensive determination of 
every action.’”20 
II. Uncontroverted Facts 
The following facts are either uncontroverted, stipulated to, or viewed in the light most 
favorable to the non-moving party. 
Cesar Rocha Flores (“Rocha”) worked for his father, Robert Rocha Don Juan, also 
known as Anselmo Rocha (“Anselmo”), in the framing business beginning in 2018. Anselmo’s 
framing business was organized as Smart Framing LLC in the State of Kansas (Business Entity 
ID No. 8981185). On July 15, 2019, the State of Kansas administratively forfeited Smart 
Framing LLC for failing to timely file an annual report. 
On June 21, 2019, Rocha organized Smart Framing Construction LLC in the State of 
Kansas (Business Entity ID No. 9456666). On January 17, 2020, LM issued a workers’ 
compensation insurance policy to Smart Framing Construction LLC with an initial effective date 
of January 14, 2020. 
On May 14, 2020, Anselmo died. After his father’s death, Rocha went to his insurance 
agent at Smart Insurance Agency and informed the agent that he was taking over his father’s 
business. Rocha told the agent that the business’s operations were not changing, that he would 
 
18 Banner Bank v. First Am. Title Ins., 916 F.3d 1323, 1326 (10th Cir. 2019). 
19 Id. 
20 Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1). 

5 
still be doing the same type of work, and that he needed the same insurance coverage for his 
operations that he and his father had before his father’s death. 
On October 15, 2020, the State of Kansas deemed Smart Framing Construction LLC 
administratively forfeited for failing to timely file its annual report by April 15, 2020. On March 
25, 2021, Rocha organized another Kansas limited liability company named Smart Framing LLC 
(Business Entity ID No. 9870304). 
In January 2023, LM issued another workers’ compensation insurance policy to Smart 
Framing Construction LLC, with a policy period of January 14, 2023, to January 14, 2024 (the 
“Policy”). The Policy defines an “Insured” as “an employer named in Item 1 of the Information 
Page.”21 Item 1 of the Information Page lists “Smart Framing Construction LLC.”22 No other 
individual or entity is listed in Item 1. 
In February 2023, Fastframe subcontracted construction work on a project located in 
Lake Winnebago, Cass County, Missouri, to Smart Framing LLC (the “Missouri Project”). 
National Liability insured Fastframe under a workers’ compensation and employers’ liability 
policy. Castillo worked on the Missouri Project for Smart Framing LLC. On February 27, 2023, 
while working on the Missouri Project, Castillo was injured on the job. 
On March 3, 2023, and March 17, 2023, Fastframe issued payments to Smart Framing 
LLC for its work on the Missouri Project. Castillo was paid for his work under the name “Angel 
Torres.”23 Payment records provided for Castillo, all of which use the name “Angel Torres,” 
 
21 Doc. 78-6 at 26. 
22 Id. at 22. 
23 Doc. 76-5 at 64. 

6 
span February 5, 2022 through January 21, 2023, and show payments by checks from “Cesar A. 
Rocha-Flores DBA Smart Framing” or “Cesar Augusto Rocha Flores, Smart Framing.”24 
On March 7, 2023, LM sent a notice of cancellation of insurance to Smart Framing 
Construction LLC, stating that the cancellation would be effective April 11, 2023, for failing to 
comply with LM’s requests to complete a final audit. 
On March 13, 2023, Castillo filed a workers’ compensation claim against Smart Framing 
LLC with the Missouri Department of Labor and Industrial Relations Division of Workers’ 
Compensation relating to his injury on the Missouri Project. On March 16, 2023, Castillo filed a 
workers’ compensation claim against Smart Framing Construction LLC with the Director of the 
Kansas Division of Workers’ Compensation relating to the same injury. 
In response to Castillo’s Kansas workers’ compensation claim, LM provided counsel to 
defend Smart Framing Construction LLC. Attorney John Pazell entered an appearance on behalf 
of Smart Framing Construction LLC and LM on March 31, 2023, and later moved to withdraw 
on June 13, 2025, because other counsel had entered their appearance. 
On April 4, 2023, LM’s adjuster made a note in Castillo’s claim file to determine whether 
the insured employer name was “Cesar A. Rocha-Flores DBA Smart Framing” or “Smart 
Framing Construction,” noting, “are these one in the same?”25 LM’s adjuster later indicated that 
Rocha had called and informed her that the employer name was listed as “Smart Framing 
Construction LLC.”26 
On August 11, 2023, LM’s counsel sent Rocha a letter requesting that he appear for an 
examination under oath with respect to the workers’ compensation claim made on behalf of 
 
24 Id. at 64–86. 
25 Doc. 79-8 at 3. 
26 Id. at 4. 

7 
Smart Framing Construction LLC regarding Castillo’s February 27, 2023 injury. The letter 
stated, in part: 
By providing you with this letter, [LM] does not waive any term or 
condition of the policy of insurance in question. [LM] continues to 
reserve its rights under all of the terms and conditions of the policy 
as well as any rights or defenses available under the laws of the 
State of Kansas. 
Furthermore, [LM] retains its rights to demand full compliance by 
you and your representatives with any and all of the terms and 
conditions of the policy. No action taken by [LM], its affiliates, 
representatives, employees, attorneys and/or agents should be 
considered a waiver of any said rights or defenses the company has 
or may have.27 
On August 9, 2024, one of Castillo’s attorneys emailed National Liability’s lawyers 
defending Fastframe in the Missouri workers’ compensation claim and stated, in part, “in the 
event that LM escapes liability for [Castillo’s claim], please also consider this a demand for each 
of you as well.”28 
III. Discussion 
In its Complaint, LM requests a declaratory judgment that the Policy provides no 
coverage for Castillo’s workers’ compensation claim and, therefore, LM has no obligation to 
defend or indemnify Smart Framing Construction LLC or to pay any further workers’ 
compensation benefits with respect to that claim. Both LM and National Liability move for 
summary judgment. 
Beginning with LM’s motion, LM argues that it is entitled to summary judgment because 
the Policy identifies only Smart Framing Construction LLC as the insured employer, and Castillo 
was injured while working for Smart Framing LLC, not Smart Framing Construction LLC. 
 
27 Doc. 79-10 at 3–4. 
28 Doc. 73 at 5 (Pretrial Order Stipulation ¶ 2.a.xv.). 

8 
Thus, according to LM, the Policy does not provide coverage for Castillo’s workers’ 
compensation claim. In response, National Liability argues that Smart Framing LLC should be 
treated as an insured under the Policy and that the Policy therefore provides coverage. 
Accordingly, resolution of this issue turns on the interpretation of the Policy, which the parties 
agree is governed by Kansas law. 
Under Kansas law, the interpretation and legal effect of an insurance contract is a matter 
of law to be determined by the Court.29 In construing an insurance policy, a court must consider 
the instrument as a whole and interpret the policy language in such a way as to give effect to the 
intent of the parties.30 “If an insurance policy’s language is clear and unambiguous, it must be 
taken in its plain, ordinary, and popular sense.”31 In such a case, there is no need for judicial 
interpretation or the application of rules of liberal construction.32 
However, if the policy language is ambiguous, it must be construed in favor of the 
insured.33 “To be ambiguous, a contract must contain provisions or language of doubtful or 
conflicting meaning, as gleaned from a natural and reasonable interpretation of its language.”34 
“Ambiguity in a written contract does not appear until the application of pertinent rules of 
interpretation to the face of the instrument leaves it genuinely uncertain which one of two or 
more meanings is the proper meaning.”35 The Court should not strain to create ambiguity where 
 
29 Am. Media, Inc. v. Home Indem. Co., 658 P.2d 1015, 1018 (Kan. 1983); Gerdes v. Am. Fam. Mut. Ins., 
713 F. Supp. 2d 1290, 1295 (D. Kan. 2010) (quoting Goforth v. Franklin Life Ins., 449 P.2d 477, 480 (Kan. 1969)). 
30 O’Bryan v. Columbia Ins. Grp., 56 P.3d 789, 792 (Kan. 2002). 
31 O’Bryan, 56 P.3d at 792. 
32 Gerdes, 713 F. Supp. 2d at 1296. 
33 Magnus v. Diamond State Ins., 101 F. Supp. 3d 1046, 1054 (D. Kan. 2015) (citing Brumley v. Lee, 963 
P.2d 1224, 1226 (Kan. 1998)); O’Bryan, 56 P.3d at 793. 
34 Gerdes, 713 F. Supp. 2d at 1296 (quoting Catholic Diocese of Dodge City v. Raymer, 840 P.2d 456, 459 
(Kan. 1992)). 
35 Id. (quoting Catholic Diocese, 840 P.2d at 459). 

9 
none exists.36 “The test in determining whether an insurance contract is ambiguous is not what 
the insurer intends the language to mean, but what a reasonably prudent insured would 
understand the language to mean.”37 
 Here, the Policy is clear and unambiguous. It defines an “Insured” as “an employer 
named in Item 1 of the Information Page,” and Item 1 names only “Smart Framing Construction 
LLC.”38 No other individual or entity is listed as an insured. Thus, under the plain language of 
the Policy, Smart Framing LLC is not an insured unless some other provision extends coverage 
to that separate entity. And National Liability identifies no such provision. 
Instead, National Liability makes three arguments. First, National Liability argues that 
Smart Framing LLC is insured under the Policy because the change from Smart Framing 
Construction LLC to Smart Framing LLC was merely a name change and nothing about the 
business was otherwise changed. In support of its argument, National Liability relies on 
language from Legacy Christian Church v. Republic-Vanguard Insurance Co.,39 stating that 
“[d]oing business under another name does not create an entity distinct from the person operating 
the business.”40 But the court made that statement in the context of analyzing “d/b/a” language 
in an insurance policy.41 There, the insurance policy listed “Steve Willman dba Craftman [sic] 
Exteriors” as the insured, and the issue was whether the policy provided coverage for Willman 
alone or whether it also provided coverage to his corporation, Craftsman Exteriors, Inc.42 The 
 
36 Id. 
37 O’Bryan, 56 P.3d at 793 (citing First Fin. Ins. v. Bugg, 962 P.2d 515, 519 (Kan. 1998)). 
38 Doc. 78-6 at 22, 26. 
39 No. 2:20-CV-02474-EFM, 2022 WL 15432543 (D. Kan. Oct. 27, 2022). 
40 Id. at *3 (alteration in original) (quoting Duval v. Midwest Auto City, Inc., 425 F. Supp. 1381, 1387 (D. 
Neb. 1977)). 
41 Id. 
42 Id. at *4. 

10 
court concluded that, given the “d/b/a” language, the policy was “ambiguous and uncertain” as to 
the parties’ intent because one reasonable interpretation was that the policy covered Willman 
personally and did not extend to the corporation under which he operated his business, while 
another reasonable interpretation was that the parties intended to extend coverage to Willman’s 
corporation.43 Because the policy was ambiguous, the court construed it against the insurer and 
found that the policy extended coverage to Craftsman Exteriors, Inc.44 
 Here, however, there is no uncertainty in the Policy language about who is insured. 
Unlike in Legacy Christian Church, the Policy contains no “d/b/a” language, trade name, or 
other wording suggesting that the named insured might include a related entity operating under a 
similar business name. Rather, the Policy unambiguously identifies only Smart Framing 
Construction LLC as the insured. The Court therefore “shall not make another contract for the 
parties” by treating Smart Framing LLC as an insured, but instead “must enforce the contract as 
made.”45 
Furthermore, the summary judgment record does not support National Liability’s 
characterization that the change from Smart Framing Construction LLC to Smart Framing LLC 
was merely a name change. Smart Framing Construction LLC and Smart Framing LLC are 
separate Kansas limited liability companies with different business entity identification numbers. 
Smart Framing Construction LLC was administratively forfeited in October 2020, and Rocha 
later organized Smart Framing LLC as a separate limited liability company in March 2021. 
Thus, even viewing the facts in the light most favorable to National Liability, the record shows 
 
43 Id. 
44 Id. 
45 O’Bryan v. Columbia Ins. Grp., 56 P.3d 789, 792 (Kan. 2002). 

11 
the formation of a separate legal entity, not a name change of the insured entity listed in the 
Policy. 
Second, National Liability invokes the doctrine of successor liability and argues that 
Smart Framing LLC is insured under the Policy because it is the “successor corporation” to 
Smart Framing Construction LLC. However, the doctrine of successor liability is inapplicable 
here. The insured-insurer relationship is a matter of contract,46 while the doctrine of successor 
liability is a matter of tort duty and liability.47 It is one thing to hold a successor corporation 
liable for its predecessor’s torts; it is quite another to treat that successor as a party to an 
insurance contract it did not sign, under which it was not named, and for which it did not pay a 
premium, thereby placing the insurer in a contractual relationship with a stranger it never 
subjected to an underwriting analysis. And National Liability cites no Kansas authority holding 
that a successor entity automatically acquires coverage rights under a workers’ compensation 
policy issued to its predecessor. The Court declines to extend successor-liability principles in 
that manner here. 
Third and finally, National Liability argues that LM waived, or should be equitably 
estopped from asserting, its position that the Policy does not provide coverage for Castillo’s 
workers’ compensation claim because LM undertook Smart Framing Construction LLC’s 
defense in the Kansas workers’ compensation proceeding and initially handled the claim as 
covered under the Policy. But National Liability’s argument raises a threshold issue: whether a 
 
46 Shelter Mut. Ins. v. Williams ex rel. Williams, 804 P.2d 1374, 1379 (Kan. 1991) (“An insurance policy is 
a contract.”). 
47 See Wells Fargo Vendor Fin. Servs., LLC v. Nationwide Learning, LLC, 429 P.3d 221, 237 (Kan. Ct. 
App. 2018) (“The whole purpose of imposing liability on a successor corporation or business ‘is to protect third 
parties, either creditors or tort claimants, from being left without recourse when a corporation or partnership either 
sells all its assets or changes the form in which it does business.’” (quoting Canadyne-Georgia Corp. v. Cleveland, 
72 F. Supp. 2d 1373, 1381 (M.D. Ga. 1999))). 

12 
non-party to an insurance contract has standing to invoke equitable remedies, such as waiver and 
estoppel, to obtain coverage under a policy it did not purchase, sign, or have the right to enforce. 
The Kansas Supreme Court has not had an opportunity to decide this precise issue, so the Court 
must predict how it would rule.48 In doing so, the Court must give “proper regard to relevant 
rulings of other courts of the State,”49 and “may also consider appellate decisions in other states 
with similar legal principles and the general weight and trend of authority in the relevant area of 
law.”50 The Court has found no Kansas authority addressing whether a non-party to an insurance 
contract has standing to assert waiver or estoppel under another insurer’s policy. But courts in 
other jurisdictions have rejected that position. 
In Western Casualty & Surety Co. v. American National Fire Insurance Co.,51 the 
plaintiff insurer argued that the defendant insurer had waived, or was estopped from denying, 
coverage under a workers’ compensation policy the defendant had issued to a third party—a 
policy to which the plaintiff was not a party.52 The South Dakota Supreme Court rejected that 
argument, holding that “[o]nly the parties to the contract of insurance, or their privies, can claim 
the benefit of a waiver or an estoppel,” and that the plaintiff insurer was “a stranger to the 
policy” and therefore “not a proper party to assert the claim of a waiver or an estoppel.”53 
 
48 Royal Maccabees Life Ins. v. Choren, 393 F.3d 1175, 1180 (10th Cir. 2005) (“A federal court sitting in 
diversity must apply state law as propounded by the forum’s highest court. Absent controlling precedent, the federal 
court must attempt to predict how the state’s highest court would resolve the issue.” (citations omitted)). 
49 Bill Barrett Corp. v. YMC Royalty Co., 918 F.3d 760, 765 (10th Cir. 2019) (quoting Stickley v. State 
Farm Mut. Auto. Ins., 505 F.3d 1070, 1077 (10th Cir. 2007)). 
50 Amparan v. Lake Powell Car Rental Cos., 882 F.3d 943, 948 (10th Cir. 2018) (citation modified). 
51 318 N.W.2d 126 (S.D. 1982). 
52 Id. at 128. 
53 Id. 

13 
Likewise, in Michigan Millers Mutual Insurance Co. v. Travelers Indemnity Co.,54 the 
United States District Court for the Eastern District of Michigan rejected an insurer’s attempt to 
use waiver and estoppel to require another insurer to cover a non-insured entity.55 The court 
reasoned that waiver and estoppel could not be used to obtain coverage “where the party seeking 
to benefit from waiver or estoppel is not even an insured in the underlying insurance contract.”56 
And in Donovan v. New York Casualty Co.,57 the Pennsylvania Supreme Court similarly 
explained that “a stranger to a contract of insurance is not in a position to invoke an estoppel or 
waiver of a condition in the policy.”58 The North Dakota Supreme Court reached the same 
conclusion in Secura Supreme Insurance Co. v. Differding,59 holding that “[l]itigants cannot 
claim estoppel based on policies to which they are not a party; nor can they claim waiver of a 
provision in a policy they have no right to enforce.”60 
Given “the general weight and trend of authority,” the Court finds these decisions 
persuasive and predicts that the Kansas Supreme Court would adopt the same rule.61 National 
Liability is not an insured under the Policy, is not a party to the Policy, and has not shown that it 
is in privity with Smart Framing Construction LLC. Nonetheless, National Liability argues that 
it and its insured, Fastframe, are third-party beneficiaries of the Policy and therefore may invoke 
waiver and estoppel to obtain coverage. 
 
54 No. 16-11767, 2016 WL 7100539 (E.D. Mich. Dec. 6, 2016). 
55 Id. at *6–7. 
56 Id. at *7. 
57 94 A.2d 570 (Pa. 1953). 
58 Id. at 571. 
59 988 N.W.2d 580 (N.D. 2023). 
60 Id. at 585. 
61 See Amparan v. Lake Powell Car Rental Cos., 882 F.3d 943, 948 (10th Cir. 2018). 

14 
“Kansas law allows a qualified third-party beneficiary plaintiff to enforce a contract 
expressly made for his or her benefit even though he or she was not a party to the transaction.”62 
Kansas case law distinguishes third-party contract beneficiaries into classes of (1) intended 
beneficiaries and (2) incidental beneficiaries.63 “A beneficiary may sue to enforce a contract 
made by others only if he is an intended beneficiary, i.e., one who the contracting parties 
intended should receive a direct benefit from the contract.”64 “In determining whether a 
particular person is an intended beneficiary of a contract, the court applies the general rules for 
construction of contracts.”65 
“A third-party beneficiary does not need to be personally named in the contract to have 
standing, as long as he or she is a member of a designated class or identifiable as a benefitted 
person.”66 “The party asserting it’s a third-party beneficiary of a contract bears the burden ‘of 
establishing standing to assert claims under a third party beneficiary theory.’”67 And “[b]efore 
the issue is reached of whether a third party may directly enforce a contract from which he would 
benefit, the third party must show the existence of some provision in the contract that operates to 
his benefit.”68 
Here, National Liability has not identified any provision in the Policy that operates for its 
direct benefit. As previously discussed, the Policy identifies only Smart Framing Construction 
 
62 Tri-State Truck Ins. v. First Nat’l Bank of Wamego, 535 F. App’x 653, 660 (10th Cir. 2013) (quoting 
State ex rel. Stovall v. Reliance Ins., 107 P.3d 1219, 1230–31 (Kan. 2005)). 
63 Id. (citing Noller v. GMC Truck & Coach Div., 772 P.2d 271, 275 (Kan. 1989)). 
64 Id. (emphasis added) (citing Noller, 772 P.2d at 275). 
65 Byers v. Snyder, 237 P.3d 1258, 1265 (Kan. Ct. App. 2010). 
66 Id. at 1266. 
67 Eucalyptus Real Est., LLC v. Innovative Work Comp Sols., LLC, 676 F. Supp. 3d 938, 969 (D. Kan. 
2023) (quoting Stovall, 107 P.3d at 1231). 
68 Stovall, 107 P.3d at 1231 (emphasis added) (quoting Hartford Fire Ins. v. Western Fire Ins., 597 P.2d 
622, 632 (Kan. 1979)). 

15 
LLC as the insured and contains no mention of National Liability or Fastframe. And rather than 
point to language in the Policy, National Liability relies on K.S.A. § 44-503 and argues that, “[i]t 
is very clear that under the statutory scheme of K.S.A. 44-503,” a general contractor is an 
“intended third party beneficiar[y]” of its subcontractor’s workers’ compensation policy because 
the general contractor may be liable as a “contingent employer” if the subcontractor fails to 
secure workers’ compensation coverage.69 
K.S.A. § 44-503 makes a principal contractor liable to pay workers’ compensation 
benefits to a subcontractor’s employee in certain circumstances, provides that a principal who 
pays compensation is entitled to indemnity from the person who would have been liable 
independently of § 44-503, and allows a principal contractor sued by a subcontractor’s worker to 
implead the subcontractor. It also provides that when the subcontractor has secured workers’ 
compensation coverage, the principal contractor is not liable for compensation that would 
otherwise be imposed under the statute. But nothing in § 44-503 purports to alter the terms of a 
workers’ compensation insurance policy, expand the policy’s definition of “insured,” or convert 
a principal contractor or its insurer into an intended third-party beneficiary of a subcontractor’s 
policy. 
At most, § 44-503 may give Fastframe a statutory defense to liability or a statutory right 
of indemnity against the party independently liable for compensation. It does not give 
Fastframe, or National Liability as Fastframe’s insurer, the right to invoke waiver or estoppel to 
obtain coverage under an insurance contract to which neither is a party. Thus, merely because 
Fastframe may be deemed Castillo’s statutory employer, and National Liability may be exposed 
 
69 Doc. 78 at 22. 

16 
to coverage obligations as Fastframe’s insurer, that statutory exposure does not make either 
entity an intended third-party beneficiary of the Policy. 
If the Policy were to cover Castillo’s claim, Fastframe and National Liability would 
benefit only because their own potential exposure would be reduced or eliminated. That is an 
incidental consequence of coverage, not evidence that LM and Smart Framing Construction LLC 
contracted with the intent to directly benefit Fastframe or National Liability. Therefore, because 
National Liability is neither a party to the Policy, nor in privity with a party to the Policy, nor an 
intended third-party beneficiary of the Policy, it lacks standing to invoke waiver or equitable 
estoppel to preclude LM from asserting that the Policy does not provide coverage for Castillo’s 
workers’ compensation claim. 
Accordingly, the Court concludes that LM has shown that no reasonable trier of fact 
could find that Smart Framing LLC was an insured under the Policy. The uncontroverted facts 
show that Castillo was working for Smart Framing LLC, not Smart Framing Construction LLC, 
when he was injured. Thus, the Policy does not provide coverage for Castillo’s workers’ 
compensation claim, and LM has no obligation to defend or indemnify Smart Framing 
Construction LLC or to pay any further workers’ compensation benefits with respect to that 
claim. LM’s Motion for Summary Judgment is therefore granted. And having found that LM is 
entitled to summary judgment because the Policy provides no coverage for Castillo’s workers’ 
compensation claim, National Liability’s motion for summary judgment, which rests on the 
contrary contention that the Policy does provide coverage for that claim, is denied. 
IT IS THEREFORE ORDERED BY THE COURT that LM Insurance Corporation’s 
Motion for Summary Judgment (Doc. 75) is granted and National Liability & Fire Insurance 

17 
Company’s Motion for Summary Judgment (Doc. 77) is denied. The Clerk is directed to enter 
judgment in favor of LM Insurance Corporation and to terminate this action. 
 IT IS SO ORDERED. 
 
 Dated: May 14, 2026 
 S/ Julie A. Robinson 
JULIE A. ROBINSON 
UNITED STATES DISTRICT JUDGE 

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