KRS CHAPTER 304.39 – Motor vehicle reparations act

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TITLE XXV – BUSINESS AND FINANCIAL INSTITUTIONS  

KRS  CHAPTER 304.39 – Motor vehicle reparations act

KRS 304.39-010 THRU KRS 304.39-340

Definitions – Right to Basic Reparation Benefits –  Obligation to Pay Basic Reparation Benefits -Motorcycle Coverage – Exclusion from Coverage – Acceptance or Rejection of Partial Abolition of Tort Liability –  Secured Person – Security Covering Motor Vehicle – Binder Cancellation – Notice to Dept. of Vehicle – Regulation of Policy Termination – Required Security – Included Coverages – Minimum Tort Liability Insurance – Statute of Limitation on Claim of Loss of Use of Motor Vehicle – Insurance Card – Calculation of Net Loss                                                   

KRS 304.39-020   Definitions for subtitle.

KRS 304.39-030   Right to basic reparation benefits.

KRS 304.39-040   Obligation to pay basic reparation benefits — Requirement of option for motorcycle coverage in liability contracts — Exclusion of motorcycle operator or passenger who has not purchased optional coverage.

KRS 304.39-045   Exclusion from coverage as operator by agreement.

KRS 304.39-050   Priority of applicability of security for payment of basic reparation benefits.

KRS 304.39-060   Acceptance or rejection of partial abolition of tort liability — Exceptions. 

KRS 304.39-070   "Secured person" — Obligor’s rights to recovery.

KRS 304.39-080   Security covering motor vehicle.  

KRS 304.39-083   Binder cancellation — Notification to Department of Vehicle Regulation.

KRS 304.39-085   Notification by insurance company to Department of Vehicle Regulation of persons insured whose policy was terminated — Exception.

KRS 304.39-087   Definition — Submission of vehicle identification numbers and name of policyholders to Department of Vehicle Regulation — Limitation of liability.

KRS 304.39-090   Required security.

KRS 304.39-110   Required minimum tort liability insurance.

KRS 304.39-115   Limitation on claim of loss of use of motor vehicle.

KRS 304.39-117 Motor vehicle insurance card to be in paper or electronic format — Presentation of electronic insurance card to peace officer.  June 25, 2013 

KRS 304.39-120   Calculation of net loss.

KRS 304.39-130 Basic weekly limit on benefits for certain losses.

KRS 304.39-140 Optional additional benefits.

KRS 304.39-150 Approval of terms and forms.   

KRS 304.39-160 Assigned claims.

KRS 304.39-170 Assigned claims bureau and plan.    

KRS 304.39-180 Time for presenting claims under assigned claims plan.  

KRS 304.39-190 Converted motor vehicles.

KRS 304.39-200 Intentional injuries.

KRS 304.39-210 Obligor’s duty to respond to claims.

KRS 304.39-220 Fees of claimant’s attorney.

KRS 304.39-230 Limitations of actions.

KRS 304.39-.240  Repealed, 1998

KRS 304.39-241 Insured’s direction of payment of benefits among elements of loss — Direction of payment to reimburse for medical expenses already paid.  

KRS 304.39-245 Reparation obligor’s request for or negotiation of reduction or modification of charges.

KRS 304.39-250 Deduction and set-off.

KRS 304.39-260 Exemption of benefits.

KRS 304.39-270 Mental or physical examinations.

KRS 304.39-280 Disclosure of facts about injured person.

KRS 304.39-290 Kentucky Insurance Arbitration Association — Creation, membership – powers — duties.   

KRS 304.39-300 Rules.    

KRS 304.39-310 Certificate of coverage — Rights and obligations of owner or registrant.

KRS 304.39-320 Underinsured motorist coverage — Effect of settlement of claims.

KRS 304.39-330 Mandatory rate reduction.   

KRS 304.39-340 Unconstitutionality — Invalidity — Severability.

KRS 304.39-350 – Repealed 1998



Updated 02/11/2014 (2013) GB

 

 

 
KRS 304.39-010 Policy and purpose.

The toll of about 20,000,000 motor vehicle accidents nationally and comparable experience in Kentucky upon the interests of victims, the public, policyholders and others require that improvements in the reparations provided for herein be adopted to effect the following purposes:

(1) To require owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles;

(2) To provide prompt payment to victims of motor vehicle accidents without regard to whose negligence caused the accident in order to eliminate the inequities which fault-determination has created;

(3) To encourage prompt medical treatment and rehabilitation of the motor vehicle accident victim by providing for prompt payment of needed medical care and rehabilitation;

(4) To permit more liberal wage loss and medical benefits by allowing claims for intangible loss only when their determination is reasonable and appropriate;

(5) To reduce the need to resort to bargaining and litigation through a system which can pay victims of motor vehicle accidents without the delay, expense, aggravation, inconvenience, inequities and uncertainties of the liability system;

(6) To help guarantee the continued availability of motor vehicle insurance at reasonable prices by a more efficient, economical and equitable system of motor vehicle accident reparations;

(7) To create an insurance system which can more adequately be regulated; and

(8) To correct the inadequacies of the present reparation system, recognizing that it was devised and our present Constitution adopted prior to the development of the internal combustion motor vehicle.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 1, effective July 1, 1975.

 

ANNOTATIONS FOR THIS STATUTE:

 

State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick (Ky., 2013) 2011-SC-000266-DG

September 26, 2013

 
Summaries: Source: Justia


Plaintiff was a Pennsylvania resident who was injured in Kentucky. Plaintiff’s daughter, with whom Plaintiff resided, was driving the vehicle involved in the accident. Plaintiff brought suit against her insurance carrier, State Farm Mutual Automobile Insurance Company, for underinsured motorist (UIM) coverage under a policy issued in Pennsylvania and covering a vehicle that Plaintiff registered and used exclusively in Pennsylvania. The trial court and court of appeals concluded that Pennsylvania law governed the dispute between Plaintiff and State Farm, but the two courts reached different results. The trial court concluded that Plaintiff was not entitled to UIM coverage because her policy disallowed coverage when she was injured in an underinsured vehicle owned or regularly used by a "resident relative." The court of appeals found Kentucky public policy would prohibit enforcement of the policy provision and concluded Plaintiff was entitled to UIM coverage despite the plain language of her policy. The Supreme Court reversed, holding (1) Pennsylvania law applied to this dispute; and (2) there was no prohibition on the type of UIM exclusion at issue in this case.

 
 

The "public policy" Hodgkiss-Warrick would have us apply does not meet this standard. Indeed, although Hodgkiss-Warrick refers broadly to our Motor Vehicle Reparations Act (MVRA), KRS 304.39—010  et. seq., as somehow implying the "policies" upon which she relies, neither she nor the Court of Appeals panel has identified any specific provision of the MVRA as forbidding the sort of exclusion from underinsured motor vehicle coverage at issue here. In fact, the plain language of the MVRA and our case law precedent are to the contrary.

While the MVRA mandates that Kentucky motorists have minimum liability coverage, KRS 304.39-100 and .39-110, the MVRA unequivocally provides that underinsured motorist coverage is optional. KRS 304.39-320, the section of the MVRA addressing underinsured motorist (UIM) coverage, states in pertinent part as follows:

Every insurer shall make available upon request to its insureds underinsured motorist coverage, whereby subject to the terms and conditions of such coverage not inconsistent with this section the insurance company agrees to pay its own insured for such uncompensated damages as he may recover on account of injury due to a motor vehicle accident because the judgment recovered against the owner of the other vehicle exceeds the liability policy limits thereon, to the extent of the underinsurance policy limits on the vehicle of the party recovering. KRS 304.39-320(2). Even assuming, doubtful as the assumption may be, that this subsection was intended to apply to insureds with no connection to Kentucky, it is clear that while underinsured motorist coverage must be made available if requested, such coverage is optional in Kentucky and may be waived by the insured. The coverage that must be made available, moreover, may be limited by terms and conditions not inconsistent with the remainder of KRS 304.39-320.Thus, while the statute serves the remedial purpose of protecting auto-accident victims from underinsured motorists who cannot adequately compensate them for’their injuries, that purpose has not been raised to the level of a public policy overriding other purposes of the MVRA, such as guaranteeing the continued availability of affordable motor vehicle insurance, or overriding all other considerations of contract construction. KRS 304.39-010.

 

Samons v. Ky. Farm Bureau Mut. Ins. Co. (Ky., 2013)  2011-SC-000414-DG May 23, 2013

 Kenneth Crum, while riding horseback along a narrow and winding stretch of mountain road in Floyd County, Kentucky, was struck and severely injured by a vehicle driven by Raymond K. Ousley. At the time, Ousley was test-driving the vehicle, a disused, uninsured Ford Escort titled to Rhonda Ward. Crum sued Ousley for personal injuries and later joined Ousley’s auto liability insurer, Kentucky Farm Bureau, for no-fault benefits. Kentucky Farm Bureau settled Crum’s liability claim against Ousley, paying its policy limits of $25,000. The circuit court entered a final order declaring coverage for Crum, ordering Kentucky Farm Bureau also to pay him the no-fault benefits. The Court of Appeals reversed, holding that Kentucky law did not allow Crum to recover and Ousley’s policy excluded Crum.

In 1974, the General Assembly brought about sweeping changes in the realm of automobile insurance with its enactment of the Kentucky Motor Vehicle Reparations Act, based largely on the Uniform Motor Vehicle Accident Reparations Act (UMVARA). 4 In doing so, the General Assembly transformed Kentucky into a no-fault state. This transformation reflected a policy "for prompt and liberal recovery to accident victims without regard to fault."  The implementation of this policy was performed primarily through KRS 304.39-030, basic reparation benefits; KRS 304.39-060, limitation of tort rights; and KRS 304.39-090, required insurance coverage.

4. See Kentucky Revised Statutes (KRS) 304.39-010 to 304.39-350.  

 

[U] Dillard v. Commonwealth (Ky. App., 2013) 2011-CA-001917-DG May 31, 2013

We disagree with Dillard’s contention that her crime lacks a victim. Kentucky adopted the MVRA to address the toll of motor vehicle accidents on victims, the public, policyholders and others. KRS 304.39-010. The MVRA’s enumerated purposes include requiring vehicle owners to obtain insurance that would cover legal liability for vehicles and reducing the need for victims to pursue recovery through tort litigation. KRS 304.39-010(1) (5).  

The Kentucky Supreme Court has indicated that the MVRA is remedial legislation to be liberally interpreted to accomplish its broad public policy goals. Mitchell v. Allstate Ins. Co., 244 S.W.3d 59, 63 (Ky. 2008); Coots v. Allstate Ins. Co., 853 S.W.2d 895, 900 (Ky. 1993). The Court has further explained that the MVRA is intended to create a comprehensive compulsory insurance system requiring owners to obtain security and imposing legal liability for damages arising out of ownership or use of the vehicle. McGrew v. Stone, 998 S.W.2d 5, 6 (Ky. 1999). It is intended to "insure that one who suffers a loss as the result of an automobile accident would have a source and means of recovery." Mitchell, 244 S.W.3d at 63 (quoting Nat’l Ins. Ass’n v. Peach, 926 S.W.2d 859, 861 (Ky.App. 1996)). The MVRA also requires that tort victims receive prompt payment. Progressive Max Ins. Co. v. Nat’l Car Rental Sys., Inc., 329 S.W.3d 320, 323 (Ky. 2011).

        Dillard’s failure to maintain insurance prevented Halk from receiving the benefit of the MVRA’s provisions that were designed to protect motorists who had properly complied with their legal obligations. Under these circumstances, the remedial purposes of the MVRA are best served by allowing Halk to seek compensation through the restitution system, rather than having to pursue recovery in tort litigation.

Whether Halk qualifies as a victim depends on whether the Commonwealth can establish that Halk’s damages are the result of Dillard’s crime. Dillard’s conviction for failure to maintain insurance does not by itself establish liability for the accident. Therefore, restitution may only be ordered if both liability for the accident and the amount of damages is proven by a preponderance of the evidence.

        Dillard’s liability can be established through a proper restitution hearing.

 
Cole v. Fagin (Ky. App., 2013)  NO. 2012-CA-000797-MR   April 19, 2013

Cole eventually filed suit against Fagin and Grange on October 13, 2011, claiming that Fagin was liable to her for negligence and that Grange was contractually liable for providing her with underinsured coverage. Additionally, Cole claimed that Grange had only partially paid a claim that she had made with Grange for Med Pay and BRB benefits under her insurance policy.

Without filing answers, Grange and Fagin moved to dismiss Cole’s claims pursuant to the applicable statutes of limitations described in Kentucky’s no-fault insurance law, i.e., the Motor Vehicle Reparations Act (MVRA), Kentucky Revised Statute (KRS) 304.39-010 et seq. KRS 304.39-230(1), which is the MVRA’s statute of limitations relating to unpaid claims for BRBs, provides:  

Moreover, the only benefits that Cole applied for were BRB benefits, and Grange and Fagin do not contest that Cole’s $3,976.57 in medical expenses could have qualified for reimbursement under Cole’s BRB coverage. In short, the only question in this matter is whether Cole received $3,976.57 from Grange for her medical expenses due to her Med Pay or BRB coverage; the answer to that question is dispositive of whether the statute of limitations expired on Cole’s tort claims.

 

Ky. Farm Bureau Mut. Ins. Co. v. Shelter Mut. Ins. Co., 326 S.W.3d 803 (Ky., 2010) Nov. 18, 2010.

This is an appeal from an opinion of the Court of Appeals reversing the Montgomery Circuit Court, which had imposed primary liability for a motor vehicle accident on the vehicle’s and vehicle owner’s insurer, rather than on the insurer of the permissive driver. Neither policy was for a business or commercial coverage.

After paying the damages, the vehicle’s and vehicle owner’s insurer, Shelter Mutual Insurance Company (Shelter), filed a declaratory judgment action and subsequent motion for summary judgment against Kentucky Farm Bureau Mutual Insurance Company (Farm Bureau), the permissive driver’s insurer, seeking to recover a pro-rata allocation of the damages between it and Farm Bureau. Farm Bureau filed a cross-motion for summary judgment asserting Shelter’s primary liability as the primary insurer of the vehicle and thus, Farm Bureau, with its "excess insurance clause," would be an excess carrier only.

The trial court granted Farm Bureau’s cross-motion for summary judgment, holding Shelter liable for the damages. It did not, however, detail its findings or reasoning in its summary judgment order. The Court of Appeals subsequently reversed, finding—as contended by Shelter—that each of the insurers’ policies contained "mutually repugnant" excess insurance clauses, and thus prorated the damages between the insurers.

Because we find that Shelter, the vehicle’s and vehicle owner’s insurer, was the primary insurer as mandated by the spirit and intent of the Kentucky Motor Vehicle Reparations Act (MVRA), KRS 304.39-010, et seq. , we hold that the Court of Appeals erred when it reversed the Montgomery Circuit Court and prorated the damages. We, therefore, reverse the decision of the Court of Appeals and reinstate the decision of the trial court.

 

Auto Owners Ins. Co. v. Consumers Ins. USA, Inc., 323 S.W.3d 781 (Ky. App., 2010) Oct. 8, 2010

Auto Owners Insurance Company (“Auto Owners”) appeals from the April 30, 2009, judgment of the Hopkins Circuit Court which granted summary judgment to Consumers Insurance USA, Inc. (“Consumers”) in the underlying civil action between the parties. Upon our conclusion that the trial court erred in holding that it lacked personal jurisdiction over Consumers, we reverse and remand.

The underlying circuit court civil action arose from an automobile accident on November 20, 2000, in Hopkins County, Kentucky. Marilyn Stafford, a Kentucky resident, was injured due to the negligence of Sharon Sweatt, a Tennessee resident, who was operating her automobile in Kentucky. As a result of Ms. Stafford’s injuries, her insurer, Auto Owners, paid her $10,000 pursuant to its policy and Kentucky law in basic reparations benefits (“BRB”)/personal injury protection (“PIP”).

On November 19, 2002, Auto Owners filed suit in the Hopkins Circuit Court against Ms. Sweatt, the party at fault, seeking recovery of its payment to Ms. Stafford. Ms. Sweatt moved for summary judgment which was granted. However, the trial court later reversed itself and returned the case to its active docket. On May 18, 2007, Auto Owners amended its complaint to include Ms. Sweatt’s insurer, Consumers, alleging bad faith for Consumers’ failure to reimburse Auto Owners for its payment to Ms. Stafford.

Consumers is domiciled in Tennessee and at the time of the accident, Consumers was not authorized to do business nor doing business in Kentucky.

Auto Owners sought summary judgment against Ms. Sweatt for the sums it had paid its insured, Ms. Stafford. Its motion was granted on February 15, 2008, and judgment was entered in favor of Auto Owners against Ms. Sweatt in the amount of $10,000, plus costs, prejudgment interest, and post-judgment interest. Next, Consumers, Ms. Sweatt’s insurer, sought summary judgment. In that motion, Consumers asserted that it did not conduct business in Kentucky, and further maintained that its policy with Ms. Sweatt did not provide PIP coverage to a Kentucky resident for an accident that occurred in Kentucky. Auto Owners again amended its complaint seeking to enforce its judgment against Ms. Sweatt from her insurer, Consumers. Consumers’ motion for summary judgment was denied and discovery was ordered by the trial court. Consumers then filed a motion to dismiss for lack of personal jurisdiction. On April 30, 2009, the trial court granted summary judgment to Consumers on grounds that the Hopkins Circuit Court lacked jurisdiction. This appeal followed.

Our view in this regard is fortified by the public policy of Kentucky as set forth in KRS 304.39-010. As noted in Bishop v. Allstate, 623 S.W.2d 865 (Ky.1981), enactment of the Motor Vehicle Reparations Act established a system of compulsory insurance for the owners and operators of motor vehicles in Kentucky. The Act established a comprehensive system for the adjustment of automobile tort claims. An essential feature of the system established was prompt payment of basic reparation benefits and the recovery of such sums from the party at fault or his insurer. Upon this public policy, Bishop v. Allstate held that an exclusionary clause in an insurance contract, which reduced it below the legal minimum or eliminated the coverage, rendered the driver uninsured to the extent of the reduction or elimination. Holding that such a reduction or elimination contravened the purpose and policy of the Act, the Court invalidated family or household exclusionary clauses. If Consumers succeeds on its lack of jurisdiction claim, the insured, Ms. Sweatt, will have been an uninsured driver in Kentucky with the result that the public policy of Kentucky will have been entirely frustrated.

Under the foregoing analysis, we are convinced that a Tennessee insurer that writes a liability policy for a Tennessee resident has voluntarily assumed an interstate obligation. We discern no breach of fair play and substantial justice by requiring a non-resident insurer to defend itself and its insured in the courts of Kentucky when the injury-producing accident has occurred on Kentucky highways. As instructed by Cummings, we look “beyond formalistic measures such as physical presence” and look instead to the nature of the contact between the defendant and the forum state. Other courts have recognized that the issuance of an insurance policy is sufficient to subject an issuing company to a foreign jurisdiction in a lawsuit brought by an injured third-party. See, e.g., Payne v. Motorists’ Mutual Insurance Companies, 4 F.3d 452 (6th Cir.1993) (third-party beneficiaries sought recovery under a breach of contract theory; court applied the same three-prong test utilized by Kentucky in Harris ); see also, Rossman v. State Farm Mutual Automobile Insurance Company, 832 F.2d 282 (4th Cir.1987) (court considered the policy territory as outlined in the insurance policy and also applied the standards of “fair play and substantial justice”). If an insurance company wishes to limit the scope of its coverage, and likewise its liability, it may do so by excluding certain geographical areas from its policies. Consumers imposed no such limitation. Accordingly, Consumers subjected itself to the long-arm jurisdiction of Kentucky courts. To hold otherwise would offend due process of law and the public policy of Kentucky. We therefore hold that in this case Consumers is subject to personal jurisdiction in the Commonwealth of Kentucky.

 

Neurodiagnostics v. Kentucky Farm Bureau, 250 S.W.3d 321 (Ky., 2008)

   LDC argues that affording a direct right [250 S.W.3d 328] of action to the medical provider is consistent with the MVRA policy stated in KRS 304.39-010(3) of encouraging prompt medical treatment and rehabilitation of the motor vehicle accident victim by providing for prompt payment of needed medical care and rehabilitation. LDC believes that if medical providers are not entitled to assert claims for payment, there is little motivation for an insurance company to make prompt and proper payments.

        We conclude that a medical provider has no standing under the MVRA to bring a direct action against the reparation obligor/insurer. For this reason, we will not address the additional issue raised by LDC in the State Farm case pertaining to whether its bill and assignment of benefits form constitute reasonable proof under KRS 304.39-210(1) of the fact and amount of loss realized.  
        We have chosen to decide this case under the current provisions of the MVRA. We decline, as did the Court of Appeals, to consider the issue of whether the insurance contracts also prohibited assignments by their terms. Those contracts are not part of the district court record in either case. In both cases, however, the insurers argued that the cases should be dismissed because LDC did not have standing under the MVRA to bring a direct cause of action against them. We agree and affirm on that ground.19

 

Daniel v. Metropolitan Direct Property, No. 2008-CA-002158-MR (Ky. App. 9/11/2009) (Ky. App., 2009)

   Brenson Daniel appeals from a judgment of the Jefferson Circuit Court dismissing his claim for underinsured motorist coverage against Metropolitan Direct Property & Casualty Insurance Company. Because we find that the only named insureds under the Metropolitan policy were his parents, that the policy unambiguously excluded Daniel from coverage under the circumstances of this case, and that Daniel’s exclusion from coverage does not violate public policy, we affirm.

  We hold that the exclusion is valid as a matter of law. Kentucky’s Motor Vehicle Reparations Act (Subtitle 39) (Act) was designed:

        "To require owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles." KRS 304.39-010(1). A more clear and emphatic expression of public policy cannot be imagined.

   This case presents a different scenario in that the owner of the vehicle, Daniel, was insured under his own policy in accordance with KRS 304.39-080(5). Despite this distinction, Daniel’s interpretation of the Metropolitan policy is analogous to Brown’s interpretation of KRS 304.39-320. Both interpretations would allow a motorist, injured while driving his own vehicle, to recover from another person’s separate policy that excludes that motorist from coverage and does not contemplate that motorist as an insured. As in Brown, such a result would circumvent the very purpose of the Act. The public policy behind the Act is to require insurance, and to that end, if underinsured coverage were provided under Daniel’s theory, there would be little, if any, incentive for a relative who owns one or more vehicles, residing with an insured, to insure any of them. To allow Daniel to recover pursuant to his parents’ underinsured coverage through Metropolitan would, in effect, hold that public policy allows every person in Kentucky who owns an automobile to meet their insurance obligation simply by living at a relative’s house, provided that relative has automobile insurance. Such a result would be untenable.

        Throughout his brief, Daniel invokes the "reasonable expectations" doctrine which is only applicable where the policy at issue is ambiguous. Simon v. Continental Ins. Co., 724 S.W.2d 210 (Ky. 1986). As stated above, we find nothing ambiguous in the policy language relevant to this appeal. In addition, where the reasonable expectations doctrine does apply, as we stated in Estate of Swartz v. Metropolitan Property and Casualty Co., 949 S.W.2d 72, 76 (Ky. App. 1997), "[u]nder controlling Kentucky law, the proper area of inquiry is what [the insureds] could reasonably expect in light of what they actually paid for, not what they personally expected or whether those expectations could be ascertained." Here, Daniel could not have reasonably anticipated recovery for a claim against his parents’ Metropolitan policy given that it unambiguously excluded him from coverage, it did not name him as an insured, and he paid nothing to be covered under it.

        The judgment of the Jefferson Circuit Court is affirmed.

 

KY     York v. Kentucky Farm Bureau Mutual Insurance Co., No. 2003-SC-334-DG (Ky. 02/17/2005)

In the instant case, Adrian York was not the owner of the vehicle involved in the accident, and did not even have permission to operate the vehicle. As such, we agree with the Court of Appeals in its holding that the language of KRS 304.39-080(5) regarding liability insurance on non-owned vehicles is merely permissive, as it reads "any other person may provide" liability insurance. Therefore, we agree with the Court of Appeals in our refusal to adopt a higher liability insurance standard than that which is required by KRS 304.39-080(5). See Consolidated American Insurance Co. v. Anderson, 964 S.W.2d 811, 814 (Ky. App. 1997).

 

Mitchell v. Allstate Ins. Co., 244 S.W.3d 59 (Ky., 2008)

     Further, this Court Beacon Insurance Co. of America v. State Farm Mutual Insurance Co., 795 S.W.2d 62 (Ky.1990), held that a named driver exclusion clause violated public policy because it "render[ed] a driver uninsured as to the compulsory statutory minimum limits" as mandated by the MVRA. Id. at 63. Beacon stated that "KRS 304.39-010(1) purposes to require, and KRS 304.39-080(5) does require, security for payment of tort liabilities arising from maintenance or use of a motor vehicle." Id. Hence any exclusion provision was considered invalid because it "render[ed] a motor vehicle owner or operator uninsured and thereby violate[d] the legislatively mandated public policy of compulsory insurance." ……. The initial permission rule thus furthers the General Assembly’s goal of making sure an innocent driver, like Allan, is covered by insurance when given permission by his mother to borrow a car, while the "minor deviation" rule more often than not engenders litigation for this same purpose.

     The initial permission rule is thus more consistent with Kentucky’s interpretation of the MVRA as well as its statutory intent than the "minor deviation" rule. By adopting the initial permission rule, we fulfill the general spirit and intent of KRS § 304.39-030 to provide a victim the right to compensation for his/her injuries. In addition, we believe that the initial permission rule will further the goals of KRS 304.39-010 by speeding up the process of compensating victims because determining the scope of permission granted to the vehicle operator will no longer be as complex, or litigation prone, as it was under the minor deviation rule. Am. Fid. Co. v. N. British & Mercantile Ins. Co., 124 Vt. 271, 204 A.2d 110, 114 (1964) (Shangraw, J., concurring) (opining that the minor deviation rule breeds litigation because it is flexibly applied and offers too many escape hatches). Moreover, such a rule will also remove any incentive on the part of an owner of a borrowed vehicle to unconsciously color his testimony in order to avoid potential personal liability for the lending of a vehicle.

        It is undisputed that Mrs. Taylor allowed Ms. Warner to use the vehicle. This permission made Ms. Warner the initial borrower of the vehicle under the initial permission rule and gave her the authority to allow others to use the vehicle, including Allan. Even if Ms. Warner was expressly prohibited by Mrs. Taylor from allowing Allan to use the vehicle, since Ms. Warner gave Allan permission to use the vehicle, Allan receives coverage through the policy’s omnibus clause. There is no evidence that Allan’s usage of the vehicle rose to the level of conversion or that he intentionally caused the accident to injure himself or others which would eliminate coverage. With the initial permission rule in mind, we therefore do not believe that Appellee was entitled to judgment as a matter of law.

        Thus, we reverse the Opinion of the Court of Appeals and the summary judgment in favor of Appellee, and remand the matter to the Harrison Circuit Court for further proceedings.

 

KY     American Premier Insurance Co. v. McBride, No. 2003-CA-002121-MR (Ky.App. 10/08/2004)

         Because the MVRA is silent regarding the limitations period for a subrogation claim arising out of a motor vehicle accident, American Premier concludes that KRS 413.120(2) applies. In support of this claim, American Premier relies upon Gray v. State Farm Mut. Auto. Ins. Co. The issue before the court in Gray was determining what limitations period applies to a subrogation action brought by an insurance carrier seeking to recoup its payment of basic reparation benefits under the MVRA to its insured for personal injury. The Gray court concluded that because the MVRA was silent regarding the applicable limitations period for a subrogation claim, the five-year limitations period in KRS 413.120(2) applied.

        It is a fundamental maxim of statutory construction that an act is to be read as a whole Reading the MVRA as a whole, it is clear that KRS 304.39-115 is not an integral part of the act. In fact, we believe that it was erroneously codified within the middle of the act. And it has no significance on the construction of the MVRA. Reading the MVRA as a whole, even after the enactment of KRS 304.39-115, we reach the same conclusion that a panel of this court did in Duncan v. Beck prior to that statute’s enactment: the MVRA does not cover claims for property damage. Since the MVRA does not cover property damage claims, any subrogation claim based on property damage arising out of a motor vehicle accidentcannot bebased on the act’s provisions on subrogation. The underlying claim in this case is common law negligence resulting in property damage. American Premier’s subrogation claim is based on the provisions of its insurance contract with Roberson and "the principals [sic] of common law subrogation." KRS 413.120(2) establishes a five-year limitations period for "[a]n action upon a liability created by statute, when no other time is fixed by the statute creating the liability." But American Premier’s claim is based entirely upon common law and contractual law. Unlike Gray, this is not an instance in which the action at issue is "[a]n action upon a liability created by a statute." Therefore, contrary to American Premier’s assertions, KRS 413.120(2) does not apply.

 

Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

       Bartlett did not have insurance on the vehicle he was operating, and there is no indication he qualified as a basic reparation insured under any other policy. Thus, he did not have his own reparation obligor from which to receive benefits. In addition, Bartlett is precluded from bringing a direct tort claim for damages that fit within the definition of "basic reparation benefits." KRS 304.39-060(2)(a). See also Stone v. Montgomery, Ky. App., 618 S.W.2d 595, 597 (1981), wherein this court held that tort liability for such damages is abolished to the extent they do not exceed $10,000, regardless of whether the injured motorist is insured or uninsured.

     Bartlett cannot seek recovery in reliance on KRS 304.39-070(3) without first considering the limitation contained in KRS 304.39-070(2). Further, an established rule of statutory construction mandates that statutes, if possible, be construed so that no part of their provisions are rendered meaningless. See Bob Hook Chevrolet Isuzu, Inc. v. Commonwealth, Ky., 983 S.W.2d 488, 492 (1998). By interpreting the subsections of KRS 304.39-070, as well as KRS 304.39-310, in this fashion, each provision is given effect. In addition, this interpretation is consistent with the plain meaning and unambiguous intent expressed by the legislature in the Act itself. See KRS 304.39010.


KY     Auto Acceptance Corporation v. T.I.G. Insurance Company, 89 S.W.3d 398 (Ky. 11/21/2002)

Our decision in Potts determined that Kentucky’s titling statutes are clear and unambiguous that "the owner of a motor vehicle is the title holder" in the absence of a valid conditional sale. . . . We further emphasized the public policy of this state, as expressed in KRS 304.39010(1), to keep uninsured motorists off Kentucky’s roads.

      The 1994 revision created an exception to the general statutory scheme that makes the title holder the owner of a vehicle for insurance purposes. But a car dealer can only take advantage of the exception by first verifying that the buyer has a valid and current insurance policy that covers the purchased vehicle . This exception is consistent with the important public policy of keeping uninsured vehicles off Kentucky highways, roads, and streets. For the reasons stated above, we hold that Chandler was the owner of the vehicle for insurance purposes and, therefore, reverse the Court of Appeals. Further, we remand this case to the trial court with instructions to vacate its order granting T.I .G .’s motion to vacate or set aside the December 10 order and to reinstate the summary judgment in J .D . Byrider’s favor.

 

KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

    This argument (that Farm Bureau malevolently manipulated the statute of limitations to Lawson’s detriment) overlooks the fact that Farm Bureau is Lawson’s insurer, not Helton’s. Farm Bureau is not Lawson’s adversary in this action, but his coplaintiff. Its claim against Travelers for reimbursement of PIP (BRB) payments is derivativeof Lawson’s tort claim against Helton. If Lawson’s claim is barred by limitations, so, too, is Farm Bureau’s claim against Travelers. State Auto. Mut. Ins. Co. v. Empire Fire & Marine Ins. Co., Ky., 808 S.W.2d 805, 807 (1991) ("[t]he right of the reparation obligor to subrogation is dependent upon the right of the injured person to recover such damage"); cf. Carlson v. McElroy, Ky. App., 584 S.W.2d 754, 756 (1979) ("[s]ubrogation, either legal or conventional, is derivative in nature, and in this case, [the injured party’s insurer’s] claim against the reparations [sic] obligor of the [tortfeasor] reached no greater status than [the injured party’s] claim against the [tortfeasor]"). Thus, it would be to Farm Bureau’s advantage if the last $500 which it paid to or on behalf of Lawson had been BRB or ARB payments which would have tolled the statute of limitations. Farm Bureau not only had no motive to mischaracterize the last $500 of its payments as Med-Pay payments rather than BRB or ARB payments, but logically would have had exactly the opposite motive.

     However, the inescapable fact is that the last $500 of its payments made to or on behalf of Lawson must have been Med-Pay payments, because the contract of insurance specifies that Med-Pay coverage is "excess insurance" over PIP (BRB) coverage, ie., Med-Pay payments are payable only after the PIP payments have been exhausted.

 
 
 
 

KY  McGrew v. Stone, 998 S.W.2d 5 (Ky. 08/26/1999)

       As Appellant notes, the primary purpose of the MVRA is " [t]o require owners . . . of motor vehicles . . . to procure insurance covering . . . legal liability arising out of ownership, operation or use of such motor vehicles." KRS 304.39010. See also Crenshaw v. Weinberg, KY., 805 S.W.2d 129, 131 (1991). By enacting the MVRA, the legislature intended to create a comprehensive compulsory insurance system that requires owners to provide vehicle security covering basic reparation benefits and that imposes legal liability on vehicle owners for damages or injuries arising out of ownership of or use of the vehicle. KRS 304.39010; KFtS 304.39-080(5). It is Appellant’s contention here that when Appellee violated the MVRA and permitted the use of her vehicle without purchasing liability insurance, she chose to be a de facto self-insurer of her car. He contends she should not escape liability for the property damage caused by her car by virtue of the fact that she broke the law, but rather should be held accountable for damages to the same extent as if she had complied with the law.

         Having considered the arguments set forth by Appellee, we reject them and their implications. First, it is clear that KRS 304.39-050(2) is limited by its terms to personal injury and does not encompass property damage. KRS 304.39-050 (1); KFS 304.39-020(2). Second, under Appellee’s construction, one without proper liability insurance would only be liable for the property damage caused by his or her vehicle if she, the owner, were found to have negligently entrusted that vehicle to the driver, whereas one who is properly insured covers the losses of her permittee users regardless of her lack of fault in entrusting the vehicle to another. KRS 304.39010; KRS 304.39-080(5). Therefore, had Appellee obtained the legally required coverage for her vehicle, Appellant would only have been required to prove that Appellee gave the permittee permission to use her vehicle and that the user’s negligence resulted in the damages sought recovered. In sum, we do not believe the legislature, in enacting the MVRA, intended to make it more difficult for an injured party to recover under the circumstances presented in this case than if the law had been obeyed. Indeed, the simplicity of proving only permission to use the vehicle and negligence on the part of the permittee user relieves the injured party of a significant burden that previously existed and corrects one of the inadequacies of the prior system, just as the legislature intended.

      In so holding, we acknowledge that the courts of other states have held otherwise when confronted with this issue. See, e.g., West v. Collins, 251 Kan. 657, 840 P.2d 435, 443 (Kan. 1992) (Kansas Automobile Injury Reparations Act does not automatically impose liability on owner/insured for accident between covered permittee driver and uninsured motorist). However, because those states also differ from Kentucky’s approach to no-fault automobile liability insurance in other respects, and considering the great lengths Kentucky has traveled to simplify coverage and recovery for injured parties, we see no need to delve too deeply into those cases. We simply hold that one who chooses to ignore the requirements of the MVRA is not thereby entitled to place additional roadblocks to recovery in the way of those injured by use of his or her vehicle. The decision of the Court of Appeals is hereby reversed and this matter is remanded to the Jefferson Circuit Court for proceedings in accordance with this opinion.


KY Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.App. 11/07/1997)

     The entire MVRA statutory scheme reflects a zero-sum approach where the injured person’s losses are fully compensated by a combination of reparation benefits, liability insurance and, if necessary, underinsured motorist coverage. The reparation obligor then recovers its payments (BRB’s or ARB’s) from the insurer for the responsible secured party. Under this system, the injured party is fully compensated or "made whole" (if appropriate coverages are in place) but never realizes a net gain from his injuries. If we focus solely on KRS 304.39-060(2)(a) and conclude tort recovery is still available for those items of damage previously paid as ARB’s, this system is skewed. The insurer for the responsible secured party (Allstate in this case) will pay the items once pursuant to the judgment and be asked to do so a second time pursuant to the statutory right of reimbursement accorded the added reparations obligor. This result is inconsistent with the MVRA’s zero-sum system and produces a double payment-double recovery scenario not expressly authorized by the statute. Read in its entirety, the MVRA must be construed as abolishing tort liability to the extent the injured party has received or could receive BRB’s or ARB’s under his or her existing coverage.

     Having concluded that added reparation benefits should be excluded from the award, we turn to Saxe’s contention that State Farm’s failure to intervene or assert its subrogation claim forecloses the trial court’s ability to deduct the amount of added reparation benefits from the award. Saxe did not dispute a deduction for the $10,000 in basic reparation benefits despite State Farm’s failure to intervene or assert a claim for a set-off as to those benefits because his tendered judgment included a corresponding reduction in the jury verdict. This set-off or deduction after judgment approach comports with Kentucky law regarding an obligor’s recovery of basic reparation benefits and is equally applicable to added reparation benefits.

 
    Under Kentucky law, a reparation obligor is not required to intervene pursuant to KRS 411.188in order to preserve its rights. In Ohio Casualty Insurance Company v. Ruschell, Ky., 834 S.W.2d 166, 171 (1992), the Kentucky Supreme Court held that KRS 411.188 does not extend to no-fault coverage in the first instance: But the essential fact in the payment of no-fault benefits is that it is for elements of damages for which tort liability has been "abolished," see discussion of KRS 304.39-070(3). No-fault benefits are payments for items which will not be claimed in a tort action. The no-fault carrier with notice of the tort action may intervene and assert a separate claim, not against the tortfeasor, but against the tortfeasor’s liability insurer, but this is a "piggyback" procedure rather than part of the tort claim.

 

KY Nantz v. Lexington Lincoln Mercury Subaru, 947 S.W.2d 36 (Ky. 06/19/1997)

The real practical effect will merely be that licensed motor vehicle dealers will be required to obtain insurance coverage for motor vehicles they sell until they transfer title by executing the appropriate legal documents in the absence of a conditional sale . . . The purpose of the statute is to require the seller of a motor vehicle to take statutory steps to properly complete the sale and until this is done the seller will be considered the owner for the purposes of liability insurance. The result will be that all the public will be protected from uninsured motorists. That was the original intention of the statute and it must be supported. 864 S.W.2d at 899-900 (emphasis added). Ultimately, Potts correctly concluded that unless a conditional sale is involved, the dealer’s insurance covers a vehicle "until" appropriate legal documents are given to the buyer. Id. Similarly, in Rogers v. Wheeler, Ky., 864 S.W.2d 892, 895 (1993), we asserted:     Whether one pays cash for a vehicle or pays for the vehicle over time, be it one month or six months, the dealer must execute the necessary paperwork and deliver it to the buyer to complete the transfer of title.


KY Motorists Mutual Insurance Co. v. Glass, 996 S.W.2d 437 (Ky. 10/30/1997)

      On the date of this accident, KRS 304.39-320 contained the following offset provision: The insurance company agrees to pay its own insured for such uncompensated damages as he may recover on account of injury due to a motor vehicle accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon, to the extent of the policy limits on the vehicle of the party recovering less the amount paid by the liability insurer of the party recovered against.

      In LaFrange v. United Services Automobile Association, supra, we held that this statutory provision meant exactly what it said, i.e., an insurance company is required to pay under its UIM coverage only to the extent that the UIM coverage exceeds the liability policy limits of the tortfeasor’s insurance policy. In that case, the limits of the injured insured’s UIM coverage were $25,000.00 and the limits of the tortfeasor’s liability coverage were also $25,000.00. "When we offset $25,000 against $25,000, the remainder is zero." Id. at 413.   The offset provision was deleted by a statutory amendment effective July 15, 1988. Ky. Acts 1988, Ch. 180, § 1. Since the amendment was not expressly declared to be retroactive, it does not affect claims arising out of injuries which occurred prior to its effective date. KRS 446.080(3); cf. Koching v. International Armament Corp., Ky., 772 S.W.2d 634 (1989). As also pointed out in LaFrange, supra, the insurance contract could provide broader coverage than required by the statute. However, as noted earlier, the policy defines an underinsured motor vehicle as "a land motor vehicle . . . to which a bodily injury liability . . . policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage."

 

KY  Stevenson v. Anthem Casualty Insurance Group, No. 96-CA-0918-MR (Ky.App. 07/03/1997)

      In this Commonwealth, it is well established that provisions of the Kentucky Motor Vehicle Reparations Act (MVRA) (KRS 304.39010 – 350) are mandatory and incorporated by operation of law into all insurance policies issued by an "insurer authorized to transact or transacting business in this Commonwealth." KRS 304.39-100(2); see also Dairyland Insurance Company v. Assigned Claims Plan, Ky., 666 S.W.2d 746 (1984); Bishop v. Allstate Insurance Company, Ky., 623 S.W.2d 865 (1981); and 43 Am. Jur. 2d § 260 (1982). One such provision, codified in KRS 304.39-140, concerns ARBs coverage and provides in relevant part as follows:

     (1) . . . each reparation obligor of the owner of a vehicle required to be registered in this Commonwealth shall , upon the request of a reparation insured, be required to provide added reparation benefits for economic loss in units of ten thousand dollars ($10,000) per person subject to the lesser of:

        (a) Forty thousand dollars ($40,000) in added reparation benefits; or

        (b) The limit of security provided for liability to any one (1) person in excess of the requirements of KRS 304.39-110(1)(a).       We construe the above statute as mandating that ARBs, if requested, shall be provided in the lesser of (a) the amount of $40,000 or (b) an amount equal to the difference between the insured’s liability coverage and the statutorily mandated liability coverage ($25,000).

    Statutorily, BRBs are designed to envelop both insureds and secured vehicles. We believe such constitutes the statutorily mandated scope of BRBs coverage. KRS 304.39-020(2) defines "BRBs" as "benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance or use of a motor vehicle . . . (emphasis added)." Thus, any loss arising out of the use, et cetera, of a secured vehicle is covered by BRBs. BRBs also cover what are termed "basic reparation insureds," defined by KRS 304.39-020(3). Basic reparation insureds are afforded broad coverage. Such coverage extends to insureds while occupying a secured or other vehicle, or even as a pedestrian.

KY Cross v. Baxter, 713 S.W.2d 478 (Ky.App. 04/11/1986)

     If economic loss (exclusive of medical expenses) exceeds the maximum BRB towhich a claimant is entitled, coordination is impermissible. In this case, Helen’s economic loss in wages alone exceeds the $10,000.00 maximum to which she is entitled. If we were to permit Blue Cross to coordinate its responsibility for medical bills with the payments which Helen has received from the no-fault carrier, it would effectively depreciate her recovery under the no-fault act. This we cannot sanction. It would vitiate the public policy set forth in the Motor Vehicle Reparations Act. KRS 304.39010.

 

KY   Stone v. Montgomery, 618 S.W.2d 595 (Ky.App. 07/10/1981)

       We conclude that the MVRA plainly abolishes a motorist’s liability to the extent that BRB benefits are payable for injuries another motorist may incur. The minimum amount of BRB coverage required under the Act is $10,000.00. Hence, tort liability for BRB injuries is abolished to the extent such injuries do not exceed $10,000.00. Because every motorist is deemed to have consented to the Act’s provisions, this limited abolition of tort liability applies regardless of whether the injured motorist is insured or uninsured.


KY  Ammons v. Winklepleck, 570 S.W.2d 287 (Ky.App. 08/18/1978)

       Because it was not permitted to set off its BRB payments against its BI liabilitycoverage, Indiana claims Winklepleck has been permitted double recovery. According to Indiana, such double recovery is barred by the provisions of the Motor Vehicle Reparations Act (MVRA), KRS 304.39010 et seq. The answer to this argument is simple. Winklepleck has not recovered twice for the same items of damage. The BRB payments were for items of loss or damage not within the BI liability coverage. The MVRA does not require that BRB payments be set-off or credited against BI liability coverage.

 

KY     State Farm Mutual Automobile Insurance Co. v. Rains, 715 S.W.2d 232 (Ky. 08/07/1986)

      The purpose of liability insurance is to indemnify the policy-holder for his liability to third parties. The purpose of no-fault insurance, as represented to the General Assembly and the public, is to displace a portion of the liability insurance system with insurance that would provide prompt and efficient payment for medical expenses and loss of income on a first party basis for persons injured while using a motor vehicle. Its purposes include, in appropriate part, to "permit more liberal wage loss and medical benefits" (KRS 304.39010(4)); "a system which can pay victims of motor vehicle accidents without the delay, expense, aggravation, inconvenience, inequities and uncertainties of the liability system" (KRS 304.39010(5)).

     Thus it makes no sense to interpret the law so as to restrict benefits for these claimants, applying liability insurance law. The key to unlock coverage should be in using a motor vehicle, not in an indefinable causal connection. Rains and Smith suffered injury and death while using a motor vehicle, just as surely as they would have done so in a head-on collision with another car.

     Nevertheless, our Court chooses to utilize as its frame of reference for the key term–"arising out of the operation, maintenance or use of a motor vehicle" (KRS 304.39-020(2))–a restricted definition suitable to the reasonable expectations of a liability insurance policyholder, but unsuitable for the reasonable expectations of a no-fault insured. Whereas the term "arising out of the use of" may suitably imply a causal connection when the issue is whether the insured should be covered by his automobile liability insurance policy for a claim made against him by a third party, the no-fault insured was promised more. He has a right to believe that: (1) the source of his injury will be viewed as accidental so long as it is an unintended consequence from his point of view, and (2) that the coverage provided is for a positional risk rather than requiring causal connection in the traditional tort sense.

       Just recently in Fryman v. Pilot Life Ins. Co., Ky., 704 S.W.2d 205 (1986), we abandoned an earlier, more restricted interpretation of "accident" and "accidental means" within the context of the double-indemnity provision in life insurance contracts, stating:

    "The fundamental flaw with such a rule is that it subjects contract terms toanalysis under tort principles, such as fault and foreseeability." 704 S.W.2d at 206. We held that "a death is accidental absent a showing that the death was a result ofplan, design or intent on the part of the decedent." Id. This should be dispositive of whether the present injuries should be considered accidents–they were from the standpoint of the insureds.

 

KY     Miller v. United States Fidelity & Guaranty Co., 909 S.W.2d 339 (Ky.App. 11/03/1995)
       We have determined that USF & G failed to meet the "good cause" standard of KRS 304.39-270(1). Were we to conclude that it was nevertheless entitled to the independent medical examination by virtue of its policy provision, we would, in effect, impermissibly delegate (indeed, abdicate) to USF & G the legislature’s role in enacting protective legislation. In enacting the MVRA, the legislature clearly struck a balance, taking into account the needs and expectations of both the insured and the obligor. See, KRS 304.39010. As the Kentucky Supreme Court has noted, "the primary purpose of the MVRA is to benefit motor vehicle accident victims by reforming, and in some areas broadening, their ability to make and collect claims." Crenshaw v. Weinberg, Ky., 805 S.W.2d 129 (1991). The statute clearly sets forth the standard by which an insured can be forced to undergo independent medical examination and creates a statutory presumption of reasonableness of medical bills as submitted. Public policy underlying that statute dictates that USF & G may not enforce an overreaching policy provision requiring an independent medical examination "when and as often as the company may reasonably require" in clear derogation of the statutory language.

 


KY     Nationwide Mutual Insurance Company v. State Farm Auto. Insurance Company, 973 S.W.2d 56 (Ky. 05/21/1998)

…… bears the risk of overpayment between the plaintiff’s underinsured motorist carrier and the tortfeasor’s liability carrier, when the plaintiff’s underinsured motorist carrier has substituted payment of a proposed settlement to protect its subrogation rights and a jury awards the plaintiff less than the amount of the proposed settlement?" Nationwide argues that it has been unfairly penalized in making the substitution as required to preserve its subrogation rights, because it had no liability at all in this case, a fact that could not be determined until the litigation of damages was complete. Nationwide’s argument is two-fold: It was not Nationwide who valued this claim at $50,000; rather, it was State Farm who made that determination, thus forcing Nationwide to advance the funds to preserve its contractual right of subrogation. To deny Nationwide the recovery of the money advanced is to punish Nationwide for exercising its right pursuant to contract. To deny the right to seek subrogation when no substitution is made is also to deny Nationwide its right to litigate whether UIM benefits are due at all. The basis for requiring the substitution of payment is explained in Coots v. Allstate Ins. Co., Ky., 853 S.W.2d 895, 901 (1993), where it is noted that: The subrogation right cannot be absolute because in some instances it is inimical to the right of the UIM insured to settle with the tortfeasor and his liability insurer for the policy limits. This is so because, before making such payment of the policy limits the tortfeasor’s insurer will routinely demand, as was done in the present cases, full release and indemnification against future claims against the tortfeasor by the UIM carrier. Indeed the liability carrier’s obligation to its own insured to defend in good faith requires that it extract such a release rather than leave its own insured unprotected. . . . . . . . If UIM coverage is to accomplish its remedial purpose as intended by the MVRA, the UIM carrier’s contractual subrogation right must not obstruct the UIM insured’s right to settle for the policy limits even if it means releasing subrogation.

 

 KY     Manies v. Croan, 977 S.W.2d 22 (Ky.App. 02/27/1998) 

        The MVRA (KRS 304.39010–304.39-350) is an attempt to improve the reparation system for motor vehicle accident victims. Its key features include compulsory insurance coverage, no-fault claims settlement, and a limited waiver of the right to seek tort damages. Fann v. McGuffy, Ky., 534 S.W.2d 770 (1975). In KRS 304.39-020(7), a definition section of the MVRA, the term "motor vehicle" is defined as:

      "any vehicle which transports persons or property upon the public highways of the Commonwealth, propelled by other than muscular power except road rollers, road graders, farm tractors, vehicles on which power shovels are mounted, such other construction equipment customarily used only on the site of construction and which is not practical for the transportation of persons or property upon the highways, such vehicles as travel exclusively upon rails and such vehicles as are propelled by electrical power obtained from overhead wires while being operated within any municipality or where said vehicles do not travel more than five (5) miles beyond the said limits of any municipality. Motor vehicles shall not mean moped as defined in this section."     

      Manies argues that this list of exceptions implies a legislative intent to include within the definition all those types of motor vehicle, such as ATVs, not expressly excluded. We disagree.


KY     Estes v. Commonwealth of Kentucky, 952 S.W.2d 701 (Ky. 10/02/1997)

DISSENT: In 1994 the General Assembly amended KRS 304.99-060 and provided criminal penalties for "the owner or operator of any vehicle who fails to have in full force and effect the security required by Subtitle 39 of this chapter . . . ." The amended version of the penalty statute is entirely consistent with KRS 304.39010(1) which declares as a statutory purpose "To require owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance . . . ." There could be no rational reason for the General Assembly to have so amended KRS 304.99-060 adding operators of motor vehicles to the penalty provision, but an intent to impose criminal penalties upon operators as well as owners of uninsured motor vehicles. The failure of the General Assembly to have corrected KRS 304.39-080(5) to achieve consistency with its other amendment can only be explained by inadvertence.


KY     Jackson v. State Automobile Mutual Insurance Co., 837 S.W.2d 496 (Ky. 09/24/1992)

      The Motor Vehicle Reparations Act, KRS 304.39010, et. seq., became effective on July 1, 1975, and has as one of its stated purposes:

     "To provide prompt payment to victims of motor vehicle accidents without regard to whose negligence caused the accident in order to eliminate the inequities which fault-determination has created." KRS 304.39-010(2).

       As a part of the Act, tort liability was abolished for damages to the extent that basic reparation benefits were payable therefore (KRS 304.39-060), unless the provisions of the Act had been rejected (KRS 304.39-060(4)). As a result of the implied acceptance of the Act by this infant’s father, no rejection having been executed, the right of the infant to bring an action for recovery of those items designated as basic reparation benefits was destroyed and with it was destroyed KRS 413.170(1), a saving statute which protects persons under legal disabilities. Thus, as a result of the Motor Vehicle Reparations Act, rights this child would have had were taken from him and with those rights the protection of the saving statute was also taken. In their place, the child was provided a right to basic reparation benefits with the millstone of a strict one-year period of limitation attached to it. When the Motor Vehicle Reparations Act is applied to the facts of this case, its stated policy of prompt payment to victims and elimination of inequities is tragically defeated and the result morally reprehensible.

 

KY     Travelers Insurance Co. v. Bowling, 806 S.W.2d 40 (Ky.App. 04/05/1991)

         We believe that the purpose of the no-fault legislation was to require all owners and registrants of motor vehicles to provide insurance, including basic reparation benefits, unless specifically rejected. KRS 304.39010.

     We would certainly rule this way in a situation where the owner or registrant made no effort to buy the required insurance or let the insurance lapse for nonpayment. Here, the Bowlings made an effort to buy the insurance, but they failed to actually acquire it. We would reach a different result if a vehicle owner actually obtained a proper insurance policy from a legitimate provider which was unable to pay the claim due to insolvency.

 

KY     Schneider v. Mahan, No. 97-CA-000813-MR (Ky.App. 08/07/1998)

      It is our opinion that where the insured has not been made whole for elements of economic loss other than medical expenses, a health insurer would not be entitled to enforce its contractual rights of subrogation. See Blue Cross & Blue Shield of Kentucky, Inc. v. Baxter, Ky. App., 713 S.W.2d 478 (1986). Although Baxter concerned a "coordination of benefits" clause, its reasoning is no less applicable vis-a-vis an insurer’s subrogation rights. "It is clear to us that in enacting no-fault legislation, the intent was to provide a remedy to automobile accident victims that could not be impinged upon by any means whatsoever. This was the victim’s reward for sacrificing traditional tort rights." Id. at 480. More recently in Wine v. Globe American Casualty Co., Ky., 917 S.W.2d 558, 562-563 (1996), our Supreme Court was emphatic that an insurer’s right to subrogation does not arise until the injured victim has been made whole.

     The trial court’s judgment allowing FHP to enforce its subrogation clause does no violence to these principles. Schneider received all the reparation benefits to which she was entitled for non-medical loss. Under those circumstances, we find nothing in KRS 304.39 et seq. evincing an intent that an injured party who also has health insurance is entitled to keep the proceeds of his or her basic reparation benefits where they overlap other coverage.

 
 

KY     Omni Insurance Co. v. Coates, 939 S.W.2d 879 (Ky.App. 02/28/1997)

In holding that the exclusion was valid, the Court noted that under KRS 304.39010(1), the purpose of Kentucky’s Motor Vehicle Reparations Act was to require owners and operators of vehicles within the Commonwealth to procure insurance which would cover BRB as well as legal liability arising out of the use of a vehicle. Brown, 875 S.W.2d at 104. The Court further noted that the public policy set forth in KRS 304.39010(1) was effectuated by KRS 304.39-080(5), which requires vehicle owners and operators to procure security for payment of any BRB or tort liability resulting from the operation of a vehicle by procuring a policy of insurance or qualifying as a self-insurer. Id.

 

KY Beacon Insurance Co. v. State Farm Mutual Insurance Co., 795 S.W.2d 62 (Ky. 09/06/1990)

       In seeking reversal, counsel for appellants at oral argument stressed four points: (1) the case of Bishop v. Allstate Insurance Company, supra, is inapplicable to the case at bar; (2) the holding of the Court of Appeals interferes with the parties’ right to contract freely; (3) the recently enacted House Bill 98 has established a new public policy for the state; and (4) the opinion in United States Fire Insurance Company v. Kentucky Truck Sales, Inc., 786 F.2d 736 (6th Cir. 1986), is dispositive of this case.

    We disagree with all four contentions. While the Bishop case was slightly different from the instant case, it presented a clear and accurate enunciation of the express legislative intent set forth in the MVRA (KRS Chapter 304, Subtitle 39), and its rationale is equally appropriate here. And while the right to contract is one of the most basic rights possessed by the citizenry, this right must however yield to the public policy of the state as declared by our General Assembly. To permit an exclusion such as that claimed by these appellants, in light of the statute as it existed at the time of contracting, at the time of the accident and at the time of trial, would tend to emasculate the act and defeat its express purpose. KRS 304.39010(1) purposes to require, and KRS 304.39-080(5) does require, security for payment of tort liabilities arising from maintenance or use of a motor vehicle. KRS 304.39-110 establishes the minimum compulsory security. KRS 304.39-150 subjects all policies and terms to approval by the Commissioner of Insurance, who "shall approve only terms and conditions consistent with the purposes of this subtitle and fair and equitable to all persons whose interests may be affected."

       In view of these statutes, as we concluded in Bishop: "Such an exclusion provision is invalid because it effectively renders a motor vehicle owner or operator uninsured and thereby violates the legislatively mandated public policy ofcompulsory insurance." 623 S.W.2d at 865.

 
 

KY     Kentucky Farm Bureau Mutual Insurance Co. v. Hall, 807 S.W.2d 954 (Ky.App. 01/18/1991)

        The statutes allow for basic reparation benefits due to accidental injury arising out of the use or maintenance of a motor vehicle. Although the required causal connection between the injury and the use of the vehicle should be more than incidental, the requirement is satisfied if the injury is reasonably identifiable with the normal use or maintenance of a vehicle and is reasonably foreseeable. This should certainly be true in unintentional and negligent situations, and even in intentional situations where the perpetrator is acting against the passing vehicle rather than directing the harm to a specific driver or passenger in a vehicle, such as in the shooting of Smith.


KY  Milby v. Wright, 952 S.W.2d 202 (Ky. 09/04/1997)

We agree with the Court of Appeals that the claim for payment is subject to the limitation set forth in KRS 304.39-230 (1). To hold otherwise would allow the potential plaintiff to hold the alleged tortfeasor hostage by the leisured submission of medical claims, thereby forestalling the running of the statute of limitations. One of the purposes of the Motor Vehicle Reparations Act (MVRA) was to simplify and speed up the process by which medical bills and other losses resulting from vehicular accidents are reimbursed, without resorting to litigation, thereby providing certainty at a time of need for those involved. Crenshaw v. Weinberg, Ky., 805 S.W.2d 129, 132 (1991); KRS 304.39010(5). Analogous to the rights bestowed upon the injured person is the right of the other party to, eventually and within a time period that can be easily determined, be free of the possibility of becoming the target of litigation. It is that right that the time limitations of the MVRA are designed to provide.

 

KY  Brown v. Atlanta Casualty Co., 875 S.W.2d 103 (Ky.App. 02/25/1994)

Appellant’s interpretation of KRS 304.39-020(3)(b) together with KRS 304.39-050(2) would allow uninsured motorists driving their own uninsured vehicles to recover BRBs and thereby circumvent the very purpose of the Act. The public policy behind the Act is to require insurance, and to that end uninsured motorists are not given the same protection as insured motorists. Clearly, the Act does not contemplate recovery of basic reparations benefits for uninsured motorists such as Brown. KRS 304.39-160(4) provides as follows:

      (4) A person who sustains injury while occupying a motor vehicle owned by such person and with respect to which security is required by the provisions on security and who fails to have such security in effect at the time of an accident in this Commonwealth causing such injury, shall not obtain through the assigned claims plan basic reparation benefits, including benefits otherwise due him as a survivor, unless such person’s failure to have such security in effect at the time of such accident was solely occasioned by the failure of the reparation obligor of such person to provide the basic reparation benefits required by this subtitle. (emphasis added).

 

KY  Coots v. Allstate Insurance Co., 853 S.W.2d 895 (Ky. 03/18/1993)

All three of these coverages are mandatory in the sense that the automobile insurer is required by statute to provide such coverage: the underinsured motorist coverage if the insured requests it, the no-fault coverage unless the insured rejects it, and minimum limits tort liability coverage with no option. The carrier has no option whether it wishes to offer these coverages if it sells policies in Kentucky. All of the coverage provided for in the MVRA is so provided to carry out the "policy and purpose" of the statute as specified in KRS 304.39010, which include: in subparagraph (3), "to encourage prompt medical treatment and rehabilitation of the motor vehicle accident victim by providing for prompt payment of needed medical care and rehabilitation"; and in subparagraph (5), "to reduce the need to resort to bargaining and litigation through a system which can pay victims of motor vehicle accidents without the delay, expense, aggravation, inconvenience, inequities and uncertainties of the liability system."

 
 

KRS 304.39-020 Definitions for subtitle.

As used in this subtitle:

(1) "Added reparation benefits" mean benefits provided by optional added reparation insurance.

(2) "Basic reparation benefits" mean benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle, subject, where applicable, to the limits, deductibles, exclusions, disqualifications, and other conditions provided in this subtitle. The maximum amount of basic reparation benefits payable for all economic loss resulting from injury to any one (1) person as the result of one (1) accident shall be ten thousand dollars ($10,000), regardless of the number of persons entitled to such benefits or the number of providers of security obligated to pay such benefits. Basic reparation benefits consist of one (1) or more of the elements defined as "loss."

(3) "Basic reparation insured" means:

(a) A person identified by name as an insured in a contract of basic reparation insurance complying with this subtitle; and

(b) While residing in the same household with a named insured, the following persons not identified by name as an insured in any other contract of basic reparation insurance complying with this subtitle: a spouse or other relative of a named insured; and a minor in the custody of a named insured or of a relative residing in the same household with the named insured if he usually makes his home in the same family unit, even though he temporarily lives elsewhere.

(4) "Injury" and "injury to person" mean bodily harm, sickness, disease, or death.

(5) "Loss" means accrued economic loss consisting only of medical expense, work loss, replacement services loss, and, if injury causes death, survivor’s economic loss and survivor’s replacement services loss. Noneconomic detriment is not loss. However, economic loss is loss although caused by pain and suffering or physical impairment.

(a) "Medical expense" means reasonable charges incurred for reasonably needed products, services, and accommodations, including those for medical care, physical rehabilitation, rehabilitative occupational training, licensed ambulance services, and other remedial treatment and care. "Medical expense" may include non-medical remedial treatment rendered in accordance with a recognized religious method of healing. The term includes a total charge not in excess of one thousand dollars ($1,000) per person for expenses in any way related to funeral, cremation, and burial. It does not include that portion o f a charge for a room in a hospital, clinic, convalescent or nursing home, or any other institution engaged in providing nursing care and related services, in excess of a reasonable and customary charge for semi-private accommodations, unless intensive care is medically required. Medical expense shall include all healing arts professions licensed by the Commonwealth of Kentucky. There shall be a presumption that any medical bill submitted is reasonable.

(b) "Work loss" means loss of income from work the injured person would probably have performed if he had not been injured, and expenses reasonably incurred by him in obtaining services in lieu of those he would have performed for income, reduced by any income from substitute work actually performed by him.

(c) "Replacement services loss" means expenses reasonably incurred in obtaining ordinary and necessary services in lieu of those the injured person would have performed, not for income but for the benefit of himself or his family, if he had not been injured.

(d) "Survivor’s economic loss" means loss after decedent’s death of contributions of things of economic value to his survivors, not including services they would have received from the decedent if he had not suffered the fatal injury, less expenses of the survivors avoided by reason of decedent’s death.

(e) "Survivor’s replacement services loss" means expenses reasonably incurred by survivors after decedent’s death in obtaining ordinary and necessary services in lieu of those the decedent would have performed for their benefit if he had not suffered the fatal injury, less expenses of the survivors avoided by reason of the decedent’s death and not subtracted in calculating survivor’s economic loss.

(6) "Use of a motor vehicle" means any utilization of the motor vehicle as a vehicle including occupying, entering into, and alighting from it. It does not include:

(a) Conduct within the course of a business of repairing, servicing, or otherwise maintaining motor vehicles unless the conduct occurs off the business premises; or 

(b) Conduct in the course of loading and unloading the vehicle unless the conduct occurs while occupying, entering into, or alighting from it.

(7) "Motor vehicle" means any vehicle which transports persons or property upon the public highways of the Commonwealth, propelled by other than muscular power except road rollers, road graders, farm tractors, vehicles on which power shovels are mounted, such other construction equipment customarily used only on the site of construction and which is not practical for the transportation of persons or property upon the highways, such vehicles as travel exclusively upon rails, and such vehicles as are propelled by electrical power obtained from overhead wires while being operated within any municipality or where said vehicles do not travel more than five (5) miles beyond the said limits of any municipality. Motor vehicle shall not mean moped as defined in this section.

(8) "Moped" means either a motorized bicycle whose frame design may include one (1) or more horizontal crossbars supporting a fuel tank so long as it also has pedals, or a motorized bicycle with a step-through type frame which may or may not have pedals rated no more than two (2) brake horsepower, a cylinder capacity not exceeding fifty (50) cubic centimeters, an automatic transmission not requiring clutching or shifting by the operator after the drive system is engaged, and capable of a maximum speed of not more than thirty (30) miles per hour.

(9) "Public roadway" means a way open to the use of the public for purposes of motor vehicle travel.

(10) "Net loss" means loss less benefits or advantages, from sources other than basic and added reparation insurance, required to be subtracted from loss in calculating net loss.

(11) "Noneconomic detriment" means pain, suffering, inconvenience, physical impairment, and other nonpecuniary damages recoverable under the tort law of this Commonwealth. The term does not include punitive or exemplary damages.

(12) "Owner" means a person, other than a lienholder or secured party, who owns or has title to a motor vehicle or is entitled to the use and possession of a motor vehicle subject to a security interest held by another person. The term does not include a lessee under a lease not intended as security.

(13) "Reparation obligor" means an insurer, self-insurer, or obligated government providing basic or added reparation benefits under this subtitle.

(14) "Survivor" means a person identified in KRS 411.130 as one entitled to receive benefits by reason of the death of another person.

(15) A "user" means a person who resides in a household in which any person owns or maintains a motor vehicle.

(16) "Maintaining a motor vehicle" means having legal custody, possession or responsibility for a motor vehicle by one other than an owner or operator.

(17) "Security" means any continuing undertaking complying with this subtitle, for payment of tort liabilities, basic reparation benefits, and all other obligations  imposed by this subtitle.

Effective: July 14, 2000

History: Amended 2000 Ky. Acts ch. 343, sec. 17, effective July 14, 2000. — Amended 1982 Ky. Acts ch. 194, sec. 6, effective July 15, 1982. — Amended 1978 Ky. Acts ch. 215, sec. 1, effective June 17, 1978; and ch. 349, sec. 12, effective June 17, 1978. — Created 1974 Ky. Acts ch. 385, sec. 2, effective July 1, 1975.

 

ANNOTATIONS FOR THIS STATUTE:

 

[U] Dream Furniture, Inc. v. Brow (Ky. App., 2012)   2011-CA-001063-MR  November 9, 2012

On January 28, 2008, Adcock filed the underlying complaint alleging that she was injured by a Dream Furniture employee, later identified as Cooper, when making an appliance delivery to Dream Furniture. Adcock claimed that while assisting Cooper unload her trailer, Cooper dropped a carton containing an electric stove on her which resulted in injury to her head and neck. Dream Furniture denied that an injury occurred on its premises, arguing that if an injury did occur it occurred in Pikeville, Kentucky, another stop on Adcock’s delivery route.

 Next, Appellants argue the trial court erred by not reducing the amount of the jury award to the extent that BRB or WCB were payable to Adcock. We disagree that any credit should be applied for WCB, but agree that the jury award should have been reduced by $10,000 of "payable" BRB.

With respect to the WCB, the record is clear that following a settlement with Adcock, the workers’ compensation insurance carrier assigned its subrogation rights to Adcock. Appellants point to a letter sent by the workers’ compensation insurance carrier dated May 7, 2009, in which a claim representative informed Adcock’s counsel that they had settled the workers’ compensation claim, and would not pursue any third party action to collect. Appellants argue the letter was sent after the statute of limitations had run for any subrogation claims, and thus, is a nullity in regards to assigning any subrogation rights. In doing so, Appellants overlook a prior assignment of subrogation rights, in which the insurance carrier assigned all subrogation rights to Adcock. KRS 342.700(1) permits the employer or carrier to recover benefits paid on behalf of an injured employee from a third party tortfeasor responsible for the damages. Under Kentucky law, if the employer or insurance carrier assigns the right of subrogation, as it did here, and has a right to recover against the third-party tortfeasor, the recovery by the employee does not constitute a double recovery. Weinberg v. Crenshaw, 896 S.W.2d 22, 24 (Ky. App. 1995). Here, Adcock sought nothing more than what her employer or employer’s insurance carrier would have been entitled to recover. Accordingly, the trial court did not err by declining to offset Adcock’s jury award by the workers’ compensation benefits she received in her settlement.

In regards to the BRB in the amount of $10,000, Appellants claim these benefits should offset the jury award. BRB provide compensation "for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle[.]" KRS 304.39-020(2). Up to $10,000 is recoverable for "accrued economic loss consisting only of medical expense, work loss, replacement services loss, and, if injury causes death, survivor’s economic loss and survivor’s replacement services loss." KRS 304.39-020(5). To prevent double recovery, "an injured person can assert a claim [against a third party tortfeasor] only for those damages which exceeded the amounts payable as [BRB]." Bohl v. Consol. Freightways Corp., 777 S.W.2d 613, 615 (Ky. App. 1989) (citation omitted). The injured party is only entitled to the maximum $10,000 allotted for BRB if the accrued medical expense and/or lost wages surpass that amount. Henson v. Fletcher, 957 S.W.2d 281, 282 (Ky. App. 1997).

 
 

[U] Chaney v. Safe Auto Ins. Co. (Ky. App., 2013) NO. 2012-CA-000462-MR  August 2, 2013

As part of the action, Chaney and Rose asserted that an automobile policy had been issued to Chaney, which was in effect on the date of the accident and covered Daniel. They asserted that Safe Auto was liable under the uninsured/underinsured portion of the policy. On September 23, 2011, Safe Auto filed for summary judgment asserting that the vehicle being driven by Isaacs at the time of the accident was not a "motor vehicle" under either Kentucky law or their policy. The trial court agreed and granted Safe Auto’s motion for summary judgment. Chaney and Rose then brought this appeal. KRS 304.39-320(2). Chaney and Rose contend that the definition of "motor vehicle" in the policy with Safe Auto is at odds with the KMVRA definition. KRS 304.39-020(7) provides the following definition:

"Motor vehicle" means any vehicle which transports persons or property upon the public highways of the Commonwealth, propelled by other than muscular power except road rollers, road graders, farm tractors, vehicles on which power shovels are mounted, such other construction equipment customarily used only on the site of construction and which is not practical for the transportation of person or property upon the highways, such vehicles as travel exclusively upon rails, and such vehicles as are propelled by electrical power obtained from overhead wires while being operated within any municipality or where said vehicles do not travel more than five (5) miles beyond the said limits of any municipality. Motor vehicle shall not mean moped as defined in this section.

Chaney and Rose argue that the 65 TMV wheel loader Isaacs was operating is a "motor vehicle" under the above definition. They assert that the definition excludes construction equipment only if: (1) the equipment is used only on the site of construction; and (2) the equipment is not practical for the transportation of person or property upon the highway.

In determining that the vehicle was not a "motor vehicle" under the statute, the trial court found as follows:

The vehicle at issue in this case . . . is a large, heavy-duty piece of machinery that would be at home on a construction site. It weighs nearly 26,000 pounds and has been fitted with a utility fork attachment but may just as easily be fitted with a general purpose bucket or extendable boom. . . . The manufacturer’s manual paints a picture of a rugged machine that can handle any tasks in a harsh, outdoor environment. . . . The loader has many of the trappings of an automobile such as headlamps, tail lamps, a parking brake, side and rearview mirrors, a seatbelt, a cab enclosed with safety glass, AM/FM radio, and air conditioning. . . . Simply because the loader was outfitted with a utility fork does not necessarily make it a forklift for purposes of determining whether it should be excluded from uninsured/underinsured coverage.
It does not appear to this Court that EILC’s loader can be classified as a forklift for purpose of excluding it from Safe Auto’s uninsured/underinsured motorist coverage and the MVRA requirements. However, the question of whether the loader is excluded from the definition of "motor vehicle" of "such other construction equipment customarily used only on the site of construction and which is not practical for the transportation of persons or property upon the highways," KRS 304.39-020(7), would seem to apply to the loader at issue. . . .
Though the loader is clearly construction equipment, nowhere is it explained what makes a vehicle impractical for use on the highways. Per the manufacturer’s specifications, loaders like EILC’s will travel no faster than twenty-five miles per hour. [Citation omitted.] It seems to this Court that those limitations would make it impractical for transporting persons or property on the public highways. KRS 304.39-020(7). The Court of Appeals in O’Keefe said of forklifts that they are "capable of operating on the public highways, [but are] not primarily designed to do so." O’Keefe v. N. Am. Refractories, 78 S.W.3d 760, 762 (Ky. App. 2002). This loader is clearly capable of driving on public roads (and in fact do so). However, since it lacks such critical equipment as a speedometer, it would appear that the manufacturer did not design it for use on the highway. The loader in issue is primarily designed to lift and haul heavy loads short distances at slow speeds on an undeveloped job site, not travel on a public highway. Accordingly, EILC’s loader should be classified as construction equipment, is therefore not a motor vehicle under the MVRA, and is excluded from coverage under Safe Auto’s uninsured/underinsured motorist policy. Opinion at pp 6-7.

We agree with the trial court’s analysis. The vehicle is designed to carry heavy loads for short distances per the manufacturer. Consequently, the vehicle can be operated at only about twenty-five miles per hour. It is not a vehicle to transport passengers nor is it an over-the-road vehicle to haul property. It is a piece of construction equipment which is slow moving and clearly falls within the exceptions to KRS 304.39-020(7).

Chaney and Rose also contend that the trial court should not have granted summary judgment. They argue that the trial court subjectively labeled the vehicle as "construction equipment" and, consequently, impractical for transportation of property or persons upon the roadway. While they point to Isaacs’ testimony that he hauled lumber in the vehicle, it is clear that the trial court did not err in determining that the weight of the evidence was that the vehicle was not meant for transportation of persons or property upon the public roadway. Thus, we affirm the decision of the trial court.

 
 

Medlin v. Progressive Direct Ins. Co. (Ky. App., 2013) 2011-CA-002258-MR

April 5, 2013

KRS 304.39-241 allows for an insured to direct an insurance company how to pay the benefits, but the insurance company is obligated to follow the payment options described in the MVRA. KRS 304.39-020 sets forth the definitions for the MVRA.  

In examining the facts of this case, Medlin was offered three ways in which to collect his PIP benefits. He could have Progressive pay his chiropractor directly, reimburse him for money he spent on medical expenses out of pocket, or issue him a check in an amount equal to his medical bills and have the check include his name and the name of his medical provider. The first two options are included in the MVRA and the third was by agreement between the parties. Medlin declined all three options.

 

[U] McCall v. Zurich Am. Ins. Co. (Ky. App., 2012) 2011-CA-002059-MR   December 21, 2012

STUMBO, JUDGE: Keoliver McCall appeals from an Opinion and Order of the Jefferson Circuit Court holding that he was not using and occupying his employer’s motor vehicle within the meaning of KRS 304.39-020(6)(b) thus rendering him ineligible for Basic Reparation Benefits ("BRB"). McCall argues that he was occupying the vehicle within the statutory framework and that the trial court erred in failing to so rule. We find no error, and accordingly affirm the Opinion and Order on appeal.

On the date at issue, McCall allegedly was injured in two separate incidents. The first injury occurred when McCall was standing near the back of the trailer with his feet on a ramp. He was using a ratchet to tighten a chain, when the chain broke. McCall fell against the trailer "and then rolled to the ground". The second event occurred a few minutes later when McCall was standing on a platform that runs across the front bumper of the tractor portion of the car hauler. The platform was covered with non-skid material and is designed to provide access to the front of the trailer so that the driver can secure the vehicles to the trailer with chains. While again tightening a chain with a ratchet, the chain broke and McCall fell to the ground where he suffered injuries to his neck, back and right shoulder.

McCall sought BRBs pursuant to KRS 304.39-030, and when they were denied he filed the instant action in Jefferson Circuit Court against Active, Zurich American Insurance Company and related entities. Active, et al., defended the action by arguing that McCall was not entitled to relief under KRS Chapter 304 because he was not occupying the vehicle at the time of the accident. Thereafter, McCall moved for Summary Judgment. On August 30, 2011, the Jefferson Circuit Court rendered an Opinion and Order denying the motion. As a basis for the ruling, the court found that McCall was not "occupying, entering into, or alighting from" the vehicle as required by KRS 304.39-020(6) to establish entitlement to BRBs. The court cited Clark v. Young, 692 S.W.2d 285 (Ky. App. 1985), wherein a panel of this Court found that an injury suffered while the plaintiff was standing on a flatbed trailer in the course of securing a load did not qualify as "occupying" the vehicles for purposes of KRS Chapter 304. Based on its application of Clark, the court denied McCall’s motion for Summary Judgment.

KRS 304.39-030(1) provides that, "[i]f the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." The use of a motor vehicle, in the context of loading and unloading a vehicle, is defined in KRS 304.39-020(6)(b) and is as follows:

"Use of a motor vehicle" means any utilization of the motor vehicle as a vehicle including occupying, entering into, and alighting from it. It does not include . . . (b) Conduct in the course of loading and unloading the vehicle unless the conduct occurs while occupying, entering into, or alighting from it.

In rejecting McCall’s contention that he was "occupying" the vehicle, the Jefferson Circuit Court found that "the facts of this case are analogous to those in Clark because McCall was standing on a platform outside the vehicle and that platform was there for the sole purpose of aiding in the loading and unloading of the vehicle." In its Order addressing McCall’s renewed motion, the court determined that McCall’s first accident occurred when he was standing on a ramp and not on the trailer carrier itself.

We find no error in the circuit court’s reasoning, nor its application of KRS Chapter 304 and the case law. Goodin, upon which McCall relies, is distinguished from the instant facts in that the plaintiff therein was inside the vehicle when he fell through a hole in the trailer. Conversely, McCall was not inside the car carrier at the time of either of the accidents in question.

 
 
Buckler v. Mathis (Ky. App., 2012)Rendered: July 22, 2011 2010-CA-000828

The Supreme Court of Kentucky addressed the definition of "medical expense" in Bolin v. Grider, 580 S.W.2d 490 (Ky. 1979), stating that KRS 304.39-020(5)(a) reflects a legislative policy that a medical expense must be reasonable in amount and "reasonably needed as a result of the collision in issue." Bolin, 580 S.W.2d at 491. Furthermore, once a medical bill has been introduced, the burden is on the defendant to go forward with proof to impeach the bill. Id. In Bolin, the defendant attacked whether the medical expense was reasonably needed due to the collision, not whether the amount of the charge was reasonable. The Court stated that a proper question on this issue would read:

Are you satisfied from the evidence that Grider incurred charges in excess of $1,000.00 for reasonably needed?

In this case, the trial court included the following interrogatory as Question No. 1:

Are you satisfied from the evidence that Plaintiff, Donald Buckler, sustained injuries and charges in excess of $1,000 for reasonably needed products and services for medical care as a direct result of the motor vehicle accident of September 1, 2005?

Buckler contends that because the medical expenses he submitted totaled $2901.90, far in excess of the $1,000 threshold, and Mathis failed to call any witnesses to question the relationship between the bills and the collision, the trial court should not have included this interrogatory in the instructions.

Mathis, in turn, contends that Buckler was unable to establish a causal connection between all of the submitted medical bills and the motor vehicle accident. And while she did not call separate witnesses on this issue, Mathis states that she was able to establish this lack through the testimony of both Buckler and Dr. Jacob. Mathis points out that the medical records showed that Buckler had a prior injury to his right index finger, one that he did not report to his treating physicians, and that he was referred to Dr. Jacob for treatment related to Raynaud’s disease in his left hand, which was unrelated to the motor vehicle accident. We agree with Mathis that, based upon Buckler’s testimony as well as the medical records and proof related to prior or unrelated injuries or conditions, the trial court did not commit any error in including the threshold question in the jury instructions regarding whether the medical expenses were reasonably needed as a result of the motor vehicle accident.

 
Interlock Indus., Inc. v. Rawlings, 358 S.W.3d 925 (Ky., 2012) – Oct. 27, 2011.Rehearing Denied Feb. 23, 2012

Rawlings filed his action some 13 months after the incident. The trial court emphasized the similarity of these facts to the case of State Farm Mutual Automobile Insurance Company v. Hudson, 775 S.W.2d 922 (Ky.1989), and granted the defendants summary judgment, dismissing the action based on the one-year statute of limitations for personal injury claims in KRS 413.140(1)(a). The trial court held that the two-year statute of limitations in the MVRA did not apply because KRS 304.39–020(6)(b) expressly excluded from the definition of “use of a motor vehicle” the “[c]onduct in the course of loading and unloading the vehicle unless the conduct occurs while occupying, entering into, or alighting from it.”

The Court of Appeals reversed, applying the two-year statute of limitations, and remanded for trial, agreeing with Rawlings that rolling removed straps is not part of unloading, but rather is part of the process of preparing the tractor-trailer for a return to the roadway. This Court then granted discretionary review.

The language of the MVRA’s two-year statute of limitations, found at KRS 304.39–230(6), is quite broad: “An action for tort liability not abolished by KRS 304.39–060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.” However, in interpreting KRS 304.39–230(6), this Court has consistently held that “the literal language of the MVRA extends the statute of limitations to two years for actions ‘with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance or use of a motor vehicle,’ when not ‘abolished’ by the Act….” Bailey, 662 S.W.2d at 833 (quoting KRS 304.39–060(2)(a)) . Pursuant to Hudson and the plain language of KRS 304.39–020(6)(b), engaging in activity integral to the unloading of a truck does not constitute “use of a motor vehicle.” Hudson, 775 S.W.2d at 923. Thus, the unloading of a vehicle does not fall under the purview of the MVRA, and is not subject to the two-year statute of limitations. This analysis is not affected by the fact that Rawlings received BRB, because an action must first fall under the MVRA before the statute of limitations based on BRB payments can apply.

We now turn to the question of whether Rawlings was in fact unloading his truck at the time of the accident. The Court of Appeals held that “Rawlings’s actions were not integral to Interlock’s unloading of the tractor-trailer and, thus, Rawlings’s actions do not constitute unloading within the meaning of KRS 304.39–020(6)….” Rawlings argues that his action in rolling the straps was not integral to the unloading process, but rather was an action in preparation for his return to the road. We disagree. This Court opines that Rawlings’ activity, like that in Hudson, in removing the straps and chains from the load and rolling the straps was a continuous, integral part of the unloading process.

 

Kentucky Farm Bureau Mutual Insurance Company v. Young, No. 2008-SC-000333-DG (Ky. 5/20/2010) (Ky., 2010)

     The sole issue in this case is whether an inaccurate Coots settlement notice relieved Appellant, Kentucky Farm Bureau Mutual Insurance Company from its obligation to pay underinsured motorists insurance (UIM) benefits to policyholders Appellees, James O. Young and Patricia Young. Farm Bureau argues that the Youngs’ notice of their tentative settlement with the tortfeasor, Andrew Winger, failed to comply with the notice requirement of KRS 304.39-320(3) and Coots v. Allstate Insurance Company, 853 S.W.2d 895 (Ky. 1993) by providing an inaccurate settlement amount, and thus prevented it from protecting its subrogation rights against Winger. The Union Circuit Court issued summary judgment in favor of Farm Bureau, finding that the Youngs’ notice failed to satisfy KRS 304.39-320(3) because of the inaccurate information regarding the final settlement. The Court of Appeals reversed, reasoning that since the Youngs’ notice stated that a "tentative settlement" had been reached with Winger, Farm Bureau had sufficient notice to preserve its subrogation rights, despite the incorrect information. We now reverse the Court of Appeals, and reinstate summary judgment in favor of Farm Bureau because we find that the notice failed to comply with KRS 304.39-320. On May 1, 2003, the Youngs’ car was struck by a tractor-trailer truck driven by Winger causing injuries to Mr. Young and his two passengers, James Buckman and Chris Wolf. It is undisputed by the parties that Winger was at fault for the accident. Winger maintained a $1,000,000.00 liability insurance policy through Sagamore Insurance Company. Young had seven automobile insurance policies with Farm Bureau. Each policy had UIM coverage of up to $25,000.00 per person/$50,000.00 per accident which could be stacked. Farm Bureau was notified of the accident and the potential claim was assigned to Senior Claims Adjuster, Larry J. Wahnsiedler.

  Thus, in this matter the Coots notice provided by Young to Farm Bureau was defective since it inaccurately listed the proposed settlement as $100,000.00 instead of $75,000.00. Farm Bureau, aware that the Coots notice conflicted with notice from other litigants as to the amount of the settlement, protected its right to object to the defective notice via Wahnsiedler’s letter to Young’s attorney seeking "clarification as to the $100,000.00 which Mr. Young is to receive as a part of this tentative settlement and where the proposed proceeds are coming from."3 Young’s attorney then had the last opportunity before finalizing the settlement and eliminating Farm Bureau’s subrogation rights, to correct the inaccurate notice. It became his responsibility to provide the clarification that would have allowed Farm Bureau to exercise its decision to make a proper tender of payment, per KRS 304.39-320(4). He failed to do so, providing the correct settlement amount to Farm Bureau only after it was too late for it to preserve its subrogation rights by substituting its funds for the settlement amount. We conclude therefore, as a matter of law, that Young’s Coots notice was defective, and the Union Circuit Court correctly granted summary judgment to Farm Bureau.

        Accordingly, we reverse the Court of Appeals and reinstate the Union Circuit Court order granting summary judgment in favor of Appellant, Kentucky Farm Bureau.

 

Rawlings v. Interlock Industries, Inc., No. 2008-CA-001616-MR (Ky. App. 3/19/2010) (Ky. App., 2010)

   The trial court based its conclusion on the term "use of a motor vehicle" as defined in theMVRA, which explicitly excludes unloading of vehicles from "use" unless the unloading occurs while occupying, entering into, or alighting from a vehicle. KRS 304.39-020(6). The court concluded that Rawlings’s injury occurred while in the process of unloading his tractor-trailer and, thus, the MVRA was not applicable to him, citing State Farm Mut. Auto. Ins. Co. v. Hudson, 775 S.W.2d 922 (Ky. 1989).

       Our analysis inexorably leads to the conclusion that Rawlings’s actions, while in proximity to his tractor-trailer and preparing it for continued use as a transport vehicle,9 were encompassed in the term "use" of his vehicle and, thus, he was engaged in an activity covered by the MVRA. As Rawlings’s actions were within the coverage of the MVRA and not excluded under the unloading exception, a court action brought under the MVRA is controlled by the statute of limitations found in KRS 304.39-230.

 For the aforementioned reasons, we reverse and remand the grant of summary judgment and affirm the trial court’s exclusion of Interlock’s expert witness

 

Cochran v. Premier Concrete Pumping, Inc., No. 2009-CA-000457-MR (Ky. App. 4/30/2010) (Ky. App., 2010)

    Jerry Cochran appeals two orders of the Jefferson Circuit Court. One allowed Premier Concrete to amend its Answer to assert the affirmative defense of statute of limitations. The other order granted summary judgment in favor of Premier Concrete. Cochran argues that Premier Concrete should not have been allowed to amend its Answer and that summary judgment should not have been granted. We find no error and affirm.

     KRS 304.39-020(6) specifically states that loading or unloading a vehicle while occupying, entering into, or alighting from it is using a motor vehicle as a motor vehicle. The argument can be made that at the time of Cochran’s injury, the cement was being unloaded from the truck. However, in the case at hand, like that of Hudson, no one was occupying, entering into, or alighting from the vehicle. Therefore Cochran’s activities at the time of the accident do not meet the definition of using a motor vehicle as a motor vehicle, at least as it relates to the loading and unloading of the cement.

 

Progressive Max Insurance Company v. National Car Rental Systems, Inc., No. 2007-CA-001800-MR (Ky. App. 5/8/2009) (Ky. App., 2009)

    The underlying facts are not in dispute and were stipulated at the trial court level. Ed Jones ("Jones") rented a motor vehicle from National on October 26, 2001. On November 1, 2001, Jones was involved in a motor vehicle accident while driving National’s vehicle. Shannon Wilkerson ("Wilkerson") was a passenger in Jones’s vehicle and was injured in the accident. At the time of the accident, Jones was insured by Progressive on his personal vehicle. The policy with Progressive included liability benefits should Jones have an accident while in a rented vehicle.

        Wilkerson sought damages for her injuries by filing a personal injury claim against Jones as well as receiving $10,000.00 in BRB from National. On September 16, 2002, Wilkerson’s personal injury action against Jones was dismissed. She neither notified National that she had filed the action, nor that it had been dismissed.

        National brought an action in Jefferson Circuit Court against Progressive for reimbursement of the BRB it paid Wilkerson. As a result of Wilkerson’s failure to notify National of her personal injury claim, National did not intervene in the action she filed against Jones. In order to recover the BRB payments, National filed suit against Jones and Progressive.

        The trial court entered judgment in favor of National on July 9, 2007. Progressive now appeals that order.

   The following definition of a reparations obligor is found in KRS 304.39-020(13):

        "Reparation obligor" means an insurer, self-insurer, or obligated government providing basic or added reparation benefits under this subtitle.

        In Kidd, 602 S.W.2d at 417, the Supreme Court of Kentucky held that "[t]he statute plainly says that the `reparation obligor shall elect to assert its claim’ in one of two specified ways." The two specific ways are arbitration or joinder in a claim made by the injured person.

    In the present action, Jones elected not to purchase extended coverage on the vehicle from National. As a result, and under the contract of insurance he had with Progressive, his primary insurer was Progressive. Under his policy with Progressive, Jones was provided with insurance coverage on rental vehicles. While Affiliated dealt with an insurer driving a vehicle he did not own, it is distinguishable. In Affiliated, the employer owned and insured the vehicle. The employee did not maintain insurance on the vehicle nor is there any indication that his personal insurance policy covered vehicles he drove which were owned by his employers. The trial court correctly held Progressive to be primarily liable for BRB. We will, therefore affirm the summary judgment.

 

Daniel v. Metropolitan Direct Property, No. 2008-CA-002158-MR (Ky. App. 9/11/2009) (Ky. App., 2009)

    Brenson Daniel appeals from a judgment of the Jefferson Circuit Court dismissing his claim for underinsured motorist coverage against Metropolitan Direct Property & Casualty Insurance Company. Because we find that the only named insureds under the Metropolitan policy were his parents, that the policy unambiguously excluded Daniel from coverage under the circumstances of this case, and that Daniel’s exclusion from coverage does not violate public policy, we affirm.

 Next, Daniel contends that even if the language of Exclusion G does unambiguously preclude coverage for his injuries, Exclusion G is void because it is against public interest to allow an insurance carrier to exclude from coverage an insured’s relative, residing in the insured’s house, who owns a motor vehicle not described in the declarations in the insured’s policy. We disagree.

        This Court previously held that an exclusion substantially similar to the one at issue in this case was valid as a matter of law. In Brown v. Atlanta Casualty Company, 875 S.W.2d 103 (Ky. App. 1994), at issue was an exclusion stating

        This coverage does not apply:

        (b) to bodily injury sustained by any relative while occupying any motor vehicle owned by such relative with respect to the security required by Kentucky Revised Statutes Chapter 304, subtitle 39, is not in effect.

     This Court enforced the above provision, which denied basic reparation benefits to an eighteen-year-old driving his own uninsured vehicle. Brown, the driver, sought recovery from his father’s insurance carrier. The father’s policy specifically excluded injuries sustained by a relative while occupying an uninsured vehicle owned by that relative. Brown argued that KRS 304.39-020(3) defines "basic reparation insured" to include "a relative residing in the same household with the named insured" and therefore the policy provision could not be enforced. This Court upheld the exclusion as totally consistent with the public policy embodied in the MVRA:

        We hold that the exclusion is valid as a matter of law. Kentucky’s Motor Vehicle Reparations Act (Subtitle 39) (Act) was designed:

        "To require owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles." KRS 304.39-010(1). A more clear and emphatic expression of public policy cannot be imagined.

     [E]very owner of a motor vehicle registered in this Commonwealth or operated in this Commonwealth by him or with his permission, shall continuously provide with respect to the motor vehicle while it is either present or registered in this Commonwealth, and any other person may provide with respect to any motor vehicle, by a contract of insurance or by qualifying as a self-insurer, security for the payment of basic reparation benefits in accordance with this subtitle and security for payment of tort liabilities, arising from maintenance or use of the motor vehicle.

     This Court reasoned that allowing an uninsured motorist driving his own uninsured vehicle to recover basic reparation benefits from a parent’s policy would "circumvent the very purpose of the Act.” We refused to strike the challenged provision of the policy because to do so would undermine the public policy of requiring "every owner of a motor vehicle registered . . . or operated" in Kentucky to maintain insurance on such vehicle as security for basic reparation benefits and tort liability.

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

Under the Motor Vehicle Reparations Act, "[b]asic reparation obligors and the assigned claims plan shall pay basic reparation benefits, under the terms and conditions stated in this subtitle[.]" KRS 304.39-040(2). A "reparation obligor" is defined as "an insurer, self-insurer, or obligated government providing basic or added reparation benefits under this subtitle." KRS 304.39020(13). Generally, the basic reparation insurance applicable "is the security covering the vehicle occupied by the injured person at the time of the accident[.]" KRS 304.39-050(1). If there is no security covering the vehicle, the Act allows for recovery from any contract of basic reparation insurance under which the injured party falls within the definition of a basic reparation insured. KRS 304.39-050(2). In either case, the recovery of basic reparation benefits from a reparation obligor is limited to $10,000. KRS 304.39-050(3). These provisions are significant to Bartlett’s ability to recover because tort liability is abolished to the extent that basic reparation benefits are payable. See KRS 304.39-060(2).

 

KY     [U] Cox v. Allstate Insurance Co., No. 2002-CA-001159-MR (Ky.App. 07/25/2003)

       It is undisputed that all four individuals received medical treatment for their injuries. Because the car in which they were riding was uninsured, the four individuals sought PIP benefits from appellee, Deerbrook Insurance Company ("Deerbrook"), through an automobile insurance policy purchased by appellant, Janis Cox, with whom all four claimed they resided at the time of the accident. Janis Cox is the mother of Julaone Cox and Brian Brooks and the grandmother of Mark Couch and Jerohn Jeffries. Deerbrook was first given notice of Janis Cox’s intent to seek PIP benefits for the four individuals by telephone on August 2, 2000, and on October 10, 2000, she filed her written application for said benefits. Thereafter, Deerbrook began an investigation into whether the car in which the four claimants were riding was covered by another insurance contract. Once Deerbrook established that the car in question was uninsured, its focus shifted to the issue of whether all four claimants actually resided with Janis Cox at 1712 Dumesnil Avenue on the date of the accident such that they would be entitled to PIP benefits under KRS 304.39020(3).

       Hence, once the reparation obligor receives reasonable notice of the loss and the amount of the loss, which Deerbrook undisputedly did in this case, the time for payment of PIP benefits begins to run. This does not mean that the insurer is obliged to pay the benefits if it does not have sufficient proof of residency/relative status under KRS 304.39020(3). Indeed, if there is no such proof, benefits will not be owed at all and the interest penalties in KRS 304.39-210(2) will not be at issue. However, if it is ultimately determined that benefits are legitimately owed, 12% interest must be paid if the payments are overdue under the statute, even if the insurer had reasonable grounds to delay such payments. See Outlaw, 575 S.W.2d at 494. A contrary interpretation of KRS 304.39-210(1) and (2) would render the distinction between the 12% interest penalty and the 18% interest penalty meaningless because neither would apply if the insurer had reasonable grounds to delay payment. There is a presumption that the Legislature intends a statute to be effective as an entirety, and statutes should not be construed such that their provisions are without meaning, whether in part or in whole. Aubrey v. Office of the Attorney General, Ky. App., 994 S.W.2d 516 (1998); George v. Scent, Ky., 346 S.W.2d 784 (1961). The only logical interpretation of the statute is that the 12% interest penalty applies when there is an overdue payment that was reasonably delayed, and the 18% interest penalty applies when the overdue payment was not reasonably delayed. Accordingly, we reverse the lower court’s denial of 12% interest on the benefits and remand for further proceedings consistent with this opinion.

 

KY     [U] State Farm Mutual Automobile Insurance Co. v. City of Louisville, No. 2002-CA-000223-MR (Ky.App. 09/05/2003)

     The statute above does not impose any specifics as to what "other security" may be.We agree that the appropriation of funds for tort liabilities carried out by the City qualifies as a continuing undertaking under the statute. However, it is not for the purpose of providing all of the obligations under the subtitle, which is a requirement for other security. The appropriation of the funds is only concerned with tort liabilities, but is not for the payment of basic reparations benefits or "all other obligations," such as subrogation. Therefore, we do not agree that it is "other security" as contemplated by the MVRA.

 

KY     Hoffman v. Yellow Cab Company of Louisville, 57 S.W.3d 257 (Ky. 09/27/2001)

    Hoffman argues that UM liability is imposed upon all self-insurers by the Motor Vehicle Reparations Act (MVRA), subtitle 39 of the Kentucky Insurance Code, specifically KRS 304.39-080. That statute requires every owner of a motor vehicle (except an agency of the state or national government) to provide "by a contract of insurance or by qualifying as a self-insurer, security for the payment of basic reparation benefits [BRB] in accordance with this subtitle and security for payment of tort liabilities, arising from the maintenance or use of the motor vehicle." KRS 304.39-080(5). By its terms, this provision applies only to basic reparation benefits (BRB) and tort liability coverage, not UM coverage.

 

KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

      In support of this proposition, Lawson cites cases which hold that a policy of insurance cannot abrogate a mandatory provision of the MVRA, m, State Farm Mut. Auto. Ins. Co. v. Mattox, Ky., 862 S.W.2d 325 (1993) ("anti-stacking" provision with respect to ARB coverage cannot be enforced against the named insured); Elkins v. Kentucky Farm Bureau Mut. Ins. Co., Ky. App., 844 S.W.2d 423 (1992) (insurance contract cannot establish a lesser period of limitations for bringing an action for BRB payments than that established by KRS 304.39-230(6)). Of course, those cases have no relevance here, because Farm Bureau has attempted neither to "abrogate" a coverage mandated by the MVRA nor to enforce a contractual period of limitations of lesser duration than that established by KRS 304.39-230(6).

     However, the inescapable fact is that the last $500 of its payments made to or on behalf of Lawson must have been Med-Pay payments, because the contract of insurance specifies that Med-Pay coverage is "excess insurance" over PIP (BRB) coverage, ie., Med-Pay payments are payable only after the PIP payments have been exhausted. (One could only wonder while considering this argument how Farm Bureau’s claims representative could have "manipulated" the statute of limitations in this case, since the PIP and Medical Coverage worksheets were prepared in 1993 and were furnished to Lawson’s attorney in March 1995, whereas the period of limitations did not expire until May 3, 1995.)

 
 

KY     Fields v. Bellsouth Telecommunications, Inc., 91 S.W.3d 571 (Ky. 12/19/2002)

     Under the MVRA, "'[U]se of motor vehicle’ means any utilization of the motor vehicle as a vehicle including occupying, enterin g into, and alighting from it." KRS 304.39020(6) (emphasis added). The determination of whether Ms. Fields was "using" her vehicle is made in light of the basic rule of statutory construction that the "MVRA is to be liberally interpreted in favor of the accident victim." Lawson v. Helton Sanitation Inc., Ky., 34 S.W.3d 52, 62 (2000).

     A number of courts have addressed the issue of what "entering into" means. Robert Joy, Annotation: What Constitutes "Entering" or "Alightina From" Vehicle Within Meaning of Insurance Policy, or Statute Mandating Insurance Coverage, 59 A.L.R.4th 149 (1989) (collecting cases). Not surprisingly, the results of these decisions are not uniform across jurisdictions. Nonetheless, some commonalities emerge. Two of these are that the issue is to be decided on a case-by-case basis and that "entering into" does not require proof that the, plaintiff was physically inside the vehicle, either in whole or in part.

        The dilemma in these cases appears to be in determining when a person’s approach to a vehicle, i.e., the preparation to entry, transforms into the process of entering into the vehicle. To establish a certain definiteness to making this determination, a number of courts hold that "entering into" a vehicle "begins, at the earliest, when physical contact with the vehicle is made with intent to enter." Aversono v. Atlantic Employers Insurance Co., 676 A.2d 556, 575 (N.J. Super. 1996). Accord Floyd v. J.C. Penny Casualty Insurance Co., 387 S.E.2d 625, 626 (Ga. App. 1989).

    In keeping with the above authority, we hold that process of "entering into" a vehicle can begin no sooner than when a person, or that person’s agent, makes contact with the vehicle with the intention of entering the vehicle. This determination is not inconsistent with our holding in West American Insurance Co. v. Dickerson, Ky., 865 S.W.2d 320 (1993), which rejected the physical contact standard for determining when a person is "alighting from" a vehicle within the meaning of the MVRA. Id. at 322.

 

KY     Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

Since KRS 304.39020(2) provides that "[tlhe maximum amount of basic reparation benefits payable for all economic loss resulting from injury to any one (1) person as the result of one (1) accident shall be ten thousand dollars ($lO,OOO)," the Bullitt Circuit Court and the Court of Appeals correctly concluded that this coverage cannot be stacked. Cf. Capital Enternrise Ins. Co. v. Kentucky Farm Bureau Mut. Ins. Co., Ky. APP.1 804 S.W.2d 377 (1991). For the same reason, we conclude that the additional $20,000 in personal injury protection coverage described on the declarations page of the policy is, in fact, added reparation benefits as described in KRS 304.39-130.

 

KY     Dupin v. Adkins, 17 S.W.3d 538, 17 S.W.3d 538 (Ky.App. 04/14/2000)

Motor vehicle" means any vehicle which transports persons or property upon the public highways of the Commonwealth, propelled by other than muscular power except . . . farm tractors . . . . KRS 304.39020(7).


KY     Shepherd v. Shelter Mutual Insurance Company, 2 S.W.3d 794 (Ky.App. 09/24/1999)

       We hold that Shepherd is not a "survivor" as that term is defined in KRS 304.39020(14). That statute defines a survivor as a person entitled to receive benefits under KRS 411.130. The court in Totten v. Parker, Ky., 428 S.W.2d 231 (1967), held that "[u]nder the provisions of KRS 411.130, 391.030, and 391.010, brothers and sisters of a deceased are entitled to a recovery only upon a showing that the deceased left no surviving spouse, child, or parent." Id. at 238. Thus, since Shepherd was Bray’s sister and Bray left children surviving him, Shepherd does not qualify as a survivor entitled to benefits under KRS 411.130 and KRS 304.39020(14).

       Shepherd relies solely on Howard v. Hamilton, Ky. App., 612 S.W.2d 345 (1981), to support her claims for survivor benefits. In Howard, a decedent’s adult children brought an action against his widow to recover one-half of the lump-sum settlement she received for survivor’s replacement services loss. While holding that the children were not entitled to recover a portion of the benefits received by the widow, the court stated that the children may have been able to recover benefits directly from the insurance company if they could have proven that they also suffered survivor’s economic loss or a survivor’s replacement services loss. Id. at 347. The Howard case is distinguishable from the case sub judice, however, since both the widow and the children in that case qualified as survivors of equal, concurrent interests. See KRS 411.130(2)(b).

     In addition to claiming benefits for survivor’s economic loss and survivor’s replacement services loss as those terms are defined in KRS 304.39020(5)(d) and (e), Shepherd also claims benefits under the policy for replacement services loss. Replacement services loss is defined as "expenses reasonably incurred in obtaining ordinary and necessary services in lieu of those the injured person would have performed . . . if he had not been injured." KRS 304.39-020(5)(c) (emphasis added). By its terms, this section limits its applicability to situations in which the accident victim lives but is unable to provide services as he had prior to the accident. Therefore, we question whether KRS 304.39020(5)(c) is applicable to this case; however, even should this provision prove to be relevant, Shepherd is not entitled to benefits because she failed to incur expenses "in lieu of those the injured person would have performed[.]" KRS 304.39020(5)(c).     This court has clearly stated that to recover "replacement services loss, [claimants] must introduce evidence of expenses reasonably incurred by them in obtaining ordinary and necessary services which would have been performed by the decedent had he notsuffered a fatal injury." France v. Kentucky Farm Bureau Mut. Ins. Co., Ky. App., 605 S.W.2d 773, 774 (1980). Shepherd testified in her deposition that she and her husband moved into an apartment after Bray died and solicited assistance from her daughter and son-in-law. She also explained that her daughter and son-in-law were not paid for their assistance and that she has incurred no expenses for replacement services. Therefore, because Shepherd has incurred no expenses in obtaining replacement services for those services performed by Bray, her claim for replacement services loss must also fail.

     Finally, we note that Shepherd’s claims for survivor benefits in her capacity as executrix of Bray’s estate are disallowed because an executrix or other personal representative of an estate may not prosecute an action for survivor benefits. United States Fidelity & Guar. Co. v. McEnroe, Ky., 610 S.W.2d 593, 594 (1980).


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KY     Stevenson v. Anthem Casualty Insurance Group, No. 96-CA-0918-MR (Ky.App. 07/03/1997)

We first address the amount of liability insurance available to Stevenson. She contends that the policy’s anti-stacking provisions should be declared void. We summarily reject this contention, and rely upon the reasoning in Butler v. Robinette, Ky., 614 S.W.2d 944 (1981), holding that the stacking of liability coverage is prohibited.

     As to BRBs, we likewise summarily reject Stevenson’s attempt to stack those applicable to the other Walker vehicles. KRS 304.39-050(3); see Capital Enterprise Insurance Company v. Kentucky Farm Bureau Mutual Insurance Co., Ky. App., 804 S.W.2d 377 (1991). KRS 304.39020(2) provides that "the maximum amount of basic reparation benefits payable . . . from injury to any one (1) person . . . shall be ten thousand dollars ($10,000) . . . ." Further, KRS 304.39-030(1) provides that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle hasa right to basic reparation benefits . . . ."We, thus, conclude that Stevenson was entitled to only $10,000 BRBs applicable to the Ford Ranger.


KY     Luttrell v. Wood, 902 S.W.2d 817 (Ky. 05/11/1995)

The issue presented is whether basic reparation benefits (BRB’s) paid as survivor’s replacement services loss benefits pursuant to KRS 304.39020(5)(e) should be credited against an award for wrongful death. KRS 411.130. Put differently, are survivor’s replacement services loss benefits a recoverable element of damages in a wrongful death action? We find that they are not, and deny the credit.

 

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KY     Robertson v. Vinson, No. 1998-CA-001941-MR (Ky.App. 10/08/1999)

     If injury causes death, loss is specifically limited by the Act to survivor’s economic loss and survivor’s replacement services loss. KRS 304.39020(5). Survivor is defined by KRS 304.39020(14) as one entitled to receive benefits pursuant to KRS 411.130 by reason of the death of another person. KRS 411.130(2) specifies those kindred entitled to receive benefits, and in this case, they would be the children of Leetta Rainwater. Id. at 594.

 

KY     Kenton County Public Parks Corp. v. Modlin, 901 S.W.2d 876 (Ky.App. 04/07/1995)

      In our opinion, a golf cart operated on a golf course fairway is not a motor vehicle contemplated by KRS 304.39-230. A motor vehicle under MVRA (KRS 304.39020(7)) is defined as any vehicle "which transports persons or property upon the public highways of the Commonwealth." While a golf cart is capable of transporting persons or property upon a public highway and conceivably could be construed as a motor vehicle for purposes of applying MVR, the particular golf cart herein was not being operated upon a public highway at the time and, therefore, was not covered within the Act.

 

KY     State Farm Mutual Automobile Insurance Co. v. Mattox, 862 S.W.2d 325 (Ky. 09/30/1993)

       Unless optional additional benefits have been purchased, KRS 304.39-140, the maximum amount of BRB payable to any one person as a result of any one accident is $10,000. . . . The statute specifically states that this is so regardless of the number of different providers of security which might be obligated to pay such benefits, KRS 304.39-020(2), . . . ." Id. at 378.


KY     Manies v. Croan, 977 S.W.2d 22 (Ky.App. 02/27/1998)

"[t]he statutory term is "motor vehicle," defined as a vehicle required to be registered under KRS Ch. 186. KRS 304.39-080(5) and 304.39-020(7). We use "automobile" in that sense throughout this opinion."   534 S.W.2d at 772, n. 3.  The registration requirement is important because it is through registration that the MVRA’s insurance provisions are enforced. The insurance provisions, in turn, require and justify the act’s extended limitations period:     "When one looks to the policy and purposes behind the Act, KRS 304.39-010, it is evident that the legislature intended to encourage those injured in auto accidents to look first to their no-fault benefits and then pursue a tort claim if necessary. This approach presupposes the need for a longer statute of limitations . . ."

 

KY     Brown v. Atlanta Casualty Co., 875 S.W.2d 103 (Ky.App. 02/25/1994)

KRS 304.39.020(3)

 "Basic reparation insured" means:     (b) While residing in the same household with a named insured, the following persons not identified by name as an insured in any other contract of basic reparation insurance complying with this subtitle: a spouse or other relative of named insured; and a minor in the custody of a named insured or of a relative residing in the same household with the named insured if he usually makes his home in the same family unit, even though he temporarily lives elsewhere.

 

KY     [U] Nathan v. St. Luke Hospitals, Inc., No. 2003-CA-001389-MR (Ky.App. 12/17/2004)

‘[U]se of motor vehicle’ means any utilization of the motor vehicle as a vehicle including occupying, entering into, and alighting from it." KRS 304.39020(6);


KY     O’Keefe v. North American Refractories, 78 S.W.3d 760 (Ky.App. 05/31/2002)

O’Keefe argues that a forklift should be considered a "motor vehicle" for purposes of the MVRA. However, in Kenton County Public Parks Corporation v. Modlin, this Court specifically held that: [A] golf cart operated on a golf course fairway is not a motor vehicle contemplated by KRS 304.39-230. A motor vehicle under MVRA (KRS 304.39020(7)) is defined as any vehicle "which transports persons or property upon the public highways of the Commonwealth." While a golf cart is capable of transporting persons or property upon a public highway and conceivably could be construed as a motor vehicle for purposes of applying MVR, the particular golf cart herein was not being operated upon a public highway at the time and, therefore, was not covered within the Act.

        Similarly, in Manies v. Croan, this Court held that an all-terrain-vehicle (ATV) is prohibited from operation on public highways and therefore cannot be considered a "motor vehicle" for purposes of the MVRA. In both cases, this Court concluded that causes of action arising from the use of these vehicles are governed by the one-year statute of limitations contained in KRS 413.140, rather than the more generous limitations period provided by the MVRA.


KY     Omni Insurance Co. v. Coates, 939 S.W.2d 879 (Ky.App. 02/28/1997)

       In Brown, the plaintiff, who lived with his father, was injured while driving an uninsured vehicle owned by him and registered in his own name. He filed a claim for BRB with defendant, which had issued a policy of insurance to his father, claiming that he was entitled to such benefits because he was a member of his father’s household. In support of his claim, plaintiff argues that he was a basic reparation insured as defined under KRS 304.39020(3) and was thus entitled to BRB under KRS 304.39-050(2). Defendant argued that plaintiff was not entitled to BRB because the policy specifically excluded injuries sustained by a relative while occupying an uninsured vehicle owned by said relative.

   We also agree with Brown that even if we were to find the exclusion in the policy to be invalid and force Omni to pay BRB to Coates, Omni would have subrogation rights back against Coates under KRS 304.39-310(2) and KRS 304.39-050(1). It would be both ridiculous and absurd to require Omni to pay BRB to Coates and then allow it to reclaim the money by exercise of its subrogation rights.

 
KY     Miller v. United States Fidelity & Guaranty Co., 909 S.W.2d 339 (Ky.App. 11/03/1995)

      Pursuant to KRS 304.39020, the submitted medical bills were presumed reasonable. USF & G contested the necessity of the treatments and refused to pay the bills. Instead, it scheduled Miller for an independent medical examination.


KY     Shelter Insurance Co. v. Humana Health Plans Inc., 882 S.W.2d 127 (Ky.App. 03/11/1994)

       In short, while an uninsured motorist may sue in tort for noneconomic damages once the medical expense threshold is met, no part of those damages defined as BRB (KRS 304.39-020(2)) may be recovered from a secured person except to the extent they exceed $10,000.00, the minimum personal injury protection (PIP) required under the Act. The appellee stresses that the "over and above" language in Fann and Gussler, supra, is meant only to prevent the possibility of a double recovery. Although the language is definitely susceptible to that limited interpretation, we believe it more logically reflects the abolition of tort liability for BRB damages which is the heart of the MVRA. The sole issue at bar is whether the BRB liability of a negligent motorist, who has nevertheless complied with the Act, remains abolished when the injured party is uninsured. Logic suggests an affirmative answer, even though seeming inequities will undoubtedly arise.


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KY     State Farm Mutual Automobile Insurance Co. v. Harris, 850 S.W.2d 49 (Ky.App. 08/28/1992)

 Blair v. Day, Ky. App., 600 S.W.2d 477, 478 (1979). The Harrises did not reject in writing the limitation on their tort rights under Kentucky’s no-fault insurance law, pursuant to KRS 304.39-060(4). They also did not come within that statute’s exception which deems a party to have fully rejected the limitations at the time of an accident when that person has in effect security equivalent to that required by KRS 304.39-110. KRS 304.39-110(1) provides that "the requirement of security for payment of tort liabilities is fulfilled by providing: . . . (c) Basic reparation benefits as defined in KRS 304.39-020(2).

KY     Capital Enterprise Insurance Co. v. Kentucky Farm Bureau Mutual Insurance Co., 804 S.W.2d 377 (Ky.App. 02/22/1991)

The statute provides that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits." KRS 304.39-030(1). Unless optional additional benefits have been purchased, KRS 304.39-140, the maximum amount of BRB payable to any one person as a result of any one accident is $10,000.

 

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KRS 304.39-030 Right to basic reparation benefits.

(1) If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4).

(2) If the accident causing injury occurs outside this Commonwealth but within the United States, its territories and possessions, or Canada, the following persons and their survivors suffering loss from injury arising out of maintenance or use of a motor vehicle have a right to basic reparation benefits:

(a) Basic reparation insureds;

(b) The driver and other occupants of a secured vehicle who have not rejected the limitation upon their tort rights, other than:

1. A vehicle, except for a vehicle as provided in paragraph (c) of this subsection, which is regularly used in the course of the business of transporting persons or property and which is one (1) of five (5) or more vehicles under common ownership; or

2. A vehicle owned by an obligated government other than this Commonwealth, its political subdivisions, municipal corporations, or public agencies; and

(c) The driver and other occupants of a bus, who have not rejected the limitation upon their tort rights, are Kentucky residents, and boarded a bus in Kentucky, if the bus is:

1. A secured vehicle;
2. Registered in Kentucky;

3. Regularly used in the course of the business of transporting persons or property; and

4. One (1) of five (5) or more vehicles under common ownership.

Effective: July 14, 2000

History: Amended 2000 Ky. Acts ch. 372, sec. 1, effective July 14, 2000. — Created

1974 Ky. Acts ch. 385, sec. 3, effective July 1, 1975.

 

ANNOTATIONS FOR THIS STATUTE:

 
 

[U] McCall v. Zurich Am. Ins. Co. (Ky. App., 2012) 2011-CA-002059-MR   December 21, 2012

STUMBO, JUDGE: Keoliver McCall appeals from an Opinion and Order of the Jefferson Circuit Court holding that he was not using and occupying his employer’s motor vehicle within the meaning of KRS 304.39-020(6)(b) thus rendering him ineligible for Basic Reparation Benefits ("BRB"). McCall argues that he was occupying the vehicle within the statutory framework and that the trial court erred in failing to so rule. We find no error, and accordingly affirm the Opinion and Order on appeal.

On the date at issue, McCall allegedly was injured in two separate incidents. The first injury occurred when McCall was standing near the back of the trailer with his feet on a ramp. He was using a ratchet to tighten a chain, when the chain broke. McCall fell against the trailer "and then rolled to the ground". The second event occurred a few minutes later when McCall was standing on a platform that runs across the front bumper of the tractor portion of the car hauler. The platform was covered with non-skid material and is designed to provide access to the front of the trailer so that the driver can secure the vehicles to the trailer with chains. While again tightening a chain with a ratchet, the chain broke and McCall fell to the ground where he suffered injuries to his neck, back and right shoulder.

McCall sought BRBs pursuant to KRS 304.39-030, and when they were denied he filed the instant action in Jefferson Circuit Court against Active, Zurich American Insurance Company and related entities. Active, et al., defended the action by arguing that McCall was not entitled to relief under KRS Chapter 304 because he was not occupying the vehicle at the time of the accident. Thereafter, McCall moved for Summary Judgment. On August 30, 2011, the Jefferson Circuit Court rendered an Opinion and Order denying the motion. As a basis for the ruling, the court found that McCall was not "occupying, entering into, or alighting from" the vehicle as required by KRS 304.39-020(6) to establish entitlement to BRBs. The court cited Clark v. Young, 692 S.W.2d 285 (Ky. App. 1985), wherein a panel of this Court found that an injury suffered while the plaintiff was standing on a flatbed trailer in the course of securing a load did not qualify as "occupying" the vehicles for purposes of KRS Chapter 304. Based on its application of Clark, the court denied McCall’s motion for Summary Judgment.

KRS 304.39-030(1) provides that, "[i]f the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." The use of a motor vehicle, in the context of loading and unloading a vehicle, is defined in KRS 304.39-020(6)(b) and is as follows:

"Use of a motor vehicle" means any utilization of the motor vehicle as a vehicle including occupying, entering into, and alighting from it. It does not include . . . (b) Conduct in the course of loading and unloading the vehicle unless the conduct occurs while occupying, entering into, or alighting from it.

In rejecting McCall’s contention that he was "occupying" the vehicle, the Jefferson Circuit Court found that "the facts of this case are analogous to those in Clark because McCall was standing on a platform outside the vehicle and that platform was there for the sole purpose of aiding in the loading and unloading of the vehicle." In its Order addressing McCall’s renewed motion, the court determined that McCall’s first accident occurred when he was standing on a ramp and not on the trailer carrier itself.

We find no error in the circuit court’s reasoning, nor its application of KRS Chapter 304 and the case law. Goodin, upon which McCall relies, is distinguished from the instant facts in that the plaintiff therein was inside the vehicle when he fell through a hole in the trailer. Conversely, McCall was not inside the car carrier at the time of either of the accidents in question.

 

Samons v. Ky. Farm Bureau Mut. Ins. Co. (Ky., 2013)  2011-SC-000414-DG May 23, 2013

 Kenneth Crum, while riding horseback along a narrow and winding stretch of mountain road in Floyd County, Kentucky, was struck and severely injured by a vehicle driven by Raymond K. Ousley. At the time, Ousley was test-driving the vehicle, a disused, uninsured Ford Escort titled to Rhonda Ward. Crum sued Ousley for personal injuries and later joined Ousley’s auto liability insurer, Kentucky Farm Bureau, for no-fault benefits. Kentucky Farm Bureau settled Crum’s liability claim against Ousley, paying its policy limits of $25,000. The circuit court entered a final order declaring coverage for Crum, ordering Kentucky Farm Bureau also to pay him the no-fault benefits. The Court of Appeals reversed, holding that Kentucky law did not allow Crum to recover and Ousley’s policy excluded Crum.

In 1974, the General Assembly brought about sweeping changes in the realm of automobile insurance with its enactment of the Kentucky Motor Vehicle Reparations Act, based largely on the Uniform Motor Vehicle Accident Reparations Act (UMVARA). 4 In doing so, the General Assembly transformed Kentucky into a no-fault state. This transformation reflected a policy "for prompt and liberal recovery to accident victims without regard to fault."  The implementation of this policy was performed primarily through KRS 304.39-030, basic reparation benefits; KRS 304.39-060, limitation of tort rights; and KRS 304.39-090, required insurance coverage.

4. See Kentucky Revised Statutes (KRS) 304.39-010 to 304.39-350.  

 

[U] Dream Furniture, Inc. v. Brow (Ky. App., 2012)   2011-CA-001063-MR  November 9, 2012

On January 28, 2008, Adcock filed the underlying complaint alleging that she was injured by a Dream Furniture employee, later identified as Cooper, when making an appliance delivery to Dream Furniture. Adcock claimed that while assisting Cooper unload her trailer, Cooper dropped a carton containing an electric stove on her which resulted in injury to her head and neck. Dream Furniture denied that an injury occurred on its premises, arguing that if an injury did occur it occurred in Pikeville, Kentucky, another stop on Adcock’s delivery route.

The trial court denied any credit against the jury award on the basis that no evidence was presented to show that Adcock had not rejected the provisions of the Motor Vehicle Reparations Act ("MVRA") pursuant to KRS 304.39-060(4). This court has previously interpreted the application of MVRA as follows:

Pursuant to KRS 304.39-060(1) any person who operates a motor vehicle on the public roadways of this state is deemed to have accepted the provisions of the [MVRA], KRS Chapter 304, Subtitle 39. Appellant makes no claim to having rejected the provisions of this act. Having, therefore, accepted the provisions of the act, appellant was entitled, despite being a non-resident, to recover $10,000 in basic reparation benefits. KRS 304.39-030(1).

Bohl, 777 S.W.2d at 614-15. Furthermore, "the law does not require these benefits actually be paid." Id. at 615. Indeed, in Thompson v. Piasta, 662 S.W.2d 223, 226 (Ky. App. 1983), we stated, "it is immaterial whether basic reparations benefits have been or have not been paid to an injured party . . . such party is not entitled to an award from the defendant in a trial on liability for any item of damages for which such benefits are payable[.]" Here, no evidence was presented to show Adcock rejected the provisions of the MVRA; instead, the evidence supported a finding that she used a motor vehicle on Kentucky roadways, and thus accepted such provisions.

 
 

Progressive Max Ins. Co. v. Jamison (Ky. App., 2013) 2011-CA-001127-MR  July 19, 2013

The Kentucky Motor Vehicle Reparations Act 4 (MVRA) obligates the "security [normally insurance] covering the vehicle occupied by the injured person at the time of the accident" to pay the injured party, regardless of fault, basic reparation benefits. KRS 304.39-050(1); KRS 304.39-030. The MVRA then abolished tort liability "to the extent basic reparation benefits provided by the statute" are paid or payable, up to $10,000.00. KRS 304.39-060(2)(a); Bohl v. Consol. Freightways Corp. of Delaware, 777 S.W.2d 613, 614 (Ky. App. 1989); Stone v. Kentucky Ins. Guar. Ass’n,858 S.W.2d 726, 728 (Ky. App. 1993) ("[T]ort liability has been abolished in Kentucky up to $10,000 pursuant to KRS 304.39-060."). KRS 304.39-060(2) operates such that "claims for lost wages and medical expenses of a person injured in an automobile accident against the person who caused the injury to the extent that basic reparations are payable therefore" are eradicated and no longer exist. Carta v. Dale, 718 S.W.2d 126, 128 (Ky. 1986). Thus, an injured party may not recover in tort those elements of damages covered by basic reparations benefits. Progressive Cas. Ins. Co. v. Kidd, 602 S.W.2d 416, 417 (Ky. 1980) ("Under the Kentucky No-Fault Act, an injured party is not entitled to an award of damages from the defendant in the trial on liability for any item of damages which was compensated by BRB.").

 
 
Interlock Indus., Inc. v. Rawlings, 358 S.W.3d 925 (Ky., 2012) – Oct. 27, 2011.Rehearing Denied Feb. 23, 2012
 
Summaries: Source: Justia

Charles Rawlings suffered injuries as he was rolling straps beside his tractor-trailer while it was being unloaded. Thirteen months after the accident, Rawlings filed an action against Defendants, his employer and the companies involved in loading and unloading the trailer. The trial court granted summary judgment in favor of Defendants and dismissed the action based on the one-year statute of limitations for personal injury claims in Ky. Rev. Stat. 413.140(1)(a). The court of appeals reversed, applying the two-year statute of limitations in the Motor Vehicle Reparations Act. At issue on appeal was whether Rawlings was in fact unloading his truck at the time of the accident, which would determine whether the one- or two-year statute of limitations applied. The Supreme Court reversed, holding (1) Rawlings’s activity in releasing the straps and rolling them qualified him as a participant in the unloading process; and (2) therefore, the trial court correctly applied the one-year personal injury statute of limitations found in section 413.140(1)(a). Remanded.

 

As the trial court noted, Hudson is factually similar. "Hudson was injured when a log rolled off his truck and struck him as he was standing on the ground unfastening a chain in the course of unloading the truck." Hudson, 775 S.W.2d at 923. The issue in Hudson was the injured driver’s entitlement to basic reparation benefits (BRB). Under KRS 304.39-030(1),‘ "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits . . . ."

The trial court in this case concluded that Hudson controlled. Rawlings correctly notes that Hudson dealt only with the issue of whether Hudson was entitled to BRB. Rawlings argues that tort liability coverage under the MVRA (which entitles a plaintiff to the MVRA’s two-year statute of limitations) is broader than BRB coverage. See, e.g., Troxell v. Trammell, 730 S.W.2d 525 (Ky.1987) (MVRA’s two-year statute of limitations applied to injured motorcyclist, even though motorcyclist had no BRB insurance coverage); Bailey v. Reeves, 662 S.W.2d 832 (Ky. 1984) (MVRA’s two-year statute of limitations interpreted broadly to apply to plaintiff injured when his vehicle struck a cow).

Rawlings also argues that the fact that his insurance company paid him BRB should automatically bring him under the purview of the MVRA’s statute of limitations. Or, in the alternative, he argues that the one-year personal injury statute of limitations should be calculated from the date of his last BRB payment.

First, we note that the unloading process was still ongoing as Rawlings rolled his straps. In addition, without releasing the straps and chains, the forklift operator could not have unloaded the bundles. Removal of the straps was an integral part of the unloading process. ….

We opine that Rawlings’ activity in releasing the straps and rolling them qualifies him as a participant in the unloading process. Therefore, for the reasons previously stated, the trial court correctly applied the one-year personal injury statute of limitations found in KRS 413.140(l)(a). …

Accordingly, the opinion of the Court of Appeals is reversed, and the order of the Shelby Circuit Court is hereby reinstated.

 

Stewart v. Elco Administrative Services, Inc., No. 2009-CA-000828-MR (Ky. App. 5/14/2010) (Ky. App., 2010)

     Both ELCO and Enterprise filed motions for summary judgment, arguing that Stewart’s failure to obtain motor vehicle insurance coverage for his own vehicle constituted a constructive rejection of his tort rights and liabilities under Kentucky’s Motor Vehicle Reparations Act. ELCO also claimed it was not the real party in interest since the vehicle was owned by Enterprise, a self-insured entity. Stewart responded with a cross-motion for summary judgment, arguing that there is no such thing as a "constructive rejection" of one’s right to collect BRB and that in order to reject no-fault coverage, there must be strict compliance with KRS 304.39-060(4).

     Kentucky’s Motor Vehicle Reparations Act ("MVRA"), also known as the No-Fault Act, was enacted to "create a comprehensive compulsory insurance system that requires owners to provide vehicle security covering basic reparation benefits and that imposes legal liability on vehicle owners for damages or injuries arising out of ownership of or use of the vehicle. KRS 304.39-010; KRS 304.39-080(5)." McGrew v. Stone, 998 S.W.2d 5, 6 (Ky. 1999). KRS 304.39-030(1) provides in pertinent part:

If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4).

        Furthermore, KRS 304.39-060 states, in part:

(1) Any person who registers, operates, maintains or uses a motor vehicle on the public roadways of this Commonwealth shall, as a condition of such registration, operation, maintenance or use of such motor vehicle and use of the public roadways, be deemed to have accepted the provisions of this subtitle, and in particular those provisions which are contained in this section.

(2)

(a) Tort liability with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance, or use of a motor vehicle is "abolished" for damages because of bodily injury, sickness or disease to the extent the basic reparation benefits provided in this subtitle are payable therefor, or that would be payable but for any deductible authorized by this subtitle, under any insurance policy or other method of security complying with the requirements of this subtitle, except to the extent noneconomic detriment qualifies under paragraph (b) of this subsection.

        With respect to the payment of BRB, KRS 304.39-050(1) provides that "[t]he basic reparation insurance applicable to bodily injury to which this subtitle applies is the security covering the vehicle occupied by the injured person at the time of the accident . . . ." Thus, the statutory language is unambiguous that the vehicle occupied by the injured person is responsible for the payment of BRB. Agreeing with this concept, a panel of this Court in Rees v. USF&G, 715 S.W.2d 904, 906 (Ky. App. 1986) held:

     Unless he has rejected the limitation on his tort rights as provided in KRS 304.39-060(4), every person suffering loss from injury arising out of the maintenance or use of a motor vehicle has a right to basic reparation benefits. See KRS 304.39-030(1). The legislative policy as announced in KRS 304.39-050(1) is that the basic reparation insurance applicable to bodily injury" is the security covering the vehicle occupied by the injured person at the time of the accident." The "security covering the vehicle" in the present case is the policy written by USF&G, see KRS 304.39-080, which is, therefore, primarily liable for the payment of basic reparation benefits to the injured passenger. We have been referred to nothing in the MVRA which permits shifting the liability for the payment of basic reparation benefits as is the case with respect to the payment of tort liabilities. As a consequence, the policy written by USF&G must be interpreted to furnish primary coverage for basic reparation benefits to the injured passenger. See KRS 304.39-100.

        Enterprise argued, and the trial court herein agreed, that despite the legislature’s expressed intent that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits . . .," Stewart’s failure to procure insurance on his own vehicle acted as a "constructive waiver" of his tort rights and liabilities. We disagree.

        Under the MVRA all persons owning an automobile, whether insured or not, are subject to the limitations of "no-fault," unless the owner actually rejects the limitation of his tort rights and liabilities under KRS 304.39-060. Atchison v. Overcast, 563 S.W.2d 736 (Ky. App. 1977). Specifically, KRS 304.39-060 provides:

(4) Any person may refuse to consent to the limitations of his tort rights and liabilities as contained in this section. Such rejection must be in writing in a form to be prescribed by the Office of Insurance and must have been executed and filed with the office at a time prior to any motor vehicle accident for which such rejection is to apply. Such rejection form together with a reasonable explanation thereof shall be furnished by the reparation obligor with each policy to each prospective insurance applicant. Such rejection form shall affirmatively state in bold print that acceptance of this form of insurance denies the applicant the right to sue a negligent motorist unless certain requirements contained in the policy of insurance are met. Rejection by a person who is under legal disability shall be made on behalf of such person by his legal guardian, conservator or his natural parent. The failure of such guardian or a natural parent of a person under legal disability to file a rejection, within six (6) months from the date that this subtitle would otherwise become applicable to such person, shall be deemed to be an affirmative acceptance of all provisions of this subtitle. Provided, however, any person who, at the time of an accident, does not have basic reparation insurance but has not formally rejected such limitations of his tort rights and liabilities and has at such time in effect security equivalent to that required by KRS 304.39-110 shall be deemed to have fully rejected such limitations within meaning of this section for that accident only.

(5)

(a) Any rejection must be filed with the Office of Insurance and shall become effective on the date of its filing until revoked;

(b) Any rejection filed prior to June 30, 1980, shall be deemed to be effective from the date of its filing until revoked; and

(c) Any revocation shall be in writing and shall become effective upon the date of its filing with the Office of Insurance.

        The plain language of KRS 304.39-060(4) explicitly requires any rejection of one’s tort rights and liabilities to be in writing and filed with the Department of Insurance. Atchison 563 S.W.2d at 737. "[O]ur duty is to ascertain and give effect to the intent" of the Legislature. Beckham v. Board of Education of Jefferson County, 873 S.W.2d 575, 577 (Ky. 1994). In so doing, we are directed to follow the clear language of the statute and when "plain and unambiguous" words are employed, we must apply those terms "without resort to any construction or interpretation." Terhune v. Commonwealth, 907 S.W.2d 779, 782 (Ky. App. 1995). We find KRS 304.39-060 to be clear on its face and not susceptible of interpretation-especially not the proposition that one can "constructively" or implicitly reject tort limits and liabilities.

        Ignoring the requirements set forth in KRS 304.39-060, the trial court relied upon the decisions from this Court in Thomas v. Ferguson, 560 S.W.2d 835 (Ky. App. 1978) and Shelter Insurance Company v. Human Health Plans, Inc., 882 S.W.2d 127 (Ky. App. 1994), wherein uninsured motorists were precluded from maintaining a cause of action for BRB against an insured motorist. In both cases, the Court held that by being voluntarily uninsured, an uninsured driver "waived" the right to collect BRB from an insured tortfeasor. Enterprise urges herein that denying Stewart BRB under the facts of this case is simply a logical extension of Thomas and Shelter Insurance.

        Importantly, however, there is a crucial factual distinction between the above cases and the instant matter. In both Thomas and Shelter Insurance, an uninsured driver, who was injured while operating his own uninsured vehicle, was attempting to claim BRB from the adverse insured driver. In the accident giving rise to the cause of action herein, Stewart was not operating his own vehicle, but was instead riding as a passenger in a vehicle owned and insured by Enterprise. Had Stewart not owned a vehicle, or had he maintained insurance on his own vehicle, there would be no question that Enterprise would be liable for BRB as a result of the accident causing Stewart’s injuries. See KRS 304.39-050(1).

        Furthermore, we are of the opinion that Enterprise and the trial court have misconstrued the holdings and rationale of both Thomas and Shelter Insurance. Neither decision hinged upon a finding that the uninsured motorist, by failing to comply with the compulsory insurance requirements of the MVRA, constructively or implicitly rejected his rights and liabilities under KRS 304.39-060. In fact, such subsection is never referenced in either case. Rather, the Court precluded the uninsured motorist from claiming BRB from an insured motorist on public policy reasons. "We do not feel that the public policy of the Commonwealth of Kentucky allows us to give this uninsured motorist a cause of action for personal injuries as against the adverse driver, an insured motorist." Thomas, 560 S.W.2d at 836.

        Indeed, since the enactment of the MVRA there have been several published decisions relating to the Act and the uninsured motorist. As noted in Bartlett v. Prime Insurance Syndicate, Inc, 156 S.W.3d 299, 303 (Ky. App. 2004), "[t]he inability of an uninsured motorist to recover basic reparations benefits is one of the penalties recognized by this court as being imposed within the no fault framework of the Motor Vehicle Reparations Act." (Citing Gussler v. Damron, 599 S.W.2d 775, 778 (Ky. App. 1980)). However, in every case, the uninsured motorist had been operating his own vehicle at the time of the accident.

        Certainly, we believe that public policy dictates that a motorist who voluntarily fails to comply with the insurance requirements of the MVRA should not be entitled to BRB if the accident and injury results from the operation or use of that uninsured vehicle. However, we simply cannot reach the same conclusion when the injury is not attributable to the motorist’s use or operation of the uninsured vehicle. Here, Stewart was not operating his vehicle, but was rather merely riding as a passenger in another vehicle. In fact, Stewart claims, and the trial court found, that his vehicle was not operable, which leads to an entirely separate inquiry of whether or not he was even required to maintain insurance on the vehicle. See KRS 304.39-020(7) and Auto-Owners Insurance Company v. Goode, 294 S.W.3d 32 (Ky. App. 2009).

        Regardless, this Court is of the opinion that to create a blanket rule that one who is uninsured is prohibited from claiming BRB under any circumstances not only contravenes the language and intent of the MVRA, but violates the public policy of this Commonwealth. BRB follows the vehicle, not the person. And KRS 304.39-050(1) provides that "[t]he basic reparation insurance applicable to bodily injury . . . is the security covering the vehicle occupied by the injured person at the time of the accident . . . ." Stewart was occupying a car owned and insured by Enterprise at the time he was injured.

        The language of KRS § 304.39-030 broadly provides for basic reparation benefits for car accident victims. "If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." KRS § 304.39-030(1) (emphasis added). As noted by our Supreme Court in Mitchell v. Allstate Insurance Company, 244 S.W.3d 59, 64 (Ky. 2008), "this Court can and will see that the General Assembly’s clear intent-that all Kentucky motorists should have automobile liability coverage-is satisfied in all reasonable instances." (Citing Beacon Insurance Co. of America v. State Farm Mutual Insurance Co., 795 S.W.2d 62, 63 (Ky. 1990)).

        For the reasons stated herein, we vacate the order of the Jefferson Circuit Court granting summary judgment in favor of Enterprise and remand the matter for entry of a judgment in favor of Stewart on his claim of entitlement to BRB.

 

Graham v. Heine, No. 2008-CA-001128-MR (Ky. App. 12/11/2009) (Ky. App., 2009)

      Under KRS 304.39-230(6), the limitation period is triggered upon payment of the "last" BRB. We believe the "last" BRB payment was made by Kentucky Farm Bureau on January 5, 2006, when Graham’s BRB coverage was depleted. To hold otherwise would allow the statute of limitations in KRS 304.39-230(6) to be unfairly manipulated by a BRB payee. It is conceivable that a BRB payee could simply "reimburse" the reparation obligor for a prior BRB payment in order to artificially extend the statute of limitations period. Such was certainly not the intent of the General Assembly when enacting KRS 304.39-230(6). Thus, we hold that the January 5, 2006, BRB payment was the last BRB payment made within the meaning of the statute of limitations in KRS 304.39-230(6).

  In sum, we conclude that Graham untimely filed her tort action under KRS 304.39-230(6) and that the circuit court properly rendered summary judgment dismissing same.

        For the foregoing reasons, the summary judgment of the McCracken Circuit Court is affirmed.

 
 

Mitchell v. Allstate Ins. Co., 244 S.W.3d 59 (Ky., 2008)

   Along those lines, the language of KRS 304.39-030 broadly provides for basic reparation benefits for car accident victims. "If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." KRS304.39-030(1) (emphasis added). Importantly, basic reparation rights are not extended to those parties who have stolen or converted the vehicle, KRS 304.39-190, or those who intended to cause injury to himself or others with the vehicle, KRS § 304.39-200. A person is not considered a converter if he has used "the motor vehicle in the good faith belief that he is legally entitled to do so." KRS 304.39-190.

Summary judgment was improper because under the initial permission rule, Allan had the permission of his mother, Ms. Warner, to use the vehicle

        The Harrison Circuit Court granted and the Court of Appeals upheld summary judgment in favor of Appellee because they both believed that, under the previous minor deviation standard, it was undeniable that Allan either did not have permission to operate the vehicle the day of his car accident or that he exceeded his scope of permission. However, under the initial permission rule, Allan is not barred from coverage.

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

 The Act provides that "[i]f the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." KRS 304.39030(1). "Basic reparation benefits" are "benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle, subject, where applicable, to the limits, deductibles, exclusions, disqualifications, and other conditions provided in this subtitle." KRS 304.39-020(2). "Loss" is defined by the statute as "accrued economic loss consisting only of medical expense, work loss, replacement services loss, and, if injury causes death, survivor’s economic loss and survivor’s replacement services loss. Non-economic detriment is not loss." KRS 304.39-020(5). The maximum amount of basic reparation benefits available in one accident to a person under the Act is $10,000. KRS 304.39-020(2).

KY     [U] Kentucky Farm Bureau Mutual Insurance Companies v. Grange Mutual Casualty Co., No. 2002-CA-000308-MR (Ky.App. 02/28/2003)

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.


KY     Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

Added reparation benefits (ARB’s) are described in a separate endorsement to the policy entitled "Additional Personal Injury Protection Coverage – Kentucky." The endorsement limits application of this coverage to "an eligible injured person who is [a] named insured or [al relative." Stevenson is neither a named insured of the policy nor a relative, thus is excluded from coverage. KRS 304.39-140(2) permits an insurer "to incorporate in added reparation benefits coverage such terms, conditions and exclusions as may be consistent with premiums charged." We need not address how this particular exclusion might be proved to be consistent or inconsistent "with premiums charged," for Stevenson did not challenge the exclusion on that basis at the trial level. (Logically, however, extension of coverage to persons outside the named insured’s family would result in a higher premium.) Instead, she argued, as she does here, that the exclusion is void, because KFS 304.39-140(l) requires the reparation obliger (Anthem/Decatur) to provide added reparation benefits "if requested by the insured," and the coverage at issue obviously was requested by the Walkers. The Court of Appeals agreed, concluding that I’ARB’s are but extensions of BRB’s," (Slip op., p. 6); and since Anthem/Decatur could not exclude BRB coverage for Stevenson, KRS 304.39030(l), KRS 304.39-080(5), KRS 304.39-100 (11, neither could it exclude ARB coverage for her. Of course, that interpretation not only ignores the fact that ARB’s and BRB’s are separately defined in KRS 304.39-020(l) and (21, it also would nullify KRS 304.39-140(2) insofar as that statute permits exclusions with respect to ARB coverage.


KY     [U] Bentley v. Bentley, No. 2002-CA-001455-MR (Ky.App. 11/26/2003)

It is time for us to take the next logical step from Bishop. Thus, we hold that family exclusion provisions in liability insurance contracts violate the public policy of thisCommonwealth and are unenforceable.  Accordingly . . . cases which uphold the validity of the family exclusion are overruled. 927 S.W.2d at 834-36 .

     Although our courts have never specifically overruled Thompson, in the years since its 1954 rendition public policy clearly has evolved in ways which abrogate the principles underlying the family tort immunity rules. As noted above, since 1954 our courts have discarded tort liability limitations pertaining to parents’ actions against their deceased children’s estates, children’s actions against their deceased parents’ estates, injured children’s actions against their living parents pertaining to motor vehicle accidents, and family member exclusion provisions in automobile liability policies. Clearly, Thompson is no longer in line with the case law and public policy considerations which have developed over the years.

     Moreover, Thompson’s viability must be considered in light of the Kentucky General Assembly’s 1974 enactment of the MVRA, which clearly and unequivocally is intended to promote automobile insurance reform by requiring "owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles." KRS 304.39.010(1). "Every person" who suffers a loss from injury arising out of a motor vehicle’s maintenance or use in Kentucky has a right to receive basic reparation benefits (BRB) unless he or she has rejected that limitation upon tortrights. KRS 304.39030(1). Such BRB "shall be paid without regard to fault," and "without regard to immunity from liability or suit which might otherwise be applicable." KRS 304.39-040(1) and (2).


KY     Thompson v. Kentucky Farm Bureau Mutual Insurance Co., 901 S.W.2d 874 (Ky.App. 03/10/1995)

     In State Farm Mutual Automobile Ins. Co. v. Rains, Ky., 715 S.W.2d 232, 234 (1986), the Supreme Court held that the MVRA "provides for payment of benefits, not to all persons who are injured while making use of a motor vehicle, but only to those persons injured while making use of a motor vehicle whose injuries arose out of the use of the motor vehicle." Further, "basic reparation benefits are payable pursuant to KRS 304.39030(1) and 040(2) only when there is a causal connection between the injuries and themaintenance or use of the motor vehicle." Id. Thompson emphasizes that his injuries were proximately and directly caused by Price’s use of his truck. While this may be true, the statute precludes recovery because Thompson also falls into the category of a mechanic engaged in the business of servicing or repairing Price’s truck.

 
 

 

KY     Kentucky Farm Bureau Mutual Insurance Co. v. McKinney, 831 S.W.2d 164 (Ky. 05/14/1992)

    Movant Farm Bureau argues in this case that Diana and her unborn child, as "Clause (II)" insureds, should be provided no uninsured motorist insurance coverage because they were not physically in, upon, entering into or alighting from the truck at the moment they were struck and killed. Using the factors of time and distance, Farm Bureau asserts that Diana had severed her relationship with the truck when she left her zone of safety and undertook an activity arguably not reasonably incidental to her "alighting from" the truck. Emphasizing the fact that Diana was 130-200 feet away from the truck, it asserts that she became a pedestrian not engaged in a transaction essential to the use of that truck, much like a third party beneficiary to an insurance contract and one who under those circumstances could not reasonably have expected to be a covered person for motor vehicle insurance purposes.     

        We believe, however, that Kentucky should adhere to its stated policy of liberally construing insurance contracts in favor of the asserted "insured" to provide insurance coverage and thereby make insurance effective, Grimes, supra. In our present case, while Diana was physically outside and away from the disabled vehicle she formerly occupied, this record does not reveal any act she took which was not directly connected to the disabled insured vehicle which at the very moment she was struck was creating an actual safety hazard upon that public highway in Jessamine County, Kentucky. She was actively engaged in a safety activity essential to the use of the insured truck and was attempting to carry out the reasonable act of protecting not only the insured disabled vehicle, but also all other persons and vehicles using that highway on that particular occasion. Perhaps if no accident had occurred on that occasion, Farm Bureau would have applauded Diana’s efforts in the prevention of an accident for which it might have been liable for payment of damages due to the insured truck’s creation of a dangerous situation in blocking the southbound traffic of that highway.

     Unquestionably, Diana’s departure from the disabled truck was temporary as she left her purse and personal belongings therein when she proceeded up the roadway. She was not a pedestrian out for a stroll and her presence at the point of impact was directly caused and necessitated by the disability of the insured vehicle. These facts satisfy the "nexus" or causal relationship required by many courts when coverage is granted to injured persons and interpretation is given to the term "occupying" under uninsured insurance contracts.

 

KY     Capital Enterprise Insurance Co. v. Kentucky Farm Bureau Mutual Insurance Co., 804 S.W.2d 377 (Ky.App. 02/22/1991)

    First, Capital contends that the court erred by finding that it was liable for BRB. We disagree.

     Capital’s entire argument in this vein is based on the assertion that a pedestrian who has sustained injuries after being struck by two motor vehicles during the course of a single accident has the burden of establishing that the injuries were caused, at least in part, by the vehicle which was insured by the reparation obligor against which the claim for BRB is asserted. However, we find no basis for Capital’s argument in the language of the no-fault statute.

     The statute provides that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits." KRS 304.39-030(1). Unless optional additional benefits have been purchased, KRS 304.39-140, the maximum amount of BRB payable to any one person as a result of any one accident is $10,000. Since the statute specifically states that this is so regardless of the number of different providers of security which might be obligated to pay such benefits, KRS 304.39-020(2), it is clear that the no-fault statute recognizes that more than one reparation obligor may be primarily liable for the BRB which is payable to aparticular claimant. Further, although the statute which fixes priorities among multiple reparation obligors states that in an instance involving a pedestrian, the applicable BRB insurance is that which covers the vehicle which struck the pedestrian, it does not impose a duty on a pedestrian who happens to be struck by two vehicles in a single accident to show that any of the resulting injuries were caused by the particular vehicle which is insured by the reparation obligor against which the pedestrian asserts a claim for BRB. See KRS 304.39-050(1). Indeed, KRS 304.39-040(1) specifically provides that BRB shall be paid without regard to fault. In our opinion, in this context the concept of payment without regard to "fault" includes any disputes regarding causation which may arise between multiple reparation obligors primarily liable for BRB. We therefore conclude, pursuant to the statutory mandate set forth in KRS 304.39-040(1), that a pedestrian who shows that injuries resulted from being struck by one or more motor vehicles has a right to claim up to $10,000 in BRB from any one reparation obligor which issued insurance on any of those motor vehicles. See KRS 304.39-050(3). To construe the statute otherwise would encourage fault-based litigation in direct contravention of the policies and purposes of the no-fault statute, including that of prompt payment of benefits to victims of motor vehicle accidents, as set forth in KRS 304.39-010.

 

KY     Mullins v. Commonwealth Life Insurance Co., 839 S.W.2d 245 (Ky. 09/03/1992)

The fact that UIM coverage is optional, is reemphasized when comparing the language found in KRS 304.39-320, with language found in both KRS 304.39-030(1), a statute covering basic reparations benefits, with language found in KRS 304.39-110, a statute covering tort liability. KRS 304.39-030(1) provides in part that "every person suffering loss from an injury arising out of maintenance or use of a motor vehicle has a right to basic reparations benefits." (Emphasis added.) Likewise, KRS 304.39-110(1) reads in part, "the requirement of security for payment of tort liabilities . . ." (Emphasis added.) "The legislature obviously could have made (UIM) coverage mandatory (as it did in KRS 304.020(1), KRS 304.39-030, and KRS 304.39-110), but elected to require it to be furnished only "upon request." Flowers v. Wells, supra, at 181.


KY     Midwest Mutual Insurance Co. v. Wireman, 54 S.W.3d 177 (Ky.App. 08/24/2001)

     In a cross-claim filed against Midwest, Bailey asserted a right to basic reparations benefits. The court permitted Bailey to precede on his cross-claim for basic reparations benefits. In so doing, the court erred.
       "[I]n this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." However, [n]otwithstanding [the right to basic reparation benefits recognized in KRS 304.39-030], no operator or passenger on a motorcycle is entitled to basic reparation benefits from any source for injuries arising out of the maintenance or use of such a motorcycle unless such reparation benefits have been purchased as optional coverage for the motorcycle or by the individual so injured.
     Here, Bailey rejected basic reparations benefits coverage in writing.

 
 
 

KY     Milby v. Wright, 952 S.W.2d 202 (Ky. 09/04/1997)

       Milby repeats the three arguments raised before the lower courts. Addressing the last argument first, Appellant contends that an insurance carrier may not refuse to pay a medical expense in order to protect its statute of limitations defense. Citing KRS 304.39-040(2), wherein it states that the obligation to pay BRB "exists without regard to immunity from liability or suit which might otherwise be applicable," Appellant contends the limitations language of KRS 304.39-230 does not apply to the right to BRB set forth in KRS 304.39030(1) ("Every person . . . has a right to basic reparation benefits"). Apparently, Appellant believes the Court of Appeals erred in equating a request for payment submitted to an insurance carrier to "an action for further benefits" which must be filed within two years of the last payment of benefits. The argument is that because the carrier is obliged to pay without regard to immunity from liability or suit, the insurer cannot, by virtue of refusal to pay, provide the insured with a statute of limitations defense.

     We agree with the Court of Appeals that the claim for payment is subject to the limitation set forth inKRS 304.39-230 (1). To hold otherwise would allow the potential plaintiff to hold the alleged tortfeasor hostage by the leisured submission of medical claims, thereby forestalling the running of the statute of limitations.

KY     Kentucky Farm Bureau Mutual Insurance Co. v. Hall, 807 S.W.2d 954 (Ky.App. 01/18/1991)

         In State Farm Mutual Automobile Insurance Company v. Rains, Ky., 715 S.W.2d 232 (1986), we read, at 234, "We hold that basic reparation benefits are payable pursuant to KRS 304.39-030(1) and 040(2) only when there is a causal connection between theinjuries and the maintenance or use of the motor vehicle." See also United States Fidelity & Guaranty Co. v. Western Fire Ins. Co., Ky., 450 S.W.2d 491 (1970). Rains was consolidated with the appeal of Smith v. State Farm Mutual Automobile Ins. Co., and both Rains and Smith were denied recovery for basic reparation benefits. Rains had become involved in a fight with people who were already fighting on and around his vehicle. He was struck with a bat when he attempted to enter his vehicle. Those facts failed to suffice as a showing that his use of his vehicle caused his injury. The case involving Smith resulted from an intentional shooting by a third party. The court determined that the only connection between the victim and the motor vehicle was incidental, that it was not a motor vehicle accident which contributed to the injury, and that Smith was not a victim of a motor vehicle accident.

 

KY     Coots v. Allstate Insurance Co., 853 S.W.2d 895 (Ky. 03/18/1993)

      Indeed, UM coverage and UIM coverage are treated coextensively in many standard insurance policies, and in some cases are offered as a combined coverage.In both, proof the offending motorist is a tortfeasor and proof of the amount of damages caused by the offending motorist are not preconditions to coverage, but only essential facts that must be proved before the insured can recover judgment in a lawsuit against the insurer on the contract of insurance. That the insurance industry, itself, recognizes that "judgment" against the tortfeasor is not a precondition to the insurance claim is illustrated by the language in the Kitchens’ policy, which premises liability upon "payment of judgments or settlements." Because of this language the Kitchens argue that they are entitled to settle with the tortfeasor and proceed against their UIM carrier who refused to consent to the settlement under the language of their own policy, regardless of statutory interpretation. But we do not reach this issue because the only rational interpretation of the statute is, while the policy limits specified in the tortfeasor’s policy must be exhausted before the UIM carrier has an obligation to pay, the liability of the tortfeasor and the amount of damages sustained are elements that must be established in measuring the UIM carrier’s obligation and not a statutory precondition to coverage. This is consonant with our earlier decision in LaFrange v. United Serv. Auto. Ass’n, supra, the only prior UIM coverage case decided by our Court.


KY State Farm Mutual Automobile Insurance Co. v. Harris, 850 S.W.2d 49 (Ky.App. 08/28/1992)

Every person suffering loss from injury arising out of the use of a motor vehicle in this Commonwealth has a right to basic reparation benefits, unless he has rejected the limitation on his tort rights. KRS 304.39-030. . . . The benefits are to be paid without regard to fault, KRS 304.39-040(1), and are not restricted to those qualifying as basic reparation insureds. KRS 304.39-030; KRS 304.39-160; See also Note, Kentucky No-Fault: An Analysis and Interpretation, 65 KY.L.J. 466 at 491.

 
 

KRS 304.39-040 Obligation to pay basic reparation benefits — Requirement of option for motorcycle coverage in liability contracts — Exclusion of motorcycle operator or passenger who has not purchased optional coverage.

(1) Basic reparation benefits shall be paid without regard to fault.

(2) Basic reparation obligors and the assigned claims plan shall pay basic reparation benefits, under the terms and conditions stated in this subtitle, for loss from injury arising out of maintenance or use of a motor vehicle. This obligation exists without regard to immunity from liability or suit which might otherwise be applicable.

(3) Every insurer writing liability insurance coverage for motorcycles in this Commonwealth shall make available for purchase as a part of every policy of insurance covering the ownership, use, and operation of motorcycles the option of basic reparations benefits, added reparations benefits, uninsured motorist, and underinsured motorist coverages.

(4) Notwithstanding any other provisions of this subtitle, no operator or passenger on a motorcycle is entitled to basic reparation benefits from any source for injuries arising out of the maintenance or use of such a motorcycle unless such reparation benefits have been purchased as optional coverage for the motorcycle or by the individual so injured.

Effective: July 15, 1998

History: Amended 1998 Ky. Acts ch. 567, sec. 1, effective July 15, 1998. — Amended

1976 Ky. Acts ch. 75, sec. 1 effective March 29, 1976. — Created 1974 Ky. Acts

ch. 385, sec. 4, effective July 1, 1975.

 

Annotations for this statute:

 
 
Motorists Mut. Ins. Co. v. Hartley (Ky. App., 2011) February 11, 2011

Even under the broadest interpretation of Chaffin, the present facts do not warrant invalidation of the "owned but not scheduled for coverage" exclusion in the Motorists policy. Although not referred to in the exclusion, consistent with the coverage bargained for between Motorists and Hartley, Hartley’s two motorcycles were excluded from UIM coverage. Although Motorists offered UIM coverage, Hartley expressly rejected it as too expensive.

Indeed, it is recognized that motorcycles are more expensive to insure and, consequently, motorcycle exclusions are enforceable. As stated in Preferred Risk Mut. Ins. Co. v. Oliver, 551 S.W.2d 574, 577 (Ky. 1977):

It is common knowledge that motorcycle riders, as a class, are among the highest risk groups conceivable. Motorcycles offer no protection whatsoever from the front, back, sides or top, and leave the rider exposed to every peril of highway travel. The exclusion of such a class from coverage is clearly reasonable where, as here, the assured has the option of avoiding the excluded peril. An assured has no choice in selecting those uninsured motorists who may injure him, but he certainly does elect to ride a motorcycle. This volitional act triggers the exclusion and he accepts the consequences.

Although, in Preferred Risk Mut. Ins. Co., the Court was dealing with an uninsured motorist, in Baxter v. Safeco Ins. Co. of America, 46 S.W.3d 577 (Ky.App. 2001), this Court applied the same logic and enforced an exclusion from UIM coverage when the insured was operating an owned motorcycle. This Court reasoned:

Kentucky courts have previously upheld insurance policy provisions excluding from underinsured coverage motor vehicles owned by or available for the regular use of the policyholder or any family member. Motorists Mutual Ins. Co. v. Glass, Ky., 996 S.W.2d 437 (1997); Windham v. Cunningham, Ky.App., 902 S.W.2d 838 (1995). The reasoning behind these decisions rests in the purpose of the statute – "to give the insured the right to purchase additional liability coverage for the vehicle of a prospective underinsured tortfeasor." Motorists Mutual, 996 S.W.2d at 449. Motorists Mutual upheld as not against public policy the exclusion from the definition of an underinsured vehicle any vehicle "owned by or furnished or available for the regular use of you or any family member." Id. at 449-450.

Similar exclusions are present in the policy at issue here. In the Underinsured Motorists Coverage portion of the policy, part C of the insuring agreement states that an "’underinsured motor vehicle’ does not include any vehicle or equipment . . . [o]wned by or furnished or available for the regular use of you or any family member . . . ." In the Exclusions portion of the policy, Safeco states that it does "not provide Underinsured Motorists Coverage for bodily injury sustained by any insured . . . [w]hile occupying or operating an owned motorcycle or moped." The policy does not, as Baxter asserts, only provide coverage for injuries arising out of automobile accidents. The exclusion of an owned motorcycle from underinsured coverage is just as valid as the exclusion of an owned automobile. Id. at 578-579.

Our General Assembly has likewise recognized that motorcycles and their increased risk of injuries to an insured distinguish motorcycles from other motor vehicles. KRS 304.39-040 provides that:

(3) Every insurer writing liability insurance coverage for motorcycles in this Commonwealth shall make available for purchase as a part of every policy of insurance covering the ownership, use, and operation of motorcycles the option of basic reparations benefits, added reparations benefits, uninsured motorist, and underinsured motorist coverages.

(4) Notwithstanding any other provisions of this subtitle, no operator or passenger on a motorcycle is entitled to basic reparation benefits from any source for injuries arising out of the maintenance or use of such a motorcycle unless such reparation benefits have been purchased as optional coverage for the motorcycle or by the individual so injured.

Thus, unlike an owner of all other motor vehicles who must opt out of uninsured/underinsured coverage pursuant to KRS 304.20-020, motorcycle owners must affirmatively purchase all optional coverage. The obvious purpose of such a distinction is to relieve insurance companies of being exposed to the financial risk of providing insurance benefits for motorcycles otherwise required for motor vehicles.

It is troubling that the Motorists policy contained an exclusion clause with language that our Supreme Court criticized over twenty years ago, and that Motorists could have avoided litigation if it had included in its policy an exclusion clause for motorcycles. Nevertheless, based on the caselaw and the Motor Vehicle Reparations Act, we cannot reasonably conclude that public policy is violated by the enforcement of the exclusion in the Motorists policy which precludes Hartley from recovering UIM coverage.

 

KY     [U] Foster v. Kentucky Farm Bureau Mutual Insurance Co., No. 2002-CA-002625-MR (Ky.App. 03/26/2004)

KRS 304.39040(2) states that BRBs shall be paid "for loss from injury arising out of maintenance or useof a motor vehicle." KRS 304.39-210 mandates that BRBs for work loss be paid within thirty days of reasonable notice of the work loss and amount of loss unless the BRB obligor has a reasonable foundation to delay said payment. KRS 304.39-020(5)(b) defines "work loss" as "loss of income from work the injured person would probably have performed if he had not been injured . . ." Relative to unemployment compensation, KRS 341.350(3) states that the unemployed worker shall be eligible for benefits only if he is "physically and mentally able to work."

     It is undisputed that Foster made inconsistent factual assertions in submitting her claims for unemployment compensation and work loss BRBs – that she was physically capable of working for purposes of unemployment compensation and that she was physically incapable of working due to the car accident for purposes of the BRB work loss claim. The determination of whether Farm Bureau had reasonable foundation to withhold or delay payment of BRBs based on that inconsistency necessarily involved the interpretation of the above statutes. It is well established that an interpretation of a statute is a matter of law to be determined by the court, not a jury. Floyd County Board of Education v. Ratliff, Ky., 955 S.W.2d 921 (1997). It has also been held that the legal implications of undisputed facts are issues of law to be decided by the court. Cobb v. King Kwik Minit Market, Inc., Ky., 675 S.W.2d 386 (1984). In Kentucky Farm Bureau Mutual Insurance Co. v. Troxell, Ky., 959 S.W.2d 82 (1997), the insured’s self-serving evidence was adjudged to be insufficient proof of work loss pursuant to KRS 304.39-210 as a matter of law. Accordingly, the lower court erred in this case in submitting the issue to the jury

 

KY     Progessive Northern Insurance Co. v. Corder, No. 1998-SC-092-CL (Ky. 04/20/2000)

 In Barrera, the Supreme Court of California vacated an intermediate court decision in the same case, 68 Cal. Rptr. 285 (Cal. Ct. App. 1968) which had held that a cancellation statute similar to KRS 304.39040 superseded its rescission statute. In doing so, however, the Supreme Court of California remanded the case to the trial court for a determination as to whether the insurer had complied with its duty to conduct a reasonable investigation into the insurability of its applicant. In Kentucky, an insurer is entitled to rely on the representations of its insured absent clear notice and full cognizance of the true facts. State Auto. Mut. Ins. Co. v. Sorav, 547 F.2d 397 (7th Cir. 1977) (surveying and interpreting Kentucky law); Cookendorfer v. Pendleton County Farmers Fire Ins. Co., 287 Ky. 735, 155 S.W.2d 204, 206-07 (1941); State Farm Mut. Auto. Ins. Co. v. Crouch, supra, at 206.

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

      Under the Motor Vehicle Reparations Act, "[b]asic reparation obligors and the assigned claims plan shall pay basic reparation benefits, under the terms and conditions stated in this subtitle[.]" KRS 304.39040(2). A "reparation obligor" is defined as "an insurer, self-insurer, or obligated government providing basic or added reparation benefits under this subtitle." KRS 304.39-020(13). Generally, the basic reparation insurance applicable "is the security covering the vehicle occupied by the injured person at the time of the accident[.]" KRS 304.39-050(1). If there is no security covering the vehicle, the Act allows for recovery from any contract of basic reparation insurance under which the injured party falls within the definition of a basic reparation insured. KRS 304.39-050(2). In either case, the recovery of basic reparation benefits from a reparation obligor is limited to $10,000. KRS 304.39-050(3). These provisions are significant to Bartlett’s ability to recover because tort liability is abolished to the extent that basic reparation benefits are payable. See KRS 304.39-060(2).


KY     Nationwide Mutual Insurance Company v. State Farm Auto. Insurance Company, 973 S.W.2d 56 (Ky. 05/21/1998)  

 This case provides an interesting and exhaustive discussion of MVRA but has little relevance to 040.

KY     [U] Bentley v. Bentley, No. 2002-CA-001455-MR (Ky.App. 11/26/2003)

 Thompson’s viability must be considered in light of the Kentucky General Assembly’s 1974 enactment of the MVRA, which clearly and unequivocally is intended to promote automobile insurance reform by requiring "owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles." KRS 304.39.010(1). "Every person" who suffers a loss from injury arising out of a motor vehicle’s maintenance or use in Kentucky has a right to receive basic reparation benefits (BRB) unless he or she has rejected that limitation upon tort rights. KRS 304.39-030(1). Such BRB "shall be paid without regard to fault," and "without regard to immunity from liability or suit which might otherwise be applicable." KRS 304.39040(1) and (2). Finally, required minimum tort liability insurance amounts are specified in KRS 304.39-110(1).

      Here, the insurance policy in question provided the required minimum amounts of BRB and tort liability coverage. It is clear, in light of subsequent legislation and case law, that Thompson is no longer good law, at least insofar as it would preclude a parent from suing an unemancipated minor child in tort for damages up to the statutorily required minimum amounts of BRB and tort liability coverage, as the legislature’s adoption of the MVRA and minimum tort liability insurance requirements compels a finding that there can be no authorized exclusions from minimum coverage. See Bishop, supra, and Lewis, supra. That being so, it is clear that the trial court erred by determining that pursuant to Thompson, David Bentley was not entitled to the benefit of the minimum insurance coverage required by the statute and provided by the policy which was in effect at the time of the collision.


KY     Midwest Mutual Insurance Co. v. Wireman, 54 S.W.3d 177 (Ky.App. 08/24/2001)

  "[I]n this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." However, [n]otwithstanding [the right to basic reparation benefits recognized in KRS 304.39-030], no operator or passenger on a motorcycle is entitled to basic reparation benefits from any source for injuries arising out of the maintenance or use of such a motorcycle unless such reparation benefits have been purchased as optional coverage for the motorcycle or by the individual so injured

 

KY     Troxell v. Trammell, 730 S.W.2d 525 (Ky. 05/21/1987)

 This section says nothing about denying the motorcyclist any other provisions of the Act. It says nothing about denying a motorcyclist who has a cause of action in tort the two year statute of limitations provided in § -230(6) of the Act.

KY     Milby v. Wright, 952 S.W.2d 202 (Ky. 09/04/1997)

Appellant contends that an insurance carrier may not refuse to pay a medical expense in order to protect its statute of limitations defense. Citing KRS 304.39040(2), wherein it states that the obligation to pay BRB "exists without regard to immunity from liability or suit which might otherwise be applicable," Appellant contends the limitations language of KRS 304.39-230 does not apply to the right to BRB set forth in KRS 304.39-030(1) ("Every person . . . has a right to basic reparation benefits"). Apparently, Appellant believes the Court of Appeals erred in equating a request for payment submitted to an insurance carrier to "an action for further benefits" which must be filed within two years of the last payment of benefits. The argument is that because the carrier is obliged to pay without regard to immunity from liability or suit, the insurer cannot, by virtue of refusal to pay, provide the insured with a statute of limitations defense

     We agree with the Court of Appeals that the claim for payment is subject to the limitation set forth in KRS 304.39-230 (1). To hold otherwise would allow the potential plaintiff to hold the alleged tortfeasor hostage by the leisured submission of medical claims, thereby forestalling the running of the statute of limitations. One of the purposes of the Motor Vehicle Reparations Act (MVRA) was to simplify and speed up the process by which medical bills and other losses resulting from vehicular accidents are reimbursed, without resorting to litigation, thereby providing certainty at a time of need for those involved. Crenshaw v. Weinberg, Ky., 805 S.W.2d 129, 132 (1991); KRS 304.39-010(5). Analogous to the rights bestowed upon the injured person is the right of the other party to, eventually and within a time period that can be easily determined, be free of the possibility of becoming the target of litigation. It is that right that the time limitations of the MVRA are designed to provide.

 
 

KY     Kentucky Farm Bureau Mutual Insurance Co. v. Hall, 807 S.W.2d 954 (Ky.App. 01/18/1991)

    We hold that basic reparation benefits are payable pursuant to KRS 304.39-030(1) and 040(2) only when there is a causal connection between the injuries and the maintenance or use of the motor vehicle." See also United States Fidelity & Guaranty Co. v. Western Fire Ins. Co., Ky., 450 S.W.2d 491 (1970). Rains was consolidated with the appeal of Smith v. State Farm Mutual Automobile Ins. Co., and both Rains and Smith were denied recovery for basic reparation benefits. Rains had become involved in a fight with people who were already fighting on and around his vehicle. He was struck with a bat when he attempted to enter his vehicle. Those facts failed to suffice as a showing that his use of his vehicle caused his injury. The case involving Smith resulted from an intentional shooting by a third party. The court determined that the only connection between the victim and the motor vehicle was incidental, that it was not a motor vehicle accident which contributed to the injury, and that Smith was not a victim of a motor vehicle accident.

        Although the case at bar is somewhat similar to the facts concerning the shooting of Smith, we nevertheless find significant differences in the two cases and we believe that Janice Hall is entitled to recover basic reparation benefits. She was using a motor vehicle, and, unlike Rains or Smith (who were injured by intentional acts), her injury resulted from a pure unintentional accident. We believe that she would clearly be entitled to recover, had she been injured as the result of a rock falling from the side of a road while going through a cut in a hill, or from being injured by a rock pitched by the tire of another vehicle or even as a result of some bird or animal striking the vehicle, and directly causing an initial injury to an occupant. Any of these would be accidental injuries occurring out of the use of a vehicle, and causally related to the use of the vehicle. Although Mrs. Hall might have been struck by a rock thrown from a lawn mower while walking down the street, her basic reparation benefits coverage is not applicable to the situation of a pedestrian. She is covered, however, from accidental injury which is causally related to her operation of the motor vehicle. We find such a causal connection to exist in this case.

 

KY     Coots v. Allstate Insurance Co., 853 S.W.2d 895 (Ky. 03/18/1993)

   Unless specifically "rejected" (KRS 304.39-030), automobile insurers must provide basic reparation benefits ("BRB") which "shall be paid without regard to fault" (KRS 304.39-040(1)); and,

 (3) For compulsory tort liability insurance (KRS 304.39-110).
      All three of these coverages are mandatory in the sense that the automobile insurer is required by statute to provide such coverage: the underinsured motorist coverage if the insured requests it, the no-fault coverage unless the insured rejects it, and minimum limits tort liability coverage with no option. The carrier has no option whether it wishes to offer these coverages if it sells policies in Kentucky. All of the coverage provided for in the MVRA is so provided to carry out the "policy and purpose" of the statute as specified in KRS 304.39-010, which include: in subparagraph (3), "to encourage prompt medical treatment and rehabilitation of the motor vehicle accident victim by providing for prompt payment of needed medical care and rehabilitation"; and in subparagraph (5), "to reduce the need to resort to bargaining and litigation through a system which can pay victims of motor vehicle accidents without the delay, expense, aggravation


KY     Capital Enterprise Insurance Co. v. Kentucky Farm Bureau Mutual Insurance Co., 804 S.W.2d 377 (Ky.App. 02/22/1991)

The statute provides that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits." KRS 304.39-030(1). Unless optional additional benefits have been purchased, KRS 304.39-140, the maximum amount of BRB payable to any one person as a result of any one accident is $10,000. Since the statute specifically states that this is so regardless of the number of different providers of security which might be obligated to pay such benefits, KRS 304.39-020(2), it is clear that the no-fault statute recognizes that more than one reparation obligor may be primarily liable for the BRB which is payable to a particular claimant. Further, although the statute which fixes priorities among multiple reparation obligors states that in an instance involving a pedestrian, the applicable BRB insurance is that which covers the vehicle which struck the pedestrian, it does not impose a duty on a pedestrian who happens to be struck by two vehicles in a single accident to show that any of the resulting injuries were caused by the particular vehicle which is insured by the reparation obligor against which the pedestrian asserts a claim for BRB. See KRS 304.39-050(1). Indeed, KRS 304.39-040(1) specifically provides that BRB shall be paid without regard to fault. In our opinion, in this context the concept of payment without regard to "fault" includes any disputes regarding causation which may arise between multiple reparation obligors primarily liable for BRB.

       We therefore conclude, pursuant to the statutory mandate set forth in KRS 304.39-040(1), that a pedestrian who shows that injuries resulted from being struck by one or more motor vehicles has a right to claim up to $10,000 in BRB from any one reparation obligor which issued insurance on any of those motor vehicles.See KRS 304.39-050(3). To construe the statute otherwise would encourage fault-based litigation in direct contravention of the policies and purposes of the no-fault statute, including that of prompt payment of benefits to victims of motor vehicle accidents, as set forth in KRS 304.39-010.

 
 

KRS 304.39-045 Exclusion from coverage as operator by agreement.

In an automobile liability insurance policy, the insurer and the named insured may agree to exclude any member of the household not a spouse or dependent from coverage as the operator of an insured vehicle. The names of persons excluded shall be set forth in the policy or in an endorsement that is signed by both parties.

Effective: July 13, 1990

History: Created 1990 Ky. Acts ch. 101, sec. 1, effective July 13, 1990.

 
NO ANNOTATIONS FOR THIS STATUTE:
 
 

KRS 304.39-050 Priority of applicability of security for payment of basic reparation

benefits.

(1) The basic reparation insurance applicable to bodily injury to which this subtitle applies is the security covering the vehicle occupied by the injured person at the time of the accident or, if the injured person is a pedestrian, the security covering the vehicle which struck such pedestrian. If the reparation obligor providing such insurance fails to make payment for loss within thirty (30) days after receipt of reasonable proof of the fact and the amount of loss sustained, the injured person shall be entitled to payment under any contract of basic reparation insurance under which he is a basic reparation insured and the insurer making such payments shall be entitled to full reimbursement from the reparation obligor providing the security covering the vehicle. A pedestrian, as used herein, means any person who is not making "use of a motor vehicle" at the time his injury occurs.

(2) If there is no security covering the vehicle, any contract of basic reparation insurance under which the injured person is a basic reparation insured shall apply.

(3) No person shall recover basic reparation benefits from more than one (1) reparation obligor as a result of the same accident, except as provided in KRS 304.39-140(4) nor in excess of ten thousand dollars ($10,000) as the result of the same accident.

Effective: June 17, 1978

History: Amended 1978 Ky. Acts ch. 215, sec. 2, effective June 17, 1978. – Created 1974 Ky. Acts ch. 385, sec. 5, effective July 1, 1978.

 

ANNOTATIONS FOR THIS STATUTE:

 

Progressive Max Ins. Co. v. Nat’l Car Rental Sys. , Inc., 329 S.W.3d 320 (Ky., 2011) – Jan. 20, 2011

This appeal arises from a subrogation dispute regarding basic reparations benefits (BRB) paid by Appellee, National Car Rental Systems, Inc. (National) to a passenger of one of its rental vehicles. After payment, National sought full reimbursement against Appellant, Progressive Max (Progressive), the insurer of the driver of National’s vehicle.

After the Jefferson Circuit Court granted summary judgment in National’s favor, the Kentucky Court of Appeals affirmed, holding that (1) Progressive was primarily liable for BRB; and (2) National may pursue its claim via KRS 304.39-050. We granted discretionary review to determine the correctness of that opinion and now reverse.

 

LawReader “Cliff Notes”: (with apologies to Justice Scott for butchering his well-written opinion)

 
National – Car Rental Agency
Jones – Car Driver and Renter

Progressive (Insurance Company) – provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle

Shannon Wilkerson – Passenger Injured in car driven by Jones – rented from National

 

Synopsis: Jones was involved in a motor vehicle accident while driving National’s vehicle, injuring his passenger, Shannon Wilkerson.

 

Wilkerson sought recovery from Jones and Progressive (which provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle).

 

At some point, Wilkerson received BRB from National (the vehicle owner).

National sued Progressive to re-coup BRB amount paid to Wilkerson.

 

The KY Supreme Court Reversed the Court of Appeals in this case; which held that a vehicle insurer may employ KRS 304.39-050 to assert a subrogation claim.

 

Supreme Court: … the Court of Appeals is reversed and this case is remanded to the Jefferson Circuit Court with instruction to enter summary judgment in favor of Progressive.

 

Stewart v. Elco Administrative Services, Inc., No. 2009-CA-000828-MR (Ky. App. 5/14/2010) (Ky. App., 2010)

     Both ELCO and Enterprise filed motions for summary judgment, arguing that Stewart’s failure to obtain motor vehicle insurance coverage for his own vehicle constituted a constructive rejection of his tort rights and liabilities under Kentucky’s Motor Vehicle Reparations Act. ELCO also claimed it was not the real party in interest since the vehicle was owned by Enterprise, a self-insured entity. Stewart responded with a cross-motion for summary judgment, arguing that there is no such thing as a "constructive rejection" of one’s right to collect BRB and that in order to reject no-fault coverage, there must be strict compliance with KRS 304.39-060(4).

     Kentucky’s Motor Vehicle Reparations Act ("MVRA"), also known as the No-Fault Act, was enacted to "create a comprehensive compulsory insurance system that requires owners to provide vehicle security covering basic reparation benefits and that imposes legal liability on vehicle owners for damages or injuries arising out of ownership of or use of the vehicle. KRS 304.39-010; KRS 304.39-080(5)." McGrew v. Stone, 998 S.W.2d 5, 6 (Ky. 1999). KRS 304.39-030(1) provides in pertinent part:

If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4).

        Furthermore, KRS 304.39-060 states, in part:

(1) Any person who registers, operates, maintains or uses a motor vehicle on the public roadways of this Commonwealth shall, as a condition of such registration, operation, maintenance or use of such motor vehicle and use of the public roadways, be deemed to have accepted the provisions of this subtitle, and in particular those provisions which are contained in this section.

(2)

(a) Tort liability with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance, or use of a motor vehicle is "abolished" for damages because of bodily injury, sickness or disease to the extent the basic reparation benefits provided in this subtitle are payable therefor, or that would be payable but for any deductible authorized by this subtitle, under any insurance policy or other method of security complying with the requirements of this subtitle, except to the extent noneconomic detriment qualifies under paragraph (b) of this subsection.

        With respect to the payment of BRB, KRS 304.39-050(1) provides that "[t]he basic reparation insurance applicable to bodily injury to which this subtitle applies is the security covering the vehicle occupied by the injured person at the time of the accident . . . ." Thus, the statutory language is unambiguous that the vehicle occupied by the injured person is responsible for the payment of BRB. Agreeing with this concept, a panel of this Court in Rees v. USF&G, 715 S.W.2d 904, 906 (Ky. App. 1986) held:

     Unless he has rejected the limitation on his tort rights as provided in KRS 304.39-060(4), every person suffering loss from injury arising out of the maintenance or use of a motor vehicle has a right to basic reparation benefits. See KRS 304.39-030(1). The legislative policy as announced in KRS 304.39-050(1) is that the basic reparation insurance applicable to bodily injury" is the security covering the vehicle occupied by the injured person at the time of the accident." The "security covering the vehicle" in the present case is the policy written by USF&G, see KRS 304.39-080, which is, therefore, primarily liable for the payment of basic reparation benefits to the injured passenger. We have been referred to nothing in the MVRA which permits shifting the liability for the payment of basic reparation benefits as is the case with respect to the payment of tort liabilities. As a consequence, the policy written by USF&G must be interpreted to furnish primary coverage for basic reparation benefits to the injured passenger. See KRS 304.39-100.

        Enterprise argued, and the trial court herein agreed, that despite the legislature’s expressed intent that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits . . .," Stewart’s failure to procure insurance on his own vehicle acted as a "constructive waiver" of his tort rights and liabilities. We disagree.

        Under the MVRA all persons owning an automobile, whether insured or not, are subject to the limitations of "no-fault," unless the owner actually rejects the limitation of his tort rights and liabilities under KRS 304.39-060. Atchison v. Overcast, 563 S.W.2d 736 (Ky. App. 1977). Specifically, KRS 304.39-060 provides:

(4) Any person may refuse to consent to the limitations of his tort rights and liabilities as contained in this section. Such rejection must be in writing in a form to be prescribed by the Office of Insurance and must have been executed and filed with the office at a time prior to any motor vehicle accident for which such rejection is to apply. Such rejection form together with a reasonable explanation thereof shall be furnished by the reparation obligor with each policy to each prospective insurance applicant. Such rejection form shall affirmatively state in bold print that acceptance of this form of insurance denies the applicant the right to sue a negligent motorist unless certain requirements contained in the policy of insurance are met. Rejection by a person who is under legal disability shall be made on behalf of such person by his legal guardian, conservator or his natural parent. The failure of such guardian or a natural parent of a person under legal disability to file a rejection, within six (6) months from the date that this subtitle would otherwise become applicable to such person, shall be deemed to be an affirmative acceptance of all provisions of this subtitle. Provided, however, any person who, at the time of an accident, does not have basic reparation insurance but has not formally rejected such limitations of his tort rights and liabilities and has at such time in effect security equivalent to that required by KRS 304.39-110 shall be deemed to have fully rejected such limitations within meaning of this section for that accident only.

(5)

(a) Any rejection must be filed with the Office of Insurance and shall become effective on the date of its filing until revoked;

(b) Any rejection filed prior to June 30, 1980, shall be deemed to be effective from the date of its filing until revoked; and

(c) Any revocation shall be in writing and shall become effective upon the date of its filing with the Office of Insurance.

        The plain language of KRS 304.39-060(4) explicitly requires any rejection of one’s tort rights and liabilities to be in writing and filed with the Department of Insurance. Atchison 563 S.W.2d at 737. "[O]ur duty is to ascertain and give effect to the intent" of the Legislature. Beckham v. Board of Education of Jefferson County, 873 S.W.2d 575, 577 (Ky. 1994). In so doing, we are directed to follow the clear language of the statute and when "plain and unambiguous" words are employed, we must apply those terms "without resort to any construction or interpretation." Terhune v. Commonwealth, 907 S.W.2d 779, 782 (Ky. App. 1995). We find KRS 304.39-060 to be clear on its face and not susceptible of interpretation-especially not the proposition that one can "constructively" or implicitly reject tort limits and liabilities.

        Ignoring the requirements set forth in KRS 304.39-060, the trial court relied upon the decisions from this Court in Thomas v. Ferguson, 560 S.W.2d 835 (Ky. App. 1978) and Shelter Insurance Company v. Human Health Plans, Inc., 882 S.W.2d 127 (Ky. App. 1994), wherein uninsured motorists were precluded from maintaining a cause of action for BRB against an insured motorist. In both cases, the Court held that by being voluntarily uninsured, an uninsured driver "waived" the right to collect BRB from an insured tortfeasor. Enterprise urges herein that denying Stewart BRB under the facts of this case is simply a logical extension of Thomas and Shelter Insurance.

        Importantly, however, there is a crucial factual distinction between the above cases and the instant matter. In both Thomas and Shelter Insurance, an uninsured driver, who was injured while operating his own uninsured vehicle, was attempting to claim BRB from the adverse insured driver. In the accident giving rise to the cause of action herein, Stewart was not operating his own vehicle, but was instead riding as a passenger in a vehicle owned and insured by Enterprise. Had Stewart not owned a vehicle, or had he maintained insurance on his own vehicle, there would be no question that Enterprise would be liable for BRB as a result of the accident causing Stewart’s injuries. See KRS 304.39-050(1).

        Furthermore, we are of the opinion that Enterprise and the trial court have misconstrued the holdings and rationale of both Thomas and Shelter Insurance. Neither decision hinged upon a finding that the uninsured motorist, by failing to comply with the compulsory insurance requirements of the MVRA, constructively or implicitly rejected his rights and liabilities under KRS304.39-060. In fact, such subsection is never referenced in either case. Rather, the Court precluded the uninsured motorist from claiming BRB from an insured motorist on public policy reasons. "We do not feel that the public policy of the Commonwealth of Kentucky allows us to give this uninsured motorist a cause of action for personal injuries as against the adverse driver, an insured motorist." Thomas, 560 S.W.2d at 836.

        Indeed, since the enactment of the MVRA there have been several published decisions relating to the Act and the uninsured motorist. As noted in Bartlett v. Prime Insurance Syndicate, Inc, 156 S.W.3d 299, 303 (Ky. App. 2004), "[t]he inability of an uninsured motorist to recover basic reparations benefits is one of the penalties recognized by this court as being imposed within the no fault framework of the Motor Vehicle Reparations Act." (Citing Gussler v. Damron, 599 S.W.2d 775, 778 (Ky. App. 1980)). However, in every case, the uninsured motorist had been operating his own vehicle at the time of the accident.

        Certainly, we believe that public policy dictates that a motorist who voluntarily fails to comply with the insurance requirements of the MVRA should not be entitled to BRB if the accident and injury results from the operation or use of that uninsured vehicle. However, we simply cannot reach the same conclusion when the injury is not attributable to the motorist’s use or operation of the uninsured vehicle. Here, Stewart was not operating his vehicle, but was rather merely riding as a passenger in another vehicle. In fact, Stewart claims, and the trial court found, that his vehicle was not operable, which leads to an entirely separate inquiry of whether or not he was even required to maintain insurance on the vehicle. See KRS 304.39-020(7) and Auto-Owners Insurance Company v. Goode, 294 S.W.3d 32 (Ky. App. 2009).

        Regardless, this Court is of the opinion that to create a blanket rule that one who is uninsured is prohibited from claiming BRB under any circumstances not only contravenes the language and intent of the MVRA, but violates the public policy of this Commonwealth. BRB follows the vehicle, not the person. And KRS 304.39-050(1) provides that "[t]he basic reparation insurance applicable to bodily injury . . . is the security covering the vehicle occupied by the injured person at the time of the accident . . . ." Stewart was occupying a car owned and insured by Enterprise at the time he was injured.

        The language of KRS § 304.39-030 broadly provides for basic reparation benefits for car accident victims. "If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." KRS § 304.39-030(1) (emphasis added). As noted by our Supreme Court in Mitchell v. Allstate Insurance Company, 244 S.W.3d 59, 64 (Ky. 2008), "this Court can and will see that the General Assembly’s clear intent-that all Kentucky motorists should have automobile liability coverage-is satisfied in all reasonable instances." (Citing Beacon Insurance Co. of America v. State Farm Mutual Insurance Co., 795 S.W.2d 62, 63 (Ky. 1990)).

        For the reasons stated herein, we vacate the order of the Jefferson Circuit Court granting summary judgment in favor of Enterprise and remand the matter for entry of a judgment in favor of Stewart on his claim of entitlement to BRB.

 

Progressive Max Insurance Company v. National Car Rental Systems, Inc., No. 2007-CA-001800-MR (Ky. App. 5/8/2009) (Ky. App., 2009)

 

Over Ruled by Supreme Court Jan. 20, 2011 <click to go to decision

 

     The underlying facts are not in dispute and were stipulated at the trial court level. Ed Jones ("Jones") rented a motor vehicle from National on October 26, 2001. On November 1, 2001, Jones was involved in a motor vehicle accident while driving National’s vehicle. Shannon Wilkerson ("Wilkerson") was a passenger in Jones’s vehicle and was injured in the accident. At the time of the accident, Jones was insured by Progressive on his personal vehicle. The policy with Progressive included liability benefits should Jones have an accident while in a rented vehicle.

     National contends that, since Progressive is an insurance company which provided a contract of liability insurance covering the use of a motor vehicle within the Commonwealth, it is deemed to provide BRB under KRS 304.39-100.

        The following definition of a reparations obligor is found in KRS 304.39-020(13):

        "Reparation obligor" means an insurer, self-insurer, or obligated government providing basic or added reparation benefits under this subtitle.

        In Kidd, 602 S.W.2d at 417, the Supreme Court of Kentucky held that "[t]he statute plainly says that the `reparation obligor shall elect to assert its claim’ in one of two specified ways." The two specific ways are arbitration or joinder in a claim made by the injured person.

        The present action is different, however, in that there are two insurance companies for whom liability exists. Priority must, therefore, attach to one over the other. KRS 304.39-050(1) provides that:

        The basic reparation insurance applicable to bodily injury to which this subtitle applies is the security covering the vehicle occupied by the injured person at the time of the accident or, if the injured person is a pedestrian, the security covering the vehicle which struck such pedestrian. If the reparation obligor providing such insurance fails to make payment for loss within thirty (30) days after receipt of reasonable proof of the fact and the amount of loss sustained, the injured person shall be entitled to payment under any contract of basic reparation insurance under which he is a basic reparation insured and the insurer making such payments shall be entitled to full reimbursement from the reparation obligor providing the security covering the vehicle. . . .

        In Affiliated FM Ins. Companies v. Grange Mut. Cas. Co., 641 S.W. 2d 49, 50 (Ky. App. 1982), the Court held that:

        KRS 304.39-050 sets forth a remedy as well as a right. We do not construe the statute as limiting a reparation obligor’s right to full reimbursement to situations in which it has either intervened or submitted its claim to arbitration under the guidelines set forth in KRS 304.390-70(3). Intervention may be impossible if — as is the instant case — no separate action has been filed. And, if the insurer were required to submit its claim for reimbursement to the arbitration procedures set forth in KRS 304.39-070(3), it would not obtain full reimbursement given the minimum deductible requirement set forth in KRS 304.39-290.

        In the present action, Jones elected not to purchase extended coverage on the vehicle from National. As a result, and under the contract of insurance he had with Progressive, his primary insurer was Progressive. Under his policy with Progressive, Jones was provided with insurance coverage on rental vehicles. While Affiliated dealt with an insurer driving a vehicle he did not own, it is distinguishable. In Affiliated, the employer owned and insured the vehicle. The employee did not maintain insurance on the vehicle nor is there any indication that his personal insurance policy covered vehicles he drove which were owned by his employers. The trial court correctly held Progressive to be primarily liable for BRB. We will, therefore affirm the summary judgment.

 

Daniel v. Metropolitan Direct Property, No. 2008-CA-002158-MR (Ky. App. 9/11/2009) (Ky. App., 2009)

       Brenson Daniel appeals from a judgment of the Jefferson Circuit Court dismissing his claim for underinsured motorist coverage against Metropolitan Direct Property & Casualty Insurance Company. Because we find that the only named insureds under the Metropolitan policy were his parents, that the policy unambiguously excluded Daniel from coverage under the circumstances of this case, and that Daniel’s exclusion from coverage does not violate public policy, we affirm.

   More applicable to the case at bar is Brown, where the insured did not own the vehicle in question, and the injured driver was not the insured. Rather, the injured driver was the insured’s son, who never insured his own vehicle and then sought to extend his father’s policy to that car on the basis that he was a relative still residing at home. This Court rejected Brown’s proposition that public policy required an insurer to provide uninsured motorist coverage in such circumstances for a non-owned vehicle never listed on the policy because such an interpretation of KRS 304.38-020(3)(b) together with KRS 304.39-050(2) would allow uninsured motorists driving their own uninsured vehicles to recover BRBs and thereby circumvent the very purpose of the Act. The public policy behind the Act is to require insurance, and to that end uninsured motorists are not given the same protection as insured motorists.

        Throughout his brief, Daniel invokes the "reasonable expectations" doctrine which is only applicable where the policy at issue is ambiguous. Simon v. Continental Ins. Co., 724 S.W.2d 210 (Ky. 1986). As stated above, we find nothing ambiguous in the policy language relevant to this appeal. In addition, where the reasonable expectations doctrine does apply, as we stated in Estate of Swartz v. Metropolitan Property and Casualty Co., 949 S.W.2d 72, 76 (Ky. App. 1997), "[u]nder controlling Kentucky law, the proper area of inquiry is what [the insureds] could reasonably expect in light of what they actually paid for, not what they personally expected or whether those expectations could be ascertained." Here, Daniel could not have reasonably anticipated recovery for a claim against his parents’ Metropolitan policy given that it unambiguously excluded him from coverage, it did not name him as an insured, and he paid nothing to be covered under it.

        The judgment of the Jefferson Circuit Court is affirmed.

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

Under the Motor Vehicle Reparations Act, "[b]asic reparation obligors and the assigned claims plan shall pay basic reparation benefits, under the terms and conditions stated in this subtitle[.]" KRS 304.39-040(2). A "reparation obligor" is defined as "an insurer, self-insurer, or obligated government providing basic or added reparation benefits under this subtitle." KRS 304.39-020(13). Generally, the basic reparation insurance applicable "is the security covering the vehicle occupied by the injured person at the time of the accident[.]" KRS 304.39050(1). If there is no security covering the vehicle, the Act allows for recovery from any contract of basic reparation insurance under which the injured party falls within the definition of a basic reparation insured. KRS 304.39050(2). In either case, the recovery of basic reparation benefits from a reparation obligor islimited to $10,000. KRS 304.39050(3). These provisions are significant to Bartlett’s ability to recover because tort liability is abolished to the extent that basic reparation benefits are payable. See KRS 304.39-060(2).

 

KY     Samples v. Cincinnati Insurance Co., No. 2002-CA-000869-MR (Ky.App. 12/05/2003)

This statutory provision merely establishes a right of subrogation to the employer or its workers’ compensation carrier. See Great American Insurance Companies v. Witt, Ky. App., 964 S.W.2d 428, 430 (1998). The phrase "the other person in whom legal liability for damages exists" in this subrogation statute "quite clearly refers to the third-party tortfeasor who is liable at common law." Fireman’s Fund, 550 S.W.2d at 557. Thus, KRS342.700(1)only prohibits a double recovery as between the employer and the tortfeasor. Cincinnati Insurance is neither, and KRS 342.700(1) is not properly applied in this instance.

     At first glance, we are aware of the public policy against double recovery, but remark that this is not a blanket rule. In Hardaway Management Co. v. Southerland, Ky., 977 S.W.2d 910, 918 (1998), ……in KRS 342.700(1), the legislature clearly provided that the injured party was entitled to only one recovery as between the employer and tortfeasor. And, in KRS 304.39050, the legislature included that "[n]o person shall recover basic reparation benefits from more than one (1) reparation obligor as a result of the same accident . . . ." More compelling is KRS 304.39-120 regarding calculations of net loss for basic or added reparation coverage wherein the legislature specifically included that workers’ compensation would be subtracted in calculating net loss.

 

KY     Yellow Cab Co. v. Hoffman, No. 1998-CA-001129-MR (Ky.App. 06/04/1999)

    Yellow Cab argues that a self-insurer is not responsible for uninsured coverage because there is no entity to whom it can reject the uninsured coverage as provided in KRS 304.20-020. Because KRS 304.20-020 does not apply to self-insurers, this Court does not agree. Under the present statutory scheme, by choosing self-insurance, the self-insurer forgoes the options given with an insurance policy, including the option to reject UM coverage under KRS 304.20-020."

       "In summary, the owner of a motor vehicle must insure the vehicle either through a policy of insurance or by qualifying as a self-insurer. KRS 187.600. A self-insurer must receive the department’s approval and a certificate. Because the certificate is not an insurance policy, this Court agrees with the majority of other jurisdictions that find that the UM statute, KRS 304.20-020, does not require a self-insurer to provide UM coverage to its employees. However, another statutory provision, KRS 304.39-080(7), mandates a self-insurer to provide the substantial equivalent to that required by an insurance policy and to provide coverage for all obligations imposed by Subtitle 39. UM coverage is an obligation of Subtitle 39. See KRS 304.39050; KRS 304.39-100; and Dairyland [Insurance Company v. Assigned Claims Plan, Ky., 666 S.W.2d 746 (1984)]."


KY     Stevenson v. Anthem Casualty Insurance Group, No. 96-CA-0918-MR (Ky.App. 07/03/1997)

As to BRBs, we likewise summarily reject Stevenson’s attempt to stack those applicable to the other Walker vehicles. KRS 304.39050(3); see Capital Enterprise Insurance Company v. Kentucky Farm Bureau Mutual Insurance Co., Ky. App., 804 S.W.2d 377 (1991). KRS 304.39-020(2) provides that "the maximum amount of basic reparation benefits payable . . . from injury to any one (1) person . . . shall be ten thousand dollars ($10,000) . . . ." Further, KRS 304.39-030(1) provides that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits . . . ." We, thus, conclude that Stevenson was entitled to only $10,000 BRBs applicable to the Ford Ranger.


KY     Capital Enterprise Insurance Co. v. Kentucky Farm Bureau Mutual Insurance Co., 804 S.W.2d 377 (Ky.App. 02/22/1991)

…although the statute which fixes priorities among multiple reparation obligors states that in an instance involving a pedestrian, the applicable BRB insurance is that which covers the vehicle which struck the pedestrian, it does not impose a duty on a pedestrian who happens to be struck by two vehicles in a single accident to show that any of the resulting injuries were caused by the particular vehicle which is insured by the reparation obligor against which the pedestrian asserts a claim for BRB. See KRS 304.39-050(1). Indeed, KRS 304.39-040(1) specifically provides that BRB shall be paid without regard to fault. In our opinion, in this context the concept of payment without regard to "fault" includes any disputes regarding causation which may arise between multiple reparation obligors primarily liable for BRB. We therefore conclude, pursuant to the statutory mandate set forth in KRS 304.39-040(1), that a pedestrian who shows that injuries resulted from being struck by one or more motor vehicles has a right to claim up to $10,000 in BRB from any one reparation obligor which issued insurance on any of those motor vehicles. See KRS 304.39-050(3). To construe the statute otherwise would encourage fault-based litigation in direct contravention of the policies and purposes of the no-fault statute, including that of prompt payment of benefits to victims of motor vehicle accidents, as set forth in KRS 304.39-010

KY     Omni Insurance Co. v. Coates, 939 S.W.2d 879 (Ky.App. 02/28/1997)

In support of her argument that she is entitled to recover BRB from Omni despite the fact that the vehicle she was driving at the time of the accident was uninsured, Coates relies on Kentucky Revised Statutes(KRS) 304.39050. Under that statute, if the vehicle occupied by an injured person at the time of an accident is uninsured, the injured person is entitled to seek BRB from "any [policy] of basic reparation insurance under which the injured person is a basic reparation insured[.]" KRS 304.39-505(2). Coates contends that she is entitled to recover BRB from Omni under this statute because she was injured in an uninsured vehicle and is a basic reparation insured under the policy issued by Omni. Coates also relies on a footnote in Fann v. McGuffey, Ky., 534 S.W.2d 770 (1975), which provides that "BRB is paid by…the issuer of any policy under which the injured person is entitled to BRB" if the vehicle was uninsured at the time of the accident. Fann, 534 S.W.2d at 772, n.8. Finally, Coates cites Bishop v. Al lstate, Ky., 623 S.W.2d 865 (1981), where the Kentucky Supreme Court stated:     

          The Uniform Motor Vehicle Accident Reparations Act, on which Kentucky’s MVRA is closely modeled, includes sections 12, 14 and 15 which provide that BRB may be subject to certain exclusions. Our legislature did not include these sections in the MVRA, although it adopted a provision for optional additional reparation benefits which could be subject to exclusions, KRS 304.39-140. Omitting sections 12, 14 and 15 of the Uniform Act clearly indicates that our lawmakers intended that BRB minimum coverage be untouchable.


KY     State Farm Mutual Automobile Insurance Co. v. Kentucky Farm Bureau Mutual Insurance Co., 671 S.W.2d 258 (Ky.App. 06/15/1984)

The trial court ruled in favor of appellee, Farm Bureau, on both issues holding that John Eldridge, Jr., was a "pedestrian" under KRS 304.39-050(1) and KRS 304.39-020(6) and that since he was a "pedestrian," the insurer of the moving vehicle was primarily liable for payment of basic reparation benefits under KRS 304.39-050(1) even though the disabled vehicle made contact with him on the theory that the disabled vehicle was an extension of the moving vehicle, and that the force which fatally injured the "pedestrian" came from the moving vehicle. The stationary vehicle could not "strike" anyone.


KY     McGrew v. Stone, 998 S.W.2d 5 (Ky. 08/26/1999)

Appellee responds by pointing out that KRS 304.39050(2) provides that "If there is no security covering the vehicle, any contract of basic reparation insurance under which the injured person is a basic reparation insured shall apply." Appellee contends that, while this provision is not directly applicable to property damage, it demonstrates the legislature intended that one who suffers loss by an uninsured vehicle must first look to his own insurer, not the tortfeasor, for redress of his loss.

     Having considered the arguments set forth by Appellee, we reject them and their implications. First, it is clear that KRS 304.39050(2) is limited by its terms to personalinjury and does not encompass property damage. KRS 304.39050 (1); KFS 304.39-020(2). Second, under Appellee’s construction, one without proper liability insurance would only be liable for the property damage caused by his or her vehicle if she, the owner, were found to have negligently entrusted that vehicle to the driver, whereas one who is properly insured covers the losses of her permittee users regardless of her lack of fault in entrusting the vehicle to another. KRS 304.39-010; KRS 304.39-080(5). Therefore, had Appellee obtained the legally required coverage for her vehicle, Appellant would only have been required to prove that Appellee gave the permittee permission to use her vehicle and that the user’s negligence resulted in the damages sought recovered. In sum, we do not believe the legislature, in enacting the MVRA, intended to make it more difficult for an injured party to recover under the circumstances presented in this case than if the law had been obeyed. Indeed, the simplicity of proving only permission to use the vehicle and negligence on the part of the permittee user relieves the injured party of a significant burden that previously existed and corrects one of the inadequacies

 
 

 

 

KY     Brown v. Atlanta Casualty Co., 875 S.W.2d 103 (Ky.App. 02/25/1994)

Appellant’s interpretation of KRS 304.39-020(3)(b) together with KRS 304.39-050(2) would allow uninsured motorists driving their own uninsured vehicles to recover BRBs and thereby circumvent the very purpose of the Act. The public policy behind the Act is to require insurance, and to that end uninsured motorists are not given the same protection as insured motorists. Clearly, the Act does not contemplate recovery of basic reparations benefits for uninsured motorists such as Brown. KRS 304.39-160(4) provides as follows:

     (4) A person who sustains injury while occupying a motor vehicle owned by such person and with respect to which security is required by the provisions on security and who fails to have such security in effect at the time of an accident in this Commonwealth causing such injury, shall not obtain through the assigned claims plan basic reparation benefits, including benefits otherwise due him as a survivor, unless such person’s failure to have such security in effect at the time of such accident was solely occasioned by the failure of the reparation obligor of such person to provide the basic reparation benefits required by this subtitle. Even if Atlanta Casualty’s exclusion were invalid and it were required to pay Brown’s claim, it would have subrogation rights back against Brown. KRS 304.39-310(2)


KY     Empire Fire and Marine Insurance Co. v. Haddix, 927 S.W.2d 843 (Ky.App. 08/23/1996)

     As a matter of law, Empire is responsible for basic reparation benefits to the occupants of the vehicle for bodily injuries caused by the accident. See Rees, 715 S.W.2d 904; KRS 304.39050(1). Capital is primarily liable to provide a defense to and to indemnify Haddix up to the limits of his policy, which are $50,000 per person and $100,000 per accident for bodily injury. See Government Employees Ins. Co., 415 S.W.2d 581; Royal-Globe, 560 S.W.2d 22.

 
 

KRS 304.39-060 Acceptance or rejection of partial abolition of tort liability — Exceptions.

(1) Any person who registers, operates, maintains or uses a motor vehicle on the public roadways of this Commonwealth shall, as a condition of such registration, operation, maintenance or use of such motor vehicle and use of the public roadways, be deemed to have accepted the provisions of this subtitle, and in particular those provisions which are contained in this section.

(2)

(a) Tort liability with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance, or use of a motor vehicle is "abolished" for damages because of bodily injury, sickness or disease to the extent the basic reparation benefits provided in this subtitle are payable therefor, or that would be payable but for any deductible authorized by this subtitle, under any insurance policy or other method of security complying with the requirements of this subtitle, except to the extent noneconomic detriment qualifies under paragraph (b) of this subsection.

(b) In any action of tort brought against the owner, registrant, operator or occupant of a motor vehicle with respect to which security has been provided as required in this subtitle, or against any person or organization legally responsible for his or her acts or omissions, a plaintiff may recover damages in tort for pain, suffering, mental anguish and inconvenience because of bodily injury, sickness or disease arising out of the ownership, maintenance, operation or use of such motor vehicle only in the event that the benefits which are payable for such injury as "medical expense" or which would be payable but for any exclusion or deductible authorized by this subtitle exceed one thousand dollars ($1,000), or the injury or disease consists in whole or in part of permanent disfigurement, a fracture to a bone, a compound, comminuted, displaced or compressed fracture, loss of a body member, permanent injury within reasonable medical probability, permanent loss of bodily function or death. Any person who is entitled to receive free medical and surgical benefits shall be deemed in compliance with the requirements of this subsection upon a showing that the medical treatment received has an equivalent value of at least one thousand dollars ($1,000).

(c) Tort liability is not so limited for injury to a person who is not an owner, operator, maintainer or user of a motor vehicle within subsection (1) of this section, nor for injury to the passenger of a motorcycle arising out of the maintenance or use of such motorcycle.

(3) For purposes of this section and the provisions on reparation obligor’s rights of reimbursement, subrogation, and indemnity, a person does not intentionally cause harm merely because his or her act or failure to act is intentional or done with the realization that it creates a grave risk of harm.

(4) Any person may refuse to consent to the limitations of his or her tort rights and liabilities as contained in this section. Such rejection must be completed in writing or electronically in a form to be prescribed by the Department of Insurance and must have been executed and filed with the department at a time prior to any motor vehicle accident for which such rejection is to apply. Such rejection form shall affirmatively state in bold print that acceptance of this form of insurance denies the applicant the right to sue a negligent motorist unless certain requirements contained in the policy of insurance are met. Rejection by a person who is under legal disability shall be made on behalf of such person by his or her legal guardian, conservator, or natural parent. The failure of such guardian or a natural parent of a person under legal disability to file a rejection, within six (6) months from the date that this subtitle would otherwise become applicable to such person, shall be deemed to be an affirmative acceptance of all provisions of this subtitle. Provided, however, any person who, at the time of an accident, does not have basic reparation insurance but has not formally rejected such limitations of his or her tort rights and liabilities and has at such time in effect security equivalent to that required by KRS 304.39-110 shall be deemed to have fully rejected such limitations within meaning of this section for that accident only.

(5)

(a) Any rejection must be filed with the Department of Insurance and shall become effective on the date of its filing until revoked. Nothing in this section shall require a new rejection to be filed for each new motor vehicle policy issued;

(b) Any rejection filed prior to June 30, 1980, shall be deemed to be effective from the date of its filing until revoked; and

(c) Any revocation shall be in writing and shall become effective upon the date of its filing with the Department of Insurance.

(6) Every insurance company when issuing an automobile policy to a resident of this Commonwealth must inform the buyer in writing in a form to be prescribed by the insurance commissioner of his or her right to reject the limitations of the tort rights and liabilities under this subtitle in the manner provided in subsections (4) and (7) of this section.

(7) Any rejection shall result in the full retention by the individual of his or her tort rights and tort liabilities. Any person injured by a motor vehicle operator who has such rejection on file may claim the full damages, including nonpecuniary damages, or, if such injured person has not rejected his or her own tort limitations, he or she may also claim basic reparation benefits from the appropriate security on the vehicle as established under KRS 304.39-050. If such provider of security is other than the one providing security for the operator who has rejected the limitations, such provider shall be subrogated to the rights of the injured person to the extent of reparation benefits paid against the owner and operator of the vehicle.

(8) No person who has rejected the tort limitations under this section, except as provided in subsection (9) of this section or KRS 304.39-140(5), may collect basic reparation benefits.

(9) Any owner or operator of a motorcycle, as defined in Kentucky Revised Statutes, may file a rejection as described in subsections (4) and (5) of this section, which will apply solely to the ownership and operation of a motorcycle but will not apply to injury resulting from the ownership, operation or use of any other type of motor vehicle.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1525, effective July 15, 2010; and ch. 166, sec. 11, effective July 15, 2010. — Amended 1986 Ky. Acts ch. 37, sec. 1, effective July 15, 1986. — Amended 1980 Ky. Acts ch. 364, sec. 1, effective July 15, 1980. — Amended 1976 Ky. Acts ch. 75, sec. 2, effective March 29, 1976. — Created 1974 Ky. Acts ch. 385, sec. 6, effective July 1, 1975.

Note: 1980 Ky. Acts ch. 396, sec. 92 would have amended this section effective July 1, 1982. However, 1980 Ky. Acts ch. 396 was repealed by 1982 Ky. Acts ch. 141, sec. 146, also effective July 1,1982.

Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 166, which do not appear to be in conflict and have been codified together.

 
 

Annotations for this statute: 

 

Progressive Max Ins. Co. v. Jamison (Ky. App., 2013) 2011-CA-001127-MR  July 19, 2013

The Kentucky Motor Vehicle Reparations Act  (MVRA) obligates the "security [normally insurance] covering the vehicle occupied by the injured person at the time of the accident" to pay the injured party, regardless of fault, basic reparation benefits. KRS 304.39-050(1); KRS 304.39-030. The MVRA then abolished tort liability "to the extent basic reparation benefits provided by the statute" are paid or payable, up to $10,000.00. KRS 304.39-060(2)(a); Bohl v. Consol. Freightways Corp. of Delaware, 777 S.W.2d 613, 614 (Ky. App. 1989); Stone v. Kentucky Ins. Guar. Ass’n,858 S.W.2d 726, 728 (Ky. App. 1993) ("[T]ort liability has been abolished in Kentucky up to $10,000 pursuant to KRS 304.39-060."). KRS 304.39-060(2) operates such that "claims for lost wages and medical expenses of a person injured in an automobile accident against the person who caused the injury to the extent that basic reparations are payable therefore" are eradicated and no longer exist. Carta v. Dale, 718 S.W.2d 126, 128 (Ky. 1986). Thus, an injured party may not recover in tort those elements of damages covered by basic reparations benefits. Progressive Cas. Ins. Co. v. Kidd, 602 S.W.2d 416, 417 (Ky. 1980) ("[U]nder the Kentucky No-Fault Act, an injured party is not entitled to an award of damages from the defendant in the trial on liability for any item of damages which was compensated by BRB.").

        However, Jamison notes, KRS 304.39-060(2)(a) only abolished tort liability; Jamison argues it neither addressed nor abolished other forms of liability. He emphasizes he settled his tort claim against Humble, thereby extinguishing any lingering tort liability. Jamison points out that the only enduring cause of action was Jamison’s breach of contract claim against Progressive. As a result, Jamison asserts, KRS 304.39-060(2)(a) has no application here. We are not persuaded.

 
 

[U] Dream Furniture, Inc. v. Brow (Ky. App., 2012)   2011-CA-001063-MR  November 9, 2012

On January 28, 2008, Adcock filed the underlying complaint alleging that she was injured by a Dream Furniture employee, later identified as Cooper, when making an appliance delivery to Dream Furniture. Adcock claimed that while assisting Cooper unload her trailer, Cooper dropped a carton containing an electric stove on her which resulted in injury to her head and neck. Dream Furniture denied that an injury occurred on its premises, arguing that if an injury did occur it occurred in Pikeville, Kentucky, another stop on Adcock’s delivery route.

The trial court denied any credit against the jury award on the basis that no evidence was presented to show that Adcock had not rejected the provisions of the Motor Vehicle Reparations Act ("MVRA") pursuant to KRS 304.39-060(4). This court has previously interpreted the application of MVRA as follows:  

 The trial court denied any credit against the jury award on the basis that no evidence was presented to show that Adcock had not rejected the provisions of the Motor Vehicle Reparations Act ("MVRA") pursuant to KRS 304.39-060(4). This court has previously interpreted the application of MVRA as follows:

Pursuant to KRS 304.39-060(1) any person who operates a motor vehicle on the public roadways of this state is deemed to have accepted the provisions of the [MVRA], KRS Chapter 304, Subtitle 39. Appellant makes no claim to having rejected the provisions of this act. Having, therefore, accepted the provisions of the act, appellant was entitled, despite being a non-resident, to recover $10,000 in basic reparation benefits. KRS 304.39-030(1). Bohl, 777 S.W.2d at 614-15. Furthermore, "the law does not require these benefits actually be paid." Id. at 615. Indeed, in Thompson v. Piasta, 662 S.W.2d 223, 226 (Ky. App. 1983), we stated, "it is immaterial whether basic reparations benefits have been or have not been paid to an injured party . . . such party is not entitled to an award from the defendant in a trial on liability for any item of damages for which such benefits are payable[.]" Here, no evidence was presented to show Adcock rejected the provisions of the MVRA; instead, the evidence supported a finding that she used a motor vehicle on Kentucky roadways, and thus accepted such provisions.

 

Samons v. Ky. Farm Bureau Mut. Ins. Co. (Ky., 2013)  2011-SC-000414-DG May 23, 2013

 Kenneth Crum, while riding horseback along a narrow and winding stretch of mountain road in Floyd County, Kentucky, was struck and severely injured by a vehicle driven by Raymond K. Ousley. At the time, Ousley was test-driving the vehicle, a disused, uninsured Ford Escort titled to Rhonda Ward. Crum sued Ousley for personal injuries and later joined Ousley’s auto liability insurer, Kentucky Farm Bureau, for no-fault benefits. Kentucky Farm Bureau settled Crum’s liability claim against Ousley, paying its policy limits of $25,000. The circuit court entered a final order declaring coverage for Crum, ordering Kentucky Farm Bureau also to pay him the no-fault benefits. The Court of Appeals reversed, holding that Kentucky law did not allow Crum to recover and Ousley’s policy excluded Crum.

In 1974, the General Assembly brought about sweeping changes in the realm of automobile insurance with its enactment of the Kentucky Motor Vehicle Reparations Act, based largely on the Uniform Motor Vehicle Accident Reparations Act (UMVARA). In doing so, the General Assembly transformed Kentucky into a no-fault state. This transformation reflected a policy "for prompt and liberal recovery to accident victims without regard to fault."  The implementation of this policy was performed primarily through KRS 304.39-030, basic reparation benefits; KRS 304.39-060, limitation of tort rights; and KRS 304.39-090, required insurance coverage.

Basic reparation benefits, often labeled Personal Injury Protection (PIP) in insurance policies, are "benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle." All "owners, registrants and operators of motor vehicles in the Commonwealth" are statutorily mandated to carry coverage for BRBs. So when an accident occurs in Kentucky, as did the one here, "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits," with the only exclusion being if the individual has rejected his tort rights under KRS 304.39-060(4). This Court has previously noted the strong public policy in Kentucky protecting BRBs, labeling them "untouchable."

Crum urges us to focus on the overall policy of the MVRA, specific language of the applicable statutes, and the case law dealing with relatively similar situations. Simply put, Crum’s argument is that Ousley was required by statute to have insurance, which he did, and this insurance covered the uninsured car he was driving. And it is required by statute that an insurance policy include coverage for BRBs. As a result, the car was covered by security (policy provided by Kentucky Farm Bureau) and Crum, as a pedestrian, has a statutory right to recover BRBs from Kentucky Farm Bureau. Further, according to Crum, the policy exclusion found by the Court of Appeals is invalid as it frustrates the purpose of the MVRA.

Illustrative of the difficult nature of this case, Kentucky Farm Bureau relies on the same menu of sources, asking us to apply the plain language of the applicable statutes, the case law, and Ousley’s policy. Essentially, Kentucky Farm Bureau argues that the applicable statutes require a pedestrian to recover from the insured vehicle; and the vehicle that struck Crum was not insured because there was no policy that listed this vehicle on its declarations page. According to Kentucky Farm Bureau, Ousley’s policy covered only the vehicle listed, a 1989 Grand Marquis. As a result, Kentucky Farm Bureau argues that it is not obligated to pay Crum BRBs but that Crum can seek BRBs through the assigned claims plan.

When engaging in statutory interpretation, it is imperative that we give the words of the statute their literal meaning and effectuate the intent of the legislature.  We have repeatedly stated that we "must not be guided by a single sentence of a statute but must look to the provisions of the whole statute and its object and policy."And the intent of the General Assembly "shall be effectuated, even at the expense of the letter of the law."18 With these principles in mind, we agree with Crum and hold that he is entitled to receive BRBs from Kentucky Farm Bureau under Ousley’s policy.

 
 

Cole v. Fagin (Ky. App., 2013) 2012-CA-000797-MR April 19, 2013

With that said, the MVRA supports Cole’s argument that Kentucky law mandates the utilization of BRB coverage prior to Med Pay coverage. By statutory mandate, a tort claimant such as Cole ( i.e. , one who has not rejected the MVRA) has no tort claim whatsoever for any element of damages to the extent that those damages have been paid, or could have been paid, through BRBs under her existing coverage. Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188, 191 (Ky. App. 1997); see also KRS 304.39-060; …  

If no basic or added reparation benefits have been paid for loss arising otherwise than from death, an action therefor may be commenced not later than two (2) years after the injured person suffers the loss and either knows, or in the exercise of reasonable diligence should know, that the loss was caused by the accident, or not later than four (4) years after the accident, whichever is earlier. If basic or added reparation benefits have been paid for loss arising otherwise than from death, an action for further benefits, other than survivor’s benefits, by either the same or another claimant, may be commenced not later than two (2) years after the last payment of benefits.

Similarly, KRS 304.39-230(6), the MVRA’s statute of limitations relating to tort claims, provides:

An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.

In sum, both limitations periods either begin with the date of the claimant’s injury or with the date the claimant receives her last payment of BRBs, whichever is later.

Both Grange and Fagin advanced the argument that Cole had received $3,976.57 in Med Pay benefits instead of BRBs; the last date for Cole to file any tort or BRB recovery action was therefore two years after July 1, 2009; and, consequently, that the suit that she filed on October 13, 2011 was untimely. In support, Grange contended that it had the option of paying Cole’s medical expenses from either the $5,000 in Med Pay coverage provided in Cole’s insurance policy or the $10,000 in BRB coverage that was imputed into her policy by Kentucky law because nothing in Cole’s policy prohibited it from doing so. Also, it asserted that Cole "raised no objection" to its decision to characterize its reimbursements to Cole as Med Pay, and that Cole was therefore "estopped" from "re-characterizing" those payments as BRBs.

With that said, the MVRA supports Cole’s argument that Kentucky law mandates the utilization of BRB coverage prior to Med Pay coverage. By statutory mandate, a tort claimant such as Cole (i.e., one who has not rejected the MVRA) has no tort claim whatsoever for any element of damages to the extent that those damages have been paid, or could have been paid, through BRBs under her existing coverage. Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188, 191 (Ky. App. 1997); see also KRS 304.39-060Carta v. Dale, 718 S.W.2d 126, 128 (Ky. 1986). Here, it is undisputed that Cole’s accrued medical expenses of $3,976.57 could have been paid through her BRBs. Consequently, regardless of whether the parties actually agreed to label Cole’s medical expense reimbursements from Grange as "Med Pay," and regardless of whether Cole filed her tort action within two years of July 1, 2009, the MVRA would require these medical expense reimbursements to be characterized as BRBs and would accordingly bar Cole from recovering that amount as an element of her damages. Because the MVRA requires Cole’s accrued medical expense reimbursements of $3,976.57 to be considered BRBs at the end of any tort litigation (i.e., for the purpose of determining her damages), to avoid absurdity it follows that the MVRA likewise requires Cole’s accrued medical expense reimbursements of $3,976.57 to be considered BRBs at the beginning of any tort litigation (i.e., for the purpose of the statute of limitations codified at KRS 304.23-230).

Furthermore, allowing an insurer to apply medical expenses toward Med Pay coverage, when those expenses could also have been applied toward BRBs, would be fundamentally at odds with the concept of "no-fault" in Kentucky. A provider of Med Pay benefits may typically file a subrogation claim directly against a tortfeasor to recover the amount of Med Pay benefits paid to its insured. Lawson v. Helton Sanitation, 34 S.W.3d 52, 60, note 5 (Ky. 2000). However, as to any insurer or party other than a reparations obligor, the right of subrogation is derivative of the right of the injured person. State Auto. Mut. Ins. Co. v. Empire Fire & Marine Ins. Co., 808 S.W.2d 805, 806 (Ky. 1991). Inasmuch as Cole has no right to recover her $3,976.57 in accrued medical expenses from Fagin under the MVRA, her carrier, Grange, has no right of subrogation against Fagin for that amount. As such, Grange’s attempt to characterize its payments to Cole as Med Pay rather than BRB was at best a self-defeating exercise. At worst, it was an impermissible attempt by Grange to give itself a legal remedy directly against Fagin that is prohibited by statute.

 

[U] McCall v. Zurich Am. Ins. Co. (Ky. App., 2012) 2011-CA-002059-MR   December 21, 2012

STUMBO, JUDGE: Keoliver McCall appeals from an Opinion and Order of the Jefferson Circuit Court holding that he was not using and occupying his employer’s motor vehicle within the meaning of KRS 304.39-020(6)(b) thus rendering him ineligible for Basic Reparation Benefits ("BRB"). McCall argues that he was occupying the vehicle within the statutory framework and that the trial court erred in failing to so rule. We find no error, and accordingly affirm the Opinion and Order on appeal.

KRS 304.39-030(1) provides that, "[i]f the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." The use of a motor vehicle, in the context of loading and unloading a vehicle, is defined in KRS 304.39-020(6)(b) and is as follows:  

"Use of a motor vehicle" means any utilization of the motor vehicle as a vehicle including occupying, entering into, and alighting from it. It does not include . . . (b)

Conduct in the course of loading and unloading the vehicle unless the conduct occurs while occupying, entering into, or alighting from it.

When viewing the record in a light most favorable to Active, et al., and resolving all doubts in their favor, we cannot conclude that the Jefferson Circuit Court erred in concluding that McCall was not occupying the car hauler within the statutory framework necessary to establish entitlement to BRB. The trial court’s conclusions on this issue are supported by the record and the law, and we find no error.

 
Interlock Indus., Inc. v. Rawlings, 358 S.W.3d 925 (Ky., 2012) – Oct. 27, 2011.Rehearing Denied Feb. 23, 2012
 
Summaries: Source: Justia

Charles Rawlings suffered injuries as he was rolling straps beside his tractor-trailer while it was being unloaded. Thirteen months after the accident, Rawlings filed an action against Defendants, his employer and the companies involved in loading and unloading the trailer. The trial court granted summary judgment in favor of Defendants and dismissed the action based on the one-year statute of limitations for personal injury claims in Ky. Rev. Stat. 413.140(1)(a). The court of appeals reversed, applying the two-year statute of limitations in the Motor Vehicle Reparations Act. At issue on appeal was whether Rawlings was in fact unloading his truck at the time of the accident, which would determine whether the one- or two-year statute of limitations applied. The Supreme Court reversed, holding (1) Rawlings’s activity in releasing the straps and rolling them qualified him as a participant in the unloading process; and (2) therefore, the trial court correctly applied the one-year personal injury statute of limitations found in section 413.140(1)(a). Remanded.

 

Rawlings also argues that the fact that his insurance company paid him BRB should automatically bring him under the purview of the MVRA’s statute of limitations. Or, in the alternative, he argues that the one-year personal injury statute of limitations should be calculated from the date of his last BRB payment.

The language of the MVRA’s two-year statute of limitations, found at KRS 304.39-230(6), is quite broad: "An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs." However, in interpreting KRS 304.39-230(6), this Court has consistently held that "the literal language of the MVRA extends the statute of limitations to two years for actions ‘with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance or use of a motor vehicle,‘ when not ‘abolished’ by the Act . . . ." Bailey, 662 S.W.2d at 833 (quoting KRS 304.39-060(2)(a)) (emphasis added). Pursuant to Hudson and the plain language of KRS 304.39-020(6)(b), engaging in activity integral to the unloading of a truck does not constitute "use of a motor vehicle." Hudson, 775 S.W.2d at 923. Thus, the unloading of a vehicle does not fall under the purview of the MVRA, and is not subject to the two-year statute of limitations.This analysis is not affected by the fact that Rawlings received BRB, because an action must first fall under the MVRA before the statute of limitations based on BRB payments can apply.

We opine that Rawlings’ activity in releasing the straps and rolling them qualifies him as a participant in the unloading process. Therefore, for the reasons previously stated, the trial court correctly applied the one-year personal injury statute of limitations found in KRS 413.140(l)(a). …

Accordingly, the opinion of the Court of Appeals is reversed, and the order of the Shelby Circuit Court is hereby reinstated.

 
Buckler v. Mathis (Ky. App., 2012)Rendered: July 22, 2011 2010-CA-000828

At the close of evidence, Mathis moved for a directed verdict on whether Buckler had met the $1,000 threshold pursuant to KRS 304.39-060(2)(b), arguing that Buckler failed to prove that the medical bills he incurred were for treatment he underwent related specifically to the motor vehicle accident. Although it denied Mathis’s motion for directed verdict, the trial court included the threshold instruction over Buckler’s objection. In addition to objecting to the instruction itself, Buckler also objected to specific language in the instruction that required the jury to find that Buckler himself had incurred the charges for the medical care.

After a short deliberation, the jury returned a verdict in favor of Mathis, having found that Buckler had not met the $1,000 threshold. The trial court entered a judgment dismissing Buckler’s claim on November 12, 2009. …

The trial court denied this motion on April 23, 2010, specifically stating that it was within the province of the jury to determine whether the medical expenses were reasonably needed and that its comments related to the instructions were only meant to assist the jury in navigating the instructions. This appeal follows.

First, Buckler contends that the trial court erred by giving a threshold instruction.

In KRS 304.39-060(2) of the Kentucky Motor Vehicle Reparations Act, the legislature set forth the requirement that before a person may recover damages under the act, his medical expenses must exceed $1,000:….

The parties extensively argued this issue at a court hearing on September 4, 2009, several months after Mathis filed her written objection. The trial court based its ruling striking the testimony regarding Dr. Jacob’s qualification of his opinion on permanency to the performance of a current physical examination. In fact, because of its delay in ruling, the trial court opted to continue the trial to specifically permit Buckler to take additional testimony from Dr. Jacob regarding permanency. That Buckler was unable to schedule a physical examination and re-depose Dr. Jacob prior to the new trial date is of no course, especially as Buckler had known of the basis of Mathis’s objection for several months prior to the entry of the ruling. Therefore, the trial court’s ruling striking portions of Dr. Jacob’s testimony regarding the permanency of Buckler’s injuries was not an abuse of discretion.

Accordingly, the judgment and the order denying Buckler’s motion for a new trial are affirmed.

 
Frost v. Dickerson (Ky. App., 2012)   April 19, 2012 – 2010-CA-000537

Nancy is not seeking further no-fault reparation benefits. Her complaint alleges liability in tort. The limitation for tort actions is governed by section (6), which provides as follows:

An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs. KRS 304.39-230(6).

The Frosts argue that the discovery rule should be applied to toll the running of the limitations period since Nancy did not know until she received the letter from Dr. Pagani on September 16, 2009, that her severe symptoms were attributable to the accident. "Under the ‘discovery rule,’ a cause of action will not accrue until the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, not only that he has been injured but also that his injury may have been caused by the defendant’s conduct." Wilson v. Paine, 288 S.W.3d 284, 286-87 (Ky. 2009) (citing Hazel v. General Motors Corp., 863 F.Supp. 435, 438 (W.D.Ky. 1994). The Frosts urge the Court to apply the distinction made in Wiseman v. Alliant Hosps., Inc., 37 S.W.3d 709 (Ky. 2000), a medical negligence case, between harm, defined as "the existence of loss or detriment in fact of any kind to a person resulting from any cause[,]" and injury, defined as "the invasion of any legally protected interest of another." Wiseman at 712. The Frosts contend that although Nancy was aware that she had been harmed, she was not aware that she had been injured in the legal sense until she received medical confirmation of the causal link between the accident and her medical condition via the September 16, 2009, letter from Dr. Pagani.

The Frosts concede that the discovery rule has never been applied to a personal injury action under the MVRA, but argue that such an extension would be in keeping with the trend of opinions from the Supreme Court of Kentucky, which have extended the rule to medical malpractice cases, Tomlinson v. Siehl, 459 S.W.2d 166 (Ky. 1970); injury from latent disease caused by exposure to asbestos, Louisville Trust Co. v. Johns-Manville Products Corp., 580 S.W.2d 497 (Ky. 1979); and legal malpractice cases, Conway v. Huff, 644 S.W.2d 333 (Ky. 1982). They further argue that extending the rule in this case would be equitable and would serve the MVRA’s purpose of reducing litigation by rewarding those claimants with latent injuries who wait to file suit until they have established a causal connection between an accident and their injuries.

Although the Frosts’ arguments are compelling, we decline to extend the discovery rule to tort actions under the MVRA because we have no statutory authority to do so. The statute of limitations set forth in KRS 304.39-230(6) makes no provision for the application of the discovery rule, unlike section (1), which expressly states that an action for reparation benefits "may be commenced not later than two (2) years after the injured person suffers the loss and either knows, or in the exercise of reasonable diligence should know, that the loss was caused by the accident[.]" Had the legislature intended the discovery rule to apply in the tort context, it could have included similar language in section (6).

 
 

Hammers v. Plunk (Ky. App., 2011) October 21, 2011 2010-CA-000279

We agree that Wagoner was wrongly decided and, therefore, reverse the circuit courts’ respective dismissals with prejudice in each of the cases herein, hereby overruling our prior holding in Wagoner that KRS 44.110 applies to actions originating in circuit court.

The appellants aver they are entitled to bring an action against individual state employees in circuit court for the negligent performance of ministerial acts under Yanero v. Davis, 65 S.W.3d 510 (Ky. 2001). The appellants further argue that the maintenance of Kentucky’s roadways is a ministerial act under Estate of Clark ex rel. Mitchell v. Daviess County, 105 S.W.3d 841 (Ky. App. 2003). Thus, according to the appellants, their cases are governed by the Kentucky MVRA. The relevant statutory limitations period under the MVRA, found in KRS 304.39-230(6), reads as follows:

An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.

On the other hand, tolling cannot save the claims brought by the Estate. Joe Plunk, et al., aver that Hammers, et al., filed the complaint one day after the expiration of the two-year limitations period in KRS 304.39-230.

Pleadings and affidavits within the record confirm this. However, when the trial court originally ruled on this matter, before its reconsideration under Wagoner, the trial court found that the one-day-late filing was acceptable as a matter of equity. Although the order did not elaborate as to why, it appears from affidavits in the record that counsel for Hammers, et al., who was located in Bowling Green, Kentucky, attempted to file the complaint by fax on the day the limitations period expired. It further appears that the Muhlenberg Circuit Court Clerk’s office initially agreed to accept same by fax, and that a faxed copy of the complaint was indeed received by the clerk’s office. However, the clerk’s office thereafter telephoned counsel to inform him that they could not accept the faxed complaint.

As the clerk’s office could not accept a faxed complaint, counsel contacted a local attorney whose legal assistant agreed to file the complaint on his behalf. The legal assistant called the clerk’s office, knowing they typically closed by four o’clock, to let them know to expect her around four o’clock. The assistant’s sworn statement attests that the clerk stated "if that is the faxed complaint from Bowling Green, we are not going to accept it," apparently under the misapprehension that the assistant could not sign the complaint and initial it with permission of counsel for filing. The assistant arrived a few minutes before four o’clock with the complaint and a check for the fees in hand, only to find that the doors had already been locked before the close of the business day. The assistant left and returned in the morning, on February 10, 2009, when the complaint was accepted and filed by the clerk’s office.

In such a situation, it is within the court’s power to find that a statute has been equitably tolled. Nanny v. Smith, 260 S.W.3d 815, 817 (Ky. 2008) (Plaintiff should not be punished for clerk’s failure to perform duties mandated by statute and court rule.); Ward v. Howard, 177 Ky. 38, 197 S.W. 506, 510 (1917) (Clerk cannot deliberately absent himself or close his office to thwart procedure.); Prewitt v. Caudill, 250 Ky. 698, 63 S.W.2d 954, 958-59 (1933) (Clerk cannot deliberately absent himself or close his office to thwart procedure.); Hagy v. Allen, 153 F.Supp. 302 (E.D. Ky. 1957) (Good faith should be considered, especially when paired with circumstances plaintiff could not control). Further, the clerk’s doors are said to "be deemed always open," although here the doors were closed – literally. Kentucky Rules of Civil Procedure ("CR") 77.01. Accordingly, we do not disturb the trial court’s prior ruling, and Hammers, et al., may proceed with their case at trial.

Accordingly, we reverse and remand in both cases for further proceedings consistent with this opinion.

 

Stewart v. Elco Administrative Services, Inc., No. 2009-CA-000828-MR (Ky. App. 5/14/2010) (Ky. App., 2010)

     Both ELCO and Enterprise filed motions for summary judgment, arguing that Stewart’s failure to obtain motor vehicle insurance coverage for his own vehicle constituted a constructive rejection of his tort rights and liabilities under Kentucky’s Motor Vehicle Reparations Act. ELCO also claimed it was not the real party in interest since the vehicle was owned by Enterprise, a self-insured entity. Stewart responded with a cross-motion for summary judgment, arguing that there is no such thing as a "constructive rejection" of one’s right to collect BRB and that in order to reject no-fault coverage, there must be strict compliance with KRS 304.39-060(4).

     Kentucky’s Motor Vehicle Reparations Act ("MVRA"), also known as the No-Fault Act, was enacted to "create a comprehensive compulsory insurance system that requires owners to provide vehicle security covering basic reparation benefits and that imposes legal liability on vehicle owners for damages or injuries arising out of ownership of or use of the vehicle. KRS 304.39-010; KRS304.39-080(5)." McGrew v. Stone, 998 S.W.2d 5, 6 (Ky. 1999). KRS 304.39-030(1) provides in pertinent part:

If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4).

        Furthermore, KRS 304.39-060 states, in part:

(1) Any person who registers, operates, maintains or uses a motor vehicle on the public roadways of this Commonwealth shall, as a condition of such registration, operation, maintenance or use of such motor vehicle and use of the public roadways, be deemed to have accepted the provisions of this subtitle, and in particular those provisions which are contained in this section.

(2)

(a) Tort liability with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance, or use of a motor vehicle is "abolished" for damages because of bodily injury, sickness or disease to the extent the basic reparation benefits provided in this subtitle are payable therefor, or that would be payable but for any deductible authorized by this subtitle, under any insurance policy or other method of security complying with the requirements of this subtitle, except to the extent noneconomic detriment qualifies under paragraph (b) of this subsection.

        With respect to the payment of BRB, KRS 304.39-050(1) provides that "[t]he basic reparation insurance applicable to bodily injury to which this subtitle applies is the security covering the vehicle occupied by the injured person at the time of the accident . . . ." Thus, the statutory language is unambiguous that the vehicle occupied by the injured person is responsible for the payment of BRB. Agreeing with this concept, a panel of this Court in Rees v. USF&G, 715 S.W.2d 904, 906 (Ky. App. 1986) held:

     Unless he has rejected the limitation on his tort rights as provided in KRS 304.39-060(4), every person suffering loss from injury arising out of the maintenance or use of a motor vehicle has a right to basic reparation benefits. See KRS 304.39-030(1). The legislative policy as announced in KRS 304.39-050(1) is that the basic reparation insurance applicable to bodily injury" is the security covering the vehicle occupied by the injured person at the time of the accident." The "security covering the vehicle" in the present case is the policy written by USF&G, see KRS 304.39-080, which is, therefore, primarily liable for the payment of basic reparation benefits to the injured passenger. We have been referred to nothing in the MVRA which permits shifting the liability for the payment of basic reparation benefits as is the case with respect to the payment of tort liabilities. As a consequence, the policy written by USF&G must be interpreted to furnish primary coverage for basic reparation benefits to the injured passenger. See KRS 304.39-100.

        Enterprise argued, and the trial court herein agreed, that despite the legislature’s expressed intent that "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits . . .," Stewart’s failure to procure insurance on his own vehicle acted as a "constructive waiver" of his tort rights and liabilities. We disagree.

        Under the MVRA all persons owning an automobile, whether insured or not, are subject to the limitations of "no-fault," unless the owner actually rejects the limitation of his tort rights and liabilities under KRS 304.39-060. Atchison v. Overcast, 563 S.W.2d 736 (Ky. App. 1977). Specifically, KRS 304.39-060 provides:

(4) Any person may refuse to consent to the limitations of his tort rights and liabilities as contained in this section. Such rejection must be in writing in a form to be prescribed by the Office of Insurance and must have been executed and filed with the office at a time prior to any motor vehicle accident for which such rejection is to apply. Such rejection form together with a reasonable explanation thereof shall be furnished by the reparation obligor with each policy to each prospective insurance applicant. Such rejection form shall affirmatively state in bold print that acceptance of this form of insurance denies the applicant the right to sue a negligent motorist unless certain requirements contained in the policy of insurance are met. Rejection by a person who is under legal disability shall be made on behalf of such person by his legal guardian, conservator or his natural parent. The failure of such guardian or a natural parent of a person under legal disability to file a rejection, within six (6) months from the date that this subtitle would otherwise become applicable to such person, shall be deemed to be an affirmative acceptance of all provisions of this subtitle. Provided, however, any person who, at the time of an accident, does not have basic reparation insurance but has not formally rejected such limitations of his tort rights and liabilities and has at such time in effect security equivalent to that required by KRS 304.39-110 shall be deemed to have fully rejected such limitations within meaning of this section for that accident only.

(5)

(a) Any rejection must be filed with the Office of Insurance and shall become effective on the date of its filing until revoked;

(b) Any rejection filed prior to June 30, 1980, shall be deemed to be effective from the date of its filing until revoked; and

(c) Any revocation shall be in writing and shall become effective upon the date of its filing with the Office of Insurance.

        The plain language of KRS 304.39-060(4) explicitly requires any rejection of one’s tort rights and liabilities to be in writing and filed with the Department of Insurance. Atchison 563 S.W.2d at 737. "[O]ur duty is to ascertain and give effect to the intent" of the Legislature. Beckham v. Board of Education of Jefferson County, 873 S.W.2d 575, 577 (Ky. 1994). In so doing, we are directed to follow the clear language of the statute and when "plain and unambiguous" words are employed, we must apply those terms "without resort to any construction or interpretation." Terhune v. Commonwealth, 907 S.W.2d 779, 782 (Ky. App. 1995). We find KRS 304.39-060 to be clear on its face and not susceptible of interpretation-especially not the proposition that one can "constructively" or implicitly reject tort limits and liabilities.

        Ignoring the requirements set forth in KRS 304.39-060, the trial court relied upon the decisions from this Court in Thomas v. Ferguson, 560 S.W.2d 835 (Ky. App. 1978) and Shelter Insurance Company v. Human Health Plans, Inc., 882 S.W.2d 127 (Ky. App. 1994), wherein uninsured motorists were precluded from maintaining a cause of action for BRB against an insured motorist. In both cases, the Court held that by being voluntarily uninsured, an uninsured driver "waived" the right to collect BRB from an insured tortfeasor. Enterprise urges herein that denying Stewart BRB under the facts of this case is simply a logical extension of Thomas and Shelter Insurance.

        Importantly, however, there is a crucial factual distinction between the above cases and the instant matter. In both Thomas and Shelter Insurance, an uninsured driver, who was injured while operating his own uninsured vehicle, was attempting to claim BRB from the adverse insured driver. In the accident giving rise to the cause of action herein, Stewart was not operating his own vehicle, but was instead riding as a passenger in a vehicle owned and insured by Enterprise. Had Stewart not owned a vehicle, or had he maintained insurance on his own vehicle, there would be no question that Enterprise would be liable for BRB as a result of the accident causing Stewart’s injuries. See KRS 304.39-050(1).

        Furthermore, we are of the opinion that Enterprise and the trial court have misconstrued the holdings and rationale of both Thomas and Shelter Insurance. Neither decision hinged upon a finding that the uninsured motorist, by failing to comply with the compulsory insurance requirements of the MVRA, constructively or implicitly rejected his rights and liabilities under KRS 304.39-060. In fact, such subsection is never referenced in either case. Rather, the Court precluded the uninsured motorist from claiming BRB from an insured motorist on public policy reasons. "We do not feel that the public policy of the Commonwealth of Kentucky allows us to give this uninsured motorist a cause of action for personal injuries as against the adverse driver, an insured motorist." Thomas, 560 S.W.2d at 836.

        Indeed, since the enactment of the MVRA there have been several published decisions relating to the Act and the uninsured motorist. As noted in Bartlett v. Prime Insurance Syndicate, Inc, 156 S.W.3d 299, 303 (Ky. App. 2004), "[t]he inability of an uninsured motorist to recover basic reparations benefits is one of the penalties recognized by this court as being imposed within the no fault framework of the Motor Vehicle Reparations Act." (Citing Gussler v. Damron, 599 S.W.2d 775, 778 (Ky. App. 1980)). However, in every case, the uninsured motorist had been operating his own vehicle at the time of the accident.

        Certainly, we believe that public policy dictates that a motorist who voluntarily fails to comply with the insurance requirements of the MVRA should not be entitled to BRB if the accident and injury results from the operation or use of that uninsured vehicle. However, we simply cannot reach the same conclusion when the injury is not attributable to the motorist’s use or operation of the uninsured vehicle. Here, Stewart was not operating his vehicle, but was rather merely riding as a passenger in another vehicle. In fact, Stewart claims, and the trial court found, that his vehicle was not operable, which leads to an entirely separate inquiry of whether or not he was even required to maintain insurance on the vehicle. See KRS 304.39-020(7) and Auto-Owners Insurance Company v. Goode, 294 S.W.3d 32 (Ky. App. 2009).

        Regardless, this Court is of the opinion that to create a blanket rule that one who is uninsured is prohibited from claiming BRB under any circumstances not only contravenes the language and intent of the MVRA, but violates the public policy of this Commonwealth. BRB follows the vehicle, not the person. And KRS 304.39-050(1) provides that "[t]he basic reparation insurance applicable to bodily injury . . . is the security covering the vehicle occupied by the injured person at the time of the accident . . . ." Stewart was occupying a car owned and insured by Enterprise at the time he was injured.

        The language of KRS § 304.39-030 broadly provides for basic reparation benefits for car accident victims. "If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits, unless he has rejected the limitation upon his tort rights as provided in KRS 304.39-060(4)." KRS § 304.39-030(1) (emphasis added). As noted by our Supreme Court in Mitchell v. Allstate Insurance Company, 244 S.W.3d 59, 64 (Ky. 2008), "this Court can and will see that the General Assembly’s clear intent-that all Kentucky motorists should have automobile liability coverage-is satisfied in all reasonable instances." (Citing Beacon Insurance Co. of America v. State Farm Mutual Insurance Co., 795 S.W.2d 62, 63 (Ky. 1990)).

        For the reasons stated herein, we vacate the order of the Jefferson Circuit Court granting summary judgment in favor of Enterprise and remand the matter for entry of a judgment in favor of Stewart on his claim of entitlement to BRB.

 

Jewell v. Kentucky School Board Association, 2008-SC-000244-DG (Ky. 1/21/2010) (Ky., 2010)

III. THE COURT OF APPEALS ERRED REVERSING THE TRIAL COURT’S RULING REGARDING THE DEDUCTION OF BRB FROM THE JUDGMENT

        The trial court deducted from the damages awarded by the jury only the $333.45 of BRB actually paid to Appellant, rather than the full amount of $20,000 in available BRB. It is not clear from the record why KSBA, as reparation obligor, paid only $333.45 in BRB, but there is no doubt that a substantial factor was the controversy over whether all of Appellant’s injuries were caused by the bus accident. The jury verdict resolved that issue in Appellant’s favor and found damages in a sum far exceeding the available BRB.

        The Court of Appeals held that the judgment must be offset by the entire $20,000.00 in available BRB. Its decision was based upon KRS 304.39-060(2), which provides:

Tort liability with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance, or use of a motor vehicle is "abolished" for damages because of bodily injury, sickness or disease to the extent the basic reparation benefits provided in this subtitle are payable therefor, or that would be payable but for any deductible authorized by this subtitle, under any insurance policy or other method of security complying with the requirements of this subtitle, except to the extent noneconomic detriment qualifies under paragraph (b) of this subsection.

        Citing several authoritative decisions3 in support of its interpretation of the statute, the Court of Appeals held that KRS 304.39-060(2) abolishes Appellant’s tort claim to the extent that reparations benefits are "payable therefor."

       Much is made in the arguments of the parties about whether KSBA denied payment of Appellant’s BRB claim and whether Appellant failed to submit claims for coverage. Appellant asserts that she sought payments of additional medical expenses under BRB, but KSBA denied them because of the active issue over whether the injuries she claimed, including the knee replacement surgery, were caused by the bus accident. KSBA contends that Appellant failed to pursue her claim to the maximum available BRB under the KSBA policy. "If the appropriate reparation obligor is not forthcoming in paying basic reparation benefits to the statutory maximum, the injured party has a remedy under the Act to collect them." Dudas, 652 S.W.2d at 870. See KRS 304.39-210, KRS 304.39-220, and KRS 304.39-160.

        If such evidence (i.e., whether Appellant requested payments and whether KSBA denied them) was essential to the factual findings needed to resolve the BRB offset issue, the trial court was the proper place to present it. It is not within the province of this Court, or the Court of Appeals, to resolve factual disputes material to the resolution of a claim. See Whicker v. Whicker, 711 S.W.2d 857 (Ky. App. 1986) (Where the trial court fails to make required findings and no request is made for such findings, the issue will not be considered on appeal).

A final judgment shall not be reversed or remanded because of the failure of the trial court to make a finding of fact on an issue essential to the judgment unless such failure is brought to the attention of the trial court by a written request for a finding on that issue.

 

Coleman v. Bee Line Courier Service, Inc., 284 S.W.3d 123 (Ky., 2009)

   Myanh Coleman appeals from a Court of Appeals opinion affirming a summary judgment in favor of Appellee, Bee Line Courier Service, Inc., for indemnity of $4,737.00 in basic reparation benefits (BRB)1 awarded after an automobile accident in which Coleman was the victim. Because the release Coleman signed to settle her personal injury claim with Bee Line was a release for settlement of her injury claim only and because she did not specifically agree to indemnify Bee Line for BRB recoupment, summary judgment against Coleman was improper. On discretionary review, we reverse the holding of the Court of Appeals on the indemnity issue and remand the case to the trial court with directions to enter summary judgment in favor of Coleman on the indemnity claim. The portion of the Court of Appeals decision affirming the dismissal of Coleman’s counterclaims against Bee Line stands as the law of the case because of Coleman’s failure to challenge that ruling in her motion for discretionary review.

    Naturally, a plaintiff cannot contract away rights that do not belong to her and are not a part of her injury claim. So a plaintiff could not release the BRB carrier’s right to recoupment. Whether a plaintiff could agree to indemnify the tortfeasor for BRB recoupment claims is another question, of course. In fact, in Ruschell, this Court noted

that the automobile victim’s "rights to those elements of damages covered by basic reparation benefits were abolished by KRS 304.39-060(2)(a)"; deducing from this that the reparations obligor is "the only party who could give the tortfeasor and his insurer a release for elements of damages covered by basic reparations benefits."

        Id. at 168 (quoting Stovall, 661 S.W.2d at 470) (emphasis added). [284 S.W.3d 128]

        In this case, Nationwide has paid BRB to Coleman; and Bee Line has reimbursed Nationwide an agreed-upon amount. Nationwide, as the no-fault carrier, had every right to seek such reimbursement since the claim belongs to it and the statute gives it the right to do so. But does the tortfeasor, Bee Line, then have the right to collect that amount back from Coleman, with whom it has settled, under a general release that does not specify that Coleman must indemnify the tortfeasor for BRB recoupment claims?

     Under these cases the MVRA, given its broad remedial purpose, has been read as preempting contracts that would undermine its purposes. Unlike the common law of contracts, the MVRA is not a set of defaults that can be avoided by consent of both parties. In fact, no-fault benefits are more than just policy—they are a statutorily declared right: "every person suffering from loss from injury arising out of … use of a motor vehicle has a right to basic reparations benefits…." KRS 304.39-030(1). (This right can be waived but must be done so in a statutorily prescribed manner, KRS 304.39-060(4), which does not include an indemnity agreement with a tortfeasor.)

        The public policy purpose served by no-fault BRB and the MVRA in general would be thwarted if a release that meets the specific designation requirement of Ruschell permits a tortfeasor’s insurer to seek indemnity for BRB from the victim of a car accident. No one is allowed to contract contrary to the law.

        For this reason, the holding in Ruschell and its dicta indicating that a party in the position of Bee Line "may be" able to seek indemnification from a settling plaintiff suggest a possibility that is clearly contrary to the purpose of the MVRA and is against sound public policy. Settling tortfeasors must recognize that they are settling only the injury portion of the plaintiffs claims, and not the BRB claim. Consequently, having examined the "next case," the lack of analysis in Ruschell as to the policy of the MVRA requires that it be overruled, as the entire case is premised on the false notion that a victim can be required by contract to indemnify a tortfeasor in order to settle the case. [284 S.W.3d 133]

This, too, results in this case being reversed.

 

Allen v. Stallings, No. 2008-CA-000889-MR (Ky. App. 5/29/2009) (Ky. App., 2009)

2. In general, KRS 304.39-060(2)(b) bars additional damages for pain, suffering, and mental anguish resulting from automobile-related injuries absent a showing of medical expenses exceeding $1,000. Allen and Taylor argue that the $1,000 bar does not apply to them, as KRS 304.39-060(2)(c) states that the $1,000 bar does not apply to persons who "are not owners, operators, maintainers, or users of a motor vehicle." In their response to the motion for summary judgment, Taylor and Allen did not put forth any affirmative evidence that they are not owners, operators, maintainers or uses of a motor vehicle. Nonetheless, as Taylor and Allen have not otherwise offered evidence to defeat summary judgment regarding the element of damages, we decline to address the issues under KRS 304.39-060(2)(b).

 

Combs v. Stortz, 276 S.W.3d 282 (Ky. App., 2009)

   Ruth Combs (Combs) appeals from a verdict rendered by a jury of the Campbell County Circuit Court, the Honorable Fred A. Stine V presiding. Combs seeks to have the verdict vacated and the case remanded for a new trial solely on the issue of damages. Specifically, Combs asserts that the trial court erred in submitting a compound question to the jury on the "threshold issue," that the trial court erred in denying Combs a directed verdict on the issue of Appellee Katie Stortz’s (Stortz) negligence, that the trial court erred in providing an apportionment instruction to the jury, that the trial court erred in failing to grant Alexandria Tire a directed verdict on the issue of liability, that the medical examination opinions allowed by the court exceeded the scope intended by law, and that the trial court erred on numerous evidentiary grounds. After a review of the record in this matter, we reverse and remand, in light of the compound question submitted to the jury on the threshold issue.

     We therefore turn to an analysis of Earle as it applies to the matter sub judice. Earle, like the instant matter, involved an automobile accident, after which the Plaintiff named both the negligent driver and the UIM carrier as party defendants. However, Earle makes a critical departure from the matter sub judice insofar as the UIM carrier in that matter elected to exercise the procedure outlined in Coots v. Allstate Insurance Company, 853 S.W.2d 895 (Ky.1993) (the Coots procedure) and codified at KRS 304.39-060, by substituting its payment for that of the liability carrier.

      The Coots procedure essentially provides that when settlement with the liability carrier occurs, and when such settlement reaches the policy limits of the liability carrier, the UIM carrier may elect to substitute its money for that of the liability carrier. In so doing, the UIM carrier retains a subrogation right against the tortfeasor.

        In Earle, the Court clearly and specifically identified the issue before it as "[w]hether an underinsured motorist (UIM) carrier must be identified at trial when it chooses to preserve its subrogation rights by means of the procedures set forth in Coots v. Allstate Insurance Company (the `Coots procedure’)." Earle, 156 S.W.3d at 258. (Emphasis added). After so identifying the issue, the Earle Court held, "We conclude that the UIM carrier should be so identified as a party … because it chose to retain its subrogation rights by substitution of its payment for that of the liability insurance carrier." Id. (Emphasis added).

        Upon review, we decline to expand Earle beyond the parameters clearly indicated in the decision. The exercise of the Coots procedure is a clear point of departure between Earle and the matter sub judice. We believe that this departure precludes the application of the Earle decision to the instant matter. In ruling as it did, the Earle Court noted that when a UIM carrier utilizes the Coots procedure, it releases the tortfeasor from liability to the plaintiff, leaving itself as the only party with potential liability. In so doing, the UIM carrier becomes a real party in interest, substituting its liability for that of the defendant.

        In the instant case, it is undisputed that the liability carrier, Allstate, entered into a settlement agreement with Combs for less than the amount of its policy limits. It is also undisputed that State Farm not only declined to exercise the Coots procedure, but was in fact unable to do so as the [276 S.W.3d 293] liability carrier had not offered its policy limits. Further, a review of the record indicates that State Farm’s attorney was not present and did not participate at trial. Accordingly, because we do not find that Earle applies to the matter sub judice, and because we decline to rely on the nonfinal Stinson decision, we uphold the trial court’s decision to exclude reference to State Farm. We find no reversible error.

 

Price v. Garcia, No. 2007-CA-001344 (Ky. App. 8/7/2009) (Ky. App., 2009)

     Rachael Price and Waedell Harris appeal from a judgment of the Jefferson Circuit Court entered on May 21, 2007, dismissing their personal injury claims with prejudice following a unanimous jury verdict in favor of Rosa Garcia and Yellow Cab Co. At the end of a three-day trial, jurors were unconvinced Price and Harris had proved they had incurred $1,000.00 in reasonably necessary medical expenses required for recovery under KRS 349.39-060(2)(b). The sole issue on appeal3 is whether the trial court properly admitted three items of testimony from the investigating officer, Sgt. Jessie L. Browning, who was neither listed nor qualified as an expert witness. Each of the pieces of challenged testimony bore on fault, an issue not reached by the jury. We now affirm.

    Finally, Price/Harris contends the trial court erred in allowing Sgt. Browning to relate how she had asked two emergency workers to assist her in carrying Price’s one-year-old daughter from the Honda to an ambulance. She stated that because of the ice-covered roads and grass, it was difficult to gain enough traction to walk on either. As a result, she asked two officers to walk on either side of her, instructing them that, should she fall, she would hold the baby up, and they should catch the baby to keep her safe. Price/Harris objected, requested an admonition, and moved for a mistrial after the officer made the statements. Price/Harris argued they were prejudiced by the harrowing story and it dashed their hopes of winning on the merits. The prejudice, they claim, far outweighed any probative value of the statements.

        Despite any prejudice that may have occurred, Garcia and Yellow Cab characterize this contention as harmless error, and we agree. CR 61.01 states in relevant part, "[t]he court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties." Even if these two minutes of testimony (out of a three-day trial) qualified as unduly prejudicial, the testimony related largely to the issue of fault and to whether Garcia’s actions fell short of her duty to exercise ordinary care for the safety of others using the roadway. Fault was not an issue considered by jurors in reaching their unanimous decision. The jury’s decision rested entirely on a lack of faith in Price/Harris’s proposed reasonable medical expenses.

        Therefore, this aspect of the appeal, like the preceding issues, is moot. The testimony of Sgt. Browning as to the weather, the point of impact, and the carrying of the child to the ambulance all bore on the lack of Garcia’s fault.

Reversal is unjustified since jurors would have reached the same outcome regardless of the challenged testimony.

        For the foregoing reasons, we affirm the judgment of the Jefferson Circuit Court.

 

Previs v. Dailey, No. 2006-CA-002243-MR (Ky. App. 8/29/2008) (Ky. App., 2008)

     This is an appeal and cross-appeal from a judgment of the Bourbon Circuit Court in a personal injury case. The appellant/cross-appellee, Nollaig Previs, sued the appellee/cross-appellant, Pete Dailey, after she was injured in a collision between her bicycle and a wagon that Dailey was towing behind his truck. The jury in the first trial returned a verdict in favor of Dailey. The Kentucky Supreme Court reversed the judgment and verdict upon finding that Dailey had been negligent per se, and it remanded the case for a new trial. See Previs v. Dailey, 180 S.W.3d 435 (Ky. 2005).

 The jury in the second trial determined that Previs and Dailey were each 50% at fault in the accident. It awarded Previs damages in the amount of $32,611.90, which was reduced in the judgment to an award of $16,305.95 based on 50% comparative fault.

        In her appeal, Previs argues that the jury instructions were erroneous and unsupported by the evidence. In his cross-appeal, Dailey argues that he was entitled to a directed verdict on the issue of Previs’s negligence, that the jury’s award of damages in the amount of $30,000 for pain and suffering was excessive, and that he was entitled to an offset for basic reparations benefits. We affirm.

       For those to whom the provisions of the no-fault act are applicable, tort liability with respect to accidents occurring in this Commonwealth arising from the ownership, maintenance or use of a motor vehicle is abolished for damages because of bodily injury, sickness or disease to the extent that basic reparations are applicable. KRS 304.39-060(2)(a). Tort liability for pain and suffering is recoverable only in the event that thresholds set forth in KRS 304.39-060(2)(b) are met.

        Tort liability is not so limited, however, for injury to a person who is not an owner, operator, maintainer or user of a motor vehicle. KRS 340.39-060(2)(c).

    The General Assembly expressly extended the presumption of acceptance of the provisions of the Act to only four categories of persons, namely, (1) those who register, (2) operate, (3) maintain, or (4) use a motor vehicle upon the highways of this Commonwealth. KRS 304.39-060(1).  . . .

        Respondent contends that the burden was upon movant to show that she met the threshold requirements of KRS 304.39-060(2)(b) or the exemptions itemized in KRS 304.39-060(2)(c). It is our view that before these provisions come into play it must be established that the person seeking recovery falls within the coverage of the Act. They are designed to permit tort recovery in certain instances by a person to whom the Act is applicable where recovery would otherwise be precluded by the Act.

        Id. at 438-39.

        Dailey can point to no evidence in this case that Previs registered, operated, maintained, or used a motor vehicle upon the highways of this Commonwealth, and therefore there is no presumption that she accepted the provisions of the Act. The trial court correctly denied the offset.

        The judgment of the Bourbon Circuit Court is affirmed.

 

KY     Hoffman v. Yellow Cab Company of Louisville, 57 S.W.3d 257 (Ky. 09/27/2001)

We need not address here whether the MVRA would require Yellow Cab to be liable for BRB payments as a matter of law, because Hoffman rejected his entitlement to basicreparation benefits.KRS 304.39060(4) and (5).

 Virtually all of the jurisdictions that have held that a certificate or authorization of self-insurance includes UM coverage have mandatory UM statutes containing no right of rejection. E.g., Hartford Ins. Co. v. Hertz Corp., 410 Mass. 279, 572 N.E.2d 1 (1991);


KY     Lawson v. Helton Sanitation, Inc., No. 1999-SC-000308-DG (Ky. 01/25/2001)

6) An action for tort liability not abolished by KRS 304.39060 may be commenced not later than two (2) vears after the iniurv. or the death. or the last basic or added reparation pavment made by anv reparation obligor, whichever later occurs.

       Thus, whether the action is brought against a reparation obligor for payment of reparation benefits, or against a tortfeasor for payment of a tort liability claim, the two-year period of limitations commences on either the date of the injury or the last payment of basic (BRB) or added (ARB) reparation benefits, "whichever later occurs." In Milby v. Wright, Ky., 952 S.W.2d 202 (1997), the insured filed his tort action on March 16, 1992. The last BRB payment had been made on March 5, 1990. On April 8, 1992, the insured submitted an additional medical bill to his reparation obligor for payment. Since both the filing of the tort action and the request for payment of the additional medical bill occurred more than two years after the last previous BRB payment, we held that the tort action was barred by the two-year statute of limitations.

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

        Bartlett did not have insurance on the vehicle he was operating, and there is no indication he qualified as a basic reparation insured under any other policy. Thus, he did not have his own reparation obligor from which to receive benefits. In addition, Bartlett is precluded from bringing a direct tort claim for damages that fit within the definition of "basic reparation benefits." KRS 304.39060(2)(a). See also Stone v. Montgomery, Ky. App., 618 S.W.2d 595, 597 (1981), wherein this court held that tort liability for such damages is abolished to the extent they do not exceed $10,000, regardless of whether the injured motorist is insured or uninsured.

 

KY     [U] Kentucky National Insurance Co. v. Bottoms, No. 2002-CA-001767-MR (Ky.App. 11/26/2003)

Applying the Court’s reasoning to the facts of our case, Bottoms has no double recovery, his PIP benefits, plus the tortfeasor’s insurance ($45,000.00 settlement less $10,000.00 deducted for the PIP subrogation claim) equals a total credit of $50,000.00. There is no windfall to Bottoms in these numbers. At this point Bottoms received only one recovery for PIP benefits under KRS 304.39060(2) and Kentucky National received reimbursement under KRS 304.39-070(2) for the PIP benefits it paid to Bottoms. Both parties received what was intended under the statutory scheme for torts.

     At this point, Bottom’s UIM policy comes into play. The UIM coverage agreed to pay the difference between the policy limits and the jury verdict. We agree with the trial court that Bottoms’s right to UIM benefits is strictly contractual. As stated by the Court in Coots v. Allstate Ins. Co., Ky., 853 S.W.2d 895, 902 (1993), "The UIM insurer is a primary obligor for the UIM insured’s loss by contractual obligation just as the tortfeasor is a primary obligor by reason of his tort obligation." KRS 304.39-320 is the statute which governs UIM liability.

     We do recognize that the underlying tort action and the recovery therefrom serve as the basis for determining the amount of UIM benefits to which the insured is entitled:     [U]nderinsured motorist coverage comes in to play whenever the insured has uncompensated damages that he is entitled to recover under a judgment in excess of the policy limits of the owner of the other vehicle. 

     Dupin v. Adkins, Ky. App., 17 S.W.3d 538, 542 (2000). In our case the jury verdict was for $59,668.26, and the policy limits of the tortfeasors was $50,000.00. Under contract law, Bottoms would be entitled to $9,668.26 from his UIM carrier.

     It is Kentucky National’s position that since the jury award to Bottoms included damages for items which were undisputedly covered by the PIP benefits he received, $10,000.00 must be deducted from the jury’s award (pursuant to the dictates of KRS 304.39060(2)(a)) to arrive at the judgment to which he would have been legally entitled from the tortfeasor for purposes of determining UIM liability. While it is true that KRS 304.39060(2)(a) "abolished" liability to the injured party to the extent of PIP/BRB benefits received, KRS 304.39-070(2) simply transferred that entitlement to the BRB obligor by giving it (Kentucky National) the right of subrogation to obtain reimbursement for the PIP/BRB benefits it paid to its insured. Progressive Casualty Insurance Co. v. Kidd, Ky., 602 S.W.2d 416 (1980). The purposes of this statutory scheme, to prevent double recovery by the injured party and to allow the BRB obligor to be directly reimbursed by the tortfeasor, were clearly achieved in the instant case. Kentucky National was reimbursed by Farm Bureau the full $10,000.00 in PIP/BRB benefits paid as part of and set-off from Bottoms’s settlement with Kissell. Hence, Kentucky National has been made whole and Bottoms did not receive double recovery. Accordingly, the lower court did not err in computing the amount of UIM benefits owed to Bottoms.

 

KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

      Thus, whether the action is brought against a reparation obligor for payment of reparation benefits, or against a tortfeasor for payment of a tort liability claim, the two year period of limitations commences on either the date of the injury or the last payment of basic (BRB) or added (ARB) reparation benefits, "whichever later occurs." In Milby v. Wright, Ky., 952 S.W.2d 202 (1997), the insured filed his tort action on March 16, 1992. The last BRB payment had been made on March 5, 1990. On April 8, 1992, the insured submitted an additional medical bill to his reparation obligor for payment. Since both the filing of the tort action and the request for payment of the additional medical bill occurred more than two years after the last previous BRB payment, we held that the tort action was barred by the two-year statute of limitations.

 

KY     State Automobile Mutual Insurance Co. v. Empire Fire & Marine Insurance Co., 808 S.W.2d 805 (Ky. 05/09/1991)

 DISSENT: The no-fault law intended to "abolish" the right of an injured person to recover in tort against a "secured person" for medical expenses and wage loss, and, indeed, for any tort liability at all if the nature of the claim does not exceed one of the statutory thresholds specified in KRS 304.39-060. The word "abolish" is used in quotes in KRS 304.39-060(2)(a), but it is not defined elsewhere. Presumably it is put in quotation because the word is being used in a special, limited sense, rather than a general sense. It is used in the sense that it destroys only those causes of action expressly abolished by the machinery of the Act. The cause of action on behalf of a reparation obligor which has paid the injured victim against the tortfeasor’s liability insurance carrier is not one specifically destroyed by the Act, nor is there any reason to assume that such was intended, because to do so conflicts with the statutory scheme.

    A reparation obligor has paid the debt of the tortfeasor, and has done so in circumstances where it would be subrogated to recover that debt from the tortfeasor or that person’s liability insurance carrier. If the tortfeasor is a "secured person" as defined in the Act, she cannot be sued. But this should be viewed as a special statutory shield not extending to others who share liability for the damages the tortfeasor has caused. The tortfeasor’s liability insurance carrier is not a "secured person," and while this carrier’s liability to pay the tortfeasor’s debt may derive from the insured’s misconduct, there is nothing in the Act specifying that the obligation to pay is cut off simply because the insured enjoys statutory immunity. There is no reason consistent with the purposes of the Act for implying that it does so, and there are two very good reasons for believing otherwise.

 
 

KY     Worldwide Equipment Inc. v. Mullins, 11 S.W.3d 50 (Ky.App. 04/16/1999)

Giving the statutory words their literal meaning, the two-year limitations period extends to actions which resulted in a "death." It defies a natural reading of the statute to suppose that survivors of those who die as a result of a motor vehicle accident are precluded from asserting a tort claim on behalf of the estate. "A legislature making no exceptions to the positive terms of a statute is presumed to have intended to make none." Bailey, 662 S.W.2d at 834 (citing Commonwealth v. Boarman, Ky. App., 610 S.W.2d 922 (1980)). The only limiting language contained in the statute regards a tort action "not abolished by KRS 304.39-060." KRS 304.39-060 eliminates tort liability in limited circumstances which have neither impact nor application to the case at hand.


KY     Estes v. Commonwealth of Kentucky, 952 S.W.2d 701 (Ky. 10/02/1997)

         If the amendment to KRS 304.99-060 was intended to place a burden on operators to also maintain insurance on motor vehicles, then why is only the owner required to come forward to verify renewal of the insurance? Moreover, if the owner does not so appear or so provide, does the period of conditional discharge set out in KRS 304.39060(3), if it is afforded to an operator, get revoked pursuant to KRS 304.39060(7) even though the operator may have done everything he was required to do? While the legislature may have intended to criminalize the conduct of a non-owner operator of a motor vehicle not covered by insurance, it obviously failed to draft the statutes clearly enough for this Court to find such an interpretation. If the legislature wanted to put the primary burden for providing insurance on the owner of the motor vehicle and the secondary burden on the non-owner operator, then it should have specifically said so in the substantiveprovision, KRS 304.39-080. Consequently, this Court cannot uphold a decision which applies KRS 304.39-080 not only to owners, but also to operators of uninsured motor vehicles.

 

KY   Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.App. 11/07/1997)

     The entire MVRA statutory scheme reflects a zero-sum approach where the injured person’s losses are fully compensated by a combination of reparation benefits, liability insurance and, if necessary, underinsured motorist coverage. The reparation obligor then recovers its payments (BRB’s or ARB’s) from the insurer for the responsiblesecured party. Under this system, the injured party is fully compensated or "made whole" (if appropriate coverages are in place) but never realizes a net gain from his injuries. If we focus solely on KRS 304.39060(2)(a) and conclude tort recovery is still available for those items of damage previously paid as ARB’s, this system is skewed. The insurer for the responsible secured party (Allstate in this case) will pay the items once pursuant to the judgment and be asked to do so a second time pursuant to the statutory right of reimbursement accorded the added reparations obligor. This result is inconsistent with the MVRA’s zero-sum system and produces a double payment-double recovery scenario not expressly authorized by the statute. Read in its entirety, the MVRA must be construed as abolishing tort liability to the extent the injured party has received or could receive BRB’s or ARB’s under his or her existing coverage.

     Having concluded that added reparation benefits should be excluded from theaward,we turn to Saxe’s contention that State Farm’s failure to intervene or assert its subrogation claim forecloses the trial court’s ability to deduct the amount of added reparation benefits from the award. Saxe did not dispute a deduction for the $10,000 in basic reparation benefits despite State Farm’s failure to intervene or assert a claim for a set-off as to those benefits because his tendered judgment included a corresponding reduction in the jury verdict. This set-off or deduction after judgment approach comports with Kentucky law regarding an obligor’s recovery of basic reparation benefits and is equally applicable to added reparation benefits.


KY     Kenton County Public Parks Corp. v. Modlin, 901 S.W.2d 876 (Ky.App. 04/07/1995)

    Modlin’s position on this issue is dependent on, in our opinion, a flawed interpretation of Lyle v. Swanks and Madison Standard Service Station, Ky. App., 577 S.W.2d 427 (1979). The facts of our case and the facts in Lyle are inconsistent. In Lyle, the plaintiff was injured on private property (a service station) as he was jump-starting his vehicle. The plaintiff was pinned between two motor vehicles. In Lyle, this Court stated: KRS 304.39060(1) "merely defines where a motor vehicle must be ‘operated, maintained, or used’ in order for the law to imply one’s acceptance of the limitations on his tort rights." Further, the opinion said, "no attempt is made to say where an accident must occur before the limitations on tort rights imposed by the Act will apply." Id. at 428.

      The plaintiff, Lyle, sued for personal injuries although he met none of the statutory thresholds required under KRS 304.39060(2)(b) to restore his common-law rights to sue in tort. Lyle argued that, because the accident happened on private property, the MVRA did not apply to him and his common-law right to sue was never abolished under KRS 304.39060(2)(a).

 

KY     Gordon v. Kentucky Farm Bureau Insurance Co., 914 S.W.2d 331 (Ky. 10/19/1995)

 A reasonable interpretation of KRS 304.39-230 implies that subsection (6), which states "an action for tort liability not abolished by KRS 304.39060" shall have a two year statute of limitations, covers contract liability when the underlying basis for the contract claim is the tort liability of an uninsured or undersinsured motorist.


KY     Luttrell v. Wood, 902 S.W.2d 817 (Ky. 05/11/1995)

In this case the $9,000 paid in BRB’s to Philip Wood were specifically denominated as being "survivor’s replacement services loss benefits." The judgment awarded to Philip Wood was for loss of earning power, which is the tort equivalent of survivor’s economic loss. Since Wood suffered both replacement services and economic losses he could have recovered for both by way of BRB’s had the total not exceeded $10,000. As it was, the BRB’s were used up for replacement services loss and, therefore, were not payable for economic loss. Since they were not payable for the damages compensated by the judgment, the judgment need not be reduced pursuant to KRS 304.39060(2)(a).The Court of Appeals then held that the $1,000 BRB paid for funeral expenses did duplicate the judgment for funeral expenses and allowed that credit, a decision not at issue in this Court

 

KY     Ohio Casualty Insurance Co. v. Ruschell, 834 S.W.2d 166 (Ky. 06/04/1992)

In Kentucky, unless the accident victim has exercised the right of rejection specified in the MVRA, by statutory mandate the tort claimant has no further tort claim whatsoever for those elements of damages paid or payable under the no-fault statute. KRS 304.39-060; Carta v. Dale, Ky., 718 S.W.2d 126, 128 (1986). Thus, while a general release may acknowledge payment in full for all claims, present and future, which the motor vehicle victim may have against the tortfeasor or any other person who may also be liable for the tort claim, the release does not address those former elements of a tort claim now abolished by the no-fault act.

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KY    David Wine v. Globe American Casualty Co., 917 S.W.2d 558 (Ky. 03/21/1996)

If the injured person, or injured persons, is entitled to damages under KRS 304.39060 from the liability insurer of a second person, a self insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or in behalf of such injured person or persons.

   The Motor Vehicle Reparations Act clearly subordinates the subrogation rights of a reparation obligor to the rights of a victim of a motor vehicle collision when the tortfeasor is insured. Because the purpose and intent of the uninsured motorist statute is to treat the insured victim as if the tortfeasor is insured, we hold the subrogation rights of the reparation obligor against the uninsured tortfeasor are subordinated to those of the injured victim. Thus, a reparation obligor’s right to subrogation does not arise until its insured has been fully compensated for the injuries and losses sustained as a result of the negligence of an uninsured motorist.


KY    Crenshaw v. Weinberg, 805 S.W.2d 129 (Ky. 03/14/1991)

Thus, we have consistently recognized that the purview of the MVRA was automobile insurance reform, not just to make the no-fault option available, and not just to benefit automobile liability insurance carriers by limiting the scope of liability claims where no-fault applied. The primary purpose of the MVRA is to benefit motor vehicle accident victims by reforming, and in some areas broadening, their ability to make and collect claims. One of these areas is by extending the statute of limitations in all actions for tort liability involving a motor vehicle accident victim "not abolished by KRS 304.39-060." KRS 304.39-230(6). We have so held in Troxell v. Trammell, supra, and in Bailey v. Reeves, supra.

      Counsel for respondents argues vehemently that the General Assembly intended two years as the outside limit for filing a tort action in a motor vehicle accident case unless the victim collects no-fault benefits within that period. But Section 230(6) plainly states "two (2) years after . . . the last [BRB] payment made by any reparation obligor," as an alternative date within which an action for tort liability may be commenced. The statute does not qualify this alternative date with whether no-fault benefits are paid within two (2) years of the date of the accident.


KY    United Services Automobile Association v. State Farm Mutual Automobile Insurance Co., 784 S.W.2d 786 (Ky.App. 03/02/1990)

There is created a nonprofit unincorporated legal entity to be known as the Kentucky Insurance Arbitration Association to provide a mechanism for the reimbursement, among reparation obligors of losses paid as basic or added reparation benefits, based solely on the law of torts without regard to subsections (1), (2) and (3) of KRS 304.39-060.


KY    Jackson v. State Automobile Mutual Insurance Co., 837 S.W.2d 496 (Ky. 09/24/1992)

An action for tort recovery not foreclosed by KRS 304.39-060 must be commenced within two years after the injury or death or after the last payment of no-fault benefits, whichever is later. . . . This provision remains subject to KRS 413.170(1), which extends the limitation period for infants and persons of unsound mind. Limitations on actions for no-fault benefits vary from one to four years after the accident or after the last payment of benefits, but are not pertinent to this inquiry except for KRS 304.39-230(5), which provides as follows: If a person entitled to basic or added reparations benefits is under legal disability when the right to bring an action for the benefits first accrues, the period of his disability is a part of the time limited for commencement of the action.

 
 

KRS 304.39-070 "Secured person" — Obligor’s rights to recovery.

(1) "Secured person" means the owner, operator or occupant of a secured motor vehicle, and any other person or organization legally responsible for the acts or omissions of such owner, operator or occupant.

(2) A reparation obligor which has paid or may become obligated to pay basic reparation benefits shall be subrogated to the extent of its obligations to all of the rights of the person suffering the injury against any person or organization other than a secured person.

(3) A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39- 140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.

(4) Any entitlement to recovery for basic or added reparation benefits paid or to be paid by the subrogee shall in no event exceed the limits of automobile bodily injury liability coverage available to the secured party after priority of entitlement as provided in this section and KRS 304.39-140(3) has been satisfied.

(5) An attorney representing a secured person in any action filed under KRS 304.39-060 shall be entitled to a reasonable attorneys’ fee in the event that reparation benefits paid to said secured person by that secured person’s reparation’s obligor are reimbursed by any insurance carrier on behalf of a tortfeasor who is the defendant in any such action filed by the said secured person or in the event such potential "action" is settled by said potential tortfeasor’s insurance carrier on his behalf prior to the filing of any such suit.

Effective: June 17, 1978

History: Amended 1978 Ky. Acts ch. 215, sec. 4, effective June 17, 1978; and ch. 384, sec. 104, effective June 17, 1978. — Created 1974 Ky. Acts ch. 385, sec. 7, effective July 1, 1975.

Legislative Research Commission Note. This section was amended by two 1978 acts which do not appear to be in conflict and have been compiled together.

 

Annotations for this statute:

 
 

Progressive Max Ins. Co. v. Nat’l Car Rental Sys. , Inc., 329 S.W.3d 320 (Ky., 2011) – Jan. 20, 2011

This appeal arises from a subrogation dispute regarding basic reparations benefits (BRB) paid by Appellee, National Car Rental Systems, Inc. (National) to a passenger of one of its rental vehicles. After payment, National sought full reimbursement against Appellant, Progressive Max (Progressive), the insurer of the driver of National’s vehicle.

We first address the question of whether National may pursue its claim via KRS 304.39-070, which provides in pertinent part:

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection….

The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030 [Arbitration]….

A plain reading of KRS 304.39-070 reveals that in order for an insurer to employ this statute for reimbursement it must have paid BRB to an injured party and it must have either joined in an existing action by the person suffering the injury or submitted its claim to arbitration. Applying these rules to this case, we conclude that National, as a reparations obligor having paid BRB, was entitled to employ this statute as a vehicle for recovery. However, because National did not comply with the constraints on how an action under KRS 304.39-070 maybe brought—through joinder or under arbitration—we hold that its action must be dismissed.

In Progressive Cas. Ins. Co. v. Kidd, 602 S.W.2d 416, 417 (Ky.1980), this Court held that where a subrogation action is brought under KRS 304.39-070, a claimant’s options "only include joinder as a party plaintiff and arbitration." We further opined that the statute plainly says that the "reparation obligor shall elect to assert its claim in one of the two specified ways." Id. Applying this rule to the case at bar, it is clear that National did not comply with the dictates of KRS 304.39-070.

After the Jefferson Circuit Court granted summary judgment in National’s favor, the Kentucky Court of Appeals affirmed, holding that (1) Progressive was primarily liable for BRB; and (2) National may pursue its claim via KRS 304.39-050. We granted discretionary review to determine the correctness of that opinion and now reverse.

 
LawReader “Cliff Notes”:
 
National – Car Rental Agency
Jones – Car Driver and Renter

Progressive (Insurance Company) – provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle

Shannon Wilkerson – Passenger Injured in car driven by Jones – rented from National

 

Synopsis: Jones was involved in a motor vehicle accident while driving National’s vehicle, injuring his passenger, Shannon Wilkerson.

 

Wilkerson sought recovery from Jones and Progressive (which provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle).

 

At some point, Wilkerson received BRB from National (the vehicle owner).

National sued Progressive to re-coup BRB amount paid to Wilkerson.

 

The KY Supreme Court Reversed the Court of Appeals in this case; which held that a vehicle insurer may employ KRS 304.39-050 to assert a subrogation claim.

 

Supreme Court: … the Court of Appeals is reversed and this case is remanded to the Jefferson Circuit Court with instruction to enter summary judgment in favor of Progressive.

 
 

Progressive Max Insurance Company v. National Car Rental Systems, Inc., No. 2007-CA-001800-MR (Ky. App. 5/8/2009) (Ky. App., 2009)

 

Over Ruled By: Progressive Max Ins. Co. v. Nat’l Car Rental Sys. , Inc., 329 S.W.3d 320 (Ky., 2011) – Jan. 20, 2011  < (click to see Above)

 

       The underlying facts are not in dispute and were stipulated at the trial court level. Ed Jones ("Jones") rented a motor vehicle from National on October 26, 2001. On November 1, 2001, Jones was involved in a motor vehicle accident while driving National’s vehicle. Shannon Wilkerson ("Wilkerson") was a passenger in Jones’s vehicle and was injured in the accident. At the time of the accident, Jones was insured by Progressive on his personal vehicle. The policy with Progressive included liability benefits should Jones have an accident while in a rented vehicle.

      Progressive begins by arguing that under Kentucky law, a reparation obligor cannot bring a subrogation action to recover reparation benefits against a liability insurer. It cites Progressive Casualty Ins. Co. v. Kidd, 602 S.W.2d 416 (Ky. 1980) in support of this argument. Progressive argues National’s exclusive remedy is to pursue a subrogation claim under Kentucky Revised Statutes (KRS) 304.39-070(3). This statute mandates that National either join an existing action by the injured person against the alleged tortfeasor or submit the subrogation claim for arbitration.

     KRS 304.39-050 sets forth a remedy as well as a right. We do not construe the statute as limiting a reparation obligor’s right to full reimbursement to situations in which it has either intervened or submitted its claim to arbitration under the guidelines set forth in KRS 304.390-70(3). Intervention may be impossible if — as is the instant case — no separate action has been filed. And, if the insurer were required to submit its claim for reimbursement to the arbitration procedures set forth in KRS 304.39-070(3), it would not obtain full reimbursement given the minimum deductible requirement set forth in KRS 304.39-290.

        In the present action, Jones elected not to purchase extended coverage on the vehicle from National. As a result, and under the contract of insurance he had with Progressive, his primary insurer was Progressive. Under his policy with Progressive, Jones was provided with insurance coverage on rental vehicles. ……. The trial court correctly held Progressive to be primarily liable for BRB. We will, therefore affirm the summary judgment.

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

 A panel of this court agreed with the defendant and held that no part of the basic reparation benefits may be recovered from a secured person except to the extent they exceed $10,000. Id. at 597. In that case the plaintiff also argued that the language of KRS 304.39-310(2) gave him "all the rights and obligations of a reparation obligor" and therefore allowed recovery of medical expenses pursuant to KRS 304.39070(3). However, this court refused to address that issue because the defendant’s reparation obligor had not been named as a party in the case. Id. at 598. In short, the Stone case does not lend support to Bartlett’s argument.

 

KY     [U] Kentucky National Insurance Co. v. Bottoms, No. 2002-CA-001767-MR (Ky.App. 11/26/2003)

It is Kentucky National’s position that since the jury award to Bottoms included damages for items which were undisputedly covered by the PIP benefits he received, $10,000.00 must be deducted from the jury’s award (pursuant to the dictates of KRS 304.39-060(2)(a)) to arrive at the judgment to which he would have been legally entitled from the tortfeasor for purposes of determining UIM liability. While it is true that KRS 304.39-060(2)(a) "abolished" liability to the injured party to the extent of PIP/BRB benefits received, KRS 304.39070(2) simply transferred that entitlement to the BRB obligor by giving it (Kentucky National) the right of subrogation to obtain reimbursement for the PIP/BRB benefits it paid to its insured. Progressive Casualty Insurance Co. v. Kidd, Ky., 602 S.W.2d 416 (1980). The purposes of this statutory scheme, to prevent double recovery by the injured party and to allow the BRB obligor to be directly reimbursed by the tortfeasor, were clearly achieved in the instant case. Kentucky National was reimbursed by Farm Bureau the full $10,000.00 in PIP/BRB benefits paid as part of and set-off from Bottoms’s settlement with Kissell. Hence, Kentucky National has been made whole and Bottoms did not receive double recovery. Accordingly, the lower court did not err in computing the amount of UIM benefits owed to Bottoms.

 

KY     American Premier Insurance Co. v. McBride, No. 2003-CA-002121-MR (Ky.App. 10/08/2004)

 But we find the instant case to be distinguishable from Gray. Gray dealt with statutory subrogation pursuant to the provisions of the MVRA for basic reparation benefits paid under the act to an insured for personal injury sustained in a motor vehicle accident. In the instant case, the underlying claim is one for property damage, rather than personal injury, arising out of a motor vehicle accident.

    Not all actions arising out of motor vehicle accidents are covered by the MVRA. Specifically, we stated in Duncan v. Beck, that the MVRA "does not cover claims for property damage." As authority to the contrary, American Premier cites KRS 304-39-115 which establishes the loss of use of a motor vehicle for the time reasonably necessary to repair or replace it as a recognizable separate item of damage in any property damage liability claim. KRS 304.39-115 does not appear to apply to the instant case because it addresses only the loss of use of a motor vehicle.


KY     [U] State Farm Mutual Automobile Insurance Co. v. City of Louisville, No. 2002-CA-000223-MR (Ky.App. 09/05/2003)

   The parties’ main point of contention is whether the motor vehicle owned by the City and driven by Alpiger was a secured vehicle. If the operator and vehicle were not secured, State Farm is left to proceed under KRS 304.39070(2). If the operator and vehicle are secured, KRS 304.39070(3) is the applicable provision. And, under that subsection, State Farm may only recover from the City if it may be considered a "reparation obligor."

     According to the above statute, a secured person is the owner, operator or occupant of a secured motor vehicle. "Security covering the vehicle" is defined as "the insurance or other security so provided." KRS 304.39-080(1). Further, that statute states in subsection (6): "Security may be provided by a contract of insurance or by qualifying as a self-insurer or obligated government in compliance with this subtitle." The City has no contract of insurance, nor is it a qualifying self insurer or "obligated government" under the Act. The city states that the KMVRA provides that municipal corporations and political subdivisions may provide security for basic reparations benefits, KRS 304.39-080(3), and the City has elected not to become subject to that provision.


KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

Before leaving this subject, it should be recalled that Farm Bureau did not claim in its intervening complaint that it was entitled to recoup its $500 in Med-Pay payments from Travelers. KRS 304.39070(3) and KRS 304.39-140(2) create a right of subrogation by direct action only with respect to BRB and ARB payments. Nor did the final judgment entered in this case award Farm Bureau a judgment against Travelers for the $500 paid under its Med-Pay coverage. Rather, the judgment awarded that sum to Lawson against Helton, presumably pursuant to the collateral source rule. Burke Enters., Inc. v. Mitchell, Ky., 700 S.W.2d 789 (1985); Taylor v. Jennison, Ky., 335 S.W.2d 902, 903 (1960). If the $500 Med-Pay payments had, in fact, been BRB or ARB payments, the right to recover those payments would have belonged not to Lawson, but by statutory assignment to Farm Bureau. Ohio Cas. Ins. Co. v. Ruschell, Ky., 834 S.W.2d 166, 168 (1992) ("by statutory mandate the tort claimant has no further tort claim whatsoever for those elements of damages paid or payable under the no-fault statute"); id. at 170 (no-fault benefits are not "collateral source payments").


KY     [U] Kentucky Farm Bureau Mutual Insurance Companies v. Grange Mutual Casualty Co., No. 2002-CA-000308-MR (Ky.App. 02/28/2003)  

          In response to Farm Bureau’s argument, Grange argues that the trial court was within its discretion to dismiss this claim on the ground that the arbitration remedy was available to Farm Bureau under KRS 304.39070(3) and that "judicial economy was promoted" by having the claim resolved in that manner rather than by continuing to leave the case pending before the court on that sole issue. We reject Grange’s argument for two reasons. First, there is no indication in the record that the court dismissed the claim for this reason. Second, even if it did, it abused its discretion in doing so because Farm Bureau had the right to assert its claim by either joining this lawsuit or through arbitration. KRS 304.39070(3). The court did not have the discretion to dictate the manner in which the claim was …

 

KY     Inn-Group Management Services, Inc. v. Greer, 71 S.W.3d 125 (Ky.App. 01/25/2002)

This case involved an attorney representing a client in a tort action (auto accident). The client’s insurance company was reimbursed after the attorney won. A statute (KRS 304.39070(5)) provided for a reasonable attorney fee and the Supreme Court held it should be set by the trial court.


KY     Lawson v. Helton Sanitation, Inc., No. 1999-SC-000308-DG (Ky. 01/25/2001)

 Pursuant to KRS 304.39070(2) and (3), a reparation obligor (Farm Bureau), which has made BRB payments to its insured (Lawson), may intervene in the insured’s tort action against the tortfeasor (Helton) in order to assert a direct claim against the tortfeasor’s insurer (Travelers) for reimbursement of the reparation benefits paid to its insured (Lawson). Granqe Mut. Cas Co. v. McDavid, Ky., 664 S.W.2d 931, 932 (1984); Stovall v. Ford, Ky., 661 S.W.2d 467 (1983). Farm Bureau’s intervening complaint against Travelers demanded only "the sum of $1 O,OOO.OO representing reimbursement of the basic reparations [sic] benefits heretofore paid to or for the benefit of the plaintiff, Ralph Lawson, by Kentucky Farm Bureau Mutual Insurance Company."

 

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KY     Shelter Insurance Co. v. Humana Health Plans Inc., 882 S.W.2d 127 (Ky.App. 03/11/1994)

Contrary to Humana’s contention, although Holt may have acquired the "rights" of a reparations obligor by virtue of the provisions of KRS 304.39-310(2), she clearly did not acquire the statutory subrogation right conferred on reparations obligors by KRS 304.39-070. On the contrary, a reparations obligor who has paid BRB is subrogated only to the extent of the injured party’s rights against the tortfeasor. See KRS 304.39-070(2). Because in her capacity as an injured party Holt acquired no right to recover BRB, and because subsection (2) of the statute limits a reparations obligor’s right of recovery to that which is possessed by the injured party, Holt did not succeed to any right of recovery against Shelter in her capacity as a reparations obligor pursuant to KRS 304.39-070. It follows, therefore, that Humana likewise was not entitled to assert a statutory subrogation claim against Shelter.

KY     David Wine v. Globe American Casualty Co., 917 S.W.2d 558 (Ky. 03/21/1996)

reparation obligor is entitled to assert a subrogation claim against an uninsured motorist. State Auto. Mut. v. Empire Fire & Marine, Ky., 808 S.W.2d 805 (1991). This right is derived from KRS 304.39070(2) which provides:

A reparation obligor which has paid or may become obligated to pay basic reparation benefits shall be subrogated to the extent of its obligations to all of the rights of the person suffering the injury against any person or organization other than a secured person.

This statutory provision is limited to creating the reparation obligor’s right to subrogation and provides no authority for establishing a preference on behalf of either party. However, the Motor Vehicle Reparations Act does contain an express legislative pronouncement concerning the priority of claims between the victims of motor vehicle collisions and their insurance carriers. This provision, KRS 304.39-140(3), states:

If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or in behalf of such injured person or persons.


KY     Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.App. 11/07/1997) 

The Court in that declaration of rights action between two insureds was confronted with the issue of whether under the Motor Vehicle Reparations Act, KRS 304.39-010 et seq. ("MVRA") an insurer which has paid BRB’s and ARB’s to its insured may recover from the insurer of the responsible "secured party" all such reparation benefits or only the BRB’s. The United Services Court concluded that the statutory scheme as a whole evinces a clearly articulated legislative intent to allow reparation obligers to recover the full amount of added as well as basic reparation benefits. As the Court noted, KRS 304.39070(3), which grants an insured’s reparation obligor the right to recover benefits from the obligor of the responsible "secured party," makes no specific reference to the recovery of added reparation benefits. However, the Court found persuasive the language of KRS 304.39070(4):

"Any entitlement to recovery for basic or added reparation benefits paid or to be paid by the subrogee shall in no event exceed the limits of automobile bodily injury liabilitycoverage available to the secured party after priority of entitlement as provided in this section and KRS 304.39-140(3) has been satisfied." (Emphasis added).


KY     State Automobile Mutual Insurance Co. v. Empire Fire & Marine Insurance Co., 808 S.W.2d 805 (Ky. 05/09/1991) 

DISSENT: The first of these reasons is that a fair reading of KRS 304.39-070(2) and (3) suggests that the liability insurance industry, the insurance companies which sponsored the no-fault legislation, while intending this legislation to limit damages available to the injured victim did not intend to limit their own interests. These sections are an attempt to retain the fault principle and indemnity wherever possible. Subsection (2) specifies that a "reparation obligor . . . shall be subrogated to the extent of its obligations to all of the rights of [its insured] against any person or organization other than a secured person." Subsection (3) sets up an elaborate mechanism whereby the reparation obligor who has paid no-fault benefits may recover from others at fault by various means, including, but not limited to, arbitration against the tortfeasor’s liability insurance carrier. This is totally inconsistent with that right to recover back having been cut off because the tortfeasor’s carrier has only derivative liability. I am convinced that those who drafted this legislation did not intend to limit their right to recover from third parties for whatever no-fault benefits they should be required to pay, except to the extent absolutely necessary to structure the Act. To do so it was necessary to exclude only the right to recover back from a secured person. It is illogical to believe the no-fault insurance lobby intended the reparation obligor to retain the right to recover back from all others, a right which would inure to it from the contract of insurance, from common law principles of restitution, and from KRS 304.39-070(2),(3).

 
 

KRS 304.39-080 Security covering motor vehicle.

(1) "Security covering the vehicle" is the insurance or other security so provided. The vehicle for which the security is so provided is the "secured vehicle."

(2) "Basic reparation insurance" includes a contract, self-insurance, or other legal means under which the obligation to pay basic reparation benefits arises.

(3) This Commonwealth, its political subdivisions, municipal corporations, and public agencies may continuously provide, pursuant to subsection (6) of this section, security for the payment of basic reparation benefits in accordance with this subtitle for injury arising from maintenance or use of motor vehicles owned by those entities and operated with their permission.

(4) The United States and its public agencies and any other state, its political subdivisions, municipal corporation, and public agencies may provide, pursuant to subsection (6) of this section, security for the payment of basic reparation benefits in accordance with this subtitle for injury arising from maintenance or use of motor vehicles owned by those entities and operated with their permission.

(5) Except for entities described in subsections (3) and (4) of this section, every owner or operator of a motor vehicle registered in this Commonwealth or operated in this Commonwealth with an owner’s permission shall continuously provide with respect to the motor vehicle while it is either present or registered in this Commonwealth, and any other person may provide with respect to any motor vehicle, by a contract of insurance or by qualifying as a self-insurer, security for the payment of basic reparation benefits in accordance with this subtitle and security for payment of tort liabilities, arising from maintenance or use of the motor vehicle. The owner of a motor vehicle who fails to maintain security on a motor vehicle in accordance with this subsection shall have his or her motor vehicle registration revoked in accordance with KRS 186A.040 and shall be subject to the penalties in KRS 304.99-060. An owner who permits another person to operate a motor vehicle without security on the motor vehicle as required by this subtitle shall be subject to the penalties in KRS 304.99-060.

(6) Security may be provided by a contract of insurance or by qualifying as a self-insurer or obligated government in compliance with this subtitle.

(7) Self-insurance, subject to approval of the commissioner of insurance, is effected by filing with the commissioner in satisfactory form:

(a) A continuing undertaking by the owner or other appropriate person to pay tort liabilities or basic reparation benefits, or both, and to perform all other obligations imposed by this subtitle;

(b) Evidence that appropriate provision exists for prompt and efficient administration of all claims, benefits, and obligations provided by this subtitle; and

(c) Evidence that reliable financial arrangements, deposits, or commitments exist providing assurance, substantially equivalent to that afforded by a policy of insurance, complying with this subtitle, for payment of tort liabilities, basic reparation benefits, and all other obligations imposed by this subtitle.

(8) An entity described in subsection (3) or (4) of this section may provide security by lawfully obligating itself to pay basic reparation benefits in accordance with this subtitle.

(9) A person providing security pursuant to subsection (7) of this section is a "self-insurer." An entity described in subsection (3) or (4) of this section that has provided security pursuant to subsection (6) of this section is an "obligated government."

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1526, effective July 15, 2010. — Amended 2007 Ky. Acts ch. 38, sec. 1, effective June 26, 2007. — Amended 2005 Ky. Acts ch. 152, sec. 1, effective June 20, 2005. — Amended 1998 Ky. Acts ch. 442, sec. 3, effective July 15, 1998. — Amended 1996 Ky. Acts ch. 341, sec. 6, effective July 15, 1996. — Created 1974 Ky. Acts ch. 385, sec. 8, effective July 1, 1975.

 
 

Annotations for this statute:

 

[U] Fuller v. Enter. Rent-A-Car Co. of Kentucky (Ky. App., 2012) 2011-CA-001301-MR October 12, 2012

Fuller further argues that the Kentucky Administrative Regulations (KAR) dictate that Enterprise, as a self-insured entity, is solely responsible for tort liability insurance. 806 KAR 39:050(2) provides that applicants for self-insurance must agree "to pay all tort liability and basic reparation benefits incurred and required by KRS Chapter 304, Subtitle 39." As we pointed out, KRS 304.39-110 permits contractual shifting of tort liability, as acknowledged by our Supreme Court in Rees. KRS 304.39-080 requires self-insured entities to pay "tort liabilities or basic reparation benefits, or both." By employing the disjunctive or, KRS 304.39-080 allows for contractual flexibility while still complying with the mandate of KRS 304.39-110 that coverage for BRB’s cannot be shifted or avoided.  

 

Samons v. Ky. Farm Bureau Mut. Ins. Co. (Ky., 2013) 2011-SC-000414-DG May 23, 2013

It is clear that BRBs are to be first sought from the security covering the vehicle. What is less clear, however, is what constitutes security covering the vehicle. Security covering the vehicle is defined in KRS 304.39-080(1) as "the insurance or other security so provided." The Kentucky Court of Appeals has previously held—and the United States Sixth Circuit Court of Appeals has ratified—that when a vehicle is not insured by its owner, the insurance coverage of its operator may provide the statutorily-required coverage. We hold this principle applicable to the present case so that the purposes of the MVRA, in protecting injured parties and assuring them quick payments, may be furthered.

 

[U] Ingram v. Commonwealth (Ky. App., 2013)  2012-CA-000245-MR February 1, 2013

In June 2011, the Fayette County grand jury indicted Ingram on charges of driving on a DUI-suspended license, third offense, pursuant to Kentucky Revised Statutes (KRS) 189A.090, a Class D felony; failure of owner to maintain required insurance pursuant to KRS 304.39-080, a Class B misdemeanor; and no taillights pursuant to KRS 189.050(1), which is a violation. Ingram entered a not guilty plea during his arraignment, and he later moved to suppress the stop of his vehicle and the fruits of the stop.

In his brief, Ingram continues to argue that the circuit erred in denying his motion to suppress because its finding that the taillights were not working was not supported by substantial evidence, and therefore the ruling that Officer Ockerman had reasonable grounds to perform the traffic stop was incorrect as a matter of law. The Commonwealth argues that the circuit court properly denied the motion to suppress because the officer had a reasonable suspicion to stop the car.

 Next, we hold that based upon the circuit court’s finding that the taillights were not working, the circuit court properly held that Officer Ockerman had a reasonable and articulable suspicion of criminal activity to justify her stop of Ingram’s vehicle. KRS 189.050(1) provides that "[a]ll motor vehicles shall display at the rear two (2) red lights visible when lighted for at least five hundred (500) feet, unless the motor vehicle was originally equipped with only one (1) such light." Based upon Officer Ockerman’s observation while Ingram was driving his vehicle ahead of her, Ingram’s vehicle was in violation of this statute because his taillights were not illuminated. Accordingly, Ingram’s arguments that the taillights were working and that he was doing nothing wrong are without merit. Therefore, we hold that the circuit court properly denied Ingram’s motion to suppress.

 

[U] Dillard v. Commonwealth (Ky. App., 2013) 2011-CA-001917-DG May 31, 2013

Under the Motor Vehicle Reparations Act (MVRA), Dillard was required to obtain and maintain appropriate insurance or approved security on her vehicle. … (KRS) 304.39-080(6), (7); KRS 304.39-090. This obligation included obtaining minimum tort liability insurance. KRS 304.39-110. Dillard was charged with violating the MVRA under KRS 304.99-060(1)(a) for failing to maintain required insurance/security, first offense, a class A misdemeanor pursuant to KRS 532.020(2).  

 

Ky. Farm Bureau Mut. Ins. Co. v. Shelter Mut. Ins. Co., 326 S.W.3d 803 (Ky., 2010) –  Nov. 18, 2010.

We are confronted here with a scenario wherein both automobile insurance policies claim to provide only excess coverage. Logically, under the circumstances, both cannot be excess insurers; rather, practically and semantically, one must be primary with the other secondary (responsible for the excess), or both must be deemed to be primary.

We glean from the legislative intent underlying the MVRA that the General Assembly intended, that in instances where both the vehicle owner and non-owner driver are separately insured, the vehicle owner’s insurance shall be primary.

Since its inception in 1974, the MVRA has required every owner to procure insurance covering liability arising out of ownership of a motor vehicle. KRS 304.39-080. The basic underlying premise is that in the event of an accident, the liable insurer will be readily identifiable and will promptly pay, up to its policy limits, for the injuries suffered. The MVRA does not gamble that a permissive driver may have insurance. See KRS 304.39-080(5)

 ("The owner of a motor vehicle who fails to maintain security on a motor vehicle in accordance with this subsection shall have his or her motor vehicle registration revoked in accordance with KRS 186A.040 and shall be subject to the penalties in KRS 304.99-060. An owner who permits another person to operate a motor vehicle without security on the motor vehicle as required by this subtitle shall be subject to the penalties in KRS 304.99-060."); see also KRS 304.39-080(1) ("The vehicle for which the security is so provided is the ‘secured vehicle.’ ").

…….And in McGrew, given the strong mandates of the MVRA, we recognized a vehicle owner’s liability for injuries resulting from the permissive use of her uninsured vehicle, a "new tort of no insurance" as described by Justice Cooper in his dissent. Id. at 7.

Finally, we find exceedingly inequitable the assertion that an insurance company can, under mandates of the MVRA, collect premiums from its insured while hiding behind an excess clause that purports to subvert its primary liability for that of another. See Roth, 269 So.2d at 6 (finding that the insurance company receiving the premium payment cannot escape primary liability).

Thus, under the mandates of the MVRA, our trial courts, under similar circumstances, will no longer be mired in the quagmire of which policy is primary. Moreover, the expedient resolution of this issue will streamline the process as each insurer’s role is clearly defined, thus facilitating a simple determination of which policy is primarily liable under these circumstances and hopefully without further drafting wars.

IV. Conclusion

For the above reasons, we reverse the Court of Appeals’ opinion and reinstate the summary judgment order of the Montgomery Circuit Court

 

KY     York v. Kentucky Farm Bureau Mutual Insurance Co., No. 2003-SC-334-DG (Ky. 02/17/2005)

A unanimous Court of Appeals panel reversed, holding that there was no ambiguity in the exclusion, and that York was "any person" driving the Neeley vehicle "without a reasonable belief"that he was "entitled to do so." The Court of Appeals found that there was simply no evidence to support that "any person" had a special meaning that did not include insureds. Appellants also argued that the public policy behind the Motor Vehicles Reparations Act (MRVA), KRS 304.39-010, required a finding in favor of insurance coverage for innocent third parties. In response, the Court of Appeals held that KRS 304.39.080(5) only permitted but did not require liability insurance for non-owned vehicles. We granted review.

 

KY     Motorists Mutual Insurance Co. v. Grance Mutual Casualty Company, No. 2003-CA-000346-MR (Ky.App. 05/28/2004) 

   In this case . . . the public policy of the MVRA [Motor Vehicle Reparations Act], specifically KRS 304.39080(5), is not satisfied by the language of Motorists’ policy as it fails to provide the required property damage coverage if there is no other insurance to which the responsibility can be shifted. Motorists’ clause violates the compulsory insurance law of the MVRA.

    Consequently, the Court agrees with Grange that the different clauses in the policies are mutually repugnant and should be disregarded, with each insurer responsible for its pro rata share of the $19,209.90 loss. See Ohio Casualty Insurance Company v. State Farm Mutual Automobile Insurance Company, Ky.[,] 511 S.W.2d 671 (1974).

 

KY     Ellis v. Browning Pontiac-Chevrolet-GMC Truck-Geo, Inc., No. 2000-CA-002772-MR (Ky.App. 02/15/2002)  

When he [the dealer] assigns the vehicle to a purchaser for use, he shall deliver the properly assigned certificate of title, and other documents if appropriate, to such purchaser, who shall make application for registration and a certificate of title thereon. The dealer may, with the consent of the purchaser, deliver the assigned certificate of title, and other appropriate documents of a new or used vehicle, directly to the county clerk, and on behalf of the purchaser, make application for registration and a certificate of title. In so doing, the dealer shall require from the purchaser proof of insurance as mandated by KRS 304.39080 before delivering possession of the vehicle. Notwithstanding the provisions of KRS 186.020, 186A.065, 186A.095, 186A.215, and 186A.300, if a dealer elects to deliver the title documents to the county clerk and has not received a clear certificate of title from a prior owner, the dealer shall retain the documents in his possession until the certificate of title is obtained.

KY  Gainsco Companies v. Gentry, No. 2002-CA-000231-MR (Ky.App. 03/05/2004)

5) When [a licensed motor vehicle dealer] assigns the vehicle to a purchaser for use, he shall deliver the properly assigned certificate of title, and other documents if appropriate, to such purchaser, who shall make application for registration and a certificate of title thereon. The dealer may, with the consent of the purchaser, deliver the assigned certificate of title, and other appropriate documents of a new or used vehicle, directly to the county clerk, and on behalf of the purchaser, make application for registration and a certificate of title. In so doing, the dealer shall require from the purchaser proof of insurance as mandated by KRS 304.39080 before delivering possession of the vehicle [emphases added].

     The above provision reflects a 1994 amendment which created an exception to the general rule that the party holding the certificate of title was the "owner" of the vehicle for insurance purposes. In Auto Acceptance, our Supreme Court explained one of the requirements that an automobile dealer must follow in order to fall within that exception:

   The 1994 revision created an exception to the general statutory scheme that makes the title holder the owner of a vehicle for insurance purposes. But a car dealer can only take advantage of the exception by first verifying that the buyer has a valid and current insurance policy that covers the purchased vehicle. This exception is consistent with the important public policy of keeping uninsured vehicles off Kentucky highways, roads, and streets [emphasis added].

     Hence, as both KRS 186A.220(5) and Auto Acceptance make clear, before a car dealer can effectively transfer ownership of a vehicle without simultaneously transferring possession of the certificate of title, the dealer must (1) obtain the purchaser’s consent to file the certificate of title and other documents on behalf of the purchaser in the county clerk’s office; and (2) verify that the purchaser has obtained insurance on the vehicle before relinquishing possession of that vehicle to the purchaser. With this in mind, we turn to the facts of the case sub judice.

 
 

KY     Ellis v. Browning Pontiac Pontiac-Chevrolet-GMC Truck-GEO, Inc., No. 2000-CA-002772-MR (Ky.App. 02/15/2002) 

When he [the dealer] assigns the vehicle to a purchaser for use, he shall deliver the properly assigned certificate of title, and other documents if appropriate, to such purchaser, who shall make application for registration and a certificate of title thereon. The dealer may, with the consent of the purchaser, deliver the assigned certificate of title, and other appropriate documents of a new or used vehicle, directly to the county clerk, and on behalf of the purchaser, make application for registration and a certificate of title. In so doing, the dealer shall require from the purchaser proof of insurance as mandated by KRS 304.39080 before delivering possession of the vehicle. Notwithstanding the provisions of KRS 186.020, 186A.065, 186A.095, 186A.215, and 186A.300, if a dealer elects to deliver the title documents to the county clerk and has not received a clear certificate of title from a prior owner, the dealer shall retain the documents in his possession until the certificate of title is obtained.

KY     Kentucky Farm Bureau Mutual Insurance Company v. York, No. 2002-CA-000952-MR (Ky.App. 04/04/2003)

Clearly, under the statute, liability coverage for non-owned vehicles is permissive rather than mandatory, and although we support the worthy purpose of the Motor Vehicle Reparations Act as discussed in Progressive Northern Insurance Co. v. Corder, Ky., 15 S.W.3d 381, 383 (2000), we do not believe that public policy considerations should be used as a means to require a higher liability insurance standard with regard to this issue than that which is reflected in KRS 304.39080(5). See also Consolidated American Insurance Co. v. Anderson, Ky. App., 964 S.W.2d 811, 814 (1997). Therefore, the plain language of the policy exclusion clearly precludes coverage under circumstances such as these, and Farm Bureau is not obligated to provide a defense to York or to indemnify him for this

 

KY     [U] State Farm Mutual Automobile Insurance Co. v. City of Louisville, No. 2002-CA-000223-MR (Ky.App. 09/05/2003)

Nevertheless, the City argues that the vehicle operated by Alpiger was a secured vehicle because the City provided "other security" under KRS 304.39080(1). "Security" is defined in KRS 304.39-020(17) as "any continuing undertaking complying with this subtitle, for payment of tort liabilities, basic reparation benefits, and all other obligations imposed by this subtitle." The City contends that although it is exempt from no-fault obligations, the City is not unsecured but provides other security by having a fund available for payment of liabilities. In their brief, appellees state: "On an annual basis, the City appropriates certain funds for automobile liability claims adjustments and expenses, thus providing a continuing undertaking for the payment of its tort liabilities." The City cites KRS 65.2001 et seq., which deals with claims against local governments, and Louisville Codified Ordinances 34.082, and 36.160 et seq. …

Additionally, the City argues that it is not required to repay State Farm for the basic reparations paid because it is not a reparations obligor as defined in KRS 304.39-020(13). Therein, "reparation obligor" is defined as "an insurer, self insurer, or obligated government providing basic or added reparation benefits under this subtitle." The City is not an insurer, under the common meaning of that term, and it has already been established that the City is not a self-insurer or obligated government.

From the foregoing, we believe that the vehicle driven by Alpiger and owned by the City was not a secured vehicle under the meaning of the KMVRA. We believe that the case should properly have proceeded under KRS 304.39080(2) above. Therefore, we find that the grant of summary judgment in this case was improper. We reverse and remand for further proceedings consistent with this opinion.

 

KY     Nationwide Mutual Insurance v. Hatfield, 122 S.W.3d 36 (Ky. 12/18/2003)

 DISSENT: The "younger sibling" relationship between the UM and UIM statutes is conceptually identical to the relationship between the BRB statutes, KRS 304.39080(5) and KRS 304.39-110(1)(c), and the added reparation benefits (ARB) statute, KRS 304.39-140, which also define coverages that are personal to the insured. While BRB coverage is mandatory, ARB coverage is optional. Stevenson, supra, note 6, at 722-24. As does the almost identical language in the UIM statute, the ARB statute provides that "each reparation obligor [insurer] of the owner of a vehicle required to be registered in this Commonwealth shall, upon the request of a reparation insured, be required to provide added reparation benefits." KRS 304.39-140(1). The ARB statute also authorizes "terms, conditions and exclusions." KRS 304.39-140(2). Thus, in Stevenson, supra note 6, we upheld a provision that did not void the ARB coverage altogether but limited it to persons who were either named insureds or relatives of a named insured. Id. at 724.


KY Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

Every owner of a motor vehicle registered or operated in Kentucky is required to provide BRB coverage for that vehicle. KRS 304.39080 (5) . Examination of the provisions of Part IIA of Anthem/Decatur’s policy reveals that it provides the BRB coverage defined in KRS 304.39-020(2) and (5). In fact, the policy specifically states that payment under Part IIA is "in accordance with Kentucky Revised Statutes Chapter 304, Sub Title 39." Thus, we have no difficulty concluding that, despite the misnomer, the personal injury protection coverage described in the Anthem/Decatur policy is, in fact, basic reparation benefits coverage.

 

KY     Jefferson County v. Allstate Insurance Co., 69 S.W.3d 469 (Ky.App. 03/16/2001)

While this Court agrees with Jefferson County that it can decide whether or not it is an obligated government entity for prospective application, this Court believes it would be against the public policy behind the KMVRA to allow the County to withdraw its participation retrospectively. Thus, Jefferson County does have an obligation under KRS 304.39080 for any occurrences prior to January 14, 1999.

Thus, the issue before this Court is whether our Legislature intended to grant a governmental entity, such as Jefferson County, the authority to terminate its status as an obligated governmental entity pursuant to KRS 304.39080 so that it would no longer be responsible for a claim that arose during the period it was an obligated government entity if the claim had not been filed with the Kentucky Insurance Arbitration Association before the date of its withdrawal from the Arbitration Association. Obviously, the answer to this question depends upon what the Legislature intended when it enacted KRS 304.39080.

     When interpreting a statute, the function of the court is to construe the language so as to give effect to the intent of the Legislature. In determining legislative intent, we may not look beyond the language of the statute unless the legislative intent is not discernible from the language used. However, a court may not surmise as to what the Legislature intended but did not express.

In 1996, when Jefferson County elected to waive sovereign immunity under KRS 304.39080, it was required to become a member of the Arbitration Association. Our Legislature exercised its authority in setting guidelines and regulations as to the formation of and membership in the Arbitration Association. While it is conceded that the applicable statutes and regulations do not specifically address the issue before us, we believe that the plan of operation provides guidance. The plan of operation was promulgated pursuant to Chapter 385 of the 1974 Acts of the General Assembly and became effective pursuant to KRS 304.39-290. According to the plan, under Article 4(c) entitled "Operations":

 
 

 

KY     Hoffman v. Yellow Cab Company of Louisville, 57 S.W.3d 257 (Ky. 09/27/2001)

Hoffman argues that UM liability is imposed upon all self-insurers by the Motor Vehicle Reparations Act (MVRA), subtitle 39 of the Kentucky Insurance Code, specifically KRS 304.39080. That statute requires every owner of a motor vehicle (except an agency of the state or national government) to provide "by a contract of insurance or by qualifying as a self-insurer, security for the payment of basic reparation benefits [BRB] in accordance with this subtitle and security for payment of tort liabilities, arising from the maintenance or use of the motor vehicle." KRS 304.39080(5). By its terms, this provision applies only to basic reparation benefits (BRB) and tort liability coverage, not UM coverage. KRS 304.39080(7

 

KY     Davidson v. American Freightways, Inc., No. 1998-SC-0554-DG (Ky. 09/14/2000)

AFI is an interstate motor carrier and had complied with the requirements of 49 U.S.C. § 31139(b) and (e), thus had qualified as a "self-insured" under federal law to the extent of its $250,000.00 deductible. However, it had not complied with KRS 304.39080(7), thus had not qualified as a "self-insured" under Kentucky law. KRS 304.39080(6). Nor was it a "liability self-insurance group" as defined in KRS 304.48- 030 so as to fall within the parameters of the only unfair claims settlement practices statute specifically applicable to self-insureds. KRS 304.48-240(2). Nevertheless, Appellants characterize AFI as a "self-insured" or, alternatively, as "an uninsured," rather than "an insured with a $250,000.00 deductible," presumably because KRS 304.12-220 specifically provides that the UCSPA does not apply to "an insured." Appellants conclude that since "an insured" is the only "person" specifically excluded from the provisions of the UCSPA, a self-insured or uninsured person must ipso facto be subject to the statute. Under this theory, any person or entity who is either uninsured or self-insured would be held to the same standards of conduct with respect to the negotiation and settlement of tort liability claims as is an insurance company which is in the business of entering into contracts under which it is paid to assume the risk of liability for claims brought against the other contracting party. Thus, even an uninsured owner of a "mom-and-pop" grocery store who balks at (or is "bull-headed" about) paying his/her own money to settle a premises liability claim would be subject to punitive damages for committing an unfair claims settlement practice in violation of the UCSPA. We reject this view as contrary to the expressed intent of the legislature in enacting the Insurance Code, contrary to the interpretation placed upon the UCSPA by the administrative agency charged with its enforcement, contrary to our own well- established precedents, and contrary to the interpretation given to similar statutes by all other state courts which have considered the issue to date. Such an interpretation also would require us to declare the UCSPA unconstitutional as violative of Section 51 of our Constitution.


KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

Farm Bureau’s standard form automobile policy refers to basic reparation benefits (BRB), which are defined in KRS 304.39-020(2) as personal injury protection (PIP) benefits. As noted in Stevenson v. Anthem Cas. Ins. Group, Ky., 15 S.W.3d 720, 723 (1999) those terms are used interchangeably in describing what are often referred to as "no-fault" benefits. There was uncontradicted evidence in this case that "PIP, BRB and no-fault benefits" are synonymous terms used interchangeably in the insurance industry to describe those benefits mandated by KRS 304.39080(5) and KRS 304.39-110(1)(c).


KY     Progessive Northern Insurance Co. v. Corder, No. 1998-SC-092-CL (Ky. 04/20/2000)

This Commonwealth’s commitment to ensuring recovery for injuries sustained in motor vehicle accidents is clearly expressed in the provisions of the MVRA. KRS 304.39080(5) requires every owner of a motor vehicle registered or operated in Kentucky to provide continuously an insurance contract or other security for payment for basic reparations benefits and tort liabilities arising from the use of the vehicle. KRS 304.39-085 requires every insurance company to report all insured persons whose policies have been terminated by the Department of Vehicle Regulation. KRS 304.39-090 prohibits a motor vehicle owner who ceases to maintain security from operating or permitting the vehicle to be operated in Kentucky

 

 

KRS 304.39-083 Binder cancellation — Notification to Department of Vehicle

Regulation.

(1) If the owner of a motor vehicle has been issued a binder, or other contract for temporary insurance, for motor vehicle security and subsequently contacts the agent who issued the binder or other contract for temporary insurance to cancel the motor vehicle security before the agent has forwarded the person’s application for a binder or other contract for temporary insurance to the insurance company, the agent shall immediately notify the Department of Vehicle Regulation that the owner has canceled the binder for motor vehicle security.

(2) The agent notification required by subsection (1) of this section may be through verbal communication or written communication with the Department of Vehicle Regulation. The agent shall notify the department of the following information:

(a) The name, address, and telephone number of the owner who canceled the binder or other contract for temporary insurance;

(b) The name of the insurer who issued the binder or other contract for temporary insurance;

(c) The year, make or model, and vehicle identification number of the motor vehicle on which the binder or other contract for temporary insurance was issued;

(d) The date the binder or other contract for temporary insurance was issued; and

(e) The date the binder or other contract for temporary insurance was canceled. The department shall respond to all agent notifications in writing confirming that an agent notified the department with the information required by this subsection. If the agent notifies the department verbally, the agent shall, within five (5) business days of the initial notification, send a letter to the department, setting forth the required information in writing.

Effective: July 15, 1996

History: Created 1996 Ky. Acts ch. 341, sec. 9, effective July 15, 1996.

 
NO ANNOTATIONS FOR THIS STATUTE:
 
 

KRS 304.39-085 Notification by insurance company to Department of Vehicle

Regulation of persons insured whose policy was terminated — Exception.

(1) Every authorized insurance company shall, within one (1) calendar week following the end of its accounting month, send to the Department of Vehicle Regulation a list of all persons insured by it whose policy was terminated by either cancellation or nonrenewal during such accounting month, except those persons whose nonrenewal was at the end of a policy with a term of six (6) months or longer and who failed to make a payment for the renewal of the policy. Such list shall include a description of each vehicle insured under such terminating policy.

(2) It shall be lawful for an authorized insurance company to present the information required by subsection (1) of this section by compatible computer tape approved by the Department of Vehicle Regulation.

(3) On and after January 1, 2006, this section shall not apply to policies covering personal motor vehicles as defined in KRS 304.39-087.

Effective: July 13, 2004

History: Amended 2004 Ky. Acts ch. 130, sec. 4, effective July 13, 2004. – Amended 1996 Ky. Acts ch. 341, sec. 7, effective July 15, 1996. — Amended 1984 Ky. Acts ch. 129, sec. 2, effective January 1, 1985. — Amended 1980 Ky. Acts ch. 269, sec. 1, effective July 15, 1980. — Created 1978 Ky. Acts ch. 102, sec. 1, effective September 1, 1978.

 
NO ANNOTATIONS FOR THIS STATUTE:
 

KY Progessive Northern Insurance Co. v. Corder, No. 1998-SC-092-CL (Ky. 04/20/2000)

 This Commonwealth’s commitment to ensuring recovery for injuries sustained in motor vehicle accidents is clearly expressed in the provisions of the MVRA. KRS 304.39-080(5) requires every owner of a motor vehicle registered or operated in Kentucky to provide continuously an insurance contract or other security for payment for basic reparations benefits and tort liabilities arising from the use of the vehicle. KRS 304.39085 requires every insurance company to report all insured persons whose policies have been terminated by the Department of Vehicle Regulation. KRS 304.39-090 prohibits a motor vehicle owner who ceases to maintain security from operating or permitting the vehicle to be operated in Kentucky.


KY     National Insurance Association v. Peach, 926 S.W.2d 859 (Ky.App. 08/09/1996)

 The provisions of the MVRA parallel those of other jurisdictions. KRS 304.39-080(5) requires every owner of a motor vehicle registered or operated in the Commonwealth to provide continuously a contract of insurance or other security for payment of any tort liability arising from the use of the vehicle. KRS 304.39085 requires every authorized insurance company to report all insured persons whose policies were terminated to the Department of Vehicle Regulation. KRS 304.39-090 prohibits an owner of a motor vehicle who ceases to maintain security from operating or permitting the operation of the vehicle in the Commonwealth. KRS 304.20-040 provides that automobile liability policies may be cancelled by the insurer due to: (1) non-payment of a premium or (2) the suspension or revocation of a driver’s license or motor vehicle registration of the named insured (or anyone else customarily operating the vehicle) during the policy period.

 
 
 

KRS 304.39-087 Definition — Submission of vehicle identification numbers and name of policyholders to Department of Vehicle Regulation — Limitation of liability.

(1) As used in this section, unless the context requires otherwise, "personal motor vehicle" means:

(a) A private passenger motor vehicle that is not used as a public or livery conveyance for passengers, nor rented to others; and

(b) Any other four-wheel motor vehicle that weighs six thousand (6,000) pounds or less which is not used in the occupation, profession, or business of the insured.

(2) Beginning January 1, 2006, every insurance company that writes liability insurance on personal motor vehicles in Kentucky shall, between the first and fifteenth day of each month, send to the Department of Vehicle Regulation a list of the vehicle identification numbers (VINs) of each personal motor vehicle covered by liability insurance issued by the insurer as of the last day of the preceding month and the name of each personal motor vehicle insurance policyholder. The information shall be submitted either electronically or by paper copy at the option of the Department of Vehicle Regulation.

(3) In the absence of malice, fraud, or gross negligence, any insurer and any authorized employee of an insurer shall not be subject to civil liability for libel, slander, or any other relevant tort, and no civil cause of action of any nature shall arise against the insurer or authorized employee, for submission of the information required by subsection (2) of this section, including submission of inaccurate or incomplete information.

Effective: July 13, 2004

History: Created 2004 Ky. Acts ch. 130, sec. 1, effective July 13, 2004.

 
NO ANNOTATIONS FOR THIS STATUTE:
 
 

KRS 304.39-090 Required security.

An owner of a motor vehicle registered in this Commonwealth who ceases to maintain security as required by the provisions on security may not operate or permit operation of the vehicle in this Commonwealth until security has again been provided as required by this subtitle. An owner who fails to maintain security as required by this subtitle shall have his or her motor vehicle registration revoked in accordance with KRS 186A.040. All other owners shall provide such security while operating a motor vehicle in this Commonwealth.

Effective: July 15, 1998

History: Amended 1998 Ky. Acts ch. 442, sec. 4, effective July 15, 1998. – Amended 1996 Ky. Acts ch. 341, sec. 8, effective July 15, 1996. — Created 1974 Ky. Acts ch. 385, sec. 9, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 
 
 

Samons v. Ky. Farm Bureau Mut. Ins. Co. (Ky., 2013)  2011-SC-000414-DG May 23, 2013

In 1974, the General Assembly brought about sweeping changes in the realm of automobile insurance with its enactment of the Kentucky Motor Vehicle Reparations Act, based largely on the Uniform Motor Vehicle Accident Reparations Act (UMVARA).In doing so, the General Assembly transformed Kentucky into a no-fault state. This transformation reflected a policy "for prompt and liberal recovery to accident victims without regard to fault."  The implementation of this policy was performed primarily through KRS 304.39-030, basic reparation benefits; KRS 304.39-060, limitation of tort rights; and KRS 304.39-090, required insurance coverage.

Basic reparation benefits, often labeled Personal Injury Protection (PIP) in insurance policies, are "benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle."  All "owners, registrants and operators of motor vehicles in the Commonwealth" are statutorily mandated to carry coverage for BRBs.So when an accident occurs in Kentucky, as did the one here, "every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits,"with the only exclusion being if the individual has rejected his tort rights under KRS 304.39-060(4). This Court has previously noted the strong public policy in Kentucky protecting BRBs, labeling them "untouchable."

 

[U] Dillard v. Commonwealth (Ky. App., 2013) 2011-CA-001917-DG May 31, 2013

Under the Motor Vehicle Reparations Act (MVRA), Dillard was required to obtain and maintain appropriate insurance or approved security on her vehicle. Kentucky Revised Statutes (KRS) 304.39-080(6), (7); KRS 304.39-090. This obligation included obtaining minimum tort liability insurance. KRS 304.39-110. Dillard was charged with violating the MVRA under KRS 304.99-060(1)(a) for failing to maintain required insurance/security, first offense, a class A misdemeanor pursuant to KRS 532.020(2).  

 

KY  Progessive Northern Insurance Co. v. Corder, No. 1998-SC-092-CL (Ky. 04/20/2000)

 This Commonwealth’s commitment to ensuring recovery for injuries sustained in motor vehicle accidents is clearly expressed in the provisions of the MVRA. KRS 304.39-080(5) requires every owner of a motor vehicle registered or operated in Kentucky to provide continuously an insurance contract or other security for payment for basic reparations benefits and tort liabilities arising from the use of the vehicle. KRS 304.39-085 requires every insurance company to report all insured persons whose policies have been terminated by the Department of Vehicle Regulation. KRS 304.39090 prohibits a motor vehicle owner who ceases to maintain security from operating or permitting the vehicle to be operated in Kentucky.

KY     National Insurance Association v. Peach, 926 S.W.2d 859 (Ky.App. 08/09/1996)

The provisions of the MVRA parallel those of other jurisdictions. KRS 304.39-080(5) requires every owner of a motor vehicle registered or operated in the Commonwealth to provide continuously a contract of insurance or other security for payment of any tort liability arising from the use of the vehicle. KRS 304.39-085 requires every authorized insurance company to report all insured persons whose policies were terminated to the Department of Vehicle Regulation. KRS 304.39090 prohibits an owner of a motor vehicle who ceases to maintain security from operating or permitting the operation of the vehicle in the Commonwealth. KRS 304.20-040 provides that automobile liability policies may be cancelled by the insurer due to: (1) non-payment of a premium or (2) the suspension or revocation of a driver’s license or motor vehicle registration of the named insured (or anyone else customarily operating the vehicle) during the policy period.

 
 

KRS 304.39-100 Included coverages.

(1) An insurance contract which purports to provide coverage for basic reparation benefits or is sold with representation that it provides security covering a motor vehicle has the legal effect of including all coverages required by this subtitle.

(2) An insurer authorized to transact or transacting business in this Commonwealth shall file with the commissioner of insurance as a condition of its continued transaction of business within this Commonwealth a form approved by the commissioner of insurance declaring that in any contract of liability insurance for injury, wherever issued, covering the ownership, maintenance or use of a motor vehicle other than motorcycles while the vehicle is in this Commonwealth shall be deemed to provide the basic reparation benefits coverage and minimum security for tort liabilities required by this subtitle, except a contract which provides coverage only for liability in excess of required minimum tort liability coverage. Any nonadmitted insurer may file such form.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1527, effective July 15, 2010. — Amended 1976 Ky. Acts ch. 75, sec. 3, effective March 29, 1976. — Created 1974 Ky. Acts ch. 385, sec. 10, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick (Ky., 2013)  2011-SC-000266-DG

September 26, 2013

 

Summaries:   Source: Justia

Plaintiff was a Pennsylvania resident who was injured in Kentucky. Plaintiff’s daughter, with whom Plaintiff resided, was driving the vehicle involved in the accident. Plaintiff brought suit against her insurance carrier, State Farm Mutual Automobile Insurance Company, for underinsured motorist (UIM) coverage under a policy issued in Pennsylvania and covering a vehicle that Plaintiff registered and used exclusively in Pennsylvania. The trial court and court of appeals concluded that Pennsylvania law governed the dispute between Plaintiff and State Farm, but the two courts reached different results. The trial court concluded that Plaintiff was not entitled to UIM coverage because her policy disallowed coverage when she was injured in an underinsured vehicle owned or regularly used by a "resident relative." The court of appeals found Kentucky public policy would prohibit enforcement of the policy provision and concluded Plaintiff was entitled to UIM coverage despite the plain language of her policy. The Supreme Court reversed, holding (1) Pennsylvania law applied to this dispute; and (2) there was no prohibition on the type of UIM exclusion at issue in this case.

 
 

The underlying facts are not in dispute. On May 17, 2008, Karen Hodgkiss-Warrick suffered serious injuries in a two-vehicle accident in Mt. Vernon, Kentucky, at the intersection of Kentucky Highway 25 and the northbound entrance ramp to Interstate 75. Hodgkiss-Warrick was a passenger in a vehicle leased, insured, and operated at the time by her twenty-three year-old daughter, Heather Warrick. Also in the car were two friends, Pamela and Heather Reynolds, another mother-daughter pair. The four women, all Pennsylvania residents, had traveled from Pennsylvania to Burnside, Kentucky, where Hodgkiss-Warrick hoped to buy a special breed of puppy. They were on their way back to Pennsylvania when the accident occurred. Pamela and Heather Reynolds were also injured in the accident, as was the driver of the other car, Natalie Bussell, a resident of Brodhead, Kentucky. Hodgkiss-Warrick, the Reynoldses, and Bussell all brought tort actions against Heather Warrick in the Rockcastle Circuit Court, and those claims were eventually settled for the limits of Heather’s liability insurance coverage with GEICO–$25,000 per person and $50,000 per accident, the minimum liability coverage required under Kentucky law. … (KRS) 304.39-100 and KRS 304.39-110. It is undisputed that Hodgkiss-Warrick’s share of the settlement fell far short of the medical expenses she incurred.

  Here, Hodgkiss-Warrick, a Pennsylvania resident, entered into an auto insurance contract in Pennsylvania that makes specific reference to Pennsylvania law and that covers, primarily, the vehicle she registered, garaged, and used exclusively in Pennsylvania.3 The fortuitous fact that the accident occurred in Kentucky is far outweighed by the significant relationship Pennsylvania has with the parties and the insurance transaction, and so, absent some compelling reason not to apply our general choice-of-law rule, Pennsylvania law should control. See Lewis, 555 S.W.2d at 579 (applying Indiana law to insurance coverage dispute between Indiana residents injured in Kentucky and their insurer); Poore v. Nationwide Mut. Ins. Co., 208 S.W.3d 269 (Ky. App. 2006) (same); Bonnlander v. Leader National Ins. Co., 949 S.W.2d 618 (Ky. App. 1996) (same); Snodgrass v. State Farm Mut. Auto. Ins. Co., 992 S.W.2d 855 (Ky. App. 1998) (applying Virginia law to Virginia insureds’ dispute with their carrier over UIM coverage for Kentucky accident).

 

[U] Bandy v. Bevins (Ky. App., 2013)  2011-CA-000020-MR  January 4, 2013

 It is undisputed that Bandy’s parents are the named insureds, they reside in Virginia, they purchased the policy and the policy covers Virginia registered vehicles in accordance with listed Virginia Code provisions. Bandy is listed only as an insured driver and not as a named insured. Although Bandy maintained a temporary residence in Kentucky to attend college, she remained a Virginia resident. Accordingly, Virginia law applies.

Finally, Bandy claims that Nationwide is compelled to provide UIM coverage equivalent to what Kentucky offers under KRS 304.39-100. However, in Snodgrass, this Court rejected the argument that insurance companies doing business in Kentucky are compelled to provide underinsured motorist coverage to non-resident insureds pursuant to KRS 304.39-100(2). Snodgrass, 992 S.W.2d at 857; Bonnlander, 949 S.W.2d at 620-621.  

Because Virginia law applies and no factual issues remain as to Bandy’s claim against Nationwide, summary judgment was proper. The summary judgment of the Pike Circuit Court is affirmed.

 

Progressive Max Insurance Company v. National Car Rental Systems, Inc., No. 2007-CA-001800-MR (Ky. App. 5/8/2009) (Ky. App., 2009) – Over Ruled (See Above)

       The underlying facts are not in dispute and were stipulated at the trial court level. Ed Jones ("Jones") rented a motor vehicle from National on October 26, 2001. On November 1, 2001, Jones was involved in a motor vehicle accident while driving National’s vehicle. Shannon Wilkerson ("Wilkerson") was a passenger in Jones’s vehicle and was injured in the accident. At the time of the accident, Jones was insured by Progressive on his personal vehicle. The policy with Progressive included liability benefits should Jones have an accident while in a rented vehicle.

        Wilkerson sought damages for her injuries by filing a personal injury claim against Jones as well as receiving $10,000.00 in BRB from National. On September 16, 2002, Wilkerson’s personal injury action against Jones was dismissed. She neither notified National that she had filed the action, nor that it had been dismissed.

        National brought an action in Jefferson Circuit Court against Progressive for reimbursement of the BRB it paid Wilkerson. As a result of Wilkerson’s failure to notify National of her personal injury claim, National did not intervene in the action she filed against Jones. In order to recover the BRB payments, National filed suit against Jones and Progressive.

        The trial court entered judgment in favor of National on July 9, 2007. Progressive now appeals that order.

  National, however, argues that Progressive is incorrect in its argument that it is not a reparations obligor. KRS 304.39-100(2) provides that "in any contract of liability insurance for injury, wherever issued, covering the ownership, maintenance or use of a motor vehicle other than motorcycles while the vehicle is in this Commonwealth shall be deemed to provide the basic reparation benefits coverage[.]"

        National contends that, since Progressive is an insurance company which provided a contract of liability insurance covering the use of a motor vehicle within the Commonwealth, it is deemed to provide BRB under KRS 304.39-100.

   In the present action, Jones elected not to purchase extended coverage on the vehicle from National. As a result, and under the contract of insurance he had with Progressive, his primary insurer was Progressive. Under his policy with Progressive, Jones was provided with insurance coverage on rental vehicles. ….The trial court correctly held Progressive to be primarily liable for BRB. We will, therefore affirm the summary judgment.

    

KY State Farm Mutual Automobile Insurance Co. v. Marley, No. 2002-SC-0846-DG (Ky. 12/16/2004)

 Thus, even though the household exclusion clause in the automobile policy is valid under Indiana law, both the policy and KRS 304.39100(2) require State Farm to provide minimum limits liability coverage while the insured vehicle is being operated in Kentucky. However, the last clause of the statute excludes an umbrella policy from that statutory requirement.

 

KY     [U] Infinity Group v. Harmon, No. 2002-CA-002229-MR (Ky.App. 03/05/2004)

The Infinity Group argues here, as it did below, that under KRS 304.39100(2) its contract of insurance does not qualify under the statute to mandate coverage of Harmon’s injuries. Specifically, the statute provides "that in any contract of liability insurance for injury" an insurer authorized to transact business in the Commonwealth of Kentucky shall be deemed to have provided coverage for basic reparation benefits and tort liability. The Infinity Group contends that because its contract of insurance is not a "contract of liability insurance for injury" that it is not required to cover any personal injuries that Harmon may have suffered.

  This very issue has been considered and decided adversely to The Infinity Group in Billie Jo Tate v. Infinity Insurance Company, et al., November 27, 2002, Ky. App., Case No. 2001-CA-002018-MR. For the reasons set forth in that Opinion we affirm the Laurel Circuit Court’s ruling in this case.

 

KY     Marley v. State Farm Mutual Automobile Insurance Company, No. 2001-CA-000603-MR (Ky.App. 09/13/2002)

Out-of-state coverage provisions similar to that contained in the State Farm policy are required in automobile liability insurance policies of most states. In Kentucky, KRS 304.39100(2) in pertinent part provides:

An insurer authorized to transact or transacting business in this Commonwealth shall file. . .a form. . .declaring that in any contract of liability insurance for injury, wherever issued, covering the ownership, maintenance or use of a motor vehicle. . .while the vehicle is in this Commonwealth shall be deemed to provide the basic reparation benefits coverage and minimum security for tort liabilities required by this subtitle. . . .Clearly, the intent of the statute is to assure that non-resident motorists traveling through Kentucky have no less than the minimum insurance coverage mandated by the MVRA.

 

KY     Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

The Court of Appeals agreed, concluding that I’ARB’s are but extensions of BRB’s," (Slip op., p. 6); and since Anthem/Decatur could not exclude BRB coverage for Stevenson, KRS 304.39-030(l), KRS 304.39-080(5), KRS 304.39100 (11, neither could it exclude ARB coverage for her. Of course, that interpretation not only ignores the fact that ARB’s and BRB’s are separately defined in KRS 304.39-020(l) and (21, it also would nullify KRS 304.39-140(2) insofar as that statute permits exclusions with respect to ARB coverage.

 

KY     Bonnlander v. Leader National Insurance Co., 949 S.W.2d 618 (Ky.App. 10/11/1996)

Appellants further maintain that because appellee insurance companies were authorized to do business in the state of Kentucky and each filed a "Declaration of Compliance with No-fault Insurance Requirements," they must provide underinsured motorists’ coverage to appellants pursuant to Kentucky law. The declarations filed by appellees pursuant to KRS 304.39100(2) only require that appellees provide basic reparations benefits and the statutory minimum tort liability insurance on any covered vehicle while it is in the state of Kentucky. There is no requirement that they provide underinsured motorists coverage to their insureds. This is in keeping with the public policy of Kentucky’s Motor Vehicle Reparations Act, which is to protect Kentucky residents from out-of-state vehicles which come into Kentucky and cause accidents and have inadequate or no insurance. It follows that basic reparations benefits and minimum tort liability insurance go with the vehicle, while underinsured motorists coverage is personal to the insured.

 

KY     Snodgrass v. State Farm Mutual Automobile Insurance Co., 992 S.W.2d 855 (Ky.App. 11/06/1998)

The declarations filed by [the insurance companies] pursuant to Krs 304.39100(2) only require that [the companies] provide basic reparations benefits and the statutory minimum tort liability insurance on any covered vehicle while it is in the state of Kentucky. There is no requirement that they provide underinsured motorists coverage to their insureds. This is in keeping with the public policy of Kentucky’s Motor Vehicle Reparations Act, which is to protect Kentucky residents from out-of-state vehicles which come into Kentucky and cause accidents and have inadequate or no insurance. It follows that basic reparations benefits and minimum tort liability insurance go with the vehicle, while underinsured motorists coverage is personal to the insured." Bonnlander at 620-621. (Emphasis added).

 

KY     Dairyland Insurance Co. v. Assigned Claims Plan and Daniel D. Briscoe, 666 S.W.2d 746 (Ky. 03/29/1984)

When considered with KRS 304.39-050(2), and the immediate preceding paragraph–KRS 304.39100(1)–it is obvious that the statute mandates coverage by out-of-state companies which is the same as and commensurate with the coverage of in-state companies. Paragraph (2), as does the first paragraph, requires that all contracts of insurance "shall be deemed to provide the basic reparation benefits and minimum security for tort liabilities required by this subtitle," which subtitle includes uninsured vehicle insurance and requires the carrier of the injured party to pay BRB. …….Although perhaps unskillfully drawn, it is our opinion that the statute–KRS 304.39100(2)–requires coverage by any insurer authorized to transact business in this Commonwealth, which insurance covers basic reparation benefits in all cases required by Subtitle 39, which includes uninsured vehicle insurance, and that the phrase "while the vehicle is in this Commonwealth" merely means that coverage is provided while the vehicle in which the injury occurs is in this state. We have long held that riding as a passenger constituted "use" of a vehicle. Applying KRS 304.39-100(2), we find that the injured party had a policy of insurance covering "use of a vehicle… while the vehicle (being used) was in this Commonwealth…."

 

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KY     Stevenson v. Anthem Casualty Insurance Group, No. 96-CA-0918-MR (Ky.App. 07/03/1997)

 We now turn to the troublesome issue concerning the extent of ARBs afforded Stevenson. In this Commonwealth, it is well established that provisions of the Kentucky Motor Vehicle Reparations Act (MVRA) (KRS 304.39-010 – 350) are mandatory and incorporated by operation of law into all insurance policies issued by an "insurer authorized to transact or transacting business in this Commonwealth." KRS 304.39100(2); see also Dairyland Insurance Company v. Assigned Claims Plan, Ky., 666 S.W.2d 746 (1984); Bishop v. Allstate Insurance Company, Ky., 623 S.W.2d 865 (1981); and 43 Am. Jur. 2d § 260 (1982).

 
 

KY     State Farm Automobile Insurance Co. v. Tennessee Farmers Mutual Insurance Co., 785 S.W.2d 520 (Ky.App. 03/02/1990)

Appellant also urges that Tennessee Farmers should have realized that its insureds might venture into other states such as Kentucky as being reasonably foreseeable. This contention is not illogical but what it overlooks is that the General Assembly has no power to dictate to a nonresident driver and his nonresident nonregistered insurance carrier what must be in their contract. In this respect, we agree with the Tennessee Court of Appeals in Trans-World Assurance co. v. McNabb, No. 83-210-II, Court of Appeals of Tennessee, Middle Section (Dec. 22, 1093), a case involving a Georgia statute (Ga. Code Ann. § 56.3405b(a)(2) (1982) Supp.) similar to KRS 304.39-100(2) wherein the court had to determine whether the plaintiff-insurer, which issued in Tennessee a policy to a Tennessee resident without any provision for no-fault coverage, must have extended such benefits to a claimant injured in an accident occurring in Georgia where the insurer is licensed in both states

 

KY     Stinnett v. Mulquin, 579 S.W.2d 374 (Ky.App. 11/17/1978)

The trial court committed reversible error when it interpreted KRS 304.39-100(2) as abolishing the tort right of nonresidents insured by companies doing business in the state of Kentucky.

KY     Yellow Cab Co. v. Hoffman, No. 1998-CA-001129-MR (Ky.App. 06/04/1999)

 "In summary, the owner of a motor vehicle must insure the vehicle either through a policy of insurance or by qualifying as a self-insurer. KRS 187.600. A self-insurer must receive the department’s approval and a certificate. Because the certificate is not an insurance policy, this Court agrees with the majority of other jurisdictions that find that the UM statute, KRS 304.20-020, does not require a self-insurer to provide UM coverage to its employees. However, another statutory provision, KRS 304.39-080(7), mandates a self-insurer to provide the substantial equivalent to that required by an insurance policy and to provide coverage for all obligations imposed by Subtitle 39. UM coverage is an obligation of Subtitle 39. See KRS 304.39-050; KRS 304.39100; and Dairyland [Insurance Company v. Assigned Claims Plan, Ky., 666 S.W.2d 746 (1984)]."

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KRS 304.39-110 Required minimum tort liability insurance.

(1) The requirement of security for payment of tort liabilities is fulfilled by providing:

(a) Either:

1. Split limits liability coverage of not less than twenty-five thousand dollars ($25,000) for all damages arising out of bodily injury sustained by any one (1) person, and not less than fifty thousand dollars ($50,000) for all damages arising out of bodily injury sustained by all persons injured as a result of any one (1) accident, plus liability coverage of not less than ten thousand dollars ($10,000) for all damages arising out of damage to or destruction of property, including the loss of use thereof, as a result of any one (1) accident arising out of ownership, maintenance, use, loading, or unloading, of the secured vehicle; or

2. Single limits liability coverage of not less than sixty thousand dollars ($60,000) for all damages whether arising out of bodily injury or damage to property as a result of any one (1) accident arising out of ownership, maintenance, use, loading, or unloading, of the secured vehicle;

(b) That the liability coverages apply to accidents during the contract period in a territorial area not less than the United States of America, its territories and possessions, and Canada; and

(c) Basic reparation benefits as defined in KRS 304.39-020(2).

(2) Subject to the provisions on approval of terms and forms, the requirement of security for payment of tort liabilities may be met by a contract the coverage of which is secondary or excess to other applicable valid and collectible liability insurance. To the extent the secondary or excess coverage applies to liability within the minimum security required by this subtitle it must be subject to conditions consistent with the system of required liability insurance established by this subtitle. (3) Security for a motorcycle is fulfilled by providing only the coverages set forth in subsections (1)(a) and (b) of this section.

Effective: July 15, 1986

History: Amended 1986 Ky. Acts ch. 437, sec. 31, effective July 15, 1986. — Amended 1984 Ky. Acts ch. 19, sec. 2, effective July 13, 1984; and ch. 86, sec. 1, effective July 13, 1984. — Amended 1976 Ky. Acts ch. 75, sec. 4, effective March 29, 1976. — Created 1974 Ky. Acts ch. 385, sec. 11, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 
 

[U] Fuller v. Enter. Rent-A-Car Co. of Kentucky (Ky. App., 2012) 2011-CA-001301-MR October 12, 2012

KRS Chapter 304, Subtitle 39[.]" As we pointed out, KRS 304.39-110 permits contractual shifting of tort liability, as acknowledged by our Supreme Court in Rees. KRS 304.39-080 requires self-insured entities to pay "tort liabilities or basic reparation benefits, or both[.]" (Emphasis added). By employing the disjunctive or, KRS 304.39-080 allows for contractual flexibility while still complying with the mandate of KRS 304.39-110 that coverage for BRB’s cannot be shifted or avoided.  

 

[U] Dillard v. Commonwealth (Ky. App., 2013) 2011-CA-001917-DG May 31, 2013

Under the Motor Vehicle Reparations Act (MVRA), Dillard was required to obtain and maintain appropriate insurance or approved security on her vehicle. Kentucky Revised Statutes (KRS) 304.39-080(6), (7); KRS 304.39-090. This obligation included obtaining minimum tort liability insurance. KRS 304.39-110. Dillard was charged with violating the MVRA under KRS 304.99-060(1)(a) for failing to maintain required insurance/security, first offense, a class A misdemeanor pursuant to KRS 532.020(2).  

 

State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick (Ky., 2013)  2011-SC-000266-DG

September 26, 2013

 

Summaries:   Source: Justia

Plaintiff was a Pennsylvania resident who was injured in Kentucky. Plaintiff’s daughter, with whom Plaintiff resided, was driving the vehicle involved in the accident. Plaintiff brought suit against her insurance carrier, State Farm Mutual Automobile Insurance Company, for underinsured motorist (UIM) coverage under a policy issued in Pennsylvania and covering a vehicle that Plaintiff registered and used exclusively in Pennsylvania. The trial court and court of appeals concluded that Pennsylvania law governed the dispute between Plaintiff and State Farm, but the two courts reached different results. The trial court concluded that Plaintiff was not entitled to UIM coverage because her policy disallowed coverage when she was injured in an underinsured vehicle owned or regularly used by a "resident relative." The court of appeals found Kentucky public policy would prohibit enforcement of the policy provision and concluded Plaintiff was entitled to UIM coverage despite the plain language of her policy. The Supreme Court reversed, holding (1) Pennsylvania law applied to this dispute; and (2) there was no prohibition on the type of UIM exclusion at issue in this case.

 
 
 

The underlying facts are not in dispute. On May 17, 2008, Karen Hodgkiss-Warrick suffered serious injuries in a two-vehicle accident in Mt. Vernon, Kentucky, at the intersection of Kentucky Highway 25 and the northbound entrance ramp to Interstate 75. Hodgkiss-Warrick was a passenger in a vehicle leased, insured, and operated at the time by her twenty-three year-old daughter, Heather Warrick. Pamela and Heather Reynolds were also injured in the accident, as was the driver of the other car, Natalie Bussell, a resident of Brodhead, Kentucky. Hodgkiss-Warrick, the Reynoldses, and Bussell all brought tort actions against Heather Warrick in the Rockcastle Circuit Court, and those claims were eventually settled for the limits of Heather’s liability insurance coverage with GEICO–$25,000 per person and $50,000 per accident, the minimum liability coverage required under Kentucky law. Kentucky Revised Statute (KRS) 304.39-100 and KRS 304.39-110. It is undisputed that Hodgkiss-Warrick’s share of the settlement fell far short of the medical expenses she incurred.

….. but she contends, and the Court of Appeals agreed, that in the circumstances of this case the exclusion of Heather’s vehicle from the policy’s UIM coverage so offends the public policy of this state that Kentucky law, rather than Pennsylvania law, should apply and that under Kentucky law a "regular use" provision excluding UIM coverage is unenforceable.

I. Under Our Choice of Law Principles, Pennsylvania Law Governs the Insurance Coverage Dispute.

        The questions presented are all purely legal ones concerning the scope of coverage provided by an insurance contract. Our standard of review, therefore, is de nov.

 


Bidwell v. Shelter Mut. Ins. Co. (Ky., 2012)
June 21, 2012

 
Summaries: Source: Justia

This case presented the question of whether an automobile insurance policy’s permissive user step-down provision was valid and enforceable. Specifically, the Supreme Court addressed whether the particular provision at issue was sufficiently conspicuous, plain, and clear to satisfy the doctrine of reasonable expectations. The circuit court entered summary judgment in favor of the insurance company, declaring the permissive user step-down provision enforceable. The court of appeals affirmed. The Supreme Court reversed, holding that the policy’s permissive user step-down provision was insufficiently plain and clear to defeat the reasonable expectations of the insureds, and therefore, the provision violated the doctrine of reasonable expectations. Remanded.

 

The Declarations page of the vehicle’s insurance policy states that Shelter’s bodily injury liability is limited to $250,000 per person and $500,000 per accident. After submitting her claim for the full $250,000, Shelter informed Bidwell that the policy’s permissive user step-down provision limited her claim to $25,000—the statutory minimum required by Kentucky law. See KRS 304.39-110. Bidwell argued that the provision was unenforceable and that the $250,000 listed on the Declarations page of the policy was therefore available for her claim.

The "financial responsibility law applicable to" this accident is KRS 304.39-110, although the Gaineses’ policy never specifically mentions it or summarizes its contents. That statute, titled "Required minimum tort liability insurance," provides the following: ….…

KRS 304.39-110. Thus, the policy’s reference to "minimum limits of liability insurance coverages mandated by the financial responsibility law applicable to the accident," means, in this case, $25,000 per person for bodily injury—a reduction of some 90% from the $250,000 in coverage stated on the Declarations page.

….. Thus, we do not hold that the $25,000 figure in KRS 304.39-110 must be included in the step-down provision,only that the insurer must clearly inform the insured how coverage for permissive users is limited.

III. CONCLUSION

We conclude that the permissive user step-down provision in the Gaineses’ automobile insurance policy is insufficiently plain and clear to defeat the reasonable expectations of the insureds. We therefore reverse and remand to the Kenton Circuit Court for proceedings consistent with this opinion.

 
Yates v. Shelter Mut. Ins. Co. (Ky. App., 2011) August 19, 2011

TAYLOR, CHIEF JUDGE, DISSENTING: Respectfully, I dissent. I believe the majority has misapplied and misinterpreted the doctrine of reasonable expectations holding that the permissive driver step-down provision in the insurance policy at issue was unenforceable. Additionally, I believe the step-down provision was enforceable under applicable contract law.

I further believe that the insurance contract on its face is enforceable as concerns the step-down coverage provision for permissive drivers. The declarations page of the policy specifically sets forth the bodily injury liability limits as $50,000 each person/$100,000 each accident for the named insured. The policy itself also contains the permissive driver step-down provision that plainly lowers the bodily injury liability limits when a permissive driver is operating the vehicle. There is no ambiguity present in the policy. The policy carefully sets forth the applicable bodily injury liability limits and provides that each applicable liability limit is dependent upon the class of driver. As a Court, we cannot create ambiguities where none exists in an insurance policy. Snow v. W. Amn. Ins. Co., 161 S.W.3d 338 (Ky. App. 2004) . The policy plainly sets forth two distinct bodily injury liability limits in terms readily understandable. In short, I do not believe the policy terms are ambiguous regarding the two bodily injury liability limits as set forth in the declarations page and in the permissive driver step-down provision, and thus, must be enforced in accord with their plain meaning.

….Rather, an insurance policy provision that affords bodily injury liability coverage equal to this Commonwealth’s minimum limits under the financial responsibility law MVRA simply provides coverage in the amount of $25,000 each person/$50,000 each accident as mandated by KRS 304.39-110. In so concluding, I believe the Court should give the term "minimum limits" its ordinary and usual meaning. See City of Louisville v. McDonald, 819 S.W.2d 319 (Ky. App. 1991); Holzknecht v. Ky. Farm Bureau Mut. Ins., Co., 320 S.W.3d 115 (Ky. App. 2010). Thus, I would, as did the circuit court below, not view the permissive driver step-down provision as ambiguously vague. Consequently, I would reject Yates’ argument that the permissive driver step-down provision should have been interpreted against Shelter so as to provide the higher limits of bodily injury liability of $50,000 each person/$100,000 each accident for Yates’ injury claim.

For the foregoing reasons, I would affirm the thoroughly written Judgment of the Hardin Circuit Court in this case.

 

Cain v. American Commerce Insurance Company, Inc., No. 2008-CA-001500-MR (Ky. App. 11/6/2009) (Ky. App., 2009)

    Cain now argues that the trial court erred in determining that she was entitled to $20,000.00 in added reparation benefits per vehicle rather than the $40,000.00 which she seeks. Resolution of her argument turns on the interpretation and application of KRS 304.39-140, which states:

        (1) On and after July 1, 1975, each reparation obligor of the owner of a vehicle required to be registered in this Commonwealth shall, upon the request of a reparation insured, be required to provide added reparation benefits for economic loss in units of ten thousand dollars ($10,000) per person subject to the lesser of:

        (a) Forty thousand dollars ($40,000) in added reparation benefits; or

        (b) The limit of security provided for liability to any one

 (1) person in excess of the requirements of KRS 304.39-110(1)(a).

        Pursuant to KRS 304.39-110(1)(a), the minimum security provided for liability for any one person is $25,000.00. American Commerce is a reparation obligor and Cain is a reparation insured for purposes of KRS Chapter 304.

        Applying the formula to the facts, we see that Cain’s liability limit (or "limit of security provided for liability to any one (1) person" in the language of KRS 304.39-140(1)(b)) is $100,000.00. Subtracting from that sum the minimum security provided for liability for any one person of $25,000.00 (set out in KRS 304.39-110(1)(a)) results in a figure of $75,000.00, which represents the "excess" described in KRS 304.39-140(1)(b). Because added reparation benefits must be sold in increments of $10,000.00, that figure is round up to $80,000.00. Thus, pursuant to KRS 304.39-140(1), American Commerce was required to offer to Cain the lesser of $40,000.00 or $80,000.00 in added reparation benefits.

        This leads to the central issue, which is whether KRS 304.39-140(1) requires American Commerce to "provide" to Cain $40,000.00 in added reparation benefits as Cain contends, or merely to "offer" it to Cain as the Jefferson Circuit Court determined and as American Commerce now argues. Our resolution of this question turns on the language of KRS 304.39-140(1), which states in no uncertain terms that the reparations obligor (American Commerce) "shall . . . be required to provide" the lesser of $40,000.00 or the limit of security provided for liability to any one (1) person in excess of the requirements of KRS 304.39-110(1)(a) (in this case $80,000.00) "upon the request of a reparation insured."

        In Nationwide Mutual Insurance Co. v. Hatfield, 122 S.W.3d 36 (Ky. 2003), Justice William Cooper discussed the parallels between uninsured/underinsured insurance and BRB/ARB insurance and described the public policy applications to each.

        The "younger sibling" relationship between the UM and UIM statutes is conceptually identical to the relationship between the BRB statutes, KRS 304.39-080(5) and KRS 304.39-110(1)(c), and the added reparation benefits (ARB) statute, KRS 304.39-140, which also define coverages that are personal to the insured. While BRB coverage is mandatory, ARB coverage is optional. Stevenson [ex rel. Stevenson v. Anthem Cas. Ins. Group.15 S.W.3d 720 (Ky. 1999)], supra,note 6, at 722-24. As does the almost identical language in the UIM statute, the ARB statute provides that "each reparation obligor [insurer] of the owner of a vehicle required to be registered in this Commonwealth shall, upon the request of a reparation insured, be required to provide added reparation benefits." KRS 304.39-140(1). The ARB statute also authorizes "terms, conditions and exclusions." KRS 304.39-140(2). Thus, in Stevenson, supranote 6, we upheld a provision that did not void the ARB coverage altogether but limited it to persons who were either named insureds or relatives of a named insured. Id.at 724.

        Like UM coverage (and liability coverage), BRB coverage is mandatory. Bishop v. Allstate Ins. Co.,Ky., 623 S.W.2d 865, 866 (1981). However, like ARB coverage, UIM coverage is optional. Mullins v. Commonwealth Life Ins. Co.,Ky., 839 S.W.2d 245, 247 (1992); Flowers v. Wells,Ky. App., 602 S.W.2d 179, 180 (1980). The same "public policy" considerations that pertain to mandatory coverages do not pertain to optional coverages. Bishop, supra, noted that whereas BRB coverage is "untouchable," ARB coverage is subject to exclusions. Id.at 866. See also Stevenson, supranote 6, at 723. And, as observed in State Farm Mutual Automobile Insurance Co. v. Mattox,Ky., 862 S.W.2d 325 (1993), "[w]e are unable to rationally distinguish between the statutory and contractual structure of added reparation benefits and underinsured motorists coverage." Id.at 326.

        Allstate Insurance Co. v. Dicke,Ky., 862 S.W.2d 327 (1993), held that the same "public policy" that precludes application of anti-stacking provisions to UM coverages in separate policies applies as well to the application of anti-stacking provisions to UIM coverages in the same policy. Id.at 329. In fact, no "public policy" precludes application of anti-stacking clauses to UIM coverages even if the coverages are in separate policies. As noted supra, unlike the UM statute, KRS 304.39-320(2) only mandates that UIM coverage be made available to the insured, not that it be provided in every policy; thus, if UIM coverage is provided "to the insured" in single limits in one policy, the coverage has been made available and the mandate of the statute, i.e., the "public policy," has been satisfied regardless of how many policies are owned by the insured or how many vehicles are insured by the policy. (Emphasis in original.)

        Id., 122 S.W.3d at 49-50, Cooper, dissenting.

        The phrase "upon the request of a reparations insured" is subject to but one interpretation, and it has not gone unnoticed that Cain has not addressed it in her written argument. The record reveals that Cain did not request the lesser of $40,000.00 or $80,000.00 in added reparation benefits. Rather, the policy documents of record show that Cain selected Personal Injury Protection (representing basic reparation benefits plus added reparation benefits) in the amount of "$30,000.00 Aggregate." Since the basic reparation benefits portion of Person Injury Protection is fixed at $10,000.00 by operation of KRS Chapter 304, Cain’s added reparation benefit is $20,000.00. The concept of "stacking" allows Cain to recover $20,000.00 in added reparation benefits per vehicle, for a total of $60,000.00. See Stevenson ex rel. Stevenson v. Anthem Casualty Insurance Group, 15 S.W.3d 720, 721 (Ky. 1999). When this amount is added to the $10,000.00 in basic reparation benefits, Cain was entitled to total benefits in the amount of $70,000.00. American Commerce paid to Cain the sum of $70,000.00 prior to litigation. Accordingly, we find no error on this issue.

        In a related argument, Cain claims that the insurance contract issued by American Commerce is violative of KRS 304.39-140 because it does not provide added reparation benefits to Cain in an amount which is the lesser of $40,000.00 or the limit of security provided for liability to any one (1) person in excess of the requirements of KRS 304.39-110(1)(a) (in this case $80,000.00). Having noted above the dispositive language requiring American Commerce to provide this additional level of coverage "upon the request of a reparations insured," and having further determined that Cain did not request the coverage, we cannot conclude that the trial court erred ruling that Cain was not entitled to relief under the Kentucky Unfair Settlement Practice Act or a common law bad faith claim. Similarly, Cain is not entitled to interest on the purported overdue payments nor reasonable attorney fees, as American Commerce paid in a reasonable time all benefits to which Cain was entitled.

        For the foregoing reasons, we affirm the Declaratory and Final Judgment of the Jefferson Circuit Court.

 

KY     Dowell v. Safe Auto Insurance Co., No. 2003-CA-002661-MR (Ky.App. 01/28/2005)

 For the purpose of this coverage the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency; an insured motor vehicle with respect to which the amounts provided, under the bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such motor vehicle, are less than the limits described in KRS 304.39110; and an insured motor vehicle to the extent that the amounts provided in the liability coverage applicable at the time of the accident is denied by the insurer writing the same.


KY     State Farm Mutual Automobile Insurance Co. v. Marley, No. 2002-SC-0846-DG (Ky. 12/16/2004)

Applying Kentucky law in interpreting both policies, the trial judge found that the household exclusion in the primary automobile policy was unenforceable in Kentucky. That decision has never been appealed. The trial judge also found that the automobile policy contained an "out-of-state" coverage provision, which reduced the amount of Larry Marley’s liability coverage to the minimum policy limits required by the Kentucky Motor Vehicle Reparations Act, KRS 304.39110. Finally, the trial judge determined that pursuant to Kentucky Farm Bureau Mut. Ins. v. Thompson, Ky., 1 S.W.3d 475 (1999), the household exclusion in Larry Marley’s umbrella policy is valid and enforceable.

 

KY     Nationwide Mutual Insurance v. Hatfield, 122 S.W.3d 36 (Ky. 12/18/2003)

 DISSENT: No automobile liability or motor vehicle liability policy of insurance … shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein… in limits for bodily injury or death set forth in KRS 304.39110… for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom; provided that the named insured shall have the right to reject in writing such coverage….

 

KY     Motorists Mutual Insurance Co. v. Grance Mutual Casualty Company, No. 2003-CA-000346-MR (Ky.App. 05/28/2004)

We begin our analysis by pointing out what appears to have been a slight oversight on the part of the trial court. As previously discussed, the trial court concluded that the language of Motorist Mutual’s policy violated KRS 304.39-080(5), which provides that "every owner of a motor vehicle registered in this Commonwealth or operated in this Commonwealth by him or with his permission shall continuously provide . . . security for payment of tort liabilities, arising from maintenance or use of the motor vehicle." However, it appears that KRS 190.033, which sets forth the required minimum liability insurance for motor vehicle dealers, such as Autorama, is controlling. Not only does KRS 190.033 apply specifically to motor vehicle dealers, the statutory minimums set forth in KRS 190.033 are higher than those set forth in KRS 304.39-110(1).

 

KY     Dowell v. Safe Auto Insurance Co., No. 2003-CA-002661-MR (Ky.App. 01/28/2005)

(1) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in KRS 304.39110 under provisions approved by the commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided that the named insured shall have the right to reject in writing such coverage; and provided further that, unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer.

      (2) For the purpose of this coverage the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency; an insured motor vehicle with respect to which the amounts provided, under the bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such motor vehicle, are less than the limits described in KRS 304.39110; and an insured motor vehicle to the extent that the amounts provided in the liability coverage applicable at the time of the accident is denied by the insurer writing the same.

 
KY     Burton v. Farm Bureau Insurance Co., 116 S.W.3d 475 (Ky. 08/21/2003)

       KRS 304.20-020(1) requires, unless rejected in writing by the named insured, that every motor vehicle liability insurance policy include uninsured motorist coverage "for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles…." (Emphasis added.) KRS 304.20-020(2) provides that, in addition to a vehicle that is actually uninsured, "the term ‘uninsured motor vehicle’ shall, subJect to the terms and conditions of such coverage [emphasis added], be deemed to include": (1) an insured vehicle whose insurer is unable to pay the legal liability limits of its policy because of insolvency; (2) an insured vehicle with liability limits less than those required by KRS 304.39110 (presently $25,000 bodily injury per person, $50,000 bodily injury per accident and $10,000 property damage, or $60,000 single limits); and (3) an insured vehicle whose liability coverage has been denied by its insurer. Except for minor technical amendments, the language of this statute has remained unchanged since it was enacted in 1966 and initially compiled as KRS 304.682. 1966 Ky. Acts, ch. 55 (eff. Oct. 1, 1966).

 
 
 

KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

Farm Bureau’s standard form automobile policy refers to basic reparation benefits (BRB), which are defined in KRS 304.39-020(2) as personal injury protection (PIP) benefits. As noted in Stevenson v. Anthem Cas. Ins. Group, Ky., 15 S.W.3d 720, 723 (1999) those terms are used interchangeably in describing what are often referred to as "no-fault" benefits. There was uncontradicted evidence in this case that "PIP, BRB and no-fault benefits" are synonymous terms used interchangeably in the insurance industry to describe those benefits mandated by KRS 304.39-080(5) and KRS 304.39110(1)(c).

 

KY     Hoffman v. Yellow Cab Company of Louisville, 57 S.W.3d 257 (Ky. 09/27/2001)

 No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in KRS 304.39110 under provisions approved by the commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided that the named insured shall have the right to reject in writing such coverage; and provided further that, unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer. (Emphasis added.)

 

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

The Kentucky Motor Vehicle Reparations Act, subtitle 39 of KRS Chapter 304, governs insurance claims arising from the operation of motor vehicles in the Commonwealth. One of the legislature’s stated purposes in adopting the no-fault insurance scheme was "[t]o require owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles[.]" KRS 304.39-010(1). In keeping with that purpose, the legislature set out the minimum tort liability insurance required in KRS 304.39110.

 

KY     Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

 Stevenson argues that Butler should be revisited and overruled, because the liability insurance statute interpreted in that case, KRS 187.490, was subsequently repealed. 1978 Ky. Acts, ch. 434, §; 9. However, the applicable language of the present statute, KRS 304.39110, is virtually identical to that of KRS 187.490. The previous statute mandated minimum liability coverage "for damages arising out of the ownership, maintenance or use of such motor vehicle . . . .I’ KRS 187.490(2) (b) (emphasis added). The present statute mandates minimum liability coverage "for all damages . . . arising out of the ownership, maintenance, use, loading, or unloading, of the secured vehicle . . . . KRS 304.39110(l) (emphasis added). Under both statutes, minimum liability coverage is mandated for the insured vehicle.

KY [U] Bentley v. Bentley, No. 2002-CA-001455-MR (Ky.App. 11/26/2003)

Moreover, Thompson’s viability must be considered in light of the Kentucky General Assembly’s 1974 enactment of the MVRA, which clearly and unequivocally is intended to promote automobile insurance reform by requiring "owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles." KRS 304.39.010(1). "Every person" who suffers a loss from injury arising out of a motor vehicle’s maintenance or use in Kentucky has a right to receive basic reparation benefits (BRB) unless he or she has rejected that limitation upon tort rights. KRS 304.39-030(1). Such BRB "shall be paid without regard to fault," and "without regard to immunity from liability or suit which might otherwise be applicable." KRS 304.39-040(1) and (2). Finally, required minimum tort liability insurance amounts are specified in KRS 304.39110(1).

 

KY     Marley v. State Farm Mutual Automobile Insurance Company, No. 2001-CA-000603-MR (Ky.App. 09/13/2002)

 This case arises from a one-vehicle accident that occurred in Simpson County, Kentucky, December 17, 1999. Three passengers, the driver’s wife and two children, filed claims for their injuries against the driver, Larry Marley. The parties are residents of Indiana and the automobile policy and personal liability umbrella policy were purchased in Indiana. Both policies contain household exclusion clauses. The automobile policy contains an "out-of-state" coverage provision, which the trial court found reduces the amount of Mr. Marley’s liability coverage to the minimum liability policy limits required by the Kentucky Motor Vehicle Reparations


KY     Progessive Northern Insurance Co. v. Corder, No. 1998-SC-092-CL (Ky. 04/20/2000)

The issues certified to this Court implicate two public policies embodied in the statutory law of this Commonwealth: (1) protection of insurance companies from insurance fraud, KRS 304.47-020(l), by permitting rescission of insurance policies procured by fraud or material misrepresentation, KRS 304.14-I 10; and (2) provision of a source of recovery for persons injured in motor vehicle accidents by requiring that every owner of a motor vehicle provide BRB coverage and minimum tort liability coverage for that vehicle. KRS 304.39-01 O(1); KRS 304.39-080(5); KRS 304.39110(l)(a); KRS 304.99-060. Our Court of Appeals has previously addressed these potentially competing public policies in two different contexts. In State Farm Mut. Auto. Ins. Co. v. Crouch, Ky. App., 706 S.W.2d 203 (1986), rescission was allowed where the claimant was the policy’s named insured, who had been a party to the perpetration of the fraud or misrepresentation. In National Ins. Ass’n v. Peach, supra, rescission was not allowed where the claimant was an innocent third party, who was injured as a result of the negligence of one who had been a party tothe perpetration of the fraud or misrepresentation.

 
 
 
 

KRS 304.39-115 Limitation on claim of loss of use of motor vehicle.

Loss of use of a motor vehicle, regardless of the type of use, shall be recognized as an

element of damage in any property damage liability claim. Such a claim for loss of use of a motor vehicle shall be limited to reasonable and necessary expenses for the time necessary to repair or replace the motor vehicle.

Effective: July 15, 1988

History: Created 1988 Ky. Acts ch. 18, sec. 1, effective July 15, 1988.

 
ANNOTATIONS FOR THIS STATUTE:
 

American Premier Insurance Co. v. McBride, No. 2003-CA-002121-MR (Ky.App. 10/08/2004)

     Not all actions arising out of motor vehicle accidents are covered by the MVRA. Specifically, we stated in Duncan v. Beck, that the MVRA "does not cover claims for property damage." As authority to the contrary, American Premier cites KRS 30439115 which establishes the loss of use of a motor vehicle for the time reasonably necessary to repair or replace it as a recognizable separate item of damage in any property damage liability claim. KRS 304.39115 does not appear to apply to the instant case because it addresses only the loss of use of a motor vehicle.

      Loss of use and damage to a motor vehicle itself are two distinct measures of recovery. The record is silent regarding whether American Premier paid its insured, Roberson, for the loss of use of her car. But even if it did, it may not raise that issue now for the first time. Because American Premier has based its subrogation claim solely on the amount of money which it paid Roberson to repair her car, KRS 304.39115 has no direct application. Nevertheless, because the statute was enacted after Duncan was rendered, we must examine its effect, if any, on the scope of the MVRA regarding property damage claims in general.

       KRS 304.39115 is codified within the MVRA. Notwithstanding its location in the code, nothing in the text of the statute suggests that it has any connection to the MVRA. If it is intended to amend the MVRA to include all types of property damage claims, it does not say so on its face. We must accord the words of a statute their commonly understood meaning unless to do so would render an absurd conclusion. We may also "look to the mischief the act was intended to remedy, the historical setting surrounding its enactment, the public policy of the state, the conditions of the law, and all other prior and contemporaneous facts and circumstances that throw intelligent light on the intention of the Legislature."

 
 

KRS 304.39-117 Motor vehicle insurance card to be in paper or electronic format — Presentation of electronic insurance card to peace officer.

(1) Each insurer issuing an insurance contract which provides security covering a motor vehicle shall provide to the insured, in compliance with administrative regulations promulgated by the department, written proof in the form of an insurance card that the insured has in effect an insurance contract providing security in conformity with this subtitle. An insurer may provide an insurance card in either a paper or an electronic format.

(2) The owner shall keep the paper insurance card or a portable electronic device to download the insurance card in his or her motor vehicle as prima facie evidence, except as provided in subsection (3) of this section, that the required security is currently in full force and effect, and shall show the card to a peace officer upon request.

(3) On and after January 1, 2006, as to personal motor vehicles as defined in KRS 304.39-087, the paper or electronic insurance card and the database created by KRS 304.39-087 shall be evidence to a peace officer who requests the card if the peace officer has access to the database through AVIS. If AVIS does not list the vehicle identification number of the personal motor vehicle as an insured vehicle, the peace officer may accept a paper or electronic insurance card as evidence that the required security is currently in full force and effect on the personal motor vehicle if the card was effective no more than forty-five (45) days before the date on which the peace officer requests the card.

(4) For purposes of this section:

(a) An insurance card in an electronic format means the display of an image on any portable electronic device, including a cellular phone or any other type of portable electronic device, depicting a current valid representation of the card;

(b) Whenever a person presents a mobile electronic device pursuant to this section, that person assumes all liability for any damage to the mobile electronic device; and

(c) When a person provides evidence of financial responsibility using a mobile electronic device to a peace officer, the peace officer shall only view the electronic image of the insurance card and is prohibited from viewing any other content on the mobile electronic device.

Effective: June 25, 2013

History: Amended 2013 Ky. Acts ch. 83, sec. 1, effective June 25, 2013. — Amended 2010 Ky. Acts ch.b24, sec.b1528, effective July 15, 2010. – Amended 2004 Ky. Acts ch.b130, sec.b5, effective July 13, 2004. — Created 1988 Ky. Acts ch.b348, sec.b1, effective July 15, 1988.

 
 
NO ANNOTATIONS FOR THIS STATUTE:
 
 

KRS 304.39-120 Calculation of net loss.

(1) All benefits or advantages a person receives or is entitled to receive because of the injury from workers’ compensation are subtracted in calculating net loss.

(2) If a benefit or advantage received to compensate for loss of income because of injury, whether from basic reparation benefits or from any source of benefits or advantages subtracted under subsection (1), is not taxable income, the income tax saving that is attributable to his loss of income because of injury is subtracted in calculating net loss. Subtraction may not exceed fifteen percent (15%) of the loss of income and shall be in a lesser amount if the claimant furnishes to the insurer reasonable proof of a lower value of the income tax advantage.

Effective: July 15, 1982

History: Amended 1982 Ky. Acts ch. 123, sec. 19, effective July 15, 1982. – Created 1974 Ky. Acts ch. 385, sec. 12, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

Medlin v. Progressive Direct Ins. Co. (Ky. App., 2013) 2011-CA-002258-MR April 5, 2013

Medlin argues that he is entitled to receive his PIP benefits directly in order for him to personally pay his medical providers. He cites to Kentucky Revised Statute (KRS) 304.39-210(1) and KRS 304.39-241 in support of his argument. KRS 304.39-210(1) states:  

Basic and added reparation benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as work loss, replacement services loss, or medical expense is incurred. Benefits are overdue if not paid within thirty (30) days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, unless the reparation obligor elects to accumulate claims for periods not exceeding thirty-one (31) days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, and pays them within fifteen (15) days after the period of accumulation. Notwithstanding any provision of this chapter to the contrary, benefits are not overdue if a reparation obligor has not made payment to a provider of services due to the request of a secured person when the secured person is directing the payment of benefits among the different elements of loss. If reasonable proof is supplied as to only part of a claim, and the part totals one hundred dollars ($100) or more, the part is overdue if not paid within the time provided by this section. Medical expense benefits may be paid by the reparation obligor directly to persons supplying products, services, or accommodations to the claimant, if the claimant so designates.

Medlin argues that nothing in the MVRA limits how the PIP benefits are to be distributed. Medlin argues that he, as the insured, can direct the payment of benefits among the elements of loss in any way he sees fit. Medlin only sought payment for one element of loss in this case, medical expenses. He requested Progressive to send him a check, in his name only, for the amount of medical expenses so he could directly pay his medical providers. He also requested Progressive not to pay his medical provider directly, as is allowed by KRS 304.39-210(1).

 

[U] Ward v. Nationwide Assurance Co. (Ky. App., 2013) 2012-CA-000809-MR September 13, 2013

On August 5, 2009, Appellant Jerry Ward, a Virginia resident, was involved in an automobile accident with Hannah Hardy, a Kentucky resident, in Jefferson County, Kentucky. Hardy, an intoxicated driver, was traveling the wrong direction on Interstate 65, and ultimately collided with the semi tractor-trailer operated by Ward. Ward was injured……

Ward then demanded UIM benefits from Nationwide. Nationwide denied Ward’s claim because, under Virginia law and Ward’s insurance policy, Hardy was not an underinsured motorist. Nationwide pointed to the language of Ward’s insurance policy, which defines an underinsured motor vehicle as one for which the liability insurance available for payment is less than the total UIM coverage afforded under the policy. Nationwide argued this definition, supported by Virginia statutory authority, entitled it to offset the face amount of Ward’s UIM benefits (i.e., $25,000.00) by Hardy’s liability policy limits available for payment (i.e., $25,000.00). Based on this, Nationwide deemed Hardy not to be an underinsured motorist and, therefore, declared Ward was not contractually entitled to UIM benefits.

The question is whether the application of another state’s law violates Kentucky public policy when that law authorizes an insurance carrier to offset the amount of insurance available to the plaintiff through the defendant’s insurer against the amount of UIM coverage. Our Supreme Court has spoken on this issue. In Philadelphia Indemnity Insurance Company v. Morris, 990 S.W.2d 621 (Ky. 1999), the Supreme Court declared void as against public policy any "UIM endorsement requiring setoff[.]" Id. at 627. The Court acknowledged the two "prevailing policy views" on this issue. Id…..

Id. Prior to 1988, Kentucky adhered to the narrow view. Indeed, KRS 304.39-320 contained language affording "a mandatory setoff of a tortfeasor’s liability limits against the insured’s UIM limits." Id. However, in 1988 the Kentucky legislature eliminated the mandatory setoff language, transforming KRS 304.39-120 "into a representation of the broad view." Id. This revision "reflects a public policy of broad UIM coverage, the purpose of which is to provide full recovery for the insured[.]" Id.

Virginia, unlike Kentucky, continues to embrace the narrow view as it certainly may do. Kentucky’s legislature and courts, however, have declared the narrow view to be against this Commonwealth’s public policy. Morris, 990 S.W.2d at 626-27. For that reason, we find the public-policy exception to our traditional conflicts-of-law analysis applicable under these circumstances. The set-off provision contained in Ward’s insurance policy and authorized under Virginia law is contrary to Kentucky public policy. Accordingly, the circuit court erred in holding Virginia law applies to this matter.

 

KY State Automobile Mutual Insurance Co. v. Outlaw, 575 S.W.2d 489 (Ky.App. 11/10/1978)

 Under the MVRA, the basic rule for treatment of collateral source payments is set forth in KRS 304.39-120. In determining reparation benefits, only social security and workmen’s compensation benefits are deductible in calculating the claimant’s net loss. State medical assistance payments are not considered "social security" benefits within the scope of KRS 304.39-120. Even though such benefits are provided under Title XIX of the Social Security Act, the actual payments are not made through the Social Security system. See the Commissioner’s Comment to Section 11 of the Uniform Motor Vehicle Accident Reparations Act (1972 version). In the ordinary case, the reparations obligor would not be entitled to deduct the amount of any state medical assistance payments in calculating net loss. However, the credit for collateral source payments is much broader when the benefits are being paid through the assigned claims plan.

KY     Cross v. Baxter, 713 S.W.2d 478 (Ky.App. 04/11/1986)

Apparently the only authorized deductions in BRB are those arising from social security or workers’ compensation. KRS 304.39-120.

KY     State Automobile Insurance Co. v. Lange, 697 S.W.2d 167 (Ky.App. 10/04/1985)

On July 14, 1981, appellee, Geneva Stokes Lange, was injured in a one-car automobile accident in Christian County, Kentucky. The automobile in which she rode was covered by a no-fault policy issued by appellant, State Automobile Insurance Company (State) and containing the traditional Basic Reparation Benefits (BRB) provision as mandated by KRS 304.39. At the time of the accident, appellee was within the course of her work with the Pennyrile Allied Community Services. She was covered by Worker’s Compensation. KRS Chapter 342. Appellee applied for an received Worker’s Compensation benefits representing approximately $200.00 medical expenses occurring soon after the accident. No claim was made for BRB under State’s policy, as the Worker’s Compensation coverage was primarily responsible. KRS 304.39-120. State did however recognize coverage under its policy of insurance by paying for damage to appellee’s car. In April, 1984, almost three years after the accident, appellee–still suffering the effects of the accident–notified State of her claim for BRB. State denied the claim based upon the limitation of actions provision of KRS 304.39-230(1), set forth above..


KY     Ammons v. Winklepleck, 570 S.W.2d 287 (Ky.App. 08/18/1978)

Indiana also relies on KRS 304.39-120(1) which provides that social security and workmen’s compensation payments are deducted in calculating net loss for the purpose of determining BRB payments. This statute does not affect the $10,000 limits of BRB coverage. The only purpose of the statute is to define what constitutes loss within the BRB coverage. The fact that the MVRA would prohibit an injured party from recovering twice for the same item of damage lends no support for the argument that BI liability coverage limits must be reduced by the amount of BRB payments. BRB payments are not made for items of loss or damage for which there could be any recovery under the BI liability coverage.

 

Kentucky Farm Bureau Mutual Insurance Co. v. All State Insurance Co. 681 S.W.2d 919 (Ky.App 12/28/1984)

Notwithstanding the policy underlying the Act, KRS 304.39-120, in specifying how net loss is to be calculated, allowed only social security payments and workers’ compensation benefits to be subtracted from the benefits received. No other statutory exceptions were allowed. The language of the statute, as it expressed the intention of the legislature, is controlling herein. Consequently, the trial court’s judgment must be reversed.

 
 

KRS 304.39-130 Basic weekly limit on benefits for certain losses.

Basic reparation benefits payable for work loss, survivor’s economic loss, replacement services loss, and survivor’s replacement services loss arising from injury to one (1) person and attributable to the calendar week during which the accident causing injury occurs and to each calendar week thereafter may not exceed two hundred dollars ($200), prorated for any lesser period. If the injured person’s earnings or work are seasonal or irregular, the weekly limit shall be equitably adjusted or apportioned on an annual basis.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 13, effective July 1, 1975.

 
 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

 Since KRS 304.39-020(2) provides that "[tlhe maximum amount of basic reparation benefits payable for all economic loss resulting from injury to any one (1) person as the result of one (1) accident shall be ten thousand dollars ($lO,OOO)," the Bullitt Circuit Court and the Court of Appeals correctly concluded that this coverage cannot be stacked. Cf. Capital Enternrise Ins. Co. v. Kentucky Farm Bureau Mut. Ins. Co., Ky. APP.1 804 S.W.2d 377 (1991). For the same reason, we conclude that the additional $20,000 in personal injury protection coverage described on the declarations page of the policy is, in fact, added reparation benefits as described in KRS 304.39130.

KY     Wemyss v. Coleman, 729 S.W.2d 174 (Ky. 04/30/1987) 

The definitions of "medical expense . . . incurred" and "loss of income from work" in KRS 304.39-020(5) are limited to amounts already "incurred," and under KRS 304.39-130 the amount for work loss is further limited ‘not to exceed $200" per week.

 
 

KRS 304.39-140 Optional additional benefits.

(1) On and after July 1, 1975, each reparation obligor of the owner of a vehicle required to be registered in this Commonwealth shall, upon the request of a reparation insured, be required to provide added reparation benefits for economic loss in units of ten thousand dollars ($10,000) per person subject to the lesser of:

(a) Forty thousand dollars ($40,000) in added reparation benefits; or

(b) The limit of security provided for liability to any one (1) person in excess of the requirements of KRS 304.39-110(1)(a).

(2) Each basic reparation obligor shall be permitted to incorporate in added reparation benefits coverage such terms, conditions and exclusions as may be consistent with premiums charged. The amounts payable under added reparation benefits may be duplicative of benefits received from collateral source benefits, or may provide for reasonable waiting periods, deductibles or coinsurance provision. The added reparation obligor shall be subrogated, subject to KRS 304.39-070 and 304.39-300, to the injured person’s right of recovery against any responsible third party.

(3) If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self-insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or in behalf of such injured person or persons.

(4) Basic reparation insurers shall make available upon request deductibles in the amounts of two hundred fifty dollars ($250), five hundred dollars ($500) and one thousand dollars ($1,000) from all basic reparation benefits otherwise payable, except that if two (2) or more basic reparation insureds to whom the deductible is applicable under the contract of insurance are injured in the same accident, the aggregate amount of the deductible applicable to all of them shall not exceed the specified deductible, which amount where necessary shall be allocated equally among them. Any person who is a basic reparation insured under an insurance policy issued with no deductible or with a deductible of a lesser amount than that under which he receives basic reparation benefits payments, shall be entitled to be paid under such policy the difference between the benefits he is actually paid and the benefits which would have been paid had his benefits been payable under such policy.

(5) Reparation obligors shall make available upon request to those persons who have rejected their tort limitations, in accordance with KRS 304.39-060(4), basic reparation benefits coverage and added reparation benefits.

Effective: June 17, 1978

History: Amended 1978 Ky. Acts ch. 215, sec. 3, effective June 17, 1978. — Created 1974 Ky. Acts ch. 385, sec. 14, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

Progressive Max Ins. Co. v. Nat’l Car Rental Sys. , Inc., 329 S.W.3d 320 (Ky., 2011) – Jan. 20, 2011

This appeal arises from a subrogation dispute regarding basic reparations benefits (BRB) paid by Appellee, National Car Rental Systems, Inc. (National) to a passenger of one of its rental vehicles. After payment, National sought full reimbursement against Appellant, Progressive Max (Progressive), the insurer of the driver of National’s vehicle.

 
"Secured person"; obligor’s rights to recovery

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.

 

After the Jefferson Circuit Court granted summary judgment in National’s favor, the Kentucky Court of Appeals affirmed, holding that (1) Progressive was primarily liable for BRB; and (2) National may pursue its claim via KRS 304.39-050. We granted discretionary review to determine the correctness of that opinion and now reverse.

 
LawReader “Cliff Notes”:
 
National – Car Rental Agency
Jones – Car Driver and Renter

Progressive (Insurance Company) – provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle

Shannon Wilkerson – Passenger Injured in car driven by Jones – rented from National

 

Synopsis: Jones was involved in a motor vehicle accident while driving National’s vehicle, injuring his passenger, Shannon Wilkerson.

 

Wilkerson sought recovery from Jones and Progressive (which provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle).

 

At some point, Wilkerson received BRB from National (the vehicle owner).

National sued Progressive to re-coup BRB amount paid to Wilkerson.

 

The KY Supreme Court Reversed the Court of Appeals in this case; which held that a vehicle insurer may employ KRS 304.39-050 to assert a subrogation claim.

 

Supreme Court: … the Court of Appeals is reversed and this case is remanded to the Jefferson Circuit Court with instruction to enter summary judgment in favor of Progressive.

 

Cain v. American Commerce Insurance Company, Inc., No. 2008-CA-001500-MR (Ky. App. 11/6/2009) (Ky. App., 2009)

    Cain now argues that the trial court erred in determining that she was entitled to $20,000.00 in added reparation benefits per vehicle rather than the $40,000.00 which she seeks. Resolution of her argument turns on the interpretation and application of KRS 304.39-140, which states: …….

          Applying the formula to the facts, we see that Cain’s liability limit (or "limit of security provided for liability to any one (1) person" in the language of KRS 304.39-140(1)(b)) is $100,000.00. Subtracting from that sum the minimum security provided for liability for any one person of $25,000.00 (set out in KRS 304.39-110(1)(a)) results in a figure of $75,000.00, which represents the "excess" described in KRS 304.39-140(1)(b). Because added reparation benefits must be sold in increments of $10,000.00, that figure is round up to $80,000.00. Thus, pursuant to KRS 304.39-140(1), American Commerce was required to offer to Cain the lesser of $40,000.00 or $80,000.00 in added reparation benefits.

        This leads to the central issue, which is whether KRS 304.39-140(1) requires American Commerce to "provide" to Cain $40,000.00 in added reparation benefits as Cain contends, or merely to "offer" it to Cain as the Jefferson Circuit Court determined and as American Commerce now argues. Our resolution of this question turns on the language of KRS 304.39-140(1), which states in no uncertain terms that the reparations obligor (American Commerce) "shall . . . be required to provide" the lesser of $40,000.00 or the limit of security provided for liability to any one (1) person in excess of the requirements of KRS 304.39-110(1)(a) (in this case $80,000.00) "upon the request of a reparation insured."

        In Nationwide Mutual Insurance Co. v. Hatfield, 122 S.W.3d 36 (Ky. 2003), Justice William Cooper discussed the parallels between uninsured/underinsured insurance and BRB/ARB insurance and described the public policy applications to each.

        The "younger sibling" relationship between the UM and UIM statutes is conceptually identical to the relationship between the BRB statutes, KRS 304.39-080(5) and KRS 304.39-110(1)(c), and the added reparation benefits (ARB) statute, KRS 304.39-140, which also define coverages that are personal to the insured. While BRB coverage is mandatory, ARB coverage is optional. Stevenson [ex rel. Stevenson v. Anthem Cas. Ins. Group.15 S.W.3d 720 (Ky. 1999)], supra,note 6, at 722-24. As does the almost identical language in the UIM statute, the ARB statute provides that "each reparation obligor [insurer] of the owner of a vehicle required to be registered in this Commonwealth shall, upon the request of a reparation insured, be required to provide added reparation benefits." KRS 304.39-140(1). The ARB statute also authorizes "terms, conditions and exclusions." KRS 304.39-140(2). Thus, in Stevenson, supranote 6, we upheld a provision that did not void the ARB coverage altogether but limited it to persons who were either named insureds or relatives of a named insured. Id.at 724.

     In a related argument, Cain claims that the insurance contract issued by American Commerce is violative of KRS 304.39-140 because it does not provide added reparation benefits to Cain in an amount which is the lesser of $40,000.00 or the limit of security provided for liability to any one (1) person in excess of the requirements of KRS 304.39-110(1)(a) (in this case $80,000.00). Having noted above the dispositive language requiring American Commerce to provide this additional level of coverage "upon the request of a reparations insured," and having further determined that Cain did not request the coverage, we cannot conclude that the trial court erred ruling that Cain was not entitled to relief under the Kentucky Unfair Settlement Practice Act or a common law bad faith claim. Similarly, Cain is not entitled to interest on the purported overdue payments nor reasonable attorney fees, as American Commerce paid in a reasonable time all benefits to which Cain was entitled.

        For the foregoing reasons, we affirm the Declaratory and Final Judgment of the Jefferson Circuit Court.

 

Progressive Max Insurance Company v. National Car Rental Systems, Inc., No. 2007-CA-001800-MR (Ky. App. 5/8/2009) (Ky. App., 2009)

    This is an appeal from a summary judgment entered in favor of the appellee, National Car Rental Systems, Inc. ("National"). The appellant, Progressive Max Insurance Company ("Progressive") brings this appeal arguing that a reparation obligor such as National cannot bring a subrogation action to recover basic reparation benefits ("BRB") against a liability insurer.

BACKGROUND INFORMATION

        The underlying facts are not in dispute and were stipulated at the trial court level. Ed Jones ("Jones") rented a motor vehicle from National on October 26, 2001. On November 1, 2001, Jones was involved in a motor vehicle accident while driving National’s vehicle. Shannon Wilkerson ("Wilkerson") was a passenger in Jones’s vehicle and was injured in the accident. At the time of the accident, Jones was insured by Progressive on his personal vehicle. The policy with Progressive included liability benefits should Jones have an accident while in a rented vehicle.

        Wilkerson sought damages for her injuries by filing a personal injury claim against Jones as well as receiving $10,000.00 in BRB from National. On September 16, 2002, Wilkerson’s personal injury action against Jones was dismissed. She neither notified National that she had filed the action, nor that it had been dismissed.

        National brought an action in Jefferson Circuit Court against Progressive for reimbursement of the BRB it paid Wilkerson. As a result of Wilkerson’s failure to notify National of her personal injury claim, National did not intervene in the action she filed against Jones. In order to recover the BRB payments, National filed suit against Jones and Progressive.

        The trial court entered judgment in favor of National on July 9, 2007. Progressive now appeals that order.

……  (3) A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.

        National, however, argues that Progressive is incorrect in its argument that it is not a reparations obligor. KRS 304.39-100(2) provides that "in any contract of liability insurance for injury, wherever issued, covering the ownership, maintenance or use of a motor vehicle other than motorcycles while the vehicle is in this Commonwealth shall be deemed to provide the basic reparation benefits coverage[.]"

  In the present action, Jones elected not to purchase extended coverage on the vehicle from National. As a result, and under the contract of insurance he had with Progressive, his primary insurer was Progressive. Under his policy with Progressive, Jones was provided with insurance coverage on rental vehicles. While Affiliated dealt with an insurer driving a vehicle he did not own, it is distinguishable. In Affiliated, the employer owned and insured the vehicle. The employee did not maintain insurance on the vehicle nor is there any indication that his personal insurance policy covered vehicles he drove which were owned by his employers. The trial court correctly held Progressive to be primarily liable for BRB. We will, therefore affirm the summary judgment.

 

KY     Nationwide Mutual Insurance v. Hatfield, 122 S.W.3d 36 (Ky. 12/18/2003)

Ohio Casualty v. Stanfield, supra, addressed whether a UM claimant could stack separate UM coverages for multiple vehicles insured by the same policy. The claimant was operating a vehicle owned by his employer when he was injured in a collision with an uninsured motorist. He sought to stack the coverages for each of the sixty-three vehicles insured by his employer’s fleet policy and the coverages for each of two vehicles insured by his own personal policy. Separate premiums had been paid for the UM coverages with respect to each vehicle insured by each policy. Stanfield distinguished an "insured of the first class" who paid the premium (or on whose behalf the premium was paid, i.e., an "additional insured" as in Siddons ) and an "insured of the second class" who did not pay the premium. An "insured of the first class" is afforded coverage for injuries caused by an uninsured motorist while occupying his own or another’s vehicle or while a pedestrian, Siddons, supra, at 832 n.1, whereas an "insured of the second class" is insured by the policy only because he/she is an occupant of the insured vehicle and is afforded only the coverage applicable to that vehicle. Stanfield, supra, at 557. Stanfield held that an insured of the first class could stack the coverages applicable to other vehicles insured by the same policy but that an insured of the second class could not. Id. at 559. Thus, the claimant in Stanfield could stack the coverages for each vehicle in his personal policy but could not stack the coverages for each vehicle in his employer’s fleet policy. Id.

     Hamilton v. Allstate Insurance Co., Ky., 789 S.W.2d 751 (1990), held under facts similar to those in Zurich v. Hall, supra, that the standard "other insurance" clause in the insured’s personal policy could not preclude stacking of the UM coverages for three vehicles in that policy despite the fact that the insured had already been paid the UM coverage of a policy insuring the owner of the vehicle in which she was a passenger at the time of the accident. Id. at 754. And Chaffin v. Kentucky Farm Bureau Insurance Co., Ky., 789 S.W.2d 754 (1990), held under facts identical to those in Allstate v. Napier, supra, that the standard "other vehicle" clause in the policy covering the vehicle occupied by the insured at the time of the accident could not preclude stacking UM coverages provided by other policies covering other vehicles owned by the insured. Id. at 757-58. Chaffin struck down the "other vehicle" exclusion as "so broadly drawn as to obfuscate its purpose in prevention of fraud" and to "prohibito claims in a multitude of circumstances in which collusion is not a reasonable possibility." Id. at 757. Chaffin then cited the government-owned vehicle exclusion upheld in Commercial Union Insurance Co. v. Delaney, Ky., 550 S.W.2d 499 (1977), as an example of a valid, narrowly drawn term and condition applicable to UM coverage. Chaffin, supra, at 757. (More on Delaney, infra.) In addition to the exclusion recognized as valid in Chaffin and Delaney, we have twice upheld the standard "motorcycle exclusion" to UM coverage.

 

KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

Lawson’s Farm Bureau policy also offered other optional coverages, viz:      additional personal injury protection (ARB) coverage, KRS 304.39140, described in Part B/2 of the policy; underinsured motorist (UIM) coverage, KRS 304.39-320, described in Part C/l of the policy; and automobile physical damage (collision) coverage, KRS 304.20-040(1)(b) and (2)(c), described in Part D of the policy. As required by KRS 304.39140(l), the ARB coverage was offered in increments of $10,000, $20,000, $30,000 or $40,000 per person:

 

KY     Stevenson v. Anthem Casualty Insurance Group, No. 97-SC-609-DG (Ky. 05/18/2000)

Added reparation benefits (ARB’s) are described in a separate endorsement to the policy entitled "Additional Personal Injury Protection Coverage – Kentucky." The endorsement limits application of this coverage to "an eligible injured person who is [a] named insured or [al relative." Stevenson is neither a named insured of the policy nor a relative, thus is excluded from coverage. KRS 304.39140(2) permits an insurer "to incorporate in added reparation benefits coverage such terms, conditions and exclusions as may be consistent with premiums charged." We need not address how this particular exclusion might be proved to be consistent or inconsistent "with premiums charged," for Stevenson did not challenge the exclusion on that basis at the trial level. (Logically, however, extension of coverage to persons outside the named insured’s family would result in a higher premium.) Instead, she argued, as she does here, that the exclusion is void, because KFS 304.39-140(l) requires the reparation obliger (Anthem/Decatur) to provide added reparation benefits "if requested by the insured," and the coverage at issue obviously was requested by the Walkers. The Court of Appeals agreed, concluding that I’ARB’s are but extensions of BRB’s," (Slip op., p. 6); and since Anthem/Decatur could not exclude BRB coverage for Stevenson, KRS 304.39-030(l), KRS 304.39-080(5), KRS 304.39-100 (11, neither could it exclude ARB coverage for her. Of course, that interpretation not only ignores the fact that ARB’s and BRB’s are separately defined in KRS 304.39-020(l) and (21, it also would nullify KRS 304.39140(2) insofar as that statute permits exclusions with respect to ARB coverage.

 

KY     State Farm Mutual Automobile Insurance Co. v. Mattox, 862 S.W.2d 325 (Ky. 09/30/1993)

At the outset, it should be noted that these cases do not deal with basic reparation benefits. Appellees have conceded that basic reparation benefits may not be aggregated by virtue of KRS 304.39-050(3). As explained in Capital Enterprise Ins. Co. v. Kentucky Farm Bureau Mut. Insurance Co., Ky.App., 804 S.W.2d 377 (1991),

  "Unless optional additional benefits have been purchased, KRS 304.39-140, the maximum amount of BRB payable to any one person as a result of any one accident is $10,000. . . . The statute specifically states that this is so regardless of the number of different providers of security which might be obligated to pay such benefits, KRS 304.39-020(2), . . . ." Id. at 378.

KY  Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.App. 11/07/1997)

The United Services Court also relied upon the language of KRS 304.39140(3) as indicative of the proposition that an obligor may recover added reparation benefits to the same extent as basic benefits:

     "If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self-insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or on behalf of such injured person or persons." (Emphasis added).

 
 

KY  United Services Automobile Association v. State Farm Mutual Automobile Insurance Co., 784 S.W.2d 786 (Ky.App. 03/02/1990)

    Any entitlement to recovery for basic or added reparation benefits paid or to be paid by the subrogee shall in no event exceed the limits of automobile bodily injury liability coverage available to the secured party after priority of entitlement as provided in this section and KRS 304.39-140(3) has been satisfied.  (Emphasis added). Likewise, KRS 304.39-140(3) refers to added benefits in setting priorities:

     If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self-insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or in behalf of such injured person or persons


KY  United States Fidelity & Guaranty Co. v. Smith, 580 S.W.2d 216 (Ky. 03/20/1979)

Therefore, we are persuaded that U.S.F.&G. was not a statutory "subrogee" in the sense that term is used in other provisions of the concerned statutory sections such as KRS 304.39-140(3), because its insured’s tort rights were asserted against "a secured person."

  KRS 304.39-140(3) provides: "If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self-insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of added reparation benefits paid to or in behalf of such injured person or persons." We regard this statutory section inapplicable to this case since it addresses itself to priority between the insured collecting collateral payments and his insurer which is a statutory "subrogee."

KY     Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

 Instead, Bartlett argues that he is entitled to recover his basic reparation benefits losses based on two statutes, KRS 304.39-310(2) and KRS 304.39-070(3). KRS 304.39-310(2) provides in relevant part that "[a]n owner or registrant of a motor vehicle with respect to which security is required under KRS 304.39-110, who fails to have such security when the motor vehicle is involved in an accident shall have all the rights and obligations of a reparation obligor[.]" KRS 304.39-070(3) provides in relevant part that "[a] reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39140(3)."

 

KY [U] State Farm Mutual Automobile Insurance Co. v. City of Louisville, No. 2002-CA-000223-MR (Ky.App. 09/05/2003)

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39140(3). . . . (Emphasis added.)

   The parties’ main point of contention is whether the motor vehicle owned by the City and driven by Alpiger was a secured vehicle. If the operator and vehicle were not secured, State Farm is left to proceed under KRS 304.39-070(2). If the operator and vehicle are secured, KRS 304.39-070(3) is the applicable provision. And, under that subsection, State Farm may only recover from the City if it may be considered a "reparation obligor."


KY     [U] Kentucky Farm Bureau Mutual Insurance Companies v. Grange Mutual Casualty Co., No. 2002-CA-000308-MR (Ky.App. 02/28/2003)

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.

 
 

KRS 304.39-150 Approval of terms and forms.

Terms and conditions of contracts and certificates or other evidence of insurance coverage sold or issued in this Commonwealth providing motor vehicle tort liability, basic reparation, and added reparation insurance coverages, and of forms used by insurers offering these coverages, are subject to approval and regulation by the commissioner of insurance. The commissioner shall approve only terms and conditions consistent with the purposes of this subtitle and fair and equitable to all persons whose interests may be affected.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1529, effective July 15, 2010. — Created 1974 Ky. Acts ch. 385, sec. 15, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Bishop v. Allstate Insurance Co., 623 S.W.2d 865 (Ky. 09/01/1981)

The Commissioner of Insurance approved the terms of the insurance policy, including the family exclusion provision, which John Franklin carried with Allstate. Although KRS 304.39-150 provides that policy terms are subject to the Commissioner’s approval and regulation, it also prohibits him from approving terms and conditions inconsistent with the purposes of the MVRA. Because a family exclusion provision eliminating minimum tort liability coverage violates one of the stated purposes of the act, compulsory insurance, the argument that the provision is valid because approved by the Commissioner falls flat.

 

KY     Beacon Insurance Co. v. State Farm Mutual Insurance Co., 795 S.W.2d 62 (Ky. 09/06/1990)

      We disagree with all four contentions. While the Bishop case was slightly different from the instant case, it presented a clear and accurate enunciation of the express legislative intent set forth in the MVRA (KRS Chapter 304, Subtitle 39), and its rationale is equally appropriate here. And while the right to contract is one of the most basic rights possessed by the citizenry, this right must however yield to the public policy of the state as declared by our General Assembly. To permit an exclusion such as that claimed by these appellants, in light of the statute as it existed at the time of contracting, at the time of the accident and at the time of trial, would tend to emasculate the act and defeat its express purpose. KRS 304.39-010(1) purposes to require, and KRS 304.39-080(5) does require, security for payment of tort liabilities arising from maintenance or use of a motor vehicle. KRS 304.39-110 establishes the minimum compulsory security. KRS 304.39-150 subjects all policies and terms to approval by the Commissioner of Insurance, who "shall approve only terms and conditions consistent with the purposes of this subtitle and fair and equitable to all persons whose interests may be affected."

       With certain exceptions not relevant to the present case, "every owner of a motor vehicle registered in this Commonwealth or operated in this Commonwealth by him or with his permission, shall continuously provide with respect to the motor vehicle while it is either present or registered in this Commonwealth . . ., security for the payment of basic reparation benefits in accordance with this subtitle and security for payment of tort liabilities, arising from maintenance or use of the motor vehicle."

 
 

KRS 304.39-160 Assigned claims.

(1) A person entitled to basic reparation benefits because of injury covered by this subtitle may obtain them through the assigned claims plan established pursuant to the provisions relating thereto and in accordance with the provisions on time for presenting claims under the assigned claims plan if:

(a) Basic reparation insurance is not applicable to the injury for a reason other than those specified in the provisions on converted vehicles and intentional injuries;

(b) Basic reparation insurance applicable to the injury cannot be identified;

(c) Basic reparation insurance applicable to the injury is inadequate to provide the contracted for benefits because of financial inability of a reparation obligor to fulfill its obligations; or

(d) A claim for basic reparation benefits is rejected by a reparation obligor for a reason other than that the person is not entitled under this subtitle to the basic reparation benefits claimed.

(2) If a claim qualifies for assignment under paragraphs (c) or (d) of subsection (1), the assigned claims bureau or any reparation obligor to whom the claim is assigned is subrogated to all rights of the claimant against any reparation obligor, its successor in interest or substitute, legally obligated to provide basic reparation benefits to the claimant, for basic reparation benefits provided by the assignee.

(3) Except in case of a claim assigned under subsection (1)(d), if a person receives basic reparation benefits through the assigned claims plan, all benefits or advantages he receives or is entitled to receive as a result of the injury, other than by way of succession at death, death benefits from life insurance, or in discharge of familial obligations of support, are subtracted in calculating net loss.

(4) A person who sustains injury while occupying a motor vehicle owned by such person and with respect to which security is required by the provisions on security and who fails to have such security in effect at the time of an accident in this Commonwealth causing such injury, shall not obtain through the assigned claims plan basic reparation benefits, including benefits otherwise due him as a survivor, unless such person’s failure to have such security in effect at the time of such accident was solely occasioned by the failure of the reparation obligor of such person to provide the basic reparation benefits required by this subtitle.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 16, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Capital Enterprise Insurance Co. v. Kentucky Farm Bureau Mutual Insurance Co., 804 S.W.2d 377 (Ky.App. 02/22/1991)

Further, although the statute which fixes priorities among multiple reparation obligors states that in an instance involving a pedestrian, the applicable BRB insurance is that which covers the vehicle which struck the pedestrian, it does not impose a duty on a pedestrian who happens to be struck by two vehicles in a single accident to show that any of the resulting injuries were caused by the particular vehicle which is insured by the reparation obligor against which the pedestrian asserts a claim for BRB. See KRS 304.39-050(1). Indeed, KRS 304.39-040(1) specifically provides that BRB shall be paid without regard to fault. In our opinion, in this context the concept of payment without regard to "fault" includes any disputes regarding causation which may arise between multiple reparation obligors primarily liable for BRB. We therefore conclude, pursuant to the statutory mandate set forth in KRS 304.39-040(1), that a pedestrian who shows that injuries resulted from being struck by one or more motor vehicles has a right to claim up to $10,000 in BRB from any one reparation obligor which issued insurance on any of those motor vehicles. See KRS 304.39-050(3). To construe the statute otherwise would encourage fault-based litigation in direct contravention of the policies and purposes of the no-fault statute, including that of prompt payment of benefits to victims of motor vehicle accidents, as set forth in KRS 304.39-010.

 

KY     State Farm Mutual Automobile Insurance Co. v. Harris, 850 S.W.2d 49 (Ky.App. 08/28/1992)

KRS 304.39-160(1)(b). The individual that hit the Harrises’ automobile from behind was an uninsured non-resident, and the Harrises are not basic reparation insureds. Therefore, there is no identifiable basic reparation insurance applicable to this case and the assigned claims plan should be accountable. Appellant refers to KRS 304.39-160(4) and claims that the Harrises fit the exception within it and are not entitled to recover from the Assigned Claims Bureau. That subsection provides that a person who fails to have security on his motor vehicle at the time of an accident in Kentucky shall not obtain basic reparation benefits through the assigned claims plan, unless the failure to have such security was solely because of the failure of that person’s reparation obligor to provide the basic reparation benefits required by this subtitle. The Harrises had security on their motor vehicle through Tennessee Farmers Mutual Insurance Company. By law Tennessee Farmers did not have to provide for basic reparation benefits. The Harrises had insurance on their automobile. The exception in KRS 304.39-160(4) is not applicable. We agree with the trial court that the appellees are entitled to recover basic reparation benefits as a result of the accident they were involved in the Commonwealth.

KY     Blair v. Day, 600 S.W.2d 477 (Ky.App. 06/15/1979)

 However, basic reparation benefits are available from two different sources: (1) basic reparation obligors, and (2) the assigned claims plan. KRS 304.39-040. In the case before us, neither party had a contract of basic reparation insurance and appellant did not qualify himself as of basic reparation insured. KRS 304.39-050; KRS 304.39-020. Under such circumstances, where "[basic] reparation insurance applicable to the injury cannot be identified," he could only obtain benefits through the assigned claims plan. KRS 304.39-160. This means of obtaining benefits was available to him, although he had no security, in view of the fact that he was not occupying the vehicle lacking security. KRS 304.39-160; Note, Kentucky No-Fault: An Analysis and interpretation, 65 Ky.L.J. 466 at 491. However, appellant has failed to seek his remedy through the assigned claims plan, but rather has sued the uninsured driver. Under such circumstances, dismissal was proper. A correct decision will not be disturbed on appeal merely because it was based on an incorrect ground or reason in view of the fact that this Court disregards errors not affecting the substantial rights of the parties. CR 61.01; Haddad v. Louisville Gas & Electric Company, Ky., 449 S.W.2d 916, 919 (1969); Commonwealth v. McCauley’s Ex’r, 166 Ky. 450, 455, 179 S.W. 411 (1915).


KY Thomas v. Ferguson, 560 S.W.2d 835 (Ky.App. 01/13/1978)

By reason of KRS 304.39-160(4), appellant is precluded from participating in the assigned claims plan.

KY Lane v. Travelers Insurance Co., 726 S.W.2d 313 (Ky.App. 11/14/1986)

Although the legislature did not adopt the UMVRA in its entirety, it did incorporate much of its language, but there are a few notable differences. The legislature rejected Uniform Act’s method of dealing with uninsured motorists and rejected a portion of UMVRA at Section 18. There was substituted therefore the current Section 160(4). The comments to Section 18 of the model code refer to payments to families of vehicle owners who had met the security requirements.

 
 

KRS 304.39-170 Assigned claims bureau and plan.

(1) Reparation obligors providing basic reparation insurance in this Commonwealth may organize and maintain, subject to approval and regulation by the commissioner of insurance, an assigned claims bureau and an assigned claims plan and adopt rules for their operation and for assessment of costs on a fair and equitable basis consistent with this subtitle. If they do not organize and continuously maintain an assigned claims bureau and an assigned claims plan in a manner considered by the commissioner of insurance to be consistent with this subtitle, the commissioner shall organize and maintain an assigned claims bureau and an assigned claims plan. Each reparation obligor providing basic reparation insurance in this Commonwealth shall participate in the assigned claims bureau and the assigned claims plan. Costs incurred shall be allocated fairly and equitably among the reparation obligors.

(2) The assigned claims bureau shall promptly assign each claim and notify the claimant of the identity and address of the assignee of the claim. Claims shall be assigned so as to minimize inconvenience to claimants. The assignee thereafter has rights and obligations as if he or she had issued a policy of basic reparation insurance complying with this subtitle applicable to the injury or, in case of financial inability of a reparation obligor to perform its obligations, as if the assignee had written the applicable basic reparation insurance, undertaken the self-insurance, or lawfully obligated itself to pay reparation benefits.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1530, effective July 15, 2010. — Created 1974 Ky. Acts ch. 385, sec. 17, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

State Automobile Mutual Insurance Co. v. Outlaw, 575 S.W.2d 489 (Ky.App. 11/10/1978)

 The plaintiff-appellee, Anna B. Outlaw, was a pedestrian who suffered serious injuries when struck by an automobile driven by Jerry L. Taylor and owned by Allen L. Taylor. Therefore, Outlaw was entitled to basic reparation benefits under the Kentucky Motor Vehicle Reparations Act (MVRA). KRS 304.39-030(1). However, the Taylor automobile was uninsured, and Outlaw was not a "basic reparation insured" within the meaning of KRS 304.39-020(3). There being no policy of basic reparation insurance applicable to her injury, Outlaw filed a claim with the Kentucky Assigned Claims Bureau. KRS 304.39-160(1)(a). Outlaw’s claim was then assigned to the defendant-appellant, State Automobile Mutual Insurance Company, which had the same obligations as though it had issued a policy of basic reparation insurance applicable to her injury. KRS 304.39-170(2).

 
 

KRS 304.39-180 Time for presenting claims under assigned claims plan.

(1) Except as provided in subsection (2), a person authorized to obtain basic reparation benefits through the assigned claims plan shall notify the bureau of his claim within the time that would have been allowed for commencing an action for those benefits if there had been identifiable coverage in effect and applicable to the claim.

(2) If timely action for basic reparation benefits is commenced against a reparation obligor who is unable to fulfill his obligations because of financial inability, a person authorized to obtain basic reparation benefits through the assigned claims plan shall notify the bureau of his claim within six (6) months after discovery of the financial inability.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 18, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

Jackson v. State Automobile Mutual Insurance Co., 837 S.W.2d 496 (Ky. 09/24/1992)

A person authorized to obtain basic reparation benefits through the assigned claims plan shall notify the bureau of the claim within the time that would have been allowed for commencing an action for those benefits if there had been identifiable coverage in effect and applicable to the claim. KRS 304.39-180. This particular limitation is codified in KRS 304.39-230 and with reference to subsection (2) which provides:

 
 

KRS 304.39-190 Converted motor vehicles.

A person who converts a motor vehicle is disqualified from basic or added reparation benefits, including benefits otherwise due him as a survivor, from any source other than an insurance contract under which the converter is a basic or added reparation insured, for injuries arising from maintenance or use of the converted vehicle. If the converter dies from the injuries, his survivors are not entitled to basic or added reparation benefits from any source other than an insurance contract under which the converter is a basic reparation insured. For the purpose of this section, a person is not a converter if he uses the motor vehicle in the good faith belief that he is legally entitled to do so.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 19, effective July 1, 1975.

 
 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Stuart v. Capital Enterprise Insurance Co., 743 S.W.2d 856 (Ky.App. 11/13/1987)

The Act contains only three classes of persons who are excluded from receiving BRB: persons who have rejected the limitations on their tort rights, KRS 304.39-030(]); persons who intentionally cause injury to themselves or another person, KRS 304.39-200; and persons who convert a motor vehicle, KRS 304.39-190.

KY     Fann v. McGuffey, 534 S.W.2d 770 (Ky.App. 06/27/1975)

person whose injuries arise out of the use or maintenance of an automobile he has converted is disentitled to BRB or added reparation benefits from any source other than an insurance policy under which he has such coverage as an insured.

 A person injured in the course of attempting intentionally to injure either himself or another person is disentitled to such benefits from any source, as are his survivors if he dies.

 
 

KRS 304.39-200 Intentional injuries.

A person intentionally causing or attempting to cause injury to himself or another person is disqualified from basic or added reparation benefits for injury arising from his acts, including benefits otherwise due him as a survivor. If a person dies as a result of intentionally causing or attempting to cause injury to himself, his survivors are not entitled to basic or added reparation benefits for loss arising from his death. A person intentionally causes or attempts to cause injury if he acts or fails to act for the purpose of causing injury. A person does not intentionally cause or attempt to cause injury merely because his act or failure to act is intentional or done with his realization that it creates a grave risk of causing injury or if the act or omission causing the injury is for the purpose of averting bodily harm to himself or another person.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 20, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Stuart v. Capital Enterprise Insurance Co., 743 S.W.2d 856 (Ky.App. 11/13/1987)

The Act contains only three classes of persons who are excluded from receiving BRB: persons who have rejected the limitations on their tort rights, KRS 304.39-030(]); persons who intentionally cause injury to themselves or another person, KRS 304.39-200; and persons who convert a motor vehicle, KRS 304.39-190.

 

KY     Fann v. McGuffey, 534 S.W.2d 770 (Ky.App. 06/27/1975)

 Heretofore our statutes of limitation have been extended to permit one who is a minor when a right of action accrues in his behalf to bring suit within the same period of time after he reaches his majority. To the extent that KRS 304.39-230(5) may provide otherwise it is claimed to be invalid.

 
 

KRS 304.39-210 Obligor’s duty to respond to claims.

(1) Basic and added reparation benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as work loss, replacement services loss, or medical expense is incurred. Benefits are overdue if not paid within thirty (30) days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, unless the reparation obligor elects to accumulate claims for periods not exceeding thirty-one (31) days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, and pays them within fifteen (15) days after the period of accumulation. Notwithstanding any provision of this chapter to the contrary, benefits are not overdue if a reparation obligor has not made payment to a provider of services due to the request of a secured person when the secured person is directing the payment of benefits among the different elements of loss. If reasonable proof is supplied as to only part of a claim, and the part totals one hundred dollars ($100) or more, the part is overdue if not paid within the time provided by this section. Medical expense benefits may be paid by the reparation obligor directly to persons supplying products, services, or accommodations to the claimant, if the claimant so designates.

(2) Overdue payments bear interest at the rate of twelve percent (12%) per annum, except that if delay was without reasonable foundation the rate of interest shall be eighteen percent (18%) per annum.

(3) A claim for basic or added reparation benefits shall be paid without deduction for the benefits which are to be subtracted pursuant to the provisions on calculation of net loss if these benefits have not been paid to the claimant before the reparation benefits are overdue or the claim is paid. The reparation obligor is entitled to reimbursement from the person obligated to make the payments or from the claimant who actually receives the payments.

(4) A reparation obligor may bring an action to recover benefits which are not payable, but are in fact paid, because of an intentional misrepresentation of a material fact, upon which the reparation obligor relies, by the insured or by a person providing an item of medical expense. The action may be brought only against the person providing the item of medical expense, unless the insured has intentionally misrepresented the facts or knows of the misrepresentation. An insurer may offset amounts he is entitled to recover from the insured under this subsection against any basic or added reparation benefits otherwise due.

(5) A reparation obligor who rejects a claim for basic reparation benefits shall give to the claimant prompt written notice of the rejection, specifying the reason. If a claim is rejected for a reason other than that the person is not entitled to the basic reparation benefits claimed, the written notice shall inform the claimant that he may file his claim with the assigned claims bureau and shall give the name and address of the bureau.

Effective: July 15, 1998

History: Amended 1998 Ky. Acts ch. 200, sec. 2, effective July 15, 1998. — Created 1974 Ky. Acts ch. 385, sec. 21, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

Medlin v. Progressive Direct Ins. Co. (Ky. App., 2013) 2011-CA-002258-MR April 5, 2013

Medlin argues that he is entitled to receive his PIP benefits directly in order for him to personally pay his medical providers. He cites to Kentucky Revised Statute (KRS) 304.39-210(1) and KRS 304.39-241 in support of his argument. KRS 304.39-210(1) states:  

Basic and added reparation benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as work loss, replacement services loss, or medical expense is incurred. Benefits are overdue if not paid within thirty (30) days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, unless the reparation obligor elects to accumulate claims for periods not exceeding thirty-one (31) days after the reparation obligor receives reasonable proof of the fact and amount of loss realized, and pays them within fifteen (15) days after the period of accumulation. Notwithstanding any provision of this chapter to the contrary, benefits are not overdue if a reparation obligor has not made payment to a provider of services due to the request of a secured person when the secured person is directing the payment of benefits among the different elements of loss. If reasonable proof is supplied as to only part of a claim, and the part totals one hundred dollars ($100) or more, the part is overdue if not paid within the time provided by this section. Medical expense benefits may be paid by the reparation obligor directly to persons supplying products, services, or accommodations to the claimant, if the claimant so designates.

Medlin argues that nothing in the MVRA limits how the PIP benefits are to be distributed. Medlin argues that he, as the insured, can direct the payment of benefits among the elements of loss in any way he sees fit. Medlin only sought payment for one element of loss in this case, medical expenses. He requested Progressive to send him a check, in his name only, for the amount of medical expenses so he could directly pay his medical providers. He also requested Progressive not to pay his medical provider directly, as is allowed by KRS 304.39-210(1).

 

Cox v. Progressive Northern Insurance Company, No. 2009-CA-000566-MR (Ky. App. 1/22/2010) (Ky. App., 2010)

   Tom Cox appeals from a judgment on the pleadings entered in favor of Progressive Northern Insurance Company on his claim that he was entitled to Pedestrian Personal Injury Protection (PIP) benefits under an insurance policy. Cox argues that: (1) the trial court erred by not accepting his factual allegations as true; (2) he is entitled to Pedestrian PIP benefits under his insurance policy; and (3) Progressive is required to pay interest and attorney’s fees pursuant to KRS 304.39-210(2) and KRS 304.39-220. After reviewing the record and briefs, we affirm.

        KRS 304.39-210(2) states that "[o]verdue payments bear interest at the rate of twelve percent (12%) per annum, except that if delay was without reasonable foundation the rate of interest shall be eighteen percent (18%) per annum." KRS 304.39-220(1)states:

If overdue benefits are recovered in an action against the reparation obligor or paid by the reparation obligor after receipt of notice of the attorney’s representation, a reasonable attorney’s fee for advising and representing a claimant on a claim or in an action for basic or added reparation benefits may be awarded by the court if the denial or delay was without reasonable foundation. No part of the fee for representing the claimant in connection with these benefits is a charge against benefits otherwise due the claimant.

        Cox was not entitled to basis PIP benefits or Pedestrian PIP benefits under the policy. Therefore, he is not entitled to interest and attorney’s fees.

 

Eriksen v. Ky. Farm Bureau Mut. Ins. Co. (Ky. App., 2010)

      KFB initially filed suit against Eriksen in Hardin District Court to recover $425 for alleged overpayment on a personal injury protection claim. Eriksen asserted a counterclaim against KFB for interest pursuant to Kentucky Revised Statute (KRS) 304.39-210(2) on allegedly late payments made by KFB at the direction of KFB’s insureds. Eriksen claimed damages in excess of the jurisdictional limits of the district court, and the case was removed to Hardin Circuit Court.

      Eriksen argues that this is not a benefits assignment case; rather, Eriksen seeks to enforce the penalty provision under KRS 304.39-210(2). Accordingly, Eriksen argues that the holding in Neurodiagnostics does not apply in this case. We disagree. The language and holding in Neurodiagnostics are clear: a medical provider does not have standing to sue under the MVRA. Instead, "the insured is the party that is ultimately responsible for payment. And it is the insured that has the direct right of action against the reparation obligor if he or she disagrees with the way in which his or her benefits were either paid or not paid." Neurodiagnostics, 250 S.W.3d at 329. We agree with the circuit court that "[i]f the interest is available to medical providers, it is not available through direct action against the reparations obligor. It is the prerogative of either the Kentucky Supreme Court or the Kentucky Legislature to create an exception to the Neurodiagnostics rule that would give a medical provider[] a direct action to enforce the statutory interest penalty of KRS 304.39-210(2)." Accordingly, we find no error.

 

Zink v. Estate of Pierson, No. 2008-CA-002111-MR (Ky. App. 9/11/2009) (Ky. App., 2009)

Notes:

2. We note that the prohibition on direct actions does not impact the right of an injured party to maintain a claim relating to the payment of basic reparation benefits (BRB) or personal injury protection (PIP) payments. See KRS 304.39-210; Kentucky Farm Bureau Mut. Ins. Co. v. Troxell, 959 S.W.2d 82 (Ky. 1997).

 

KY     [U] Allstate Insurance Co. v. McDowell, No. 2002-CA-001949-MR (Ky.App. 10/10/2003)

Allstate first argues that the trial court erred when it held, in its July 11, 2002, order granting McDowell summary judgment, that Allstate did not respond within thirty days of receipt of reasonable proof of loss, in violation of KRS 304.39210. Allstate is correct. In its April 25, 2002, order denying Allstate’s motion for summary judgment, the trial court found that the thirty-day time limit did not begin to run until Allstate received the March 29, 2000, letter from Dr. Frazier which provided information linking the dental bills with the October 8, 1999, motor vehicle accident. In its July 11, 2002, order, however, the trial court inexplicably made the statement that the thirty-day time period to respond had already expired as of April 17, 2000, when Allstate began the independent review. We agree with Allstate that this statement was in error. We believe the error is harmless, however, because the court was not referencing back to February 25, 2000, (the date Allstate first received the collection of dental bills), as Allstate contends, but was merely miscalculating thirty days.

   The thirty-day period began to run after Allstate received reasonable proof that the dental bills were related to the motor vehicle accident. KRS 304.39210(1); State Automobile Mutual Insurance Co. v. Outlaw, Ky. App., 575 S.W.2d 489, 493 (1978). In its April 25, 2002, order, the trial court found that reasonable proof of loss was established when Allstate received the March 29, 2000, submissions from Dr. Frazier. It is uncontroverted that this information was received on April 3, 2000, by Allstate.

 More importantly at issue in this case, is Allstate’s argument that the trial court erred when it interpreted KRS 304.39210 as requiring an insurer to either pay or reject benefits within thirty days of receiving "reasonable proof", and that the insurer cannot investigate the claim beyond thirty days once it receives "reasonable proof." We disagree with the trial court’s conclusion that after receiving the March 29, 2000, documentation, that Allstate had only two options, to either pay or deny the claim. KRS 304.39210(1) provides that when benefits are not "paid within thirty (30) days after . . . receiv[ing] reasonable proof of the fact and amount of loss realized",the payments become overdue. See Outlaw, 575 S.W.2d 489. Thus, the relevant question is not if the benefits were paid, but were the benefits overdue.

 

KY     [U] Cox v. Allstate Insurance Co., No. 2002-CA-001159-MR (Ky.App. 07/25/2003)

 We agree with the trial court that the insurance company had a reasonable basis to withhold payment of PIP benefits until it had adequate proof that injured plaintiffs resided with the insured and that there was no material issue of fact regarding this issue. However, because the benefits were overdue pursuant to KRS 304.39210, 12% interest on the payments was owed. Hence, we affirm in part and reverse in part, and remand the matter for further proceedings.


KY     Hartley v. Geico Casualty Co., No. 2003-CA-001134-MR (Ky.App. 09/17/2004)

The same logic espoused in FB Insurance applies to the present case. KRS 304.39210 and KRS 304.39-220 contain the "prod to prevent laxity in the adjustment of claims," while the injured party is free to seek relief from "more egregious behavior" by pleading a private cause of action through KRS 446.070. Id. Therefore, the holding in Phoenix Healthcare is limited to actions brought to recover for a late payment, and has no impact on suits regarding the conduct, if any, behind the delay in payment. In conclusion, a plaintiff alleging the late payment of basic reparation benefits is still permitted to bring a private cause of action under KRS 446.070 for bad faith under the Unfair Claims Settlement Practices Act and for punitive damages when alleging bad conduct on the part of the insurance carrier.

KY     Morrison v. Kentucky Central Insurance Co., 731 S.W.2d 822 (Ky.App. 04/17/1987)

Medical expense, defined in KRS 304.39-020(5)(a), is "reasonable charges incurred for reasonably needed products, services, and accommodations, including those for medical care, physical rehabilitation, rehabilitative occupational training and other remedial treatment and care. ‘Medical expense’ may include nonmedical remedial treatment rendered in accordance with a recognized religious method of healing. . . . Medical expense shall include all healing arts professions licensed by the Commonwealth of Kentucky. There shall be a presumption that any medical bill submitted is reasonable."


KY     Phoenix Healthcare of Kentucky, L.L.C. v. Kentucky Farm Bureau Mutual Insurance Company, 120 S.W.3d 726 (Ky.App. 10/03/2003)

   Furthermore, where one statute deals with a subject matter in a general way and another in a specific way, the more specific provision prevails. See Travelers Indem. Co. v. Reker, Ky., 100 S.W.3d 756, 763 (2003). Because KRS 304.39210 specifically applies to late payments of basic reparation benefits, as opposed to the more general language of KRS 304.12-230 and -235, we hold that it governs

 

KY     [U] Foster v. Kentucky Farm Bureau Mutual Insurance Co., No. 2002-CA-002625-MR (Ky.App. 03/26/2004)

It is undisputed that Foster made inconsistent factual assertions in submitting her claims for unemployment compensation and work loss BRBs – that she was physically capable of working for purposes of unemployment compensation and that she was physically incapable of working due to the car accident for purposes of the BRB work loss claim. The determination of whether Farm Bureau had reasonable foundation to withhold or delay payment of BRBs based on that inconsistency necessarily involved the interpretation of the above statutes. It is well established that an interpretation of a statute is a matter of law to be determined by the court, not a jury. Floyd County Board of Education v. Ratliff, Ky., 955 S.W.2d 921 (1997). It has also been held that the legal implications of undisputed facts are issues of law to be decided by the court. Cobb v. King Kwik Minit Market, Inc., Ky., 675 S.W.2d 386 (1984). In Kentucky Farm Bureau Mutual Insurance Co. v. Troxell, Ky., 959 S.W.2d 82 (1997), theinsured’s self-serving evidence was adjudged to be insufficient proof of work loss pursuant to KRS 304.39210 as a matter of law. Accordingly, the lower court erred in this case in submitting the issue to the jury.


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KY     Kentucky Farm Bureau Mutual Insurance Company v. Troxell, 959 S.W.2d 82 (Ky. 11/20/1997)

In its opinion, the Court of Appeals acknowledged that the quantum of proof necessary to establish "reasonable proof of the fact and amount of loss realized" is a question of first impression in this jurisdiction. In recognizing that the proof necessary to establish a claim for lost wages is the same as that necessary to establish a claim for medical bills, KRS 304.39210(1),the court cited State Automobile Mutual Insurance Co. v. Outlaw, Ky.App., 575 S.W.2d 489 (1978), which provides:

A proof of loss is intended to provide insurance companies with an opportunity to investigate the claim and to make an intelligent estimate of the company’s rights and liabilities before becoming obligated to pay the claim…. [T]he statement of the claimant alone would not, as a matter of law, satisfy the statutory requirement of "reasonable proof of the fact and amount of loss realized." … The statute placed the burden on the claimant to provide reasonable proof of the fact and amount of loss realized.

 

KY     Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.App. 11/07/1997)

Finally, we note that as to BRB’s and ARB’s, the trial judge utilized the procedure approved in Drury v. Spalding, Ky., 812 S.W.2d 713, 716 (1991), for handling the matter of reimbursement without misleading or confusing the jury:

   "Two previous appellate decisions, Thompson v. Piasta, [Ky. App., 662 S.W.2d 223 (1983)], and Beckner v. Palmore, Ky. App., 719 S.W.2d 288 (1986), have instructed trial courts to take care of this matter by giving the plaintiff’s reparation obligor "credit" in the judgment. As stated in Beckner, "the proper procedure is to reduce the amount of the judgment at the conclusion of the trial to the extent that its award would provide a double recovery."

 This set-off after judgment is the proper method for handling both BRB’s and ARB’s.


KY     Ohio Casualty Insurance Co. v. Ray Atherton as Administrator of Estate of Mary L. Atherton, 656 S.W.2d 724 (Ky. 05/11/1983)

It is the opinion of this court that where a reparations obligor has paid the death benefits to the estate of a person killed in an accident involving a vehicle of an uninsured motorist, this death is an injury under the statute and the reparations obligor by independent action as the subrogee may seek recovery of the reasonable charges for funeral or burial expenses, not to exceed the statutory amount, against the uninsured party, his estate or such other persons against whom the action may survive. KRS 304.39-070(2); KRS 304.39-310(2); KRS 411.140.


KY     Ohio Casualty Insurance Co. v. Ruschell, 834 S.W.2d 166 (Ky. 06/04/1992)

In recognizing a rule that a tort release will not release a no-fault claim unless there is a specific designation of the no-fault claim in the tort release, we are persuaded by the reasoning of the Supreme Court of Colorado in Cingoranelli v. St. Paul Fire & Marine Ins., 658 P.2d 863 (Colo. 1983), interpreting provisions of a no-fault act substantially similar to our own. In Cingoranelli, after acknowledging . . .   "the scope of a release is determined primarily by the intent of the parties as expressed in the release instrument, considered in light of the nature of the claim and the objective circumstances underlying the execution of the instrument." Id. at 865.

 

KY     Kentucky Farm Bureau Mutual Insurance v. McQueen, 700 S.W.2d 73 (Ky.App. 11/22/1985)

In addition, the appellant challenges the propriety of the trial court’s imposition of an interest penalty upon the judgment. It was stipulated that the appellant received the proof of loss claim within the period provided under the decedent’s policy. As the claim was not paid within thirty days, it was overdue and subject to 18% interest if the delay in  The trial court found, based upon the decision in Couty, supra, that the appellant’s refusal to pay the appellees’ claim was unreasonable. We agree. The appellant claims that its refusal was in accordance with France, supra, and therefore reasonable. While France was not expressly overruled by Couty, its holding was supplemented by the latter. Given the clarify of such decision, any doubt about the effect of Couty upon prior decisions should have been resolved by the appellant in favor of the appellees. Therefore, the trial court did not err in finding that the delay was unreasonable.

 
 

KY     Holzhauser v. West American Insurance Co., 772 S.W.2d 650 (Ky.App. 06/30/1989)

Nor do we find the failure to issue a written denial directly to Holzhauser constituted a waiver. Since a suit was filed prior to the expiration of the statutory 30-day time limit, West American’s answer constituted a written denial. See KRS 304.39-210. The Civil Rules require that the answer be served upon Holzhauser’s attorney not Holzhauser personally. CR 5.02.

     Since there was no waiver, we move on to the merits. We are presented with the question of whether a general release as to all persons, and all claims executed by a plaintiff (Holzhauser) to a defendant and its liability carrier (Farmers) also releases plaintiff’s BRB carrier (West American) when no BRB has been paid prior to the release.

 

KY     State Automobile Mutual Insurance Co. v. Outlaw, 575 S.W.2d 489 (Ky.App. 11/10/1978)

 The substantive issues are interrelated and may be discussed together. Outlaw contends that State Auto is liable for 18% interest under KRS 304.39-210(2) because its delay in paying medical bills was "without reasonable foundation." State Auto asserts that it did have a "reasonable foundation" for delaying payment and that the trial court erred in granting summary judgment. State Auto argues that Outlaw failed to provide "reasonable proof of the fact and amount of loss" as required by subsection (1) of KRS 304.39-210 and that time was required to determine the amount of payments made under the state medical assistance program in order to calculate "net loss" under subsection (3) of KRS 304.39-160.

 

KY     Couty v. Kentucky Farm Bureau Mutual Insurance Co., 608 S.W.2d 370 (Ky. 09/23/1980)

"Basic and added reparation benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as work loss, replacement services loss, survivor’s economic loss, survivor’s replacement services loss, or allowable expense is incurred….

   Commissioners’ Comment –  "This Section describes what is intended to be customary practice-paying basic reparation benefits monthly as loss accrues-contrasted to the customary practice of paying tort claims in lump sum settlements or judgments…."

 
 

KRS 304.39-220 Fees of claimant’s attorney.

(1) If overdue benefits are recovered in an action against the reparation obligor or paid by the reparation obligor after receipt of notice of the attorney’s representation, a reasonable attorney’s fee for advising and representing a claimant on a claim or in an action for basic or added reparation benefits may be awarded by the court if the denial or delay was without reasonable foundation. No part of the fee for representing the claimant in connection with these benefits is a charge against benefits otherwise due the claimant.

(2) In any action brought against the insured by the reparation obligor, the court may award the insured’s attorney a reasonable attorney’s fee for defending the action.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 22, effective July 1, 1975.

 
 
ANNOTATIONS FOR THIS STATUTE:
 

Cox v. Progressive Northern Insurance Company, No. 2009-CA-000566-MR (Ky. App. 1/22/2010) (Ky. App., 2010)

   Tom Cox appeals from a judgment on the pleadings entered in favor of Progressive Northern Insurance Company on his claim that he was entitled to Pedestrian Personal Injury Protection (PIP) benefits under an insurance policy. Cox argues that: (1) the trial court erred by not accepting his factual allegations as true; (2) he is entitled to Pedestrian PIP benefits under his insurance policy; and (3) Progressive is required to pay interest and attorney’s fees pursuant to KRS 304.39-210(2) and KRS 304.39-220. After reviewing the record and briefs, we affirm.

        KRS 304.39-210(2) states that "[o]verdue payments bear interest at the rate of twelve percent (12%) per annum, except that if delay was without reasonable foundation the rate of interest shall be eighteen percent (18%) per annum." KRS 304.39-220(1) states:

If overdue benefits are recovered in an action against the reparation obligor or paid by the reparation obligor after receipt of notice of the attorney’s representation, a reasonable attorney’s fee for advising and representing a claimant on a claim or in an action for basic or added reparation benefits may be awarded by the court if the denial or delay was without reasonable foundation. No part of the fee for representing the claimant in connection with these benefits is a charge against benefits otherwise due the claimant.

        Cox was not entitled to basis PIP benefits or Pedestrian PIP benefits under the policy. Therefore, he is not entitled to interest and attorney’s fees.

 
KY     Hartley v. Geico Casualty Co., No. 2003-CA-001134-MR (Ky.App. 09/17/2004)

    This Court affirmed the lower court’s decision, citing Grzyb v. Evans, Ky., 700 S.W.2d 399, 401 (1985), as follows: "It is well settled that ‘[w]here the statute both declares the unlawful act and specifies the civil remedy available to the aggrieved party, the aggrieved party is limited to the remedy provided by the statute.’" Phoenix Healthcare, 120 S.W.3d at 727.

     The same logic espoused in FB Insurance applies to the present case. KRS 304.39-210 and KRS 304.39220 contain the "prod to prevent laxity in the adjustment of claims," while the injured party is free to seek relief from "more egregious behavior" by pleading a private cause of action through KRS 446.070. Id. Therefore, the holding in Phoenix Healthcare is limited to actions brought to recover for a late payment, and has no impact on suits regarding the conduct, if any, behind the delay in payment. In conclusion, a plaintiff alleging the late payment of basic reparation benefits is still permitted to bring a private cause of action under KRS 446.070 for bad faith under the Unfair Claims Settlement Practices Act and for punitive damages when alleging bad conduct on the part of the insurance carrier.

 

KY     Phoenix Healthcare of Kentucky, L.L.C. v. Kentucky Farm Bureau Mutual Insurance Company, 120 S.W.3d 726 (Ky.App. 10/03/2003)

      KRS 304.39-210 requires basic reparation benefits to be paid within thirty days of receipt of reasonable notice of a claim. If an insurer fails to comply with this, it will be required to pay interest on the overdue payment. KRS 304.39220 allows a claimant to recover reasonable attorney’s fees if legal assistance is required to recover payment.

 

KY     [U] Allstate Insurance Co. v. McDowell, No. 2002-CA-001949-MR (Ky.App. 10/10/2003)

    We agree with the trial court that, in this case, the insurer, Allstate, did not have a reasonable foundation for not paying the benefits after receiving the March 29, 2000, documentation from Dr. Frazier. This documentation constituted reasonable proof of the fact and amount of loss. KRS 304.39-210(1). That did not mean, however, that there could not still have been a reasonable foundation for an issue as to causation. Indeed, the failure of McDowell to list a facial injury on his "application for benefits" or to tell the chiropractor about facial injury, would give Allstate a reasonable foundation or cause to investigate. However, Allstate did not investigate the claim honestly or "reasonably"; it learned on April 3, 2000, that, on November 11, 1999, McDowell had told Dr. Frazier of injury to his mouth, and that Dr. Frazier believed that there could be a causal relationship between the dental problems and the accident. Instead of investigating the claim, which would have been reasonable, Allstate went on the defensive and sought an opinion based on "no record of injury to the mouth." Allstate then relied on this opinion (Dr. Kuhl’s), which could not consider facial injury as a cause for the dental problems, to justify denying benefits when it was aware that there was some evidence of facial injury, which Allstate knew created a real question of fact. Rather than seeking the answer, however, Allstate denied benefits.

     It was not until the independent exam by Dr. Beadle that Allstate allowed evidence of facial injury to be considered. If Allstate had asked the correct question earlier (allowing facial injury to be considered), it would have learned that it no longer had a reasonable foundation for delay, would have paid the claim earlier, and would therefore have been liable for only 12% interest on the overdue benefits.

 

KY     State Automobile Mutual Insurance Co. v. Outlaw, 575 S.W.2d 489 (Ky.App. 11/10/1978)

To encourage prompt payment of claims, the MVRA provides that a reparations obligor may be liable for the payment of 18% interest and attorney’s fees if its delay in the payment of "overdue" benefits was "without reasonable foundation." KRS 304.39-210(2) and 304.39-220(1). Whether a payment is "overdue" must be determined under KRS 304.39-210(1) which provides that the time for payment does not commence until the reparations obligor "receives reasonable proof of the fact and amount of loss realized." State Auto asserts that Outlaw failed to provide reasonable proof of loss. State Auto then reasons that no payments could be "overdue" in the absence of proof of loss and that it could not be liable for the 18% interest if no payments were overdue.

 

KY     Automobile Club Insurance Co. v. Lainhart, 609 S.W.2d 692 (Ky.App. 12/12/1980)

 It is our opinion that the assertion of a legitimate and bona fide defense by the reparation obligor constitutes reasonable foundation for delay under KRS 304.39-210 and KRS 304.39-220, and this is not changed by the fact that the case is ultimately decided against the obligor. The defense asserted herein clearly falls within this rule.

 
KY     [U] Cox v. Allstate Insurance Co., No. 2002-CA-001159-MR (Ky.App. 07/25/2003)

 The only logical interpretation of the statute is that the 12% interest penalty applies when there is an overdue payment that was reasonably delayed, and the 18% interest penalty applies when the overdue payment was not reasonably delayed. Accordingly, we reverse the lower court’s denial of 12% interest on the benefits and remand for further proceedings consistent with this opinion.

 

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KY     Kentucky Farm Bureau Mutual Insurance Co. v. Roberts, 603 S.W.2d 498 (Ky.App. 08/22/1980)

Under both statutes, the insured and the reparation obligor has specific statutory duties: the insured has the duty to provide the obligor with any medical report within his possession, as well as to provide authorization for the inspection of any relevant record of a physician or hospital; conversely, the obligor has the duty to pay a claim within thirty (30) days after it has received reasonable proof that a loss or medical expense has, in fact, occurred. Here, we believe that the appellant failed to pay the appellee’s claim within the thirty (30) day period as set forth in KRS 304.39-210(1). In the correspondence of December 28, the appellant received copies of all outstanding physicians’ bills. Additionally, the appellant was furnished with a completed medical authorization form. This would have entitled the appellant to secure from any attending physician any existing medical report relating to the appellee’s injuries not available to the appellee. In effect, we believe that the injured party has the obligation to furnish any medical reports in his hands or subsequently coming into them, but that the duty to search out or to have reports prepared, as well as the duty to ascertain that the medical bills are

 

KY     Moore v. Roberts, 684 S.W.2d 276 (Ky. 12/14/1982)

    KRS 304.39-220 allows a reasonable attorney’s fee to be awarded if the denial or delay of benefits from the reparations obligor was without reasonable foundation. The trial court held that the delay of payments to Lisa Roberts by Farm Bureau was unreasonable, and a fee was assessed against Farm Bureau. This decision was affirmed on appeal in Kentucky Farm Bureau Mutual Insurance Company v. Roberts, Ky. App., 603 S.W.2d 498 (1980). Subsequently, the trial court imposed an additional attorney’s fee to cover the representation on that appeal.

    Appellant argues that its constitutional right to an appeal cannot be subjected to an assessment of damages on the first appeal as a matter of right contemplated by Section 115 of the Constitution of Kentucky. See KRS 264A.300(1).

   KRS 304.39-220 provides for a penalty of reasonable attorneys fees "on a claim or in an action for basic or added reparation benefits . . . if the denial or delay was without reasonable foundation." The only issue of that appeal was the reasonableness of the delay. Until that issue is fully resolved either through the appellate process or through failure to perfect an appeal, the appellee has no basis upon which to enforce her judgment. Had the Court of Appeals determined that the delay was not unreasonable, then the appellee would not have been able to collect any additional attorney’s fees.

    The award of the additional fee is not, as suggested by Farm Bureau, a penalty imposed upon its right to appeal, but rather an item of monetary damages allowed by the legislature due to the continuing representation upon the issue of reasonableness. An appeal is always at one’s own peril. Clearly KRS 304.39-220 envisages that the fee shall attach to the logical and legal conclusion of litigation.

   Therefore, since a portion of this appeal relates to that same issue, the trial court may permit additional attorney’s fees for this appeal proportionate with this issue as to the overall appeal.

 
 

KRS 304.39-230 Limitations of actions.

(1) If no basic or added reparation benefits have been paid for loss arising otherwise than from death, an action therefor may be commenced not later than two (2) years after the injured person suffers the loss and either knows, or in the exercise of reasonable diligence should know, that the loss was caused by the accident, or not later than four (4) years after the accident, whichever is earlier. If basic or added reparation benefits have been paid for loss arising otherwise than from death, an action for further benefits, other than survivor’s benefits, by either the same or another claimant, may be commenced not later than two (2) years after the last payment of benefits.

(2) If no basic or added reparation benefits have been paid to the decedent or his survivors, an action for survivor’s benefits may be commenced not later than one (1) year after the death or four (4) years after the accident from which death results, whichever is earlier. If survivor’s benefits have been paid to any survivor, an action for further survivor’s benefits by either the same or another claimant may be commenced not later than two (2) years after the last payment of benefits. If basic or added reparation benefits have been paid for loss suffered by an injured person before his death resulting from the injury, an action for survivor’s benefits may be commenced not later than one (1) year after the death or four (4) years after the last payment of benefits, whichever is earlier.

(3) If timely action for basic reparation benefits is commenced against a reparation obligor and benefits are denied because of a determination that the reparation obligor’s coverage is not applicable to the claimant under the provisions on priority of applicability of basic reparation security, an action against the applicable reparation obligor or the assigned claims bureau may be commenced not later than sixty (60) days after the determination becomes final or the last date on which the action could otherwise have been commenced, whichever is later.

(4) Except as subsections (1), (2), or (3) of this section prescribe a longer period, an action by a claimant on an assigned claim which has been timely presented may be commenced not later than sixty (60) days after the claimant received written notice of rejection of the claim by the reparation obligor to which it was assigned.

(5) If a person entitled to basic or added reparation benefits is under legal disability when the right to bring an action for the benefits first accrues, the period of his disability is a part of the time limited for commencement of the action.

(6) An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 23, effective July 1, 1975.

 

Riggs v. State Farm Mut. Auto. Ins. Co. (Ky. App., 2013) 2012-CA-000354-MR July 19, 2013

Riggs asserts the circuit court erred as a matter of law when it found the two-year contractual limitation clause in his insurance policy with State Farm to be reasonable, and because it is, in fact, unreasonable, it is invalid. He argues, therefore, that the fifteen-year statute of limitations for general actions on written contracts, set forth in … (KRS) 413.090, should apply. We agree and hold that the circuit court erred when it declared Riggs’ claim for UIM benefits to be time-barred.

Second, absent a valid and enforceable – that is, reasonable – contractual limitation, the "fifteen-year statute of limitations for general actions on a written contract" set forth in KRS 413.090(2), rather than the two-year tort statute of limitations in KRS 304.39-230(6), controls. Gordon, 914 S.W.2d at 332-33; Kentucky Farm Bureau Mut. Ins. Co. v. Ryan, 177 S.W.3d 797, 801 (Ky. 2005). Unless a reasonable contractual provision provides otherwise, the limitations period for a contractual UM or UIM benefits claim is fifteen years. Gordon, 914 S.W.2d at 333.

Riggs asserts that Kentucky’s appellate courts have not yet spoken on the precise issue of whether a two-year contractual limitation is reasonable. Consequently, Riggs relies upon the decision of the United States District Court for the Western District of Kentucky in Brown v. State Auto, 189 F. Supp. 2d 665 (W.D. Ky. 2001), in which the district court held that a two-year "contractual limitation on bringing underinsured motorist benefits claims is unreasonable and therefore invalid." Id. at 670.

….However, in Gordon, our Supreme Court found "it illogical to adopt a general rule which would require a plaintiff to sue his own insurer before discovering whether or not the tort-feasor is in fact an uninsured [or underinsured] motorist." 914 S.W.2d at 332 (emphasis added). A contractual limitation clause that parrots the language of KRS 304.39-230(6), like the one in Pikeand in this case, might very well require the insured to do just that – to bring suit against his insurer before discovering whether the tortfeasor is uninsured or underinsured.

…….. While, of course, a tortfeasor or his insurance carrier may freely notify the injured party of the tortfeasor’s liability policy limits, we know of no statute or procedural rule that compels a tortfeasor or his insurance company to do so absent a proper discovery request.

 

[U] Beaumont v. Muluken (Ky. App., 2013)  2012-CA-000660-MR  June 28, 2013

MOORE , JUDGE: Bonita Beaumont appeals the Jefferson Circuit Court’s dismissal of her personal injury claims against Muluken Zeru in this automobile accident case. At issue is whether Beaumont’s complaint was timely filed under … (KRS) 304.39-230(6), which specifies in pertinent part  that a tort action must be filed within two years after the last payment made by a reparations obligor.

The pertinent provision of the Kentucky Motor Vehicle Reparations Act, (KMVRA) provides that "[a]n action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs." KRS 304.39-230(6). Thus, if the last payment made was the August 13, 2009, check to Jewish Hospital, Beaumont’s action is barred as untimely; if it was the reissue of the check on September 25, 2009, her action may proceed.

Beaumont argues that the two-year period should be calculated from the date the bank honors the insurer’s check. She contends that this approach is in keeping with the principles of the Uniform Commercial Code (UCC), which provides that "[a] check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it." KRS 355.3-408. Beaumont also relies on a pre-UCC opinion which states that "[t]o constitute in law a payment by check, the check must be accepted and actually paid by the bank upon which it is drawn." Breathitt County Bd. of Educ. v. Cockrell, 38 S.W.2d 660, 662 (Ky. App. 1931).

Beaumont acknowledges that the adoption of such an approach would directly conflict with well-established precedent, which states that payment for purposes of KRS 304.39-230(6) occurs when the insurer issues the check. "[T]he date the PIP provider made the last payment to the medical service provider begins the running of the two-year statute of limitations. In other words, the date the PIP provider issued the check is the date the PIP provider ‘made’ the payment." Wilder v. Noonchester, 113 S.W.3d 189, 191 (Ky. App. 2003)

We see no reason to abandon this precedent. We are bound by the principle of stare decisis, which ensures that the law will "develop in a principled and intelligible fashion" rather than "merely change erratically." Chestnut v. Commonwealth, 250 S.W.3d 288, 295 (Ky. 2008). Adopting the approach advocated by Beaumont would place an additional burden upon the trial courts by requiring them to delve into banking records to ascertain when a check was actually paid.

 

Hampton v. Watkins (Ky. App., 2013) 2012-CA-000005-MR February 1, 2013

In this case, the trial court granted Watkins’s motion for summary judgment because the Hamptons failed to file their complaint within the required statutory time frame. … (KRS) 304.39-230(6) provides that "[a]n action for tort liability . . . may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever occurs later." The Hamptons argue that because they received the last medical pay insurance payment on March 7, 2011, their complaint was filed in a timely fashion. However, the court agreed with Watkins that because the accident occurred in October 2008 – nearly two-and-one-half years prior to filing the lawsuit – it was untimely.

        The Hamptons’ argument is that the medical pay insurance is equivalent to the basic and added reparation payments referred to in KRS 304.39-230(6), which toll the statute of limitations. The Supreme Court of our state has addressed this issue, however, and has held unequivocally that medical pay insurance does not toll the time frame. Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52, 61 (Ky. 2000).

 
 
Cole v. Fagin (Ky. App., 2013)  2012-CA-000797-MR  April 19, 2013

Without filing answers, Grange and Fagin moved to dismiss Cole’s claims pursuant to the applicable statutes of limitations described in Kentucky’s no-fault insurance law, i.e., the Motor Vehicle Reparations Act (MVRA), Kentucky Revised Statute (KRS) 304.39-010 et seq. KRS 304.39-230(1), which is the MVRA’s statute of limitations relating to unpaid claims for BRBs, provides:  

If no basic or added reparation benefits have been paid for loss arising otherwise than from death, an action therefor may be commenced not later than two (2) years after the injured person suffers the loss and either knows, or in the exercise of reasonable diligence should know, that the loss was caused by the accident, or not later than four (4) years after the accident, whichever is earlier. If basic or added reparation benefits have been paid for loss arising otherwise than from death, an action for further benefits, other than survivor’s benefits, by either the same or another claimant, may be commenced not later than two (2) years after the last payment of benefits.

Similarly, KRS 304.39-230(6), the MVRA’s statute of limitations relating to tort claims, provides:

An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.

In sum, both limitations periods either begin with the date of the claimant’s injury or with the date the claimant receives her last payment of BRBs, whichever is later.

 

Abel v. Austin (Ky., 2013) 2010-SC-000426-DG October 24, 2013

We confronted a similar question in Troxell v. Trammell, 730 S.W.2d 525 (Ky. 1987), where the issue was whether a motorcyclist’s claim for negligence against the operator of a pickup truck was governed by the two-year limitation established by the Motor Vehicle Reparations Act (KRS 304.39-230(6)) or the one-year personal injury statute of limitations (KRS 413.140(1)(a)). There, we found no indication that the General Assembly intended to create two different statutes of limitations for the same conduct negligently causing personal injury in a vehicular collision. Troxell, 730 S.W.2d at 528. In the same vein, we see no reason to believe that the General Assembly intended to subject claims of attorneys’ misconduct to two different limitations periods. More significant is the express language of KRS 413.245. Its opening clause, "Notwithstanding any other prescribed limitation of actions which might otherwise appear applicable," plainly evinces a legislative intent to rule out the application of other statutes of limitations.

 
 
Frost v. Dickerson (Ky. App., 2012) – April 19, 2012 – 2010-CA-000537

NICKELL, JUDGE: Nancy A. Frost and Glen F. Frost appeal from a Boone Circuit Court order dismissing Nancy’s action for damages and Glen’s action for loss of consortium in this personal injury case stemming from an automobile accident. At issue is whether the "discovery rule" tolls the limitations period for bringing a tort action under Kentucky’s Motor Vehicle Reparations Act ("MVRA"), KRS 304.39-230. We hold that it does not, and, therefore, we affirm.

 

Hammers v. Plunk (Ky. App., 2011) October 21, 2011 2010-CA-000279

After the case was filed in circuit court, the defendants Joe Plunk, et al., filed a motion to dismiss the complaint, arguing that the statute of limitations for a wrongful death action was, at the most, two years. In answer, Hammers, et al., filed a response asserting that the correct statute of limitations under KRS 304.39-230(6) is two years from the receipt of the last basic reparations benefit under the Motor Vehicle Reparations Act ("MVRA").

Thereafter, upon consideration of same, the trial court denied Joe Plunk’s, et al.’s motion to dismiss and held that the two-year limitations period under the MVRA, which runs from the date of the last reparations payment, was the applicable limitations period.Approximately four months later, this Court handed down its decision in Wagoner v. Bradley, supra, applying the one-year statute of limitations found in KRS 44.110 to an action filed in circuit court against individual state employees, as in the present case. 

We agree that Wagoner was wrongly decided and, therefore, reverse the circuit courts’ respective dismissals with prejudice in each of the cases herein, hereby overruling our prior holding in Wagoner that KRS 44.110 applies to actions originating in circuit court.

The appellants aver they are entitled to bring an action against individual state employees in circuit court for the negligent performance of ministerial acts under Yanero v. Davis, 65 S.W.3d 510 (Ky. 2001). The appellants further argue that the maintenance of Kentucky’s roadways is a ministerial act under Estate of Clark ex rel. Mitchell v. Daviess County, 105 S.W.3d 841 (Ky. App. 2003). Thus, according to the appellants, their cases are governed by the Kentucky MVRA. The relevant statutory limitations period under the MVRA, found in KRS 304.39-230(6), reads as follows:

An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.

In such a situation, it is within the court’s power to find that a statute has been equitably tolled. Nanny v. Smith, 260 S.W.3d 815, 817 (Ky. 2008) (Plaintiff should not be punished for clerk’s failure to perform duties mandated by statute and court rule.); Ward v. Howard, 177 Ky. 38, 197 S.W. 506, 510 (1917) (Clerk cannot deliberately absent himself or close his office to thwart procedure.); Prewitt v. Caudill, 250 Ky. 698, 63 S.W.2d 954, 958-59 (1933) (Clerk cannot deliberately absent himself or close his office to thwart procedure.); Hagy v. Allen, 153 F.Supp. 302 (E.D. Ky. 1957) (Good faith should be considered, especially when paired with circumstances plaintiff could not control). Further, the clerk’s doors are said to "be deemed always open," although here the doors were closed – literally. Kentucky Rules of Civil Procedure ("CR") 77.01. Accordingly, we do not disturb the trial court’s prior ruling, and Hammers, et al., may proceed with their case at trial.

Accordingly, we reverse and remand in both cases for further proceedings consistent with this opinion.

 
Interlock Indus., Inc. v. Rawlings, 358 S.W.3d 925 (Ky., 2012) – Oct. 27, 2011.Rehearing Denied Feb. 23, 2012
 
Summaries: Source: Justia

Charles Rawlings suffered injuries as he was rolling straps beside his tractor-trailer while it was being unloaded. Thirteen months after the accident, Rawlings filed an action against Defendants, his employer and the companies involved in loading and unloading the trailer. The trial court granted summary judgment in favor of Defendants and dismissed the action based on the one-year statute of limitations for personal injury claims in Ky. Rev. Stat. 413.140(1)(a). The court of appeals reversed, applying the two-year statute of limitations in the Motor Vehicle Reparations Act. At issue on appeal was whether Rawlings was in fact unloading his truck at the time of the accident, which would determine whether the one- or two-year statute of limitations applied. The Supreme Court reversed, holding (1) Rawlings’s activity in releasing the straps and rolling them qualified him as a participant in the unloading process; and (2) therefore, the trial court correctly applied the one-year personal injury statute of limitations found in section 413.140(1)(a). Remanded.

 

Discretionary review was granted in these three appeals, which arose from a single case in Shelby Circuit Court. We reviewed and heard the appeals together to decide a common issue: whether the one-year personal injury statute of limitations (KRS 413.140(l)(a)) or the two-year Motor Vehicle Reparations Act (MVRA) statute of limitations (KRS 304.39-230(6)) applies to an action for the injuries suffered by Charles Rawlings as he was rolling straps beside his tractor-trailer as it was being unloaded.

We opine that Rawlings’ activity in releasing the straps and rolling them qualifies him as a participant in the unloading process. Therefore, for the reasons previously stated, the trial court correctly applied the one-year personal injury statute of limitations found in KRS 413.140(l)(a). …

Accordingly, the opinion of the Court of Appeals is reversed, and the order of the Shelby Circuit Court is hereby reinstated.

 

Graham v. Heine, No. 2008-CA-001128-MR (Ky. App. 12/11/2009) (Ky. App., 2009)

      Viewing the facts most favorable to Graham, it appears that Kentucky Farm Bureau erroneously paid Graham $246.90 as lost income from her BRB coverage. Rather than reimbursing Graham for lost income, she wanted Garnett Chiropractic Center to be paid such sum. Upon discovering the error, Graham reimbursed Kentucky Farm Bureau the $246.90 and directed Kentucky Farm Bureau to issue a BRB payment of $246.90 to Garnett Chiropractic Center. Kentucky Farm Bureau then issued the $246.90 as a BRB payment on March 20, 2008.

        Under KRS 304.39-230(6), the limitation period is triggered upon payment of the "last" BRB. We believe the "last" BRB payment was made by Kentucky Farm Bureau on January 5, 2006, when Graham’s BRB coverage was depleted. To hold otherwise would allow the statute of limitations in KRS 304.39-230(6) to be unfairly manipulated by a BRB payee. It is conceivable that a BRB payee could simply "reimburse" the reparation obligor for a prior BRB payment in order to artificially extend the statute of limitations period. Such was certainly not the intent of the General Assembly when enacting KRS 304.39-230(6). Thus, we hold that the January 5, 2006, BRB payment was the last BRB payment made within the meaning of the statute of limitations in KRS 304.39-230.

    In sum, we conclude that Graham untimely filed her tort action under KRS 304.39-230(6) and that the circuit court properly rendered summary judgment dismissing same.

        For the foregoing reasons, the summary judgment of the McCracken Circuit Court is affirmed

 
Mattingly v. Commonwealth, No. 2008-CA-000610-DG (Ky. App. 4/24/2009) (Ky. App., 2009)

    Tiffany Mattingly appeals from a judgment of the Grayson Circuit Court affirming a district court judgment entered pursuant to a conditional guilty plea on the charge of operating a motor vehicle under the influence of alcohol (DUI). The sole issue before this Court is whether a golf cart operating on a platted subdivision road constitutes a "motor vehicle" for purposes of KRS 189A.010. We affirm.

      Mattingly maintains that she cannot be convicted under KRS 189A.010 because a golf cart is not a "motor vehicle" when it is not operated on a "public highway." Because KRS 189A.010, the statute under which she was charged, does not contain a definition of "motor vehicle," Mattingly argues that this Court should adopt the definition of "motor vehicle" found in KRS 189.010(19). Under that statute, a motor vehicle is a motorized transportation agent used for the purpose of transporting people or property over or upon the public highways of the Commonwealth. Mattingly claims that this definition exempts golf carts because they are not legally driven on public roadways under KRS 186.010. Further, Mattingly cites Kenton County Public Parks Corp. v. Modlin, 901 S.W.2d 876 (Ky. App. 1995), in which this Court held that a golf cart driven on a golf course fairway is not a "motor vehicle" under KRS 304.39-230, the Motor Vehicle Reparations Act (MVRA). We decline to apply either the definition found in KRS Chapter 189 or the MVRA.

 

Zink v. Estate of Pierson, No. 2008-CA-002111-MR (Ky. App. 9/11/2009) (Ky. App., 2009)

    Evelyn M. Zink appeals from orders of the Kenton Circuit Court dismissing her negligence action for failure to revive the action as required by KRS 395.278 and because a direct action will not lie against appellee, Progressive Casualty Insurance Company. Zink argues that: (1) KRS 395.278 and Kentucky Rules of Civil Procedure (CR) 25.01 do not apply to her cause of action because the defendant died before suit was filed; (2) KRS 304.39-230(6) applies to the circumstances of her case; (3) CR 15 permits the relation back of her amended complaint to her original complaint; (4) she was entitled to maintain a direct action against Progressive; (5) she was permitted to stack basic reparation benefits; and (6) she was entitled to receive a response to her discovery request before the trial court considered the motion to dismiss. After reviewing the record and briefs, we affirm in part, reverse in part, and remand for further proceedings.

        On April 29, 2005, Zink was crossing the intersection of Dixie Highway and Main Street in Erlanger, Kentucky. As she was crossing the intersection, Zink was struck by an automobile driven by Pierson, which was insured by Progressive. Subsequently, Zink and Progressive entered into settlement negotiations. The negotiations were unsuccessful and Zink filed suit against Pierson on April 6, 2007.

   Pierson died on October 15, 2006. Zink did not file suit until April 6, 2007. Upon the return of service, she learned of Pierson’s death. Therefore, because the suit was filed after Pierson’s death, there was no action to revive. Similarly, the plain language of CR 25.01 does not apply to the circumstances of this case because Pierson did not die during the pendency of the action; he died prior to the filing of suit. We find that the trial court erred by dismissing the claim against the estate of Pierson pursuant to KRS 395.278.

 

Carroll v. National Casualty Company, No. 2008-CA-000244-MR (Ky. App. 2/13/2009) (Ky. App., 2009)

  On November 6, 2001, Carroll was a passenger in a car being driven by his wife on Interstate 75. Carroll, who was not wearing a seat belt, was lying on the back seat when the car was struck by a truck. The truck was owned by Dallas Benge Trucking and was being driven by its employee, Philip Cathers. Dallas Benge was insured by National Casualty. Carroll, who suffered serious head, neck and back injuries in the accident, hired an attorney, C. Wayne Shepherd, to pursue his claims against Cathers and Dallas Benge. Shepherd negligently failed to file suit on Carroll’s behalf within the applicable statutory limitations period, which ended on June 29, 2004, two years after Carroll’s receipt of his last personal injury protection payment (PIP). See KRS 304.39-230(1). Consequently, Carroll’s claims against Dallas Benge were permanently barred.

     On June 20, 2006, Carroll filed a complaint in Laurel Circuit Court against Shepherd, alleging breach of contract and negligence, and against National Casualty, alleging that the company had acted in bad faith and had violated the Unfair Claims Settlement Practices Act (KRS 304.12-230) in its handling of his claim against Dallas Benge. Carroll obtained a default judgment against Shepherd on October 17, 2006. The trial court ordered the legal negligence claim against Shepherd to be bifurcated, for purposes of trial, from the bad faith claim against National Casualty. It further ordered that the results of the malpractice case would not be binding nor have any precedential impact on National Casualty. At the malpractice trial, the jury was instructed to award Carroll such damages as he was entitled to recover from the injuries he sustained in the accident. The jury awarded $609,793.81 for past and future medical expenses; lost income; loss of ability to labor and earn money; and physical pain and mental suffering. On November 7, 2007, National Casualty moved for summary judgment on the bad faith claims made by Carroll. The motion was granted on January 11, 2008. This appeal followed.

     In our view, this appeal can be resolved on narrower grounds. We agree with the trial court that there was no genuine issue of material fact regarding National Casualty’s behavior during the period following the accident that could support the Wittmer elements. Carroll never demanded a settlement from National Casualty, nor did National Casualty ever deny his claim. As National Casualty has outlined at some length, there were many unresolved factual disputes regarding liability in this accident. And, as the trial court noted, Carroll’s own attorney delayed in contacting National Casualty because of uncertainty regarding Carroll’s future medical expenses. There was simply no evidence, even though extensive discovery was taken, that National Casualty acted unreasonably or recklessly in this matter.

        The summary judgment of the Laurel Circuit Court is therefore affirmed.

 

Gilbert v. Nationwide Mut. Ins. Co., 275 S.W.3d 690 (Ky., 2009)

   Notwithstanding Reliance’s assurances, Schindler was eventually obliged to bring suit against Prime for her personal injury damages. Gilbert did not join her property damage claim to her daughter’s suit, but assumed that her loss would be paid once her daughter’s claim had been resolved. Schindler’s personal injury claim was not settled until December 2003, more than two years after the May 2000 accident. When Gilbert then demanded reimbursement for the destruction of her vehicle, Prime asserted the statute of limitations and repudiated her claim. Gilbert was then permitted to intervene in her daughter’s suit against Prime and also made a collision damage claim under her own policy with Nationwide. Nationwide, too, refused to pay, whereupon Gilbert joined it as a party to her suit against Prime.

        In separate orders entered July 26, 2005, the Jefferson Circuit Court granted summary judgment to both Prime and Nationwide. The trial court ruled that Gilbert’s claim against Prime was barred by the two-year statute of limitations applicable to tort actions arising from the use of a motor vehicle. KRS 304.39-230. Gilbert’s claim against Nationwide was foreclosed, the court ruled, by a policy provision requiring Gilbert "to do nothing to prejudice" Nationwide’s subrogation rights. Gilbert had prejudiced those rights, the court concluded, by allowing the lapse of her (and hence her subrogee’s) property damage claim against Prime.

     In sum, the subrogation clause in Gilbert’s insurance contract required her to "do nothing to prejudice" Nationwide’s subrogation right, but it did not relieve Nationwide of its duty to protect itself, nor did it require Gilbert to act affirmatively on Nationwide’s behalf. In this case, Gilbert’s prompt notice of her loss satisfied her contractual duty. By its terms the subrogation clause did not require Gilbert to bring suit against the tortfeasor, and her mere failure to do so within the limitations period cannot, therefore, be deemed a contract violation barring her recovery of collision benefits. Accordingly, we reverse [275 S.W.3d 694] that portion of the December 22, 2006 Opinion of the Court of Appeals upholding summary judgment in favor of Nationwide and remand to the Jefferson Circuit Court for additional proceedings consistent with this Opinion.

 

KY [U] Nathan v. St. Luke Hospitals, Inc., No. 2003-CA-001389-MR (Ky.App. 12/17/2004) .

Nathan contends that the circuit court erroneously applied the one-year statute of limitations contained in KRS 413.140(1)(e) rather than the two-year statute of limitations contained in KRS 304.39230(6), a section of the Motor Vehicle Reparations Act (MVRA). We agree with Nathan that the circuit court incorrectly applied KRS 403.140(1)(e).

 

KY     Wilder v. Noonchester, 113 S.W.3d 189 (Ky.App. 08/01/2003)

 Under KRS 304.39230, a provision of the Motor Vehicles Reparations Act, if reparation benefits, such as PIP payments, have been paid, an action for further benefits "may be commenced not laterthan two (2) years after the last payment of benefits." Thus, KRS 304.39230 extends the limitations period from the one-year statute of limitations for personal injury actions to "two years for actions ‘with respect to accidents occurring in this Commonwealth and arising from the ownership, maintenance or use of a motor vehicle,’ when not ‘abolished’ by the Act[.]" Bailey v. Reeves, Ky., 662 S.W.2d 832, 833 (1984) (citing the Motor Vehicle Reparations Act, KRS Chapter 304, Subtitle 39). Moreover, KRS 304.39-230 would be applicable to Wilder’s cause of action against the Noonchesters even though, as owners of the land, they are nonmotorists. See id. at 835. Accordingly, the date the PIP provider made the last payment to the medical service provider begins the running of the two-year statute of limitations. See Lawson v. Helton Sanitation, Inc., Ky., 34 S.W.3d 52, 57 (2000). In other words, the date the PIP provider issued the check is the date the PIP provider "made" the payment. See id. at 56-7.

 

KY     Holbrook v. Lexmark International Group, Inc., 65 S.W.3d 908 (Ky. 09/27/2001)

The claimant asserts that Crenshaw v. Weinberg, Ky., 805 S.W.2d 129 (1991) supports her argument that the entire claim was timely, but we are not persuaded that it does. Crenshaw involved the interplay of two provisions of the Motor Vehicle Reparations Act. KRS 304.39230(l) provided that an action for no-fault benefits must be filed within two years of the date of "loss" or four years of the date of "accident," whichever was earlier.

 KRS 304.39230(6) provided that an action for tort liability must be commenced with two years after the injury, death, or last reparation payment, "whichever later occurs." The plaintiff filed a no-fault claim more than two years after the accident, but it was timely under subsection (1) because it was filed within two years of the loss that was claimed and within four years of the accident. Within four years after the accident, the defendant’s carrier made a reparation payment, after the plaintiffs tort action was filed. The defendants argued that the tort claim was barred by limitations because no reparation payment was made within two years after the accident. We explained, however, that the plain language of subsection (6) provided that the "later" event triggered the period of limitations for filing a tort action. There, the later event was a reparation payment that was made pursuant to a timely filed claim for no-fault benefits. Thus, because the no-fault claim was timely and resulted in a reparation payment, the tort limitations period was tolled by the reparation payment on that claim. Had the no-fault claim not been timely, no reparation payment would have been required, and none was likely to have been made. Thus, the tort limitations period would not have been tolled.

KY     [U] Harralson v. Monger, No. 2004-CA-000078-MR (Ky.App. 11/12/2004)

 KRS 304.39230(6) provides that a plaintiff who has rejected no fault limitations must commence an action for tort liability within two years of the injury. An amended pleading relates back to the date of the original pleading only if it satisfies CR 15.03

KY     [U] Hamlett v. Cowell, No. 2003-CA-001146-MR (Ky.App. 06/11/2004)

       In Gailor, the plaintiff filed a personal injury claim stemming from a two-car accident against the tortfeasor who, unbeknownst to the plaintiff, was deceased at the time the action was filed. Like in the present case, the plaintiff filed the action within the two-year statute of limitations in KRS 304.39230(6), but didn’t learn of the defendant’s death until after expiration of the limitations period. Upon learning the defendant had died, the plaintiff had an administrator appointed for the defendant’s estate and thereafter filed an amended complaint substituting the administrator of the estate as the defendant. The defendant’s insurer was not given notice of the action until after expiration of the two-year limitations period, and the insurer was never named a party in an amended complaint. The Gailor Court held that the action was barred by the statute of limitations because the original complaint did not confer jurisdiction over the matter since the only then named defendant was deceased. The Court also held there could be no relation back via the amended complaint under CR 15.03(2) since the administrator of the estate did not exist as a legal entity at the time the original complaint was filed and thus could not have had notice of the action.

        Hamlett points to the language in section (2)(b) of the above statute as confirmation that the Legislature intended for the decedent’s insurer to be sued and not be subject to the two-year limitation period in section (1) of that statute. However, we would note that section (2)(b) still refers to establishing the liability of the "decedent or the personal representative." Moreover, Hamlett seems to ignore the provision in section (1) which limits its applicability to claims "not barred earlier by other statute of limitations." Since Hamlett’s claim was already barred by the limitations period in KRS 304.39230(6) for claims arising out of motor vehicle accidents, KRS 396.011 would not apply.

[38]    The lower court in the present case also correctly noted that, in any event, the insurer could not be the real party in interest in this case because a plaintiff in a personal injury case in Kentucky cannot sue the tortfeasor’s insurer directly in the original action to recover for the injuries caused by the tortfeasor. See State Automobile Mutual Ins. Co. v. Empire Fire & Marine Ins. Co., Ky., 808 S.W.2d 805 (1991); Cuppy v. General Accident Fire & Life Assurance Corp., Ky., 378 S.W.2d 629 (1964). The proper party to be sued where the tortfeasor has died is the administrator of the decedent’s estate. In Gailor, the Court likewise acknowledged that the administrator of the estate was the proper defendant:

   In this case, Appellee did not sue the proper defendant; and the proper defendant (the administrator) could not have had notice within the period of limitations, because he had not yet been appointed.

 

KY     O’Keefe v. North American Refractories, 78 S.W.3d 760 (Ky.App. 05/31/2002)

O’Keefe argues that a forklift should be considered a "motor vehicle" for purposes of the MVRA. However, in Kenton County Public Parks Corporation v. Modlin, this Court specifically held that: [A] golf cart operated on a golf course fairway is not a motor vehicle contemplated by KRS 304.39230. A motor vehicle under MVRA (KRS 304.39-020(7)) is defined as any vehicle "which transports persons or property upon the public highways of the Commonwealth." While a golf cart is capable of transporting persons or property upon a public highway and conceivably could be construed as a motor vehicle for purposes of applying MVR, the particular golf cart herein was not being operated upon a public highway at the time and, therefore, was not covered within the Act.

  Similarly, in Manies v. Croan, this Court held that an all-terrain-vehicle (ATV) is prohibited from operation on public highways and therefore cannot be considered a "motor vehicle" for purposes of the MVRA. In both cases, this Court concluded that causes of action arising from the use of these vehicles are governed by the one-year statute of limitations contained in KRS 413.140, rather than the more generous limitations period provided by the MVRA


KY     Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52 (Ky. 10/26/2000)

Lawson first accuses Farm Bureau of intentionally manipulating the statute of limitations so as to deprive him of his cause of action against Helton by characterizing reparation payments defined within the MVRA, i.e., KRS 304.39-020(2) and/or KRS 304.39-140, as Med-Pay payments which, of course, are not governed by any provision of the MVRA. In support of this proposition, Lawson cites cases which hold that a policy of insurance cannot abrogate a mandatory provision of the MVRA, m, State Farm Mut. Auto. Ins. Co. v. Mattox, Ky., 862 S.W.2d 325 (1993) ("anti-stacking" provision with respect to ARB coverage cannot be enforced against the named insured); Elkins v. Kentucky Farm Bureau Mut. Ins. Co., Ky. App., 844 S.W.2d 423 (1992) (insurance contract cannot establish a lesser period of limitations for bringing an action for BRB payments than that established by KRS 304.39230(6)). Of course, those cases have no relevance here, because Farm Bureau has attempted neither to "abrogate" a coverage mandated by the MVRA nor to enforce a contractual period of limitations of lesser duration than that established by KRS 304.39230(6).


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KY     Worldwide Equipment Inc. v. Mullins, 11 S.W.3d 50 (Ky.App. 04/16/1999)

It is Worldwide’s contention that the amended complaint is barred by KRS 413.140(a), the statute of limitations governing wrongful death actions. Worldwide mistakenly relies upon Gray v. State Farm Mut. Auto. Ins. Co., Ky. App., 605 S.W.2d 775 (1980), wherein this Court opined that KRS 304.39230(1) and (6) "applies only to injured persons or those who are entitled to survivor’s benefits in determining when they must bring an original action." Id. at 776. Worldwide interprets this holding as limiting the two-year statute of limitations to only the injured party or one entitled to reparations benefits. We disagree.

       Worldwide misconstrues the holding in Gray as "limiting" application of the statute (KRS 304.39230) to only those entitled to survivor’s benefits. Contrary to Worldwide’s understanding, this Court intended the holding in Gray to direct the statute’s limitation period be applicable to a "limited" class of persons.

 

KY     Milby v. Wright, 952 S.W.2d 202 (Ky. 09/04/1997)

We agree with the Court of Appeals that the claim for payment is subject to the limitation set forth in KRS 304.39230 (1). To hold otherwise would allow the potential plaintiff to hold the alleged tortfeasor hostage by the leisured submission of medical claims, thereby forestalling the running of the statute of limitations. One of the purposes of the Motor Vehicle Reparations Act (MVRA) was to simplify and speed up the process by which medical bills and other losses resulting from vehicular accidents are reimbursed, without resorting to litigation, thereby providing certainty at a time of need for those involved. Crenshaw v. Weinberg, Ky., 805 S.W.2d 129, 132 (1991); KRS 304.39-010(5). Analogous to the rights bestowed upon the injured person is the right of the other party to, eventually and within a time period that can be easily determined, be free of the possibility of becoming the target of litigation. It is that right that the time limitations of the MVRA are designed to provide.

 

KY     Gordon v. Kentucky Farm Bureau Insurance Co., 914 S.W.2d 331 (Ky. 10/19/1995)

Although [KRS 304.39230] does not specifically refer to suing one’s insurance carrier for uninsured or underinsured benefits, it makes no sense to allow two years (or more) to file a Suit against an uninsured or underinsured tort-feasor and yet permit the insurer to escape liability if the suit involving it is not filed within one year. Such would not only be an unreasonably short time, but it would completely frustrate the no-fault insurance scheme.

  We find no merit in [appellee’s] argument that uninsured motorist coverage does not fall within the two-year limit allowed by KRS 304.39230(6). . . . KRS 304.20-020 simply requires an insurer to offer uninsured motorist coverage as part of the contract. Otherwise, the provisions in Subtitle 39 control.

 

KY     Elkins v. Kentucky Farm Bureau Mutual Insurance Co., 844 S.W.2d 423 (Ky.App. 05/22/1992)

In invalidating a one-year contract limitation requiring that an uninsured motorist claim be commenced within 12 months of the date of the loss, we join the majority of states who have addressed the issue. See Scalf v. Globe American Casualty Co., 442 N.E.2d 8 (Ind. Ct. App. 1982); Sandoval v. Valdez, 91 N.M. 705, 580 P.2d 131 (1978); Signal Insurance Co. v. Walden, 10 Wash. App. 350, 517 P.2d 611 (1973); Burgo v. Illinois Farmers Insurance Co., 8 Ill. App. 3d 259, 290 N.E.2d 371 (1972); Nixon v. Farmers Insurance Exchange, 56 Wis. 2d 1, 201 N.W.2d 543 (1972); but see Colvin v. Globe American Casualty Co., 69 Ohio St. 2d 293, 432 N.E.2d 167 (1982).

   We find persuasive the reasoning of the court in Scalf, supra in which it held that the one-year limitation in the uninsured motorist section of Globe American’s policy  inhibits the fulfillment of the purpose that a claimant should have the same rights as he would have against an insured third party. This provision is an attempt by the insurer to dilute and to diminish the protection of the uninsured motorist statute. As such, it is contrary to public policy.

 

KY     Kenton County Public Parks Corp. v. Modlin, 901 S.W.2d 876 (Ky.App. 04/07/1995)

 In our opinion, a golf cart operated on a golf course fairway is not a motor vehicle contemplated by KRS 304.39-230. A motor vehicle under MVRA (KRS 304.39-020(7)) is defined as any vehicle "which transports persons or property upon the public highways of the Commonwealth." While a golf cart is capable of transporting persons or property upon a public highway and conceivably could be construed as a motor vehicle for purposes of applying MVR, the particular golf cart herein was not being operated upon a public highway at the time and, therefore, was not covered within the Act.

 

KY     Manies v. Croan, 977 S.W.2d 22 (Ky.App. 02/27/1998)

Moreover, there is no credible basis for concluding that the registration and insurance requirements of the MVRA were intended to apply to ATVs. The exclusion of ATVs from the MVRA’s reparations system similarly excludes causes of action arising from their use from the MVRA’s more generous limitations period. The trial court correctly applied the one-year limitations period in KRS 412.140.

 
 
 

KRS 304.39-241 Insured’s direction of payment of benefits among elements of loss — Direction of payment to reimburse for medical expenses already paid.

An insured may direct the payment of benefits among the different elements of loss, if the direction is provided in writing to the reparation obligor. A reparation obligor shall honor the written direction of benefits provided by an insured on a prospective basis. The insured may also explicitly direct the payment of benefits for related medical expenses already paid arising from a covered loss to reimburse:

(1) A health benefit plan as defined by KRS 304.17A-005(22);

(2) A limited health service benefit plan as defined by KRS 304.17C-010;

(3) Medicaid;
(4) Medicare; or

(5) A Medicare supplement provider.

Effective: July 12, 2012

History: Amended 2012 Ky. Acts ch. 41, sec. 1, effective July 12, 2012. — Created 1998 Ky. Acts ch. 200, sec. 3, effective July 15, 1998.

 
 
ANNOTATIONS FOR THIS STATUTE:
 

Medlin v. Progressive Direct Ins. Co. (Ky. App., 2013) 2011-CA-002258-MR April 5, 2013

Medlin argues that he is entitled to receive his PIP benefits directly in order for him to personally pay his medical providers. He cites to Kentucky Revised Statute (KRS) 304.39-210(1) and KRS 304.39-241 in support of his argument. KRS 304.39-210(1) states: …..

KRS 304.39-241 states in relevant part that "[a]n insured may direct the payment of benefits among the different elements of loss, if the direction is provided in writing to the reparation obligor. A reparation obligor shall honor the written direction of benefits provided by an insured on a prospective basis."

 
 

KRS 304.39-245 Reparation obligor’s request for or negotiation of reduction or modification of charges.

A reparation obligor may request or negotiate a reduction or modification of charges from a provider of services to a secured person. In no event shall a provider of services which agrees to a reduction or modification of the charges bill the secured person for the amount of the reduction or modification. Nothing in this section is intended to prohibit a provider of services from billing charges to a secured party if the charges are not paid by a reparation obligor because the reparation benefits have been exhausted.

Effective: July 15, 1998

History: Created 1998 Ky. Acts ch. 200, sec. 1, effective July 15, 1998.

 
NO ANNOTATIONS FOR THIS STATUTE:
 
 

KRS 304.39-250 Deduction and set-off.

Except as otherwise provided in this subtitle, basic reparation benefits shall be paid without deduction or set-off.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 25, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Cross v. Baxter, 713 S.W.2d 478 (Ky.App. 04/11/1986)

It is clear to us that in enacting no-fault legislation, the intent was to provide a remedy to automobile accident victims that could not be impinged upon by any means whatsoever. This was the victim’s reward for sacrificing traditional tort rights. See Fann v. McGuffey, Ky., 534 S.W.2d 770 (1975): KRS 304.39-060(2): KRS 304.39-030(1). No-fault is a specie of compulsory insurance. 7 Am. Jur. 2d Automobile Insurance §§ 20 and 341 (1980). It is remedial in nature and thus will be broadly construed to carry out its beneficial purpose of providing compensation for persons injured by automobiles. 7 Am. Jur. 2d Automobile Insurance § 28 (1980). Although our statute provides that an insured party may not collect from more than one "reparation obligor" (KRS 304.39-050[3]), there is every indication the legislature intended that his one-time recovery not be diminished. The statute defines reparation obligor as "an insurer, self-insurer, or obligated government providing basic or added reparation benefits under the statute." KRS 304.39-020(13). The statute does not include insurers, such as Blue Cross, who are not providing insurance under the no-fault statute. Further, BRB are qualifiedly exempt from execution (KRS 304.39-260[1]), and are not subject to deductions or set-off. KRS 304.39-250. Apparently the only authorized deductions in BRB are those arising from social security or workers’ compensation. KRS 304.39-120.

 In view of the foregoing, we believe it offensive to the public policy manifested in the act to permit Blue Cross to coordinate under the circumstances. Blue Cross has a right to contract, but the right is not unlimited. 17 Am. Jur. 2d Contracts § 174 (1964).

 
 
 

KRS 304.39-260 Exemption of benefits.

(1) Basic or added reparation benefits for medical expense are exempt from garnishment, attachment, execution, and any other process or claim, except upon a claim of a creditor who has provided products, services, or accommodations.

(2) Basic reparation benefits other than those for medical expense are exempt from garnishment, attachment, execution, and any other process or claim.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 26, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Cross v. Baxter, 713 S.W.2d 478 (Ky.App. 04/11/1986)

Blue Cross maintains that the "coordination of benefits" provision in its policy renders the no-fault carrier the primary obligor: thus, it does not have to duplicate medical payments. Helen argues enforcement of the coordination of benefits provision would essentially deny her the recovery for lost wages to which she is entitled under the no-fault act. Coordination of benefits clauses are designed to establish responsibility for payment between carriers where overlapping "health plans" exceed 100% of the covered services–in this case, medical expenses. It appears that the underlying purpose of coordination clauses is to prevent overlapping of insurance coverage thereby reducing premiums. We are directed to one state which mandates that health plans be coordinated with no-fault benefits. See Nyquist v. Aetna Ins. Co., 84 Mich. App. 589, 269 N.W.2d 687 (1978). We are directed to no such provision in our no-fault act.

 
 

KRS 304.39-270 Mental or physical examinations.

(1) If the mental or physical condition of a person is material to a claim for past or future basic or added reparation benefits, the reparation obligor may petition the circuit court for an order directing the person to submit to a mental or physical examination by a physician. Upon notice to the person to be examined and all persons having an interest, the court may make the order for good cause shown. The order shall specify the time, place, manner, conditions, scope of the examination, and the physician by whom it is to be made.

(2) If requested by the person examined, the reparation obligor causing a mental or physical examination to be made shall deliver to the person examined a copy of a detailed written report of the examining physician setting out his findings including results of all tests made, diagnoses, and conclusions, and reports of earlier examinations of the same condition. By requesting and obtaining a report of the examination ordered or by taking the deposition of the physician, the person examined waives any privilege he may have, in relation to the claim for basic or added reparation benefits, regarding the testimony of every other person who has examined or may thereafter examine him respecting the same condition. This subsection does not preclude discovery of a report of an examining physician, taking a deposition of the physician, or other discovery procedures in accordance with any rule of court or other provision of law. This subsection applies to examinations made by agreement of the person examined and the reparation obligor, unless the agreement provides otherwise.

(3) If any person refuses to comply with an order entered under this section the court may make any just order as to the refusal, but may not find a person in contempt for failure to submit to a mental or physical examination.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 27, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY     Metropolitan Property & Casualty Insurance Co. v. Scott Circuit Court, 103 S.W.3d 31 (Ky. 04/24/2003)

We have held in numerous cases that the trial court enjoys broad discretion in matters pertaining to discovery. E.g., Berry v. Commonwealth, Ky., 782 S.W.2d 625, 627-28 (1990); see also Crawford-El v. Britton, 523 U.S. 574, 598-99, 118 S.Ct. 1584, 1597, 140 L.Ed.2d 759 (1998) (noting trial court’s "broad discretion" to tailor and limit discovery). Consequently, we conclude that the same standard should apply to a trial court’s decisions with respect to a CR 35.01 examination and will review such decisions for abuse of discretion. Cf. Miller v. United States Fid. & Guar. Co., Ky. App., 909 S.W.2d 339, 342 (1995) (applying "abuse of discretion" standard to trial court’s decision as to whether insurer had shown "good cause" for a physical examination under KRS 304.39270).

 

KY     Miller v. United States Fidelity & Guaranty Co., 909 S.W.2d 339 (Ky.App. 11/03/1995)

On June 10, 1994, the circuit court entered its order requiring Miller to submit to the independent medical examination proposed by USF & G. The order concluded that good cause had been shown pursuant to KRS 304.39270; that the provisions of the policy issued by USF & G entitled the company to the independent examination; that the policy provision did not conflict with the terms of the MVRA; that the policy provision did not contravene public policy; and that the request of the company for the independent examination was not unreasonable.


KY     Grant v. State Farm Mutual Automobile Insurance Co., 896 S.W.2d 24 (Ky.App. 03/31/1995)

If the mental or physical condition of a person [herein Ms. Grant] is material to a claim for past or future basic or added reparation benefits, the reparation obligor [herein State Farm] may petition the circuit court for an order directing the person to submit to a mental or physical examination by a physician. Upon notice . . ., the court may make the order for good cause shown. (Emphasis added).

 
 

KRS 304.39-280 Disclosure of facts about injured person.

(1) Upon request of a basic or added reparation claimant or reparation obligor, information relevant to a claim for basic or added reparation benefits shall be disclosed as follows:

(a) An employer shall furnish a statement of the work record and earnings of an employee upon whose injury the claim is based. The statement shall cover the period specified by the claimant or reparation obligor making the request and may include a reasonable period before, and the entire period after, the injury.

(b) The claimant shall deliver to the reparation obligor a copy of every written report, previously or thereafter made, relevant to the claim, and available to him, concerning any medical treatment or examination of a person upon whose injury the claim is based and the names and addresses of physicians and medical care facilities rendering diagnoses or treatment in regard to the injury or to a relevant past injury, and the claimant shall authorize the reparation obligor to inspect and copy relevant records of physicians and of hospitals, clinics, and other medical facilities.

(c) A physician or hospital, clinic, or other medical facility furnishing examinations, services, or accommodations to an injured person in connection with a condition alleged to be connected with an injury upon which a claim is based, upon authorization of the claimant, shall furnish a written report of the history, condition, diagnoses, medical tests, treatment, and dates and cost of treatment of the injured person, and permit inspection and copying of all records and reports as to the history, condition, treatment, and dates and cost of treatment.

(2) Any person other than the claimant providing information under this section may charge the person requesting the information for the reasonable cost of providing it.

(3) In case of dispute as to the right of a claimant or reparation obligor to discover information required to be disclosed, the claimant or reparation obligor may petition the Circuit Court in the county in which the claimant resides for an order for discovery including the right to take written or oral depositions. Upon notice to all persons having an interest, the order may be made for good cause shown. It shall specify the time, place, manner, conditions, and scope of the discovery. To protect against annoyance, embarrassment, or oppression, the court may enter an order refusing discovery or specifying conditions of discovery and directing payment of costs and expenses of the proceeding, including reasonable attorney’s fees.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 28, effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY State Farm Mutual Automobile Insurance Co. v. Caudill, 136 S.W.3d 781 (Ky.App. 09/26/2003)

 IT IS HEREBY ORDERED that Petitioner’s Petition and Motion to take Discovery is GRANTED and SUSTAINED with respect to matters affecting Petitioner’s medical information and basic reparation benefits. Pursuant to KRS 304.39280(3), petitioner may take discovery, including written or oral depositions with the limitation that such discovery must be related to matters affecting his medical information and basic reparation benefits. Respondent’s objections to such discovery are OVERRULED.

KY     Kentucky Farm Bureau Mutual Insurance Co. v. Roberts, 603 S.W.2d 498 (Ky.App. 08/22/1980)

The appellant argues that the delay involved was not without reasonable foundation. KRS 304.39-210(2). In effect, it argues that any delay was caused by the appellee’s refusal to supply the attending physicians’ report forms as requested by its agent. In support of this argument, it cites the language of KRS 304.39-280(1)(b), which states as follows:

 The claimant shall deliver to the reparation obligor a copy of every written report, previously or thereafter made, relevant to the claim, and available to him, concerning any medical treatment or examination of the person upon whose injury the claim is based and the names and addresses of physicians and medical care facilities rendering diagnoses or treatment in regard to the injury or to relevant past injury, and the claimant shall authorize the reparation obligor to inspect and copy relevant records of physicians and of hospitals, clinics, and other medical facilities.

 
 

KRS 304.39-290 Kentucky Insurance Arbitration Association — Creation, membership – powers –duties.

(1) There is created a nonprofit unincorporated legal entity to be known as the Kentucky Insurance Arbitration Association to provide a mechanism for the reimbursement, among reparation obligors of losses paid as basic or added reparation benefits, based solely on the law of torts without regard to subsections (1), (2), and (3) of KRS 304.39-060.

(2) All basic reparation obligors shall be and remain members of the association as a condition of their authority to transact business in this Commonwealth.

(3) The association shall perform its functions under a plan of operation established and approved under subsection (5) and shall exercise its powers through a board of directors established under subsection (4) hereof.

(4) The board of directors of the association shall consist of not less than five (5) nor more than ten (10) persons serving terms as established in the plan of operation. They shall be selected by member obligors subject to the approval of the commissioner. If no members have been selected and approved prior to July 1, 1974, the commissioner shall appoint the initial members of the board. In approving selections to the board, the commissioner shall consider, among other things, whether all member obligors are fairly represented.

Each member of the board shall designate qualified experienced claims persons from the member’s company, who upon approval by the commissioner, may serve as his or her alternates for the purpose of claims arbitration.

(5) The association shall submit to the commissioner a plan of operation and any amendments thereto necessary, or suitable to assure the fair, reasonable, and equitable administration of the association. The plan shall become effective upon approval in writing by the commissioner:

(a) All reparation obligors shall comply with the provisions of the plan of operation;

(b) The plan of operation shall:

1. Establish procedures whereby all the powers and duties of the association will be performed;

2. Establish minimum requirements for the initial submission of a case for reimbursement or arbitration;

3. Establish minimum requirements beneath which reimbursements shall not be made in order that there be fair allocation of significant losses and the elimination of unnecessary costs in the reimbursement mechanism;

4. Encourage voluntary reimbursement procedures between reparation obligors so that resort to arbitration shall be as infrequent as possible;

5. Recognize that fair allocation of loss between commercial and noncommercial motor vehicles may require different minimum requirements than when the loss is between two (2) or more noncommercial vehicles;

6. Establish regular places and times for meetings;

7. Establish procedures for records to be maintained on all cases presented for arbitration and dispositions thereof;

8. Establish procedures for compensation to reparation obligors for travel related expense and the fair value of the time devoted by their employees as a director or alternate in performance of duties for the association;

9. Establish procedures for adequately and equitably financing the cost of the association among members; and

10. Contain additional provisions necessary or proper for execution of the powers and duties of the association.

(6) The association shall be subject to examination and regulation by the commissioner:

(a) The board of directors shall submit to the commissioner, not later than March 30 of each year, a report on its activities for the preceding calendar year;

(b) The board of directors shall promptly notify the commissioner whenever it appears that any member insurer has failed or refused to comply with an arbitration decision or has shown a protracted tendency to decline a significant number of meritorious claims presented to it prior to initiation of arbitration proceedings.

(7) The association shall be exempt from payment of all fees, licenses, and taxes levied by this Commonwealth or any of its subdivisions except taxes on real or personal property.

(8) There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association or its agents or employees, the board of directors, or the commissioner or his or her representative for any action taken by them in the performance of their powers and duties under this section.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1531, effective July 15, 2010. — Amended 1996 Ky. Acts ch. 326, sec. 2, effective July 15, 1996. — Created 1974 Ky. Acts ch. 385, sec. 29, effective July 1, 1975.

 
 
ANNOTATIONS FOR THIS STATUTE:
 

Progressive Max Ins. Co. v. Nat’l Car Rental Sys. , Inc., 329 S.W.3d 320 (Ky., 2011) – Jan. 20, 2011

This appeal arises from a subrogation dispute regarding basic reparations benefits (BRB) paid by Appellee, National Car Rental Systems, Inc. (National) to a passenger of one of its rental vehicles. After payment, National sought full reimbursement against Appellant, Progressive Max (Progressive), the insurer of the driver of National’s vehicle.

 
"Secured person"; obligor’s rights to recovery

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.

 

After the Jefferson Circuit Court granted summary judgment in National’s favor, the Kentucky Court of Appeals affirmed, holding that (1) Progressive was primarily liable for BRB; and (2) National may pursue its claim via KRS 304.39-050. We granted discretionary review to determine the correctness of that opinion and now reverse.

 
LawReader “Cliff Notes”:
 
National – Car Rental Agency
Jones – Car Driver and Renter

Progressive (Insurance Company) – provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle

Shannon Wilkerson – Passenger Injured in car driven by Jones – rented from National

 

Synopsis: Jones was involved in a motor vehicle accident while driving National’s vehicle, injuring his passenger, Shannon Wilkerson.

 

Wilkerson sought recovery from Jones and Progressive (which provided coverage for Jones’s liability for both the use of his vehicle and the use of a rental vehicle).

 

At some point, Wilkerson received BRB from National (the vehicle owner).

National sued Progressive to re-coup BRB amount paid to Wilkerson.

 

The KY Supreme Court Reversed the Court of Appeals in this case; which held that a vehicle insurer may employ KRS 304.39-050 to assert a subrogation claim.

 

Supreme Court: … the Court of Appeals is reversed and this case is remanded to the Jefferson Circuit Court with instruction to enter summary judgment in favor of Progressive.

 

KY     [U] Kentucky Farm Bureau Mutual Insurance Companies v. Grange Mutual Casualty Co., No. 2002-CA-000308-MR (Ky.App. 02/28/2003)

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39290.

 

KY     Jefferson County v. Allstate Insurance Co., 69 S.W.3d 469 (Ky.App. 03/16/2001)

In 1996, when Jefferson County elected to waive sovereign immunity under KRS 304.39-080, it was required to become a member of the Arbitration Association. Our Legislature exercised its authority in setting guidelines and regulations as to the formation of and membership in the Arbitration Association. While it is conceded that the applicable statutes and regulations do not specifically address the issue before us, we believe that the plan of operation provides guidance. The plan of operation was promulgated pursuant to Chapter 385 of the 1974 Acts of the General Assembly and became effective pursuant to KRS 304.39290. According to the plan, under Article 4(c) entitled "Operations":

     A claim may be submitted to arbitration not later than two (2) years after the injury or the death, or the last basic reparation payment made by any reparation obligor, or the settlement of a claim or claims arising out of the same accident, occurrence, or insured event, whichever later occurs.

      It should be noted that the plan of operation’s claim provision is without any limitation as to membership in the Arbitration Association. Thus, we cannot accept Jefferson County’s argument that its decision to remove itself as a member of the Arbitration Association has any legal significance in regard to Allstate’s claim. The accident involving the Jefferson County employee occurred on August 10, 1997, and the final BRB payment was made to Brown by Allstate on August 17, 1998. On April 19, 1999, Allstate filed an application for arbitration with the Arbitration Association seeking reimbursement for the BRB payments it made to Brown. Hence, under the terms of the plan of operation, Allstate filed its application for arbitration in a timely manner.

 

KY  Affiliated FM Insurance Companies v. Grange Mutual Casualty Co., 641 S.W.2d 49 (Ky.App. 09/03/1982)

The appellant’s argument that the instant action is barred by virtue of KRS 304.39-070(3) is misplaced. That section of the No-Fault Act "… creates a separate right of recovery in the basic reparation obligor, and the purpose of the statute is to allocate, still under a fault concept, the ultimate responsibility for the benefits paid to the injured parties." Ohio Security Ins. Co. v. Drury, Ky.App., 582 S.W.2d 64, 67 (1979). In other words, KRS 304.39-070(3), which requires either intervention or arbitration on the part of the basic reparation obligor, attempts to provide a mechanism for reimbursement of losses paid as basic reparation benefits based solely on the law of torts. See KRS 304.39-290(1).

 

KY   Saxe v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 188 (Ky.App. 11/07/1997)

The United Services Court also relied upon the language of KRS 304.39-140(3) as indicative of the proposition that an obligor may recover added reparation benefits to the same extent as basic benefits:

  "If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self-insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or on behalf of such injured person or persons." (Emphasis added).

      In addition, the Court cited KRS 304.39290(1), the statute creating an arbitration association "to provide a mechanism for the reimbursement, among reparation obligers of losses paid as basic or added reparation benefits . . . ." With respect to this particular statute, the Court noted it would be "absurd if the legislature set up a means of recovering added [reparation] benefits when there was no right to do so." 784 S.W.2d at 788. Having considered all relevant provisions of the MVRA, the United Services Court concluded that the reparations obligor was entitled to reimbursement for both BRB’s and ARB’s.

 

KY     United Services Automobile Association v. State Farm Mutual Automobile Insurance Co., 784 S.W.2d 786 (Ky.App. 03/02/1990)

 If the injured person, or injured persons, is entitled to damages under KRS 304.39-060 from the liability insurer of a second person, a self-insurer or an obligated government, collection of such damages shall have priority over the rights of the subrogee for its reimbursement of basic or added reparation benefits paid to or in behalf of such injured person or persons.  (Emphasis added). Further, in establishing an arbitration association, KRS 304.39-290(1) states:

  There is created a nonprofit unincorporated legal entity to be known as the Kentucky Insurance Arbitration Association to provide a mechanism for the reimbursement, among reparation obligors of losses paid as basic or added reparation benefits, based solely on the law of torts without regard to subsections (1), (2) and (3) of KRS 304.39-060.

 

KY     Progressive Casualty Insurance Co. v. Kidd, 602 S.W.2d 416 (Ky. 05/13/1980)

A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3). The reparation obligor shall elect to assert its claim (i) by joining as a party in an action that may be commenced by the person suffering the injury, or (ii) to reimbursement, pursuant to KRS 304.39-030, sixty (60) days after said claim has been presented to the reparation obligor of secured persons. The right to recover basic reparation benefits paid under (ii) shall be limited to those instances established as applicable by the Kentucky Insurance Arbitration Association as provided in KRS 304.39-290.


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KY     Baker v. Motorists Insurance Companies, 695 S.W.2d 415 (Ky. 06/13/1985)

The appellant was unable to name anything he did that was of benefit or assistance to Motorist in collecting reimbursement for reparations benefits paid to his client. The statute in question, Subsection Five (5) of KRS 304.39-070," is styled, "’Secured person’ — Obligor’s rights to recovery."

   The five subsections must be read as a whole. Subsection Three (3) provides that a reparation obligor, such as Motorist, having paid basic reparation benefits, may pursue reimbursement for such payment either by joining in an action that may be commenced by the person suffering the injury or by demanding reimbursement directly from the tortfeasor’s liability insurance carrier followed by arbitration under KRS 304.39-290 if such reimbursement is not made.

   The fact that these alternative remedies are established suggests that although the attorneys’ fee language of Subsection Five (5) is mandatory, whether it applies depends on the circumstances.

 
 

KRS 304.39-300 Rules.

The commissioner may adopt rules to provide effective administration of this subtitle which are consistent with the purposes of this subtitle and fair and equitable to all persons whose interests may be affected.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 1532, effective July 15, 2010. — Created 1974 Ky. Acts ch. 385, sec. 30, effective July 1, 1975.

 
NO ANNOTATIONS FOR THIS STATUTE:
 
 

KRS 304.39-310 Certificate of coverage — Rights and obligations of owner or registrant.

(1) All reparation obligors shall be obligated to provide to a reparation insured or an insured person who has rejected his tort limitations as provided in KRS 304.39-060 a certificate or other evidence of insurance whenever coverage required by KRS 304.39-110 is issued or renewed upon policy anniversary date;

(2) An owner or registrant of a motor vehicle with respect to which security is required under KRS 304.39-110, who fails to have such security when the motor vehicle is involved in an accident shall have all the rights and obligations of a reparation obligor, and any other reparation obligor which has paid or may become obligated to pay basic or added reparation benefits to an injured person under a basic or added reparation contract or under the terms of the assigned claims plan shall be subrogated to the rights of the injured person against such owner or registrant.

Effective: July 1, 1975

History: Created 1974 Ky. Acts ch. 385, sec. 31(2), (3), effective July 1, 1975.

 
ANNOTATIONS FOR THIS STATUTE:
 

KY  Bartlett v. Prime Insurance Syndicate, Inc., No. 2003-CA-000849-MR (Ky.App. 04/30/2004)

   Bartlett did not have insurance on the vehicle he was operating, and there is no indication he qualified as a basic reparation insured under any other policy. Thus, he did not have his own reparation obligor from which to receive benefits. In addition, Bartlett is precluded from bringing a direct tort claim for damages that fit within the definition of "basic reparation benefits." KRS 304.39-060(2)(a). See also Stone v. Montgomery, Ky. App., 618 S.W.2d 595, 597 (1981), wherein this court held that tort liability for such damages is abolished to the extent they do not exceed $10,000, regardless of whether the injured motorist is insured or uninsured.

   Instead, Bartlett argues that he is entitled to recover his basic reparation benefits losses based on two statutes, KRS 304.39310(2) and KRS 304.39-070(3). KRS 304.39310(2) provides in relevant part that "[a]n owner or registrant of a motor vehicle with respect to which security is required under KRS 304.39-110, who fails to have such security when the motor vehicle is involved in an accident shall have all the rightsand obligations of a reparation obligor[.]" KRS 304.39-070(3) provides in relevant part that "[a] reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3)."

    Bartlett argues that, had he had insurance on his vehicle, his insurer (his basic reparation obligor) would have paid his medical bills and wage loss and would have then sought recovery against Prime Insurance Syndicate. Therefore, he reasons that, because he was uninsured, he is his own basic reparations obligor and that KRS 304.39310(2) permits him the right to seek subrogation for medical expenses and lost wages against Prime Insurance Syndicate, the basic reparations obligor of Manley and his employer. In support of his argument, Bartlett cites the Stone case. See 618 S.W.2d at 595.

     A panel of this court agreed with the defendant and held that no part of the basic reparation benefits may be recovered from a secured person except to the extent they exceed $10,000. Id. at 597. In that case the plaintiff also argued that the language of KRS 304.39310(2) gave him "all the rights and obligations of a reparation obligor" and therefore allowed recovery of medical expenses pursuant to KRS 304.39-070(3). However, this court refused to address that issue because the defendant’s reparation obligor had not been named as a party in the case. Id. at 598. In short, the Stone case does not lend support to Bartlett’s argument.