FOSTER V. KENTUCKY FARM BUREAU MUT. INS. CO.
INSURANCE – PIP Benefits and attorneys fees and interest; Punitive Damages; Election of Remedies
REVERSING AND REMANDING; WINTERSHEIMER
The Supreme Court reverses and remands a Court of Appeals decision that an insurer had a reasonable basis to delay BRB payments.
(Jefferson Cir. Ct., Hon. Stephen K. Mershon, Judge, presiding at the trial court).
Appellant suffered soft tissue injuries in an auto collision and treated for several months; her tort claims were settled. On the date of the accident, appellant was unemployed and had a KFB policy that provided basic reparation benefits (BRB). Initially, she only sought BRB for her medical expenses, however, two months after the accident she accepted a job as a mail sorter, but was told by her doctor that the job was too physically demanding given her injuries. She then made a claim for lost earnings related to the new position, which was denied. Appellant sued, alleging a violation of the Unfair Claims Settlement Practices Act. She received a jury verdict in her favor that KFB was required to pay and that it did not have a reasonable foundation for the delay. She was awarded $5,290 in work loss benefits; plus 18% interest as a penalty for the delay; plus $40,000 in attorney fees.
On appeal, the CA held that KFB DID have a reasonable foundation to withhold payments and that that question should not have been submitted to the jury, but should have been decided as a matter of law.
The Supreme Court held that the Motor Vehicle Reparation Act (MVRA) provides work loss benefits to an injured person for work she probably could have performed if not injured. KFB was entitled to investigate; Appellant provided sufficient proof of loss. The credibility and evaluation of the evidence presented by Appellant was in a proper jury determination. Also, the MVRA provides the exclusive remedy for wrongful delay, i.e., 18% interest. Interest and attorney fees are the remedies provided. The trial court was correct in dismissing the punitive damage claim under the UCSPA.
Digest by John Hamlett.