Tort Report: Dec.11, 2009 COA Decisions

Dec.11, 2009 COA Decisions Dealing with Torts and Insurance

Names, intro, and links to full text:

PUBLISHED:

1263 – CIVIL PROCEDURE, LACK OF PROSECUTION, DISMISSAL
Wildcat Property Management vs. Reuss

APPEAL FROM FAYETTE CIRCUIT COURT v
HONORABLE KIMBERLY N. BUNNELL, JUDGE
OPINION REVERSING AND REMANDING
** ** ** ** **
BEFORE: COMBS, CHIEF JUDGE; MOORE, JUDGE; LAMBERT,1 SENIOR JUDGE.
LAMBERT,
SENIOR JUDGE: Wildcat Property Management, LLC appeals from the
November 13, 2008, order of the Fayette Circuit Court dismissing its
action against Stephanie Reuss, Carl Thomas Franzen, Lindsay Franzen,
Doug Graff, Mary Martha McGeehan, Tom Reuss, and Jenna Stevens for lack
of prosecution. For failure of the trial court to support its dismissal
with appropriate findings, we reverse and remand.

NOT TO BE PUBLISHED:

JUDY GRAHAM v.  BARRY HEINE, INDIVIDUALLY AND AS NEXT FRIEND OF JOSHUA R. HEINE
OPINION AFFIRMING
** ** ** ** ** BEFORE: CAPERTON, DIXON, AND TAYLOR, JUDGES.
TAYLOR, JUDGE: Judy Graham brings this appeal from a May 15, 2008, summary judgment of the McCracken Circuit Court dismissing her tort action as time-barred by the statute of limitations. We affirm.

On January 29, 2008, Graham filed a complaint against Barry Heine, individually and as next friend of Joshua R. Heine (collectively referred to as Heine) for damages arising from an automobile accident that occurred September 2, 2005. Graham claimed that Joshua, a minor, negligently drove his motor vehicle into a motor vehicle operated by Graham. Graham allegedly suffered personal injuries for which she sought damages.

Upon review of the record, it is undisputed that Graham was covered by an automobile insurance policy with Kentucky Farm Bureau at the time of the accident. The insurance policy contained $10,000 in BRB coverage. On January 5, 2006, a BRB payment was made that completely exhausted Graham’s $10,000 policy limit of BRB coverage under the policy. Thereafter, in 2008, after Heine’s motion for summary judgment was filed, Graham  “refunded” Kentucky Farm Bureau $246.90 it had previously paid to her for lost income under the BRB coverage. Per Graham’s instructions, Kentucky Farm Bureau then paid $246.90 to Granett Chiropractic Center as a BRB payment. This “BRB payment” was made on March 20, 2008.

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.2    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.

JOSHUA SLONE v.  CRAIG IBERT AND OLDHAM’S TRUCK AND CAR SOURCE
OPINION AFFIRMING
** ** ** ** ** BEFORE: STUMBO, THOMPSON, AND WINE, JUDGES.
STUMBO, JUDGE: This is a motor vehicle collision litigation in which Joshua Slone, Appellant, appeals from a jury verdict in favor of the Appellees, Craig Ibert and Oldham’s Truck and Car Source, Inc. The jury found that Ibert caused the collision, but that he “blacked out” and was therefore not liable for damages.

Slone appeals a number of issues. We find there was no reversible error in this case and affirm.

As stated above, the jury found that Ibert caused the accident, but because he passed out, he was not liable for damages. The jury apparently believed the blackout defense and returned a defense verdict. We do not see how evidence of past criminal behavior could have prejudiced the jury against Slone on this issue. Had the jury returned a verdict finding Ibert did not cause the accident or returned a verdict in Slone’s favor, but with only nominal damages, our finding might be different. However, because the jury accepted the blackout defense, we do not find that a new trial is warranted.

Slone next argues that a new trial is warranted because there was no competent evidence to allow the jury to consider the blackout defense. We find this argument without merit. As previously stated, the blackout defense was first recognized by the Kentucky Court of Appeals in Rogers v. Wilhelm-Olsen, 748 S.W.2d 671 (Ky. App. 1988). Rogers states that “[w]here a defendant demonstrates that he suddenly became incapacitated while driving, and the ensuing accident was a result thereof, and further demonstrates that the sudden incapacity was not reasonably foreseeable, he shall have a defense to any liability that would otherwise arise from the accident.” Id. at 673.

Testimony was presented that Ibert had two doctors give a diagnosis of sleep apnea, which can cause one to suddenly lose consciousness.

AUTO-OWNERS INSURANCE COMPANY V. DRUIE A. WOOD ET AL
OPINION AFFIRMING
** ** ** ** ** BEFORE: KELLER, MOORE, AND TAYLOR, JUDGES.
TAYLOR, JUDGE: Auto-Owners Insurance Company (Auto-Owners) brings this appeal from a November 24, 2008, summary judgment entered in favor of Druie A. Wood by the Monroe Circuit Court. We affirm.

The underlying action arose from a fatal motor vehicle accident in October, 2006. At the time of the accident, Grover Evans was driving his motor vehicle on a hilly road in Monroe County. Demple Hawkins, Larry Hawkins, and Robert Calvin were passengers in Evans’ vehicle. After topping a hill, Evans’ vehicle collided into the rear of a seed drill being pulled by a farm tractor operated by Druie A. Wood. The impact of the collision rolled Evans’ vehicle onto its side into oncoming traffic. All four individuals in Evans’ vehicle were killed; Wood survived the accident.

Evans was insured by an automobile policy issued by Auto-Owners; Calvin was also a named insured under an automobile policy issued by Auto- Owners. And, Wood was insured by a farm owner policy issued by Kentucky Farm Bureau (Farm Bureau). Relevant to this appeal, the estates of all four passengers (including Evans and Calvin) filed tort actions against Wood. The estates of Evans and Calvin also filed claims against Auto-Owners for underinsured motorist coverage (UIM).1    Eventually, Wood reached a settlement agreement with the estates of all four passengers, including Evans and Calvin. Thereunder, Wood’s insurer, Farm Bureau, would tender its policy limits of $100,000; each estate would receive $25,000, respectively. In return, the estates would release Wood from additional liability.

Auto-Owners was notified of the proposed settlement with Wood by letter dated April 28, 2008, from counsel for Calvin’s Estate to counsel for Auto- Owners. This notification was made “to permit Auto Owners an opportunity to protect its right of subrogation.” By letter dated May 30, 2008, counsel for Auto- Owners gave notice that it intended to protect its subrogation rights against Wood and would “immediately” be issuing checks. However, Auto-Owners did not tender its substituted payment of $25,000 to the estates of Evans and Calvin until July 29, 2008. Again, these payments by Auto-Owners were intended to preserve its right of subrogation against Wood.

Thereafter, Wood filed a motion for summary judgment against Auto- Owners. Wood pointed out that Auto-Owners “has attempted substitution of [Wood’s] offer of settlement so as to maintain a subrogation claim against” Wood. Wood argued that Auto-Owners’ attempted substitution was not made within thirty days of receiving notice of the settlement agreement per the terms of Evans’ and Calvin’s policies of insurance. Thus, Wood maintained that Auto-Owners could not assert subrogation claims against him.

By summary judgment, the circuit court concluded that Auto-Owners was barred from maintaining subrogation claims under the terms of its insurance policies against Wood. This appeal follows.

Auto-Owners contends that the circuit court erred by rendering summary judgment in favor of Wood and by holding that it could not assert subrogation claims against Wood. We disagree.

Under the above provision, Auto-Owners “shall” pay the injured person within thirty days from receipt of the not
ice of the proposed settlement. The provision is clear and unambiguous. In this appeal, Auto-Owners does not argue that it fulfilled its duty under the policies and tendered the required payments within thirty days. Instead, Auto-Owners essentially argues that it can disregard the unambiguous terms of its insurance policies, asserting that it may exercise a common law right of subrogation against Wood irrespective of any policy language to the contrary. Auto-Owners also argues that Wood may not rely upon the terms of the policies with Evans and Calvin because no privity of contract exists with Wood.

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