Kentucky

There were three civil/tort decisions from SCOKY for Jan. 2010:

The Jewell decision is probably the most significant for those practicing motor vehicle insurance law since it addressed PIP, UIM, and Workers Compensation assignments.  I suggest it be read in its entirety.  Those who have tried to get a workers compensation assignment of the subrogation claim when settling workers comp claims and then proceeding against the UIM carrier have found (or will find an empty pocket with no recovery against the UIM insurer).   Of course, I would like to think that settling with liability carrier and any assignment of WC benefits will remain unaffected but not a likely scenario. 

As a matter of contract law, the Jewell decision regarding UIM's paymen of UIM benefits will be of minimal impact since many policies have a specific workers compensation exclusion.  See, eg., KFBM Kentucky Automobile Policy which states regarding UIM coverage that "This coverage shall not apply directly or indirectly to benefit any insurer or self-insurer under any workers' compensation, disability benefits or similar law."  A similar exclusion can be found in the same policy with KFBM regarding UM or uninsured motorist benefits, see, eg., "This coverage shall not apply directly or indlrectly benefit any insurer or self-insurer under any of

following or similar law: '1 .. Workers' compensation law; or 2. Disability benefits law."

In Jewell, the UIM carrier was attempting get a full offset for the $20,000 in reparation benefits under the automobile policy.  There had been a disputed that was not fully documented in the record such that only $333.45 in BRB had been paid of an available $20,000.  The trial judge only ordered an offset for what was actual paid, but KSBA wanted the whole $20,000.  The SCOKY did a bypass of this stating there were no findings of fact in the record, none were requested by the party with the burden, and thus KSBA was stuck.  This made a big difference in the net money that the claimant received.

Justice Scott's concurring opinion wished to limit the offset to PIP (reparation benefits "paid or payable"), eg.,

SCOTT, JUSTICE, CONCURRING IN RESULT ONLY OPINION: I concur

in the result of the majority's opinion, but would add as to Issue 111, that the

amount of any offset is limited to the BRB actually "paid or payable" - meaning

it has been, or will be paid. There is no offset for amounts that will not be

paid. Such an effect was never the intention o.f .KRS..304 .39-060(2) . , See Slone v. Caudill, 734 S.W .2d 480 (Ky. App. 1987) ; and Henson v. Fletcher, 957

S.W.2d 281 (Ky. App. 1997) .

Unfortunately, we will have to discern with difficulty the full extent of that opinion. 

The problem with the PIP offset is that that a verdict will award future medicals that are reasonably foreseeable at the time of the verdict and to be paid per the eventual judgment.  The future medicals and wages are not placed upon hold if needed but awarded.  Now, PIP has a statute of limitations which puts an end date on these, and as revealed in this case, there is a potential rub with PIP and workers compensation.  Thus, an offset would/could deprive the claimant of his award but never to be paid.  No solution offered, but it looked as if the statute of limitations had expired on making this PIP claim by the time the verdict was reached so there was NO PIP PAYABLE in the future by operation of law.

4 - PROFESSIONAL NEGLIGECE, ASSIGNMENT OF CLAIMS AGAINST BROKERS

ASSOCIATED INSURANCE SERVICES VS. DANIEL GARCIA, M.D

Questions Presented:

Professional negligence claims against insurance agents or brokers are assignable; and such assignment, when coupled with a settlement agreement as to damages and a covenant not to execute, is not against public policy where reasonable..



OPINION OF THE COURT BY JUSTICE CUNNINGHAM AFFIRMING IN PART AND REVERSING IN PART

In this case, we are asked to consider two issues of first impression in Kentucky:whether professional negligence claims against an insurance agent and an insurance broker are assignable, and, if so, whether such assignment, when coupled with a settlement agreement as to damages and a covenant not to execute, is illusory or void as against public policy.  The Star of Louisville ("the Star") is a pleasure craft operating on the Ohio River by the City of Louisville. In 1997, it sought marine insurance coverage through Associated Insurance Service, Inc.("Associated"), an insurance agency in Louisville . Given the specialized nature of the coverage, Associated contacted an insurance brokerage firm, AON Risk Services, Inc. of  Ohio ("ARS"). Thereafter, ARS provided a quote to Associated from an insurance company in Australia, HIH Casualty and General Insurance, Inc. ("HIH"). The Star ultimately purchased a policy from HIH in October 1997 . It renewed the HIH policy in 1998 and 1999.



Both ARS and Associated argue that the Court ofAppeals erred by invalidating the arbitration award, but upholding the validity of the assignment . Pursuant to the terms of the arbitration agreement, they point out the award cannot be severed without invalidating the entire agreement. As explained above, we have not invalidated the arbitration award;rather, we have remanded this case for further proceedings, which may include an assertion that the arbitration award was unreasonable . Should it be determined that the arbitration award is unreasonable, only then would it be appropriate to argue that the entire agreement has been voided.  For the foregoing reasons, the opinion of the Court of Appeals is affirmed in part and reversed in part. The summary judgment of the Jefferson Circuit Court is reversed, and this matter is remanded for further proceedings consistent with this opinion.

Minton, C .J.;Scott and Venters, JJ.,concur. Noble, J .,concurs by separate opinion. Schroder, J.,concurs in part and dissents in part and would

affirm the Court ofAppeals. Abramson, J.,not sitting.



5 - INSURANCE, NO FAULT, PIP, UIM AND WORKERS COMPENSATION

JEWELL VS. KENTUCKY SCHOOL BOARD ASSOCIATION

Questions Presented:

Insurance. UIM Coverage. Basic Reparation Benefits. Subrogation. Double Recovery . Workers Compensation. Issues include the proper prioritization of claims against workers'  Compensation carrier, no-fault carrier, and UIM carrier.



OPINION OF THE COURT BY JUSTICE VENTERS AFFIRMING IN PART AND REVERSING IN PART

This case arises from a motor vehicle collision where the injured party, at work when the collision occurred, pursued her remedies against her under-insured motorist insurer. Among other issues, we address the question of whether an injured worker, as assignee of her workers' compensation carrier's subrogation rights, may enforce those rights agains their underinsured motorist insurance provider. Although prior decisions have addressed separate

elements of the issue, we find none that have application to the combination of factors present here .

In Samples,we suggested that in appropriate circumstances persons other than the tortfeasor himself may fall within the range of "the other person in whom legal liability for damages exists." Specifically, we mentioned "the tortfeasor's employer, his parents-(if he is minor and the -parent had signed for his-driver's license, his insurer (if permitted), or any one else who could be held liable because of the tortfeasor's negligence." Samples, 192 S .W.3d at 315. That language refers to persons or entities (or their liability insurer) that under traditional tort law may be vicariously liable for another's conduct.  The  UIM carrier's responsibility to its insured does not arise from any relationship with the tortfeasor;it arises because of a contractual relationship with the tort victim to provide insurance forwhat the tortfeasor has failed to insure. In providing Appellant's UIM  coverage, KSBA undertook to insure damages owed by the tortfeasor to Appellant in her own right. It did not insure the damages the tortfeasor may owe to her workers' compensation provider. The assignment of its subrogation

rights to Appellant did not expand the UIM carrier's contractual obligation or

expose it to liability that did not exist prior to the assignment. The rights she acquired by taking the assignment are no greater than the rights of her assignor. Because it had no right to recover from the UIM carrier, Appellant had no right to do so. The Court of Appeals opinion in this regard is affirmed.



Notwithstanding the fairness to be found in Appellant's position, we agree with the Court of Appeals that the rationale for the holding in Minton is guided exclusively by the language of the statute quoted above, and that by its terms the statute is limited to offsetting the recoupment due to the workers' compensation carrier.  We see no authority that would justify the extension of Minton allowing an offset against the UIM provider's credits for Appellant's attorney's fees and expenses.



Accordingly, we affirm the Court of Appeals' denial of a credit for Appellant's attorney's fees and expenses .

KSBA's argument that Appellant cannot rely upon Slone and Henson, depends, in,this Court, as in the Court of Appeals, upon a finding of fact that - was never made by the trial court -whether Appellant followed the correct process to claim the full measure of BRB available to her.  CR 52.04 does not permit the trial court to be reversed for failure to make a finding on an essential fact unless a party has expressly requested such a finding. The Court

of Appeals erred in reversing the trial court's decisionon the BRB because of a disputed issue of fact,when the matter was never brought to the attention of the trialcourt. We therefore reverse the Court ofAppeals on that point and reinstate the decision of the trial court to deduct from the judgment the actual BRB payment of $333.45 rather than the full $20,000.00 of available BRB.



CONCLUSION For the forgoing reasons, we reverse the opinion of the Court of Appeals

insofar as it directs the trial court to deduct from the judgment the entire $20,000.00 of available BRB. Otherwise, we affirm the Courts of Appeals in remanding this case to the trial court for recalculation of damages consistent with this opinion .

All sitting. Minton, C .J.,Abramson, Cunningham, Noble and Schroder concur . Scott, J ., concurs in result only by separate opinion.

7. MEDICAL MALPRACTICE

BLANKENSHIP, M.D. VS. COLLIER

Questions Presented:

Medical malpractice. Trial court?s grant of summary judgment against a plaintiff who fails to identify and expert witness.



OPINION OF THE COURT BY JUSTICE ABRAMSON REVERSING

The central question in this medical malpractice case is whether and when a trialcourt may grant summary judgment against a plaintiff who has failed to identify any expert witnesses. Pursuant to Kentucky law, in most medical malpractice cases, a plaintiff is required to put forth expert medical testimony to establish the applicable standard of care, any breach that occurred and any resulting injury to the plaintiff. This case being a typical medical malpractice case, Horace Collier, the plaintiff, never disputed that an expert was necessary to prove that Dr .Robert Blankenship and Caritas Health Services were negligent in the diagnosis and treatment of his appendicitis . Despite his repeated representations to the trial court that he would be using expert testimony and,his request,for an extension for more time to locate and identify an expert, Collier still had failed to provide the names of any expert witnesses more than one year following the filing of the complaint . Because under Kentucky substantive law Collier would be unable to sustain his burden of proof without expert testimony, the trial court granted Dr .Blankenship's  and Caritas's motions for summary judgment.  After the Court of Appeals reversed the trial court's grant of summary judgment, this Court granted

discretionary review.



KSBA's argument that Appellant cannot rely upon Slone and Henson, depends, in,this Court, as in the Court of Appeals, upon a finding of fact that - was never made by the trial court -whether Appellant followed the correct process to claim the full measure of BRB available to her.  CR 52.04 does not permit the trial court to be reversed for failure to make a finding on an essential fact unless a party has expressly requested such a finding. The Court

of Appeals erred in reversing the trial court's decisionon the BRB because of a disputed issue of fact,when the matter was never brought to the attention of the trialcourt. We therefore reverse the Court ofAppeals on that point and reinstate the decision of the trial court to deduct from the judgment the actual BRB payment of $333.45 rather than the full $20,000.00 of available BRB.



CONCLUSION For the forgoing reasons, we reverse the opinion of the Court of Appeals

insofar as it directs the trial court to deduct from the judgment the entire $20,000.00 of available BRB. Otherwise, we affirm the Courts of Appeals in remanding this case to the trial court for recalculation of damages consistent with this opinion .

All sitting. Minton, C .J.,Abramson, Cunningham, Noble and Schroder concur . Scott, J ., concurs in result only by separate opinion.