Opinion ID: 1723196
Heading Depth: 1
Heading Rank: 5

Heading: additional benefits

Text: Globe, in its role as a reparation's obligor, paid Lisa Webb the sum of $10,000 in basic reparation benefits. Motorist and Aetna paid the non-party Webb brothers, Robert and James, the collective sum of $26,456.04 in basic reparation benefits and $10,000 in uninsured motorist benefits. Citing to KRS 304.20-020(4) and 304.39-070(2), which establish the insurers' right to subrogation, the trial court ordered that the three insurers shall each first receive full payment of their respective Judgments prior to Lisa Webb or the estate receiving any payments. This had the effect of giving priority to all three insurers' subrogation claims over the claims of Lisa Webb and the estate. A 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 304.39-070(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. 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. The Globe release concerned uninsured motorist benefits, not basic reparation benefits. Thus, we do not address whether a reparations obligor can subordinate the rights of its insured to its own right to subrogation. Accordingly Lisa Webb has priority over Globe for the reparations benefits paid. The trial court also effectively granted Motorist and Aetna preference for the payments made by them to the non-party Webb brothers. All subrogation rights are derivative and the insurer only acquires the rights of its insured. A subrogee is substituted in place of its insured; it does not acquire greater rights. Fireman's Fund Ins. v. Government Employees Ins., Ky., 635 S.W.2d 475 (1982). Here, because the Webb brothers were not parties to this suit, the brothers have no statutory, contractual or equitable basis for having a preferred status over the Webb estate. In view of the fact they possess no such preferred status, their carrier can acquire no greater right. Having considered the other issues raised in the briefs, we find they are without merit and decline to discuss them. Accordingly, we affirm in part and reverse in part and remand this case to the trial court for proceedings in accord with this opinion. By virtue of its release, Globe has priority over the estate to the first $25,000 in payments by Wine. The estate and the children are entitled to the next $490,000 in payments. The following $122,500, representing uninsured motorist and basic reparations benefits to Lisa Webb and the estate, is payable to Globe, Motorist and Aetna. Finally, Aetna and Motorist are entitled to receive $36,456.04, representing their payments to the non-party Webb brothers. Interests shall accrue to the respective parties in accordance with the judgment entered by the trial court. STEPHENS, C.J., and KING, STUMBO and WINTERSHEIMER, JJ., concur. GRAVES, J., concurs in part and dissents in part. He would apply the made whole doctrine despite the language of Globe's release and would give priority to the estate for the first $490,000.00 in payments by Wine. Otherwise, he concurs in the opinion. LAMBERT, J., dissents by separate opinion.