Opinion ID: 1450087
Heading Depth: 1
Heading Rank: 5

Heading: indistinguishable payments?

Text: Lawson's second theory is that the Med-Pay payments were, in fact, BRB or ARB payments (the argument does not specify which), because the last $500 in payments paid by Farm Bureau to or on behalf of Lawson were indistinguishable from the first $10,000 paid to or on his behalf, because they were all reparation benefit payments. This assertion ignores both the language of the statutes pertaining to reparation benefits (BRB or ARB) and the language of the contract entered into by Farm Bureau and Lawson. The last $500 paid by Farm Bureau to or on behalf of Lawson could not have been BRB payments, because BRB payments are limited by statute to a maximum of $10,000, KRS 304.39-020(2); and that maximum was paid out as of May 3, 1993. (Remember, the contract provides that Med-Pay coverage is excess insurance over PIP coverage, so it cannot be asserted that the first $500 was paid under the Med-Pay coverage and the last $10,000 was paid under the PIP coverage.) Nor could the last $500 have been ARB payments, since ARB coverage is statutorily required to be written upon the request of the insured in units of $10,000 per person, KRS 304.39-140(1), supra, whereas the Med-Pay coverage was for only $500 per person. [3] Lawson's brief addresses this obstacle as follows: They [ARB benefits] also did not have to be requested by Mr. Lawson because Farm Bureau voluntarily made them available under its policy. It is unclear whether this statement posits (1) that the ARB statute only requires Farm Bureau to offer ARB in increments of $10,000 each, but does not preclude Farm Bureau from offering ARB coverage in increments of less than $10,000, if requested (though the statement appears to concede that Lawson did not request ARB coverage in lesser increments of, e.g., $500), or (2) that Farm Bureau voluntarily provided ARB benefits pro bono even though not requested. The proposition that an insurance company would gratuitously provide coverage which was neither requested nor paid for is too absurd to merit consideration. Thus, we assume Lawson's claim is that, even though the statute requires ARB coverage to be offered in $10,000 increments, and even though the ARB provision of his Farm Bureau policy offered such coverage only in $10,000 increments, Farm Bureau was not precluded from contracting to sell ARB coverage in lesser increments of, e.g., $500. We note at the outset that there is no evidence to support a supposition that Lawson's local Farm Bureau agent had the authority to sell ARB coverage to Lawson in increments neither offered in the policy nor required by the statute. But even if such were true, the next issue would have to be whether Farm Bureau did, in fact, enter into such a contract with Lawson; and that issue can only be resolved by examining the contract, itself. Since the declaration page of the policy reflects that a premium was paid for Med-Pay coverage with limits of $500/$2500 and a premium was not paid for ARB coverage, Lawson is reduced to arguing that Med-Pay coverage is but a misnomer for ARB coverage even though the PIP (BRB), ARB, and Med-Pay coverages are all described in separate and distinct provisions of the policy which define separate and distinct coverages which clearly are not indistinguishable. The Med-Pay coverage pays only medical and funeral expenses incurred by an insured while occupying or while a pedestrian when struck by any motor vehicle, whereas persons other than an insured are covered only if injured while occupying (but not while a pedestrian when struck by) the insured vehicle. Under the PIP (BRB) and ARB coverages, an eligible injured person can recover not only medical and funeral expenses, but also work loss, replacement services loss, survivor's economic loss, and survivor's replacement services loss. Under the PIP coverage, an eligible injured person is the named insured or any relative who sustains bodily injury while occupying or while a pedestrian through being struck by any motor vehicle  (emphasis added), or any other person who sustains bodily injury while occupying or while a pedestrian through being struck by the insured motor vehicle.  (Emphasis added.) The ARB provision defines an eligible injured person only as the named insured or relative (not any other person) and does not provide coverage for injuries sustained while a pedestrian or injuries sustained by passengers in the insured vehicle who are not relatives of the named insured. [4] Furthermore, the Med-Pay coverage in Lawson's policy is limited to $500 per person and $2,500 per accident. The MVRA does not permit a per accident limitation on either BRB or ARB coverage. Those coverages are required to be provided in increments of $10,000 per person regardless of the aggregate amount payable per accident. Thus, the Med-Pay coverage described in Lawson's Farm Bureau policy could not be simply a misnomer for ARB coverage. 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. [5] KRS 304.39-070(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).