Opinion ID: 1450087
Heading Depth: 1
Heading Rank: 4

Heading: manipulation of the statute of limitations?

Text: Lawson first accuses Farm Bureau of intentionally manipulating the statute of limitations so as to deprive him of his cause of action against Helton by characterizing reparation payments defined within the MVRA, i.e., KRS 304.39-020(2) and/or KRS 304.39-140, as Med-Pay payments which, of course, are not governed by any provision of the MVRA. In support of this proposition, Lawson cites cases which hold that a policy of insurance cannot abrogate a mandatory provision of the MVRA, e.g., State Farm Mut. Auto. Ins. Co. v. Mattox, Ky., 862 S.W.2d 325 (1993) (anti-stacking provision with respect to ARB coverage cannot be enforced against the named insured); Elkins v. Kentucky Farm Bureau Mut. Ins. Co., Ky.App., 844 S.W.2d 423 (1992) (insurance contract cannot establish a lesser period of limitations for bringing an action for BRB payments than that established by KRS 304.39-230(6)). Of course, those cases have no relevance here, because Farm Bureau has attempted neither to abrogate a coverage mandated by the MVRA nor to enforce a contractual period of limitations of lesser duration than that established by KRS 304.39-230(6). This argument (that Farm Bureau malevolently manipulated the statute of limitations to Lawson's detriment) overlooks the fact that Farm Bureau is Lawson's insurer, not Helton's. Farm Bureau is not Lawson's adversary in this action, but his co-plaintiff. Its claim against Travelers for reimbursement of PIP (BRB) payments is derivative of Lawson's tort claim against Helton. If Lawson's claim is barred by limitations, so, too, is Farm Bureau's claim against Travelers. State Auto. Mut. Ins. Co. v. Empire Fire & Marine Ins. Co., Ky., 808 S.W.2d 805, 807 (1991) ([t]he right of the reparation obligor to subrogation is dependent upon the right of the injured person to recover such damage); cf. Carlson v. McElroy, Ky.App., 584 S.W.2d 754, 756 (1979) ([s]ubrogation, either legal or conventional, is derivative in nature, and in this case, [the injured party's insurer's] claim against the reparations [sic] obligor of the [tortfeasor] reached no greater status than [the injured party's] claim against the [tortfeasor]). Thus, it would be to Farm Bureau's advantage if the last $500 which it paid to or on behalf of Lawson had been BRB or ARB payments which would have tolled the statute of limitations. Farm Bureau not only had no motive to mischaracterize the last $500 of its payments as Med-Pay payments rather than BRB or ARB payments, but logically would have had exactly the opposite motive. However, the inescapable fact is that the last $500 of its payments made to or on behalf of Lawson must have been Med-Pay payments, because the contract of insurance specifies that Med-Pay coverage is excess insurance over PIP (BRB) coverage, i.e., Med-Pay payments are payable only after the PIP payments have been exhausted. (One could only wonder while considering this argument how Farm Bureau's claims representative could have manipulated the statute of limitations in this case, since the PIP and Medical Coverage worksheets were prepared in 1993 and were furnished to Lawson's attorney in March 1995, whereas the period of limitations did not expire until May 3, 1995.)