Opinion ID: 2127372
Heading Depth: 1
Heading Rank: 3

Heading: the misrepresentation of precedents.

Text: In holding that a UIM-covered plaintiff is entitled to a prejudiced jury and a poisoned verdict, the majority opinion has seriously misstated and/or misrepresented the holdings of our own precedents and those of other jurisdictions. That, of course, will not surprise anyone familiar with the anti-business, anti-insurance opinions of this Court over the past fifteen years. See, e.g., Nationwide Mut. Ins. Co. v. Hatfield, Ky., 122 S.W.3d 36, 44-61 (2003) (Cooper, J., dissenting). In Wheeler v. Creekmore, Ky., 469 S.W.2d 559 (1971), our predecessor court did not, as the majority asserts, hold that a UM carrier must be identified to the jury where a direct contractual relationship exists between a plaintiff and a defendant insurance company. Ante, at 259. Wheeler only held that the UM carrier must be identified when the carrier's counsel actively participates in the trial. Otherwise the jury would be left to speculate as to the interest represented by an attorney participating in the trial who had no apparent connection with any of the parties. It is our opinion that the considerations which have prompted the rule against mention of ordinary liability insurance in an automobile negligence case must yield in uninsured-motorist cases to the procedural desirability of letting the jury know who are the parties to the litigation where the uninsured motorist carrier elects to participate actively in the trial. Id. at 563 (emphasis added). Of course, as has been noted by other courts, infra, in an uninsured motorist case, the UM carrier generally will participate actively at trial because the uninsured motorist usually does not have the financial means to retain counsel or to mount a defense. The same is not true in an underinsured motorist case where the defendant will be represented by counsel provided by the defendant's liability insurer. And, contrary to the representation in the majority opinion that Coots v. Allstate Insurance Co. somehow supports today's decision, ante at 261, Coots did not hold that the UIM insurer must be named as a party defendant at trial. Coots only held that the UIM insurer cannot defend the case in the tortfeasor's name (as can the tortfeasor's liability insurer). The UIM carriers have raised as a collateral issue whether they should be able to defend before the jury in a suit against the UIM carrier in the name of the tortfeasor rather than in their own name, claiming that it is fundamentally unfair to take aim against them as a target defendant.... There is no more reason to create a legal fiction by substituting the name of the tortfeasor for the UIM carrier, when the carrier alone is the real party in interest in UIM cases, than there is reason to do so when dealing with UM coverage.... Underinsured and uninsured carriers should be treated similarly, as their purpose and the intent of their coverage is similar. Coots, 853 S.W.2d at 903 (emphasis added). Of course, the carrier is not the only real party in interest in this UIM case. Cobb is not a fictitious presence, ante at 261; she is the real party in interest because she will have to pay any judgment rendered in favor of Earle. Nor do any of the foreign cases cited in the majority opinion support the result reached in this case. In King v. State Farm Mutual Automobile Insurance Co., 157 Md.App. 287, 850 A.2d 428 (2004), the plaintiff brought a separate action against the UIM insurer after settling with the underinsured tortfeasor. Id. at 430. The UIM carrier waived its subrogation rights against the tortfeasor, id. at 430 n. 1, and the tortfeasor was never a party to the action against the UIM carrier; thus the carrier alone [was] the real party in interest. Coots, 853 S.W.2d at 903. The issue in King was whether the UIM carrier could defend the action anonymously, i.e., without being identified to the jury as an insurance company. Thus, the issue in King was factually identical to that in Wheeler v. Creekmore , and bore no factual resemblance to the case sub judice. State ex rel. State Farm Mutual Automobile Insurance Co. v. Canady, 197 W.Va. 107, 475 S.E.2d 107 (1996), was not an action in which the insurer sought to conceal its identity from the jury. It was an original action in an appellate court in which the UM insurer petitioned for a writ to require the trial court to allow it to intervene in its insured's tort action against an uninsured motorist so that the insurer could mount a defense in its own name and with its own counsel. Id. at 109, 475 S.E.2d 107. A West Virginia statute, W. Va.Code § 33-6-31(d), permits a UM or UIM carrier to defend an action brought against an uninsured or underinsured tortfeasor in the name of the tortfeasor, in its own name, or in the names of both. See Tilley v. Allstate Ins. Co., 40 F.Supp.2d 809, 812 (S.D.W.Va.1999) (interpreting West Virginia law and granting motion to join underinsured tortfeasor so that UIM carrier could defend in tortfeasor's name, even though plaintiff had settled with tortfeasor and UIM carrier had waived subrogation rights against tortfeasor). In defending against the petition for a writ, the plaintiff in Canady relied on State ex rel. Allstate Ins. Co. v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993), which had suggested that the insurer could raise only policy defenses in its own name and must otherwise defend in the name of the alleged tortfeasor. Id. at 759. Canady , a UM case, distinguished Karl , a UIM case, as holding only that (1) a UIM carrier could not assume the defense of an underinsured tort defendant who was already represented by his or her own liability carrier, Karl, 437 S.E.2d at 758; and (2) a UIM carrier could not defend in its own name if the tort defendant was being defended by a liability carrier, presumably because of the prejudice flowing to the tort defendant from informing the jury that he was insured, id. at 759. Canady, 475 S.E.2d at 110-11. In Canady , the uninsured motorist was not represented by counsel, but the UM carrier wanted to distance itself from him. Id. at 111. Canady held that the UM carrier could intervene, noting that one purpose of the statute was to prevent prejudice against insurance companies and that the UIM carrier had waived its right not to have insurance mentioned in the negligence case. Id. at 114. Since the tortfeasor was uninsured, identifying the UM carrier to the jury did not prejudice him. Canady also noted that UM coverage, like liability coverage, is primary coverage while UIM coverage is only secondary coverage, analogous to excess liability insurance. Canady, 475 S.E.2d at 111 n. 4. That analogy comports with our own characterization of UIM coverage as conceptually permitting the insured to purchase additional liability coverage for the vehicle of a prospective underinsured tortfeasor. LaFrange v. United Serv. Auto. Ass'n, 700 S.W.2d 411, 414 (1985). Canady further noted that in a UIM case, the tort defendant generally has counsel provided by the liability insurer, so there is no need for the UIM carrier to participate, whereas in a UM case, the tortfeasor often does not have private counsel, so the UM carrier has no choice but to actively participate to protect its interests. See Canady, 475 S.E.2d at 112 n. 8. All of these points contradict the majority opinion's reasoning in the case sub judice. Lima v. Chambers, 657 P.2d 279 (Utah 1982), was similar to Canady in that a UM carrier had unsuccessfully sought to intervene and defend in its own name a tort action brought by its insured against an uninsured motorist. The plaintiff did not sue the UM carrier and had obtained an uncounselled affidavit from the defendant in which he admitted liability. The plaintiff had used this affidavit to obtain a summary judgment on the issue of liability. The UM carrier sought to intervene to defend against the issue of damages, arguing that the defendant was unrepresented and unlikely to provide an adequate defense to the issue. The plaintiff asserted that its relationship to the UM carrier was contractual, i.e., the UM carrier was obligated to pay any judgment obtained against the uninsured motorist, but had no right to participate in the plaintiff's tort action. Id. at 280. Relying on Utah's equivalent of CR 24.01, Lima held that the UM carrier could intervene as a matter of right, overruling two prior cases holding otherwise. Id. at 284. Those prior cases had held that a UM carrier could not be a party to a tort action against an uninsured motorist because of the prejudice resulting from the interjection of insurance into the case. Kesler v. Tate, 28 Utah 2d 355, 502 P.2d 565, 566 (1972) (denying intervention); Christensen v. Peterson, 25 Utah 2d 411, 483 P.2d 447, 448 (1971) (denying joinder). In Tucker v. McQuery, 107 Ohio Misc.2d 38, 736 N.E.2d 574 (Com.Pl.1999), the tortfeasor was no longer a party to the action, so the UIM carrier was the only party in interest. Id. at 575 n. 1. In Lamz v. Geico General Insurance Co., 803 So.2d 593 (Fla.2001), the Court noted that Geico [the UIM carrier] participated at trial as a party defendant, represented by its own attorney, id. at 594, and held that the jury should be made aware of the precise identity of an uninsured or underinsured insurance carrier if it is a party at trial.  Id. at 595 (emphasis added). Thus, Lamz, like King v. State Farm , was factually akin to Wheeler v. Creekmore , but bore no factual resemblance to the case sub judice. Medina v. Peralta, 724 So.2d 1188 (Fla.1999), indeed held that the UM/UIM carrier must be joined as a party and identified specifically to the jury by its status as a UM or UIM carrier. Id. at 1190. However, that case turned on the fact that under Florida law, a UM/UIM carrier is a necessary party to the action. Id. (citing Government Employees Ins. Co. v. Krawzak, 675 So.2d 115, 118 n. 3 (Fla.1996), which held that a 1992 amendment of Fla. Stat. Ann. § 627.727(6) required that an action for UIM coverage be brought solely against the UIM insurer). Under Kentucky law, a UIM carrier is a real party in interest to an action against an underinsured motorist but is not a necessary party to such an action. See CR 19.01. While an action must be prosecuted by a real party in interest, CR 17.01, no provision requires that an action be prosecuted against or defended by a real party in interest  especially where that interest is identical at trial to that of another real party in interest who is providing an adequate defense. I would note in passing that the Court in Medina v. Peralta did not address what, if any, prejudice might flow to the tort defendant from identifying the plaintiff's UIM insurer as such at trial. To summarize, no case cited in the majority opinion supports the majority's conclusion that a plaintiff has a right to inform the jury in a UIM case that the tort defendant is covered by a policy of liability insurance. All of our own precedents hold otherwise and, except for Medina v. Peralta , which turned on the language of a local statute, no case is found where a court has held that a UIM carrier that is potentially liable for an excess verdict must participate in the trial and must be identified to the jury.