Court Opinion

ID: 9567176
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:50:09.460331+00
Date Added: 2024-06-11T10:00:21.968576
License: Public Domain

Schroeder, J.,
concurring and dissenting: I join in the concurring and dissenting opinion written by Miller, J., but would like to add my reasons for construing K. S. A. 1975 Supp. 40-3113 (a) contrary to the construction placed upon it by the court.
The question presented is whether the defendant-appellee, Farmers Insurance Company, Inc., insurer of the plaintiff-appellant, is entitled to reimbursement, pursuant to 40-3113 (a), supra, in the full amount of personal injury protection (PIP) benefits previously paid to the plaintiff without a proportionate deduction for attorneys’ fees and costs of litigation.
The general purpose and application of the Kansas Automobile Injuries Reparations Act (KAIRA) is stated in the Act itself and in our prior decisions.
It was said in Manzanares v. Bell, 214 Kan. 589, 522 P. 2d 1291, that one of the obvious purposes of the legislature in limiting recovery under the threshold provision was clearly to eliminate minor claims for pain and suffering. The suggestion that an insured person under “no-fault” receives an amount equal to that which would have been recovered under the common law is illusory because it infers that the insured has been “given” the PIP benefits. Actually the insured has not been “given” anything, he has merely received a contractual benefit for which he paid a premium.
In K. S. A. 1975 Supp. 40-3102 the legislature states:
"The purpose of this act is to provide a means of compensating persons promptly for accidental bodily injury arising out of the ownership, operation, maintenance or use of motor vehicles in lieu of liability for damages to the extent provided herein.”
Our court also discussed the purpose of the Act in Farm & City Ins. Co. v. American Standard Ins. Co., 220 Kan. 325, 552 P. 2d 1363, where the court stated:
"... [T]he purpose of the Kansas automobile injury reparations act is to make personal injury protection insurance mandatory by requiring *435every owner of a motor vehicle to obtain first party coverage for personal injury protection benefits payable by his own insurance company.” (p. 329.)
Thus, three recognized purposes emerge from the Act as interpreted by the court:
(1) To compensate persons promptly for accidental bodily injury;
(2) To discourage only the filing of minor claims for non-pecuniary loss; and
(3) To make PIP insurance mandatory.
The payment of an attorney’s fee as applied to PIP benefits under the Act is first mentioned by the legislature in K. S. A. 1975 Supp. 40-3111 (b). It reads in part:
“An attorney is entitled to a reasonable fee for advising and representing a claimant in an action for personal injury protection benefits which are overdue. The attorney’s fee shall be a charge against the insurer or self-insurer in addition to the benefits recovered, if the court finds that the insurer or self-insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment.” (Emphasis added.)
In my opinion, the legislative intent expressed in the foregoing section of the statute is carried through and expressed in 40-3113 (a), supra.
The terms of K. S. A. 1975 Supp. 40-3113 (a) contemplate “subtraction” or “reimbursement” in the following situations: In the first sentence a subtraction applies where damages are recovered before PIP benefits are received. There is no right of subtraction merely because a liability claim exists. However, once damages are recovered from the wrongdoer “a subtraction shall be made to the extent of the recovery, less reasonable attorney’s fees and other reasonable expenses incurred in effecting the recovery.”
In the second sentence if damages are recovered from the wrongdoer after PIP benefits have been received “claimant shall repay . . . a sum equal to the benefits received, but no more than the recovery, exclusive of reasonable attorneys’ fees and other reasonable expenses incurred in effecting the recovery.”
Both “subtraction” and “reimbursement” are limited by the following general proviso “but only to the extent that the injured person has recovered said damages from the tortfeasor . . . which are duplicative of personal injury protection benefits payable” or “received.”
This section of the statute, in its entirety, was designed to prevent double or duplicative recovery. (Farm & City Ins. Co. v. *436American Standard Ins. Co., supra; and Manzanares v. Bell, supra.) It is abundantly clear that the provisions of 40-3113 (a) with respect to “subtraction” and “reimbursement” are confined exclusively to PIP benefits.
The legislative design is accomplished by the following formula for reimbursement: First, the amount of recovery which is duplicative of PIP benefits is determined, which in no event may exceed the amount received by way of settlement or judgment; second, a proportionate amount of reasonable attorney’s fees and expenses are deducted from the reimbursable PIP benefits, and the insured-claimant’s portion of the recovery, if any; third, the respective balances, after deduction for fees and expenses, are paid to the PIP carrier and claimant.
This formula accomplishes the intent of the legislature. In exchange for premiums paid by Kansas insureds, the PIP carrier provides prompt payment. Thereafter, if the insured is successful in obtaining a recovery of damages for the fault of another, the insurer is granted a limited right of reimbursement out of the recovery, after a deduction for its proportionate share of fees and expenses. This seems fair and consistent with the purpose of the Act. The full benefits promised and paid for by the insured claimant are provided, double recovery is prevented, and the insurance company justly pays a fair share of the cost of collecting its money where the injury to the plaintiff was caused by the fault of another.
Where the injured plaintiff is required to pay the entire cost of recovering. PIP benefits paid by his insurance carrier, the purpose of the No-Fault Act is violated.
I shall resort to the facts in the case of Jaremko v. Jones, 221 Kan. 444, 560, P. 2d 136, because the facts there presented clearly disclose the issue untarnished. The plaintiff there settled her damage action for $35,315. Her insurance carrier paid and the plaintiff received PIP benefits of $5,315. The trial court held the entire $5,315 must be repaid and that the full amount recovered as damages ($35,315) was subject to fees of one-third (Já), or $11,772, even though the plaintiff actually received only $30,000 as net damages. There the insurance carrier intervened claiming the entire $5,315 remaining on deposit with the clerk, when the plaintiff filed and served her motion for final distribution of the remaining $5,315 retained by the clerk. The plaintiffs motion recited that $1,771.67 should be applied to the plaintiffs attorney as and for a reasonable *437attorney’s fee and the sum of $3,543.33 to the intervenor, as its distributive portion of amounts paid as personal injury protection benefits to the plaintiff. In my opinion, the order of the trial court for distribution of the full $5,315 to the intervenor was erroneous.
The net result of the court’s holding in Jaremko is that the plaintiff has effectively netted only $3,543 as PIP benefits, not the $5,315 to which she was entitled under the Act and under her policy of insurance.
One of the statutory purposes of “no-fault” is to provide “payment of compensation.” As remedial legislation the “No-Fault” Act is to be liberally construed to provide the intended benefits. Conversely, any interpretation of other sections of the Act which detracts from that purpose must be narrowly construed against the PIP carrier. (Clayton v. Alliance Mutual Casualty Co., 212 Kan. 640, 512 P. 2d 507.)
The statute clearly recognizes that reasonable attorneys’ fees and expenses are to be paid. The only question is whether such costs should be paid by the insured or by the PIP carrier. Liberally construed the Act clearly requires that the plaintiff actually receive and keep the full amount of her PIP benefits. Thus, the cost of securing reimbursement must be borne by the insurance carrier of the insured. Any other construction unreasonably detracts from the statutory purpose.
The grammatical structure of the section of the statute here in question requires payment of fees and expenses from reimbursable PIP benefits. When the legislature provided for reimbursement “exclusive of reasonable attorneys’ fees and other reasonable expenses incurred in effecting the recovery,” to what “recovery” was it referring? Fees on the recovery of damages; on the recovery of reimbursable PIP; or both? The concept of single versus dual recovery seems important here.
In the first sentence when subtraction is involved, the PIP carrier has no financial interest in the recovery, since PIP benefits have not been paid. Thus the claimant effects but one recovery — his or her damages. Here, the legislature used the term “attorney’s fees” (singular possessive).
However, in the second sentence when reimbursement is involved, the “recovery” is divided between the claimant and the PIP carrier. Thus the claimant effects a dual recovery, that is, *438damages and reimbursable PIP benefits. In this situation the legislature uses the same words — “attorneys’ fees” (plural possessive) — but changes the punctuation.
Unquestionably, use of the plural possessive “s’" was volitional, not accidental, and was intended to refer to two attorney’s fees— one on the duplicative PIP benefits recovered for the insurer and another on the claimant’s non-duplicative damages.
The use by the legislature of two expressions, “less” versus “exclusive of,” is insignificant. In the first sentence of the section of the statute in question dealing with subtraction, the term “less” was used as opposed to the use of the words “exclusive of,” in the second sentence dealing with reimbursement. When reimburse-reasonable attorneys’ fees and expenses.
ment of PIP benefits should be in full, not taking into account ment is involved, the plaintifFs insurance carrier ruges that repay-
This construction is effective only when the words “exclusive of” are isolated from the rest of the statute and given a strict literal interpretation. Under general rules of statutory construction the various provisions of the statute in pari materia must be construed together with a view of reconciling and bringing them into workable harmony, if it is reasonably possible to do so. (Callaway v. City of Overland Park, 211 Kan. 646, 508 P. 2d 902; and Fleming Company v. McDonald, 212 Kan. 11, 509 P. 2d 1162.)
To adopt the strict literal meaning of “exclusive of” would nullify other provisions of the statute, previously discussed, dealing with mandated payment of compensation, dual attorneys’ fees and recovery of duplicative PIP benefits. Interpreting the statute to mean “minus” is not inconsistent with the common use of the word, and would harmonize the second sentence to conform with the terms of the first. This in my opinion, is the construction consistent with the intended sense and spirit of the Act.
It is respectfully submitted the plaintiff’s insurance carrier is entitled to reimbursement, pursuant to K. S. A. 1975 Supp. 40-3113 (a), for personal injury protection benefits previously paid to the plaintiff after a proportionate deduction is made for the attorney’s fee and costs of litigation attributable to PIP benefits which are duplicative of recovery.
Fatzer, C. J., and Miller, J., join in the foregoing concurring and dissenting opinion.