Court Opinion

ID: 9619614
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:30:21.748939+00
Date Added: 2024-06-11T12:45:19.182324
License: Public Domain

Rees, J.:
I dissent.
We have here for review a case stemming from an October 12, 1980 two-vehicle country intersection accident. Rodney K. O’Donnell, the named plaintiff, was a passenger in one vehicle. Defendant Daniel J. Fletcher was the driver of the other vehicle. On appeal it is contended the trial judge erroneously refused a default judgment against Fletcher for recovery of damages in the amount of $5,766.58, all of which would be duplicative of personal injury protection (PIP) benefits paid by Farmers Insurance Group (Farmers) to O’Donnell. The denial of a punitive damages award is not challenged; the petition’s allegations regarding a claim for such damages is no part of this case as it comes before us.
This lawsuit was commenced two years and thirteen days after the accident. It has been continuously prosecuted by Farmers in O’Donnell’s name. Farmers has made no claim for recovery for so much of O’Donnell’s incurred medical specials as exceed Farmers’ $5,000 PIP medical benefits coverage limit. Farmers has asserted no claim for O’Donnell’s pain and suffering, for his temporary disability, or for his permanent disability, if any, save and except for $766.58 in lost wages for which Farmers paid O’Donnell under its PIP disability benefits coverage. The record reveals that as a result of the accident O’Donnell was hospitalized for treatment of a torn ligament in one knee. It also reveals the $5,000 PIP medical benefits payment was insufficient to cover $857.18 of O’Donnell’s treating doctor’s charges. Payment of all the hospital’s charges must be presently assumed in the absence of contrary showing in the record.
Farmers tells us that under K.S.A. 40-3113a(c), its action taken herein is proper. That statute reads in part:
“In the event an injured [PIP insured] . . . fails to commence an action against [the third party] tortfeasor within eighteen (18) months after the date of the accident resulting in the injury, such failure shall operate as an assignment to the [PIP] insurer ... of any cause of action in tort which the injured [PIP insured] . . . may have against [the third party] tortfeasor for the purpose and to the extent of recovery of damages which are duplicative of personal injury protection benefits. [The PIP] insurer . . . may enforce same ... in *496the name of the injured [PIP insured] ... for their benefit as their interest [sic] may appear by proper action of any court of competent jurisdiction.”
That there is but a single cause of action against Fletcher is not open to dispute. It is a tort claim in negligence for personal injury to O’Donnell. The common law rule is that such an unliquidated damages claim, a chose in action, cannot be assigned. Terrell v. Ready Mixed Concrete Co., 174 Kan. 633, 638, 258 P.2d 275 (1953); Howe v. Mohl, 168 Kan. 445, 448, 214 P.2d 298 (1950); Old Colony Ins. Co. v. Kansas Public Ser. Co., 154 Kan. 643, 646, 121 P.2d 193 (1942); St. Paul Fire & Marine Ins. Co. v. Bender, 153 Kan. 752, 754-55, 113 P.2d 1062 (1941). However, as with most if not all rules, there is at least one exception. Here, the exception is statutory assignment. Cf. Terrell v. Ready Mixed Concrete Co., 174 Kan. at 638-639; Wise v. Morgan-Mack Motor Co., 173 Kan. 372, 376-77, 246 P.2d 308 (1952).
What does the statute say? It says that if the PIP insured has not commenced an action against the tortfeasor within 18 months, his cause of action is assigned to the PIP insurer “for the purpose and to the extent of recovery of damages which are duplicative of [PIP] benefits” and that “the [PIP] insurer . . . may enforce [the cause of action] ... in the name of [its insured] . . . for . their benefit as their interests] may appear.”
It is clear to me that the self-executing statutory language effects partial assignment and conditions the assignee’s enforcement right or entitlement. The assignment is partial in that its extent does not exceed in nature or amount the recoverable damages duplicative of the insurer’s PIP benefits payment obligation. The insurer-assignee’s enforcement right or entitlement is conditional in that if the insurer elects to enforce its interest in the cause of action assigned to it, the enforcement, if sought in the name of the insured, is to be by an action against the third party tortfeasor for recovery for the benefit of the insurer and the insured as their interests may appear.
Farmers has not sought recovery against Fletcher for the benefit of Farmers and O’Donnell as their interests appear. Farmers frankly concedes it seeks recovery for only its interest in this matter and its position is that it has no responsibility for O’Donnell’s interest. This lawsuit by Farmers is not in compli*497anee with the statutory provision conditioning Farmers’ right or entitlement to sue Fletcher in O’Donnell’s name; the interest in O’Donnell’s cause of action that Farmers holds by assignment ($5,000 for reimbursed medical specials and $766.58 for reimbursed lost wages) can be asserted in a lawsuit brought by Farmers in O’Donnell’s name only if Farmers pursues recovery for the interests of both itself and O’Donnell. In addition to the statutory language, see also these property damage cases and cases cited therein: Dondlinger & Sons’Constr. Co. v. EMCCO, Inc., 227 Kan. 301, 306, 606 P.2d 1026 (1980); Ellsaesser v. Mid-Continent Casualty Co., 195 Kan. 117, 118-20, 403 P.2d 185 (1965); City of New York Ins. Co. v. Tice, 159 Kan. 176, 152 P.2d 836 (1944); Thompson v. James, 3 Kan. App. 2d 499, 502-03, 597 P.2d 259, rev. denied 226 Kan. 793 (1979), as well as Rumbaugh v. Vonfeldt, 190 Kan. 798, 805, 378 P.2d 5 (1963), a worker’s compensation case.
If this analysis is not correct, then one practical consequence is that upon the running of 18 months following the accident without commencement of a tort action by O’Donnell against Fletcher, O’Donnell was barred from recovery of his uninsured loss subject only to Farmers’ whim, that is, whether it would seek recovery for O’Donnell’s uninsured loss. I cannot conceive this was intended by the legislature. I am convinced that if by statutory subrogation the insurer (Farmers) steps into the shoes of its insured (O’Donnell), it steps into and must stand in both shoes, not one shoe only. Again, the insurer’s statutory right or entitlement to sue the third party tortfeasor in the insured’s name carries with it the condition and requirement that recovery of the insured’s personal interest, his uninsured loss, also must be sought.
Farmers has no more right or entitlement to proceed as it has done and continues to do than it would have if it had made voluntary gratuitous payment of $5,766.58 to O’Donnell. It would have no right, entitlement or standing to unilaterally file and prosecute a lawsuit in which O’Donnell is named as plaintiff and the judgment sought is recovery from Fletcher of the $5,766.58. Had that occurred, I am satisfied it would be insincere nonmeritorious argument to say a trial judge’s sua sponte denial of a default judgment against Fletcher was erroneous as a matter of law.
*498If the majority’s holding is correct, O’Donnell was deprived of six months of statute of limitations time because of the fortuitous circumstance, albeit statutorily required, that the owner of the vehicle in which he was riding carried PIP insurance. Under the majority’s holding the price of that PIP insurance is not only premium payment but also, subject only to the insurer’s whim, every policy beneficiary’s loss of six months’ time within which to prosecute a claim for uninsured loss. Surely that should not be.
If within 18 months after the accident, O’Donnell had sued Fletcher, Farmers would have been subrogated to and would have had a lien against any recovery by O’Donnell duplicative of the PIP benefits payments made by Farmers to or on behalf of O’Donnell. By operation of K.S.A. 40-3113a(c) and (b), such an action by O’Donnell is for the benefit of both the insured and the insurer as their interests may appear. I am satisfied the language of K.S.A. 40-3113a(c) plainly discloses legislative purpose and intent that an action prosecuted by the insurer after 18 months following the accident and in the insured’s name must also be for the benefit of both the insured and the insurer. The apparent purpose of statutory assignment to the insurer plainly and simply is to protect the insurer’s right of reimbursement in those instances where the insured, by choice or inadvertence, does not timely prosecute his cause of action against the third-party tortfeasor.
Construing the subject statute to mandate assertion by the PIP insurer of the entirety of the insured’s cause of action with recovery sought for the interests of both the insured and the insurer avoids possible “splitting of a cause of action” and harassment by multiplicity of suits problems.
I agree with the majority that the statute of limitations bar is an affirmative defense and since it inexplicably was not timely asserted by Fletcher by answer or other responsive pleading, that bar was not an available ground for the trial judge’s refusal of judgment against Fletcher.
I disagree with the majority’s conclusion that this case should be reversed. If the real party in interest rule was not a proper ground for the trial judge’s action, a proper ground lies in Farmers’ failure to comply with the statutorily imposed condition that when the PIP insurer prosecutes the assigned cause of action, it must be for the benefit of both the insurer and the *499insured. However, this may be denominated, e.g., lack of standing, is of no moment. If the trial judge’s decision was correct for any reason, it must be affirmed. Micheaux v. Amalgamated Meatcutters & Butcher Workman, 231 Kan. 791, 798, 648 P.2d 722 (1982).
As a final note, I find the majority’s direction on remand to be a mystery. The trial judge is told to enter judgment consistent with the evidence presented. He is not directed to enter judgment granting the relief requested by Farmers’ lawyer who appears as counsel of record for O’Donnell. Beyond what Farmers asked and asks to recover, the evidence presented indisputably discloses at the least an “additional” $857.18 in incurred medical expense as well as pain and suffering which must be inferred from the fact of O’Donnell’s injured knee and his hospitalization. If the majority is directing entry of judgment for these uninsured elements of O’Donnell’s loss, Farmers’ case is not only being mended, it is being expanded beyond thé theory upon which this case has been prosecuted in the trial court and before us. That should not occur.