Court Opinion

ID: 9678469
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:20:28.348157+00
Date Added: 2024-06-11T18:17:04.787758
License: Public Domain

NOBLE, Justice,
concurring in result only.
I concur with the result reached by the majority, but I disagree with the view expressed in Footnote 2 that there is no need to address the public policy issue of whether a specific agreement to indemnify a tortfeasor for BRB recoupment claims is void because it contravenes the Motor Vehicle Reparations Act (MVRA). This case presents the “next question” discussed in dicta in Ohio Casualty Insimnce Company v. Ruschell, 834 S.W.2d 166 (Ky.1992), because of the alignment of the parties in this case. The majority simply applies, and therefore tacitly approves, the “rule” (really dicta) laid out in Ruschell, yet that rule is built on a false foundation, violates the MVRA, and should be rejected.
In Ruschell, this Court had before it the question of whether a claimant’s own basic reparations benefits (BRB) carrier had to pay her BRB claims after she had settled with the tortfeasor and given a general release that contained language releasing *130“all other persons, firms and corporations” from any further claims relating to the automobile accident and covenanted to “indemnify and save harmless” such entities. Ruschell had outstanding BRB claims which Ohio Casualty argued had been released by the above language.
This Court correctly held that since a motor accident victim’s rights to the elements of damages which were covered by BRB had been abolished by the MVRA, the victim had no further right as a tort claimant for those elements under the MVRA. On the other hand, that same victim had specifically contracted, under the MVRA, with the BRB carrier to make payment for those elements. Under that factual scenario, this Court held that a general release would not release the BRB carrier unless the release specifically said it was doing so.
However, this Court also engaged in dicta stating that as a contract right, a tortfeasor may require a victim to give a “release or reimbursement of no-fault obligations.” Also noted was the language that the Court of Appeals had used in the case below that it “may be” that the tort-feasor’s carrier “may in turn have a right to seek reimbursement” of any BRB benefits it might be required to pay to the BRB carrier under the MVRA, from the victim. The question of whether a victim could give such a release or whether the tortfea-sor’s carrier could in fact do so under the MVRA was not before the Court.
This is precisely the question that is now before the Court, because the parties in this action are indeed the tortfeasor’s carrier seeking indemnification from the victim for BRB payments it was required to make to her BRB carrier under the MVRA.
Thus the question of whether an agreement, specific or not, can be demanded in a settlement between the tortfeasor and a victim is squarely before the Court and the majority does not answer it. While I arrive at the same result, I do so by answering that question.
I. The Motor Vehicle Reparations Act
This release arose from a claim based on an automobile accident, thus it is subject to the provisions of the Motor Vehicle Reparations Act. The MVRA is remedial legislation and it must be broadly construed to effectuate its purpose. See KRS 304.39-010 (MVRA enacted “[t]o correct the inadequacies of the [previous] reparation system.”); Crenshaw v. Weinberg, 805 S.W.2d 129, 131 (Ky.1991) (“The primary purpose of the MVRA is to benefit motor vehicle accident victims by reforming, and in some areas broadening, their ability to make and collect claims.”); Beacon Ins. Co. of America v. State Farm Mut. Ins. Co., 795 S.W.2d 62, 63 (Ky.1990) (“The MVRA is remedial legislation and thus is to be construed to accomplish its stated purposes.”); National Ins. Ass’n v. Peach, 926 S.W.2d 859, 861 (Ky.App.1996) (“Our courts have explained that the MVRA is social legislation that must be liberally construed to accomplish those objectives.”). The MVRA is the exclusive remedy for the payment of BRB and it preempts laws to the contrary. Foster v. Kentucky Fann Bureau Mut. Ins. Co., 189 S.W.3d 553, 557 (Ky.2006) (The MVRA “provides an exclusive remedy where an insurance company wrongfully delays or denies payment of no-fault benefits.... The MVRA is the exclusive remedy.”). KRS 304.39-060(2)(a) abolishes claims to the extent BRB are payable.5
*131II. Ruschell and Public Policy Considerations
Unfortunately, this Court engaged in dicta in Ruschell speculating that a plaintiff may agree to indemnify a tortfeasor for BRB as a matter of contract in order to settle a claim, without making a policy analysis:
We recognize that, as a contract right, in the process of striking a bargain to pay a given amount for a release of the tort claim, an alleged tortfeasor and his liability carrier may extract as an additional consideration the release or reimbursement of no-fault obligations, but certainly this should not be inferred as the intent of the parties unless the release specifically so provides.

Id.

Since that scenario was not before the Court, no research was done and no authority was cited. The ramifications of such a scenario were not examined. At best this language must be regarded as a passing thought.
In this case, Nationwide has paid BRB to Coleman, and Bee Line has reimbursed them an agreed-upon amount. However, analysis in this case demonstrates that there is no sound reason to infer under any circumstances that no-fault benefits are subject to a release/indemnification given by a plaintiff to a tortfeasor.
Arguably, a plaintiff could agree to obligate herself to indemnify any BRB her no-fault carrier may recoup, but why would she? She has paid premiums to her carrier to cover exactly this type of claim, as she is required to do by the MVRA. She is the beneficiary of the intent behind the MVRA which requires her own insurer to pay BRB regardless of fault in an accident. Their contract is not only statutorily required, it is exclusive of the tortfeasor.
Under the MVRA, the tortfeasor is excused from responsibility to the victim for the amount of damages covered by BRB, most often up to $10,000. However, the MVRA does provide that the BRB carrier may seek reimbursement for the amount of BRB actually paid from the tortfeasor. After all, the party responsible for the harm should bear the cost of the harm. Added together, whatever the tortfeasor pays a victim, added to reimbursement for BRB, should equal 100% of the damages. It is fundamental that a victim is entitled to a full recovery from the one at fault.
It can be argued that this Court should not interfere with a victim’s right to contract a settlement. We don’t need to, because the legislature already has. It has required a no-fault victim and every other driver to purchase minimum insurance coverage for liability and for basic reparations. Under the MVRA drivers in Kentucky do not have freedom to contract or not as to this coverage. It is mandated. Insurance companies benefit by selling the contracts of insurance the MVRA requires. Tortfeasors benefit by having the damage they cause paid by insurance instead of paying in a lump sum themselves. Victims benefit by having no-fault payment of treatment and necessities regardless of whether they share in the fault. Holding that all beneficiaries of the Act may not take advantage contrary to the policy of the MVRA is merely applying legislative intent.
The majority’s application of Ruschell would allow a tortfeasor to refuse to settle with a victim unless the victim gave him a specific release/indemnity clause in a set*132tlement release. This view would allow this contract even though everything about it is contrary to the policy of the MVRA, which is remedial, not to be used for further victimization.
Let there be no doubt that this type of contract would lead to further victimization. The victim would end up responsible for the cost of her BRB elements of damage twice: when she indemnified the tort-feasor for the damage he caused her when her carrier sought reimbursement, and when she paid the premiums to her BRB carrier. The tortfeasor and BRB carrier are in a superior position as recognized by the MVRA. The victim is injured and in need of treatment and basic expenses. The protective policy behind the MVRA is so strong that the legislature has mandated payment to the victim, even if the accident is her own fault, “to eliminate the inequities which fault-determination has created....” KRS 304.39-010(2). That policy is clearly violated if the guilty party and a business are allowed to be the only beneficiaries of such a contract.
In a number of cases, this Court and the Court of Appeals have held that certain contractual provisions are void because they are contrary to the overall purpose of the MVRA. See State Farm Mut. Auto. Ins. Co. v. Marley, 151 S.W.3d 33, 35-36 (Ky.2004) (household exclusions unenforceable); Philadelphia Indemnity Ins. Co. v. Moms, 990 S.W.2d 621, 627 (Ky.1999) (UIM set-off provisions unenforceable); Gordon v. Kentucky Farm Bureau Ins. Co., 914 S.W.2d 331, 332-33 (Ky.1995) (contractual statutes of limitations provisions unenforceable); State Farm Mut. Auto. Ins. Co. v. Mattox, 862 S.W.2d 325, 326 (Ky.1993) (anti-stacking provisions unenforceable); Miller v. U.S. Fidelity & Guar. Co., 909 S.W.2d 339, 343 (Ky.App.1995) (independent medical examinations under terms different than set forth under MVRA unenforceable); Mosley v. West American Ins. Co., 743 S.W.2d 854, 855 (Ky.App.1987) (intentional act exclusions unenforceable).
Under these cases the MVRA, given its broad remedial purpose, has been read as preempting contracts that would undermine its purposes. Unlike the common law of contracts, the MVRA is not a set of defaults that can be avoided by consent of both parties. In fact, no-fault benefits are more than just policy — they are a statutorily declared right: “every person suffering from loss from injury arising out of ... use of a motor vehicle has a right to basic reparations benefits.... ” KRS 304.39-030(1). (This right can be waived but must be done so in a statutorily prescribed manner, KRS 304.39-060(4), which does not include an indemnity agreement with a tortfeasor.)
The public policy purpose served by no-fault BRB and the MVRA in general would be thwarted if a release that meets the specific designation requirement of Ruschell permits a tortfeasor’s insurer to seek indemnity for BRB from the victim of a car accident. No one is allowed to contract contrary to the law.
For this reason, the holding in Ruschell and its dicta indicating that a party in the position of Bee Line “may be” able to seek indemnification from a settling plaintiff suggest a possibility that is clearly contrary to the purpose of the MVRA and is against sound public policy. Settling tortfeasors must recognize that they are settling only the injury portion of the plaintiffs claims, and not the BRB claim. Consequently, having examined the “next case,” the lack of analysis in Ruschell as to the policy of the MVRA requires that it be overruled, as the entire case is premised on the false notion that a victim can be required by contract to indemnify a tortfeasor in order to settle the case.
*133This, too, results in this case being reversed.
VENTERS, J., joins.

. KRS 304.39-060(2)(a) provides in part:
Tort liability with respect to accidents occurring in this Commonwealth and arising *131from the ownership, maintenance, or use of a motor vehicle is "abolished” for damages because of bodily injury, sickness or disease to the extent the basic reparation benefits provided in this subtitle are payable therefor. ...