Court Opinion

ID: 9673421
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:11:30.903241+00
Date Added: 2024-06-11T18:16:21.834091
License: Public Domain

LAMBERT, Justice,
dissenting.
The majority opinion has virtuaHy abolished subrogation rights arising out of uninsured motorist claims. It has whoHy embraced the idea that until an injured party is “fidly compensated” and “made whole,” the insurance carrier paying pursuant to uninsured motorist coverage shaH not receive any subrogation payments. By concluding also that fuH compensation is generaUy impossible for injuries and damages so horrendous as these, the majority has estabHshed a standard which can rarely, if ever, be achieved.
If this Court were at Hberty to establish the law and pubHc poücy as we beHeve it should be, the majority view with respect to the “made whole” rule would have some appeal. Such would recognize that the insurer is paid to undertake the risk that an insured may be injured by a financiaHy irresponsible motorist. In fact, however, we have no such right with respect to pubfic poHcy or the determination of risk. Those decisions have been made by the General Assembly with its enactment of statutes and by the parties through their contractual undertakings.
The pubHc poHcy of this Commonwealth is found in KRS 304.20-020 whereby automo-bHe insurance carriers doing business in Kentucky are required to furnish uninsured motorist coverage unless such coverage is specificaUy rejected. KRS 304.20-020. Hamilton v. Allstate Ins. Co., Ky., 789 S.W.2d 751 (1990). The foregoing statute provides, in part, that coverage shaH be in the amounts required for bocHly injury or death set forth in KRS 304.39-110, the mandatory Kabifity insurance statute. An essential component of our pubHc poHcy is found in KRS 304.20-020(4) which provides as foUows:
In the event of payment to any person under the [uninsured motorist] coverage *567required by this section ... the insurer making such payment shall ... be entitled to the benefits of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made....
The majority has construed the foregoing statute as creating a right of subrogation but as being silent with respect to priority.
In my view, any such construction is pure sophistry. The subrogation provision appears as subsection (4) of a four-part statute which establishes the legal requirements for uninsured vehicle coverage. When it says “the insurer making such payment shall ... be entitled to the proceeds of any settlement or judgment ...,” it could only mean that the first and every succeeding dollar recovered from the tortfeasor shall be used to reimburse the uninsured motorist carrier. Such a construction would be entirely consistent with our decision in Bailey v. Reeves, Ky., 662 S.W.2d 832 (1984), by which we are required “... to accord to words of a statute their literal meaning unless to do so would lead to an absurd or wholly unreasonable conclusion.” Id. at 834. Words have meaning and these words mean that upon payment pursuant to an uninsured motorist policy, the carrier making payment shall be entitled to the proceeds of any recovery from the tortfeasor to the extent of its payment. In Commonwealth, Transportation Cabinet v. Roof, Ky., 913 S.W.2d 322 (1996), we specifically rejected a proposed construction of KRS 44.070(1) which would have subtracted the amount required to be offset from the claimant’s total damages, i.e., that which would have accommodated the “made whole” doctrine. Id. at 325. Instead we held that the offset must be from the maximum available Board of Claims award. Id. at 326. Roof stands for the proposition that in circumstances where the General Assembly possesses the prerogative to impose limitations or conditions upon damage awards, this Court will respect that prerogative and give it application when statutory intent is clear. Id.
The majority concedes that all of the insurance policies here under review contain provisions which establish contractually the right of subrogation. It dismisses such provisions with the same facile argument made concerning the statute, “the policies do not express an intent to invest the carrier with priority over its less than fully compensated insured.” It also undertakes to discover an ambiguity which may then be construed in favor of the insured.
The same sophistry referred to herein-above is at work with respect to construction of this policy provision. The substantive language by which these parties are bound is as follows:
If we [the insurance carrier] make a payment under the policy and the person to and for whom payment was made [Webb] has a right to recover damages from another [Wine], we shall be subrogated to that right.1
It is contrary to any reasonable construction to suggest that the foregoing provision fails to establish priority. Quite plainly it grants an insurance carrier which has paid pursuant to an uninsured motorist policy provision the right to recover the damages to which the injured person would otherwise have been entitled until all such payments are reimbursed.
The fundamental flaw in the majority opinion is in its wedding to the concept of full compensation. Believing, as it does, that an injured party should receive all available funds until he or she is fully compensated, and further believing that full compensation is impossible, the practical conclusion is that no subrogation will be allowed. In a perfect world where resources were unlimited, the full compensation standard would be appropriate. In the real world, it is not.
Uninsured motorist coverage exists to compensate injured persons when the tort-feasor has failed to comply with the mandato*568ry liability insurance statute. If the tortfea-sor has complied with the liability insurance statute and purchased even minimum policy limits, no payment is due under the uninsured motorist coverage.2 This alone is sufficient to defeat the “full compensation” concept which is so fundamental to the majority opinion. Under the majority opinion, a motorist who has uninsured vehicle protection will be better off being injured by an uninsured tortfeasor than by one who has minimum limits. This is so because the injured person will recover all available benefits from his or her uninsured motorist coverage plus whatever additional sums can be wrested from the personal assets of the tortfeasor. Such an anomaly should not be written into Kentucky law.

. Subrogation is defined in Black’s Law Dictionary 1279 (6th ed. 1979) as "the substitution of one person in the place of another with reference to a lawful claim, demand or right so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies or securities.”

. KRS 304.20-020(2) defines "uninsured motor vehicle," inter alia, by reference to KRS 304.39-110, the mandatory liability insurance statute.