Court Opinion

ID: 9773287
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:41:30.269561+00
Date Added: 2024-06-11T07:31:51.687808
License: Public Domain

LEIBSON, Justice,
dissenting.
Respectfully, I dissent.
Those of us who have been struggling to construe the many nonsensical provisions in the no-fault provisions of the Motor Vehicle Reparations Act so that the law will make some sense, can sympathize with the difficulty of doing so in this particular case. But this does not mean we should abandon the enterprise.
The no-fault law intended to “abolish” the right of an injured person to recover in tort against a “secured person” for medical expenses and wage loss, and, indeed, for any tort liability at all if the nature of the claim does not exceed one of the statutory thresholds specified in KRS 304.39-060. The word “abolish” is used in quotes in KRS 304.39-060(2)(a), but it is not defined elsewhere. Presumably it is put in quotation because the word is being used in a special, limited sense, rather than a general sense. It is used in the sense that it destroys only those causes of action expressly abolished by the machinery of the Act. The cause of action on behalf of a reparation obligor which has paid the injured victim against the tortfeasor’s liability insurance carrier is not one specifically destroyed by the Act, nor is there any reason to assume that such was intended, because to do so conflicts with the statutory scheme.
A reparation obligor has paid the debt of the tortfeasor, and has done so in circumstances where it would be subrogated to recover that debt from the tortfeasor or that person’s liability insurance carrier. If the tortfeasor is a “secured person” as defined in the Act, she cannot be sued. But this should be viewed as a special statutory shield not extending to others who share liability for the damages the tortfeasor has caused. The tortfeasor’s liability insurance carrier is not a “secured person,” and while this carrier’s liability to pay the tortfeasor’s debt may derive from the insured’s misconduct, there is nothing in the Act specifying that the obligation to pay is cut off simply because the insured enjoys statutory immunity. There is no reason consistent with the purposes of the Act for implying that it does so, and there are two very good reasons for believing otherwise.
The first of these reasons is that a fair reading of KRS 304.39-070(2) and (3) suggests that the liability insurance industry, the insurance companies which sponsored the no-fault legislation, while intending this legislation to limit damages available to the injured victim did not intend to limit their own interests. These sections are an attempt to retain the fault principle and indemnity wherever possible. Subsection (2) specifies that a “reparation obligor ... shall be subrogated to the extent of its obligations to all of the rights of [its insured] against any person or organization other than a secured person.” Subsection (3) sets up an elaborate mechanism whereby the reparation obligor who has paid no-fault benefits may recover from others at fault by various means, including, but not limited to, arbitration against the tort-feasor’s liability insurance carrier. This is totally inconsistent with that right to recover back having been cut off because the tortfeasor’s carrier has only derivative liability. I am convinced that those who drafted this legislation did not intend to *809limit their right to recover from third parties for whatever no-fault benefits they should be required to pay, except to the extent absolutely necessary to structure the Act. To do so it was necessary to exclude only the right to recover back from a secured person. It is logical to believe the no-fault insurance lobby intended the reparation obligor to retain the right to recover back from all others, a right which would inure to it from the contract of insurance, from common law principles of restitution, and from KRS 304.39-070(2), (3).
In the present case the tortfeasor carried her liability insurance coverage in two policies, a basic policy and an umbrella policy, rather than one policy. Because the basic policy has already paid its limits to the accident victim, there was no money available to pay the reparation obligor. Had all the liability coverage been written in one policy, the funds to pay this obligation would be available. There is no practical or sensible reason to distinguish between the two situations.
This brings us to the second important reason why this case should be reversed. It is a matter of fundamental importance to maintain a just and responsible society that liability should follow fault. Fundamental fairness dictates that the person who causes the loss should be obliged to pay for it, and if that person has liability insurance to cover the loss, the tortfeasor’s liability insurer should perform on its obligation. As a matter of practical expediency, the General Assembly has seen fit to give up this principle to a limited extent by adopting the no-fault law. Supposedly this was necessary expediency to meet a crisis in the cost and availability of automobile liability insurance. The no-fault law should be interpreted consistent with giving up no more of the fault principle than the statute demands. The present opinion gives way to the no-fault concept in a way that was not specified, not required to carry out its purposes, and, indeed, obviously not intended by its proponents.