Court Opinion

ID: 9683765
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:36:28.159645+00
Date Added: 2024-06-11T18:17:50.166943
License: Public Domain

Dissenting Opinion by
Justice SCOTT.
Respectfully, I dissent.
The majority opinion concedes that apportionment would not be appropriate against a third-party immune from liability as a matter of law, citing Lexington-Fayette Urban County Government v. Smolcic, 142 S.W.3d 128 (Ky.2004). Yet, they would allow apportionment to an unknown tortfeasor who is neither before the court, nor subject to personal liability, such as the unknown motorcyclist in this case.
In Smolcic and Jefferson County Commonwealth Attorney’s Office v. Kaplan, 65 S.W.3d 916 (Ky.2001), this Court held that fault could not be apportioned to persons or entities that enjoyed absolute or sovereign immunity because they failed to qualify as substantive “parties to the action” and therefore were not within the scope of KRS 411.182, Kentucky’s apportionment statute. Following this same line of reasoning, a non-party, non-settling entity, not before the court, and not subject to personal liability, should not be considered for apportionment purposes because such a person is not a “party to the action” as required by KRS 411.182. There is simply no consistent logic between Smolcic and the majority’s opinion in this case.
Of course, the majority doesn’t even think KRS 411.182 applies in this case. They conclude the statute only applies in tort actions and feel this case is purely contractual. They cite Philadelphia Indemnity Insurance Co. v. Morris, 990 *805S.W.2d 621, 625 (Ky.1999) 1 for the well-settled principle that “a ‘suit to recover UIM coverage is a direct action’ against the UIM carrier and ‘the [UIM] carrier alone is the real party in interest..H owever, it does not follow from that premise that KRS 411.182 is irrelevant to adjudication of KFB’s contractual obligations. Under the terms of the contract, KFB’s liability is measured by the uninsured driver’s fault as determined under tort law. See Hoffman v. Yellow Cab Co. of Louisville, 57 S.W.3d 257, 259 (Ky.2001). However, if the procedural requirements of KRS 411.182 are not applicable to contract claims, then neither can the comparative negligence principles of Hilen v. Hays, 673 S.W.2d 713 (Ky.1984) be used to obtain the same result (Hilen only applies to ordinary negligence cases — not contract issues). How then can the majority claim any right to apportionment in a contract case?
I believe KRS 411.182 does apply in this case, and this Court has repeatedly recognized that apportionment is strictly limited to those who fall within the scope of the statute. Kaplan, supra; Owens Corning Fiberglas Corp. v. Parrish, 58 S.W.3d 467 (Ky.2001). As such, it is important to look to the terms of the statute in order to determine to whom it applies. KRS 411.182 does not expressly define the term “party.” But upon review of the statute, it becomes clear that “party” means anyone who actively assert claims, offensively or defensively, as parties before the court or who have settled by release or agreement.
In this case, the Kruers’ estate sued KFB for UIM coverage provided under their policy. KFB then filed a third party complaint against the unknown motorcyclist, who was constructively served via warning order attorney. The Kruers countered with a claim against KFB on its UM coverage, but were denied their claim on grounds there was no contact by the motorcyclist with the Kruers’ vehicle. See Burton v. Farm Bureau Ins. Co., 116 S.W.3d 475, 478 (Ky.2003)(“the purpose of the physical contact rule is to protect [] the insurer from fraudulent claims”). Yet, here, the majority refuses to apply its own Burton “no contact” logic in the apportionment of fault to an “unknown defendant”, who was only constructively served by a warning order attorney, and thus, was unavailable as a real party in the case.
Civil Rule 4.05 allows “individuals whose name or place of residence is unknown” to be constructively served via warning order. However, CR 4.05 should be read in conjunction with KRS 454.165, which provides that a court cannot achieve in per-sonam jurisdiction over persons who are the subject of constructive service of process.
Proceedings are divided into three classes, viz.: (1) in personam, (2) in rem, and (3) quasi in rem.
A judgment in a proceeding in rem is an adjudication upon the status of some particular thing by a tribunal having jurisdiction of the subject matter; it differs from a judgment in a proceeding in personam, in that the latter is an adjudication of the rights of the parties to the action, and does not directly affect the status of a thing or res. A personal judgment is a pronouncement binding only on the parties to the action and their privies; a judgment in rem, by a court of competent jurisdiction, is a pronouncement upon the status of the subject matter, and is binding upon the world. Judgments in rem and quasi in rem may be pronounced in an action in which the defendant has been notified by constructive process; whereas, a personal judgment may be pronounced only *806by personal service upon the defendant within the territorial jurisdiction of the court, or by his voluntary appearance to the action.
Gayle v. Gayle, 301 Ky. 613, 192 S.W.2d 821, 822 (1946)(internal citations omitted).
As the Kruers’ action against KFB for UIM benefits is an in personam action, the unknown motorist cannot be constructively served and become a “party to the action.”
In effect, the majority opinion lowers the standard of service necessary for apportionment. Instead of requiring personal jurisdiction, the majority would now allow apportionment to any unknown, nominal party, constructively served. They argue “fundamental fairness” requires that KFB be permitted to introduce evidence pertaining to the alleged fault of a third-party tortfeasor (who never touched anybody), even though the deceased plaintiffs are not to be accorded the same “fundamental fairness” on their UM coverage from KFB per Burton.
Even so, we are not dealing with a true “third-party” in this case. A constructively served “unknown” defendant is not considered to be before the court in an in personam action such as this. c.f., Nolph v. Scott, 725 S.W.2d 860, 861-862 (Ky.1987) (“Appointment of a warning order attorney is a procedural device permitting an action to proceed in certain circumstances, unknown to the defendant”). Even Justice Liebson in his dissent in Nolph acknowledged: “This lawsuit is an action in per-sonam and not in rem, and constructive service does not, per se, make Mr. Nolph a party defendant.” Nolph at 862 (emphasis added). Therefore, the unknown motorcyclist is not a “third-party” or any “party to the action.” Fundamental fairness requires that apportionment not be allowed to such a non-party on the basis of constructive service of process alone.
He does not defend himself — and in many cases in the future, he will only be a “ghost” — created by the intellect of the otherwise liable party — defending himself against subrogation from the UIM carrier, both having the same interest — reducing the damages awarded. In this case the parties were killed, and thus, they cannot dispute the tortfeasor’s proof as to who did what. Yet, for some unfathomable reason — we now have a “no personal jurisdiction” apportionment and a “no contact” rule for KFB — but not for their policyholders who paid their premiums on the earnest expectation they were buying coverage.
For the above stated reasons, I believe the unknown motorcyclist cannot be deemed a “party to the action” for purposes of apportionment. And because fault should not be apportioned against the “unknown motorcyclist”, the issue of dismissal of the UM claim need not be addressed, other than to add, this Court has repeatedly upheld policy provisions requiring direct, physical contact with an uninsured vehicle as a prerequisite to UM coverage. That being said, the policyholders ought to have the benefit of the same rule. That would meet the need for consistency and avoid this absurd result.
LAMBERT, C.J., joins this dissent.

. (quoting Coots v. Allstate Insurance Company, 853 S.W.2d 895, 903 (Ky.1993)).