Court Opinion

ID: 9648184
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:08:06.642102+00
Date Added: 2024-06-11T18:11:56.896864
License: Public Domain

GUDGEL, Judge,
concurring by separate Opinion:
I concur in the result reached by the majority but deem it appropriate to separately state my views as to the issue regarding the limit of underinsured motorist coverage. Without a doubt, the policy issued by employer Manning’s insurance agency on behalf of insurer TICO was seriously flawed, as the persons who prepared the policy’s declarations sheet simply failed to complete the section of the sheet which was intended to set forth TICO’s limit of liability under the policy for each of the provided types of coverage. Moreover, although the motor carrier endorsements which were attached to the policy in compliance with state and federal law specified a miUion-dollar coverage limit, by their very terms those endorsements apply only to claims whieh involved Manning’s public liability to others. As those endorsements have nothing at all to do with the policy’s underinsured motorist coverage of additional insureds such as appellees, they cannot by any stretch of the imagination be deemed to govern the limits of liability with respect to such claims. In fact, two of the endorsements specifically state that they do not cover claims for injuries or deaths of Manning’s employees.
Because the form governing underinsured motorist coverage states that TICO’s limit of liability for such coverage is “the limit of insurance for underinsured motorist coverage shown in the declarations,” but the section of the declarations sheet which was to reflect the limit of underinsured motorist coverage was left blank, one might interpret the policy as indicating that Manning pur*906chased unlimited underinsured motorist coverage. However, I agree with TICO that it is simply unfair and unreasonable to construe Manning’s policy as providing such unlimited coverage. Further, I do not believe that Simon v. Continental Insurance Co., Ky., 724 S.W.2d 210 (1986), compels a different result.
In Simon, the court construed a policy which, as here, failed to specify any limit of underinsured motorist coverage. However, the policy in Simon was issued prior to the enactment of the 1988 version of KRS 304.39-320. The earlier statute required that the amount which the insured recovered from the underinsured tortfeasor be set off against the payment made by the insured’s own insurer “to the extent of the policy limits” on the insured’s vehicle, “less the amount paid by the liability insurer” of the underinsured party. (Emphasis added.) The insurer in Simon argued that absent any specification in the policy of the amount of the underinsured motorist coverage, that coverage should be deemed to be the same as that specified in the policy for uninsured motorist coverage. Due to the requisite statutory offset, however, such an interpretation would have had the effect of providing no underinsured coverage at all. The insured, by contrast, claimed that under the statute the underinsured motorist limit should be deemed to be coextensive with the policy’s $100,000 liability limit. The court concluded that in light of the statute then in effect, the insured was entitled to underinsured motorist coverage in the amount of $80,000, representing the policy’s $100,000 liability limit less an offset of the amount recovered from the tortfeasor’s liability insurer.
Unlike the situation in Simon, where the language of the statute permitted the court to reasonably construe the policy as providing coverage to the extent of the policy’s total liability limit, here TICO’s policy was issued pursuant to the amended version of KRS 304.39-320, which now specifically provides that a policy’s provision of underin-sured motorist coverage obligates the insurer to pay its insured for uncompensated damages up to the amount of the policy’s under-insured motorist limits on the vehicle. Since here the portion of the policy’s declarations sheet which was to reflect the underinsured motorist coverage limits was left blank, the policy could be interpreted as providing either no underinsured motorist coverage whatever, or unlimited underinsured motorist coverage. As the doctrine of reasonable expectations certainly precludes a construction of the policy which would provide the insured with no coverage at all, it is arguable that the only other possible alternative is to construe the policy as providing unlimited underin-sured motorist coverage. Such an interpretation would be unfair and unreasonable, especially since it cannot be seriously argued that any insurer would intentionally issue an insurance policy providing unlimited coverage, and since the language of TICO’s under-insured motorist coverage form clearly indicates that TICO believed that its declarations sheet included a limit of liability in regard to such coverage.
Because the only permissible construction of the policy itself necessarily leads to unfair and unreasonable results, I believe that the trial court should have resorted to considering extrinsic evidence and fixing an underin-sured motorist coverage limit which was consistent with the parties’ true intentions and expectations. Indeed, as I view it this ease is further unlike Simon in that it is not one which involves an ambiguous insurance policy which is susceptible of two reasonable interpretations and therefore must be construed most strongly against the insurer. Nor does it involve the doctrine of reasonable expectations of the insured, except insofar as Manning is concerned, because here the appeEees are insureds of the second class. See Ohio Casualty Insurance Co. v. Stanfield, Ky., 681 S.W.2d 555 (1979). Rather, this case involves an insurance contract which on its face is incomplete in the important respect that it fails to specify the policy’s agreed limits of underinsured motorist coverage. Due to this silence, parol and other extrinsic evidence should have been adduced to establish the *907agreement’s missing term. See Anderson v. Britt, Ky., 375 S.W.2d 258 (1963). Then, based upon the evidence adduced in this vein, the court should have made a finding of fact, consistent with the evidence pertaining to the parties’ intentions and expectations, regarding the amount of the underinsured motorist coverage.
For the reasons stated, I concur in the result reached by the majority.