Court Opinion

ID: 9775514
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:01:22.807107+00
Date Added: 2024-06-11T07:32:27.577817
License: Public Domain

SPAIN, Justice,
concurring in result.
Respectfully, I concur only in the result reached by the majority. In doing so, I too would reverse the summary judgments granted by the trial courts to the respective UIM carriers and would remand for further proceedings under the UIM coverages of the policies.
I also would overrule Kentucky Cent. Ins. Co. v. Kempf, Ky.App., 813 S.W.2d 829 (1991), because in that case, as in the two before us today, the UIM policy coverage became payable not only in the event of and after the insured obtained a judgment against the underinsured motorist, but also in the event of a settlement. As a matter of fact, the opinion of the Court of Appeals states “... it is clear that the policy itself allows settlements by the insured with the underinsured motorist.” Id. at 830. The opinion, however, failed to address the effect which that court’s literal application of KRS 304.39-320 had in impairing the contract of insurance entered into between the UIM insured and his insurer.
In my view, insufficient importance was attached to the clear and unambiguous language of the insurance contract between the parties vis-a-vis the language of the statute. I prefer to harmonize the two by interpreting the statute as only requiring the UIM insured to obtain judgment against the tortfeasor or underinsured motorist before proceeding against his UIM insurer, if the UIM coverage language in his policy does not authorize payment in the event of settlement. In other words, if the coverage provided by the insuring agreement is broader than the requirement of the statute, the contract will govern the rights and obligations of the parties.
Applying this rule to both the Kitchen and Coots cases would require reversal of the summary judgments rendered in favor of both UIM insurers. Both judgments *905were occasioned by the failure of the UIM insureds to obtain judgments against their tortfeasors or underinsured motorists, as required by Kempf, notwithstanding the fact that both insurance policies afforded UIM coverage after termination of the liability claims by “judgments or settlements.”
As I read the majority opinion, however, it cavalierly repudiates the statute in question without any regard to the fact that there were broader coverages under the policies before us in the Kitchen and Coots cases as well as in the Kempf case. This seems not only unnecessary but also a bit gratuitous to me.
Having said that I would hold that both the Cootses and the Kitchens were free to settle their claims under their policies of insurance as against their respective tort-feasors notwithstanding the statutory reference to “judgment,” I now address the question of whether the Cootses and Kitchens breached their contracts of insurance by impairing the subrogation rights of their own respective UIM carriers.
First of all, I note that in 1990 the UIM language in KRS 304.39-320 was again amended so as to delete the following sentence from the statute:
His [the UIM insured’s] insurance company shall be subrogated to any amount it so pays, and upon payment shall have an assignment of the judgment against the other party to the extent of the money it pays.
Notwithstanding this deletion, I would hold that both UIM carriers in the cases at hand retained their common law rights .of subrogation. Henderson v. Selective Ins. Co., 242 F.Supp. 48 (E.D.Ky.1965). I am further of the opinion that such a potential right of subrogation does not actually accrue or become vested until such time as the UIM carrier makes a payment under that portion of the policy. Employers Mutual Ins. Co. v. Griffin Constr. Co., Ky., 280 S.W.2d 179 (1955). Therefore, any release executed by the Cootses or the Kitchens in favor of their respective tortfeasor or said tortfeasor’s liability carrier was ineffectual to abrogate or terminate any potential subrogation claim of the respective UIM carrier. Just as an injured party may not release a subrogation claim belonging to a reparations obligor under the Kentucky No-Fault Statute, KRS 304.39-070, by executing a release in favor of a tortfea-sor; similarly, a UIM insured would have no right or standing to release a potential subrogation claim belonging to the UIM carrier only.
STEPHENS, C.J., and WINTERSHEIMER, J., join in this concurring opinion.