Court Opinion

ID: 9473132
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:20:22.283651+00
Date Added: 2024-06-11T17:43:20.448774
License: Public Domain

WELLFORD, Circuit Judge,
dissenting in part:
I agree with the majority that the government should not be entitled to recover as a third party beneficiary of the insurance contract. However, I cannot agree that the government should not be allowed reimbursement under the Kentucky no-fault statute.
*668In United States v. Government Employees Ins. Co., 605 F.2d 669 (2d Cir.1979), the Second Circuit held that under the New York no-fault statute, the government could recover from an insurer medical expenses paid out for a serviceman’s injuries. The relevant language of that statutory scheme was explained as follows:
Section 672(l)(a) of New York’s no-fault law provides, in part, that every no-fault insurance policy should provide for the payment of certain statutory benefits to “persons, other than occupants of another motor vehicle or a motorcycle, for loss arising out of the use or occupation in [New York] of [the insured] motor vehicle....”
Id. at 670 (emphasis added and brackets original) (quoting N.Y.Ins.Law § 672(l)(a) (McKinney Supp.1978)). The court concluded that the term “persons” was not limited to living beings, and thus the government could not be precluded from recovery on this ground.
The court next decided that the government could recover despite the absence of physical injury to itself. Under the New York statutory scheme, the benefits to be paid out are essentially defined as including “payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle.” 605 F.2d at 671 (quoting N.Y.Ins.Law § 671(2)). This definition, the court found, was not limited to payments made solely because of personal physical injury.
The broad language of section 672(l)(a) suggest [sic] that a third party claimant who incurs the medical costs of an accident victim may recover those expenses under this section.
605 F.2d at 671. Thus, the government’s payments for a serviceman’s injuries were found not to be excluded, and could be recovered.
It is important to note in considering the above rationale that Kentucky’s no-fault statute is similar to that of New York, and is subject to much the same analysis. Kentucky grants the relevant right to benefits in Ky.Rev.Stat.Ann. § 304.39-030(1) (Michie 1981):
If the accident causing injury occurs in this Commonwealth every person suffering loss from injury arising out of maintenance or use of a motor vehicle has a right to basic reparation benefits,____
(Emphasis added). “Injury” is defined as meaning “bodily harm, sickness, disease, or death.” Ky.Rev.Stat.Ann. § 304.39-020(4). “Loss,” in turn, is defined as being “accrued economic loss consisting only of medical expense, work loss, replacement service loss; and, if injury .causes death, survivor’s economic loss and survivor’s replacement services loss.” Ky.Rev.Stat. Ann. § 304.39-020(5). Thus, in sum, “loss from injury” is economic loss resulting from bodily harm, sickness, disease or death (“physical injury”). There can be no doubt that the government, by paying for the serviceman’s medical care,1 has suffered economic loss by reason of a physical injury suffered by the serviceman.
The fact that the physical injury resulting in the loss was not inflicted directly upon the government itself does not defeat the government’s claim. As was the case in Government Employees, the no-fault statute nowhere requires that the person physically injured be the same “person” suffering the economic loss. In fact, section 304.39-020(5) (defining loss) expressly includes the economic loss borne by a survivor, one not personally physically injured. Any argument that the party bearing the economic loss must also be the person *669physically injured is thus patently inconsistent with the statutory language.2
The last question that must be answered is whether the government qualifies as a “person” for purposes of Kentucky’s no-fault statute. “Person” is not defined in the Act. Section 304.39-030(1), however, purports to encompass “every person.” First, consistent with the immediately preceding discussion, this choice of language would seem to indicate clearly that all parties suffering economic loss, even those not personally physically injured, receive compensation. Second, the legislature, in another context, limited specifically those who could receive compensation; where the accident occurs out-of-state, only
the following persons ... suffering loss from injury ... have a right to basic reparation benefits:
(a) Basic reparation insureds; and
(b) The driver and other occupants of a secured vehicle____
Ky.Rev.Stat.Ann. § 304.39-030(2) (emphasis added). “Basic reparation insureds” are defined as those persons named on the insurance contract and the family members of those named persons. Ky.Rev.Stat.Ann. § 304.39-020(3). Thus, where the accident occurs out-of-state, only a select group of persons may recover reparation benefits. Where the accident occurs in-state, as here, “every person” who otherwise qualifies may recover. The coverage of section 304.-39-030(1) (applying to in-state accidents) is broader than the coverage provided by section 304.39-030(2) (applying to out-of-state accidents). I find it logical, therefore, to infer that the class of “every person” was intended to include entities other than living beings.3 See Government Employees, 605 F.2d at 671.
Accordingly, the government qualifies as a “person” entitled to reparation benefits. This analysis is consistent with the no-fault statute policy of spreading liability among a large class of individuals, and is also consistent with the policy of compensating promptly those who have suffered economic loss. Further, such an interpretation will in no way influence the government’s decision whether to pay, or not to pay, injured servicemen. Indeed, the fact that the government might be reimbursed would only encourage prompt payment and could only enhance prompt reparation for needed medical care for those injured.
The equities in this case clearly weigh in favor of the government. Should the government not be able to recover, the insurer experiences a two-fold windfall. First, it is relieved of paying that which it would otherwise have been required to pay had there been no third-party payment. Second, the insurer keeps premiums paid not only by the injured serviceman, but also those paid by the driver of the automobile, and the government is forced to bear a burden which should rightfully fall on the insurer.
In United States v. Dairyland Ins. Co., 674 F.2d 750 (8th Cir.1982), after interpreting the North Dakota no-fault statute, the court concluded that the government was not entitled to reimbursement for expenses paid for a serviceman’s medical needs. In that case, however, recovery was limited to loss “sustained by an injured person ‘or his dependent survivors or incurred on his behalf by his spouse, relatives, or guardian.’ ” Id. at 753 (quoting N.D.Cent.Code § 26-41-09). That language is more restrictive than that of the Kentucky statute previously analyzed (“every person”).
Similarly, in Heusle v. National Mutual Ins. Co., 628 F.2d 833, 839 (3d Cir.1980), *670the Pennsylvania no-fault statute included a provision expressly relieving the insurer of liability for amounts paid by “any government.” See Pa.Stat.Ann. tit. 40, § 1009.206(a) (Purdon Supp.1980). The Kentucky no-fault law contains no such provision. Heusle is therefore inapplicable to the facts of this case.
For these reasons I respectfully dissent; I would reverse the judgment of the district court, and render judgment for the government.

. I take note of the reference in note 1 of the majority opinion to 10 U.S.C. § 1074(a). I have difficulty, however, with the government’s apparent interpretation that § 1074(a) requires it to pay for "privately provided care.” I accordingly have doubt, as set out by the majority in Part II of its opinion, that the government "was legally obligated to provide free medical care” if it is referring to care at Louisville General Hospital, a private hospital, where Tangerman was treated.

. As set out in section 304.39-030(1), a person suffering economic loss by reason of physical injury is entitled to "basic reparation benefits.” These benefits are defined as “benefits providing reimbursement for net loss suffered through injury____” Ky.Rev.Stat.Ann. § 304.39-020(2). This language is consistent with the conclusion that the government has suffered ‘loss from injury.’

. Gregory v. Allstate Insurance Co., 618 S.W.2d 582 (Ky.Ct.App.1981), does not require a different result. That case dealt with whether a decedent’s estate could recover for "work loss” under the no-fault statute. The court concluded it could not, relying heavily on the fact that an estate is not a “survivor,” and also relying on its interpretation of "work loss.” These statutory terms are not implicated in the present case.