Adkins v. Kentucky Nat. Ins. Co.

• Decision Date: 06 April 2007
• Docket Number: No. 2005-CA-002213-MR.,2005-CA-002213-MR.
• Citation: 220 S.W.3d 296
• Parties: Vernal ADKINS, Individually and as Administrator of the Estate of Kathleen Adkins, Appellant, v. KENTUCKY NATIONAL INSURANCE COMPANY and Hon. Steven Combs, Judge, Appellees.
• Court: Kentucky Court of Appeals

220 S.W.3d 296

Vernal ADKINS, Individually and as Administrator of the Estate of Kathleen Adkins, Appellant, v. KENTUCKY NATIONAL INSURANCE COMPANY and Hon. Steven Combs, Judge, Appellees.

No. 2005-CA-002213-MR.

Court of Appeals of Kentucky.

April 6, 2007.

Kristie M. Goff, Pikeville, KY, for appellant.

Bayard V. Collier, Julie Ann Sharp, Pikeville, KY, for appellee, Kentucky National Insurance Company.

Before LAMBERT and STUMBO, Judges; BUCKINGHAM,¹ Senior Judge.

OPINION

STUMBO, Judge.

Vernal Adkins (hereinafter referred to as "Adkins"), individually and as administrator of the estate of Kathleen Adkins, appeals from a summary judgment of the Pike Circuit Court. Adkins maintains that his action to recover aggregate or "stacked" Uninsured Motorist Coverage ("UM coverage") payments from Kentucky National Insurance Company raised genuine issues of material fact sufficient to overcome Kentucky National's motion for summary judgment. Specifically, he argues that Kentucky National improperly sought to unilaterally amend an insurance contract for the purpose of preventing Adkins from stacking three units of UM coverage. For the reasons stated below, we affirm the summary judgment.

On October 1, 2001, Kathleen Adkins received fatal injuries in a tragic automobile accident. The vehicle she was driving was owned by her daughter and was insured by a policy with State Farm Insurance Company. Kathleen and her husband, Vernal Adkins, had insurance coverage via a policy issued by Kentucky National. The at-fault driver, Norman Thacker, was not insured at the time of the accident.

The Adkinses' Kentucky National policy was issued on August 13, 1998. At the time of issuance, it provided insurance coverage for two vehicles. Sometime thereafter, an additional vehicle was added to the coverage. After the third vehicle was added, the Adkinses began paying three separate premiums for UM coverage, representing one unit of coverage per vehicle. Each UM coverage premium cost $32 for $50,000 of UM coverage, for a total of $96 in premiums representing $150,000 of stacked coverage.

Prior to the policy's renewal date of August 13, 2001, Kentucky National mailed to the Adkinses renewal materials which included a written notice of changes to their coverage. Specifically, Kentucky National stated that it would begin charging a single UM premium for the three units of coverage on the three vehicles, rather than three distinct premiums as had previously been done. The apparent purpose of this change—though not stated in the notice—was to prevent the stacking of the three units of UM coverage. The Adkinses accepted the new coverage and began paying premiums according to its terms.

After the death of Kathleen Adkins, and because the at-fault driver was not insured, Kathleen's estate sought payment from Kentucky National of $150,000 representing 3 stacked units of $50,000 UM coverage. Relying on the new policy provisions in effect at the time of Kathleen's death, Kentucky National offered to pay a non-aggregate or "non-stacked" coverage limit of $50,000. Rejecting the offer, Vernal Adkins, individually and as administrator of Kathleen's estate, filed the instant action in Pike Circuit Court. After the litigation commenced, Kentucky National paid to Adkins the sum of $50,000 to which the parties agreed Adkins was at least minimally entitled, and discovery was undertaken on the stacking issues.

Kentucky National subsequently filed a motion for summary judgment, followed by a renewed motion for summary judgment. As a basis for the motion, Kentucky National argued that it gave the Adkinses proper notice of the policy change affecting the UM coverage, that they accepted the change when they renewed the policy, and that Adkins was entitled to one unit of UM coverage or $50,000. In sum, it maintained that no genuine issue of fact remained for adjudication and that it was entitled to a summary judgment as a matter of law. A hearing on the motion was conducted on September 30, 2005, after which the circuit court granted the motion and rendered a summary judgment. This appeal followed.

Adkins now argues that the circuit court erred in granting Kentucky National's motion for summary judgment. He maintains that the Adkinses were not notified that Kentucky National intended to begin charging a single premium for three units of UM coverage, and that they did not consent to said change. Adkins also argues that Hamilton v. Allstate, 789 S.W.2d 751 (Ky.1990) expressly bars any provision in an automobile insurance policy prohibiting stacking. He directs our attention to case law which he claims holds that underinsured motorist coverage may be stacked even where a single premium is charged, and argues that this principle is equally applicable to UM coverage. Lastly, Adkins maintains that the policy change is void as contrary to the case law and public policy, and asserts that he had a reasonable expectation of aggregate (i.e., "stackable") coverage. He seeks an order reversing the summary judgment and remanding the matter for further adjudication.

We have closely examined the written arguments, the record and the law, and having heard the parties' oral arguments, we find no basis to overturn the summary judgment on appeal. Adkins' argument centers on his claim that the Adkinses were not given notice of Kentucky National's intention to change the terms of coverage resulting in their payment of a single premium rather than three distinct premiums for three units of UM coverage. Subsumed in this argument is Adkins' assertion that the Adkinses never consented to the policy change.

This argument is refuted by the record, which contains the notification of change in coverage mailed to the Adkinses as well as the "new" policy declaration which became effectual on August 13, 2001. Adkins admits as much in his written argument, where he states that ". . . Kentucky National sent a copy of the `altered' policy to the Adkinses [sic], which indicated that Kentucky National had changed the way they calculated the premium to be paid for UM coverage."² (Emphasis added).

Though Adkins maintains that the Adkinses were not notified of the change in coverage, the corpus of his argument on this issue is that they were not told of the ramifications of that change. This too, however, is refuted by the record. Kentucky National's notice to the Adkinses contained the following notice:

The enclosed renewal contains important changes in Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverages. In the past, premiums for these coverages have been charged on a per-vehicle basis. You paid a separate premium for each vehicle on the policy and coverage was determined by adding the number of vehicles and multiplying this amount by the limits of UM/UIM coverage. The amount of coverage would vary by the number of vehicles insured on the policy. On the renewal date specified on the declarations page of your renewal policy, we have revised this coverage. Only one change is made for this coverage per policy and coverage is limited to the coverage limits shown on the declarations page. If you have any questions...