Allen v. West American Ins. Co.
| Decision Date | 19 March 1971 |
| Citation | 467 S.W.2d 123 |
| Parties | Sadie A. ALLEN, Appellant, v. WEST AMERICAN INSURANCE COMPANY, Appellee. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. Anna MOSTOVYCH, Administratrix of the Estate of Nadia O. Mostovych, Deceased, et al., Appellees. Ralph W. HYBERGER, Appellant, v. Ruby W. HYBERGER et al., Appellees. |
| Court | United States State Supreme Court — District of Kentucky |
Henry V. B. Denzer, Hogan, Taylor, Denzer & Bennett, Robert E. Hogan, Edward F. Rectenwald, Robinson, Rectenwald, Tackett & DeMoss, James F. Donoghoe, Jr., Louisville, for appellants.
Fred C. Dolt, John L. Bennett, Jr., Louisville, W. F. Boelter, Cincinnati, Ohio, for appellees.
DAVIS, Commissioner.
This opinion deals with three separate appeals which have been consolidated because a single legal issue is presented in each of them. Basically, the question presented is whether the uninsured-motorist (UM) provisions of former KRS 304.682, now KRS 304.20--020, impose liability upon an insurance carrier in situations in which 'household exclusion' provisions otherwise relieve the company from liability.
In the appeal styled Allen v. West American Insurance Company, F--294--69, Sadie Allen was a passenger in an automobile owned and driven by her husband, William, and she sustained injuries in an accident allegedly caused by William's negligence. Sadie obtained a judgment against William, pro confesso, in the sum of $5,000. When an execution was returned 'no property found,' Sadie named West American Insurance Company as defendant, seeking to enforce collection of her judgment against West which had issued an automobile liability insurance policy to William. The policy contained a 'household exclusion' clause and also provided UM coverage. The trial court ruled in favor of West; hence, this appeal by Sadie.
State Farm Mutual Insurance Company v. Mostovych, F--2--70, presents these facts: Professor Mostovych was the owner and driver of an automobile upon which the company had issued a liability insurance policy containing the 'household exclusion' and UM coverage. While driving the automobile, Professor Mostovych ran off I--64 in Shelby County. His wife and daughter were killed in the accident, and his son was injured. Professor Mostovych also lost his life in the accident. In an action by the personal representatives of the widow and daughter of Professor Mostovych, the trial court adjudged that the UM provisions of the policy were mandatory and superseded the household exclusion provisions of the policy and entered judgment requiring the insurance company to pay the statutory limits prescribed for UM coverage. The insurance company has appealed.
Hyberger v. Hyberger, W--200--70, presenting the same legal question as the other two cases, has slightly varying facts. Ruby Hyberger, wife of Ralph Hyberger, was driving Ralph's automobile in which he was a passenger. Because of Ruby's alleged negligence, the car ran off the road and Ralph was injured. Ralph had liability insurance with Automobile Club Insurance Company; the policy contained the usual household exclusion provision, as well as UM coverage. The company was permitted to intervene for the purpose of permitting a binding adjudication respecting its responsibility under the policy. The trial court held that Ralph had no claim against his insurance company. Ralph has taken an appeal from that adverse ruling.
The insurance policies in all three cases contain language substantially the same, and exclude from coverage liability for bodily injury to the named insured or any member of the family of the named insured residing in the same household as the insured. This is the 'household exclusion,' the validity of which is admitted by these litigants and recognized in several decisions of this court, e.g., Third National Bank of Ashland v. State Farm Mut. Auto. Ins. Co., Ky., 334 S.W.2d 261; Orange v. State Farm Mut. Auto. Ins. Co., Ky., 443 S.W.2d 650.
Each of the policies contains within the UM provisions the clause that the term 'uninsured automobile' shall not include an automobile defined in the policy as an 'insured automobile' or an automobile owned by the named insured.
If there were no UM coverage, it seems plain that the 'household exclusion' would preclude liability of the insurance company in each case. However, because the 'household exclusion' does operate to prevent coverage, it is reasoned by the various plaintiffs that the respective operators became uninsured motorists, and the automobiles became uninsured motor vehicles, within the purview of the UM coverage of each policy. This seemingly anomalous conclusion is required, argue the plaintiffs, because of public policy considerations expressed or implied by the UM statute and the Financial Responsibility Law (KRS Chapter 187).
The provisions of the UM statute, KRS 304.682 (recompiled as 304.20--020), are:
'(1) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in KRS 187.330(3) under provisions approved by the Commissioner of Insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided, that the named insured shall have the right to reject in writing such coverage; and provided further that, unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer.
'(2) For the purpose of this coverage the term 'uninsured motor vehicle' shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency; an insured motor vehicle with respect to which the amounts provided, under the bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such motor vehicle, are less than the limits described in KRS 187.330(3); and an insured motor vehicle to the extent that the amounts provided in the liability coverage applicable at the time of the accident is denied by the insurer writing the same.
'(4) In the event of payment to any person under the coverage required by this section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer.'
It will be observed that subparagraph (1) of the statute requires the UM coverage unless the insured rejects it in writing. Within that framework, the...
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