Fisher v. State Farm Mut. Auto. Ins. Co.

• Citation: 955 P.2d 622,264 Kan. 111
• Decision Date: 06 March 1998
• Docket Number: No. 77231,77231
• Parties: James R. FISHER, Terra M. Helm, and Joshua Ian Helm, by his conservator, First United National Bank & Trust Co. in Great Bend, Kansas, Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, and The Kansas Department of Transportation and the Estate of Ralph Horan, deceased, Defendants.
• Court: United States State Supreme Court of Kansas

Page 622

955 P.2d 622

264 Kan. 111

James R. FISHER, Terra M. Helm, and Joshua Ian Helm, by his conservator, First United National Bank & Trust Co. in Great Bend, Kansas, Appellees, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant and The Kansas Department of Transportation and the Estate of Ralph Horan, deceased, Defendants.

No. 77231.

Supreme Court of Kansas.

March 6, 1998.

Syllabus by the Court

1. When construing a statute, it is fundamental that the intent of the legislature governs, and a court should give words in common usage their natural and ordinary meaning.

2. When construing a statute, legislative intent must be derived from the language of the statute. Where the language used is plain and unambiguous, the court must follow the intent as expressed by the words used.

3. The uninsured and underinsured motorist statutes are remedial and should be liberally construed. They provide broad protection to the insured against damages for bodily injury in an automobile accident caused by an uninsured or underinsured motorist when that accident arises out of the ownership, maintenance, or use of the insured's motor vehicle.

4. Underinsured motorist coverage provides the individual who is covered by the standard automobile liability policy with a right against his or her own insurer equal to that the insured would have against an uninsured or underinsured tortfeasor.

5. K.S.A. 40-284(e)(4) allows an insurer to exclude or limit its uninsured and underinsured motorist coverage to the extent that duplicative workers compensation benefits apply. To permit an insured to recover underinsured motorist benefits which are duplicative of workers compensation benefits would negate the legislature's intent to require underinsured motorist coverage protection.

6. The intent of the 1993 amendment to K.S.A.1992 Supp. 44-504(b) was to exclude damages for loss of services and loss of consortium from subrogation because they are not compensable under the Workers Compensation Act.

7. Ordinarily, one who is dismissed as a party from a civil action cannot complain as to the compensation of the verdict form. However, a party that is dismissed from a civil action at its request, declines its right to intervene in the proceeding, and agrees to be bound by the amount of the judgment cannot later appeal the amount of the judgment.

Harry M. Bleeker, of Watkins, Calcara, Rondeau, Friedeman, Bleeker, Glendenning & McVay, Chtd., Great Bend, argued the cause and was on the brief for appellant.

M. John Carpenter, of Carpenter Law Office, argued the cause, and Jane M. Isern, of Brown & Isern Law Office, and Hugh D. Mauch, Great Bend, were with him on the brief for appellees.

LOCKETT, Justice:

Insured was killed in an automobile accident with an underinsured vehicle while in the course and scope of employment. After a trial, decedent's heirs obtained a judgment against the estate of the other vehicle's driver which exceeded the other driver's policy limits. Heirs moved to collect under the decedent's underinsured motorist policy provision. The district court awarded decedent's heirs $50,000 under the underinsured motorist coverage. Insurer appealed to the Court of Appeals, claiming that because the workers compensation benefits paid were in excess of damages awarded by the jury, the heirs had no claim against the underinsured motorist provision of the insurer's policy. The case was transferred to this court pursuant to K.S.A. 20-3018(c).

On February 23, 1994, Katherine Fisher was riding in a vehicle that collided with a vehicle driven by Ralph Horan. Both Fisher and Horan were killed. Fisher was acting in the course and scope of her employment at the time of the accident. Subsequently, her husband, James, and a minor son, Joshua, entered into a $204,779.40 lump sum settlement for indemnification and medical expenses under the Workers Compensation Act. The settlement included $3,300 in funeral benefits and $200,000 in death benefits for her husband and the minor child.

Subsequently, James, along with Katherine's daughter Terra (age 18, a partially dependent adult child) and Joshua, filed a civil action against the Kansas Department of Transportation (KDOT) and Horan's estate for wrongful death. At the time of her death, Fisher was insured by a State Farm Mutual Automobile Insurance Company (State Farm) policy which provided uninsured/underinsured motorist benefits of $100,000. Prior to trial, the heirs settled with Horan's estate for his policy limits of $50,000 and preserved all issues against the other parties. Since the policy covering the Horan vehicle had a limit of $50,000, Fisher's heirs asserted a claim for $50,000 underinsured motorist benefits against State Farm. State Farm was an active participant in all discovery and pretrial proceedings.

On October 28, 1994, the district court approved a settlement with the Horan estate. The judge allowed fees and expenses and apportioned the $50,000 settlement one-half to the surviving spouse, one-fourth to the minor child, and one-fourth to the adult child. The district court ordered that $37,500 of the settlement be paid to the workers compensation carrier, United States Fidelity and Guaranty Company, and $12,500 be paid directly to the adult child.

On the morning of trial, State Farm moved for dismissal as a named party, declined to intervene in the proceedings, and agreed to be bound by the final judgment. Despite being dismissed from the case, State Farm attended the instruction conference at trial and suggested that the verdict form contain a separate calculation under economic loss for loss of services or wages suffered by the heirs as a result of Fisher's death. The verdict form prepared by the judge and submitted to the jury did not contain the suggested change. At the conclusion of the trial, the jury returned a verdict of $126,000 and found KDOT not at fault, Horan 90 percent at fault, and Fisher 10 percent at fault. The verdict set the damages as:

                   A.  Past noneconomic damages    $  3,500
                   B.  Future noneconomic damages  $ 65,000
                   C.  Past economic damages       $  7,500
                   D.  Future economic damages     $ 50,000
                                                   --------
                                 TOTAL:            $126,000
                

The portion collectable against Horan based upon his 90 percent fault was:

                   A.  Past noneconomic damages    $  3,150
                   B.  Future noneconomic damages  $ 58,500
                   C.  Past economic damages       $  6,750
                   D.  Future economic damages     $ 45,000
                                                   --------
                                 TOTAL:            $113,400
                

Because the $113,400 verdict exceeded Horan's liability coverage, the heirs moved for a $50,000 judgment, the difference between the underinsured motorist limits and Horan's liability limits, against State Farm's underinsured motorist coverage. At the hearing on the heirs' motion, State Farm asserted it had no underinsured liability because the workers compensation settlement of $204,779.40 and the Horan estate's $12,500 payment to Terra had exceeded the $113,400 judgment. State Farm based this argument upon K.S.A. 40-284(e)(4) and the exclusion in its policy which provided:

"3. Any amount payable under this coverage shall be reduced by any amount paid or payable for the same damages to or for the insured:

(a) for bodily injury under the liability coverage; or

(b) under any workers' compensation law."

The district court entered a $50,000 judgment against State Farm.

DISTRICT COURT OPINION

In its memorandum and order awarding judgment to the heirs against State Farm, the district court stated:

"The second issue is whether or not the plaintiffs are entitled to a judgment against State Farm Mutual Automobile Insurance Company. The plaintiffs allege they are entitled to a judgment against State Farm, who is the underinsured carrier for Katherine Fisher. The plaintiffs argue under the jury's verdict they should be entitled to receive from the underinsured carrier, State Farm Insurance, any amount awarded by the jury which are non-duplicative of workers' compensation benefits. State Farm Insurance argues under the jury's verdict and award there are no non-duplicative amounts, or if there are, these amounts are small. As a result thereof, no payments or judgment should be awarded against State Farm Insurance.

"The Court finds there is no dispute between the parties concerning the funeral bill and expense therein. Workers' compensation benefits paid $3,300 of the funeral bill. Therefore that amount would be duplicative. However, there is a $2,798 balance on the funeral bill that has not been paid and would not be a duplicative payment.

"The real issues deal with the remaining jury award and whether it is or is not duplicative. The plaintiffs claim all the non-economic loss to date, $61,650, should be considered as loss of consortium and would be non-duplicative of the workers' compensation benefits. In addition, they argue, based upon the future economic loss of $45,000, part of that is for loss of services to the plaintiff's spouse, James Fisher, with some to be awarded to Terra Helm, the oldest child who was a partially dependent child under the workers' compensation benefits. The problem within this case is there was not a separation made by the jury on the verdict form as to loss of wages and loss of services under the economic loss argument. Therefore, the defendant State Farm Insurance argues the plaintiffs failed to meet their burden of proof and cannot guess what the jury was thinking when they awarded future economic loss [$45,000]. State Farm believes no amount should be attributable to loss of services for the plaintiff. In addressing this particular issue the Court would review applicable statutes to that factual issue. K.S.A. 44-504(b) states:

'In the event of recovery from such other person by the injured worker or the dependents or personal representatives of a deceased worker by judgment,...