Foveaux v. Smith

• Decision Date: 04 December 1992
• Docket Number: No. 67963,67963
• Citation: 843 P.2d 283,17 Kan.App.2d 685
• Parties: Carol L. FOVEAUX, Plaintiff/Appellee, v. Cassandra L. SMITH, Defendant/Appellee, and Colonial Insurance Company of California, Intervenor/Appellant.
• Court: Kansas Court of Appeals

Page 283

843 P.2d 283

17 Kan.App.2d 685

Carol L. FOVEAUX, Plaintiff/Appellee, v. Cassandra L. SMITH, Defendant/Appellee, and Colonial Insurance Company of California, Intervenor/Appellant.

No. 67963.

Court of Appeals of Kansas.

Dec. 4, 1992.

Syllabus by the Court

1. Subrogation-assignment rights granted to a personal injury protection (PIP) insurance carrier by K.S.A.1991 Supp. 40-3113a of the Kansas Automobile Injury Reparations Act, K.S.A. 40-3101 et seq., justify the PIP carrier's intervention, in actions by the insured against a negligent party, to recover damages duplicative of the PIP benefits paid.

2. The PIP carrier's right of intervention does not include the right of its counsel to absolute and full participation in discovery and trial.

3. The injured party who has received PIP benefits remains in full and complete control of the cause of action against the party alleged to have negligently caused the injuries no matter when within the period of limitations the injured party files suit.

4. Under the facts of this case, the trial court did not abuse its discretion in limiting and restricting the role of the attorneys for the PIP carrier to actions deemed necessary to protect such carrier's interest in its subrogation rights.

5. Under the facts of this case, the trial court did not abuse its discretion in apportioning attorney fees between the insurer and the injured party after a recovery against a third party had been obtained.

Paul Hasty, Jr., and Robert J. Luder, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, Overland Park, for intervenor/appellant.

Kathryn D. Myers and Danton C. Hejtmanek, of Bryan, Lykins & Hejtmanek, P.A., Topeka, for plaintiff/appellee Carol L. Foveaux.

Meryl D. Wilson, of Stites, Hill, Wilson & Knopp, Manhattan, for defendant/appellee Cassandra L. Smith.

Before LARSON, P.J., PIERRON, J., and M. KAY ROYSE, District Judge, Assigned.

LARSON, Presiding Judge:

This appeal questions the trial court's discretion in limiting participation of the attorneys for a personal injury protection (PIP) insurance carrier in an automobile negligence action and the award of attorney fees to the insured's counsel.

On February 4, 1989, Carol L. Foveaux was involved in an automobile accident with Cassandra L. Smith, which resulted in Colonial Insurance Company of California paying Foveaux $12,886.59 in PIP benefits.

Foveaux did not sue Smith within 18 months after the date of the accident. Therefore, pursuant to K.S.A.1991 Supp. 40-3113a(c), Colonial sued Smith in Riley County, Kansas, to recover its PIP benefits.

Smith's insurer, State Farm Insurance Company, requested that Colonial's claim be arbitrated, and Colonial voluntarily dismissed without prejudice its suit against Smith.

Before the statute of limitations ran, Foveaux sued Smith, alleging her negligence resulted in personal injuries.

Colonial's motion to intervene in Foveaux's suit was allowed, but with the following specific limitations:

(1) Colonial's name would not appear in the caption of the case;

(2) Colonial could not actively participate in the trial, but could sit at plaintiff's table and offer assistance to Foveaux's attorney;

(3) Colonial's attorney could approach the bench to make any objections deemed necessary to adequately protect Colonial's interest;

(4) Foveaux would cooperate with Colonial by making her file available to Colonial for the purposes of evaluation, input, and suggestions;

(5) Colonial's counsel would be precluded from stating at trial that he/she represented Colonial;

(6) Colonial's counsel would be precluded from making specific and separate arguments or additional voir dire questioning; and

(7) Colonial's counsel would not be permitted to secure his/her attorney fees from any settlement proceeds or verdict rendered; Colonial would be obligated to pay its own separately incurred attorney fees.

Just before trial, the trial court again denied Colonial's counsel's motion for active participation at the trial. Colonial did not have a lawyer present during the trial of the case.

The jury found generally in favor of Foveaux, who was charged with 15% of the negligence, while Smith was proportioned 85% of the fault. The trial court entered judgment in favor of Foveaux for $35,700. $19,975 of the judgment represented expenses for medical care and treatment incurred by Foveaux and her loss of time and income. This amount exceeded the PIP benefits paid by Colonial to Foveaux.

Colonial appeals the trial court's order denying it full participation at trial and the award of attorney fees to Foveaux's counsel. We affirm.

Did the trial court err by limiting Colonial's participation in the discovery and trial?

Colonial contends that because K.S.A.1991 Supp. 40-3113a makes an absolute assignment to it of Foveaux's cause of action in tort once 18 months after the date of the automobile accident had expired without commencement of any action by Foveaux, it must be allowed to fully participate in the court proceedings.

Colonial correctly notes no Kansas appellate court has decided the extent of insurance carrier participation in the discovery process and at trial once a statutory assignment has taken place. Colonial argues cases interpreting K.S.A.1991 Supp. 44-504 are relevant and require Colonial to be given full participation in discovery and trial.

Foveaux asserts there was no abuse of the trial court's discretion; that Colonial's interests were adequately protected and represented; that attempted analogies to K.S.A.1991 Supp. 44-504 are flawed; and that Colonial waived its assignment rights by voluntarily dismissing its action against Smith.

Smith contends that even if the trial court erred by limiting Colonial's participation at trial, Colonial's substantial rights were not prejudiced, and no basis exists for a reversal of the judgment.

The statute at issue, K.S.A.1991 Supp. 40-3113a, is part of the Kansas Automobile Injury Reparations Act (KAIRA), K.S.A. 40-3101 et seq., which, although enacted in 1974, was substantially amended in 1977 to change the language concerning an insurer's right to recover PIP benefits. The statute reads in its entirety as follows:

"(a) When the injury for which personal injury protection benefits are payable under this act is caused under circumstances creating a legal liability against a tortfeasor pursuant to K.S.A. 40-3117 or the law of the appropriate jurisdiction, the injured person, such person's dependents or personal representatives shall have the right to pursue such person's remedy by proper action in a court of competent jurisdiction against such tortfeasor.

"(b) In the event of recovery from such tortfeasor by the injured person, such person's dependents or personal representatives by judgment, settlement or otherwise, the insurer or self-insurer shall be subrogated to the extent of duplicative personal injury protection benefits provided to date of such recovery and shall have a lien therefor against such recovery and the insurer or self-insurer may intervene in any action to protect and enforce such lien. Whenever any judgment in any such action, settlement or recovery otherwise shall be recovered by the injured person, such person's dependents or personal representatives prior to the completion of personal injury protection benefits, the amount of such judgment, settlement or recovery otherwise actually paid and recovered which is in excess of the amount of personal injury protection benefits paid to the date of recovery of such judgment, settlement or recovery otherwise shall be credited against future payments of such personal injury protection benefits.

"(c) In the event an injured person, such person's dependents or personal representative fails to commence an action against such tortfeasor within 18 months after the date of the accident resulting in the injury, such failure shall operate as an assignment to the insurer or self-insurer of any cause of action in tort which the injured person, the dependents of such person or personal representatives of such person may have against such tortfeasor for the purpose and to the extent of recovery of damages which are duplicative of personal injury protection benefits. Such insurer or self-insurer may enforce same in such person's own name or in the name of the injured person, representative or dependents of the injured person for their benefit as their interest may appear by proper action in any court of competent jurisdiction.

"(d) In the event of a recovery pursuant to K.S.A. 60-258a, and amendments thereto, the insurer of self-insurer's right of subrogation shall be reduced by the percentage of negligence attributable to the injured person.

"(e) Pursuant to this section, the court shall fix attorney fees which shall be paid proportionately by the insurer or self-insurer and the injured person, his or her dependents or personal representatives in the amounts determined by the court."

Colonial's argument first brings into question the interpretation of subsection (c), which is ultimately a question of law for the courts. See Hall v. State Farm Mut. Auto. Ins. Co., 8 Kan.App.2d 475, Syl. p 6, 661 P.2d 402, rev. denied 233 Kan. 1091 (1983).

" 'The fundamental rule of statutory construction, to which all others are subordinate, is that the purpose and intent of the legislature governs when that intent can be ascertained from the statutes. Legislative intent is to be determined by a general consideration of the entire act. Effect should be given, if possible, to the entire statute and every part thereof. To this end it is the duty of the court, so far as is practicable, to reconcile the different provisions so as to make them consistent, harmonious and sensible. Where a statute is plain and unambiguous, this court must give effect to the intention of the legislature as expressed rather than determine what the law should or should not be. Where various provisions of an act...