Sherwin v. Kentucky Farm Bureau Mutual Insurance Company, No. 2008-CA-000718-MR (Ky. App. 3/27/2009)
| Decision Date | 27 March 2009 |
| Docket Number | No. 2008-CA-000718-MR,2008-CA-000718-MR |
| Parties | SHERWIN and Donna Dunn, Appellants. v. KENTUCKY FARM BUREAU MUTUAL INSURANCE COMPANY, Appellee. |
| Court | Kentucky Court of Appeals |
M. Austin Mehr, Timothy E. Geertz, Lexington, Kentucky, Briefs for Appellants.
M. Austin Mehr, Lexington, Kentucky, Oral Argument for Appellants.
Michael D. Risley, Joseph L. Hamilton, Marjorie A. Farris, Louisville, Kentucky, Michael J. Schmitt, Paintsville, Kentucky, Marcia L. Wireman, Jackson, Kentucky, Brief for Appellee.
Michael D. Risley, Louisville, Kentucky, Oral Argument for Appellee.
Before: CLAYTON and STUMBO, Judges; BUCKINGHAM,1 Senior Judge.
NOT TO BE PUBLISHED
Sherwin and Donna Dunn appeal the grant of summary judgment in favor of Kentucky Farm Bureau Mutual Insurance Company (KFB) that dismissed their class action claims. The Dunns argue that they are entitled, as a matter of law, to interest on the money KFB paid out to them pursuant to a homeowners' insurance claim and that they should be allowed to pursue a class action claim as to this issue.
The facts are not in dispute. On December 22, 2005, the Dunns' mobile home caught fire. The mobile home was insured by KFB. On January 5, 2006, the Dunns submitted a proof of claim form to KFB. KFB investigated the claim and on May 12, 2006, made a payment on the claim. Further payments were made on June 8, 2006, and July 3, 2006. No payments or offers of settlement were made within the 30-day window set forth in KRS 304.12-235.
The Dunns filed the underlying lawsuit individually and on behalf of three classes of persons that they alleged would have a claim for interest under KRS 304.12-235.2 The three named classes were:
A. All first party insureds who, within the last fifteen years, suffered a loss covered by their KFB policy, furnished KFB with a notice and proof of claim as required by the policy, and who received a settlement or claim payment from KFB, but who were not paid 12% interest on the ultimate settlement, and where KFB did not attempt to settle their claim within thirty days of being furnished the aforesaid notice and proof of claim.
B. All first party insureds and their health care providers who, within the last fifteen years, suffered a loss covered by their KFB policy (or in the case of health care providers, furnished health care for an injury covered by PIP or Added Reparations benefits), furnished KFB with a notice and proof of claims as required by the policy, and who have not yet received a settlement or claim payment from KFB, and where KFB did not attempt to settle their claim within thirty days of being furnished the aforesaid notice and proof of claim.
C. All health care providers who provided health care under PIP or Added reparations benefit coverage applicable to automobile policies issued by KFB, and who, within the last fifteen years, furnished KFB with a notice and proof of claim as required by the policy, and who received a settlement or claim payment from KFB, but who were not paid 12% interest on the ultimate settlement, and where KFB did not attempt to settle their claims within thirty days of being furnished the aforesaid notice and proof of claim.
Kentucky Farm Bureau filed a motion to dismiss pursuant to Civil Rule 12.02(f). The trial court dismissed the class action claims and all of the individual claims except the one dealing with payment of interest pursuant to Kentucky Revised Statute (KRS) 304.12-235.
KRS 304.12-235 states:
(1) All claims arising under the terms of any contract of insurance shall be paid to the named insured person or health care provider not more than thirty (30) days from the date upon which notice and proof of claim, in the substance and form required by the terms of the policy, are furnished the insurer.
(2) If an insurer fails to make a good faith attempt to settle a claim within the time prescribed in subsection (1) of this section, the value of the final settlement shall bear interest at the rate of twelve percent (12%) per annum from and after the expiration of the thirty (30) day period.
(3) If an insurer fails to settle a claim within the time prescribed in subsection (1) of this section and the delay was without reasonable foundation, the insured person or health care provider shall be entitled to be reimbursed for his reasonable attorney's fees incurred. No part of the fee for representing the claimant in connection with this claim shall be charged against benefits otherwise due the claimant.
The case progressed with the Dunns' filing of a motion for summary judgment, arguing that since KFB made no attempt to settle the claim until May 12, 2006, when they made the first payment, KRS 304.12-235 requires some interest to be paid. In other words, the statute makes it mandatory to pay interest when no attempt is made to pay the claim within 30 days. The trial court overruled the motion on the grounds that there is a genuine issue of material fact as to whether KFB acted in good faith to settle the claim.
The Dunns filed a second motion for summary judgment and stipulated that they would put on no evidence challenging KFB's good faith. KFB responded with its own motion for summary judgment arguing that since the Dunns will not put forth any evidence of bad faith, summary judgment should be granted in KFB's favor. The trial court granted summary judgment for KFB and denied the Dunns interest. This appeal followed.
The Dunns first argue that because there was no attempt to make a settlement until more than 30 days after submission...
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