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Samons v. Kentucky Farm Bureau Mutual Insurance Co.

Supreme Court of Kentucky

May 23, 2013

LINDA KAYE SAMONS, ADMINISTRATRIX OF THE ESTATE OF KENNETH R. CRUM APPELLANT
v.
KENTUCKY FARM BUREAU MUTUAL INSURANCE COMPANY APPELLEE

ON REVIEW FROM COURT OF APPEALS CASE NO. 2010-CA-001659-MR FLOYD CIRCUIT COURT NO. 01-CI-00622

COUNSEL FOR APPELLANT: Nathaniel Leslie Collins

COUNSEL FOR APPELLEE: Deborah R. Lewis

OPINION

MINTON, CHIEF JUSTICE

Kenneth Crum, while riding horseback along a narrow and winding stretch of mountain road in Floyd County, Kentucky, was struck and severely injured by a vehicle driven by Raymond K. Ousley. At the time, Ousley was test-driving the vehicle, a disused, uninsured Ford Escort titled to Rhonda Ward. Crum sued Ousley for personal injuries and later joined Ousley's auto liability insurer, Kentucky Farm Bureau, for no-fault benefits. Kentucky Farm Bureau settled Crum's liability claim against Ousley, paying its policy limits of $25, 000. The circuit court entered a final order declaring coverage for Crum, [1] ordering Kentucky Farm Bureau also to pay him the no-fault benefits. The Court of Appeals reversed, holding that Kentucky law did not allow Crum to recover and Ousley's policy excluded Crum.

We granted discretionary review to consider an issue that has evaded review to this point and is capable of repetition. That is, whether a pedestrian struck by an uninsured vehicle being driven by an insured driver can recover no-fault benefits from the driver's insurance company. Because we conclude that the applicable statutory and policy language is clear and the public policy on this point is strong, we must reverse the decision of the Court of Appeals.

I. FACTUAL AND PROCEDURAL BACKGROUND.

The facts of this case are undisputed. Crum was riding horseback along Route 3381 in Floyd County. Crum was living in North Carolina at the time and had no personal automobile insurance. Crum was struck by a motor vehicle driven by Ousley but owned by Rhonda Ward. Ousley was test-driving the vehicle with Ward's fiance, John Reed, riding along as a passenger. Ward did not carry any insurance on the car, but Ousley had informed Ward and Reed that he was covered by two insurance policies. The policy important in this matter was policy number 4248070, furnished by Kentucky Farm Bureau, listing Ousley as the named insured and identifying a 1989 Grand Marquis as the insured vehicle. This policy, among other coverages, provided $10, 000 for Personal Injury Protection (PIP).

Crum filed a tort action against Ousley seeking damages for the injuries he suffered in the motor vehicle accident. Nearly a year after filing the suit, Crum joined Kentucky Farm Bureau as a defendant and filed an amended complaint, alleging, among other claims, a right to basic reparation benefits (BRBs). Kentucky Farm Bureau denied that it was required to provide Crum with BRBs under the Kentucky Motor Vehicle Reparations Act (MVRA) and the language of the policy issued to Ousley. The trial court, upon Kentucky Farm Bureau's motion, agreed to bifurcate the tort claim from the coverage issue. The trial court then entered summary judgment on the amount of liability coverage, limiting it to $25, 000 from a single policy. Crum and Kentucky Farm Bureau later settled the negligence claims against Ousley for $25, 000.

Later, the trial court declared by final order that Kentucky Farm Bureau was also required to pay BRBs to Crum for the motor vehicle accident. The trial court ruled that the MVRA's policy of compulsory insurance required that Kentucky Farm Bureau pay BRBs to Crum, and the policy issued by Kentucky Farm Bureau did indeed cover Crum because it covered Ousley for the use of any motor vehicle and any pedestrian struck by a motor vehicle Ousley drove. Additionally, the trial court found that any policy exclusion would be invalid under the MVRA and the doctrine of reasonable expectations.

Kentucky Farm Bureau appealed to the Court of Appeals, which reversed the trial court's final order declaring coverage, holding that the MVRA compelled the opposite conclusion. Relying on the plain language of the MVRA, the Court of Appeals panel held that because there was no insurance on the vehicle, Crum was not entitled to BRBs from Kentucky Farm Bureau but, instead, could seek them under the Assigned Claims Plan. Further, the Court of Appeals found that Ousley's policy excluded Crum from coverage for BRBs. In the opinion of the Court of Appeals, the trial court misread the policy and instead of covering any pedestrian struck by any motor vehicle, the policy actually only covered a pedestrian struck by a motor vehicle other than the vehicle under the policy if the pedestrian was an "insured." And Crum was not an "insured" under the policy.

We granted Crum's motion for discretionary review to advance Kentucky jurisprudence in the area of no-fault law. We now reverse the Court of Appeals. And because we hold that Crum was entitled to receive BRBs from Kentucky Farm Bureau, we do not reach the merits of the exclusion found by the Court of Appeals in Ousley's policy.

II. ANALYSIS.

Because these facts are undisputed, this case comes to us on appeal of a final order declaring coverage by the trial court, closely akin to a summary judgment. On appeal of summary judgment, our standard of review is "whether the trial court correctly found there are no genuine issues of material fact and the moving party is entitled to a judgment as a matter of law."[2] In this case, neither party has asserted any issue with the underlying facts; but both parties take issue with the legal conclusions reached by the courts below based on those undisputed facts. Accordingly, we are faced with only questions of law and statutory interpretation. ...


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