Cameron R. Stone by Next Friend and Co-Conservator, Regina Ramage v. Kentucky Farm Bureau Mutual Insurance Company

• Court: Court of Appeals of Kentucky
• Decided: December 10, 2020
• Docket: 2019 CA 001739
• Status: Unknown

Opinion

RENDERED: DECEMBER 11, 2020; 10:00 A.M. TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals

NO. 2019-CA-1739-MR

CAMERON R. STONE, BY NEXT FRIEND AND CO-CONSERVATOR, REGINA RAMAGE; AND REGINA RAMAGE, IN HER INDIVIDUAL CAPACITY APPELLANTS

APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE SUSAN SCHULTZ GIBSON, JUDGE ACTION NO. 18-CI-006277

KENTUCKY FARM BUREAU MUTUAL INSURANCE COMPANY APPELLEE

OPINION AFFIRMING

** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; KRAMER AND MCNEILL, JUDGES.

CLAYTON, CHIEF JUDGE: This appeal is brought from a Jefferson Circuit

Court order granting summary judgment to Kentucky Farm Bureau Mutual

Insurance Company (“KFB”). The appellants are the mother and the minor son of a woman who was killed in a car accident. They seek to recover loss of

consortium damages under the underinsured motorist (“UIM”) provisions of a

KFB automobile insurance policy, although the decedent’s claims are expressly

excluded under the terms of the policy. The circuit court dismissed the mother’s

claim as a matter of law because Kentucky does not recognize a claim for loss of

consortium for an adult child. It further held that the son’s loss of consortium

claim is excluded from coverage because it is derivative of the excluded primary

wrongful death claim. Having reviewed the record and the applicable law, we

affirm.

MaKaela Franklin was twenty-six years of age when she was killed in

a head-on collision with a vehicle driven by Kaysie Yaw. At the time of the

accident, she resided in the same household as her minor son, Cameron Stone, and

her mother, Regina Ramage. Several months before the accident, KFB issued a

renewal of an automobile insurance policy (“Policy”) to Regina and Darrell

Ramage.

The UIM provision of the Policy provides in relevant part as follows:

PART C/1 – UNDERINSURED MOTORISTS COVERAGE

INSURING AGREEMENT A. We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury: -2- 1. Sustained by an insured; and 2. Caused by an accident. The owner’s or operator’s liability for these damages must arise out of the ownership, maintenance or use of the underinsured motor vehicle.

B. Insured as used in this Coverage Part C/1 – Underinsured Motorists Coverage means:

1. You or any family member. 2. Any other person while occupying your covered auto. 3. Any person for damages that person is entitled to recover because of bodily injury to which this coverage applies sustained by a person described in B.1. or B.2. above.

“Family member” is defined elsewhere in the Policy as “a person

related to you by blood, marriage or adoption who is a resident of your household.”

The Policy also contains several exclusions of UIM coverage,

including the following which is pertinent to this case:

A. We do not provide Underinsured Motorists Coverage for bodily injury sustained by any insured:

1. While occupying, or when struck by, any motor vehicle or trailer of any type owned by you or any family member for which the security required by the Kentucky Motor Vehicle Reparations Act is not in effect.

In the fatal accident, Franklin was driving an uninsured vehicle titled

in her own name.

Following Franklin’s death, Regina Ramage was appointed

administratrix of her estate and the co-conservator of her son, Ramage’s grandson.

-3- The estate and Stone settled for policy limits with Yaw’s insurer. Stone and

Ramage, as his next friend and co-conservator, and in her individual capacity,

thereafter filed a lawsuit against KFB in Jefferson Circuit Court. According to the

complaint, the settlement with Yaw’s insurer was insufficient to compensate the

plaintiffs for the loss of Franklin’s consortium, and they sought to recover damages

under the UIM provisions of the Ramages’ KFB Policy.

Following written discovery, KFB moved for summary judgment.

The circuit court granted the motion, holding that Regina’s UIM claim could not

be sustained because loss of consortium for the death of an adult child is not

recognized in Kentucky. It further held that claims for Franklin’s wrongful death

were clearly excluded from the Policy’s UIM coverage because she was operating

an uninsured motor vehicle, a violation of the security required by the Kentucky

Motor Vehicle Reparations Act (“MVRA”). The court concluded that Stone’s

claim for loss of consortium was also excluded from coverage under the Policy

because it derived from Franklin’s injury. This appeal followed.

In reviewing a grant of summary judgment, our inquiry focuses on

“whether the trial court correctly found that there were no genuine issues as to any

material fact and that the moving party was entitled to judgment as a matter of

law.” Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996) (citing Kentucky

Rules of Civil Procedure (“CR”) 56.03).

-4- The appellants argue that the circuit court’s dismissal of Ramage’s

claim on the grounds that Kentucky does not permit recovery for the loss of

consortium of an adult child should be reconsidered on equitable and public policy

grounds. They contend there is no rational basis for the distinction between the

losses suffered by the parent of a deceased adult child as opposed to a minor child.

In Kentucky, the claim for loss of consortium for the death of a minor

child is expressly created by statute. Kentucky Revised Statutes (“KRS”) 411.135

provides that “[i]n a wrongful death action in which the decedent was a minor

child, the surviving parent, or parents, may recover for loss of affection and

companionship that would have been derived from such child during its minority,

in addition to all other elements of the damage usually recoverable in a wrongful

death action.” In Giuliani v. Guiler, 951 S.W.2d 318 (Ky. 1997), the Kentucky

Supreme Court recognized reciprocal claims of minor children for the loss of

parental consortium. Id. at 323.

The Court subsequently refused, however, to recognize a cause of

action for loss of parental consortium brought by emancipated adult children.

Clements v. Moore, 55 S.W.3d 838 (Ky. App. 2000). The Court explained its

decision as follows:

We are not insensitive to the losses experienced by the appellants [adult children of a deceased parent], losses which are substantially the same as those experienced by their minor sibling. Further, we do not -5- have any reason to believe that the appellants are any less deserving of compensation than other family members merely because they have reached the status of adults. Nevertheless, it is the belief of this Court that it is not the proper function of the judiciary to further develop the common law in the area of loss of consortium claims in the context of wrongful death. Rather, the recognition of filial claims for wrongful death is one exclusively within the purview of the Legislature. . . . While this Court has not hesitated to take an active role in extending the common law of torts when appropriate, we decline the invitation in the case sub judice so as not to invade the province of the Legislature, the branch of our government to which our constitution has granted the [sole] responsibility for determining who can recover what damages for the wrongful death of another.

Id. at 840-41 (internal quotation marks and footnotes omitted).

In light of this clear refusal by the Kentucky Supreme Court to create

a loss of consortium claim for adult children, and in the absence of a statutorily-

created claim, we must affirm the circuit court’s dismissal of Ramage’s reciprocal

claim as the parent of a deceased adult child. Such a claim is not recognized in

Kentucky and we are not empowered to create one. Whatever the merits of the

appellants’ arguments, “as an intermediate appellate court, this Court is bound by

established precedents of the Kentucky Supreme Court. SCR[1] 1.030(8)(a). The

Court of Appeals cannot overrule the established precedent set by the Supreme

Court or its predecessor Court.” Smith v. Vilvarajah, 57 S.W.3d 839, 841 (Ky.

App. 2000).

1 Rules of the Supreme Court. -6- We turn now to consider whether Stone’s claim for loss of parental

consortium is excluded from the UIM coverage of the Policy.

The interpretation of an insurance contract is a matter of law to be

reviewed de novo, giving no deference to the trial court. Davis v. Kentucky Farm

Bureau Mutual Ins. Co., 495 S.W.3d 159, 161 (Ky. App. 2016); Hallahan v. The

Courier-Journal, 138 S.W.3d 699, 705 (Ky. App. 2004). When an insurance

contract is ambiguous, it “is to be construed against the drafter, and so as to

effectuate the policy of indemnity.” Bituminous Cas. Corp. v. Kenway

Contracting, Inc., 240 S.W.3d 633, 638 (Ky. 2007), as modified on denial of

reh’g (Jan. 24, 2008).

Specifically, in regard to UIM exclusions, the Kentucky Supreme

Court has held that “there is nothing either in the MVRA or our public policy

prohibiting enforcement of exclusion of UIM coverage in certain scenarios. The

reasonable expectations of coverage are satisfied so long as the plain meanings of

the terms of the underlying policies are clear and unambiguous.” Philadelphia

Indemnity Ins. Co., Inc. v. Tryon, 502 S.W.3d 585, 592 (Ky. 2016).

For purposes of the motion for summary judgment, KFB conceded

that Franklin and Stone were residents of Ramage’s household at the time of the

fatal accident and therefore met the definition of “insureds” under the Policy. The

appellants argue Stone is entitled to UIM coverage under the plain language of Part

-7- C/1 (A.) of the Policy as an “insured” who “is legally entitled” to recover loss of

consortium damages “because of bodily injury . . . [s]ustained by an insured[,]”

namely Franklin. Because Stone was not occupying Franklin’s uninsured vehicle

at the time of her fatal injury, the appellants contend he is not subject to the UIM

exclusion. Had KFB wished to exclude loss of consortium claims from UIM

coverage, the appellants contend the Policy should have included express

provisions to that effect.

KFB contends that the appellants’ argument is not adequately

preserved in the record before the circuit court or in the appellants’ prehearing

statement. In their response to KFB’s motion for summary judgment, the

appellants relied on Hoskins v. Kentucky Farm Bureau Mutual Insurance

Company, No. 2011-CA-001454-MR, 2012 WL 4841094 (Ky. App. Oct. 12,

2012), an unpublished Opinion which we shall discuss more fully below, to argue

that the Policy does not specify that the underlying bodily injury from which the

loss of consortium claim is derived must be one that is covered by the terms of the

Policy. The appellants also cited Hoskins in their prehearing statement. These

references by the appellants to Hoskins are sufficient to preserve these arguments

for review, particularly as we are applying a de novo standard of review which

affords no “deference to the interpretation afforded by the circuit court.” Cinelli v.

Ward, 997 S.W.2d 474, 476 (Ky. App. 1998).

-8- Two unpublished Opinions of this Court have construed provisions of

insurance contracts virtually identical to the one before us and arrived at

conflicting conclusions regarding loss of consortium claims. In the Opinion relied

upon by the appellants, Hoskins,2 a husband and wife were named insureds under

an automobile policy containing an identical UIM clause to the Policy at issue in

this case. The specific exclusion at issue in Hoskins was for bodily injury

sustained by an insured while occupying or operating a motorcycle. After the

husband was seriously injured while riding his motorcycle, the wife sought to

recover for loss of consortium damages. She contended the plain language of the

insurance policy unambiguously provided UIM coverage for her claim, since the

phrase “because of bodily injury” in the general UIM clause encompassed her

claim, as distinguished from the “for bodily injury” language in the motorcycle

exclusion clause that barred her husband’s claim. The insurance company argued

2 The fact that Hoskins was affirmed by the Kentucky Supreme Court does not, as the appellants suggest, endow it with greater precedential authority than any other unpublished Opinion. After the Kentucky Supreme Court granted discretionary review of Hoskins, the Opinion was de- published by operation of CR 76.28(4)(a). The Kentucky Supreme Court subsequently entered an order indicating that, due to the recusal of one of the justices, the vote of the six remaining members of the Court on the case was equally divided. Pursuant to SCR 1.020, the Opinion of the Court of Appeals was affirmed and ordered not to be published. In Estate of Wittich By and Through Wittich v. Flick, 519 S.W.3d 774 (Ky. 2017), the Kentucky Supreme Court ruled that an Opinion with an identical procedural history “properly falls within the type of publication status which makes it merely persuasive authority[,]” in reliance on CR 76.28(4)(c), which states: “Opinions that are not to be published shall not be cited or used as binding precedent in any other case in any court of this state . . .” and “unpublished Kentucky appellate decisions, rendered after January 1, 2003, may be cited for consideration by the court if there is no published opinion that would adequately address the issue before the court.” Wittich, 519 S.W.3d at 779 (emphasis in original). -9- that the loss of consortium claim was derivative or based upon the husband’s

bodily injury for purposes of the insurance policy exclusions and because the

wife’s claim was based on an excluded injury, it was not covered under the policy.

The Court of Appeals, in a 2-1 decision, ruled in the wife’s favor because the plain

language of the policy failed to specify that the underlying bodily injury from

which the loss of consortium claim was derived must be one that is covered under

the terms of the policy. Hoskins, slip op. at 5-6.

Several years later, in Kentucky Farm Bureau Mutual Insurance

Company v. Armfield, No. 2014-CA-001559-MR, 2016 WL 748388 (Ky. App.

Feb. 26, 2016), a different panel of this Court, also in a 2-1 decision, construed

identical insurance policy language and arrived at the opposite conclusion. In

Armfield, the UIM claims of a husband and wife who were injured while riding

together on a motorcycle were barred by a motorcycle exclusion, but they filed loss

of spousal consortium claims for each other. The Armfield majority took an

unfavorable view of this tactic, characterizing the couple’s claims as attempting an

end run around the exclusion from coverage of their non-covered, non-

compensable bodily injuries. The Opinion held that they were not entitled to

recover because a spouse’s claim for loss of consortium is not a separate injury but

is derivative of the injured spouse’s personal injury claim and is entirely dependent

on the success of the underlying injury claim. “Loss of consortium is a wholly

- 10 - derivative claim that merely provides access to an additional category of damages

if a defendant’s liability can be established under another legal theory.” Id. at *3

(citation omitted). “If no liability attaches for the injured plaintiff’s personal injury

claim, the plaintiff-spouse’s claim for loss of consortium should be dismissed.” Id.

at *2.

We have considered Hoskins and Armfield, as well as the arguments

of the parties, in arriving at our decision in this case. We recognize that the

Armfield Opinion conflates the right to recover from a tortfeasor in legal

proceedings with the right to recover under the insurance contract. As the

appellants argue, the fact that loss of consortium is derivative of bodily injury

under the common law does not alter the language of the Policy which purports to

pay compensatory damages which an insured is “legally entitled to recover.” In

their view, Stone’s right to recover for loss of consortium exists independently of

Franklin’s right to recover under the Policy.

On the other hand, our courts have reiterated that insurance contracts

must be given a reasonable interpretation. “While ambiguous terms [in the

insurance contract] are to be construed against the drafter and in favor of the

insured, we must also give the policy a reasonable interpretation, and there is no

requirement that every doubt be resolved against the insurer. . . . [T]he terms

should be interpreted in light of the usage and understanding of the average

- 11 - person.” American Commerce Ins. Co. v. Brown, 168 S.W.3d 386, 388 (Ky. App.

2004) (emphasis and citation omitted). Under the doctrine of reasonable

expectations, when an ambiguity exists in an insurance contract, “ambiguous terms

should be interpreted in favor of the insured’s reasonable expectations.” True v.

Raines, 99 S.W.3d 439, 443 (Ky. 2003), as amended (Apr. 2, 2003) (internal

quotation marks and citation omitted).

An insured could reasonably expect that her claim for UIM coverage,

and the derivative claim of her minor child for loss of consortium, would be

excluded if they were injured in an uninsured vehicle. What is not reasonable is

the expectation that the minor child’s loss of consortium claim would, however, be

covered if he was not present in the vehicle. Under this interpretation, KFB would

be required to compensate Stone “for a risk which was not contemplated and for

which no compensation was paid.” Huelsman v. National Emblem Ins. Co., 551

S.W.2d 579, 581 (Ky. App. 1977).

“A basic rule of contract interpretation requires that preference be

given to the ‘interpretation which gives a reasonable, lawful, and effective meaning

to all the terms’ over a reading ‘which leaves a part unreasonable, unlawful, or of

no effect.’” Maze v. Board of Directors for Commonwealth Postsecondary

Education Prepaid Tuition Trust Fund, 559 S.W.3d 354, 363 (Ky. 2018) (quoting

L.K. Comstock & Co., Inc. v. Becon Const. Co., 932 F.Supp. 948, 967 (E.D. Ky.

- 12 - 1994)). Stone would not have a loss of consortium claim but for his mother’s

claim, which is expressly excluded by the Policy. An interpretation of the Policy

which gives a reasonable meaning to all its provisions supports the circuit court’s

holding that his derivative claim is excluded from UIM coverage.

Finally, we address the appellants’ argument that the language of the

UIM exclusion referring to “the security required by the Kentucky Motor Vehicle

Reparations Act” is ambiguous and unclear. The appellants did not raise this

argument before the circuit court. The circuit court found the exclusion was

enforceable and served to exclude Franklin from UIM coverage under the Policy

because she was driving an uninsured vehicle which did not meet the security

requirements of the MVRA. The circuit court’s analysis is well-founded and will

not be disturbed on appeal.

For the foregoing reasons, the memorandum and order of the

Jefferson Circuit Court granting KFB’s motion for summary judgment is affirmed.

ALL CONCUR.

- 13 - BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:

David V. Oakes Michael E. Krauser Andrew K. AsBridge Louisville, Kentucky Paducah, Kentucky

Kevin C. Burke Jamie K. Neal Louisville, Kentucky

- 14 -