Erie Insurance Exchange v. Megan Johnson

• Court: Kentucky Supreme Court
• Decided: April 24, 2025
• Docket: 2024-SC-0018
• Status: Published

Opinion

RENDERED: APRIL 24, 2025 TO BE PUBLISHED

Supreme Court of Kentucky 2024-SC-0018-DG

ERIE INSURANCE EXCHANGE APPELLANT

ON REVIEW FROM COURT OF APPEALS V. NO. 2022-CA-1405 FLOYD CIRCUIT COURT NO. 19-CI-00059

MEGAN JOHNSON; TERRI REED; AND APPELLEES SHANE HALL, ATTORNEY AT LAW, PLLC

OPINION OF THE COURT BY JUSTICE THOMPSON

AFFIRMING IN PART, REVERSING IN PART, AND REMANDING

In 1974, the General Assembly enacted the Motor Vehicle Reparations

Act (MVRA). When it became effective the following year, the MVRA brought

about “sweeping changes in the realm of automobile insurance” which

“transformed Kentucky into a no-fault state.” Samons v. Kentucky Farm Bureau

Mut. Ins. Co., 399 S.W.3d 425, 427 (Ky. 2013). An important part of the MVRA

was that it required insurance policies to contain $10,000 of basic reparation

benefits (BRB) or personal injury protection (PIP) 1 which was paid from the

insured driver’s policy regardless of fault. 2

1 “Courts have long-held that it is acceptable to use BRBs and PIP

interchangeably.” Samons, 399 S.W.3d at 428, n.7. 2 Kentucky Revised Statutes (KRS) 304.39-020(2); KRS 304.39-030(1). While $10,000 could provide generous benefits in 1975, to keep up with

inflation the amount of PIP benefits now would need to be about six times

higher to have equivalent purchasing power. 3 Even worse, increases in health

care costs have exceeded simple inflation. 4

All of this leads to the inexorable conclusion that since the General

Assembly has not increased the mandatory amount of PIP benefits in the

intervening time, 5 PIP benefits can be quickly exhausted from even relatively

minor accidents, and insureds are under tremendous pressure to carefully

allocate what benefits they have, to receive the most “bang for their buck.”

KRS 304.39-241 empowers covered persons to “direct the payment of

benefits among the different elements of loss[.]” This appeal concerns whether

insureds who elect to exercise their statutory right to control how these PIP

benefits are paid out pursuant to KRS 304.39-241, can then specify which

healthcare providers get paid first out of the limited fund of PIP benefits. The

3 According to the Inflation Tool: Calculator, the inflation rate in the United

States between 1975 and today totals 488.02%, and $10,000 in 1975 was equivalent to $58,288.42 in 2024. https://www.inflationtool.com/us-dollar/1975-to-present- value (last visited Feb. 3, 2025). 4 See Lekhnath Chalise, How have Healthcare Expenditures Changed? Evidence

from the Consumer Expenditure Surveys, Beyond the Numbers, Nov. 2020, U.S. Bureau for Labor Statistics, https://www.bls.gov/opub/btn/volume-9/how-have- healthcare-expenditures-changed-evidence-from-the-consumer-expenditure- surveys.htm. 5 We do not fault the General Assembly for failing to take such an action. These

are complex issues and other states have failed to adopt “no-fault” coverage or repealed it due to problems which have arisen after the implementations of such coverage, and even most states which have kept PIP benefits have not increased the amount of coverage. See generally, Trevor M. Gordon, To Reform or Repudiate? An Argument on the Future of No-Fault Auto Insurance, 17 Quinnipiac Health L.J. 63 (2014); Nora Freeman Engstrom, An Alternative Explanation for No-Fault’s “Demise”, 61 DePaul L. Rev. 303 (2012).

2 resolution to this issue depends upon the meaning to be given to the phrase

“elements of loss” and the purposes for which mandatory no-fault insurance

was created.

Megan Johnson purchased an insurance policy from Erie Insurance

Exchange (Erie); the policy contained the statutorily mandated PIP coverage.

Johnson and her passenger Terri Reed (the insureds) were involved in a motor

vehicle accident. Their attorney submitted a written request that Erie withhold

tendering payment to their initial healthcare providers as the insureds were

exercising their rights pursuant to KRS 304.39-2421. Their attorney later

directed Erie to follow the insureds’ directions in distributing their PIP benefits

to their chiropractor.

Erie refused, stating that it had to pay requests for medical expense

reimbursement in the order in which they were submitted, because all medical

bills fell under “one element of loss” based on the definition of “loss” contained

in KRS 304.39-020(5) which also defines five categories of loss in subparts (a)-

(e), one of which is “medical expense.”

The Floyd Circuit Court disagreed, granting summary judgment to the

insureds and awarding extra interest and attorney fees because Erie failed to

follow the insureds’ direction. Erie appealed and the Court of Appeals affirmed.

Having considered the legislative intent behind the relevant statutes, we

rule that Erie should have followed the insureds’ directives. Therefore, we

affirm the grant of summary judgment on this issue and the award of statutory

interest for the delayed payment of benefits.

3 However, we reverse the awards to the insureds of excess interest and

attorney fees. These awards are not justified because Erie acted appropriately

in filing a declaration of rights action and requesting interpleader on this novel

issue.

I. FACTUAL AND LEGAL BACKGROUND

On October 14, 2018, the insureds were involved in a vehicular accident

in Johnson’s car. They sought medical treatment the next day, and the

hospital, radiologist, and osteopath submitted bills and records to Erie for

payment under the BRB coverage. The insureds later sought chiropractic

treatment, and the chiropractor also submitted bills and records to Erie.

The insureds promptly requested no-fault benefits and their counsel sent

the PIP applications to Erie along with a letter of representation and instructed

Erie to withhold all no-fault benefit payments until further instruction. Erie

complied.

A few months later, counsel requested that Erie make PIP payments only

to the insureds’ chiropractor. Erie refused, arguing that it would pay the

medical bills in the order in which they “accrued” on a “first-in, first-out basis.”

The insureds’ attorney disagreed with Erie’s interpretation of KRS

304.39-241 and informed Erie that if it did not pay the insureds’ medical bills

in the order they preferred, they would file suit and request PIP benefits,

attorney fees, and costs. Further discussions did not result in any agreement.

On January 25, 2019, Erie filed a declaratory judgment action,

explaining in its pleading its contention that while KRS 304.39-241 permits an

4 injured party to direct or allocate PIP benefits between or among the elements

of loss, the MVRA does not permit an injured party to direct payment within an

element of loss. In the heading of its pleading, Erie also indicated that it

intended to file interpleader.

On February 15, 2019, the insureds filed an answer and counterclaim

regarding Erie’s failure to follow their directive and sought excess interest on

overdue payments and an award of attorney fees pursuant to KRS 304.39-210

and KRS 304.39-220. 6

On April 11, 2019, Erie simultaneously filed a motion for summary

judgment and a motion for interpleader. On June 4, 2019, the trial court

denied both motions.

On June 14, 2019, the insureds filed their own motion for summary

judgment.

On August 22, 2019, a new order was entered which amended the trial

court’s June 4, 2019, order. The trial court reiterated its denial of Erie’s motion

for summary judgment, ruled Erie was responsible for the payment of the

insureds’ medical bills in accordance with their directives, and finalized its

previous orders. Another order, entered August 22, 2019, stated that the trial

court “will award attorney’s fees[.]” On September 20, 2019, an order was

entered awarding attorney Hall $14,383 in attorney fees.

6 Initially, the appellees also sought extra-contractual damages for bad faith but

later voluntarily dismissed this count.

5 On September 20, 2019, Erie appealed. The Court of Appeals affirmed

the trial court’s rulings. Erie Insurance Exchange v. Johnson, 2019-CA-1449-

MR, 2021 WL 1823283, at *6 (Ky. App. May 7, 2021) (Erie I) (unpublished). In

its opinion, the Court of Appeals determined it was appropriate for the insureds

to be allowed to designate the order of payment within an element of loss. Id. at

*4. The Court of Appeals also upheld the granting of attorney fees and excess

interest, even though it noted irregularities with the relevant orders,

determining it was sufficient that it was established that the denial or delay in

payment was without reasonable foundation. Id. at *5.

Erie sought discretionary review from our Court which we granted. We

vacated the Court of Appeals’ opinion and dismissed the appeal for lack of

subject jurisdiction over non-final and non-appealable orders. Erie Insurance

Exchange v. Johnson, 647 S.W.3d 198, 204 (Ky. 2022) (Erie II). We noted that in

awarding attorney fees the trial court applied KRS 304.39-220(1) when it

should have applied KRS 304.39-220(2) because the action was brought by the

reparation obligor. Erie II, 647 S.W.3d at 203. In our conclusion we commented

that the issue raised, which could not appropriately be addressed on the merits

at that juncture, “affects potentially millions of Kentuckians, and yet is an

issue of first impression.” Id. at 204.

On remand, on November 16, 2022, a final judgment was entered which

granted summary judgment to the insureds and their attorney and denied

summary judgment to Erie. The trial court concluded:

6 Johnson and Reed may direct the payment of benefits “among” the different elements of loss, i.e., “medical expense” and “work loss,” in writing. Johnson and Reed may also direct payment “within” an element of loss, i.e., “medical expense,” in writing. Therefore, Erie must honor the written direction of benefits provided by Johnson and Reed on a prospective basis. KRS 304.39-241.

The trial court ruled that after Erie received the insureds’ PIP payment directive

to pay the chiropractor bills that had accrued as of January 16, 2019, Erie had

a statutory duty to make such payments and such payments were overdue.

This entitled the insureds to the statutorily mandated 12% interest pursuant to

KRS 304.39-210(2).

The trial court further found as a matter of law that “Erie’s refusal to

follow Johnson’s and Reed’s PIP payment directive was without reasonable

foundation under KRS 304.39-210(2) and Johnson and Reed are entitled to

recover ‘excess interest’ on overdue payments at the rate of eighteen percent

(18%) per annum.” Finally, the trial court awarded attorney fees under one or

both sections of KRS 304.39-220 because “(1) Erie’s denial or delay in making

payments was without reasonable foundation, and (2) because Johnson and

Reed are successful litigants in an action originated by Erie.” This resulted in

attorney fees totaling $51,048.

Erie appealed and the Court of Appeals affirmed, ruling “KRS 304.39-241

effectively allows insureds to direct payments within an element of loss.” Erie

Insurance Exchange v. Johnson, 2022-CA-1405-MR, 2023 WL 8656205, at *6

(Ky. App. Dec. 15, 2023) (Erie III) (unpublished). The Court of Appeals also

concluded that the trial court did not abuse its discretion in awarding attorney

fees and increased interest because Erie’s good faith was irrelevant. Id. at *7. 7 While acknowledging that the interpretation of KRS 304.39-210(1) and 304.39-

241 was a matter of first impression, the Court of Appeals agreed with the trial

court “that Erie’s position was clearly contrary to the language of the statutes

and the policies behind the MVRA.” Erie III, 2023 WL 8656205, at *6.

We granted discretionary review and set the matter for oral argument.

We also granted motions for the filing of amicus curiae briefs by the Insurance

Institute of Kentucky, the Kentucky Defense Counsel, Inc., the Kentucky

Hospital Association, and the Kentucky Justice Association.

II. STANDARD OF REVIEW

As resolution of what “elements of loss” means depends solely on the

statutory interpretation of the meaning, impact, and interrelation of statutes

within the MVRA, we review the trial court’s decision de novo. 7 Mr. Roof of

Louisville, LLC v. Estate of Henry, 681 S.W.3d 115, 121 (Ky. 2023). Accordingly,

the trial court’s and the Court of Appeals’ interpretation of these statutes is not

entitled to any deference. Cumberland Valley Contractors, Inc. v. Bell Cnty. Coal

Corp., 238 S.W.3d 644, 647 (Ky. 2007).

As to whether the award of attorney fees and increased interest was

appropriate, we review such awards for abuse of discretion. Erie II, 647 S.W.3d

at 203. See generally Officeware v. Jackson, 247 S.W.3d 887, 891–92 (Ky.

2008).

7 This is of course the regular standard of review for a grant of summary

judgment as well, as it is a question of law. Dolt, Thompson, Shepherd & Conway, P.S.C. v. Commonwealth ex rel. Landrum, 607 S.W.3d 683, 686 (Ky. 2020).

8 III. ANALYSIS

Erie requests that we reverse the Court of Appeals and the trial court by

ruling that summary judgment was improperly granted because: (1) the MVRA,

requires insurers to pay PIP benefits “as loss accrues” and does not require

insurers to pay particular providers in the order that an insured requests

within an element of loss; and (2) Erie had a reasonable foundation for delaying

PIP payments because the plain meaning of the statute is a question of law

which is a matter of first impression, arguing therefore that even if Erie was

incorrect in its interpretation, it should not have to pay extraordinary interest

or attorney fees.

A. Statutory Interpretation

When we engage in statutory interpretation, it is our goal and duty to

carry out the intent of the legislature. Mr. Roof of Louisville, LLC, 681 S.W.3d at

121; Commonwealth v. Plowman, 86 S.W.3d 47, 49 (Ky. 2002). This is in

accordance with the relevant portion of KRS 446.080(1): “All statutes of this

state shall be liberally construed with a view to promote their objects and carry

out the intent of the legislature[.]”

“This Court has repeatedly held that statutes must be given a literal

interpretation unless they are ambiguous and if the words are not ambiguous,

no statutory construction is required.” Plowman, 86 S.W.3d at 49. “In other

words, we assume that the ‘[Legislature] meant exactly what it said, and said

exactly what it meant.’” Revenue Cabinet v, O’Daniel, 153 S.W.3d 815, 819 (Ky.

9 2005) (quoting Stone v. Pryor, 103 Ky. 645, 45 S.W. 1136, 1142 (1898) (Waddle,

S.J., dissenting)).

When particular words need interpretation, we should look to “the

common meaning of the particular words chosen, which meaning is often

determined by reference to dictionary definitions.” Jefferson Cnty. Bd. of Educ.

v. Fell, 391 S.W.3d 713, 719 (Ky. 2012). This is in accordance with KRS

446.080(4), which states: “All words and phrases shall be construed according

to the common and approved usage of language, but technical words and

phrases, and such others as may have acquired a peculiar and appropriate

meaning in the law, shall be construed according to such meaning.” We

recognize, however, that dictionary definitions are not necessarily conclusive

and legislative intent reigns supreme. Plowman, 86 S.W.3d 47, 49 (Ky. 2002).

Sometimes a review of the words in a statute will reveal a latent

ambiguity, in which a particular word or words is subject to more than one

reasonable interpretation. See MPM Financial Group, Inc. v. Morton, 289 S.W.2d

193, 197-98 (Ky. 2009). In such a situation, “we must consider all of the

relevant accompanying facts, circumstances, and laws, including time-honored

cannons of construction[.]” Fox v. Grayson, 317 S.W.3d 1, 8 (Ky. 2010). This

may include considering the general purpose of the statute. Barnett v. Central

Kentucky Hauling, LLC, 617 S.W.3d 339, 343 (Ky. 2021).

We have repeatedly stated that we “must not be guided by a single

sentence of a statute but must look to the provisions of the whole statute and

its object and policy.” Samons, 399 S.W.3d at 429 (quoting Cosby v.

10 Commonwealth, 147 S.W.3d 56, 59 (Ky. 2004)). A particular word, sentence or

subsection under review should not be viewed in a vacuum. Fell, 391 S.W.3d at

719. Instead, the entire statute should be considered “in context with other

parts of the law” with any key language interpreted by considering the whole

act in which it appears. Petitioner F v. Brown, 306 S.W.3d 80, 85–86 (Ky. 2010).

Ultimately, “the intent of the General Assembly ‘shall be effectuated, even

at the expense of the letter of the law.’” Samons, 399 S.W.3d at 429 (quoting

Commonwealth v. Rosenfield Bros. & Co., 118 Ky. 374, 80 S.W. 1178, 1180

(1904)).

B. Resolving What “Elements of Loss” Means

Erie’s first argument is that an insured cannot designate which providers

are paid first within the category of “medical expense” because such category

constitutes one “element of loss” and an insured can only designate which

category is paid first, not how payments within such a category are paid. Erie

relies on too narrow of an interpretation of three statutes (KRS 304.39-210(1),

KRS 304.39-241, and KRS 304.39-020(2) and (5)), rather than considering how

and when they were enacted and amended.

KRS 304.39.210(1) provides in relevant part:

Basic and added reparation benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as work loss, replacement services loss, or medical expense is incurred. Benefits are overdue if not paid within thirty (30) days after the reparation obligor[8] receives reasonable proof of the fact and amount of loss

8 “Reparation obligor” as defined in KRS 304.39-020(13) “means an insurer,

self-insurer, or obligated government providing basic or added reparation benefits under this subtitle.”

11 realized. . . . Notwithstanding any provision of this chapter to the contrary, benefits are not overdue if a reparation obligor has not made payment to a provider of services due to the request of a secured person when the secured person is directing the payment of benefits among the different elements of loss. . . . Medical expense benefits may be paid by the reparation obligor directly to persons supplying products, services, or accommodations to the claimant, if the claimant so designates.

(Emphasis added).

KRS 304.39-241 provides:

An insured may direct the payment of benefits among the different elements of loss, if the direction is provided in writing to the reparation obligor. A reparation obligor shall honor the written direction of benefits provided by an insured on a prospective basis. The insured may also explicitly direct the payment of benefits for related medical expenses already paid arising from a covered loss to reimburse:

(1) A health benefit plan as defined by KRS 304.17A-005(22);

(2) A limited health service benefit plan as defined by KRS 304.17C-010;

(3) Medicaid;

(4) Medicare; or

(5) A Medicare supplement provider.

There is no specific definition provided in the MVRA for “element” or

“elements of loss.” The definition in KRS 304.39-020(2) for “basic reparation

benefits” does, however, reference this term in its final sentence.

“Basic reparation benefits” mean benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle, subject, where applicable, to the limits, deductibles, exclusions, disqualifications, and other conditions provided in this subtitle. The maximum amount of basic reparation benefits payable for all economic loss resulting from 12 injury to any one (1) person as the result of one (1) accident shall be ten thousand dollars ($10,000), regardless of the number of persons entitled to such benefits or the number of providers of security obligated to pay such benefits. Basic reparation benefits consist of one (1) or more of the elements defined as “loss.”

KRS 304.39-020(5) defines “loss” as follows:

“Loss” means accrued economic loss consisting only of medical expense, work loss, replacement services loss, and, if injury causes death, survivor’s economic loss and survivor’s replacement services loss. Noneconomic detriment is not loss. However, economic loss is loss although caused by pain and suffering or physical impairment.

The statute then proceeds to provide additional definitions in its subparts for

(a) “medical expense,” (b) “work loss,” (c) “replacement services loss,” (d)

“survivor’s economic loss,” and (e) “survivor’s replacement services loss.”

Neither the definition for “basic reparation benefits” nor the definition for

“loss” provides any basis for determining whether each element of loss is solely

one of these five named categories, or whether elements of loss can also include

individual costs/payments within each category of loss under this definition.

For example, the definition for “medical expense” listed in KRS 304.39-020(5)(a)

provides a broad list of what type of expenses are covered as “loss” under that

umbrella term and includes charges for ambulance services, medical care, and

funeral expense. 9 We must resolve whether a single category as a whole should

9 “Medical expense” means reasonable charges incurred for reasonably

needed products, services, and accommodations, including those for medical care, physical rehabilitation, rehabilitative occupational training, licensed ambulance services, and other remedial treatment and care. “Medical expense” may include non-medical remedial treatment rendered in accordance with a recognized religious method of healing. The term 13 be considered an “element of loss” or whether different bills for different

expenses which fall under this umbrella should also be considered an element

of loss.

Since there is ambiguity regarding what the word “element” covers, it is

appropriate to consider the ordinary definition of “element.” 10 Merriam-

Webster’s pertinent definitions define element as “a constituent part: such as .

. . a distinct group within a larger group or community”; the Cambridge

Dictionary defines it as “a part of something”; and Dictionary.com defines it as

“a component or constituent of a whole or one of the parts into which a

whole may be resolved by analysis[.]” 11

These definitions for “element” do not clarify the issue since as “a part of

the loss” could be the categories set out in KRS 304.39-020(5), or the specific

charges incurred to receive reasonable services. To resolve this latent

ambiguity, it is appropriate to examine 1998 Kentucky Laws 200 (HB 493).

includes a total charge not in excess of one thousand dollars ($1,000) per person for expenses in any way related to funeral, cremation, and burial. It does not include that portion of a charge for a room in a hospital, clinic, convalescent or nursing home, or any other institution engaged in providing nursing care and related services, in excess of a reasonable and customary charge for semi-private accommodations, unless intensive care is medically required. Medical expense shall include all healing arts professions licensed by the Commonwealth of Kentucky. There shall be a presumption that any medical bill submitted is reasonable. 10 There are of course many different definitions of “element” within each

source, e.g., element on a periodic table, but these are the definitions of “element” that make logical sense considering the statutory language. 11 Element 2.c., Merriam-Webster, https://www.merriam-webster.com

/dictionary/element; Element 1.c., Cambridge Dictionary, https://dictionary. cambridge.org/us/dictionary/english/element; Element A.1., dictionary.com, https://www.dictionary.com/browse/element (all last visited Jan. 10, 2025).

14 HB 493 consisted of four sections which made significant changes to the

MVRA. Among these changes was how it “married” the “elements of loss”

language to an insured’s right to “direct payment of benefits among such

elements of loss[.]” Considering all the changes made to the MVRA by HB 493

clarifies the General Assembly’s intent in making the more specific changes at

issue here.

Section 1 of HB 493 created KRS 304.39-245, which provides:

A reparation obligor may request or negotiate a reduction or modification of charges from a provider of services to a secured person. In no event shall a provider of services which agrees to a reduction or modification of the charges bill the secured person for the amount of the reduction or modification. Nothing in this section is intended to prohibit a provider of services from billing charges to a secured party if the charges are not paid by a reparation obligor because the reparation benefits have been exhausted.

KRS 304.39-245 has never been amended.

Section 2 amended KRS 304.39-210(1) to add the language:

“Notwithstanding any provision of this chapter to the contrary, benefits are not

overdue if a reparation obligor has not made payment to a provider of services

due to the request of a secured person when the secured person is directing

the payment of benefits among the different elements of loss.”

Section 2 also took the preexisting sentence “[m]edical expense benefits

may be paid by the reparation obligor directly to persons supplying products,

services, or accommodations to the claimant[,]” and added to the end of it the

phrase “if the claimant so designates.” (Emphasis added).

15 Section 3 created KRS 304.39-241, which at that time stated as follows:

“An insured may direct the payment of benefits among the different elements of

loss, if the direction is provided in writing to the reparation obligor. A

reparation obligor shall honor the written direction of benefits provided by an

insured on a prospective basis.” 12

Section 4 repealed KRS 304.39-240 which concerned the assignment of

benefits. Prior to HB 493 going into effect on July 15, 1998, KRS 304.39-240

provided:

An assignment of or agreement to assign any right to benefits under this subtitle for loss accruing in the future is unenforceable except as to benefits for:

(1) Work loss to secure payment of alimony, maintenance, or child support; or

(2) Medical expense to the extend the benefits are for the cost of products, services, or accommodations provided or to be provided by the assignee.

KRS 304.39-240 (1996) (repealed by HB 493).

In considering HB 493 as a whole, the legislative intent becomes clear.

The General Assembly was empowering insureds/secured persons or

reparation obligors to negotiate the amount to be paid on beneficiaries’

particular healthcare bills. KRS 304.39-245. To facilitate such negotiations,

insureds/secured persons had to be able to direct the reparation obligor not to

make payments to the providers of service, except at their direction. KRS

12 KRS 304.39-241 was amended in 2012, to its present form, set out supra.

2012 Kentucky Laws Ch. 41 (HB 42). This permitted the insured to direct payments to reimburse health insurance for paid medical expenses.

16 304.39-241. Insurance companies were, accordingly, exempt from any

penalties for making late payments if they were following their

insureds’/secured persons’ directives regarding the payment of benefits among

the different elements of loss. KRS 304.39-210(1).

Finally, with the repeal of KRS 304.39-240, medical providers were

prohibited from receiving an assignment of PIP benefits which had allowed

them to be paid the list prices of their services, rather than the reasonable cost

of their services after negotiation. In Neurodiagnostics, Inc. v. Kentucky Farm

Bureau Mut. Ins. Co., 250 S.W.3d 321, 327 (Ky. 2008), we explained that by

repealing KRS 304.39.240 and replacing it with KRS 304.39-241,

the legislature recognized that it is a more efficient, economical, and equitable system to keep the provider out of the reparations process and afford the insured the control of how his or her benefits are paid because there is only a certain amount of money available for payment. If each and every medical provider obtained an assignment—as a matter of course—of any right to benefits under the MVRA, the insured’s benefits could be exhausted after an accident[.]

We clarify our use of the term insured/secured person in the above

explanation. KRS 304.39-210(1) refers to “a secured person” and KRS 304.39-

241 refers to “an insured.” KRS 304.39-070(1), defines a “secured person” as

being “the owner, operator or occupant of a secured motor vehicle[.]” As

explained in Schmidt v. Leppert, 214 S.W.3d 309, 312 (Ky. 2007), “in order to

have ‘security’ on a motor vehicle, an insured’s policy must include BRB.” KRS

304.39-020(3)(a) defines “basic reparation insured” as being “[a] person

identified by name as an insured in a contract of basic reparation insurance

complying with this subtitle[.]” Therefore, generally, a “secured” person will be 17 synonymous with “an insured” and the occupants of the insured’s vehicle.

While KRS 304.39-245 does not mention insureds/secured persons

negotiating, they are of course the ones who have an interest in getting as

many bills paid as possible out of the BRB limits. In contrast, once it is

established that the BRB limits will be exceeded, the reparation obligor (their

insurance company), has no specific interest in negotiating how the $10,000

PIP benefits are allocated.

Negotiations to reduce payments to health care providers as provided for

in KRS 304.39-245 could not be effective if “elements of loss” referred solely to

the different categories of loss defined in KRS 304.39-020(5)(a)-(e) and obligated

insurance companies to pay healthcare providers on a first-in, first-out basis

once it was apparent that the secured persons did not have any other

categories of loss. Yet, this is exactly what Erie argues it is mandated to do.

The mandatory $10,000 of PIP benefits provided for in KRS 304.39-

020(2) could be exhausted within minutes of arriving at the hospital if the

listed prices for services were simply paid out, resulting in injured persons

having difficulty accessing appropriate healthcare after that time. However,

providers will often take pennies on the dollar to ensure that they receive some

payment rather than try to collect directly from an insured who may have no

funds or health insurance. For example, in Hughes and Coleman, PLLC v.

Chambers, 526 S.W.3d 70, 72 (Ky. 2017), counsel was able to negotiate a

hospital bill totaling $71,812.40 down to a negotiated full-satisfaction payment

of $3,492.88 which counsel paid out of escrowed PIP funds.

18 Additionally, such an interpretation furthers the MVRA’s general

purposes as set out in its provisions and in our previous interpretations. KRS

304.39-010 provides the general purposes of the MVRA, which includes:

(2) To provide prompt payment to victims of motor vehicle accidents without regard to whose negligence caused the accident in order to eliminate the inequities which fault-determination has created;

(3) To encourage prompt medical treatment and rehabilitation of the motor vehicle accident victim by providing for prompt payment of needed medical care and rehabilitation; ...

(6) To help guarantee the continued availability of motor vehicle insurance at reasonable prices by a more efficient, economical and equitable system of motor vehicle accident reparations[.]

The adoption of the MVRA “reflected a policy ‘for prompt and liberal recovery to

accident victims without regard to fault.’” Samons, 399 S.W.3d at 427 (quoting

Robert P. Moore & David W. Rutledge, Note, Kentucky No–Fault: An Analysis

and Interpretation, 65 Ky. L.J. 466, 473-74 (1976–77)).

In interpreting provisions of the MVRA, we should keep in mind that it

constitutes “remedial legislation and should be interpreted broadly.” Samons,

399 S.W.3d at 430. “[T]he basic rule of statutory construction [is] that the

‘MVRA is to be liberally interpreted in favor of the accident victim.’” Fields v.

BellSouth Telecommunications, Inc., 91 S.W.3d 571, 572 (Ky. 2002) (quoting

Lawson v. Helton Sanitation, Inc., 34 S.W.3d 52, 62 (Ky. 2000) (Wintersheimer,

J., dissenting)). See Crenshaw v. Weinberg, 805 S.W.2d 129, 131 (Ky. 1991).

The “significant changes” contained in the MVRA “were aimed at a specific

objective: to insure continuous liability insurance coverage in order to protect

19 the victims of motor vehicle accidents and to insure that one who suffers a loss

as the result of an automobile accident would have a source and means of

recovery.” National Ins. Ass’n v. Peach, 926 S.W.2d 859, 861 (Ky. App. 1996).

By allowing the insureds to control and direct the payment of their

medical bills, they can get needed medical care and rehabilitation promptly and

without delay. Limiting insureds’ ability to choose only the category of which

loss will be paid may, instead, result in the delay of their physical recovery by

blocking their access to needed medical care. The insureds, who properly

complied with the law by purchasing appropriate first party coverage, receive

the benefit of their bargain when they can direct how these limited funds are

allocated in the method which best suits their needs.

Here, these insureds have determined that being able to obtain

chiropractic services was a priority in their treatment and rehabilitation; this

decision should be respected. As was argued by the insureds during oral

argument, another insured might feel that a surgery was warranted, yet such

surgery might be impossible to obtain without the availability of retained PIP

funds.

We conclude that the trial court and the Court of Appeals correctly ruled

that Erie should have allowed the insureds to designate the order in which Erie

paid their medical bills. We disagree, however, with our lower courts’

conclusion that this is appropriate because KRS 304.39-241 allows insureds to

direct payments within an element of loss in contravention of the clear

statutory language of KRS 304.39-210 and KRS 304.39-241 which permits a

20 secured person to “direct[13] the payment of benefits among the different

elements of loss.” (Emphasis added). We properly conform our ruling to the

statutory language by interpreting “elements of loss” as both including the five

categories of “loss” set out in KRS 304.39-020(5)(a)-(e), and any bills/costs that

come within those categories. This is simply a sensible conclusion in light of

the purposes of the MVRA, which gives effect to the statutory language.

Samons, 399 S.W.3d at 430.

We depart from the misleading dicta contained in Neurodiagnostics, Inc.,

which implied that the phrase “elements of loss” was synonymous with the five

categories of loss set out under KRS 304.39-020(5). 14 A definition for “elements

of loss” was not required for our holding that medical providers have no

standing to bring a direct action against the reparation obligor for BRB under

the MVRA. Neurodiagnostics, Inc., 250 S.W.3d at 329.

C. Entitlement to Extra Interest and Attorney Fees

In Erie II, which was decided some six years after Neurodiagnostics, Inc.,

we specifically noted that how we should define “elements of loss” was “an

issue of first impression.” Erie II, 647 S.W.3d at 204. There would have been no

13 KRS 304.39-241 uses “direct” while KRS 304.39-210 uses “is directing”;

otherwise, the language in these two statutes is identical. 14 We stated in a footnote “[u]nder KRS 304.39–020(5), as applied to this case,

the elements of accrued economic loss are medical expenses and work loss.” Neurodiagnostics, Inc., 250 S.W.3d at 323 n.2. Later, in providing the practical reasons why KRS 304.39-240 was repealed and replaced with KRS 304.39-241, we stated it would be problematic to allow medical providers to obtain an assignment of benefits because that would rapidly exhaust the insured’s PIP benefits, “leaving the insured no ability to decide at a later date that he or she would be better served by directing reparation benefits to cover some other element of loss such as [work] loss.” Neurodiagnostics, Inc., 250 S.W.3d at 327.

21 need to resolve this issue then or now, or to have four amicus curiae briefs

submitted for our consideration if Neurodiagnostics, Inc. had already

definitively resolved the matter. This bears on our resolution of the remaining

issues.

We review the relevant statutes to determine whether the trial court

abused its discretion in awarding extra interest on the overdue payments and

attorney fees.

As to interest, KRS 304.39-210(1) provides in relevant part that

“[b]enefits are overdue if not paid within thirty (30) days after the reparation

obligor receives reasonable proof of the fact and amount of loss realized[.]” KRS

304.39-210(2) states: “Overdue payments bear interest at the rate of twelve

percent (12%) per annum, except that if delay was without reasonable

foundation the rate of interest shall be eighteen percent (18%) per annum.”

While Erie received direction from the insureds as to how the healthcare

bills needed to be paid, it failed to pay the chiropractor’s bills within a timely

matter, and apparently did not pay any bills during the course of this litigation.

Therefore, these payments are overdue. However, as should be obvious from

our discussion supra, Erie’s delay was not “without reasonable foundation” as

it was an open question as to how “elements of loss” should be interpreted, and

the dicta from Neurodiagnostics, Inc. provided Erie with a legitimate reason for

not following the insureds’ directions. Erie failed to make timely payments

based on its reasonable interpretation of an unsettled area of the law and

attempted to do what the statutes required.

22 Moreover, Erie acted reasonably by filing a declaratory judgment action

to clarify this matter. Our analysis is not changed by the fact that the case was

ultimately decided against Erie. Automobile Club Ins. Co. v. Lainhart, 609

S.W.2d 692, 695 (Ky. App. 1980). Erie also acted reasonably in filing a motion

for interpleader to pay the PIP funds to the court. Although the trial court was

correct to determine that the statutorily mandated interest is due, the trial

court abused its discretion in requiring the 18% interest rate per annum.

Therefore, we reverse the award of 18% interest, but affirm the award of

interest at the regular overdue rate of 12%.

As to attorney fees, KRS 304.39-220(2) provides: “In any action brought

against the insured by the reparation obligor, the court may award the

insured’s attorney a reasonable attorney’s fee for defending the action.”

Regarding attorney fees, the trial court’s order appears to question our

conclusion in Erie II that only KRS 304.39-220(2) applies to the award of

attorney fees by making rulings that attorney fees were appropriate pursuant

to KRS 304.39-220(1) and (2). We will treat our previous pronouncement as the

law of the case for purposes of this litigation, without resolving whether law of

the case applies generally in such a situation. That issue is not truly before us

as the parties have not argued about whether law of the case should apply.

A decision to award attorney fees pursuant to KRS 304.39-220(2) is

discretionary due to the “may” language. We conclude that the trial court

abused its discretion in awarding attorney fees in this situation where the law

was unsettled and Erie was acting in good faith to file a declaratory judgment

23 action where the insureds stated they would be taking legal action if Erie did

not follow their directions, Erie asked to have the trial court resolve the

dispute, and Erie attempted to have the trial court accept interpleader, which

the trial court refused. Undoubtedly, litigating this action has been quite

expensive for both parties, but an award of fees is not justified under the

circumstances.

III. CONCLUSION

Accordingly, we affirm the Court of Appeals in part, reverse in part, and

remand for proceedings consistent with this opinion. We affirm the Court of

Appeals’ decision that Erie must pay the insureds’ healthcare providers’ bills in

the order they designated. We affirm statutory interest at 12% but reverse the

award of interest above that rate. We also reverse the award of attorney fees.

LAMBERT, C.J.; Bisig, Conley, Keller, Nickell, and Thompson, JJ.,

sitting. Lambert, C.J.; and Conley, J., concur. Bisig, J., concurs in result only.

Nickell, J., concurs in part, dissents in part by separate opinion in which

Keller, J., joins. Goodwine, J., not sitting.

NICKELL, J., CONCURRING IN PART AND DISSENTING IN PART: I agree

with the reasoning of the majority relative to excess interest and attorney’s fees

having been improperly awarded. However, I respectfully dissent in part

regarding the primary issue presented on appeal.

This case essentially involves an issue of statutory construction. “The

cardinal rule of statutory construction is that the intention of the legislature

should be ascertained and given effect.” Cabinet for Human Res., Interim Office

24 of Health Planning & Certification v. Jewish Hosp. Healthcare Servs., Inc., 932

S.W.2d 388, 390 (Ky. App. 1996).

I diverge from the majority’s holding which purports to divine a more

“sensible” definition for the MVRA’s phrase “elements of loss.” In reality, the

majority’s inflated exegesis of the statute’s plain language stretches its meaning

far beyond its clearly intended reach, bolstered largely by the majority’s own

policy preferences supported by nothing more than bald assertions.

Public policy derives from “the Constitution and statutes and the

decisions of the courts of last resort of a state[.]” Lewis by Lewis v. West

American Ins. Co., 927 S.W.2d 829, 835-36 (Ky. 1996) (quoting City of Princeton

v. Princeton Elec. Light & Power Co., 166 Ky. 730, 179 S.W. 1074, 1078 (1915)).

Declarations of public policy are “not simply something courts establish from

general considerations of supposed public interest, but rather something that

must be found clearly expressed in the applicable law.” State Farm Mut. Auto.

Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 881 (Ky. 2013) (emphasis

added).

While the majority’s stated policy reasons may be compelling to some,

they are not expressed in the MVRA and in accordance with our caselaw may

not serve as a legitimate foundation upon which to judicially construct a

statutory intent contrary to that clearly expressed by plain legislative language.

Yet that is precisely what the majority’s opinion does.

In Kentucky, every person suffering a loss because of use of a motor

vehicle has the right to BRB coverage, unless the person has rejected the

25 limitation upon his or her tort right as provided in KRS 304.39-060(4). KRS

304.39-030. BRB payments are made “without regard to fault.” KRS 304.39-

040(1). The purpose of BRB is to cover the most pressing and necessary needs

of an injured party. Kentucky’s MVRA defines BRB as:

benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance, or use of a motor vehicle, subject, where applicable, to the limits, deductibles, exclusions, disqualifications, and other conditions provided in this subtitle. The maximum amount of basic reparation benefits payable for all economic loss resulting from injury to any one (1) person as the result of one (1) accident shall be ten thousand dollars ($10,000), regardless of the number of persons entitled to such benefits or the number of providers of security obligated to pay such benefits. Basic reparation benefits consist of one (1) or more of the elements defined as “loss.”

KRS 304.39-020(2) (emphasis added).

“Loss” is defined by the MVRA as an “accrued economic loss consisting

only of medical expense, work loss, replacement services loss, and, if injury

causes death, survivor’s economic loss and survivor’s replacement services

loss.” KRS 304.39-020(5) (emphasis added). The MVRA then further defines

“medical expense” as “reasonable charges incurred for reasonably needed

products, services, and accommodations, including those for medical care,

physical rehabilitation, rehabilitative occupational training, licensed

ambulance services, and other remedial treatment and care.” KRS 304.39-

020(5)(a). 15

15 KRS 304.39-020(5)(b)-(e) similarly provide definitions for work loss, replacement services loss, survivor’s economic loss, and survivor’s replacement services loss. None of these types of losses are at issue in this case.

26 Thus, the plain language of KRS 304.39-020(5) clearly contemplates each

medical bill or charge to be subsumed under the categorical umbrella of

“medical expense” and not to be considered an element of loss in and of

themselves. In the statutory framework, “element of loss” is used as a broad

phrase setting forth categories of loss which, in the context of medical

expenses, includes within itself the individual charges levied by various

medical providers.

The MVRA provides direction and guidance regarding how and when

BRB payments are to be made. Pursuant to KRS 304.39-210(1), benefits “are

payable monthly as loss accrues. Loss accrues not when injury occurs, but as

. . . medical expense is incurred. Benefits are overdue if not paid within thirty

(30) days after the reparation obligor receives reasonable proof of the fact and

amount of loss realized[.]”

However, “benefits are not overdue if a reparation obligor has not made

payment to a provider of services due to the request of a secured person when

the secured person is directing the payment of benefits among the different

elements of loss.” KRS 304.39-210(1) (emphasis added). “An insured may

direct the payment of benefits among the different elements of loss, if the

direction is provided in writing to the reparation obligor.” KRS 304.39-241

(emphasis added). “A reparation obligor shall honor the written direction of

benefits provided by an insured on a prospective basis.” Id.

In the present appeal, the statutory authority of the insured to direct

payments “among” the “different” elements of loss is uncontested. It is further

27 undisputed that the claimants notified Erie of their desire to direct payment of

their benefits. The sole issue presented in this case is whether the scope of the

insured’s authority to govern an obligor’s BRB payments is unlimited,

permitting the insured to single out an individual medical provider for payment

of medical services to the exclusion of all others. I conclude it is not.

A reparations obligor is required to pay BRB medical expenses on a first-

in, first-out basis pursuant to the mandates of KRS 304.39-210(1), which

plainly states such benefits “are payable monthly as loss accrues,” which in

this instance is explained to mean when “medical expenses [are] incurred.”

The majority, however, ignores the statute’s transparent language and

eviscerates its inescapable legislative intent by quixotically interpreting the

statute’s reference to “element of loss” to mean each incurrence of a medical

expense—rather than medical expenses as a category of loss—thereby

ostensibly permitting the insured, Johnson, to direct the obligor, Erie to pay

only a single medical provider for providing specific medical services. Such a

conclusion is both fallacious and impracticable.

First, the majority’s statutory interpretation of the statutory phrase

“element of loss” defies logic.

The legislatively drawn statute begins by clearly defining BRB as benefits

up to a specified limited amount “providing reimbursement for net loss suffered

through injury arising out of the operation, maintenance, or use of a motor

vehicle,” and consisting “of one (1) or more of the elements defined as ‘loss.’”

KRS 304.39-020(2). The statute then logically proceeds to immediately identify

28 and define only five enumerated characteristic types of “accrued economic loss”

subject to such reimbursement, including (1) expenses for obtaining

reasonably necessary medical care, (2) loss of income resulting from an

inability to perform customary work, (3) replacement of ordinary and necessary

services customarily performed by an insured for the benefit of oneself or

family, (4) deprivation of certain limited income, items, or services of economic

value lost by survivors due to an insured’s death, and (5) costs suffered by

survivors costs to replace ordinary and necessary services formerly performed

by a deceased insured. KRS 304.39-020(5)(a)-(e).

In setting forth the reparation obligor’s reimbursement duties, the

statute alludes to an insured’s statutory right to direct “the payment of benefits

among the different elements of loss.” KRS 304.39-210. More specifically, KRS

304.39-241 specifically establishes the limited parameters of that right, stating

“[a]n insured may direct the payment of benefits among the different elements

of loss.”

Logically, if an insured directs a reparations obligor to pay only medical

expenses to the exclusion of the other four “different” enumerated types of

statutory loss, then the insured’s right to direct BRB payments is at an end

and the obligor’s duty to sequentially pay such designated losses pursuant to

statutory dictates begins. “[L]ogic, like common sense, ‘must not be a stranger

in the house of the law.’” Southworth v. Commonwealth, 435 S.W.3d 32, 45

(Ky. 2014) (quoting Cantrell v. Kentucky Unemployment Ins. Comm’n, 450

S.W.2d 235, 237 (Ky. 1970)).

29 This pragmatic reading and practical application of the statutory phrase

“element of loss” harmonizes with stated legislative policies aimed at

encouraging “prompt medical treatment and rehabilitation . . . by providing

prompt payment,” KRS 304.39-010(3); restraining “inequities and

uncertainties,” KRS 304.39-010(5); and fostering “continued availability of

motor vehicle insurance at reasonable prices” by ensuring “a more efficient,

economical and equitable system of motor vehicle accident reparations,” KRS

304.39-010(6). Moreover, this rational and equitable statutory interpretation is

contrary to the majority’s errant overbroad apprehension of “element of loss”

which would untenably expand an insured’s statutory right to include the

arbitrary and solipsistic culling or cherry-picking of favored medical providers

for reimbursement to the exclusion of other similarly-situated medical

providers possessing an equivalent rightful expectation of timely

reimbursement for promptly and professionally provided necessary medical

and rehabilitative care and services.

Second, the majority’s statutory treatment of each individual medical

charge as a separate element of loss is divergent from the plain and ordinary

meaning of the statutory language. Contrary to the majority’s conclusion, the

phrase “element of loss” is not ambiguous or reasonably susceptible to multiple

interpretations. The language chosen by the legislature is clear and

straightforward.

Separate medical charges billed for each distinct medical treatment,

prescription, or service rendered by a medical provider are mere self-contained

30 component parts comprising the whole of the “loss” category defined as

“medical expense” under KRS 304.39-020(5). There, the legislature defined

“medical expense” to mean “reasonable charges incurred for reasonably needed

products, services, and accommodations, including those for medical care,

physical rehabilitation, rehabilitative occupational training, licensed

ambulance services, and other remedial treatment and care,” and specified the

term included “all healing arts professions licensed by the Commonwealth of

Kentucky.”

Had the legislature intended to allow claimants to micromanage

reparations obligors by directing reimbursement or nonpayment relative to

each individual medical bill accrued, it could easily have done so. It did not.

Instead, it clearly and quite simply allowed claimants to direct limited BRB

payments among five broadly defined elements, or categories, of loss.

The majority holds that the statutory definition of “loss” contained in

KRS 304.39-020(5) envisioned individual medical expenses, rather than

medical expenses as a whole, to constitute an element of loss. Because the

statute allows claimants to choose between “different” elements of loss for

reimbursement by obligors, this granular perspective of medical expenses now

effectively allows claimants line-item authority to direct payments or avoidance

among equivalent medical charges. The majority’s expansive redefining of what

“element of loss” means in relation to the MVRA is not a subtle or nuanced

change and drastically alters the scope of the provision.

31 In short, the majority’s holding effectuates implicitly what could not have

legitimately been accomplished explicitly—that is, to judicially rewrite a

legislative statute. By its decision today, the majority judicially alters the

statutory authority allowing claimants to direct payments “among” “different”

statutorily defined elements, or types, of loss to now empower them to dictate

payments “within” a single element—something it initially admits is disallowed

under the statute’s plain language. In reaching its “sensible conclusion,” the

majority ignores the statute’s plain language and clear meaning, substitutes its

own notion of what public policy and legislative intent should be, and guts the

obvious legislative intent in reaching its own favored outcome.

One purpose of allowing an injured party to direct payments among

different elements of loss is to maximize the economic impact of BRB when

paid in conjunction with other insurance coverages. For example, injured

claimants may obtain economic benefits by being allowed to initially present

medical bills to their health insurance provider while directing payment of BRB

for reimbursement of lost wages so the costs of daily living, such as rent,

mortgage expenses, utilities, and groceries, can be paid.

Third and finally, in casting a grim specter of BRB being quickly

exhausted following initial post-injury emergency room and hospital visits, and

urging its own policy preferences, the majority evinces a misapprehension of

the manner in which medical bills are paid by the reparations obligor. As

discussed in Neurodiagnostics, Inc. v. Kentucky Farm Bureau Mut. Ins. Co., 250

S.W.3d 321, 327-28 (Ky. 2008), following statutory changes to the MVRA in

32 1998, medical providers no longer have standing to assert claims for payment

or to bring direct actions against insurers. Instead, reparations obligors must

be provided with “reasonable proof of the fact and amount of loss realized,”

KRS 304.39-210, and may “request or negotiate a reduction or modification of

charges from a provider of services to a secured person.” KRS 304.39-245.

Offering no support for its position, the majority dismisses these proven

safeguards by suggesting reparations obligors will ignore these statutory

provisions and hastily pay the face amount of submitted medical charges

without regard to an insured’s interest.

In stark contrast to the majority’s apocalyptic prognostications, though

the record is devoid of medical billings, multiple filings in the circuit court

reveal the total amount of economic losses accrued in the present case never

reached the $10,000 BRB limit; this, despite the two injured parties having

received diagnostic radiology examinations and osteopathic treatments at

McDowell ARH Hospital the day following the minor motor vehicle collision, and

thereafter having received multiple therapeutic chiropractic treatments. In

short, the very facts of this case cut directly against a primary concern

expressed by the majority which serves as a basis for its holding.

Further, the majority offers no reason for denouncing the innocuous

language contained in a footnote in Neurodiagnostics, Inc., which simply

indicated the elements of accrued economic loss in that case under KRS

304.39-020(5) at issue included medical expense and work loss. Instead, the

33 majority merely declares that language to be dicta. 16 Ignoring that the majority

opinion, itself, contains extensive discussions which might likewise qualify as

dicta, it is noteworthy that even dicta may be “persuasive or entitled to respect

according to the reasoning and application or whether it was intended to lay

down a controlling principle.” Cawood v. Hensley, 247 S.W.2d 27, 29 (Ky.

1952) (citation omitted). In my view, whether dicta or not, Neurodiagnostics,

Inc. set forth a correct statement of the law which has never been seriously

challenged—apparently till now—and such settled propositions should not be

abandoned simply because they compel a particular result which may be

disfavored by some.

Though the majority no doubt believes it is reaching an appropriate

result in furtherance of the purposes of the MVRA, it has seemingly failed to

consider its decision’s potential chilling effects. Allowing claimants to

arbitrarily direct payment to a favored medical provider to the exclusion of

others could result in confusion and chaos within the medical and insurance

communities; provider business practices and medical care could be negatively

impacted due to BRB payments being unreasonably delayed or annulled; costs

of certain medical procedures, items, and services may be increased to cover

postponed payments and increased financial losses; and insurance premiums

16 Interestingly, the majority takes no issue with another statement from the

body of the opinion in Neurodiagnostics, Inc. which discusses exhaustion of benefits by paying medical providers first as potentially “leaving the insured no ability to decide at a later date that he or she would be better served by directing reparation benefits to cover some other element of loss, such as economic loss.” 250 S.W.3d at 327 (emphasis added).

34 could rise and policy availability and competitiveness become limited. The

occurrence of any of these consequences would be antithetical to the

aforementioned core purposes of the MVRA. Perhaps the majority has not

viewed its decision through this lens, and is instead focused solely on

permitting a single provider of medical services to be paid to the possible

exclusion of all others simply because an insured feels that resolution “best

suits their needs.”

In my research, I have been unable to locate any other court at any level

in any other jurisdiction which has given the extremely expansive reading to

the phrase “element of loss” as does the majority today. At its core, today’s

holding countermands the intent and purpose of the MVRA. Following this

anomalous decision, Kentucky will firmly become an outlier in the no-fault

insurance arena. Today, the majority opinion boldly goes where no Court has

gone before. I decline to join the ill-advised journey and aberrant result, and

am compelled to dissent in part.

Keller, J., joins.

35 COUNSEL FOR APPELLANT:

Mark A. Osbourn Bush & Osbourn, PLLC

COUNSEL FOR APPELLEE:

Shane Hall Shane Hall Attorney at Law, PLLC

COUNSEL FOR AMICUS CURIAE, INSURANCE INSTITUTE OF KENTUCKY:

Susan L. Maines Casey Bailey & Maines, PLLC

COUNSEL FOR KENTUCKY DEFENSE COUNSEL, INC.:

William B. Orberson Ryan D. Nafziger Phillips Parker Orberson & Arnett PLC

COUNSEL FOR KENTUCKY HOSPITAL ASSOCIATION:

Wesley R. Butler Barnett Benvenuti & Butler, PLLC

COUNSEL FOR KENTUCKY JUSTICE ASSOCIATION:

Damon B. Willis Ewing & Willis, PLLC