Fidelity State Bank ex rel. Estate of Martin v. McNeilus Truck & Manufacturing, Inc.

12 F. Supp. 2d 1204, 1998 U.S. Dist. LEXIS 9955
CourtDistrict Court, D. Kansas
DecidedJune 29, 1998
DocketNo. 96-1253-JTM
StatusPublished
Cited by1 cases

This text of 12 F. Supp. 2d 1204 (Fidelity State Bank ex rel. Estate of Martin v. McNeilus Truck & Manufacturing, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fidelity State Bank ex rel. Estate of Martin v. McNeilus Truck & Manufacturing, Inc., 12 F. Supp. 2d 1204, 1998 U.S. Dist. LEXIS 9955 (D. Kan. 1998).

Opinion

MEMORANDUM ORDER

MARTEN, District Judge.

The parties have settled the underlying claims in this litigation and the only remaining issue is the extent of American Family Mutual Insurance Company’s lien on the plaintiffs’ recovery.

[1205]*1205On April 2, 1998, American Family filed a motion to intervene in this case. The court granted the motion at an April 3, 1998 hearing. American Family had paid $20,000 in death benefits and $12,800 in personal injury protection (PIP) benefits as a result of the wrongful death of Eric Martin. Plaintiffs’ counsel had agreed to protect American Family’s subrogation interests. Plaintiffs’ counsel then informed American Family it was only entitled to subrogation for the $12,-800 in PIP benefits. American Family argues it is entitled to subrogation for the entire amount.

American Family argues its right to subro-gation is equitable. American Family cites Ins. Co. of North America v. Medical Protective Co., 768 F.2d 315 (1985), which involved an excess insurer’s right to recover from a primary insurer who failed to engage in good faith efforts to settle the underlying case within its policy limits. Significantly, the excess insurer was required to pay the plaintiffs damages in the underlying action before proceeding against the primary insurer for indemnification. American Family cites no ease law for the proposition that an insurance company has a non-statutory right to a lien against an insured’s recovery in a tort action.

In Kansas, an automobile insurance company’s right to subrogation for PIP benefits is governed by statute, the Kansas Automobile Injury Reparations Act (KAIRA), K.S.A. 40-3101 et seq. See e.g. Safeco Ins. Co. v. Allen, 262 Kan. 811, 941 P.2d 1365 (1997) (medical benefits paid pursuant to policy terms governed by Missouri law were not subject to subrogation under KAIRA because benefits were not paid pursuant to a policy provision or modification required by the KAIRA); Farm, & City Ins. Co. v. American Standard Ins. Co., 220 Kan. 325, 552 P.2d 1363 (1976) (interpreting prior version of KAIRA and holding that survivor’s benefits were not subject to subrogation).1 See also K.S.A. 40-3113a. Whether an insurance company may recover PIP benefits in subro-gation depends on whether the benefits are duplicative of a settlement and on the express terms of the settlement release. State Farm Mutual Automobile Insurance Company v. Kroeker, 234 Kan. 636, 676 P.2d 66 (1984).

Plaintiffs argue the $20,000 death benefit paid by American Family is not a PIP benefit, and thus is not subject to subrogation under the statute and that the insurance contract contains no provision for subrogation of the death benefit. See Safeco, 262 Kan. at 823, 941 P.2d 1365 (insured bargained for medical benefits of up to $2,000 without subrogation under Missouri law and received what he bargained for). The court agrees. American Family makes no argument that the death benefit is .covered by the KAIRA or another statute authorizing liens against a tort plaintiffs recovery. Statutory authorization may exist, but the court has no obligation to search on American Family’s behalf. Further, American Family does hot argue that the insurance contract provides for subrogation of death benefits.

The KAIRA provides for subrogation and a lien when a settlement duplicates PIP benefits. K.S.A. 40-3113a(b). The KAIRA includes the following definitions:

(b) “Disability benefits” means allowances for loss of monthly earnings due to an injured person’s inability to engage in available and appropriate gainful activity, subject to the following conditions and limitations: (1) The injury sustained is the proximate cause of the injured person’s inability to engage in available and appropriate gainful activity; (2) subject to the maximum benefits stated herein, allowances shall equal 100% of any such loss per individual, unless such allowances are deemed not includable in gross income for federal income tax purposes, in which event such allowances shall be limited to 85%; and (3) allowances shall be made up to a maximum of not less than $900 per month for not to exceed one year after the date the injured person becomes unable to engage in available and appropriate gainful activity.
(d) “Funeral benefits” means allowances for funeral, burial or cremation expenses in [1206]*1206an amount not to exceed $2,000 per individual.
(k) “Medical benefits” means and includes allowances for all reasonable expenses, up to a limit of not less than $4,500, for necessary health care rendered by practitioners licensed by the board of healing arts or licensed psychologists, surgical, x-ray and dental services, including prosthetic devices and necessary ambulance, hospital and nursing services; and such term also includes allowances for services recognized and permitted under the laws of this state for an injured person who relies upon spiritual means through prayer alone for healing in accordance with such person’s religious beliefs.
(q) “Personal injury protection benefits” means the disability benefits, funeral benefits, medical benefits, rehabilitation benefits, substitution benefits and survivors’ benefits required to be provided in motor vehicle liability insurance policies pursuant to this act.
(r) “Rehabilitation benefits” means allowances for all reasonable expenses, up to a limit of not less than $4,500, for necessary psychiatric or psychological services, occupational therapy and such occupational training and retraining as may be reasonably necessary to enable the injured person to obtain suitable employment.
(w) “Substitution benefits” means allowances for appropriate and reasonable expenses incurred in obtaining other ordinary and necessary services in lieu of those that, but for the injury, the injured person would have performed for the benefit of such person or such person’s family, subject to a maximum of $25 per day for not longer than 365 days after the date such expenses are incurred.
(y) “Survivors’ benefits” means total allowances to all survivors for: (1) Loss of an injured person’s monthly earnings after such person’s death, up to a maximum of not less than $900 per month; and (2) substitution benefits following the injured person’s death.

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Related

FIDELITY STATE BANK v. McNEILUS TRUCK AND MFG.
12 F. Supp. 2d 1204 (D. Kansas, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
12 F. Supp. 2d 1204, 1998 U.S. Dist. LEXIS 9955, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fidelity-state-bank-ex-rel-estate-of-martin-v-mcneilus-truck-ksd-1998.