Jefferson County v. Allstate Insurance Co.

69 S.W.3d 469, 2001 Ky. App. LEXIS 30, 2001 WL 262691
CourtCourt of Appeals of Kentucky
DecidedMarch 16, 2001
DocketNo. 1999-CA-003085-MR
StatusPublished

This text of 69 S.W.3d 469 (Jefferson County v. Allstate Insurance Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jefferson County v. Allstate Insurance Co., 69 S.W.3d 469, 2001 Ky. App. LEXIS 30, 2001 WL 262691 (Ky. Ct. App. 2001).

Opinion

OPINION

JOHNSON, Judge.

Jefferson County, Kentucky has appealed from an order granting summary judgment in favor of Allstate Insurance Company and the Kentucky Insurance Arbitration Association. We have concluded that even though Jefferson County had chosen to no longer be an “obligated governmental entity” under the Motor Vehicle Reparations Act before Allstate filed its application for arbitration, the Kentucky Insurance Arbitration Association retained jurisdiction over Allstate’s claim for repayment for basic reparation benefits based on a claim that arose while Jefferson County was still an obligated government entity. Hence, we affirm.

On July 23, 1996, after Jefferson County opted to become an “obligated government entity” under the Motor Vehicle Reparations Act (MVRA), it sent a formal written notice to the Kentucky Department of Insurance, stating:

Jefferson County Fiscal Count has elected to become an obligated government entity pursuant to KRS 1 304.39-040[sic] and 806 KAR2 39:040 and thereby become obligated to pay basic reparation benefits.

On May 23, 1996, two months prior to Jefferson County’s notification to the De[471]*471partment of Insurance that it intended to become an “obligated government”, the Department of Insurance had written to Jefferson County to make the County aware of the obligations it would be assuming: “As provided in 806 KAR 39:050 (Section 2), applicants are required to pay both BRB’s and tort liabilities” [emphasis original].

On August 10, 1997, Marcia Brown was involved in a motor vehicle accident with an employee of Jefferson County. As a result of the injuries Brown sustained, Allstate, her insurer, paid her basic reparations benefits (BRB’s). The initial payment of BRB’s was made by Allstate on August 22, 1997, and payments continued through succeeding months, with the final payment of BRB’s occurring on August 17, 1998. At that time, Brown’s $10,000.00 in BRB coverage with Allstate was exhausted. Brown’s accident and all BRB payments made by Allstate to Brown, occurred during the time period in which Jefferson County was an “obligated government entity.”

On January 14, 1999, the County sent a notice to the Department of Insurance advising it of its intention to withdraw from its status as an “obligated government entity.” In its letter, Jefferson County stated that it was changing its status because it was unwilling to continue as a member of the Kentucky Insurance Arbitration Association, the statutory “mechanism for the reimbursement, among reparations obli-gers [sic], of losses paid as basic or added reparations benefits, based solely on the law of torts without regard to subsections (1), (2) and (3) of KRS 304.39-060” [emphasis original].

On February 9,1999, the Department of Insurance responded to the County and advised it that its decision to terminate its status as an “obligated government entity” would only be effective with respect to future claims:

It will be necessary to have on file a copy of the Jefferson County Fiscal Court resolution to this effect. The County’s election in this regard will be deemed effective as of the date it is received in our offices. However, please note that the election to withdraw is effective only as to future claims; any claims still open as of the date the election is received will still have to be settled or closed based on the legal provisions by which the County was bound when it elected to remain an “obligated government.” We would appreciate receiving periodic updates as to the resolution of any current outstanding claims, until such time as all claims are closed.

On February 11, 1999, Jefferson County sent the Department of Insurance a certified copy of its resolution directing its chief financial officer “to notify, in writing, the Kentucky Department of Insurance of Jefferson County Fiscal Court’s intention to be a governmental unit as permitted under 806 KAR 39:050(12) and no longer be an obligated government unit.” In reply to the Department of Insurance’s request to be notified and updated on pending claims, Jefferson County stated:

Nor do we deem it feasible to provide the Department of Insurance with a roster of claims made against Jefferson County and an “update” of dispositions. It should suffice to state that all claims for no fault benefits will be treated in the manner as determined to be appropriate in point of time. In reality, I do not believe any such claims are pending presently.

On February 18, 1999, Jefferson County sent a letter to the Kentucky Insurance Arbitration Association indicating that it was withdrawing as member of the Arbitration Association. On April 19, 1999, [472]*472Allstate filed an application for arbitration with the Arbitration Association to recover from Jefferson County the $10,000.00 in BRB payments it had paid to Brown. In response to a notice by the Arbitration Association that an arbitration hearing had been scheduled for July 12, 1999, Jefferson County, filed a complaint in the Jefferson Circuit Court on July 2, 1999, wherein it sought to enjoin the Arbitration Association from conducting the scheduled hearing. On July 8, 1999, a temporary restraining order was issued by the trial court prohibiting the Arbitration Association from conducting its scheduled hearing and restraining it from rendering any decision pending further order of the court.

On August 16, 1999, Allstate filed an answer to Jefferson County’s complaint. On September 16, 1999, Allstate filed a motion to dissolve the restraining order of July 8, 1999, and a motion to dismiss Jefferson County’s complaint for failure to state a claim upon which relief can be granted. On November 22, 1999, the trial court entered an order granting both of Allstate’s motions. This appeal followed.

The statutory scheme that Jefferson County, as an “obligated government entity,” opted to comply with provides at KRS 304.39-080, in relevant part, as follows:

(3) This Commonwealth, its political subdivisions, municipal corporations, and public agencies may continuously provide ... security for the payment of basic reparation benefits in accordance with this subtitle for injury arising from maintenance or use of motor vehicles owned by those entities and operated with their permission.
(8) An entity described in subsection (3) ... may provide security by lawfully obligating itself to pay basic reparation benefits in accordance with this subtitle[.]

The trial court found that Jefferson County’s decision to become an “obligated government entity”, obligated it to pay all claims that arose during the time frame between the effective date of its option, July 23, 1996, and January 14, 1999, the date that its withdrawal from the program became effective. The trial court held:

While this Court agrees with Jefferson County that it can decide whether or not it is an obligated government entity for prospective application, this Court believes it would be against the public policy behind the KMVRA to allow the County to withdraw its participation retrospectively.

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Cite This Page — Counsel Stack

Bluebook (online)
69 S.W.3d 469, 2001 Ky. App. LEXIS 30, 2001 WL 262691, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jefferson-county-v-allstate-insurance-co-kyctapp-2001.