... and Justice for All

Insured Must Request Added Reparation Benefits (ARB) Coverage

Kentucky law requires an auto insurer to provide added reparation benefits (ARB) coverage.  This obligation, however, is triggered by the request of the insured by Kentucky Court of Appeals ruled recently in Cain v. American Commerce Insurance Company, No. 2008-CA-001500 (October 30, 2009).

Cain was injured in an auto accident due to the fault of another driver.  She was paid basic reparation (BRB also known as PIP) benefits of $10,000 plus added reparation benefits of $20,000 for each of her three insured vehicles for a total of $70,000.  Cain claimed that she was entitled to $40,000 in per insured vehicle.  She argued that KRS 304.39-140(1) entitled her to that level of coverage because it mandated that American Commerce "shall be ... required to provide" in ARB coverage per vehicle the lesser of $40,000 or $80,000, which represented the amount of liability coverage for Cain over the required minimum of $25,000.

The Court of Appeals rejected Cain's argument, ruling that American Commerce's obligation to provide Cain with $40,000 of ARB coverage per vehicle was triggered only "upon the request" of Cain.  Since Cain had not shown that she had requested $40,000 in ARB coverage, the Court ruled that she was not entitled to that level of ARB coverage.

Robert L. Abell
www.RobertAbellLaw.com

Kentucky's Nursing Homes Among Nation's Worst, Government Report States

Kentucky's nursing homes as a whole rank as the nation's 15th worst including ten among our nation's worst, according to a report released by the federal Government Accountability Office (GAO), reports the Lexington Herald-Leader, "Ten Kentucky Nursing Homes Among Worst In Country." 

The GAO report, ""Nursing Homes: CMS's Special Focus Facility Methodology Should Better Target the Most Poorly Performing Homes, Which Tended to Be Chain Affiliated and For-Profit" by clicking here.  According to the report, chain and for-profit nursing homes provide the worst care as a general rule. 

Robert L. Abell
www.RobertAbellLaw.com

Let the Personal Injury Lawyer Beware: ERISA Requires Lawyer to Pay His Earned Fee To Client's Insurance Company

Beware to alll personal injury lawyers and their clients: ERISA can require a personal injury lawyer to pay his earned fee to his client's insurance company.  This result the United States Court of Appeals for the Sixth Circuit ruled recently in Longaberger Company v Kolt, No 08-4432 (November 16, 2009), was appropriate "equitable relief." 

Kolt, a personal injury lawyer, was hired by Samuel Billiter with regard to injuries caused Billiter's minor son by negligent drivers.  Kolt did an excellent job, reaching settlements of $100,000 with one auto insurance company and $35,000 with the other.  After reaching these settlements, Kolt contacted the Billiter's medical insurer indicating that the Billiter's wished to resolve the medical insurer's subrogation interests.  It appears from the record that the medical insurance company did not respond at all to Kolt's correspondence.  And so, after being ignored by the medical insurance company, Kolt many months later went ahead and distributed the $135,000 received from the auto insurers of the negligent drivers.  This included a $45,000 fee for Kolt and some $86,000 plus to the Billiters. 

After ignoring Kolt for many months and still several months after he distributed the settlement proceeds and took his fee, the medical insurer sued both Kolt and his client, Billiter, claiming that it had a first priority subrogation lien under the terms of the Billiter's medical insurance policy.  The insurance company claimed that it was entitled under ERISA, as a form of equitable relief, to force Kolt to pay it the attorney's fee he had worked for and earned.  Nonetheless, the Court ruled that Kolt must pay his earned attorney's fee to his client's medical insurance company.

This decision has several troubling aspects.  One is the degree to which the federal courts (or at least this panel of the Sixth Circuit) are inclined to defer to if not serve the interests of insurance companies.  Second, the insurance company here stonewalled Kolt, let him do all the work while itself apparently doing nothing, delayed for no reason explained in the court's opinion and then, despite all this, was deemed entitled, as a matter of equity, to convert both Kolt and his client into indentured servants, entitled to nothing for their undeniable and substantial service to the insurance company's interests.  Third, the subrogation provisions involved in this case are similar to that in many medical insurance policies.  There will be many other decisions like this one; both personal injury lawyers and their clients can ask themselves if they truly wish to labor solely and only for the insurance company.

Robert L. Abell
www.RobertAbellLaw.com