 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
State Farm Mutual Automobile Insurance Co. v. Marley12/16/2004
TO BE PUBLISHED
AFFIRMING
This appeal is from an opinion of the Court of Appeals which determined that the household exclusion contained in the personal liability umbrella policy is void against the public policy of the Commonwealth of Kentucky.
The questions presented are whether the household exclusion in the personal liability umbrella policy should be upheld as valid; whether the personal liability umbrella policy is optional coverage that is not governed by the Motor Vehicle Reparations Act; and whether decisions from courts in foreign jurisdictions support the validity and enforceability of such clauses and should be followed.
On December 17, 1999, Larry Marley, the insured, a resident of Indiana, was en route to Florida in the family van when he fell asleep at the wheel and lost control of the vehicle. One child, Heather, was killed. Sixteen-year-old Rachel received injuries resulting in paraplegia, and her mother, Carma, was seriously injured. David, a 12-year-old twin of Heather, was also injured. Carma, Rachel and David are all residents of Indiana and filed an action for damages against the father in Simpson Circuit Court in Kentucky. A separate declaratory judgment action was brought to determine the amount of liability insurance coverage available to Larry under the automobile policy with limits of $100,000 per person/$300,000 per accident, issued in Indiana by State Farm Mutual Automobile Insurance Company, and a personal liability umbrella policy with limits of $1 million issued in Indiana by State Farm Fire & Casualty Company.
Applying Kentucky law in interpreting both policies, the trial judge found that the household exclusion in the primary automobile policy was unenforceable in Kentucky. That decision has never been appealed. The trial judge also found that the automobile policy contained an "out-of-state" coverage provision, which reduced the amount of Larry Marley's liability coverage to the minimum policy limits required by the Kentucky Motor Vehicle Reparations Act, KRS 304.39-110. Finally, the trial judge determined that pursuant to Kentucky Farm Bureau Mut. Ins. v. Thompson, Ky., 1 S.W.3d 475 (1999), the household exclusion in Larry Marley's umbrella policy is valid and enforceable.
The Court of Appeals reversed on the two issues appealed. Distinguishing Thompson, supra, it held that the household exclusion in the umbrella policy as applied to automobile liability coverage was void as against the public policy of this Commonwealth and was unenforceable. It also held that the out-of-state coverage provision does not limit the plaintiffs' recovery to the minimum liability amount contained in the MVRA. The insurance company sought discretionary review in this Court. While that motion was pending, the parties filed a joint motion stating that all claims relating to the automobile policy had been settled and were now moot, and asked this Court to consider only the issue relating to the household exclusion in the umbrella policy. This Court granted discretionary review and also the joint motion.
I. Enforceability of Policy
The critical issue is whether a household exclusion in the personal liability umbrella policy as it applies to automobile liability coverage violates Kentucky public policy. In Lewis v. West American Ins. Co., Ky., 927 S.W.2d 829 (1996), household exclusions in automobile liability policies were held to be unenforceable regardless of the policy limits because they violate Kentucky public policy. In Thompson it was held that the public policy of the state only precludes household exclusions in automobile liability policies, not other types of liability policies such a
Page 1 2 3 4 5 6 7 8 9 10 11 12 Kentucky Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|