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Brewer v. National Indemnity Co.5/19/2005
TO BE PUBLISHED
CERTIFYING THE LAW
This case presents a certified question from the United States Court of Appeals for the Fourth Circuit. Specifically, the question certified is as follows: Whether a fiduciary may maintain an action against an insurer for negligently underinsuring its insured, where the fiduciary, the insurer, and the insured have executed an agreement in which:
(1) the fiduciary settled a wrongful death claim against the insured for the maximum limit of the insurance policy, which the insurer agreed to pay to the fiduciary in consideration for the insured's release;
(2) the insured assigned to the fiduciary the right to pursue its claim that the insurer negligently underinsured its insured ; and
(3) the insurer agreed to litigate with the fiduciary the claim that it negligently underinsured its insured.
We answer the certified question in the affirmative. Under the facts presented here, Kentucky law allows a fiduciary to proceed against an insurer pursuant to the bargained-for agreement entered into by the parties.
The defendant in this action is National Indemnity, an insurance company incorporated in Nebraska. National Indemnity's presence in this case stems from a car wreck between its insured, Maynard's Wrecker Service, and Edward Rose, who is represented by the plaintiff. The plaintiff, Leona Brewer, is the administratrix of the estate of Edward Rose, who was killed in the car accident.
On November 29, 2001, in West Virginia, the vehicle driven by Edward Rose, a resident of West Virginia, collided with the truck of Joe Maynard, a Kentucky resident. Maynard, an employee of a Kentucky business known as Maynard's Wrecker Service, was operating a 1999 Ford Rollback truck within the scope of his employment when the accident occurred. Maynard's negligence proximately caused the accident and Rose's death.
The truck operated by Maynard was insured by National Indemnity, which provided liability coverage on the vehicle in the sum of $100,000. This policy was issued in Kentucky. Brewer, serving in her capacity as administratrix of Rose's estate, filed a civil suit against Maynard and his wrecker company. After the claim was removed to the United States District Court for the Southern District of West Virginia, Brewer amended her complaint, naming additional defendants, including National Indemnity. Count I (the Death Claim) of Brewer's complaint alleged a wrongful death claim against the Maynards. Count II (the Coverage Claim) alleged that National Indemnity negligently breached its duty to provide the Maynards with the minimum amount of commercial liability coverage (claimed to be $750,000) required by federal law, proximately causing the Maynards to be underinsured at the time of the accident.
Brewer, National Indemnity, and the Maynards all entered into a partial settlement agreement. Three issues were agreed upon. First, National Indemnity agreed to pay Brewer the policy limit of $100,000 in exchange for a release of its insured, the Maynards. Second, National Indemnity agreed to further litigate the Coverage Claim with Brewer. Finally, the Maynards assigned to Brewer their rights and claims for indemnification under the policy against National Indemnity, as well as all rights and claims against National Indemnity for extra-contractual, statutory, or common law liability arising out of the Coverage Claim.
Subsequent to the agreement, National Indemnity moved the trial court to dismiss the Coverage Claim. The trial court granted that motion, reasoning that Brewer lacked standing to bring the claim since Rose (whose rights Brewer was representing) h
Page 1 2 3 Kentucky Personal Injury Attorneys
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