INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Sad fate for driver and passenger
A motor vehicle accident occurred on November 4, 2015, that involved Fendol Carruthers Jr. and Donna Powers. Carruthers was charged and pleaded guilty to operating a motor vehicle under the influence of alcohol or drugs. Powers claimed to have sustained serious, permanent injuries from the crash. Carruthers was insured by State Farm Mutual Automobile Insurance Company with a policy limit of $50,000.
Powers began receiving Personal Injury Protection (PIP) benefits from her own insurer, Kentucky Farm Bureau Mutual Insurance Company (KFB). The Kentucky Motor Vehicle Reparations Act (MVRA) imposes a two-year statute of limitations for tort actions arising from motor vehicle accidents. Powers received her last PIP payment on August 4, 2016, meaning that any tort claim she wished to assert that arose from her accident with Carruthers must have been filed by August 4, 2018.
Powers filed a complaint in McCracken Circuit Court on April 3, 2018, asserting a negligence claim against Carruthers and an underinsured motorist claim against KFB. Carruthers had died two years earlier in March 2016, unbeknownst to Powers or her attorneys. The case remained stagnant for the next year, with Powers failing to take any action to rectify the portion of her complaint that was a nullity against Carruthers. In August 2019, Powers successfully moved the district court to appoint the public administrator to act as administrator of Carruthers’s estate.
In May 2019, the circuit clerk issued a notice to dismiss for lack of prosecution. In her response to that notice, Powers stated that she had been engaged in unsuccessful settlement negotiations with State Farm for the last year and would soon be filing a motion to appoint the public administrator.
Powers then erroneously moved the circuit court to appoint the public administrator, and the circuit court denied the motion because that function was within the exclusive jurisdiction of the district court.
In August 2019, Powers successfully moved the district court to appoint the public administrator to act as administrator of the estate. One month later, Powers moved to substitute the estate as a party defendant to her claim and to revive her action.
In response to Powers’s motion to substitute and revive, the estate argued that any claim against Carruthers was a nullity and any claim against the estate was now time barred by the MVRA’s two-year statute of limitations. The circuit court then entered an order that abated the action pending its decisions in two related cases.
After those decisions were rendered, the estate filed a motion to remove the case from abeyance and for a ruling on Powers’s motion to revive. KFB then filed its own motion for summary judgment in which it likewise argued that Powers’s motion to substitute was untimely. KFB also argued that Powers’s inability to recover from Carruthers precluded her from succeeding on her UIM claim because, under the terms of its insurance agreement, KFB could only be held liable for damages in excess of those that Powers is “legally entitled to recover” from Carruthers.
The Supreme Court of Kentucky affirmed the decisions of the lower courts, which had dismissed Powers’s negligence claim against Carruthers, denied Powers’s motions for substitution and revival, denied Powers’s motion for leave to amend her complaint to raise a new claim, and granted summary judgment in favor of KFB. The court held that Powers’s claim against Carruthers was null, and her attempted claim against the estate was untimely. Furthermore, Powers’s inability to recover from Carruthers or the estate foreclosed her underinsured motorist claim against KFB.
Billy E. Powers as administrator of the estate of Donna Powers v. Kentucky Farm Bureau Mutual Insurance Company and the estate of Fendol Carruthers Jr.—Supreme Court of Kentucky—No. 2022-SC-0309-DG—June 13, 2024.
