RENDERED: JULY 19, 2002; 10:00 a.m. NOT TO BE PUBLISHED C ommonwealth Of K entucky Court Of A ppeals NO. 2001-CA-000345-MR CECILIA WINEBRENNER; and J. RICHARD HUGHES, Administrator of the Estate of DANIELLE MARIE HUGHES APPELLANTS APPEAL FROM JEFFERSON CIRCUIT COURT V. HONORABLE THOMAS J. KNOPF, JUDGE ACTION NO. 99-CI-004407 RYAN L. LACKEY; STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY; and STATE FARM INSURANCE COMPANIES APPELLEES OPINION AFFIRMING * * * * * * * * BEFORE: GUDGEL, JOHNSON, and TACKETT, Judges. GUDGEL, JUDGE: This is an appeal from an order entered by the Jefferson Circuit Court adjudging that appellants are not entitled to claim underinsured motorist coverage (UIM) under a personal liability umbrella policy (umbrella policy), issued by State Farm Fire and Casualty Company (State Farm) to appellant Cecilia Winebrenner, which did not expressly include such coverage. On appeal, appellants contend that as a matter of law, Winebrenner was statutorily entitled under her umbrella policy to receive such coverage from appellee State Farm Insurance Companies. We disagree. Hence, we affirm.
The relevant facts are essentially undisputed. On June 27, 1999, Winebrenner was operating a vehicle which was owned by her and insured for liability by State Farm Mutual Automobile Insurance Company (State Farm Mutual). As she entered an intersection, her vehicle was struck by one operated by Ryan Lackey. Winebrenner was seriously injured and her passenger was fatally injured. Lackey was determined to be solely at fault in causing the accident. At the time of the accident, Lackey was insured by Kentucky Farm Bureau Insurance under a liability insurance policy which provided insurance coverage of $100,000 per person. In addition, Winebrenner s State Farm Mutual liability policy provided both BRB and UIM coverage with limits of $250,000 per person and $500,000 per accident. Winebrenner and the deceased passenger s personal representative therefore filed the instant action seeking damages against Lackey and UIM benefits against State Farm Insurance Companies. In Count III of the complaint appellants alleged: 13. Plaintiffs state there exists a real controversy and dispute between the Defendant, State Farm Insurance Companies, and the Plaintiffs Cecilia Winebrenner and the Estate of Danielle Marie Hughes, concerning policy number 17-BX-4638-4 written by the Defendant State Farm Insurance Companies for Cecilia Winebrenner affording to the Plaintiffs One Million Dollars of personal liability umbrella coverage. Plaintiffs state the real controversy and dispute involving the personal umbrella liability policy is over whether the umbrella policy extends and provides uninsured and underinsured coverage in the amount of One Million Dollars to the two Plaintiffs named herein. -2-
14. Plaintiffs state the underlying automobile liability coverage, written by the Defendant State Farm Mutual Automobile Insurance Company to Cecilia Winebrenner, provides uninsured/underinsured coverage to the Plaintiffs of $250,000/$500,000 and Plaintiffs state that as a result of the umbrella policy being written by the Defendant State Farm Insurance Companies, the underlying coverage for uninsured/underinsured motorist coverage is extended by the umbrella policy and that policy extends and provides an additional One Million Dollars of uninsured/underinsured motorist coverage to the Plaintiffs named herein. Appellants sought a declaration of rights to the effect that there was additional UIM coverage under Winebrenner s umbrella policy in the amount of one million dollars over and above the $250,000/$500,000 UIM coverage provided by her automobile liability insurance policy. Subsequently, Winebrenner made a motion for summary judgment as to the UIM coverage issue, supported by an affidavit in which she claimed: 1. Affiant states at the time she purchased her personal umbrella protection policy from State Farm agent Cindy Graham, the agent or company did not offer, nor advise her of the availability of uninsurance/underinsurance coverage as an endorsement to the personal umbrella being written and purchased. 2. Affiant states that she advised Cindy Graham, her State Farm agent, at the time of the purchase of her personal umbrella policy that she wanted full coverage and she wanted to purchase as much protection and coverage as possible. 3. Affiant states at the time she purchased the State Farm personal umbrella policy she was required to have in full force and effect an underlying State Farm policy with liability limits of 250/500 and uninsured/underinsured limits of 250/500. -3-
In due course, the court entered an order adjudging that Winebrenner s umbrella policy did not provide appellants with additional UIM coverage. This appeal followed. Appellants argue that Kentucky law requires liability insurers to make UIM coverage available in regard to all automobile liability insurance policies, including personal liability umbrella policies such as Winebrenner s, and that the court therefore erred by adjudging that her umbrella policy did not provide such coverage. However, we agree with the trial court that it is unnecessary to address appellants contention because, in light of the undisputed facts and existing case law, we are compelled to conclude that appellants simply have no right to claim such coverage herein. KRS 304.39-320 states in pertinent part as follows: (1) As used in this section, underinsured motorist means a party with motor vehicle liability insurance coverage in an amount less than a judgment recovered against that party for damages on account of injury due to a motor vehicle accident. (2) Every insurer shall make available upon request to its insureds underinsured motorist coverage, whereby subject to the terms and conditions of such coverage not inconsistent with this section the insurance company agrees to pay its own insured for such uncompensated damages as he may recover on account of injury due to a motor vehicle accident because the judgment recovered against the owner of the other vehicle exceeds the liability policy limits thereon, to the extent of the underinsurance policy limits on the vehicle of the party recovering. -4-
In interpreting this statutory language, the Kentucky Supreme Court squarely held in Mullins v. Commonwealth Life Insurance Co., Ky., 839 S.W.2d 245 (1992), that UIM coverage is optional rather than mandatory, and that it must be offered to an insured only if the insured makes a specific request for such coverage. It follows, therefore, that absent such a request by the insured, the insurer has no duty to offer or to provide such coverage. Thus, it is clear herein that unless Winebrenner specifically requested that she be provided UIM coverage under her umbrella policy, State Farm had no duty to provide or to make such coverage available to her. The record shows that during her deposition, Winebrenner admitted that she had no specific conversations with her insurance agent regarding UIM coverage, and that while she purchased the umbrella policy for the purpose of protecting her assets against any liability she might incur, she never heard of the term underinsured until after the collision occurred. Moreover, in the affidavit filed in support of her motion for summary judgment, Winebrenner stated she told her agent only that she wanted full coverage and to purchase as much protection and coverage as possible. Thus, there is nothing in the record to support a finding that Winebrenner made a specific request for UIM coverage under her umbrella policy. In fact, she apparently did not even know about such coverage. Further, it is clear from a review of Flowers v. Wells, Ky. App., 602 S.W.2d 179 (1980), that Winebrenner s request for full coverage and for as much protection and coverage as -5-
possible under her umbrella policy was not legally sufficient to constitute a request for UIM coverage, as this court squarely held in Flowers that a request for full coverage only applies to statutorily-mandated coverage and not to optional coverage such as UIM coverage. The fact that a specific, legally sufficient request for UIM coverage was not made is confirmed by Winebrenner s admission that she never heard of the term underinsured until after the accident. We hold, therefore, that the court did not err by finding that regardless of whether or not State Farm is mandatorily required to provide UIM coverage under an umbrella policy upon an insured s request, appellants are not entitled to claim such coverage since Winebrenner did not specifically request it under her umbrella policy. In light of this conclusion, it follows that we need not address appellants remaining arguments herein. The court s order is affirmed. TACKETT, J., CONCURS. JOHNSON, J., DISSENTS AND FILES SEPARATE OPINION. JOHNSON, JUDGE, DISSENTING: I respectfully dissent. I believe the practice followed by State Farm of selling a personal liability umbrella policy which covers motor vehicle liability without making available underinsured motorist (UIM) coverage is contrary to the public policy of this Commonwealth as established -6-
1 by our Legislature and case law. I would reverse and remand for a trial. State Farm claims that Winebrenner failed to make a specific request for UIM coverage, and thus, pursuant to KRS 304.320(2) and Flowers, supra, it was not required to provide UIM coverage. I find this argument to be disingenuous and the coverage State Farm offers to be illusory. The law of this Commonwealth requires every insurer upon request to make available UIM coverage; and I believe State Farm s practice of not offering UIM coverage as a part of its umbrella liability coverage is untenable. The effect of the Majority Opinion is to allow State Farm to collect Winebrenner s premiums on an insurance policy that does not comply with the minimum standards of Kentucky law. State Farm argues that the policy it sold was in compliance with the laws of this state because Winebrenner did not specifically request UIM coverage. State Farm s position in effect is that Winebrenner could not have requested UIM coverage because it does not offer UIM coverage, and that it would not have sold her an umbrella policy without coverage that it did not offer. In other words, if Winebrenner had requested UIM coverage, State Farm implies that it would have sent her to another company that sold such coverage. I believe State Farm s 1 KRS 304.39-320(2); La Frange v. United Services Automobile Association, Ky., 700 S.W.2d 411 (1985); Allstate Insurance Co. v. Dicke, Ky., 862 S.W.2d 327 (1993); Philadelphia Indemnity Insurance Co. v. Morris, Ky., 990 S.W.2d 621 (1999). -7-
position raises a genuine issue of material fact which should be 2 presented to a jury. I would reverse and remand for a trial. BRIEF AND ORAL ARGUMENT FOR APPELLANTS: F. Thomas Conway Louisville, KY NO BRIEF FOR RYAN L. LACKEY BRIEF AND ORAL ARGUMENT FOR STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY; and STATE FARM INSURANCE COMPANIES: Lee E. Sitlinger Louisville, KY 2 Pan-American Life Insurance Co. v. Roethke, Ky., 30 S.W.3d 128 (2000); Young v. White, Ky.App., 551 S.W.2d 12 (1977). -8-