Request By:
David A. Weinberg, P.S.C.
Attorney at Law
180 North Mill Street
Lexington, KY 40507
Opinion
Opinion By: David L. Armstrong, Attorney General; Carl T. Miller, Jr., Assistant Attorney General
In your capacity as a Hearing Officer for the Board of Claims you have requested an opinion of the Attorney General as to whether the Board in making an award of damages resulting from the negligent operation of a state owned vehicle is required to deduct from the award the amount which the claimant has received as basic reparation benefits under the Kentucky No-Fault Insurance Law, KRS 304.39.
It is the opinion of this office that the Board of Claims must deduct from any award made on a motor vehicle claim an amount equal to the sum which the claimant has received in the form of basic reparation benefits. This question has evoked some conflicting statements in court opinions but has now been clearly decided. In Hargett v. Dodson, Ky.App., 597 S.W.2d 151 (1979), the Court opined that: "A tort feasor may not derive benefit from insurance coverage procured by the injured party." But in that case the Court ruled that the plaintiff did not receive double recovery and, therefore, the amount which the plaintiff had received as basic reparation benefits should be deducted from the total award. The peculiar fact in that case was that both the plaintiff and the defendant were insured by the same insurance company and the insurer had made a claim for subrogation for the BRB it had paid to the plaintiff.
In the case Progressive Casualty Insurance Co. v. Kidd, Ky., 602 S.W.2d 416 (1980), the Supreme Court allowed double recovery by an accident claimant simply because the insurer which had paid basic reparation benefits to the claimant did not join as a party in the action or submit its claim for arbitration and, therefore, had not made a proper application for subrogation. The Court said at page 418:
"We trust that in the future, reparation obligors will follow the letter of the law, and damages will not be awarded to injured parties who have already been provided BRB when the insurer is not a party to the action."
The final word from the appellate court to date is the case of Dudas v. Kaczmarek, Ky.App., 652 S.W.2d 868 (1983). In that case, as in Progressive Casualty Insurance Co. v. Kidd, supra, the insured did not join in the action and was, therefore, not entitled to subrogation for the $8,008.85 paid to the claimant as basic reparation benefits. The Court of Appeals held that since KRS 304.39-060(2)(a) abolishes tort liability up to $10,000, if an individual does not pursue basic reparation benefits to the maximum payable the award to him should be reduced by $10,000, the maximum amount to which he would have been legally entitled as basic reparation benefits.
This case would seem to indicate that it is not the actual amount of BRB which is received that should be educted from the award but the amount of $10,000 -- the maximum amount which could have been received as BRB. Such an interpretation makes moot the question of whether a part of the basic reparation benefits were for pain and suffering for which compensation cannot be awarded by the Board of Claims under KRS 44.070. Unless the compensation for damage to persons or property exceeds the sum of $10,000, excluding any award for pain and suffering, no award should be made against the Commonwealth by the Board of Claims when basic reparation benefits apply. When the compensation for damages exceeds the sum of $10,000 only that sum in excess of $10,000 should be awarded where basic reparation benefits apply.