STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY CONSOLIDATED APPEALS v. BOURBON C. JOHNSTON; and JEWEL VANDERHOEF, Executrix of the Estate of Bourbon C. Johnston
Annotate this Case
Download PDF
RENDERED: July 2, 1998; 10:00 a.m.
NOT TO BE PUBLISHED
NO. 97-CA-1714-MR
and NO. 97-CA-1715-MR
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
v.
APPELLANT
CONSOLIDATED APPEALS FROM SHELBY CIRCUIT COURT
HONORABLE WILLIAM F. STEWART, JUDGE
ACTION NOS. 95-CI-51 AND 95-CI-52
BOURBON C. JOHNSTON; and
JEWEL VANDERHOEF, Executrix
of the Estate of Bourbon C. Johnston
APPELLEES
OPINION
AFFIRMING
* * *
BEFORE:
GUIDUGLI, JOHNSON, AND SCHRODER, JUDGES.
SCHRODER, JUDGE:
These are consolidated appeals by an auto
insurance carrier from the trial court's denial of its motion to
intervene in a suit to preserve its subrogation rights of
underinsured coverage.
The trial court ruled that the carrier's
cause of action was time barred for failure to timely revive the
action after the tortfeasor died.
We agree and therefore affirm.
This case arose out of an automobile accident that
occurred on January 31, 1991, in Shelby County, Kentucky between
a vehicle driven by Sharron Jones, in which Brenda Sipes was a
passenger, and a vehicle driven by Bourbon Johnston.
Ms. Jones
and Ms. Sipes (plaintiffs) were injured in this accident and
filed separate but similar suits against Bourbon Johnston
(Johnston) on January 27, 1995.
The plaintiffs' vehicle was
covered by State Farm Mutual Automobile Insurance Company (State
Farm), including underinsured coverage, and Johnston's vehicle
was covered by Castle Insurance Company (Castle).
Johnston died on October 27, 1995, of causes unrelated
to the accident.
On February 15, 1996, Johnston's liability
carrier, Castle, tendered its $50,000 policy limits, $25,000 each
to the two plaintiffs.
On March 28, 1996, the plaintiffs'
underinsured motorist and personal injury protection carrier,
State Farm, advanced the plaintiffs $50,000 ($25,000 each) to
protect its subrogation rights against Johnston's estate pursuant
to Coots v. Allstate Ins. Co., Ky., 853 S.W.2d 895 (1993).
The
plaintiffs took no further action in the filed cases, but State
Farm attempted to engage in settlement negotiations with defense
counsel through much of 1996.
In both May and October, 1996,
State Farm offered to forego pursuing a subrogation claim against
Johnston's estate if Castle would reimburse it for the amount it
advanced the plaintiffs.
Defense counsel responded on
December 17, 1996, by claiming that the one-year revival statute
barred all claims.
State Farm sought to intervene in both suits on
March 18, 1997 in order to assert its subrogation claim against
2
Johnston's estate; to recover from Castle $15,088.55 in basic
reparation benefits it paid the plaintiffs; and to substitute as
party defendant, Jewel Vanderhoef, as executrix of the estate of
Johnston, who was appointed executrix on November 27, 1995.
Johnston's estate objected to State Farm's motions and filed a
motion to dismiss the plaintiffs' claims on the grounds that the
plaintiffs failed to revive their actions within one year after
Johnston's death as required by statute (KRS 411.140, KRS 395.278
and CR 25.01, collectively).
The Shelby Circuit Court denied
State Farm's motions and granted the estate's motion to dismiss
as to it.
State Farm filed appeals in the two cases and the
appeals have been consolidated.
Castle is not named as an
appellee in the notices of appeal, nor are the plaintiffs named
as appellees.
No appeals were filed by the plaintiffs, Ms. Jones
or Ms. Sipes.
This fight is strictly between State Farm and
Johnston's estate.
On appeal, State Farm argues that the one-year revival
statute, KRS 395.278, applies to the plaintiffs' actions against
the estate, but not to a subrogation claim not yet filed against
the estate, that its claim did not arise until after Johnston's
death because his insurance company tendered its liability limits
after his death, and that revival implies a claim at the time of
Johnston's death.
State Farm characterizes its attempt at
intervention as its own action in the nature of an underinsured
motorist subrogation claim against the personal representative of
3
the estate, subject to the time limits of KRS 396.011 (claims
against an estate).
KRS 396.011 deals with "[a]ll claims against a
decedent's estate which arose before the death of the decedent,"
id. at section 1, and establishes a six-month statute of
limitation where a personal representative is appointed, except
in the cases where there is insurance and the purpose of the
action is to establish liability of the decedent which is covered
by insurance.
Id. at section 2.
In February 1996, when Castle offered the policy limits
to the plaintiffs, it was the plaintiffs who had a cause of
action against the deceased, not State Farm.
The offer of policy
limits would create a derivative action for State Farm through
its policy's contractual provisions that gave State Farm
subrogation rights, but State Farm still did not have a direct
tort action or direct contract action against Johnston's estate.
State Auto. Mutual Ins. Co. v. Empire Fire & Marine Ins. Co.,
Ky., 808 S.W.2d 805 (1991).
Therefore, State Farm cannot claim a
separate cause of action after the decedent's death.
Johnston's
entire liability, if any, arose out of the accident of
January 31, 1991, as a tortfeasor.
State Farm's subrogation
rights come from a contractual transfer of the plaintiffs'
claims.
See Coots v. Allstate Ins. Co., Ky., 853 S.W.2d 895
(1993).
Therefore, State Farm only has those rights that the
plaintiffs had, no more.
KRS 395.278 provides:
4
When party may revive action and
limitation. - An application to revive an
action in the name of the representative or
successor of a plaintiff, or against the
representative or successor of a defendant,
shall be made within one (1) year after the
death of a deceased party.
In the case sub judice, plaintiffs have already filed suit, so
KRS 396.011 does not apply to them.
Clearly KRS 395.278 and CR
25.01 apply to plaintiffs if they want to continue their tort
actions against the estate of the tortfeasor.
Since State Farm's
subrogation rights are derivative of the plaintiffs' rights,
State Farm can have no greater rights than the plaintiffs who
have to revive their actions in order to maintain their causes of
action.
See State Auto Mutual Ins. Co. v. Empire Fire & Marine
Ins. Co., supra; Snyder v. Snyder, Ky. App., 769 S.W.2d 70
(1989); Coots v. Allstate Ins. Co., supra; and Nationwide Mutual
Insurance Company v. State Farm Automobile Insurance Company,
Ky., ______ S.W.2d _____ (1998) (96-SC-558-DG, rendered May 21,
1998).
KRS 304.39-070 applies to State Farm's request to
recover the $15,0088.55 paid in basic reparation benefits.
Under
Beckner v. Palmore, Ky. App., 719 S.W.2d 288 (1986), State Farm's
subrogation claim for basic reparation benefits is against the
tortfeasor's basic reparation benefits carrier and not the
tortfeasor.
See also State Auto. Mut. Ins. Co. v. Empire Fire &
Marine Ins. Co., supra.
Therefore, Castle should have been
joined and named in the notice of appeal.
Grange Mutual Cas. Co.
v. McDavid, Ky., 664 S.W.2d 931 (1984) and Anderson v. National
5
Sec. Fire & Casualty Co., Ky. App., 870 S.W.2d 432 (1993).
Castle was not named, so we do not have the subrogation claim for
basic reparation benefits before us.
For the foregoing reasons, the judgment of the Shelby
Circuit Court is affirmed.
ALL CONCUR.
6
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Chester A. Vittitow, Jr.
Scott A. Davidson
Louisville, Kentucky
Leslie W. Morris, II
Lexington, Kentucky
7
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
