NATIONAL INSURANCE ASSOCIATION v. GWENOLYN T. APPLEGATE
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RENDERED: June 9, 2000; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-001385-MR
NATIONAL INSURANCE ASSOCIATION
APPELLANT
APPEAL FROM FLEMING CIRCUIT COURT
HONORABLE ROBERT I. GALLENSTEIN, JUDGE
ACTION NO. 96-CI-00116
v.
GWENOLYN T. APPLEGATE
by and through Janet Timberlake,
her guardian
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUDGEL, Chief Judge; COMBS and MILLER, Judges.
COMBS, JUDGE:
The appellant, National Insurance Association
(National), appeals from a judgment of the Fleming Circuit Court
in a declaratory action.
The appellee, Gwenolyn Applegate, by
and through her guardian, Janet Timberlake, sought a declaration
of her rights under an insurance policy issued by National.
Having carefully considered the arguments on appeal, we affirm
the judgment of the circuit court.
In February 1996, Applegate purchased an insurance
policy from National to insure her 1978 Monte Carlo.
Shortly
thereafter, National discovered that Applegate had failed to
disclose that her husband, Jeffery Applegate, had been convicted
of reckless driving.
Based upon this additional information,
National increased Applegate's premium and sent her a bill for
the difference ($28.50) on March 12, 1996.
When National did not
receive a payment from Applegate, it sent her a "Notice of
Cancellation" on March 26, 1996.
The "Notice of Cancellation"
stated in part:
YOUR PREMIUM PAYMENT OF $28.50 HAS NOT BEEN
RECEIVED. THE KENTUCKY INSURANCE DEPARTMENT
REQUIRES A CANCELLATION NOTICE BE SENT
TERMINATING COVERAGE ON 6/28/96. IF WE
RECEIVE YOUR PAYMENT OF $28.50 BEFORE THE
CANCELLATION EFFECTIVE DATE, YOUR POLICY WILL
NOT BE CANCELED. IF YOUR PAYMENT IS RECEIVED
AFTER THE CANCELLATION EFFECTIVE DATE, A NEW
POLICY WILL BE ISSUED. YOUR NEW POLICY WILL
BEGIN AT 12:01 AM THE DAY FOLLOWING THE
POSTMARK DATE OF YOUR PAYMENT AS SHOWN BELOW.
The bottom portion of the notice was entitled
"REINSTATEMENT BILLING" and indicated that if payment was
postmarked by June 6, 1996, the amount due would be $28.50 — but
that if that payment was postmarked after June 27, 1996, the
amount due would be $95.50.
The bottom portion of the notice
also stated, "OFFER VALID FOR 30 DAYS."
On June 30, 1996, the Applegates were involved in a
horrific automobile accident resulting in a double tragedy.
Jeffery was driving the 1978 Monte Carlo in which Applegate was a
passenger.
Jeffery died as a result of the accident, and
Applegate sustained injuries so traumatic that she was ultimately
declared incompetent.
Her sister, Janet Timberlake, was
appointed as her guardian.
Following the accident, National
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denied coverage of the June 30, 1996, accident, claiming that her
policy had been canceled.
On September 4, 1996, Applegate, by and through her
guardian, filed a petition for a declaration of her rights with
regard to the insurance policy and the cancellation notice.
On
April 4, 1997, the Harlan Circuit Court found that the
cancellation notice was ambiguous, stating that an ordinary
person reading the notice could reasonably expect a thirty-day
grace period before the policy was actually canceled.
The court
held that the purported cancellation of the policy was
ineffective and that Applegate's policy was active at the time of
the accident of June 30, 1996.
National appealed that ruling to this court.
On
December 23, 1998, the Court of Appeals rendered an opinion
affirming the court's declaratory judgment in part and vacating
and remanding in part.
We disagreed with the circuit court's
conclusion that the notice was ambiguous but agreed with the
trial court's finding that the policy may have been in effect at
the time of the accident if she had been under a disability
tolling the premium payment period.
Accordingly, we remanded the
case to the circuit court for additional findings as to whether
Applegate had tendered payment of the premium and, if she had
not, whether the thirty-day grace period had been tolled by her
disability.
On remand, the court entered judgment on April 26,
1999, making the additional findings as directed by this court.
The circuit court found that Applegate had not tendered payment
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to National but that she had been under a disability since June
30, 1996, which affected her ability to contract.
It held that
Applegate's disability was a supervening condition which excused
her failure to pay the premium within the thirty-day grace period
and, therefore, that her policy with National was in effect that
and the accident of June 30, 1996, was covered.
This appeal
followed.
National argues on appeal that regardless of
Applegate’s alleged incapacity, her policy had lapsed at the time
of the accident and that it is not required -- nor does it have a
duty -- to reinstate the policy retroactively.
However, the “law
of the case” doctrine has essentially settled this issue, and we
are precluded from re-visiting it here.
The law of the case doctrine “is a rule under which an
appellate court, on subsequent appeal, is bound by a prior
decision on a former appeal in the same court and applies to the
determination of questions of law and not question of fact.”
Inman v. Inman, Ky., 648 S.W.2d 847, 849 (1982).
Moreover,
[I]f a party is aggrieved by an adverse
appellate determination, his remedy is in an
appellate court at the time the adverse
decision is rendered. This is so because an
objection in the trial court is futile and an
appeal from the trial court’s implementation
of the appellate determination is nothing
more than an attempt to relitigate an issue
previously decided.
Williamson v. Commonwealth, Ky., 767 S.W.2d 323, 325 (1989).
A
final decision of an appellate court is the law of the case as to
the issues already adjudged and stands intact as to those issues
in a second appeal adjudicating other issues.
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Id.
In this case, we addressed and disposed of the issue of
coverage on the first appeal.
This court reasoned:
Kentucky follows the majority view that
reinstatement of an insurance policy that was
cancelled for nonpayment of premiums has been
held to restore or reinstate all the benefits
accruing to the policy holder under the
original contract. . . . In the case sub
judice, the only conditions for reinstatement
were: (1) if the premium of $28.50 is paid
and postmarked on or before June 27, 1996;
and (2) if the premium of $95.50 is paid and
postmarked after June 27, 1996 but before
July 27, 1996. We believe that the
reasonable interpretation of the language
"OFFER VALID FOR 30 DAYS" is that the policy
holder had thirty days from June 27, 1996 in
which to reinstate her coverage by paying the
$95.50 premium. The additional premium
required if the payment were postmarked after
June 27, 1996 is further indication that the
same policy would be reinstated, but because
payment was made within thirty days after the
otherwise effective date of cancellation,
National demanded further consideration. The
record doesn't reveal whether or not the
$95.50 was offered or tendered in a timely
manner, nor if the grace period was tolled by
Applegate's disability. Therefore, the case
must be remanded for these findings.
(Opinion NO. 1997-CA-001293-MR, pp. 7-8).
Essentially, we held
that the accident of June 30, 1996, is covered by Applegate’s
policy if either of two possible contingencies had occurred:
(1)
if she tendered payment within the thirty-day grace period
provided by the cancellation notice or (2) if the grace period
had been tolled by her disability.
Thus, if the trial court
found that either of these conditions existed, Applegate’s
accident was covered.
In responding to the directions of our opinion in the
first appeal, the circuit court found on remand that Applegate’s
disability had indeed tolled the thirty-day grace period and
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that, therefore, her policy was in effect at the time of the
accident.
This contingency having been resolved as a finding on
remand, it became the law of the case as to the issue of
coverage.
Although National has framed the issue on appeal as
“whether the reinstatement of a lapsed accident policy operates
prospectively or retroactively,” we ruled in the first case that
coverage did exist if payment had been tendered or if the thirtyday period had been tolled -- thus rendering the issue of
"reinstatement" a moot point.
Additionally, we note that
National did file a motion for reconsideration with this Court
following our first opinion.
This issue has been carefully
considered, and we reiterate that we are bound by our previous
opinion and the results that flowed from its directives on
remand.
The circuit court committed no error in carrying out the
directions as provided.
We affirm the judgment of the Harlan Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Brennen C. Ragone
Lexington, KY
John F. Estill
Maysville, KY
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