EDWIN COHEN v. COMMONWEALTH OF KENTUCKY, DEPARTMENT OF INSURANCE, INSURANCE COMPANY
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RENDERED: JUNE 13, 2003; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2002-CA-000795-MR
EDWIN COHEN
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE ROGER L. CRITTENDEN, JUDGE
ACTION NO. 01-CI-01616
v.
COMMONWEALTH OF KENTUCKY,
DEPARTMENT OF INSURANCE,
and STATE AUTOMOBILE MUTUAL
INSURANCE COMPANY
APPELLEES
OPINION
AFFIRMING
** ** ** ** ** ** ** **
BEFORE: COMBS and PAISLEY, Judges; and MILLER, Special Judge.1
COMBS, JUDGE.
This is an appeal of a decision of the Franklin
Circuit Court affirming an order of the Commonwealth of
Kentucky, Department of Insurance, which upheld a decision of
State Automobile Mutual Insurance Company (“State Auto”) not to
1
Senior Status Judge John D. Miller sitting as Special
Judge by assignment of the Chief Justice pursuant to Section 110(5)(b)
of the Kentucky Constitution.
renew the appellant’s automobile liability policy.
The circuit
court concluded that the decision was supported by substantial
evidence of record and that it was consistent with the
provisions of KRS2 304.20-030(4)(c).
The appellant argues that
the court erred by failing to conclude that the loss he had
suffered was the result of an act of God -- thus negating State
Auto’s reason for refusing to renew his policy.
We affirm.
On January 7, 1998, the appellant, Edwin Cohen,
suffered a loss in an automobile accident.
On April 3, 2001, he
was involved in a second automobile accident in which he
sustained a second loss.
notice of non-renewal.
Subsequently, State Auto issued a
The notice of non-renewal complied with
all statutory requirements and listed the reason for non-renewal
as losses -- or accidents -- occurring on January 7, 1998, and
April 3, 2001.
Cohen requested and received an administrative hearing
with the Department of Insurance on August 27, 2001.
Cohen
admitted before a hearing officer that he had sustained two
losses within the past five years.
While he accepted
responsibility for the first accident, Cohen contended that the
second incident resulted from his sudden and unexpected loss of
consciousness –- “an act of God” -– while he was driving.
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Kentucky Revised Statutes.
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He
stated that he had fainted as the result of an undiagnosed
potassium deficiency that has since been corrected by
medication.
A State Auto representative testified that the
insurer routinely used loss frequency as a factor in arriving at
a decision for non-renewal.
He acknowledged that Cohen’s losses
were the determining factors in the decision not to renew his
liability policy.
Following a review of the evidence and the relevant
policy and statutory provisions, the hearing officer prepared
his findings of fact and conclusions of law.
He recommended
that State Auto’s decision not to renew be enforced.
On
November 7, 2001, the Commissioner of the Department of
Insurance entered an order adopting the recommendation of the
hearing officer.
Cohen appealed the order to the Franklin
Circuit Court.
In an opinion and order affirming the decision of the
Department of Insurance, the Franklin Circuit Court relied on
the provisions of KRS 304.20-040(4)(c).
The statute forbids
insurers from refusing to renew a policy of automobile insurance
solely because the insured has sustained one or more losses
that:
immediately result from a natural cause
without the intervention of any person and
that could not have been prevented by the
exercise of prudence, diligence, and
care....
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The court interpreted this language to mean an “act of God” as
that phrase is commonly defined by Kentucky case law.
The Franklin Circuit Court correctly concluded that an
insurer could not refuse to renew a policy based on a loss that
resulted from an act of God.
However, the court was not
persuaded that Cohen’s loss was the result of an act of God.
Consequently, it agreed that State Auto’s non-renewal of Cohen’s
policy was not barred by KRS 3-4.20-040(4)(c).
The court held
that the Department of Insurance had correctly applied the rule
of law and that its decision was supported by substantial
evidence.
This appeal followed.
Cohen argues that the Franklin Circuit Court erred by
concluding that the second loss was not the result of an act of
God.
He contends that the loss resulted from an unforeseen
event and not from a lack of prudence, diligence, or care as set
forth by the pertinent statute.
Because the medical condition
underlying his loss of consciousness has been diagnosed and
corrected since the accident, Cohen argues that State Auto’s
refusal to renew his policy is unfair and unenforceable.
State Auto and the Department of Insurance contend
that the insurer’s decision not to renew the policy is not
prohibited by the provisions of KRS 304.20-040.
While the
insured’s fainting spell was sudden, they argue that it was
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neither unforeseeable nor unexpected and that, therefore, the
loss did not result from an act of God.
Medical records confirm that Cohen had experienced a
similar fainting spell in January 2001 –- just two months prior
to his automobile accident.
As a result of his first loss of
consciousness, Cohen suffered a fracture to his back.
Since
Cohen was painfully aware that he was susceptible to fainting
without warning, the Department of Insurance contends that the
second loss could have been prevented if he had acted with
prudence, diligence, and care in seeking immediate medical
treatment.
State Auto also contends that whether Cohen’s
potassium level can be adequately controlled to reduce the
likelihood of future episodes is not a material consideration
under the provisions of the statute.
We agree.
Cohen’s potassium level had been adjusted by
medication for some time prior to 2001.
He was aware for
several months before his second automobile accident that he
might faint without experiencing any warning symptoms.
Prudence, diligence, and care under these circumstances dictated
that Cohen either consult promptly with a physician or stop
driving his automobile in order to prevent an accident.
As he
failed to do either, we cannot conclude that Cohen’s second
collision resulted from an act of God.
Consequently, State
Auto’s non-renewal decision was not prohibited by the provisions
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of KRS 304.20.
The Department of Insurance did not err by
enforcing the decision; the Franklin Circuit Court did not err
by affirming the Department’s order.
Accordingly, we affirm the opinion and order of April
15, 2002, of the Franklin Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT PRO SE:
BRIEF FOR APPELLEE COMMONWEALTH
OF KENTUCKY, DEPARTMENT OF
INSURANCE:
Edwin Cohen
Louisville, Kentucky
Wendy A. Craig
Frankfort, Kentucky
BRIEF FOR APPELLEE STATE
AUTOMOBILE INSURANCE COMPANY:
Leslie Rosenbaum
James G. Noll
Lexington, Kentucky
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