40-3113a. Remedy against a tortfeasor, insurer or self-insurer subrogated, when; credits against future payments; limitation of actions; attorney fees. (a) When the injury for which personal injury protection benefits are payable under this act is caused under circumstances creating a legal liability against a tortfeasor pursuant to K.S.A. 40-3117 or the law of the appropriate jurisdiction, the injured person, such person's dependents or personal representatives shall have the right to pursue such person's remedy by proper action in a court of competent jurisdiction against such tortfeasor.
(b) In the event of recovery from such tortfeasor by the injured person, such person's dependents or personal representatives by judgment, settlement or otherwise, the insurer or self-insurer shall be subrogated to the extent of duplicative personal injury protection benefits provided to date of such recovery and shall have a lien therefor against such recovery and the insurer or self-insurer may intervene in any action to protect and enforce such lien. Whenever any judgment in any such action, settlement or recovery otherwise shall be recovered by the injured person, such person's dependents or personal representatives prior to the completion of personal injury protection benefits, the amount of such judgment, settlement or recovery otherwise actually paid and recovered which is in excess of the amount of personal injury protection benefits paid to the date of recovery of such judgment, settlement or recovery otherwise shall be credited against future payments of such personal injury protection benefits.
(c) In the event an injured person, such person's dependents or personal representative fails to commence an action against such tortfeasor within 18 months after the date of the accident resulting in the injury, such failure shall operate as an assignment to the insurer or self-insurer of any cause of action in tort which the injured person, the dependents of such person or personal representatives of such person may have against such tortfeasor for the purpose and to the extent of recovery of damages which are duplicative of personal injury protection benefits. Such insurer or self-insurer may enforce same in such person's own name or in the name of the injured person, representative or dependents of the injured person for their benefit as their interest may appear by proper action in any court of competent jurisdiction.
(d) In the event of a recovery pursuant to K.S.A. 60-258a, and amendments thereto, the insurer or self-insurer's right of subrogation shall be reduced by the percentage of negligence attributable to the injured person.
(e) Pursuant to this section, the court shall fix attorney fees which shall be paid proportionately by the insurer or self-insurer and the injured person, such person's dependents or personal representatives in the amounts determined by the court.
History: L. 1977, ch. 164, § 4; L. 1987, ch. 173, § 5; January 1, 1988.
Cross References to Related Sections:
Allowance of attorney fees in other insurance cases, see 40-256, 40-908, 40-3111, 40-3114.
Law Review and Bar Journal References:
"No Fault—The Insurer's Reimbursement Rights Under the New Statute," William R. Sampson, 46 J.B.A.K. 211 (1977).
"Survey of Kansas Law: Insurance," Charles H. Oldfather, Jr., 27 K.L.R. 255 (1979).
"P.I.P.—The Free Ride," Gerald W. Scott, 2 J.K.T.L.A No. 1, 5, 9 (1978).
"Stacking Personal Injury Protection Benefits: Can You? Should You?" Jay Thomas, 3 J.K.T.L.A. No. 6, 20, 22 (1980).
"Recent Developments in Kansas Insurance Law: A Survey, Some Analysis, and Some Suggestions," Robert H. Jerry II, 32 K.L.R. 287, 339, 340, 341, 342 (1984).
"More Goo for Our Tort Stew: Implementing the Kansas Collateral Source Rule," James Concannon and Ron Smith, 58 J.K.B.A. No. 2, 19, 23, 28 (1989).
"Workers' Compensation Review," Patrick Nichols, J.K.T.L.A. Vol. XIV, No. 6, Review p. 1 (1991).
"Practitioner's Guide To Subrogation Liens And Reimbursement Rights," Gary D. White, Jr., J.K.T.L.A. Vol. XVIII, No. 4, 5, 7 (1995).
"Will Debtors Win the Battle as Creditors Win the War?: Retroactive Recovery of Attorney Fees in Consumer Credit Contracts in Kansas," Tamara Putnam and Jonathan Lautt, 34 W.L.J. 556, 569 (1995).
"Kansas's Conflict of Laws Rules for Insurance Contract Cases: It's Time to Change Policies," Jason E. Pepe, 46 K.L.R. 819 (1998).
"An Update to Consumer's Guide to Court-Awarded Attorney Fees," Mark A. Scott, J.K.T.L.A. Vol. XXII, No. 1, 7 (1998).
"Liens, Liens & More Liens," David P. Calvert, J.K.T.L.A. Vol. 25, No. 5, 10 (2002).
"Workers Compensation Review," Joseph Seiwert, J.K.T.L.A. Vol. 30, No. 4, 19 (2007).
Attorney General's Opinions:
Statutory basis for rules and regulations concerning prohibition of subrogation clauses by insurance commissioner. 84-35.
CASE ANNOTATIONS
1. Construed; section applied retroactively with regard to insurer's rights concerning recovery of attorney fees. Nitchals v. Williams, 225 Kan. 285, 288, 289, 290, 292, 294, 295, 590 P.2d 582.
2. Recovery duplicative where settlement includes elements of damage represented by PIP benefits. Russell v. Mackey, 225 Kan. 588, 589, 590, 591, 592, 593, 594, 595, 592 P.2d 902.
3. Cited; section not to be applied retroactively with regard to insured's substantive legal rights. Farmers Ins. Co. v. Farm Bureau Mut. Ins. Co., 227 Kan. 533, 534, 535, 608 P.2d 923.
4. Cause of action accrued on date of accident; plaintiff real party in interest. Dinesen v. Towle, 3 Kan. App. 2d 505, 508, 597 P.2d 264.
5. Proportionate payment of attorney fees authorized even though one insurance carrier insured all relevant persons involved in accident. Ballweg v. Farmers Ins. Co., 228 Kan. 506, 508, 509, 511, 618 P.2d 1171.
6. Repeal of statute allowing setoff of personal injury protection provisions and uninsured motorist provisions was to operate prospectively. Davis v. Hughes, 229 Kan. 91, 101, 103, 622 P.2d 641.
7. No statute authorizes plaintiff's attorney to collect fees from subrogated insurer's portion of settlement fund. Quesenbury v. Wichita Coca Cola Bottling Co., 229 Kan. 501, 503, 625 P.2d 1129.
8. Insurance policy provisions more favorable to insured than statutory requirements; ambiguity construed in favor of insured. Howard v. Farmers Ins. Co., 5 Kan. App. 2d 499, 500, 501, 502, 503, 619 P.2d 160.
9. Trial court erred in finding insurer could not recover against insured who settled with third-party tort-feasor before insurer notified third party of its interests. Hawkeye Security Ins. Co. v. Nelson, 6 Kan. App. 2d 17, 18, 626 P.2d 795.
10. Statute to be applied prospectively only to settlements and judgments resulting from causes of action arising on or after July 1, 1977. Grizzle v. Jacobberger, 6 Kan. App. 2d 42, 43, 44, 626 P.2d 813.
11. Trial court erred in ordering payment of PIP benefits; question as to whether at time of accident insured and purported employer had an employee and employer relationship. Egy v. United States Fidelity & Guaranty Co., 8 Kan. App. 2d 144, 148, 149, 651 P.2d 954 (1982).
12. Reimbursement of PIP benefits not advance or partial payment which tolls statute of limitations. Lytle v. Pepsi Cola General Bottlers, Inc., 8 Kan. App. 2d 332, 336, 656 P.2d 786 (1983).
13. Award of attorney fee is not contingent upon contract between the insurer and the attorney. Johnston & Johnston, P.A. v. Gulf Ins. Co., 8 Kan. App. 2d 401, 403, 404, 407, 659 P.2d 249 (1983).
14. Insurer's lien has priority over hospital's lien under K.S.A. 65-406. Richards v. Etzen, 231 Kan. 704, 705, 706, 707, 647 P.2d 1331 (1982).
15. Insurer has subrogation rights to benefits in excess of statutory minimum requirements. Hall v. State Farm Mut. Auto. Ins. Co., 8 Kan. App. 2d 475, 478, 661 P.2d 402 (1983).
16. Court has jurisdiction to assess attorney fees against insurer even though insurer is not a party. Potts v. Goss, 233 Kan. 116, 117, 118, 119, 120, 660 P.2d 555 (1983).
17. Insurer's rights to reimbursement of PIP benefits paid discussed in detail; duplicative recovery considered and construed. State Farm Mut. Auto. Ins. Co. v. Kroeker, 234 Kan. 636, 643, 676 P.2d 66 (1984).
18. In recovering duplicative benefits, insurer's recovery properly reduced by insured's attorney fee in effecting settlement. American Family Mut. Ins. Co. v. Griffin, 9 Kan. App. 2d 482, 484, 681 P.2d 683 (1984).
19. Statute of limitations is affirmative defense that must be raised. O'Donnell v. Fletcher, 9 Kan. App. 2d 491, 494, 681 P.2d 1074 (1984).
20. Insurer has not recovered PIP benefits when advance payments under K.S.A. 40-275 subsequently deducted; no attorney fees allowed. Howard v. Edwards, 9 Kan. App. 2d 763, 765, 767, 689 P.2d 911 (1984).
21. No reimbursement to PIP insurer where actual damages exceed liability coverage plus PIP benefits received. Kansas Farm Bureau Ins. Co. v. Miller, 236 Kan. 811, 812, 817, 696 P.2d 961 (1985).
22. Insurer has no right of subrogation where plaintiff recovered from owner of steer which collided with car. Yunghans v. Carson, 9 Kan. App. 2d 45, 47, 670 P.2d 928 (1983).
23. Cited; when subsequent change of law occurs, K.S.A. 60-260(b) cannot be used as substitute for failure to appeal. Ellis v. Whittaker, 10 Kan. App. 2d 676, 678, 709 P.2d 991 (1985).
24. Choice of law principles regarding medical payments examined where Missouri owner of motor vehicle had accident in Kansas. State Farm Mut. Auto Ins. Co. v. Baker, 14 Kan. App. 2d 641, 645, 797 P.2d 168 (1990).
25. Medical benefits coverage must be expressly identified as personal injury protection before subrogation allowed hereunder. Durrett v. Bryan, 14 Kan. App. 2d 723, 730, 799 P.2d 110 (1990).
26. Computation of diminution of employer's subrogation interest for fault (K.S.A. 44-504(d)) where worker obtains judgment against third party discussed and determined. Brabander v. Western Cooperative Electric, 248 Kan. 914, 918, 811 P.2d 1216 (1991).
27. Cited in holding that attorney fees cannot be deducted from hospital lien (K.S.A. 65-406, 65-408) when there are sufficient funds to satisfy both. Harlow v. Lloyd, 15 Kan. App. 2d 497, 499, 809 P.2d 1228 (1991).
28. Where PIP benefits wholly contractual between insurer and insured with no subrogation involved, statute inapplicable regarding attorney fees. Bardwell v. Kester, 15 Kan. App. 2d 679, 684, 815 P.2d 120 (1991).
29. Cited in holding vicarious liability not imputed to vehicle owner based solely on permissive use by third party. West v. Collins, 251 Kan. 657, 662, 840 P.2d 435 (1992).
30. Limitations on participation by PIP carrier's counsel following intervention and award of attorney fees to insured's counsel affirmed. Foveaux v. Smith, 17 Kan. App. 2d 685, 695, 843 P.2d 283 (1992).
31. Cited in holding insured may recover underinsured motorist benefits (K.S.A. 40-284) which are not duplicative of workers compensation benefits. Kilner v. State Farm Mut. Auto. Ins. Co., 252 Kan. 675, 681, 683, 847 P.2d 1292 (1993).
32. Nonresident self-insurer's duty to defend and pay employee vehicle defense costs, including attorney fees examined. Overbaugh v. Strange, 254 Kan. 605, 613, 867 P.2d 1016 (1994).
33. Cited; whether holder of accrued tort action not reduced to judgment has a vested property right in actions examined. Resolution Trust Corp. v. Fleischer, 257 Kan. 360, 367, 892 P.2d 497 (1995).
34. Trial court may apportion an injured party's attorney fees from PIP benefits paid to tortfeasor's insurer. Jackson v. Browning, 21 Kan. App. 2d 845, 847, 908 P.2d 641 (1995).
35. Plaintiff awarded amount under statutory threshold in medical expenses could not recover for pain and suffering. Mommens v. Ottley, 948 F. Supp. 57, 59 (1996).
36. When an insurer who insures both parties to a settlement agreement is liable for attorney fees based on PIP benefits examined. Servos v. Corbett, 26 Kan. App. 2d 385, 386, 987 P.2d 1132 (1999).
37. Court approves award of 25% of PIP subrogation recovery to attorney hired by plaintiff. Musse v. Garcia, 31 Kan. App. 2d 574, 68 P.3d 165 (2003).
38. Insurer could not assert lien against settlement proceeds without violating automatic stay where state statute barred retroactive perfection. In re White, 297 B.R. 626, 631 (2003).
39. Plaintiff's settlement with tortfeasor allowed reimbursement for PIP claims paid; extinguished obligation to pay further PIP claims. Chamberlain v. Farm Bureau Mut. Ins. Co., 36 Kan. App. 2d 163, 173, 137 P.3d 1081 (2006).
40. Insurer paid PIP benefits to debtor in bankruptcy pre-petition; insurer violated automatic stay by arbitration to recover PIP benefits. In re Hokanson, 383 B.R. 548, 555, 556 (2008).
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