State Farm Mutual Automobile Insurance Company v. Reeder

763 S.W.2d 116 (1988)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P and the parents of Paul Hampton are next-door neighbors and share a common driveway. Hampton accidentally drove his car into the support for the Pr carport which collapsed. The impact damaged the roof, and the home and demolished a ladder and boat in the carport. Hampton's parents were insured by D and the company was promptly notified. D obtained an estimate of repair for $8,471. The lowest estimate P obtained was $13,392. P declined an offer of $8,961 and sued for the amount he claimed for property damage and expenses, plus $15,000 for his attorney fees as well as 250,000 for violation of KRS 304.12-230. The circuit judge dismissed the unfair practice claim. A jury returned an $11,000 verdict which has been satisfied. On appeal, P argued a violation of KRS 304.12-230 and also sought prejudgment interest which had been denied by the circuit court. D contends that the statute does not create a private right of action, but only gives the Commissioner of Insurance authority to perform a regulatory function. KRS 304.12-230 does not specifically provide that any individual may maintain a claim for damages for violation of the act. However, the statute does not state that a violation of its terms is enforceable only by the insurance commissioner, and it does not prohibit a claim by an individual for damages for its breach. The appeals court held that the statute did create a private right of action but denied interest. Both parties appealed.