Travelers Property Casualty Company of America v. Procarent, Inc.
2020 CA 000009
| Ky. Ct. App. | Apr 28, 2022Background
- Procarent (parent company) operates Care Ambulance (Indiana) and Yellow Enterprise (Louisville/southern Indiana); Procarent applied for workers’ compensation coverage only for Care Ambulance and listed only Indiana locations/states.
- Yellow Enterprise employees had been self-insured by Procarent for years and frequently worked in Kentucky; Care Ambulance employees worked solely in Indiana.
- Travelers issued a policy with an estimated premium and contractual provisions for final premium calculation and audit rights; Information Page listed only Indiana and Care Ambulance’s Indianapolis address.
- Post-policy audit revealed additional payroll/employee exposure (including Yellow Enterprise employees), and Travelers billed an additional $155,511 in final premium based on audit results.
- Procarent refused to pay, asserting Yellow employees were self-insured and excluded from coverage; Travelers sued for an account stated. The trial court granted summary judgment for Procarent; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper (genuine issue of material fact) | Travelers: factual disputes exist about assent and coverage | Procarent: facts undisputed; legal issues appropriate for summary judgment | Affirmed: no genuine factual dispute; legal question resolved for Procarent |
| Whether Procarent assented to the audited additional premium (account stated) | Travelers: policy audit provision and final premium clause bind Procarent to pay audit-based additional premium | Procarent: never intended or agreed to insure Yellow employees; no assent to premium for them | Held: Procarent never manifested assent to the charged amount; account stated claim fails |
| Whether Procarent’s failure to obtain Indiana certificate of self-insurance prevents claiming self-insurance | Travelers: noncompliance with Indiana self-insurance statutes means Procarent could not exclude Yellow employees | Procarent: statutory certificate absence is not dispositive; conduct and application show intent to self-insure Yellow | Held: Court rejects Travelers’ argument; failure to obtain certificate isn’t determinative of coverage intent |
| Whether Indiana law/§ 22-3-5-5 voids policy exclusions or prohibits splitting coverage | Travelers: statute presumes policies cover all employees and forbids limiting liability, so exclusion unenforceable | Procarent: statutes protect employees but do not prevent parties from contracting re coverage or permit insurer to seek reimbursement from employer | Held: Employee protections don’t eliminate insurer/insured contractual allocation; insurer may be reimbursed; exclusion enforceable between parties |
Key Cases Cited
- Steelvest, Inc. v. Scansteel Serv. Ctr., 807 S.W.2d 476 (Ky. 1991) (standard for when summary judgment is appropriate)
- Scifres v. Kraft, 916 S.W.2d 779 (Ky. App. 1996) (summary judgment inquiry on genuineness of factual issues)
- Hallahan v. The Courier-Journal, 138 S.W.3d 699 (Ky. App. 2004) (appellate de novo review of summary judgment legal questions)
- Georgia Cas. Co. v. City of Fort Wayne, 145 N.E. 284 (Ind. App. 1924) (statute protects employee recovery but does not bar insurer/insured contractual allocation or insurer’s right to reimbursement)
- Munz v. Underwriters at Lloyds, 336 F.2d 798 (9th Cir. 1964) (insurer may owe employee benefits under statute but can seek reimbursement from employer for excluded losses)
- Webster v. Pfeiffer Eng’g Co., 568 S.W.3d 371 (Ky. App. 2018) (definition of account stated as mutual manifestation of assent to an amount due)