author: Chief Justice LAMBERT. KELLER, J., GRAVES, Justice, COOPER, Justice,

text:
    Bonita EARLE, Appellant, v. Alice S. COBB and Indiana Insurance Company, Appellees.
    No. 2000-SC-0818-DG.
    Supreme Court of Kentucky.
    Dec. 16, 2004.
    Rehearing Denied March 17, 2005.

      Mike Breen, Kerry S. Morgan, Bowling Green, for appellant.
    Reford H. Coleman, Eric Allen Hamilton, Coleman Lochmiller Bond & Hess, Elizabethtown, for appellee Alice S. Cobb.
    W. Douglas Myers, W. Jonathan Sweeten, Jack N. Lackey, Deatherage, Myers, Self & Lackey, Hopkinsville, for appellee Indiana Insurance Company.
   Opinion of the Court by

Chief Justice LAMBERT.

The issue presented is whether an underinsured motorist (UIM) carrier must be identified at trial when it chooses to preserve its subrogation rights by means of the procedure set forth in Coots v. Allstate Ins. Co. (the “Coots procedure”). We conclude that the UIM carrier should be so identified as a party because it was named as a party by virtue of its contract and because it chose to retain its subrogation rights by substitution of its payment for that of the liability insurance carrier. As the trial court and the Court of Appeals held otherwise, and the case was tried without all real parties, we reverse and remand for a new trial.

On February 17, 1998, Appellant, Bonita Earle, and Appellee, Alice Cobb, were involved in an automobile accident in Muhlenberg County. As a result of the accident, Earle was injured. She sought recovery from Appellee Cobb and from her UIM carrier, Appellee Indiana Insurance Company (Indiana Insurance). Earle sought damages for medical expenses, lost wages, and pain and suffering. Indiana Insurance filed a cross-claim against Cobb for indemnity.

Prior to trial, Cobb’s liability insurance carrier, Hartford Insurance Company, offered its policy limit of $25,000 to Earle as full settlement of her claims against Cobb. Earle was willing to accept this sum, but as was its right, the UIM carrier, Indiana Insurance, elected to preserve its subrogation right against Cobb by using the Coots procedure of substituting its payment for Hartford’s (liability carrier) proposed $25,000 settlement. Thus, Cobb was not released and she remained a party defendant.

For the purposes of trial, the court ordered Earle’s claims against Indiana Insurance for UIM benefits to be determined after the jury rendered a verdict. The trial court also held that the existence of the UIM coverage provided by Indiana Insurance could not be revealed to the jury. Thus, Indiana Insurance was not identified as a party, did not participate at trial, and agreed to be bound by the jury verdict. However, Indiana Insurance did defend by participating in pretrial motions and discovery. In short, the case was tried to the jury as Earle v. Cobb, and nothing more was revealed.

During its deliberations, the jury asked the trial judge the following question: “Is insurance involved or is it coming from Ms. Cobb?” The trial judge declined to answer the jurors’ question. Thereafter a verdict was returned and Earle was awarded $500.00 for pain and suffering, $500.00 for past medical bills, and $500.00 for lost wages. Judgment was entered thereon. Earle appealed and Cobb cross-appealed to the Court of Appeals. In its opinion, the Court of Appeals affirmed the trial court holding that the interest and participation of Indiana Insurance was properly withheld from the jury. Earle was granted discretionary review by this Court.

CR 17.01 provides, in part, “Every action shall be prosecuted in the name of the real party in interest.... Nothing herein, however, shall abrogate or take away an individual’s right to sue.” In the case at bar, Appellee Indiana Insurance was a party defendant in the trial court and was allowed to participate in all pretrial proceedings and discovery. At trial, however, it was not identified and the case was presented as if the only parties were the plaintiff, Earle, and the defendant, Cobb. Such a trial is fundamentally misleading to the jury and it deprives a plaintiff of the right to try her case against the party she chooses.

For sound policy reasons, evidence of liability insurance to show culpability is excluded. However, where a direct contractual relationship exists between a plaintiff and a defendant insurance company no such policy is warranted. In Wheeler v. Creekmore, we explained this proposition as follows:

The insurance company was in fact a party and we think properly so, because it had a direct contractual obligation to Mrs. Wheeler. Since the company was a party and was actively represented by counsel we think the jury was entitled to know that fact and to have the company’s counsel identified. Otherwise the jury would be left to speculate as to the interest represented by an attorney participating in the trial who had no apparent connection with any of the parties. It is our opinion that the considerations which have prompted the rule against mention of ordinary liability insurance in an automobile negligence case must yield in uninsured-motorist [UM] cases to the procedural desirability of letting the jury know who are the parties to the litigation where the uninsured motorist carrier elects to participate actively in the trial. (Citations omitted).

While Wheeler addressed UM coverage, we held in Coots v. Allstate Ins. Co. that UM and UIM coverage should be treated similarly as the purpose and intent of their coverages is similar.

Kentucky is not alone in recognizing the right of a plaintiff to bring a contract claim against his or her UIM carrier and have that UIM carrier identified as such at trial. The reasoning employed in some jurisdictions for allowing identification of UIM or UM carriers to the jury is well articulated in King v. State Farm, Mut. Auto. Ins. Co. :

In the instant matter, the defendant, a corporation, has no personal right of privacy. Further, the unsubstantiated belief by State Farm that its disclosure as the defendant would adversely affect the jury’s verdict furnishes insufficient justification for withholding from the jury, and from the general public, State Farm’s identity as the defendant at a public trial. The lack of per se prejudice to the UM/UIM carrier in being identified at a trial at which the insured’s damages, under the policy, are determined by rules applicable to tort cases is shown by the permissibility of joining, as defendants in an action brought by the insured, the tortfeasor and the UM/ UIM carrier. Indeed, State Farm’s position here is no different from that of any insurer that is sued directly for breach of its policy or from that of any apparently “deep pocket” corporation that is sued for breach of contract by its promisee. We hold that the circuit court abused its discretion in imposing this partial blackout on public information. (citations omitted).

Prejudice to a UM/UIM carrier from being identified as a party has been considered insignificant, and in any event the contractual relationship and full disclosure must prevail. The Supreme Court of Florida has recently held in Medina v. Peralta that a trial court’s failure to identify to the jury a properly joined UM7UIM motorist carrier to be per se reversible error.

As in the foregoing cases, Earle brought a direct action against her UIM carrier and Cobb. The claim against Cobb was based on negligence and the claim against the UIM carrier was based on its contractual undertaking. As analyzed by the Florida Court, the danger of not naming Indiana Insurance at trial is that the jury is left to “speculate about the exact role of plaintiffs carrier in the lawsuit, perpetuating the ‘charades in trials.’ ” The note from the jury verifies this. As reiterated in Wheeler; and in King and Medina, the policy of full disclosure outweighs any prejudice that Indiana Insurance might experience.

Appellant also argues that it is improper to maintain the legal fiction of permitting the UIM carrier to either participate or sit idly by and allow the tortfeasor to defend at trial, thereby hiding the identity of a bona fide party. Coots criticized this “legal fiction” of substituting the name of the tortfeasor for the UIM carrier. The basis for the criticism was enhanced with our decision in True v. Raines whereby the tortfeasor’s liability to the plaintiff is totally extinguished when the Coots procedure is undertaken. When only the tortfeasor is identified, a fictitious presence appears at trial instead of the bona fide party. Moreover, when that practice is followed, one with only a contingent and secondary liability by means of subrogation is presented as the solely and exclusively liable party. We denounced this practice in Coots:

There is no more reason to create a legal fiction by substituting the name of the tortfeasor for the UIM carrier, when the carrier alone is the real party in interest in UIM cases, than there is reason to do so when dealing with UM coverage. The issue of permitting a “legal fiction” to be employed has been laid to rest in uninsured motorist claims which involve a direct action against the UM carrier in Wheeler v. Creekmore, Ky., 469 S.W.2d 559 (1971). Underin-sured and uninsured carriers should be treated similarly, as their -purpose and the intent of their coverage is similar. (emphasis added).

In our recent decision in True, we held that when a UIM used the Coots procedure, the tortfeasor is released from liability to the plaintiff. Although the tortfea-sor remains liable for indemnity to the UIM, the UIM then becomes the only real party with potential liability to the plaintiff. Precedent, parity, and fairness demand that this Court put an end to charades and legal fictions, and treat UIM and UM carriers the same. Therefore, we hold that the failure to identify to the jury a named party defendant at trial that is also the plaintiffs UIM carrier to be reversible error.

With respect to Appellees’ argument that KRE 411 would prevent UIM identification, there is no rule of exclusion of evidence showing insurance coverage if offered “for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness.” Whether Ms. Cobb had liability insurance is not at issue. Indiana Insurance is a party defendant to this action based upon the contractual relationship between Appellant and Indiana Insurance, her UIM carrier. As stated hereinabove, when Indiana Insurance invoked the Coots procedure it should have been identified as a party to the jury.

For the forgoing reasons, we reverse the Court of Appeals and remand to the trial court for proceedings consistent with this opinion.

GRAVES, STUMBO, and WINTERSHEIMER, JJ., concur.

GRAVES, J. files a separate concurring opinion.

COOPER, J., dissents by separate opinion in which JOHNSTONE, J., joins.

KELLER, J.,

dissents and would affirm the Court of Appeals in accordance with the legal analysis contained in Justice COOPER’S dissenting opinion, but does not join that opinion because he strongly disagrees with the dicta contained therein that the majority opinion “seriously misstated and/or misrepresented the holdings” of precedents in furtherance of an alleged “anti-business, anti-insurance” agenda of this Court.

GRAVES, Justice,

concurring.

I concur with the majority because I believe it would be a fraud upon the jury not to let them know the entire truth. The direct inquiry by the jury concerning insurance reveals there is a pervasive commonality concerning automobile insurance in Muhlenberg County, Kentucky. We live in a state where liability insurance is compulsory and most jurors operate motor vehicles.

In paying for insurance, jurors are made aware of the direct correlation between premiums and losses, especially since insurance companies advertise to protest jury awards. Today liability insurance is prevalent, and jurors likely assume insurance is involved in vehicular accidents. Prejudice should no longer be presumed merely because insurance is mentioned. When the rule against mentioning insurance originated, most people neither owned nor operated motor vehicles and insurance was not common.

After all, Louisiana has a direct action statute in which insurance companies may be named as a party along with the defendant and the sky has not fallen yet.

COOPER, Justice,

dissenting.

Today, the majority of this Court holds that it is reversible error to deny a plaintiff in a tort action arising out of a vehicular accident the right to inform the jury that the defendant is covered by a policy of liability insurance. Because that decision abrogates generations of common law decisions to the contrary in this and every other jurisdiction in the United States save one (Florida), I dissent.

I. FACTS.

On February 17, 1998, Bonita Earle was injured when her automobile collided with an automobile owned and operated by Alice S. Cobb. Cobb, a retired schoolteacher, was exiting a high school parking lot when she failed to yield the right-of-way to Earle’s vehicle. The trial court ruled that Cobb’s negligence was the sole cause of the collision, and that issue is not pursued on this appeal. Cobb was insured by a policy of insurance issued by the Hartford Insurance Company (“Hartford”) with liability coverage limits of $25,000 per person and $50,000 per accident. KRS 304.39-110(l)(a)(l). Earle was insured by a policy of insurance issued by Indiana Insurance Company (“Indiana”) with underinsured motorist (UIM) coverage limits of $200,000. KRS 304.39-320(2). Earle brought an action in tort against Cobb and in contract against Indiana Insurance. Indiana filed a cross-claim against Cobb for indemnity for any amounts it might be required to pay under its insurance contract with Earle because of Cobb’s negligence.

Cobb’s insurer, Hartford, offered to pay Earle its $25,000 liability limit to settle her claim against Cobb. Pursuant to Coots v. Allstate Ins. Co., Ky., 853 S.W.2d 895, 902-03 (1993), Indiana substituted $25,000 of its own money for Hartford’s settlement offer. Earle accepted Hartford’s settlement offer and Indiana’s $25,000, thus precluding any additional recovery by Earle against Cobb. True v. Raines, Ky., 99 S.W.3d 439, 448 (2003). However, Indiana’s substitution of its money for Hartford’s preserved its subrogation claim against Cobb. Id.; Coots, 853 S.W.2d at 902. After the settlement, Earle had a contractual right to collect any judgment in excess of $25,000 from Indiana, Indiana had a right of indemnity against Cobb for any such sums it was required to pay Earle, and Cobb thus remained personally hable for any amounts payable to Earle in excess of $25,000. Assuming Cobb was solvent and able to pay any excess judgment (and no one in this case suggests otherwise), Indiana’s role in the case was merely that of a conduit — Indiana would pay Earle any part of a judgment against Cobb that exceeded $25,000 and would be reimbursed by Cobb for any such payment made. In that scenario, Cobb was the real party in interest with respect to any judgment in tort rendered in favor of Earle in excess of $25,000.

Prior to trial, Cobb (not Indiana) filed a motion in limine to bifurcate the issue of her tort liability from the issue of Indiana’s contractual liability to Earle. The logic of her motion is inescapable; for if the jury knew that Indiana was an undeñnsured motorist carrier, they would ipso facto know that Cobb was insured by a policy of liability insurance — though undeñnsured in Earle’s view. The trial court sustained Cobb’s motion to bifurcate and ruled that Earle’s contractual claim against Indiana “shall be handled post verdict.” The trial court’s order also prohibited Indiana from participating in the trial or in any depositions that might be used at trial. In compliance with this order, Indiana’s attorney did not participate in the trial in any respect and did not ask any questions of the medical witnesses during their pretrial depositions.

During the course of deliberating their verdict, the jury sent Judge Jernigan a note inquiring, “Is insurance involved or is it coming from Ms. Cobb?” (Emphasis added.) The judge appropriately replied that he could not answer the question. The jury returned a verdict awarding Earle $500 for pain and suffering, $500 for medical bills, and $500 for lost wages, for a total of $1,500. The trial court entered judgment against Cobb in accordance with the verdict, and Earle has not asked for a new trial on grounds that the verdict was inadequate. Since Earle had already settled with Cobb for $25,000, and since the verdict did not exceed the amount of Hartford’s liability policy limits, the verdict and judgment exonerated Indiana and relieved Cobb from any potential indemnity liability.

II. PREJUDICE.

The majority of this Court now reverses and remands this case for a new trial, holding that it was reversible error to preclude Earle from informing the jury that she had sued both Cobb and her own underinsurance carrier, thereby also informing the jury (1) that Cobb was covered by a policy of liability insurance, and (2) that any verdict rendered against Cobb would be paid by either or both insurance companies. Ante, at 261. Of course, Indiana can inform the jury that Cobb must reimburse Indiana for any money that Indiana is required to pay Earle. That, however, will not eliminate the prejudice to Cobb stemming from the jury’s knowledge that she is covered by a policy of liability insurance. And, of course, since the majority’s holding will apply to every case in which a plaintiff sues both the tortfeasor and the plaintiffs UIM carrier — whether or not a Coots settlement has occurred — the effect of today’s holding is that every juror in every vehicular tort action where the defendant is insured and the plaintiff has a policy providing UIM coverage will be informed that the defendant is covered by a policy of liability insurance. After all, what sane plaintiff would not join his or her UIM carrier, regardless of the limits of the defendant’s liability coverage, in order to prejudice the jurors by informing them that the defendant is covered by a policy of liability insurance?

Every jurisdiction in the United States, including ours, recognizes the inherent and pervasive prejudice that results from informing a jury in a tort action that any verdict rendered against the defendant will be paid by an insurance company. See generally J.B. Glen, Annotation, Admissibility of Evidence, and Propriety and Effect of Questions, Statements, Comments, Etc., Tending to Show that Defendant in Personal Injury or Death Action Carries Liability Insurance, 4 A.L.R.2d 761 (1949 and Supp.2004) (citing literally thousands of cases). Of all of those cases, however, none has better or more colorfully explained the prejudicial effect of exposing jurors to such information than did our predecessor court in Star Furniture Co. v. Holland, 273 Ky. 617, 117 S.W.2d 603 (1938):

It would be difficult — even beyond the power of overcoming — to conclude that such reference to the question of insurance did not have the desired effect to give the case an “insurance” coating, and to sprinkle it with an “insurance” perfume — all of which we have said in numerous cases was calculated to influence the jury in arriving at its verdict, both upon the issue of culpable negligence, as well as the amount of remuneration.
... [W]e, as well as all courts, have held that the average juror is either unconsciously or otherwise influenced by the fact that the alleged negligent actor carries insurance. Such average juror, it has been found, is frequently led astray and returns an unauthorized verdict because he concludes that the defendant against whom it is rendered will not be required to pay it out of his individual funds because of indemnity insurance carried by him. Knowing that fact counsel representing injured plaintiffs frequently seek to get before the jury the fact of such indemnity insurance being carried by the defendant in such tort actions, and we, as well as other courts, have never failed to condemn it.... The consequence of such information is well known, and is sufficient to require a new trial. It is useless for counsel to talk of the innocuous character of this evidence, when they at the same time, in order to get the information before the jury, are willing to imperil any verdict which might be rendered. All lawyers know the rule in regard to such evidence, and they must not expect the court to establish a rule, and then wink at its violation....
... The combined efforts to get before the jury the fact of indemnity insurance undoubtedly had the effect to create in the minds of the jury that defendants were indemnified by a contract of insurance so as to lead its members to conclude that the burden of any verdict rendered would not have to be borne by the local corporate defendant, or by the driver of its truck, but that it would be borne exclusively by the indemnifying corporation.... Therefore, the allegation in the petition, as well as the statement of counsel, was clearly intended to accomplish no other purpose than the one we have so often condemned, i.e., of wrongfully influencing the jury to return a verdict that, perhaps, it would not otherwise have done. The argument of counsel, supra, in avoidance of this error, we conclude, is insufficient for that purpose, since it did not remove the “insurance paint” nor the “perfumed insurance odor” referred to, supra, from the case.

Id. at 606-07. See also Turpin v. Scrivner, 297 Ky. 365, 178 S.W.2d 971, 974 (1944) (“[T]he effect of bringing to the knowledge of the jury the fact of defendant’s indemnity against such accidents permeates the case as thoroughly and completely as dissolved sugar in hot liquid, and cannot be more easily separated or eradicated.”). Even indirect references to the existence of liability insurance have been condemned. See e.g., Bybee v. Shanks, Ky., 253 S.W.2d 257, 260 (1952) (statement in closing argument that “I am satisfied [the named defendants] think [the plaintiff] ought to be paid,” implying that defendants were insured, thus would not have to pay the verdict); Randle v. Mitchell, 283 Ky. 501, 142 S.W.2d 124, 125 (1940) (statement in closing argument that, “It does not make a great deal of difference what the amount of your verdict is, because it won’t hurt the taxi company very much any way.”).

The jury’s inquiry in the case sub judice as to whether the judgment would be paid by insurance or by Cobb clearly indicates that the prejudice resulting from the interjection of insurance into a tort case has not diminished in the sixty-six years since Holland was decided. The jury’s inquiry obviously indicates that the verdict would have been different if the jurors had known that the judgment would be paid by insurance rather than by Cobb, and the inquiry reinforces the universally recognized truism that a jury’s knowledge that any verdict will be paid by insurance and not the tortfeasor will poison the verdict.

As exemplified by Holland, some personal injury lawyers will employ any device and risk any penalty to administer that poison. Consider White v. Piles, Ky. App., 589 S.W.2d 220 (1979), in which the plaintiff was injured in a collision between an uninsured vehicle and an insured vehicle in which she was a passenger. The plaintiff sued the uninsured motorist, the insured vehicle’s uninsured motorist (UM) insurance carrier, and the driver of the insured vehicle. At the conclusion of the evidence, the trial court directed a verdict in favor of the uninsured motorist on the issue of liability, dismissing the complaint against him and the UM carrier, and directed a verdict in favor of the plaintiff against the insured driver, requiring the jury to decide only the issue of damages. Id. at 221. In closing argument, the plaintiffs attorney remarked that the judge had simplified matters for the jury by throwing out the 11 only uninsured motorist in here.” Id. at 222. The jury’s verdict for $24,812 was set aside because of that remark and, upon a retrial at which insurance was not mentioned, the plaintiff received a verdict for only $10,000. Id. at 221. After today, of course, plaintiffs attorneys need not fear the consequences of poisoning the verdict by “sneaking in” evidence that the defendant is covered by a policy of liability insurance. Now, a UIM-covered plaintiff is absolutely entitled to inform the jury of that fact.

III. THE MISREPRESENTATION OF PRECEDENTS.

In holding that a UIM-covered plaintiff is entitled to a prejudiced jury and a poisoned verdict, the majority opinion has seriously misstated and/or misrepresented the holdings of our own precedents and those of other jurisdictions. That, of course, will not surprise anyone familiar with the anti-business, anti-insurance opinions of this Court over the past fifteen years. See, e.g., Nationwide Mut. Ins. Co. v. Hatfield, Ky., 122 S.W.3d 36, 44-61 (2008) (Cooper, J., dissenting).

In Wheeler v. Creekmore, Ky., 469 S.W.2d 559 (1971), our predecessor court did not, as the majority asserts, hold that a UM carrier must be identified to the jury “where a direct contractual relationship exists between a plaintiff and a defendant insurance company.” Ante, at 259. Wheeler only held that the UM carrier must be identified when the carrier’s counsel actively participates in the trial.

Otherwise the jury would be left to speculate as to the interest represented by an attorney participating in the trial who had no apparent connection ivith any of the parties. It is our opinion that the considerations which have prompted the rule against mention of ordinary liability insurance in an automobile negligence case must yield in uninsured-motorist cases to the procedural desirability of letting the jury know who are the parties to the litigation where the uninsured motorist carrier elects to participate actively in the trial.

Id. at 563 (emphasis added). Of course, as has been noted by other courts, infra, in an uninsured motorist case, the UM carrier generally will participate actively at trial because the uninsured motorist usually does not have the financial means to retain counsel or to mount a defense. The same is not true in an underinsured motorist case where the defendant will be represented by counsel provided by the defendant’s liability insurer.

And, contrary to the representation in the majority opinion that Coots v. Allstate Insurance Co. somehow supports today’s decision, ante at 261, Coots did not hold that the UIM insurer must be named as a party defendant at trial. Coots only held that the UIM insurer cannot defend the case in the tortfeasor’s name (as can the tortfeasor’s liability insurer).

The UIM carriers have raised as a collateral issue whether they should be able to defend before the jury in a suit against the UIM carrier in the name of the tortfeasor rather than in their own name, claiming that it is fundamentally unfair to take aim against them as a target defendant....
There is no more reason to create a legal fiction by substituting the name of the tortfeasor for the UIM carrier, when the carrier alone is the real party in interest in UIM cases, than there is reason to do so when dealing with UM coverage.... Underinsured and uninsured earners should be treated similarly, as their purpose and the intent of their coverage is similar.

Coots, 853 S.W.2d at 903 (emphasis added). Of course, the carrier is not the only real party in interest in this UIM case. Cobb is not a “fictitious presence,” ante at 261; she is the real party in interest because she -will have to pay any judgment rendered in favor of Earle.

Nor do any of the foreign cases cited in the majority opinion support the result reached in this case. In King v. State Farm Mutual Automobile Insurance Co., 157 Md.App. 287, 850 A.2d 428 (2004), the plaintiff brought a separate action against the UIM insurer after settling with the underinsured tortfeasor. Id. at 430. The UIM carrier waived its subrogation rights against the tortfeasor, id. at 430 n. 1, and the tortfeasor was never a party to the action against the UIM carrier; thus the “carrier alone [was] the real party in interest.” Coots, 853 S.W.2d at 903. The issue in King was whether the UIM carrier could defend the action anonymously, i.e., without being identified to the jury as an insurance company. Thus, the issue in King was factually identical to that in Wheeler v. Creekmore, and bore no factual resemblance to the case sub judice.

State ex rel. State Farm Mutual Automobile Insurance Co. v. Canady, 197 W.Va. 107, 475 S.E.2d 107 (1996), was not an action in which the insurer sought to conceal its identity from the jury. It was an original action in an appellate court in which the UM insurer petitioned for a writ to require the trial court to allow it to intervene in its insured’s tort action against an uninsured motorist so that the insurer could mount a defense in its own name and with its own counsel. Id. at 109, 475 S.E.2d 107. A West Virginia statute, W. Va.Code § 33-6-31(d), permits a UM or UIM carrier to defend an action brought against an uninsured or underin-sured tortfeasor in the name of the tortfea-sor, in its own name, or in the names of both. See Tilley v. Allstate Ins. Co., 40 F.Supp.2d 809, 812 (S.D.W.Va.1999) (interpreting West Virginia law and granting motion to join underinsured tortfeasor so that UIM carrier could defend in tortfea-sor’s name, even though plaintiff had settled with tortfeasor and UIM carrier had waived subrogation rights against tortfea-sor).

In defending against the petition for a writ, the plaintiff in Canady relied on State ex rel. Allstate Ins. Co. v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993), which had suggested that the insurer could raise only policy defenses in its own name and must otherwise defend in the name of the alleged tortfeasor. Id. at 759. Canady, a UM case, distinguished Karl, a UIM case, as holding only that (1) a UIM carrier could not assume the defense of an under-insured tort defendant who was already represented by his or her own liability carrier, Karl, 437 S.E.2d at 758; and (2) a UIM carrier could not defend in its own name if the tort defendant was being defended by a liability carrier, presumably because of the prejudice flowing to the tort defendant from informing the jury that he was insured, id. at 759. Canady, 475 S.E.2d at 110-11. In Canady, the uninsured motorist was not represented by counsel, but the UM carrier wanted to distance itself from him. Id. at 111. Ca-nady held that the UM carrier could intervene, noting that one purpose of the statute was to prevent prejudice against insurance companies and that the UIM carrier had waived its right not to have insurance mentioned in the negligence case. Id. at 114. Since the tortfeasor was uninsured, identifying the UM carrier to the jury did not prejudice him.

Canady also noted that UM coverage, like liability coverage, is primary coverage while UIM coverage is only secondary coverage, analogous to excess liability insurance. Canady, 475 S.E.2d at 111 n. 4. That analogy comports with our own characterization of UIM coverage as conceptually permitting the insured, to purchase additional liability coverage for the vehicle of a prospective underinsured tortfeasor. LaFrange v. United Serv. Auto. Ass’n, 700 S.W.2d 411, 414 (1985). Canady further noted that in a UIM case, the tort defendant generally has counsel provided by the liability insurer, so there is no need for the UIM carrier to participate, whereas in a UM case, the tortfeasor often does not have private counsel, so the UM carrier has no choice but to actively participate to protect its interests. See Canady, 475 S.E.2d at 112 n. 8. All of these points contradict the majority opinion’s reasoning in the case sub judice.

Lima v. Chambers, 657 P.2d 279 (Utah 1982), was similar to Canady in that a UM carrier had unsuccessfully sought to intervene and defend in its own name a tort action brought by its insured against an uninsured motorist. The plaintiff did not Sue the UM carrier and had obtained an uncounselled affidavit from the defendant in which he admitted liability. The plaintiff had used this affidavit to obtain a summary judgment on the issue of liability. ‘ The UM carrier sought to intervene to defend against the issue of damages, arguing that the defendant was unrepresented and unlikely to provide an adequate defense to the issue. The plaintiff asserted that its relationship to the UM carrier was contractual, i.e., the UM carrier was obligated to pay any judgment obtained against the uninsured motorist, but had no right to participate in the plaintiffs tort action. Id. at 280. Relying on Utah’s equivalent of CR 24.01, Lima held that the UM carrier could intervene as a matter of right, overruling two prior cases holding otherwise. Id. at 284. Those prior cases had held that a UM carrier could not be a party to a tort action against an uninsured motorist because of the prejudice resulting from the interjection of insurance into the case. Kesler v. Tate, 28 Utah 2d 355, 502 P.2d 565, 566 (1972) (denying intervention); Christensen v. Peterson, 25 Utah 2d 411, 483 P.2d 447, 448 (1971) (denying joinder).

In Tucker v. McQuery, 107 Ohio Misc.2d 38, 736 N.E.2d 574 (Com.Pl.1999), the tort-feasor was no longer a party to the action, so the UIM carrier was the only party in interest. Id. at 575 n. 1.

In Lamz v. Geico General Insurance Co., 803 So.2d 593 (Fla.2001), the Court noted that “Geico [the UIM carrier] participated at trial as a party defendant, represented by its own attorney,” id. at 594, and held that the “jury should be made aware of the precise identity of an uninsured or underinsured insurance carrier if it is a party at trial.” Id. at 595 (emphasis added). Thus, Lamz, like King v. State Farm, was factually akin to Wheeler v. Creekmore, but bore no factual resemblance to the case sub judice.

Medina v. Peralta, 724 So.2d 1188 (Fla.1999), indeed held that the UM/UIM carrier must be joined as a party and identified specifically to the jury by its status as a UM or UIM carrier. Id. at 1190. However, that case turned on the fact that under Florida law, a UM/UIM carrier is a “necessary party” to the action. Id. (citing Government Employees Ins. Co. v. Krawzak, 675 So.2d 115, 118 n. 3 (Fla.1996), which held that a 1992 amendment of Fla. Stat. Ann. § 627.727(6) required that an action for UIM coverage be brought solely against the UIM insurer). Under Kentucky law, a UIM carrier is a real party in interest to an action against an underin-sured motorist but is not a “necessary party” to such an action. See CR 19.01. While an action must be prosecuted by a real party in interest, CR 17.01, no provision requires that an action be prosecuted against or defended by a real party in interest — especially where that interest is identical at trial to that of another real party in interest who is providing an adequate defense. I would note in passing that the Court in Medina v. Peralta did not address what, if any, prejudice might flow to the tort defendant from identifying the plaintiffs UIM insurer as such at trial.

To summarize, no case cited in the majority opinion supports the majority’s conclusion that a plaintiff has a right to inform the jury in a UIM case that the tort defendant is covered by a policy of liability insurance. All of our own precedents hold otherwise and, except for Medina v. Peral-ta, which turned on the language of a local statute, no case is found where a court has held that a UIM carrier that is potentially liable for an excess verdict must participate in the trial and must be identified to the jury.

IV. BIFURCATION NOT ONLY PERMITTED, BUT REQUIRED.

Generally, whether to bifurcate issues for purposes of trial is within the sound discretion of the trial court. CR 42.02 (“If the court determines that separate trials will be in furtherance of convenience or will avoid prejudice, or will be conducive to expedition and economy, it shall order a separate trial of any ... separate issue ... or issues.”) (Emphasis added.). That is especially true when the purpose of bifurcation or separation is to avoid the prejudice associated with the interjection of insurance. Gray v. Bailey, Ky., 299 S.W.2d 126 (1957). See also Fid. & Cas. Co. of N.Y. v. Mills, 319 F.2d 68 (1963) (interpreting Fed.R.Civ.P. 42(b)); Tilley, 40 F.Supp.2d at 815-16 (same). If that were the issue, I would conclude that Judge Jernigan did not abuse his discretion in bifurcating the negligence and damages issues from the insurance issue for purposes of trial.

However, in Wittmer v. Jones, Ky., 864 S.W.2d 885 (1993), we held that it was reversible error not to bifurcate a direct action against an insurance company from the underlying negligence claim:

While we see no impediment to joinder of the claims in a single action, at trial the underlying negligence claim should first be adjudicated. Only then should the direct action against the insurer be presented. Liability insurance should not be interjected needlessly into the trial of a negligence case. Here failure to bifurcate was prejudicial error but for the fact that no actual prejudice resulted. If we were going to reverse this case for a new trial, we would order bifurcation.

Id. at 891 (emphasis added). Wittmer was a direct action against an insurer claiming a violation of the Unfair Claims Settlement Practices Act. KRS 304.12-230. The case sub judice is a direct action against an insurer on a contractual obligation. The prejudice to the tort defendant is the same. Absent bifurcation, the jury will be informed that the tort defendant is insured by a policy of liability insurance. The prejudice flowing from that knowledge was exemplified when the jury inquired of the trial judge whether the verdict would be paid by insurance or by Ms. Cobb, obviously indicating that the amount of the verdict would depend upon who would be required to pay it.

Under Wittmer v. Jones, Judge Jernigan was required to bifurcate the contractual issue from the underlying negligence case. Under CR 42.02, he at least did not abuse his discretion in doing so. If Indiana had asserted its right to participate and defend against Earle’s claim in its own name, he would have been required to balance that right against the prejudice to Cobb from the jury’s knowledge that she was covered by a policy of liability insurance. Here, the only person asserting a right to prejudice the jury and poison the verdict is Earle. Remarkably, the majority of this Court has concluded that she has an absolute right to do so.

Accordingly, I dissent.

JOHNSTONE, J., joins this dissenting opinion.

      . Ky., 853 S.W.2d 895 (1993). The Coots procedure has been statutorily adopted and is codified at KRS 304.39-320.

      . CR 17.01.

      . A party who undertakes defense of a case and avoids default is a party for all purposes. Cf. Stuart v. Richardson, Ky., 407 S.W.2d 716 (1966) (holding real party in interest is one entitled to the benefits of action upon the successful termination thereof). One cannot be a party for purposes of motion and discovery, and later strategically conceal its identity at trial. See King v. State Farm Mut. Auto. Ins. Co., 157 Md.App. 287, 294-96, 850 A.2d 428, 434-436 (2004).

      . CR 17.01.

      . Ky., 469 S.W.2d 559 (1971).

        . Id. at 563.

      . 853 S.W.2d at 903.

      . E.g., Lima v. Chambers, 657 P.2d 279, 285 (Utah 1982) (identity of intervening insurance company should be made known to the jury); State ex rel. State Farm Mut. Auto. Ins. Co. v. Canady, 197 W.Va. 107, 475 S.E.2d 107, 113 (1996) ("[T]he jury is entitled to be aware of the uninsured motorist carrier's identity”); Tucker v. McQuery, 107 Ohio Misc.2d 38, 736 N.E.2d 574, 576 (1999) ("[J]urors have the right to know who the real party in interest is”); Lamz v. Geico Gen. Ins. Co., 803 So.2d 593 (Fla.2001) (holding petitioners are entitled to have their UIM carrier identified as such, when the carrier is joined as party defendant).

      . 157 Md.App. at 298-99, 850 A.2d at 435.

      . King, 157 Md.App. at 298-99, 850 A.2d at 435.

      . Id. at n. 6 (noting federal magistrate judge considered any prejudice "not significant” when denying the carrier’s motion in limine seeking to suppress its identity by relying on Farley v. Allstate, 355 Md. 34, 733 A.2d 1014 (1999) and Allstate v. Miller, 315 Md. 182, 553 A.2d 1268 (1989); See also Connolly v. Lotkin, 2000 WL 1508258 (D.Md.2000)).

      . 724 So.2d 1188 (Fla.1999).

      . Id. at 1189.

      . Lamz v. Geico Gen. Ins. Co., 803 So.2d 593, 596 (Fla.2001).

      . 469 S.W.2d 559 (1971).

      . 853 S.W.2d at 903.

      . Ky., 99 S.W.3d 439, 448 (2003).

      . Coots, 853 S.W.2d at 903.

      . 99 S.W.3d at 448.

      . KRE 411.

      . This accident occurred before the 1998 amendment of KRS 304.39-320(3), (4) and (5) that codified the Coots procedure.

      . Coincidentally, the author of this opinion was the trial attorney for the UM carrier in White — one of the rare occasions when I was on the positive end of a directed verdict.

      . In support of this holding, Justice Leibson cited his own dissenting opinion in Federal Kemper Insurance Co. v. Hornback, Ky., 711 S.W.2d 844, 847 (1986), incorporated by reference in Curry v. Fireman’s Fund Insurance Co., Ky., 784 S.W.2d 176, 178 (1989), in which he noted that "[t]he trial court elected to bifurcate the trial,” 711 S.W.2d at 847 and "[a] bifurcated procedure was the proper way to try the present case.” Id. at 849. Coincidentally, the author of this opinion was the trial judge in Federal Kemper.


source: Caselaw Access Project

author: JOHNSTONE, Justice. KELLER, Justice,

license: Public Domain

text:
    Jason WEAVER, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. 2003-SC-0353-DG.
    Supreme Court of Kentucky.
    Feb. 17, 2005.
    Michael C. Lemke, Louisville, Counsel for Appellant.
    Gregory D. Stumbo, Attorney General of Kentucky, Teresa Young, Special Assistant Attorney General, Louisville, Counsel for Appellee.
   JOHNSTONE, Justice.

This is an appeal from a decision of the Court of Appeals determining that the trial court erred in dismissing a second-degree escape charge. Discretionary review was granted. For the reasons set forth below, we affirm.

The, facts in this matter are uncontested. Following Appellant’s indictment for assault and criminal abuse, the Jefferson Circuit Court ordered that he be released on his own recognizance upon the conditions that he be committed to the Jefferson County Department of Corrections pending trial and participate in the Home Incarceration Program until his August 29, 2001 trial date. His participation in the program required that he wear an electronic monitoring device and that he leave his home only to go to work. In July of 2001, Appellant failed to report on time to work. This failure prompted the supervising officer to request that Appellant report to the program’s office; Appellant did not appear. For several weeks he could not be located and was subsequently indicted for escape in the second degree.

Appellant filed a pretrial motion seeking to dismiss the charge of escape in the second degree. The trial court granted the motion, reasoning that a defendant being held on home incarceration prior to trial was not in custody because such restraint was incidental to bail, an exception to the escape statute. The Commonwealth appealed the dismissal of the charge. The Court of Appeals reversed, concluding that Appellant was in “custody” within the meaning of Kentucky’s escape statutes and therefore could be charged. Appellant sought discretionary review with this Court, which was granted.

The sole issue before us is whether a conviction for escape may arise from a violation of home incarceration that was imposed as a condition of pretrial release. We conclude that it may.

This issue is one of statutory interpretation, specifically whether Appellant’s placement on home incarceration as a condition of pretrial release fits the definition of “custody” within the meaning of KRS 520.010(2). Pursuant to KRS 520.030, a person is guilty of escape in the second degree when he “escapes from a detention facility or, being charged with or convicted of a felony, he escapes from custody.” KRS 520.010(2) defines “custody” for purposes of KRS Chapter 520 as “restraint by a public servant pursuant to a lawful arrest, detention, or an order of court for law enforcement purposes, but does not include supervision of probation or parole or constraint incidental to release on bail.”

Appellant urges that his participation in the home incarceration program was a “constraint incidental to release on bail,” thereby excepting him from the escape statute. This argument is necessarily predicated on a finding that Appellant was actually released on bail; he was not. No bail was ever set or paid in this case. Rather, Appellant was released to the home incarceration program instead of being released on bail. A distinction exists between a person released on bail versus other forms of pretrial release, and it is patently evident that the General Assembly intended this distinction. KRS 27A.360(1) requires a trial court to include in its disposition of a case whether a defendant is being released “on bail or pretrial release” (emphasis added). Moreover, KRS 431.517 speaks directly to the issue at bar, while also emphasizing that the General Assembly intended that a distinction exists between release on bail versus other forms of pretrial release. KRS 431.517 provides:

Home incarceration may be ordered as a form of pretrial release, subject to the conditions imposed by the provisions of KRS 532.200 to 532.250.

KRS 532.220(2), in turn, provides that violation of the terms of home incarceration may subject “the home incarceree to prosecution under KRS 520.030 (escape).” Such penalties are not available to a defendant who has violated the conditions of his release on bail. Rather, a defendant acting in violation of the terms of his release on bail-is subject to having his bail bond forfeited. RCr 4.42(1). Therefore, we cannot conclude that Appellant had been released on bail.

In reaching the same conclusion, the Court of Appeals noted that it would be simply illogical to consider Appellant’s home incarceration as some form of “constraint incidental to release on bail.” The restraint and restrictions placed on Appellant as terms of his pretrial release were far more intense and comprehensive than the “incidental” constraint involved in a release on bail. Typical forms of constraint that are incidental to release on bail might include restrictions on travel, restrictions on place of dwelling, or perhaps a restriction on association with certain persons. Here, Appellant was ordered to wear an electronic monitoring device at all times, was not permitted to leave the home except to travel to and from work, and was required to report to the program’s offices upon request. These restrictions were certainly not “incidental” to a release on bail; rather these restrictions constituted the substantive terms of Appellant’s pretrial release on his own recognizance subject to home incarceration.

Finally, we reiterate our holding in Stroud v. Commonwealth, that a “[violation of the Home Incarceration Program could result in a second-degree escape.” 922 S.W.2d 382, 384 (Ky.1996). Appellant argues that Stroud is inapplicable because it does not specifically state whether the defendant was participating in the home incarceration program pursuant to terms of a pretrial release order or as part of a sentence. We find this distinction to be of no consequence, as the Court’s underlying reasoning is relevant to the present matter: “a narrow technical reading of the term ‘custody’ is not appropriate for the purposes of determining escape.” Id. at 384.

For these reasons, the trial court erred in dismissing the escape charge. Because Appellant’s home incarceration was not a constraint incidental to release on bail, his behavior constituted an escape from custody as defined by KRS 520.030. The case is remanded to the Jefferson Circuit Court for further proceedings consistent with this opinion.

COOPER, GRAVES, and WINTERSHEIMER, JJ., concur.

KELLER, J., dissents by separate opinion, with LAMBERT, C.J., and SCOTT, J., joining that dissent.

KELLER, Justice,

dissenting.

Because KRS 520.010(2) specifically excludes “constraint incidental to release on bail” from the definition of custody, the Appellant may not be charged with escape from custody under KRS 520.030 for violating home incarceration as a form of pretrial release. If KRS 520.010(2)’s definition of custody is “unwise or impolitic, the remedy rests with the Legislature; not with the courts .... We have no authority to change or alter the established rules of law. Our functions are judicial, not legislative. We sit here to declare what the law is, and not what it ought to be.” Accordingly, I dissent.

While I have no doubt that a defendant may properly be charged with escape while on home incarceration as an “alternative to confinement in a penitentiary after the fact of sentencing by a court,” a defendant may not properly be charged with escape from custody while on home incarceration as a form of pretrial release pursuant to KRS 431.517 because he or she is not in custody as that term is defined by statute. Instead, the proper remedy for a violation of home incarceration while on pretrial release would be to revoke the release privilege and return the defendant to the county jail to await trial.

In Buford v. Commonwealth, which bears the imprimatur of this Court, the Court of Appeals made the distinction between pretrial home incarceration and home incarceration as a sentence in concluding that jail-time credit would be afforded to those participating in the program after trial, but not to those whose participation occurred before trial. Specifically, the Buford Court determined that a defendant, like Appellant here, who had been released to Jefferson County’s home incarceration program in lieu of bond, could not receive jail-time credit for the time he spent on home incarceration because he was not in “custody” at that time. There is no reason why this Court should take a different view when addressing home incarceration in the context of an escape charge. It is inconsistent and illogical to deny a defendant jail-time credit for time spent in home incarceration prior to conviction because he or she is not in custody, and yet hold as the majority opinion does that a defendant in pretrial home incarceration is in custody for purposes of a conviction for escape from custody. In such circumstances, a defendant is either in custody or not; logically it cannot be both.

The majority of this Court, in effect, concludes that pretrial home incarceration is custody based upon the common meaning of custody. But the Legislature made it clear in defining custody for KRS Chapter 520 that the common meaning of custody does not apply where it would include pretrial release conditions, and the statutory definition of custody must control. The Court of Appeals in Cooper v. Commonwealth understood the definition of “custody” when it said, “As the definition [of custody] currently stands in Kentucky law, restrictive terms on bond-released time do not amount to custody and are indeed still a privilege granted to an arres-tee.” Home incarceration was a nonfi-nancial condition imposed on Appellant’s pretrial release and was used in lieu of requiring bail. As a result, for the purpose of determining whether he escaped from custody, it was no different than if the Appellant had been released on bail. Thus pretrial home incarceration is “constraint incidental to release on bail.”

There is a huge and glaring inconsistency in denying one person jail-time credit for time spent in pretrial home incarceration and in convicting another person of escape from custody for violating the terms of pretrial home incarceration. Both actions (the denial and the conviction) depend on whether one is in “custody,” and it necessarily follows that a determination in one case that an individual on pretrial home incarceration is not in “custody” would apply to all cases where pretrial home incarceration is imposed and the dis-positive question is whether the individual is in “custody.” “The majority of courts interpreting whether the term house arrest constitutes being ‘in custody’ have held that it does not.” By virtue of today’s majority opinion, this Court holds that an individual on pretrial release conditioned on home incarceration is not in custody for purposes of jail-time credit, but nevertheless is in custody for purposes of charging him or her with escape from custody. I cannot accept this inconsistency and thus, I respectfully dissent.

LAMBERT, C.J. and SCOTT, J., join this dissenting opinion.

      . Drury v. Franke, 247 Ky. 758, 57 S.W.2d 969, 982 (1933).

      . Cooper v. Commonwealth, 902 S.W.2d 833, 835 (Ky.App.1995), discretionary review denied, Aug. 16, 1995.

      . State v. Fellhauer, 123 N.M. 476, 481, 943 P.2d 123, 128 (N.M.Ct.App.1997) ("Defendant was not subject to a charge of escape if he failed to abide by the terms of his house arrest. The district court could have revoked the order allowing house arrest, but no new charges could have been brought. Thus, his non-compliance with house arrest would only have resulted in a revocation of his order of release.”); RCr 4.14 (allows the issuance of a warrant for violation of conditions of release). I would note that a defendant may properly be charged with bail jumping if he or she fails to appear as specified by court order. KRS 520.070-.080.

      . 58 S.W.3d 490 (Ky.App.2001) (ordered published by Supreme Court of Kentucky).

      . But see Buford v. Commonwealth, 58 S.W.3d 490, 492 (Ky.App.2001) ("We conclude there is no inconsistency in denying one jail-time credit for time spent in home incarceration prior to conviction and convicting one who violates home incarceration of escape.”).

      . Camera Center, Inc. v. Revenue Cabinet, 34 S.W.3d 39, 43 (Ky.2000) (citing Dixon v. Caudill, 143 Ky. 623, 136 S.W. 1043 (1911) ("[Wjherever it may appear in the statutes, the definitions therein must control elsewhere, unless there be some statutory interdiction.”)).

      . Cooper, 902 S.W.2d at 836.

      . Id.

      . RCr 4.04(1 )(c); RCr 4.04(2); RCr 4.14.

        . See, e.g., State v. Fellhauer, 123 N.M. 476, 943 P.2d 123, 128 (Ct.App.1997) (holding that defendant released on pretrial house arrest was not entitled to jail-time credit); State v. Faulkner, 102 Ohio App.3d 602, 657 N.E.2d 602 (1995) (where defendant was not entitled to credit toward prison sentence for time “served" under electric home monitoring as condition of recognizance bond pending trial because such electronic house arrest constituted "constraint incidental to release on bail” and not “detention” or "confinement” within statute providing for sentencing credit).

      . See id. at 491. I would note, however, that there is no inconsistency with denying one jail time credit for time spent in home incarceration prior to conviction and convicting one who violates home incarceration of escape, but only when the latter home incarceration was imposed as an alternative to confinement in a penitentiary after conviction.

      . State v. Climer, 127 Idaho 20, 896 P.2d 346, 349 (Ct.App.1995).


author: KELLER, Justice.

text:
    Edsel Eugene HALE, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. 2003-SC-0284-MR.
    Supreme Court of Kentucky.
    Feb. 17, 2005.

      John Palombi, Assistant Public Advocate, Department of Public Advocacy, Frankfort, Counsel for Appellant.
    Gregory D. Stumbo, Attorney General, Perry T. Ryan, Assistant Attorney General, Office of Attorney General, Criminal Appellate Division, Frankfort, Counsel for Appellee.
   KELLER, Justice.

I. INTRODUCTION

Upon his pleas of guilty to First-Degree Robbery, Second-Degree Assault, Kidnapping, Criminal Attempt to Commit Murder, and to being a First-Degree Persistent Felony Offender, Appellant was sentenced to a total of thirty-years imprisonment. Now, in this appeal, Appellant argues that because the trial court ordered him to submit to a psychological evaluation after he entered his guilty pleas, the trial court thus questioned his competency to stand trial, and therefore, he contends that the trial court erred in accepting his guilty pleas before resolving the competency issue. Additionally, Appellant contends that his pleas were infirm because the trial court failed to conduct a competency hearing after the filing of the report on his mental condition. Because a trial court may order a mental evaluation without having reasonable grounds to believe that the defendant is incompetent to stand trial, and because the trial court did not have reasonable grounds — either before or after Appellant’s evaluation — to believe that Appellant was incompetent to stand trial, the trial court did not err in accepting Appellant’s guilty pleas or in not conducting a competency hearing. Accordingly, we affirm Appellant’s convictions.

II. BACKGROUND

During the first day of his trial, Appellant pled guilty to First-Degree Robbery, Second-Degree Assault, Kidnapping, Criminal Attempt to Commit Murder, and to being a First-Degree Persistent Felony Offender. These charges arose from Appellant allegedly carjacking Charles Bright, driving him to a remote location, taking his money, his truck and the animals inside the truck, striking Mr. Bright in the head with a pistol, and then shooting at him. In accepting his pleas, the trial court conducted the routine Boykin colloquy — which we have reviewed — during which Appellant was coherent and seemed to have an above-average comprehension of the proceedings. In addressing the trial court earlier that day, Appellant was able to recount the number of times he had appeared before the court, the day of his pretrial, the day his counsel had been appointed, the number of times he had met with counsel, and a review of the discovery produced by the Commonwealth’s Attorney’s office. After accepting Appellant’s guilty pleas, the trial court ordered a psychological evaluation of Appellant. It does not appear from the record that reasonable grounds existed to believe that Appellant was incompetent to stand trial when the evaluation was ordered by the trial court. The evaluation stated that Appellant was competent and the trial court subsequently sentenced the Appellant to thirty-years imprisonment.

III. ANALYSIS

Appellant argues that the trial court ordered a psychological evaluation of him due to doubts concerning his mental condition, and therefore, he contends that the trial court could not have properly accepted his guilty pleas until the completion of the evaluation and a competency hearing in accordance with KRS 504.100. For these reasons, Appellant requests that his appeal be held in abeyance while the case is remanded for a retrospective competency hearing.

Although a trial court is required to order a psychological evaluation when it has reasonable grounds to believe that a defendant is incompetent to stand trial, it may do so at its discretion absent such grounds. For example, before imposing a sentence for a felony conviction, “the court may order the defendant to submit to psychiatric observation and examination for a period not exceeding sixty (60) days.” And that is exactly what happened in this case. Appellant’s compétence was not in question and was not raised as an issue by Appellant himself or his trial counsel. In ordering Appellant’s evaluation the trial court did not indicate that it had reasonable grounds to believe that Appellant was incompetent; rather, in the Order for Psychiatric Evaluation, entered on February 15, 2001, the Court stated: “IT IS HEREBY ORDERED pursuant to KRS 582.050(3) that the defendant submit to psychiatric observation and examination for a period not to exceed Sixty (60) Days.... ” Thus the purpose of the evaluation was to allow the trial court to make an informed sentencing determination. The acceptance of the pleas prior to the completion of the evaluation was entirely proper, and because the evaluation found that Appellant was competent, the failure to hold a competency hearing was not error.

IY. CONCLUSION

For the above reasons, we affirm the judgment of the Laurel Circuit Court.

All concur.

      . Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969).

      . KRS 504.100.

      . KRS 532.050(3).


author: COOPER, Justice,

text:
    Joann BRUMMITT, Appellant, v. SOUTHEASTERN KENTUCKY REHABILITATION INDUSTRIES; Hon. Bonnie Kittinger, Administrative Law Judge; and Workers’ Compensation Board, Appellees.
    No. 2003-SC-1028-WC.
    Supreme Court of Kentucky.
    Feb. 17, 2005.

      John E. Anderson, Cole, Cole, Anderson & Nagle, PSC, Barbourville, Counsel for Appellant.
    Ronald J. Pohl, Picklesimer, Pohl & Kiser, P.S.C., Lexington, Counsel for Appel-lee.
   OPINION OF THE COURT

The defendant-employer covered its workers’ compensation liability with different earners in April and October, 2000. The claimant settled her claim for a gradual injury with the first carrier but fully litigated it against the second. Based on a finding that a gradual injury became manifest on April 17, 2000, an Administrative Law Judge (ALJ) dismissed the claim for an October, 2000, injury and determined that the carrier on risk in April, 2000, bore all liability. The Workers’ Compensation Board (Board) and the Court of Appeals affirmed. We have concluded, however, that the ALJ misapplied KRS 342.0011(1) and erred by determining that an April manifestation date necessarily made the carrier on risk at that time responsible for the employer’s entire liability. As a result, the ALJ failed to consider whether work-related trauma that occurred after April, 2000, caused a harmful change for which the subsequent carrier was responsible. For that reason, we reverse and remand for further consideration.

The claimant was employed by the defendant-employer from October 11, 1999, through December 11, 2000. She testified that her work on the assembly line required her to perform various tasks that involved the repetitive use of her hands. In April, 2000, she began to experience pain in her wrists as well as in her neck and shoulders. After discussing her symptoms with her co-workers, she purchased and began wearing wrist braces as some of them did.

On April 17, 2000, while at the White House Clinic with a sick child, the claimant complained of swelling and numbness in her hands to Ms. Fee, a nurse practitioner. Ms. Fee noted that the claimant performed a “repetitive motion job” and that she suffered from “probable repetitive motion syndrome of both extremities.” She prescribed Celebrex and provided the claimant with new wrist supports, directing her to wear them at night and as much of the day as possible. She did not restrict the claimant’s work activities. When asked subsequently if Ms. Fee had told her that her symptoms were work-related, the claimant stated that she did and that they were due to “overworking my hands.” She also stated that she informed her supervisor when she returned to work.

On October 6, 2000, the claimant returned to the White House Clinic for treatment of her hand pain. At that time, Dr. Adkins noted that the claimant worked on an assembly line and did repetitive work. He diagnosed probable carpal tunnel syndrome, discussed treatment options, and recommended the use of wrist splints. The claimant returned on October 10, 2000, stating that her pain was worse and that she was unable to work. Dr. Adkins restricted her from performing activities that would aggravate the condition and scheduled nerve conduction studies. When she returned on October 12, 2000, stating that severe pain prevented her from doing anything with her hands, Dr. Adkins took her off work for several days and suggested that she attempt to find other employment. An EMG was performed on November 1, 2000, and revealed bilateral median mononeuropathy. Dr. Adkins released the claimant to limited work on the following day, but her symptoms continued, causing her to miss work sporadically until December 11, 2000, when she quit altogether.

On March 28, 2002, the claimant filed an application for benefits, alleging an injury date of April 17, 2000. Ms. Fee’s notes as well as the results of the EMG and nerve conduction studies were attached to the application. On June 21, 2002, the claimant moved to amend her application to allege an alternative injury date of October 6, 2000, when Dr. Adkins diagnosed bilateral carpal tunnel syndrome. It was later shown that Kentucky Employers’ Mutual Insurance (KEMI) provided workers’ compensation coverage for the employer from April 17, 2000, until May 1, 2000. Century Insurance provided coverage in October, 2000. Century did not object to the motion to amend but asserted that the proper date of injury was April 17, 2000.

On or about September 24, 2002, after the hearing but before the matter was submitted to the ALJ for a decision, the claimant reached a settlement with her employer, as insured by KEMI, and the parties submitted the agreement to the ALJ for approval. The claimant agreed to release the employer from any liability that it might have for an injury that became manifest on April 17, 2000, in exchange for a lump sum of $5,000.00. She reserved her right to pursue the claim for an injury of October 6, 2000, against the employer, as insured by Century.

When the claim for an October 6, 2000, injury came before the ALJ, the contested issues included: date of injury/pre-existing active disability, extent and duration, entitlement to temporary total disability, unpaid medical expenses, and the carrier responsible for medical expenses. Notice and limitations were not at issue. Nonetheless, the ALJ stated that there was a threshold issue concerning the date on which the injury became manifest. The ALJ acknowledged that although Dr. Adkins did not diagnose carpal tunnel syndrome until October 6, 2000, Ms. Fee informed the claimant that she suffered from “repetitive motion syndrome” and advised her that it was caused by her work. The ALJ stated that this was “not a case in which the claimant’s symptoms improved and a ‘new injury’ later became manifest at a later date” or a case in which company medical personnel misled her about the cause of her symptoms. Concluding that the injury became manifest on April 17, 2000, the ALJ determined that it occurred during KEMI’s coverage period and that Century bore no liability. After rendering the decision, the ALJ approved the agreement between the claimant and KEMI.

Having failed to convince the Board, or the Court of Appeals that the decision was erroneous, the claimant continues to maintain she could not have known that she sustained an injury until October, 2000, since Ms. Fee made no definitive diagnosis and imposed no specific restrictions. She asserts that because carpal tunnel syndrome is the harmful change that she has alleged and because the condition was not diagnosed until October, 2000, the injury did not become manifest until then. She also argues that the ALJ failed to consider the difference between knowledge that a condition is symptomatic at work and knowledge that it is caused by work. Finally, she asserts that the manifestation of injury in a cumulative trauma case is not analogous to an injury due to a single event. Although we are convinced that there was substantial evidence the claimant’s injury became manifest in April, 2000, we agree that the ALJ erred by treating this claim as being analogous to one for a single traumatic event.

A gradual injury generally arises imperceptibly, from the physical strain of numerous instances of minor workplace trauma, also referred to as minitrauma. For that reason, the courts have applied a rule of discovery for establishing the date of injury. Hence, a gradual injury becomes manifest for the purpose of notice and limitations with the worker’s knowledge of the harmful change and the fact that it is caused by the work. Special Fund v. Clark, Ky., 998 S.W.2d 487 (1999); Alcan Foil Products v. Huff, Ky., 2 S.W.3d 96 (1999). Whether a healthcare provider has given the harmful change a general or specific name is immaterial.

KRS 342.0011(1) defines an injury as being a work-related traumatic event that causes a harmful change in the human organism. The ALJ erred by treating this claim as being analogous to one for a single traumatic event and by relying on the fact that the claimant’s symptoms did not improve as a basis for determining that there was no new injury. Where an individual continues to perform the same repetitive activity after a gradual injury becomes manifest, additional incidents of workplace trauma may well cause additional harmful changes. In other words, the individual may well sustain subsequent gradual injuries. We acknowledged as much in Special Fund v. Clark, supra, although the question there was one of limitations.

Notice and limitations were not at issue in this case, and the claimant settled regarding the employer’s liability for a gradual injury of April, 2000. Discussion at the hearing indicated that Century provided coverage beginning in May or June, 2000. The claimant continued to perform the same work between April and October, 2000, and the claim before the ALJ concerned the employer’s liability for a gradual injury of October, 2000, when Century provided coverage. Therefore, the ALJ erred by determining that an April manifestation date necessarily made KEMI responsible for the employer’s entire liability and necessarily precluded an award for the effects of trauma incurred during the period for which Century was responsible. KRS 342.0011(1) required the ALJ to consider the medical evidence and to determine whether workplace trauma that occurred after April, 2000, caused a harmful change. If it did, the claimant sustained an injury for which Century was responsible.

The decision of the Court of Appeals is reversed, and this matter is remanded to an ALJ for further consideration.

LAMBERT, C.J., and JOHNSTONE, KELLER, SCOTT and WINTERSHEIMER, J.J., concur.

COOPER, J., dissents by separate opinion in which GRAVES, J., joins.

COOPER, Justice,

dissenting.

The majority opinion has sua sponte created a new rule for “gradual injury” cases that inexplicably departs from the sound principles established in cases such as American Printing House for the Blind v. Brown, 142 S.W.3d 145 (Ky.2004), which was so recently decided that there were ink stains on my hands after reviewing it. Because this new rule undoubtedly will discourage voluntary payments and settlements of such cases and encourage insurers to avoid liability by canceling coverage, thereby encouraging employers to terminate partially disabled workers, I respectfully dissent.

The issue in this case, as it was in American Printing House, is which of two successive insurers of the same employer provided coverage for a work-related gradual injury, i.e., on what date did the injury legally occur? In Randall Co. v. Pendland, 770 S.W.2d 687 (Ky.App.1989), the Court of Appeals adopted a rule of discovery and held that the date of injury is “when the disabling reality of the injuries .becomes manifest,” id. at 688, i.e., when the worker experiences disabling symptoms of pain. In Alcan Foil Products v. Huff, 2 S.W.3d 96 (Ky.1999), we refined that rule by holding that the compensable injury manifests itself “where a worker discovers that a physically disabling injury has been sustained [and] knows it is caused by work,” regardless of whether the worker thereafter continues to work in the same employment. Id. at 101.

In American Printing House, the employer’s workers’ compensation insurer for the period prior to October 1, 2000, was Mutual Insurance Company of America (MICOA); its insurer on and after that date was KESA. The worker began to experience pain in her wrists on June 5, 2000, and immediately gave notice to her employer that she had sustained a work-related injury. On June 28, 2000, she complained to the company nurse of arm and shoulder pain. In November 2000, she informed her employer that her physician had diagnosed her condition as carpal tunnel syndrome. She continued to work until January 8, 2001. On January 11, 2001, she saw Dr. Roberts (not further identified), who diagnosed carpal tunnel syndrome and concluded that the condition was work-related. We held that June 5, 2000, was the date of the injury for coverage purposes, not November 2000 or January 11, 2001, even though the worker was not diagnosed with carpal tunnel syndrome and was not advised by a medical expert that' the condition was work-related until after the coverage changed on October 1, 2000:

It is undisputed that the claimant sustained work-related trauma and that harmful changes from the trauma were symptomatic on June 5, 2000. Therefore, she sustained an injury as defined by KRS 342.0011(1) although Chapter 342’s notice and limitations provisions were not triggered until she received a medical diagnosis in January, 2001.

Id. at 148. Thus, MICOA was the responsible insurer (and, incidentally, the employee received seven additional months of benefits). See also Special Fund v. Clark, 998 S.W.2d 487, 490 (Ky.1999) (holding that the “date of accident,” for statute of limitations purposes, in a gradual injury claim is the date the worker becomes aware of the existence of a disabling condition and the fact that it is caused by work).

In the case sub judice, the facts are virtually identical as those in American Printing House (even the dates roughly correspond). Kentucky Employers Mutual Insurance Co. (KEMI) was the workers’ compensation insurer for Southeastern Kentucky Rehabilitation Industries until it canceled its coverage effective May 1, 2000. Century Insurance Co. was Southeastern’s insurer after that date. Southeastern employed Appellant as an assembly line worker from October 11, 1999 through December 11, 2000. The work required repetitive use of her arms and hands. In early April 2000, Appellant developed symptoms of what she believed to be tendonitis and purchased two arm braces at Wal-Mart, later explaining that she did so “[b]eeause other girls at work was, you know, wearing them and they told me that it helped a lot.” On April 17, 2000, Appellant sought treatment at White House Clinic in McKee, Kentucky, because:

I had went to work and my hands was hurting. And I asked her if there was something that she could give me or give me advice on my hands.

She was seen and treated by Jean L. Fee, a nurse practitioner, whose handwritten note in the clinic’s medical records reflects “problems with hands, swelling, fingers numb.” Fee diagnosed “[pjrobable repetitive motion syndrome of both upper extremities” and gave Appellant a new pair of wrist splints and some pain medication. Appellant testified that Fee told her on that date that her condition was work-related and that she should wear the splints when working and rest her hands as much as possible. Appellant notified Gretta Lawson, her personnel supervisor, of Fee’s advice and Lawson reassigned Appellant to a different assembly-line job.

On October 6, 2000, Appellant returned to White House Clinic and presented the same symptoms to Dr. Daniel Adkins, who diagnosed “probably early carpal tunnel syndrome” and tendonitis. Dr. Adkins prescribed a Colles’ splint and pain medication. Appellant returned on October 10, 2000, and told Dr. Adkins that she was unable to work and that she “wants to file a workman’s comp claim.” Dr. Adkins’ record for that date contains the following handwritten note: “has forms she wants filled out states DOI k!17/00.” (Emphasis added.) Dr. Adkins referred her to Dr. Paul Brooks for electromyography (EMG) testing. Dr. Brooks’s report, dated November 1, 2000, reflects a “conclusion” of “Electrodiagnostic evidence of bilateral mild median mononeuropathies at the wrist.” Appellant continued to work sporadically until December 11, 2000, when she finally quit. Thus, the facts of this case are virtually identical to those in American Printing House.

On her Application for Resolution of Injury Claim, Appellant stated that the date of her injury was April 17, 2000 (the date she learned that her disabling condition was work-related). She later amended her application to allege an alternate date of injury of October 6, 2000, the date Dr. Adkins diagnosed her disabling condition as “probably carpal tunnel syndrome” and tendonitis. The Administrative Law Judge (ALJ) made a finding of fact that Appellant became awai’e of both her disabling condition and that it was caused by her work on April 17, 2000, and the ALJ concluded from that finding that the date of injury and the relevant date for determining which insurer provided coverage for the claim was April 17, 2000. The ALJ also found that “[t]his is not a case in which the worker’s symptoms improved, and a ‘new injury’ became manifest at a later date.” Brummitt v. Southeastern Ky. Rehab. Indus., Inc., No. 00-66642, slip op. at 8 (Ky. Dep’t of Workers’ Claims Oct. 28, 2002). In other words, there was only one injury, not two separate injuries occurring on both April 17, 2000, and October 6, 2000. Appellant has never contested that finding and does not claim on appeal that she sustained more than one injury. That theory is promulgated for the first time in today’s majority opinion.

The Workers’ Compensation Board unanimously affirmed, noting that the ALJ’s findings of fact were supported by “substantial evidence” and that her conclusions were “not wholly unreasonable as a matter of law.”

As aptly pointed out by the ALJ, this claim involves neither notice or [sic] statute of limitations; however, both Brummitt and South Eastern [sic] concede the respective rights and obligations of the parties become fixed on the date of manifestation of disability. This manifestation of disability date is a fact intensive determination by the fact finder based upon the particular circumstances in each case.... [A]n ALJ is authorized to conclude, if supported by evidence of record, that a disability could manifest on the date the claimant seeks treatment and is -informed on that occasion that her condition is related to her work.

Brummitt v. Southeastern Ky. Rehab. Indus., Inc., No. 00-66642, slip op. at 4-5 (Ky. Workers’ Comp. Bd. Apr. 23, 2003).

The Court of Appeals also unanimously affirmed, noting that the standard of review is “to correct the Board only where it has overlooked or misconstrued controlling statutes or precedent, or committed an error in assessing the evidence so flagrant as to cause injustice.” Brummitt v. Southeastern Ky. Rehab. Indus., Inc., No. 2003-CA-001055, slip op. at 6-7, 2003 WL 22417228 (Ky.App. Oct. 24, 2003) (citing W. Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky.1992)). Both the Board and the Court of Appeals noted that our cases do not require that the worker be aware of the precise diagnosis of the disabling condition, so long as the worker is aware of the existence of the condition and the fact that it is work related. That principle was most recently reiterated in American Printing House, 142 S.W.3d at 148-49, in which we held that the date of injury was June 5, 2000, when the worker gave her employer notice of her work-related gradual injury, even though the medical diagnosis of work-related carpal tunnel syndrome was not made until January 11, 2001. Thus, the date of injury in this case does not turn on whether the swelling of Appellant’s hands and the numbness in her fingers were caused by tendonitis (Appellant), repetitive motion syndrome (Jean Fee), carpal tunnel syndrome and tendonitis (Dr. Adkins), or bilateral mild median mononeuropathies (Dr. Brooks). Appellant admitted that she was aware of the swelling and numbness prior to April 17, 2000, and that she learned on that date that the swelling and numbness were caused by her work. She gave notice to her employer on that same date.

The ALJ’s finding that a new injury did not occur on October 6, 2000, is also supported by substantial evidence and, thus, is binding on appeal. KRS 342.285(1). The White House Clinic records for October 6, 2000, reflect that Appellant “had the same symptoms six months ago.” Nor did Appellant testify that her .symptoms were different on October 6, 2000. But even if she had, “[o]nce a worker is aware of the existence of a disabling condition and the fact that it is caused by work, the worker would also be aware that continuing to perform the same or similar duties was likely to cause additional injury.” Special Fund v. Clark, 998 S.W.2d at 490. Appellant has never claimed that she sustained more than one gradual injury. She only claims that the injury did not manifest itself until it was specifically diagnosed as carpal tunnel syndrome on October 6, 2000, the very same argument that we rejected in American Printing House.

The majority opinion’s sua sponte holding that a gradual injury claim can be divided into a series of mini-injury claims to be separately litigated against an employer’s subsequent insurers is simply unworkable. Insurers like KEMI will attempt to reduce their own liability by proving that the worker’s gradual injury worsened during a subsequent period when the employer was covered by a different insurer. That is especially true here, where KEMI cancelled its coverage only fourteen days after Appellant’s manifestation of injury but Appellant continued to work for more than seven months thereafter. Based upon today’s holding, we should have held in American Printing House that MICOA, the insurer providing coverage on June 5, 2000, was liable only for benefits that accrued prior to October 1, 2000, and that KESA, the subsequent insurer, was hable for benefits accruing thereafter. It is no answer to say that the issue was not raised in American Printing House — -for neither was it raised here.

Today’s holding will also encourage insurers to cut their losses by canceling coverage for employers who retain gradually injured workers with only partial disabilities on them employment rolls, and it will discourage potential subsequent insurers from accepting coverage and, thus, assuming liability for payments to previously injured workers. This, in turn, could encourage employers to terminate gradually injured workers, who otherwise might remain gainfully employed, in order to obtain new coverage at a reasonable premium. This holding will also inhibit voluntary payments and settlements of gradual injury claims if an otherwise liable insurer believes it can reduce or avoid future payments by canceling coverage. Would KEMI have settled with Appellant if it had known that its liability for benefits expired fourteen days after the date of injury? I hope we have not made this unfortunate change in the law solely because Appellant did, in fact, settle her claim against KEMI and, thus, could recover additional benefits only against Century. However, I am aware of no fact, other than the claimant’s settlement with the otherwise responsible insurer, that distinguishes this case from American Printing House.

Accordingly, I dissent.

GRAVES, J., joins this dissenting opinion.