On November 3, 2021, Louis Scholz was driving west on Interstate 40 in Madison County, Tennessee, when a semi-trailer truck began merging into his lane. To avoid a collision, he swerved and struck the concrete barrier on the left side of the roadway. His car bounced back, left the road, and came to rest in a grassy area. Scholz alleged that he suffered severe and permanent injuries as a result of the incident.
At the time, Scholz was insured under an uninsured motorist (UM) policy issued by American Select Insurance Company. Within six weeks of the crash, Scholz notified the company of his claim and provided updates about his medical treatment. By May 24, 2022, his personal injury protection benefits were exhausted. When settlement negotiations stalled, Scholz filed suit in September 2023 seeking UM benefits.
American Select moved to dismiss, arguing that Scholz was barred from recovering UM benefits because Tennessee’s one-year statute of limitations for personal injury claims against a tortfeasor had expired. It contended that since Scholz could not bring a direct tort claim against the unknown driver, he was not “legally entitled to recover” damages and therefore could not collect under the policy.
Scholz countered that Kentucky’s ten-year limitations period for written contracts applied because the claim was contractual, not tort-based. He argued that under Kentucky law, proving the fault of the uninsured motorist and the resulting damages satisfied the policy requirement of being “legally entitled to recover.”
The Eastern District of Kentucky examined the policy language and Kentucky precedent. The court noted that Kentucky courts have interpreted “legally entitled to recover” under UM policies in two ways. Some decisions required insureds to maintain a viable claim against the tortfeasor, while others applied the “essential facts” approach, which only required proof of fault and damages.
The court explained that when foreign law conflicts with Kentucky’s public policy, Kentucky law favors protecting accident victims by broadening their ability to recover. It found that requiring Scholz to have sued a completely unknown driver within Tennessee’s one-year period would unfairly shorten Kentucky’s ten-year contractual period and contradict state policy. The court held that the “essential facts” approach applied, meaning Scholz only needed to establish that an uninsured motorist caused his injuries and the extent of those damages.
American Select also argued that there was no physical contact between the unidentified truck and Scholz’s car, as required under Kentucky UM law. The court rejected dismissal on this ground, noting that Scholz’s complaint alleged a collision, and at the motion to dismiss stage, those allegations must be accepted as true.
The insurer further sought dismissal of Scholz’s punitive damages claim, arguing that such damages are not recoverable in uninsured motorist benefit cases. The court agreed, citing Kentucky precedent, and dismissed the punitive damages request.
The Eastern District of Kentucky denied American Select’s motion to dismiss except as to punitive damages. Scholz’s claim for uninsured motorist benefits was allowed to proceed.
If you were injured in a crash involving an uninsured or unidentified driver, Whitcomb, Selinsky PC handles claims involving UM benefits, coverage disputes, and accident-related litigation. Reach out to schedule a consultation and learn how our team can assist with your case.