Decision on Appeal:
1. PIP.  Trial court erred.  KFBM could intervene or arbitrate on its PIP. Fact that the underlying claim had settled did not deprive them of their claim.  Instead of dismissing PIP claim, Court should have granted summary judgment awarding KFBM the $10K in PIP since KFBM submitted an affidavit in support of PIP paid and Geico did not respond with any EVIDENCE to rebut it (argument w/o facts not sufficient).

2. Dismissal of Reimbursement Claim.  Affirmed.  KFBM never amended it's pleadings to assert a reimbursement claim for moneys paid for UIM.

Comments. This a good case to read because the issues happen day in and day out in UIM cases.  Plaintiff asserts BI and UIM claims.  PIP claims are also asserted (presumably UIM carrier and PIP carrier are the same carriers but represented by different attorneys to avoid conflict of interest since PIP is supporting the plaintiff's claim but the UIM defense does not).  When the UIM carrier advanced the Coots money which was less than policy limits, then the plaintiff recovered her $20K from the UIM carrier and waives her UIM claim from $20K to $100K per KRS 304.39-320.  

Please note that the UIM reimbursement claim is a possible 'mixed bag'; first, it is a subrogation claim against the tortfeasor for the $20,000 paid and UIM sits in the shoes of the plaintiff; second, it's an indemnity claim against the liability carrier who advanced the money; third, the $20K paid to plaintiff is subordinate to any recovery the plaintiff has in excess of $20K so that the UIM carrier gets their advancement first and plaintiff does not get a double recovery; and fourth, the UIM carrier bears the risk of a verdict less than $20K.  

Now who bears the risk of a verdict between between $20k and $100k?  Can plaintiff recover from the liability carrier because there is no release? Or has the plaintiff waived or is he/she estopped from making any claim against the defendant/liability carrier since plaintiff accepted (or was willing to accept a sum for settlement BUT for the UIM Coots advancement)?  Hmmmm.  Was the plaintiff willing to settle for the $20K?  Yes.  Is that a waiver or estoppel for $20 to $100K?  Not the UIM carrier's problem (unless the liability carrier asserts a claim against the UIM carrier for improperly advancing the money to preserve it's subrogation interests per Coots - no cases or law to support this either, but it's a thought).

If the plaintiff recovers greater than $100K, then the UIM is exposed and recovers the $20K advanced and only pays judgment in excess of $100k (policy liability limits here  up to the UIM limits.  

Of course, doesn't the insured/plaintiff have a duty to cooperate with the UIM carrier in the assertion of the subrogation/indemnity claims for $20,000?  Isn't the UIM advance really an indemnity claim rather than a subrogation claim such UIM carrier KFBM could have possibly asserted it independently against GEICO who was not a party (and can it not now be asserted  since the statute of limitations is 15 years?)

Solution?  Easy.  Before UIM benefits are advanced to preserve subrogation, execute an agreement to acknowledge insured's cooperation in pursuing claim (and asserting claim in own name!), to subordinate the sum advanced to any recovery against tortfeasor (UIM gets paid before plaintiff since plaintiff has already been paid the first $20K), etc.  Next, assert claim against defendant tortfeasor for any monies paid and think about asserting claim against liability carrier if already a party in defending pip claim. Remember when you pay the advancement, what do you do if your insured just takes the money and runs???  Sue the insured or sue the tortfeasor's carrier.  Here KFBM wanted to go after the carrier, but what about a constructive trust pending outcome of the litigation.  Again, spell it out in a letter.

Other Reading?  Go to LawReader.com for an interesting page.

Gross v. Gross Estate
Appeals
Failed to join an indispensable party on appeal.  the current administrator of the Estate, is a necessary party to the appeal, and Willard’s failure to name him is fatal.