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                              2007-SC-000221-DG

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WILLIAM MATTINGLY, ET AL                                             APPELLANTS


                    ON REVIEW FROM COURT OF APPEALS
V.                       CASE NO . 2006-CA-000337
                   HARDIN CIRCUIT COURT NO . 02-CI-00432


WILLIAM E. STINSON, ET AL                                             APPELLEES

                                       AND

                              2007-SC-000222-DG


KENTUCKY FARM BUREAU
MUTUAL INSURANCE COMPANY                                              APPELLANT


                    ON REVIEW FROM COURT OF APPEALS
V.                       CASE NO . 2006-CA-000337
                   HARDIN CIRCUIT COURT NO . 02-CI-00432


WILLIAM E . STINSON, ET AL                                            APPELLEES


            OPINION OF THE COURT BY JUSTICE CUNNINGHAM

                                  REVERSING

      In this appeal, we consider whether the rule set forth in Earle v. Cobb ,

requiring the identification at trial of a defendant underinsured motorist

carrier, applies when there has been no Coots settlement between the carrier

and the alleged tortfeasor.
       William Stinson and William Mattingly were driving vehicles that collided

 at an intersection in Hardin County . Though both drivers were injured,

 Stinson suffered severe and permanent injuries, including brain damage .

 Mattingly filed suit against Stinson, and Stinson counterclaimed . Stinson also

 brought third-party complaints against Mattingly's employer and his own

 insurer, Kentucky Farm Bureau Mutual Insurance Company (KFB), pursuant

 to his underinsured motorist (UIM) coverage . Mattingly's suit against Stinson

was settled.

       The parties went to trial on Stinson's counterclaim . Prior to trial,

Mattingly successfully moved the trial court to exclude any reference to UIM

coverage. KFB also moved to prohibit its identification as a party. KFB argued

that identification was not required because it was not participating at trial and

because there had been no settlement between it and Mattingly pursuant to

Coots v. Allstate Ins . Co ., 853 S .W.2d 895 (Ky. 1993) . The motion was granted.

      The jury returned a verdict in favor of Mattingly, finding Stinson 100%

liable for the accident. A judgment was entered in accordance with the verdict,

dismissing Stinson's counterclaim and the third-party complaints . Stinson

appealed the judgment, arguing that the trial court erred in prohibiting

reference to UIM coverage . The Court of Appeals reversed and remanded for a

new trial, finding that the prohibition violated the rule set forth in Earle v.

Cobb, 156 S.W.3d 257 (Ky. 2004) . This Court granted discretionary review .

      In Earle v. Cobb, we considered "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.
                                         2
 Co." 156 S .W .3d at 258 . When an injured party intends to settle with a

 tortfeasor and the tortfeasor's liability insurance carrier, the Coots procedure

 allows the injured party's UIM carrier to preserve its subrogation rights against

 the tortfeasor by paying the injured party the policy amount. We held that the

 "UIM carrier should be so identified as a party [at trial] 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." Id.

       The Earle decision attacks the "legal fiction" that occurred when the

name of the tortfeasor was substituted for the UIM carrier for trial purposes .

See Coots , id . Our decision rested on the recognition that when an UIM carrier

substitutes its payment for that of the liability insurance carrier through the

Coots procedure, that UIM carrier "becomes the only real party with potential

liability to the plaintiff." 156 S.W.3d at 261 . To conceal the insurer's identity,

in light of the practical effect of a Coots settlement on the parties' interests, is

to engage in a legal "charade" whereby the trial is presented to the jury as a

claim against the alleged tortfeasor when, in reality, the plaintiffs only

remaining claim is against the UIM carrier. Id .

      In this case, Stinson argues that Earle required identification of KFB at

trial, and that the trial court's prohibition re-created the "legal fiction"

denounced therein . We disagree because, in this case, there has been no Coots

settlement between KFB and Mattingly. Thus, we decline to extend the holding

in Earle to situations where the UIM carrier has not utilized the Coots
 settlement procedure and, therefore, has not substituted its liability for that of

 the defendant.

       The Earle Court recognized that, when a UIM carrier has reached a Coots

 settlement, the tortfeasor is "released from any further liability to the injured

 party[ .]" True v. Raines, 99 S .W.3d 439, 448 (Ky. 2003) (emphasis added) . In

 such circumstances, to permit the UIM carrier "to either participate or sit idly

 by and allow the tortfeasor to defend at trial, [is to hide] the identity of a bona

 fide party." Earle , 156 S .W .3d at 261 . When the UIM carrier has not reached a

 Coots settlement with the tortfeasor, the tortfeasor remains primarily liable to

the plaintiff. The UIM carrier is only potentially liable, contingent upon a

judgment in excess of the tortfeasor's own liability coverage . Because the

tortfeasor remains a real party in interest, no legal fiction is created for the

jury. The jury considers an actual case in tort between the injured party and

the tortfeasor and decides liability and damages. Any liability of the UIM

carrier to the tortfeasor or the injured party is ancillary to the jury's

determinations in this regard, and then any such liability exists in contract.

       Here, KFB did not participate at trial. It did not enter into a Coots

settlement with Mattingly and, therefore, did not substitute its own liability for

Mattingly's . At trial, Mattingly remained the principal party in Stinson's suit,

primarily responsible for his injuries upon a finding of liability. The jury was

not presented with a legal fiction and was not asked to decide a controversy

between Mattingly and Stinson when the only real controversy existed between

Stinson and KFB. Rather, it considered the "live" issue of Mattingly's tort

liability to Stinson. In accordance with our courts' long-standing policy against
                                         4
reference to liability insurance in tort actions, including UIM coverage, no

mention was made of KFB . See Turpin v . Scrivner, 297 Ky. 365, 178 S.W .2d

971 (1944) .

       By its express language, Earle requires identification of an UIM carrier at

trial when it has used the Coots procedure "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." 156

S.W .3d at 258 (emphasis added) . We decline to extend the holding in Earle to

those trials where the UIM carrier has not availed itself of the Coots procedure

to subrogate its rights .

      Accordingly, the Hardin Circuit Court did not err in prohibiting mention

of KFB at trial, and Mattingly's motion in this regard was properly granted.

The opinion of the Court of Appeals is reversed and the judgment of the Hardin

Circuit Court is hereby reinstated .

      Minton, C .J. ; Noble, Schroder, Venters, JJ., concur. Scott, J ., concurs in

result only. Abramson, J., not sitting.
WILLIAM MATTINGLY ET AL V. WILLIAM E. STINSON ET AL; KENTUCKY
FARM BUREAU MUTUAL INSURANCE CO . V. WILLIAM E. STINSON ET AL,
2007-SC-000221-DG; 2007-SC-000222-DG:

SCOTT, J., CONCURS IN RESULT ONLY: I concur with the majority's opinion

in result only as Earle v. Cobb, 156 S .W.3d 257 (Ky. 2005) specifically cites two

separate triggers for UM/UIM identification, (1) a "Coots" settlement, i .e .,

"when [the Insurance Co .,] invoked the `Coots' procedure it should have been

identified ." Id. at 262, and (2) participation at trial, i.e., the jury should know

"who are the parties to the litigation where the [UIM] carrier elects to

participate actively in the trial." Id . at 260. As Kentucky Farm Bureau did not

enter into a "Coots settlements," or participate at trial, it was appropriate that

it not be identified . Had it done either one, however, Cobb commands that it

be properly identified as one of the parties .

      As the majority opinion seems to suggest that both are required for

identification, my concurrence is in result only as Kentucky Farm Bureau did

neither.
COUNSEL FOR APPELLANTS/ APPELEES,
WILLIAM MATTINGLY, TRADITIONAL MASONRY, INC.
AND TRADITIONAL MASONRY, LLC :

Wayne J . Carroll
Deborah Lynne Harrod
MacKenzie 8s Peden, P.S .C.
7508 New Lagrange Road, No. 3
Louisville, KY 40222

COUNSEL FOR APPELLANT/ APPELLEE,
KENTUCKY FARM BUREAU MUTUAL INSURANCE COMPANY:

Patrick A. Ross
Hensley, Ross & Howard
207 East Main Street
P. O. Box 350
Horse Cave, KY 42749

COUNSEL FOR APPELLEE,
WILLIAM E . STINSON:

Jason B . Bell
Kerrick, Stivers, Coyle 8v Van Zant, P.L.C .
2819 Ring Road, Suite 200
P. O. Box 844
Elizabethtown, KY 42702-0844

KENTUCKY DEFENSE COUNSEL:

William Baxter Orberson
Sara Clark Davis
Phillips, Parker, Orberson & Moore, P.L.C .
716 West Main Street
Suite 300
Louisville, KY 40202

KENTUCKY JUSTICE ASSOCIATION:

Michael Anthony Breen
Breen and Morgan
870 Fairview Avenue, Suite 5
P. O. Box 3310
Bowling Green, KY 42102-3310
