Darryl Isaacs and Theresa Isaacs v. Sentinel Insurance Company Limited d/b/a The Hartford

Summary

The Kentucky Supreme Court affirmed summary judgment for Sentinel Insurance Company in an underinsured motorist coverage dispute. The court held that Darryl Isaacs was not an insured under the commercial policy issued to his professional service corporation because he was neither the named insured nor occupying a covered automobile when injured. The court rejected arguments based on corporate identity, illusory coverage, reasonable expectations, and Kentucky public policy.

Holdings

1. A professional service corporation is a separate legal entity from its sole shareholder, and the shareholder cannot treat the corporation as separate for liability protection but disregard that separation to obtain insurance coverage.
2. Isaacs was not an insured under the commercial policy because the policy named a corporation as the insured and, under its unambiguous terms, covered individuals only while occupying a covered automobile; Isaacs was neither the named insured nor occupying a covered automobile.
3. The policy's UIM coverage was not illusory, did not violate the reasonable-expectations doctrine, and was not contrary to Kentucky public policy because it provided coverage in specified circumstances and its exclusion of Isaacs under the facts was clear and reasonable.

Questions Presented

1. Whether Darryl Isaacs and Isaacs & Isaacs, P.S.C. were legally interchangeable for purposes of determining insured status under Sentinel's commercial UIM policy.
2. Whether Isaacs qualified as an insured under the policy despite not being the named insured and not occupying a covered automobile at the time of the accident.
3. Whether the policy's limitation of UIM coverage, or its application to Isaacs, was invalid under the doctrines of illusory coverage or reasonable expectations or under Kentucky public policy.

Disposition

affirmed