Ky. Decisions: Court of Appeals - Dec. 2, 2005

MINUTES for December 2, 2005

PUBLISHED DECISIONS OF KENTUCKY COURT OF APPEALS FOR Dec. 2, 2005

HORN V. WHEELER
EXTRAORDINARY WRITS - Mandamus and no adequate remedy at law
2005-CA-000453
PUBLISHED
AFFIRMING
COMBS, J.
Date: 12/2/2005

The district court did not act outside its jurisdiction by refusing his request to stay the judgment. As a result, petitioner was required to show that there was no adequate remedy by appeal or otherwise and that without the writ there would be great injustice and irreparable injury. See Grange Mutual Ins. Co. v. Trude, 151 S.W.3d 803 (Ky. 2004).

JOHNSON V. COM.
CRIMINAL - RCr 11.42 (Evidentiary hearing)
WITNESSES - Sequestration during trial (finished testifying)
2004-CA-001960
PUBLISHED
AFFIRMING
VANMETER
Date: 12/2/2005

A hearing is not required to consider the evidence on motion under RCr 11.42 when issues are refuted on the trial court record. The rule to sequester witnesses is not violated if a witness remains in the courtroom after having testifies and being excused and not being recalled.

LEGGETT V. SPRINT COMMUNICATIONS CO., L.P.
PROPERTY - Eminent Domain
2004-CA-001739
PUBLISHED
AFFIRMING IN PART AND REVERSING AND REMANDING IN PART
MINTON, J.
Date: 12/2/2005

This appeal arose from an eminent domain action.   A family trust  (Leggett) in Louisville appealed from a summary judgment granted by the Jefferson Circuit Court in favor of Sprint Communications.  The court ruled that there were no genuine issues of material fact on Leggett’s counterclaim against Sprint  for malicious prosecution, abuse of process, and violation of his civil rights. The COA agreed with the circuit court that summary judgment on the issue of malicious prosecution was proper, but because there are material factual issues on Leggett’s claims of abuse of process and violation of his civil rights,  COA reversed and remanded.

Leggett first argues the court erroneously relied on God’s Center Foundation in concluding that Sprint had authority to exercise eminent domain over his entire property.  In agreeing with Leggett, COA noted eminent domain is “the power of the nation or a sovereign state to take, or to authorize the taking of, private property for a public use without the owner’s consent, conditioned upon the payment of just compensation.”  This power is limited by the “constitutional restriction that the taking be for ‘public use’ and the condemnee receive ‘just compensation.’”

The “right to authorize the exercise of the power is legislative, and there can be no taking of private property for public use against the will of the owner without direct authority from the legislature.”

KUHLMAN ELECTRIC CO. B. CHAPPELL
TORTS - Legal Neglience (Rule 1.7 and damages)
2003-CA-001232
PUBLISHED
AFFIRMING
DYCHE, J.
Date: 12/2/2005

This is a most unusual situation in which a lawfirm (Landrum and Shouse) had represented a particular carrier for years and had been defending a particular claim for years.  But the firm changed carriers at a point in time and a disputed arose as to the reopening of a claim and which carrier would be responsible with the law firm now taking a different position.  The COA stated that there is no exception to an attorney’s duties to his client in workers’ compensation cases, and an attorney must be cautious in proceeding in such cases if he is currently representing, or has formerly represented, the company in the matter, and then advocates a position on behalf of the insurance carrier which is adverse to the interests of the company.  Although the COA found a breach of duties owed by the law firm, it also affirmed the summary judgment dismissing the cause of action since there were no damages shown by the plaintiff employer.

Based upon the actions in the workers comp matter, Kuhlman Electric filed an action against Landrum & Shouse and Amerisure.  As amended, the complaint alleged causes of action against Landrum & Shouse based upon professional negligence, breach of contract, negligent and intentional breach of fiduciary duties, gross negligence, and breach of implied covenant of good faith and fair dealing.

Under the hypothesis advocated by Landrum & Shouse and the circuit court, though Kuhlman Electric was a client in the matter, it was proper for Landrum & Shouse to subordinate the interests of the company to the interests of the insurer, Amerisure. This subordination of interests of the insured to the insurer is against the weight of authority in cases where an insurance company retains an attorney to represent an insured, and Landrum & Shouse has cited us to no authority that there is an exception to this principle in workers’ compensation cases.

“An attorney’s representation of two or more clients with adverse or conflicting interests constitutes such misconduct as to subject the attorney to liability for malpractice, unless the attorney has obtained the consent of the clients after full disclosure of all the acts concerning the dual representation.” 7 Am. Jur. 2d, Attorneys at Law § 213 (1997). “[T]here are situations in which a conflict of interest may arise between insurer and insured represented by the same attorney. If such a conflict does exist, the attorney may continue to represent both clients only after full disclosure and full consent; and if he fails to make such full disclosure, he will be held liable in a malpractice action.” 28 A.L.R.3d 389, Malpractice: Liability of Attorney Representing Conflicting Interests § 6 (1969).

There is no exception to an attorney’s duties to his client in workers’ compensation cases, and an attorney must be cautious in proceeding in such cases if he is currently representing, or has formerly represented, the company in the matter, and then advocates a position on behalf of the insurance carrier which is adverse to the interests of the company. At minimum the attorney should disclose the conflict to his company-client, and obtain its consent to the dual representation. SCR 3.130, Rule 1.7.

In summary, because Kuhlman Electric was a client of Landrum & Shouse upon the 1991 reopening, and because Landrum & Shouse sought on behalf of the insurer to shift liability to the company in its self-insured capacity, COA could not, as a matter of law, conclude that there was not a violation of the duties owed by Landrum & Shouse to Kuhlman Electric.

Nevertheless, summary judgment was proper because Kuhlman Electric is unable to show damages in connection with the violation of any duties owed to it by Landrum & Shouse.

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