TIPS Update: Supreme Court (11/23/2005) and Court of Appeals (12/2/2005)

Published decisions.

KENTUCKY FARM BUREAU MUT INS CO V. RYAN
INSURANCE - Uninsured motorist
CIVIL PROCEDURE - Apportionment, Warning order attorney
2003-SC-000944-DG.pdf
Published
reversing
JOHNSTONE
Date: 11/23/2005

The basic holding permitted Kentucky Farm Bureau Mutual Ins. Co. (underinsured motorist benefits) to third party an unknown motorcyclist defendant for purposes of apportioning fault even though there was no personal jurisdiction over that unknown motorcyclist.  An odd twist in this case was that the Farm Bureau was also  permitted to use the 'no contact' rule to defeat the plaintiff's claim for uninsured motorist benefits arising from the negligence of that 'unknown motorcyclist'.

Comment:  Was this trial strategy at odds with the advertising slogan by the "Farm Bureau Family"  promising "All Around Coverage, All Around Kentucky".  One part of the policy permitted KFBM to place fault on an unknown  person whom they claimed to exist but deny coverage under another portion of the policy by saying the unknown motorist did not do not exist.  The "phantom" motorist - Now you see him,  now you don't.  In pleadings as well as on the highways.  Hats off to KFBM and their attorneys for this successful strategic move.  However, do not forget the sad human element of this case in which the claim was presented by the KFBM Insured's Estate on behalf of the elderly couple who died in the accident as a result of some of the negligence of that 'unknown motorcyclist."   The COA parsed this case to its barest elements without reading the purpose of the 'phantom motorist' rule (to prevent fraudulent claims) in the context of apportionment and possible estoppel of pleadings.

WILLIAMS V. WAL-MART STORES, INC.
TORTS - Age Discrimination
2004-SC-000080-DG.pdf
Published 
AFFIRMING
ROACH
Date: 11/23/2005

Although plaintiff  was replaced by at least one of these substantially younger individuals,  this  case is one of those "instances where, although the plaintiff has established a prima facie case and set forth sufficient evidence to reject the defendant's explanation, no rational factfinder could conclude that the action was discriminatory ."

In St. Mary's Honor Center, the Supreme Court rejected the "pretext plus" and "pretext only" approaches in favor of the "permissive pretext only' standard and held that it was permissible, but not mandatory, for the trier of fact to make an ultimate finding of intentional discrimination once the plaintiff has established pretext.   Considered together, and despite Williams's weak showing of pretext, these facts show that Medina was solely responsible for Williams's termination and that he did not know her age at the time he made that decision .

PREVIS V. DAILEY
TORTS- Negligence (duty of care, bicyclist and MVA)
2004-SC-000131-DG.pdf
Published
REVERSING AND REMANDING
JOHNSTONE
Date: 11/23/2005

The accident arose when a truck was cresting a hill and pulled into the left lane to pass a bicyclist.   Assuming he had passed her, the trucker maneuvered his truck back into the right-hand lane  and caught the bike's  handlebars which became wedged under the second flatbed wagon . The bike was pulled under the wagon and the bycyclist was thrown into a ditch on the side of the road .

Biker sued car in a personal injury action.  The trial court denied both parties' motions for a directed verdict, and the case was thereafter submitted to the jury, which returned a verdict in favor of Dailey .

Trucker's legal duty required that he not pass biker unless he could do so without interfering with the safe operation of her bicycle, and that if, in fact, he did pass her that he not drive to the right until he was reasonably clear of her.  Apparently, truck believed that it was solely biker's obligation to make sure he safely passed her. Clearly that is not the law. See KRS 189 .340(1). Nor are we sympathetic to truck driver's claim that he had no choice but to move back into the right lane so as to avoid a potential collision with oncoming traffic .

If the terrain was such that Dailey could not see oncoming traffic, then he certainly was in violation of his duty to exercise ordinary care for the safety of other persons using the roadway. See KRS 189 .340(4) .2

We hold that the trial court should have granted bicyclist a directed verdict on the issue of truck driver's negligence .

However, a jury is still entitled to consider Previs's duties in operating her bicycle, and apportion fault should it find that Previs was negligent as well. The jury was given instructions on both Previs's duties and apportionment, but the roadway before coming within one hundred feet (100') of any vehicle approaching from the opposite direction. was directed not to consider them upon finding for Dailey . On remand, a jury must consider these additional issues.

KUHLMAN ELECTRIC CO. B. CHAPPELL
TORTS - LEGAL NEGLIGENCE (RULE 1.7, LAWYERS DUTIES)
ATTORNEYS - Conflicts of interest, dual representation
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.

NOT to be Published.

SILVESTRI V. HON. GILLUM
CIVIL PROCEDURE - Rule 35 Examination
2005-SC-000392-MR.pdf
Not Published 
Date: 11/23/2005

The COA denied defendant's writ of prohibition seeking to prevent enforcement of the trial court's order permitting the defendant to videotape the medical examination by defendant's doctor recognizing the trial court has discretion to determine whether to impose certain conditions, including the appropriateness of certain external presences such as a video recorder

REINLE V. CAB. FOR FAMILIES AND CHILDREN
APPEALS - Continuing Jurisdiction and Notice of appeal
2005-CA-000260
Not Published
Date: 12/2/2005

COA rejected contention that the trial court lacked jurisdiction to order disbursal of the $1,200.00 because an appeal was pending.  In Johnson v. Commonwealth, 17 S.W.3d 109 (Ky. 2000), the Kentucky Supreme Court held: “As a general rule, except with respect to issues of custody and child support in a domestic relations case, the filing of a notice of appeal divests the trial court of jurisdiction to rule on any issues while the appeal is pending.”

P. (D.) V. CAB. FOR HEALTH AND FAMILY SERVICES
CIVIL PROCEDURE - Motion to intervene
2005-CA-000672
Not Published  44
Date: 12/2/2005

Affirmed family court's denial ot motion to intervene in termination of parental rights for failure to comply with CR 24.03 since the motion was not accompanied by a pleading setting forth the claim or defense for which intervention was sought.

WELCH V. EDDS, M.D.
MEDICAL NEGLIGENCE - Statute of limitations  (discovery rule)
2004-CA-002255
Not Published  53
Date: 12/2/2005

HUNSAKER V. COM.
PROPERTY - Condemnation
CIVIL PROCEDURE - Substitution of parties
2004-CA-002130
Not Published  46
Date: 12/2/2005

This appeal followed upon a substitution of parties in a condemnation action and a substituted party's objection to obligation to repay funds to the commonwealth since she never received the money paid to the substituted party who received the money prior to the substitution.  COA held when a party is substituted in the place of another party in a pending action, “[t]he substituted party, as a general rule, takes up the litigation with all of its benefits and with all of its burdens."

ENGLER V. DAVIS
TORTS - Premises liability and open and obvious; summary judgment
2005-CA-000669
Not Published  33
Date: 12/2/2005

Business invitee fell at bookstore while stepping on a landing to look at books.  In acknowledging the law of slip-and-fall cases has undergone a sea change in the last few years, and that in such cases the burden of proof has changed. Lanier v. Wal-Mart Stores, Inc., 99 S.W.3d 431 (Ky. 2003),the COA noted this is not a slip-and-fall case such as when the plaintiff slipped on a foreign substance and the question is how long the substance had been on the floor. In this case the issue is whether the step’s condition constituted a hazardous condition (were the premises reasonably safe?)

The patron had entered the store, stepped up one step to a landing where she looked at books on shelves for about five minutes, and fell while descending the one step to the original elevation. She filed this action to recover money damages to compensate her for those injuries. The trial court granted a summary judgment (Ky. R. Civ. Pro. 56) to the owners of the building, holding that the step was an open and obvious hazard, and the owners should not have anticipated harm to to the invitee/patron.

It is unquestioned, at least for the purposes of the motion below, that: the step was uneven in elevation, its rise being greater in the middle than on the ends; the patron had ascended the step approximately five minutes before she fell down it; the step was covered with carpet the same color as the carpet on the rest of the floor above and below, with no markings delineating the step; and there were no warnings on or around the step.


In this case the issue is whether the step’s condition constituted a hazardous condition (were the premises reasonably safe?), and, if so, whether the hazard was open and obvious to the patron, or whether the owner had a duty to warn invitees of the step and its danger to them. Johnson v. Lone Star Steakhouse & Saloon of Kentucky, Inc., 997 S.W.2d 490 (Ky. App. 1999).

The trial court implicitly found that the step was dangerous, and explicitly that it was open and obvious.  COA disagreed and could not say, as a matter of law, that the hazard was open and obvious to the patron, despite the fact that she had ascended the step a short time earlier. The owner acknowledged that the step is uneven in its elevation side-to-side. Whether that unevenness was not apparent and is what made the patron fall, or her fall was caused by her own inattentiveness to the open and obvious hazard, are jury questions.
 

 

Thanks to Chad Kessinger, Cherry Hennault, Mike Stevens, and John Hamlett for assisting in digesting our torts, insurance and procedure summaries.