APRIL 2005 published decisions from the Kentucky Court of Appeals. The 'links' are to the full text documents in PDF format with the
Kentucky Administrative Office of the Courts (AOC).
If you would like a complete listing of the published and nonpublished decisions of from the Court of Appeals for this month posted by the Louisville LawWire, then click on the following dates (organized by subject matter, with short summaries and links to the full text of the decision posted at the AOC Web Site).
GARDINER PARK DEVELOPMENT, LLC V. MATHERLY LAND SURVEYING, INC.
CIVIL PROCEDURE - STATUTE OF LIMITATIONS
2003-CA-002017.pdf
Judge: BARBER
VACATING AND REMANDING
Date: 4/29/2005 - PUBLISHED
Folks, the facts are pretty long. Suffice it to say MLS entered into a contract with GPD to perform engineering and survey work for a planned subdivision in Louisville. There are some other facts involving the work a law firm did on this case, but the main issue at bar is whether a one-year SOL applies to professional engineering, or whether the fifteen-year SOL for written contracts applies. The trial court originally found that KRS 413.245, the one year SOL, applied because engineers are considered professionals.
KRS 413.243 defines "professional services" as "any service rendered in a profession required to be licensed, administered and regulated as professions." KRS 413.245 is clear that actions based on professional services, whether those claims arise out of a tort or a contract, are subject to the one year SOL. The focus of the statute is on the nature of the cause of action, not the type of damages claimed. The CA then noted that it was central to this claim to determine who qualifies as a professional and what constitutes professional services.
Surprise! The law is unsettled on this issue. Plaza Bottle Shop, Inc. v. Al Torstrick Ins. Agency, Inc., 712 S.W.2d 349 (Ky.App. 1986), suggests that whether a particular vocation is a profession is dependent upon finding that it requires specialized education, knowledge and training. A license to engage in that vocation is not determinative. Moreover, in KRS 275.015(19), a professional limited liabilty company is defined as one formed for purposes including the rendering of professional services. Section (20) of that statute defines professional services as those rendered by physicans, osteopaths, and engineers, among many others. Though the CA declined to say 275.015(19)&(20) could be used to define who is a profession/what constitutes professional services for purposes of KRS 413.245, the provisions supported the notion that a "professional" in Kentucky is defined more broadly than at common law and the services provided by those professionals, if incident to the profession, are also considered professional services.
The CA found these definitions insufficient, as the current case law yields no true distinction among a trade or occupation versus a profession. Clearly the legislature intended for there to be such a distinction since it enacted a different SOL to apply to professionals. The CA then examined several approaches from our sister states: one adopts the common law view that restricts the statute's application only to those engaged in the practice of law, medicine or divinity. Another defines a professioanl and professsional services as all licensed occupations. Another follows the "dictionary" definition of professional. The last, followed in Florida, involves a bright-line rule requiring that any vocation wishing to be considered a profession must require, at a minimum, a four-year college degree before licensing. If alternative methods may be used to practice the vocation, it is not a profession. Other courts have utilized the definitions and analyses contained in 29 U.S.C. 152(12) defining professional employee and the Restatement (2d) of Torts, Section 299A, comment b, discussing the undertaking of services in the practice of a profession or trade.
The CA then stated the following: in Kentucky, the legislature clearly intended for professionals providing professional services to be subject to a one year SOL whether the claim is based on tort or contract. The guidance from our case law is that licensing is not determinative, but specialized education, knowledge and training are important. The status of the person performing the services and whether those services are professional in nature or consistent with the duties of the profession are important to determining whether KRS 413.245 applies. The nature of the claims between the parties is also important. It cited with favor the cases of Chase Scientific Research, Inc. v. NIA Group, Inc., 749 N.E.2d 161 (N.Y.App. 2001), and Jilker v. Berger Electric, Inc., 441 N.W.2d 660 (1989), which contain a framework for deciding whether a particular occupation should be considered a profession within the malpractice SOL, though it was quick to note these cases add to, rather than replace, this jurisdiction's established statutory and cas law.
As to the particulars of this case, the CA felt it was clear that professional engineers may claim the application of KRS 413.245, and that a business like MLS may argue for the one year SOL to be applied to its contracts involving professional services. Thus, to the extent that the services the plaintiffs complained of involved the performance of professional engineering services or services incident to professional engineering, such claims were barred by the one year SOL.
The twist (you're thinking, there's more??) comes in determing what services are incident to professional engineering. At the time of the dispute, ('97 & '98), the statute defining "engineering" specifically excluded land surveying; what's more, KRS 413.243 is clear that licensure is required for any service to be considered professional, and until '99, land surveyors were not required to be licensed. Even after the statutory scheme was amended in 1999, the CA still believed land surveying could not be considered "professional services" if not provided incident to professional engineering services. For instance, no code of conduct exists for surveyors; there is no evidence they can be disciplined for violating a code of conduct; there's no evidence that the surveyor and his client have a relationship based on trust or confidence; and there's no evidence a surveyor owes his client a fiduciary duty to advise. Thus, even after the revamping of KRS 322.010 in '99, a land surveyor is not to be considered a professional under KRS 413.245 unless those services prove incidental to professional engineering as defined in KRS 322.010.
The CA vacated and remanded for the trial court to determine what disputed services were professional engineering versus land surveying. To the extent they were professional engineering services, they would be barred by the one year SOL; to the extent they were surveys, they were not so subjected to the one year SOL.
BROWN V. COM
CRIMINAL -- Ineffective Assistance; Peremptory Challenges; Preserving Error 2003-CA-001093.pdfJudge: HUDDLESTON
REVERSING
Date: 04/01/2005 - PUBLISHED
CA reversed TC's denial of Brown's motion alleging ineffective assistance of counsel. Following a joint trial of Brown and a co-defendant, Brown was convicted of Second Degree Arson, Second Degree Burglary, and Persistent Felony Offender in the First Degree. He was later sentenced to 80 years in prison. His RCr 11.42 motion alleged that trial counsel failed to object during jury selection when the judge assigned 9 peremptory challenges instead of 13 as required under the circumstances. RCr 9.40. Specifically, Brown's counsel told the court, "Your honor, we'd like to ask for extra strikes." The judge denied the request. CA held that merely requesting bonus peremptory strikes is not sufficient to preserve the error for appellate review. Further, when a trial judge assigns an insufficient number of strikes to a defendant, reversal is required as a matter of law. Springer v. Commonwealth, 998 S.W.2d 439, 445 (Ky. 1999). Consequently, the performance of Brown's counsel was deficient. Because Springer holds that insufficient peremptory strikes are always prejudicial to defendants, counsel's deficient performance in this case resulted in prejudice to Brown. Hence, reversal is required and Brown gets a new trial.
Editor's Note: Defense 101: When objectionable events occur during trial, always utter the magic word "objection" and state the relief that you request. Here, Brown's attorney failed to do that and, sadly for him, he now has a published opinion memorializing this error.
SOWELL V. COM
CRIMINAL - Warrant Packs for Traffic Stops
2004-CA-000348.pdf
Judge: COMBS
AFFIRMING
Date: 04/01/2005 - PUBLISHED
Commonwealth's failure to produce 'warrant packs' used to justify traffic stop was harmless since officers were credible and four warrants were outstanding at the time.
SHROUT V. THE TFE GROUP
EMPLOYMENT LAW
2004-CA-000834.pdf
Judge: VANMETER
AFFIRMING IN PART AND REVERSING IN PART
Date: 04/01/2005 - PUBLISHED
Issues before the COA were whether failure to comply with federal testing regulations creates an exception to Kentucky employment at will doctrine (no) and whether Appellant stated a viable claim for defamation (yes).
Appellant, a truck driver was subjected to a random drug test. At the time of the test he requested a split sample. A split sample was not done and when the test came back positive, Appellant was fired based on the positive result. A subsequent body hair test revealed the first test to be a false positive. Appellant was unable to find other employment because whenever he applied for a position he was required to sign a consent and release form which authorized his former employer to release prior drug testing results (even false positives). Appellant filed suit against Appellees alleging, among other things, wrongful termination and defamation.
Appellee moved to dismiss the complaint for failure to state a claim. TC granted Appellee's motion. On appeal, Appellant argued the exception to the employment at will doctrine which allows a cause of action for wrongful termination (i.e., the discharge is contrary to public policy as evidenced by existing law and the policy is evidenced by a constitutional or statutory provision). The COA declined to apply the exception holding the statute in question was a federal not a state statute and the federal statute was not specifically directed at providing statutory protection to the worker in his employment situation. Therefore, the exception could not apply. The COA also found the employer's failure to follow the federal regulations was not negligence per se because the regulation was not designed to prevent such an injury.
In reviewing the TC's grant of Appellee's motion to dismiss the defamation claim, the COA reversed, holding pursuant to CR 12.02, the facts which Appellant alleged stated a cause of action for defamation sufficient to survive a motion to dismiss.
Q.C. V. COM.
FAMILY LAW - JUVENILES (Probation Revocation)
2004-CA-000147.pdf
Judge: HUDDLESTON
DISMISSING APPEAL
Date: 4/29/2005 - PUIBLISHED
Q.C. appealed to CA after Circuit Court affirmed District Court’s order committing him to Department of Juvenile Justice (DJJ) because he had violated his probation. District Court had labelled the hearing a “contempt/probation revocation hearing,” and held the hearing without written notice to Q.C.
Q.C. first argued to CA that because a juvenile court can only commit a child to DJJ when the child has been guilty of a public offense, a child cannot be committed for probation violation or contempt because the statutory definition of public offense does not include probation violation and specifically excludes contempt. CA disagreed and held that, because the juvenile court has the authority to impose probation, it also must inherently have the power to revoke the probation. Further, CA held that adult probation and juvenile probation are sufficiently similar so that the statute allowing district and circuit courts to revoke an adult’s probation also applies to juvenile probation
Q.C. next argued that his state and federal due process rights had been violated as he did not receive a written petition or motion notifying him of the attempt to revoke his probation. CA agreed, noting that lack of adequate written notice in this instance may have been grounds for reversal, but because Q.C. had reached the age of majority and was no longer in the DJJ, the appeal should be dismissed as moot.
B.F. V. T.D.
FAMILY LAW - CUSTODY (DE FACTO)
2004-CA-000083.pdf
Judge: MINTON
AFFIRMING
Date: 4/15/2005 - PUBLISHED
Husband loses motion to nullify the waiver and agreement in divorce claiming he was functionally illiterate and he did not understand the true nature of the waiver and the agreement at the time it was signed by him. Wife claims he can read. Both parties were represented by counsel during the hearing, and counsel sat the husband and wife down and explained the agreement to them and no mention was made husband could not read; plus the parties discussed the document in their attorney's office.
WESTFIELD INS. COS. V. QUALITY SIGNS & SERVICE, INC.
INSURANCE - REASONABLE EXPECTATIONS
2004-CA-000557.pdf
Judge: MILLER
AFFIRMING
Date: 4/22/2005 - PUBLISHED
This appeal addressed the insured's reasonable expectations regarding duty to defend and potential duty to indemnify. The case was a little complex due to some conflict of laws issues relative to Ohio tort law and workplace intentional tort precedents. However, under the "doctrine of reasonable expectations," an insured is entitled to all the coverage he may reasonably expect to be provided according to the terms of the policy. Hendrix v. Fireman's Fund Ins. Co., 823 S.W.2d 937, 938 (Ky.App. 1991); Woodson v. Manhattan Life Ins. Co., 743 S.W.2d 835, 839 (Ky. 1987).
GOSNEY V. GLENN
REAL PROPERTY - EASEMENT BY ESTOPPEL
2004-CA-000169.pdf
Judge: MILLER
AFFIRMING
Date: 4/15/2005 - PUBLISHED
This property dispute arose over the use of a passageway over the other's property claiming an easement by estoppel (among other theories). In rejecting this claim, the trial court determined that the passageway was not a county road, and that the Gosneys did not have a right to traverse the passageway based upon easement by necessity, easement by prescription, or easement by estoppel.
An easement by estoppel concerns prohibiting a party from denying the existence of a right to use property, i.e., a license, based on justifiable reliance that the license will continue. The reliance derives from conduct by the licensor and typically also includes actions by the licensee such as the making of improvements based on that reliance. Cole v. Gilvin, 59 S.W.3d 468, 477-478 (Ky.App. 2001).
MARTIN V. MAN O WAR RESTAURANTS, INC.
STATUTORY INTERPRETATION
2003-CA-002368.pdf
Judge: BUCKINGHAM
REVERSING AND REMANDING
Date: 04/01/2005 - PUBLISHED
Appellant Marin was hired in 1989 to manage the Man O War Restaurant’s (“MOWR,” the Appellant herein) Sizzler in Lexington. His five-year contract permitted him to purchase 25% of MOWR’s stock for $1000, but required him to return the stock for the purchase price if his employment was terminated before the end of the contact. MOWR terminated Martin’s employment after three years and filed this suit in 1992.
Initially the Fayette Circuit Court ruled in favor of MOWR. However, this decision was reversed on appeal on the basis for the Commonwealth’s public policy against forfeiture. The case was remanded so a jury could value the stock at the time of Martin’s surrender back to MOWR. In 2000, a jury concluded the stock’s fair market value had been zero. Again on appeal, the zero verdict was held to be inadequate and contrary to the proof. The case was remanded for a new trial to determine damages in an amount not less than $1000.
By the time the trial court heard the case for the third time, the state legislature amended KRS 27B.6-270 to permit restrictions on the transfer of shares as contemplated by the parties herein. Accordingly, MOWR moved for summary judgment, which was granted. This appeal followed.
On this, the Court of Appeal’s third review, they held that the doctrine of res judicata prevented retroactive application of the revised statute to this case. The COA remanded the case yet again for a new trial.
GREENWELL V. UNIFIED FOOD SERVICE PURCHASING CO-OP, LLC
TORTS - RETALIATORY DEMOTION & INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
EVIDENCE - PRIVILEGE (ATTORNEY CLIENT)
2004-CA-000391.pdf
Judge: GUIDUGLY
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
Date: 04/01/2005 - PUBLISHED
CA affirms in part and reverses in part TC entry of directed verdict against employee alleging retaliatory conduct and IIED by her employer. (Jefferson Cir. Ct., Hon. Martin McDonald, Judge, presiding).
Appellant testified for a co-worker (and, therefore, against Employer) at the co-worker's unemployment hearing. By agreement, appellant's testimony at the hearing was to be admitted in co-worker's reverse discrimination action taken separately in civil court; appellant had been under subpoena in this action. The civil action settled and was dismissed before the testimony was admitted.
Shortly after the dismissal of former co-workers' discrimination action, Appellant's superiors sent her a memo reprimanding her for actions she took 18 months prior that were tangentially related to the office squabbles that lead to the discrimination action. Certain managerial duties were removed from Appellant. Appellant filed suit alleging retaliation in violation of the Kentucky Civil Rights Act as well as IIED. The defense argued no retaliation in violation of the Civil Rights Act because Appellant had not engaged in protected activity under KRS 344, but had only testified at an unemployment hearing under KRS 341.
CA held TC was ultimately correct to exclude evidence between Appellant, as representative of the company, and the company's lawyer. CA also reversed TC's directed verdict on retaliation, holding that Appellant was engaged in protected activity as her testimony was to be admitted in the civil action and Employer had acted adversely to her because of it. Finally, CA upheld TC dismissal of IIED claim b/c Appellant failed to present a prima facie case.
PARKER V. HENRY PETTER SUPPLY CO.
TORTS - PRODUCTS LIABILITY
2004-CA-000259.pdf
Judge: MCANULTY
AFFIRMING IN PART, VACATING AND REMANDING IN PART
Date: 04/01/2005 - PUBLISHED
CA affirms in part, and vacates and remands in part, TC entry of SJ for certain defendants in this asbestos exposure products liability case.
Two defendants, Hannan Supply and Petter Supply, argued to apply the "middleman statute" in Kentucky's Products Liability Act, KRS 411.340, to remove them from the action by SJ. Appellant argues the statute does not apply because there exist other as-yet-unnamed (and probably never-to-be-named) manufacturers as defendants. CA holds that the middleman statute does apply in this instance to protect these suppliers.
CA, however, agrees with appellant that SJ was premature as to when the suppliers know or should have know of the dangers of asbestos. Appellant presented evidence that created an issue of fact. Finally, one supplier's grant of SJ was upheld as the evidence showed that that supplier, Mine Equipment & Supply, had been incorporated after appellant's exposure and was not a successor corporation to a defendant corporation.
WESTFIELD COMPANIES V. QUALITY SIGNS & SERVICE, INC.
INSURANCE - DUTY TO DEFEND AND DUTY TO INDEMNIFY
2004-CA-000557.pdf
Judge: MILLE
AFFIRMING
Date: 4/8/2005 - PUBLISHED
Westfield Companies, Inc. (Westfield) and Kentucky Associated General Contractors Self Insurers’ Fund (Kentucky Associated) appeal from a judgment determining that they have a duty to defend, and a potential duty to indemnify, Quality Signs & Service, Inc. (Quality Signs) in an action brought by the Estate of Christopher House in Clermont County, Ohio, seeking recovery of damages for Christopher’s accidental death while acting in the scope of his employment with Quality Signs. The Estate pled causes of action under Ohio’s common law workplace intentional tort precedents.
While performing a repair job at a motel located in Clermont County, House was killed while acting within the scope of his employment when he was thrown from a crane basket while working on a sign approximately 55 feet
above ground level.
The Estate filed suit against Quality Signs in Ohio, seeking recovery under Ohio’s common law workplace intentional tort precedents. The action alleged counts for wrongful death, for survivorship damages, and for punitive damages.
At the time of House’s death, Quality Signs was covered by insurance policies issued by Westfield and Kentucky Associated. The Westfield policy provided a primary Comprehensive General Liability Policy (CGL), and a Commercial Umbrella Policy. Quality Signs seeks coverage related to the Ohio lawsuit under the umbrella policy only.
Kentucky Associated provided Quality Signs with a Workers’ Compensation Policy and an Employers’ Liability Policy.
Kentucky Associated agreed to payment under the Workers’ Compensation section of the policy, and workers’ compensation coverage was not an issue in this case. However, Quality Signs claimed coverage related to the Ohio action under the Employers’ Liability section of the Kentucky Associated policy.
The Kentucky circuit court rendered an order determining that Westfield and Kentucky Associated had a duty to defend, and a potential duty to indemnify, Quality Signs in the Estate’s Ohio intentional tort lawsuit.
The causes of action in the Ohio case sounded in Ohio’s “substantial certainty” employer intentional tort law. This type of employer intentional tort occurs when the employer does not directly intend to injure the employee, but acts with the belief that injury is substantially certain to occur. See Van Fossen v. Babcock & Wilcox Co., 36 Ohio St.3d 100, 522 N.E.2d 489 (1988).
The “expected” exception contained in the Westfield umbrella policy was held not to operate to deny coverage to Quality Signs in the Ohio action.
The duty to defend is separate and distinct from the obligation to pay any claim. Brown Foundation at 279. If, in the Ohio action, there were to be a finding by the jury that Quality Signs deliberately intended House’s death, the exclusion would apply to Westfield’s obligation to pay the resulting judgment. However, pursuant to Brown Foundation, the exclusion cannot be applied at this stage to avoid providing Quality Signs with a defense in the Ohio litigation.
Kentucky Associated contends that Ohio case law prohibits insurance coverage for this claim referring to holdings in Ohio to the effect that “expected or intended” exclusions in an insurance policy provide a valid exclusion in “substantially certain” employer tort cases. In essence, these cases equate expected with “substantial certainty.” However, Kentucky does not follow this interpretation of these terms. See James Graham Brown Foundation, Inc. v. St. Paul Fire & Marine Ins. Co., 814 S.W.2d 273 (Ky. 1991). As "we are applying Kentucky law in our interpretation of these insurance policies, and since our Supreme Court has spoken on the issue, the holdings of the Ohio courts in this area are not pertinent."
Thanks to Scott Byrd, Patrick Bouldin, Melissa Dimeny, Reed Ennis, John Hamlett, Cherry Henault, Sam Hinkle, Suzan J. Hixon, Chad Kessinger, Stephen Keller, Michelle Eisenmenger Mapes , Peter Naake, Paul C. O'Bryan, Bryan Pierce, Richard Schiller, Paul Schurman, and James Worthington for their efforts in digesting these decisions.
Michael L. Stevens, Editor