Kentucky Law Review

2010 LEGISLATION: "House passes juror and radon bills; GOP fails again with discharge petition"

From the Bluegrass Politics Blog with the Kentucky Herald Leader (www.Kentucky.com), I submit the following squib and link:

House passes juror and radon bills; GOP fails again with discharge petition

By Jack Brammer on KY General Assembly

FRANKFORT -- Any Kentuckian who is at least 80 and disabled may have his or her name removed from the list of prospective jurors under a bill the House approved 85-5 Friday. House Bill 372, sponsored by Rep. Tom Riner, D-Louisville, now goes to the Senate for its consideration. The House also approved on a 85-5 vote HB 494, which regulates professionals who measure radon gas in buildings. Also, Rep. Stan Lee, R-Lexington, tried to get the House to remove from a committee and bring to the House for a vote a resolution that would declares states have sovereignty over powers not given to the federal government by the U.S. Constitution. But House Speaker Greg Stumbo, D-Prestonsburg, said Lee's discharge petition was out of order.

2010 LEGISLATURE: "Senate approves ban on texting while driving"

From the Bluegrass Politics Blog with the Kentucky Herald Leader (www.Kentucky.com), I submit the following squib and link:

Senate approves ban on texting while driving

By Government Editor on KY General Assembly

By Jack Brammer - jbrammer@herald-leader.com FRANKFORT – The state Senate approved a bill Tuesday to ban text messaging while driving and prohibit drivers under 18 from using a cell phone while driving. The vote was 27-6, with some members questioning whether police could enforce such a law. The sponsor of Senate Bill 23, Sen. Denise Harper Angel, D-Louisville, said the measure sends the message that texting while driving is dangerous. A person texting while driving is 23 times more likely to be involved in a car accident, she said. Sen. Tom Jensen, R-London, said the bill has “a minimum penalty but it tries to instill in people that this is a dumb thing to do.” If the bill becomes law, any person who violates it prior to Jan. 1, 2011, will receive a courtesy warning. After then, a violator will be fined $25 for the first offense and $50 for each subsequent offense. All fines will be subject to court costs.

STATE: Jury convicts all 8 defendants in Clay County vote-buying case FROM BLUEGRASS POLITICS BLOG/KENTUCKY.COM

Jury convicts all 8 defendants in Clay County vote-buying case

By Government Editor on State Government

By Bill Estep - bestep@herald-leader.com FRANKFORT — Some of the most powerful politicians in Clay County corrupted the election process in recent years, buying and stealing votes in pursuit of power and money, a federal jury ruled Wednesday. After deliberating for more than 9 hours over the past two days, the jury convicted all eight people on trial, including former Circuit Judge R. Cletus Maricle and former school Superintendent Douglas C. Adams, on a racketeering conspiracy charge. That charge was that they used the county election board as a tool to rig elections, appointing corrupt precinct officers to help with vote-buying. The jury convicted several of the defendants on other charges as well, including mail fraud, extortion and laundering money that was used to buy votes. They face up to 20 years in prison, though their sentences will likely be less under advisory guidelines. Those charged in the case are Maricle; Adams; county Clerk Freddy W. Thompson; Magistrate Stanley Bowling; Charles Wayne Jones, a former Democratic election commissioner; William Stivers, a former election official; and William Bart Morris, who owns a garbage-transfer company, and his wife Debi Morris, who owns a beauty shop. They allegedly used the county board of elections as a vehicle to buy and steal votes between 2002 and 2007 so they could get power, jobs and contracts.

JUDICIAL ELECTIONS: Sitting Judge fined for illegal campaign contributions in election that put her on the bench

Judge Katie King and her father, mayoral candidate (and metro councilman) Jim King, were fined $15,000 each today (3/25/2010).  His violation was giving $130,000 to her campaign, and her violation was accepting it.  Although, the Kentucky Registry of Finance concluded the violations were "not knowing", the Kentucky Attorney General has referred the matter to Special Prosecutor Hart McGibben for investigation (and he has been sitting on this for months!). Justice delayed is justice denied.  McGibben needs to get off his duff and get us past this for  Judge Kings' sake and/or the voters.  Letting this hang over everyone's heads throughout the election is unfair to all concerned. The issues are just not that complicated.

This post follows my earlier post entitled More on the Katie King - Jim King Campaign Finance Story as Legislation Proposed to Clear up the mess  from January 25, 2010.  And if you wonder how much pain is being felt by this fine, then take a look at this post from January 17, 2010 -ELECTIONS: Jim King throws $760,000 of his own money into his mayor's campaign.   And, back on Nov. 17, 2010, we referenced a Page One post in Judicial Campaigns: "Jim King’s Campaign Finance Lawyers Respond" from PageOne

What some might not realize is that the "knowing"  is the difference between criminal conduct and bad legal advice from their attorneys and is typically not a defense to criminal violations. [CHAPTER 121 CAMPAIGN FINANCE REGULATION]

In any event, here is the Fox 41 story with a link to the newscast:

Jim, Katie King pay election finance fines

•   WATCH VIDEO:  Jim, Katie King pay election fines

Jim and Katie King settle their election finance case with the state.  Each has paid a $15,000 dollar fine.

But this does not end the investigations into Katie King's campaign for district judge two years ago.  The people who regulate campaign money in Kentucky, members of the Registry of Election Finance, approved the settlement with the Kings in Frankfort on Thursday.

It called for two $15,000 fines and ends the registry's probe, at least, into $135,000 Jim King gave his daughter Katie King for her successful run for Jefferson district judge in 2008.  The state limit for everyone -- family members included -- is $1,000 per person.

"A $15,000 fine for each allegation for a total of a $30,000 result, quite frankly, is one of the largest in recent years. So, again, I would say that speaks to the severity of the violation, if you will," said registry chairman Craig Dilger.

* * *

For those who might wonder about the acceptance of this conciliation agreement, it is noteworthy that the consequences of failing to agree would be a political nightmare for an officeholder or a candidate seeking re-election.  Imagine a sitting judge coming under the scrutiny of the Chief Justice of the Supreme Court of Kentucky and at least five other retired or former justices about their campaign conduct?!!!  The damage to the public's perception, respect and confidence for the judiciary would be terrible. And coincidentally, this would be following the criminal conviction of a Senior Status Judge (Cletus Maricle) in another county on a totally unrelated matter  (Jury convicts all 8 defendants in Clay vote-buying case) but both incidents involve campaign irregularities involving members of our judiciary.

CAVEAT: Before going further, I confess I am NOT an elections or campaign finance lawyer.  Nor, am a civil liberties lawyer.  I practice personal injury and insurance law, plus continue to assist those in claims or actions involving the military (short of criminal law).  I offer this as an analysis of someone who campaigned for judge once back in 2002 but does not devote his practice to this subject.

Meanwhile, back to the failure to accept the conciliatory agreement would result in the Supreme Court's involvement in the resolution of the allegations:

For example,

If the alleged violator declines to accept the conciliation agreement or fails to respond within the time allowed, the registry shall submit a written request to the Chief Justice of the Kentucky Supreme Court to recommend not fewer than five (5) nor more than ten (10) retired or former justices or retired or former judges of the Court of Justice who are qualified and willing to conduct a hearing to determine if a violation has occurred.  KRS 121.140(4).

And if the KREF believed the violation was knowing (and per some individuals the statute is pretty clear that it is knowing and if clear enough for non-lawyers it should be pretty clear to those who went to law school and are licenses to practice law in the Commonwealth), then the matter is referred for criminal investigation:

If the registry concludes that there is probable cause to believe that the campaign finance law has been violated knowingly, it shall refer the violation to the Attorney General or the appropriate Commonwealth's or county attorney for prosecution. The Attorney General may request the registry's attorney or the appropriate county or Commonwealth's attorney to prosecute the matter and may request from the registry all evidence collected in its investigation. KRS 121.140(5).

Furthermore, the fact that the Kings received some obscure response to an email which was vague and ambiguous should be immaterial to the conclusion on the "knowing" violation as KRS 121.135(3) provides that "(3) No advisory opinion shall be issued by the registry or any of its employees except in accordance with the provisions of this section."  Since this same section provides that reliance upon an advisory opinion would not result in a punishment under the same section did not apply (since the Kings were in fact fined), then there is acknowledgement by all that there was no advisory opinion upon which they relied!  Translation - nothing official was forthcoming from the KREF prior to the conduct, and most attorneys would have know that an informal remark in an unofficial capacity is of little weight and legal efficacy. However, that misses the point.

More importantly, "It shall be no defense in any civil or criminal proceeding regarding a violation of any provision of this chapter or any administrative regulation promulgated by the registry for a person or committee to claim that he relied upon and acted in good faith based upon any provision or finding of an advisory opinion if the person or committee was not the person or committee involved in the specific transaction or activity with respect to which the advisory opinion was rendered."  KRS 121.135(4)(c).  Thus no opinion, no out.  And the opinion only applies to the person seeking it.

And, what are the consequences of a knowing violation of the campaign finance law (besides the criminal penalties)?  The election can be voided and the office declared vacant!!!

The nomination for, or election to, an office of any candidate or slate of candidates who knowingly violates any provision of KRS 121.150 to 121.220, or whose campaign treasurer knowingly violates any provision of KRS 121.150 to 121.220, with the knowledge of that candidate or slate of candidates, shall be void, and, upon a final judicial determination of guilt, the office shall be declared vacant and the officeholder shall forfeit all benefits which he would have been entitled to receive had he continued to serve, and the office or candidacy shall be filled as provided by law for the filling of a vacancy. An action to declare a vacancy under this subsection may be brought by the registry, the Attorney General, any candidate or slate of candidates for the office sought to be declared vacant, or any qualified voter.  KRS 121.990(4).

And what does KRS 121.150(6) provide about the contribution?

KRS 121.150   Campaign contribution and loan restrictions and expenditure limitations.

No candidate, slate of candidates, campaign committee, political issues committee, nor anyone acting on their behalf, shall accept a contribution of more than one thousand dollars ($1,000) from any person, permanent committee, or contributing organization in any one (1) election; except that no candidate for school board, his campaign committee, nor anyone acting on their behalf shall accept a contribution of more than one hundred dollars ($100) from any person or more than two hundred dollars ($200) from any permanent committee or contributing organization in any one (1) election. No person, permanent committee, or contributing organization shall contribute more than one thousand dollars ($1,000) to any one (1) candidate, campaign committee, political issues committee, nor anyone acting on their behalf, in any one (1) election; except that no person shall contribute more than one hundred dollars ($100) and no permanent committee or contributing organization shall contribute more than two hundred dollars ($200) to any one (1) school board candidate, his campaign committee, nor anyone acting on their behalf, in any one (1) election.

Although Craig Dilger in the newscast likes to make these rules sound complex, are they really that hard to figure out?  Not really.  And those reading this include a certified public account and a few lawyers.  

You will also note from the news cast that Dilger said that Jim King's contributions were out there for all to see.  Let's look at the KREF data base, and you will note that in the publicly filed documents there is no record of those contributions  in the amount of $145,000 from Jim King to Katie King as a family contribution:

JAMES (JIM) KING'S 2008 FINANCIAL CONTRIBUTIONS TO KATIE KING AS REPORTED TO KREF [The combined contributions were almost overlooked in the search and may still be two different individuals since the names are different and the occupations different and the addresses different.]

	KING, JAMES 403 GABLEWOOD CIRCLE LOUISVILLE, KY, 402450000 Employer : KING SOUTHERN BANK Occupation : BANKER	INDIVIDUAL Contribution $250.00 on 05/15/2008 KING, KATIE for DISTRICT COURT JUDGE - 30TH DISTRICT-16TH DIVISION UNEXPIRED - PRIMARY - 05/20/2008
	KING, JAMES 403 GABLEWOOD CIRCLE LOUISVILLE, KY, 402450000 Employer : KING SOUTHERN BANK Occupation : BANKER	INDIVIDUAL Contribution $1,000.00 on 09/08/2008 KING, KATIE for DISTRICT COURT JUDGE - 30TH DISTRICT-16TH DIVISION UNEXPIRED - GENERAL - 11/04/2008
	KING, JIM 3400 DUTCHMANS LANE LOUISVILLE, KY, 402050000 Employer : KING SOUTHERN BANK Occupation : EXECUTIVE	INDIVIDUAL Contribution $1,000.00 on 04/04/2008 KING, KATIE for DISTRICT COURT JUDGE - 30TH DISTRICT-16TH DIVISION UNEXPIRED - PRIMARY - 05/20/2008
	KING, JIM 3400 DUTCHMANS LANE LOUISVILLE, KY, 402050000 Employer : KING SOUTHERN BANK Occupation : EXECUTIVE	INDIVIDUAL Contribution $1,000.00 on 07/01/2008 KING, KATIE for DISTRICT COURT JUDGE - 30TH DISTRICT-16TH DIVISION UNEXPIRED - GENERAL - 11/04/2008

The list of Katie King's contributions to her own campaigns are below the fold of this post and total $243,489.08 for 2008 and $10,000 (thus far) for 2010.  You will also note that the timing of a very large portion of those contributions were so late in the campaign cycle that they were not reported until after the election!  With the effect that the opponent did not even know the amount of money available to his opponent, AND he did not know where that money was coming from! 

election date                    receipts     disbursements
	KING, KATIE DISTRICT COURT JUDGE - 30TH DISTRICT-16TH DIVISION	11/04/2008	UNEXPIRED - GENERAL	295,931.73	250,965.92
	KING, KATIE DISTRICT COURT JUDGE - 30TH DISTRICT-16TH DIVISION	05/20/2008	UNEXPIRED - PRIMARY	111,072.35	111,072.35

And in the general election, the following dates and amounts from Katie King to Katie King were for  AFTER the election:

$40,000 on 11/6/08
$11,000 on 11/20/08
$10,000 on 12/04/09
$48,807.35 on 1/6/10 (for debt assumption)
$193,681.73 on 1/6/10 (for debt assumption)

Thus, these contributions were not out there for all to see, including the opponent.

However, McGibben's delay is not fair to either Katie King or the voters; not to mention the fact that the $130,000 (or actually $145,000 in total contributions by Jim King to Katie King) in illegal contributions may very well have been the key to Katie King defeating the sitting judge who was lawfully appointed by the governor and running to retain that seat.

Other bloggers throughout the state are scrutinizing this issue closely:

• JIM AND KATIE KING $30,000 IN FINES IS JUST THE BEGINNING by Ed Springston at My View Matters
  

• JIM KING CPA: WHO IS THE REAL KING?by Ed Springston at My View Matters

APPELLATE DECISIONS: COA reverses a denial of JNOV and addresses prejudice of voir dire questions relating to plaintiff's occupation/profession as lawyer

This COA decision announced Mar. 5, 2010 and authored by Judge Combs arose from a trial out of Jefferson County and resulted in Judge Judith McDonald-Burkman being reversed.  The decision was styled Jospeh L. and Julie Hardesty vs. Scot-Bilt Homes and Kenneth S. Burns (No. 2008-CA-000564), not to be published and withdrawing an earlier opinion rendered Oct. 23, 2009.  Click here for the current opinion.

Although the case arose from a construction project and the implied warranties of habitability and alleged violations of the building code, the interesting part of this decision was that the trial judge was reversed for not granting the plaintiff's motion JNOV.  Specifically, the COA stated:

Burns disagrees and disputes at length each of the Hardestys’ claimed errors. After a review of the arguments presented by the parties, the voluminous record and applicable law, we reverse the trial court. Although there was evidence presented to support Burns, it was simply inadequate substantively to support the verdict of the jury in this case. We are persuaded that the Hardestys were entitled to a JNOV.

* * *

Appellate restraint dictates that we grant great deference to a jury verdict and the discretion of a trial court. However, we have indeed reversed jury verdicts when the evidence was lacking in sufficiency to sustain a verdict. Shreve v. Biggerstaff, 777 S.W.2d 616 (Ky. App. 1989). After our review of the records, we are persuaded that the evidence was so compelling against Burns that no reasonable jury could have returned a verdict in his favor. The verdict was truly puzzling in light of the scant evidence offered to absolve Burns of liability. In an abundance of caution, the trial court allowed this case to proceed to a jury rather than entering a directed verdict. However, after the jury failed to return a verdict in compliance with the evidence, we conclude that the trial court erred in not granting a JNOV.

What I also found troubling at the trial court was the voir dire questioning into wholly inadmissible areas pertaining to the plaintiff's profession as lawyers.  As the COA noted -

During voir dire, the Hardestys’ counsel informed the jury that Mr. Hardesty was a partner at the “large” law firm of Stites and Harbison and that Mrs. Hardesty was an attorney with the Jefferson County Attorney’s office. Over the Hardestys’ objection, the jury also learned that Mr. Hardesty is a member of the construction group in his firm. The Hardestys believe that the jury was tainted from the outset to their detriment. Although we agree that this evidence was wholly inadmissible on relevancy grounds, its erroneous admission would not suffice alone to warrant a reversal. We shall not speculate on the subjective impact  of such information. Therefore, our inquiry will focus solely on the substantiality of the evidence presented and the pertinent law.

APPELLATE DECISIONS (Pretrial deadlines): COA decision addresses effect of new trial date and old pretrial deadlines

A new trial date may or may not affect the existing pretrial deadlines, eg., disclosures of witnesses, experts, damages, exhibits, instructions etc.  Some guidance when the new trial order may not be clear is found in the COA decision of Rawlings v. Interlock Industries, Inc.  The decision has some extensive analysis on the statute of limitations (2 years vs. 1 year) that hinges on the use of a motor vehicle and the unloading of a truck.

Here is the extract from Judge Caperton's decision regarding the pretrial order:

TORT REPORT: COA Published Six Tort Decisions in Jan. 2010

The COA published 6 torts decisions and 1 insurance law decision in January 2010. 

TORTS

A. Baxter v. AHS Samaritan Hospital, LLC
2008-CA-000541 01/15/2010 2010 WL 133796

Opinion by Judge Keller; Judge Acree concurred; Judge Caperton dissented in part by separate opinion. The Court affirmed a judgment of the circuit court dismissing a medical malpractice action after a jury found that a doctor was not negligent in failing to remove a surgical sponge following an appendectomy. Following the holding in Nazar v. Branham, 291 S.W.3d 599 (Ky. 2009), the Court first held that the trial court did not err in overruling motions for partial summary judgment and directed verdict against the doctor under the doctrine of negligence per se. The Court next held that trial court correctly denied motions for partial summary judgment and directed verdict under the doctrine of res ipsa loquitur. Although the presence of the sponge constituted prima facie evidence of negligence, the expert testimony created a question of fact as to the doctor’s liability for the injuries. The Court next held that the trial court did not err by failing to give an instruction on the doctrine of res ipsa loquitur. Although Nazar allowed the jury to infer negligence and a party to avoid a directed verdict or to win a directed verdict, the instructions on the doctrine should not be submitted to a jury. The Court finally held that the trial court did not err in granting partial summary judgment, precluding a deceased infant from bringing a wrongful death action pursuant to KRS 411.130, because the experts concluded that the infant was never viable and was not capable of sustaining life apart from his mother. Even so, because the jury determined that the doctor was not negligent, he could not have been liable for the death of the infant.

B. Bobbitt v. Collins
2007-CA-001422 01/22/2010 2010 WL 199308

Opinion by Judge Wine; Judges Stumbo and Thompson concurred. The Court reversed and remanded summary judgment orders dismissing personal injury claims arising from a multi-vehicle collision. The Court held that the trial court did not err in finding that the clear language of a general release discharged all the defendants. Because the claimant did not make a timely acceptance of an offer of judgment and the settling defendants did not extend the settlement offer beyond the ten-day period allowed by CR 68, the settlement offer was subject to ordinary contract law. The Court then held that the trial court correctly found that the general release, signed by the claimant, was enforceable as a contract provision. Because the release was not ambiguous, the trial court was not required to look beyond its terms to interpret it. However, the Court held that the trial court erred in finding that the release precluded the claimant from seeking rescission and that the parol evidence rule precluded an equitable claim for rescission or reformation based on fraud, illegality or mutual mistake. The Court then held that the evidence clearly established a mutual mistake and that the parties to the contract never intended the general release language to be included. Therefore, the trial court erred by denying the request for rescission of the release.

C. Brett v. Media General Operations, Inc.
2008-CA-000620 01/29/2010 2010 WL 323136

Opinion by Senior Judge Harris; Judges Lambert and VanMeter concurred. The court affirmed a summary judgment entered by the circuit court in favor of appellant’s former employer, a television station, and its general manager and an order awarding costs to the employer. The Court first held that summary judgment was not based upon improper evidence when the majority of the proof consisted of witness depositions that were properly certified and notarized. Further, appellant’s deposition was complete, as he did not request a re-direct examination, nor did he file an affidavit to explain, correct, or contradict the testimony he gave under examination by opposing counsel, which was authorized by CR 56.03. The Court also held that although the employer and general manager may have violated office policies by destroying documents, appellant failed to demonstrate that any law or court orders were violated or that they were lost or destroyed in anticipation of litigation. The Court next held that appellant failed to present evidence demonstrating any genuine issue of material fact on his breach of contract claim. His contract contained a morals clause and his termination letter made it clear that he was terminated for cause after four women complained that he had sexually harassed them on numerous occasions. Absent a specific contractual provision, the employer was under no obligation to provide additional investigative measures or an opportunity to be heard. The Court next held that appellant failed to demonstrate the existence of any genuine issue of material fact on the basic element of material misrepresentation to support his claim that he was fraudulently induced into entering the employment contract. The Court next held that appellant failed to show how his allegations of misrepresentations and improper termination constituted contractual interference. The Court next held that appellant failed to specifically describe any alleged defamatory statements or state where they were published to show how the employer was responsible for dissemination of information to support a claim for defamation. The Court next held that appellant failed to produce evidence to show that his termination was outrageous or intolerable in the manner required under Kentucky law to support his claim for intentional infliction of emotional distress. The Court finally held that the ruling by the Kentucky Supreme Court in the employer’s favor, in an original action wherein appellant argued that the trial court lost jurisdiction under CR 52.02 to award costs after appellant filed his Notice of Appeal, was dispositive of the appeal from the order awarding costs.

D. Caudill v. Salyersville National Bank
2008-CA-000017 01/08/2010 2010 WL 45882

Opinion by Judge Thompson; Judges Caperton and Wine concurred. The Court affirmed a judgment of the circuit court granting a directed verdict to the appellee bank on a estate’s claim that the bank aided and assisted the deceased’s nephew, acting under the authority of a power of attorney and as an authorized signatory on the deceased’s personal checking account, to convert funds held by the Bank. The Court held that there was no evidence that the bank acted in bad faith or with knowledge that the nephew breached his fiduciary duty when it conducted financial transactions concerning the account. It acted pursuant to a valid power of attorney and Consumer Account Agreement and was not obligated to look beyond the language of the power of attorney to determine the extent of the power.

E. Flint v. Stilger
2009-CA-000475 01/22/2010 2010 WL 199566

Opinion by Judge Caperton; Judge Dixon and Senior Judge Henry concurred. The Court reversed and remanded a summary judgment entered in favor of appellee on appellant’s claim for defamation. The trial court found that statements made in response to appellant’s appeal for the Attorney General to prosecute a condominium association’s failure to comply with KRS 381.990 were entitled to absolute privilege. The Court first held that appellant’s naming of additional appellees as “Jane and John Does” was not fatal to the appeal. As members of the Board of Directors of the association, they were not necessary parties because the defamation claim was only between appellant and the named appellee, the attorney for the association. The Court next held that review was confined to one for manifest injustice, as appellant failed to properly cite to the record as required by CR 76.12(4)(c)(iv)-(v). The Court ultimately held that the statements made in the response to the appeal for the Attorney General to prosecute was not entitled to absolute privilege because the Attorney General’s office was undertaking an investigation and had not made known whether it would pursue a judicial remedy. Therefore, the statements were only entitled to a qualified privilege, which could be overcome by a showing of malice.

F. Higginbotham v. Keeneland Association
2009-CA-000301 01/29/2010 2010 WL 323287

Opinion by Judge Lambert; Judge Wine and Senior Judge Harris concurred. The Court affirmed a summary judgment entered in favor of appellee on appellants’ claims related to a motor vehicle accident. A passenger was killed and a passenger was injured when the driver improperly reacted to a flat tire, lost control of her vehicle, and a struck a vehicle owned by appellee’s employee who had parked the vehicle on the shoulder to activate temporary signs directing traffic into Keeneland racetrack. The Court held that the trial court properly granted summary judgment in favor of the employer. The Court first declined to review appellants’ argument or supporting documentation that the employee’s parking on the shoulder constituted negligence per se because the argument was not raised before the trial court and the documents, which were not part of the record on appeal, were improperly attached as an appendix to the brief. The Court then held that the employee did not owe appellants a duty to refrain from parking on the shoulder of the road. The particular harm was not foreseeable as no reasonable person could have foreseen the injuries sustained or that the driver would lose control to the extent that she could not bring her vehicle to a complete stop utilizing the portions of the shoulder available. KRS 189.450(3) did not impose a duty of care because the statute was inapplicable to the road where the accident occurred, nor did KRS 189.290(1) because the employee was not operating the vehicle at the time of the accident. The employee did not have a common law duty, as there was no authority for the proposition that the shoulder was reserved exclusively for emergency purposes. Public policy considerations also supported the finding that the employee did not have a duty to refrain from parking on the road, as he acted within the guidelines of the encroachment permit. The Court finally held that the trial court properly found that the employee’s actions were not the proximate cause of the collision, when it was undisputed that the driver lost control of her vehicle when she improperly reacted to a flat tire. Further, the evidence established that the vehicle was out of control, traveling at a high rate of speed, and would have collided with whatever was in its path - either the temporary sign, the steep earth berm or both.

INSURANCE

A. Lynch v. Claims Management Corporation
2007-CA-001840 01/22/2010 2010 WL 199343

Opinion by Judge Wine; Judges Clayton and Dixon concurred. The Court reversed and remanded a summary judgment in appellee’s favor on its intervening subrogation/reimbursement claim from settlement proceeds appellant received from his uninsured motorist carrier. Appellee was the claims administrator for a disability policy purchased by appellant, an independent contractor. The Court held that the trial court erred in granting summary judgment to appellee and denying summary judgment to appellant on the intervening claim. The insurance contract was both ambiguous and subject to a reasonable interpretation that appellee would only seek reimbursement from a third-party tortfeasor, not another insurer. Therefore, appellant was entitled to summary judgment.

APPELLATE DECISIONS: COA Reverses Trial Judge's dismissal for lack of prosecution for failure to make required findings

Senior Status Judge Lambert authored a decision which reversed and remanded the trial judge's dismissal for lack of prosecution for failure to make the required findings.  I can't say whether this published decision will mark a change in appellate attitude regarding these dismissals for lack of movement by one side or the other, but one might think depriving any party of their Constitutional rights to a jury trial for not moving the case forward is a harsh remedy which ignores the facts of the case.  Although it might be a little more work for the trial court in moving its own docket forward, I would like to think the courts would fall on the side of an opportunity to be heard.  Incredibly cumbersome to say the least, but requiring a trial date, following an opportunity to respond or take discovery,  would place the case in a posture for a dismissal, directed verdict, summary judgment etc which addresses the facts of the case rather than failure to prosecute. 

Here's the squib with link to full text:

Wildcat Property Management, LLC v. Reuss
2008-CA-002290 12/11/2009 2009 WL 4723203
Opinion by Senior Judge Lambert; Chief Judge Combs and Judge Moore concurred. The Court reversed and remanded an order of the circuit court dismissing an action with prejudice. The Court first held that because both CR 77.02(2) and the local housekeeping rule only provided for dismissal without prejudice, the dismissal with prejudice was, of necessity, pursuant to CR 41.02. However, the circuit court failed to properly exercise its discretion by failing to make the required findings as to why the case was dismissed.

TORTS (wrongful termination): Brett v. Media General Operations, Inc. (COA 1/29/2010)

Brett v. Media General Operations, Inc.
2008-CA-000620 01/29/2010 2010 WL 323136

Opinion by Senior Judge Harris; Judges Lambert and VanMeter concurred. The court affirmed a summary judgment entered by the circuit court in favor of appellant’s former employer, a television station, and its general manager and an order awarding costs to the employer. The Court first held that summary judgment was not based upon improper evidence when the majority of the proof consisted of witness depositions that were properly certified and notarized. Further, appellant’s deposition was complete, as he did not request a re-direct examination, nor did he file an affidavit to explain, correct, or contradict the testimony he gave under examination by opposing counsel, which was authorized by CR 56.03. The Court also held that although the employer and general manager may have violated office policies by destroying documents, appellant failed to demonstrate that any law or court orders were violated or that they were lost or destroyed in anticipation of litigation. The Court next held that appellant failed to present evidence demonstrating any genuine issue of material fact on his breach of contract claim. His contract contained a morals clause and his termination letter made it clear that he was terminated for cause after four women complained that he had sexually harassed them on numerous occasions. Absent a specific contractual provision, the employer was under no obligation to provide additional investigative measures or an opportunity to be heard. The Court next held that appellant failed to demonstrate the existence of any genuine issue of material fact on the basic element of material misrepresentation to support his claim that he was fraudulently induced into entering the employment contract. The Court next held that appellant failed to show how his allegations of misrepresentations and improper termination constituted contractual interference. The Court next held that appellant failed to specifically describe any alleged defamatory statements or state where they were published to show how the employer was responsible for dissemination of information to support a claim for defamation. The Court next held that appellant failed to produce evidence to show that his termination was outrageous or intolerable in the manner required under Kentucky law to support his claim for intentional infliction of emotional distress. The Court finally held that the ruling by the Kentucky Supreme Court in the employer’s favor, in an original action wherein appellant argued that the trial court lost jurisdiction under CR 52.02 to award costs after appellant filed his Notice of Appeal, was dispositive of the appeal from the order awarding costs.

APPELLATE DECISIONS: Subrogation/reimbursement language in policy did not include UM/UIM proceeds

The Court of Appeals in a case of first impression interpreted an insurance policy's subrogation language to rule that the clause was ambiguous and did not include a claim against the uninsured motorist policy.  The language in the policy - "claim against any person, firm, or corporation for the injuries and damages sustained as a result of the occurrence on or about the above referenced date," and the language in the subsequently signed reimbursement agreement (which was objected to as changing the terms of the policy and  without additional consideration) - "the amount paid by the third party which represents reimbursement to the Insured for such expenses" were interpreted to include a third party tortfeasor and not another insurer.

This case may be limited to the policy language concerned but reminds us that the insurance policy will be interpreted against the drafter.  Furthermore, dicta in the decision reveals an attitude in the appellate courts to finally recognize the very existence of a subrogation entitlement against UM/UIM proceeds is not to be cavalierly applied and may not exist regardless of policy language, to wit:  "Not only does this appear to be a case of first impression in Kentucky, but we recognize there is no clear consensus in other jurisdictions as to whether a health care contractor has a subrogation right (under contractual or equitable terms) against a UIM/UM carrier or UIM/UM proceeds."   This issue did not need to be addressed as the language of the policy fell short.

Although it was clear that this COA did not express anything further than the ruling hinged on the particular policy language,  I would submit that the door has been left ajar. 

I further submit that the practice of insurance carriers writing contracts of adhesion which expand the former concepts of subrogation (sitting in the shoes of the claimant for a recovery of their payments) to a claim of "reimbursement" from any and all sources of recovery (and without consideration of attorneys fees in obtaining the recovery or a reductions for comparative negligence or made whole plus subordinating the insured's claims) is one-sided, arbitrary, and unevenly applied (since there is no reduction in the premiums paid for those who lose part of their claim to the subrogor/reimbursed insurer). 

Worse yet, the subrogor/reimbursed insurer does not require all insureds to obtain UIM/UM coverages as a condition to obtaining health insurance, does not contribute to the payment of the premiums, is not a party to the UIM/UM agreements, and allows the putative savings inuring to the recovery to inure to the benefit of all without any concomitant benefits in future premiums etc to the insured who watches his or her recovery go down the proverbial deep pocket of the insurer!  Insurance law is typically a state regulated enterprise, and insurers like AIG and others who get federal assistance to help them through their mismanagement of investments to exploit their insureds is unforgivable and needs to be regulated by the state.  If the legislatures won't step up to the plate, then the Courts will need to address these issues.  And the Courts will not be afforded the opportunity with attorneys protecting the injured claimants and challenging the practice, policies and procedures in Court.

Equitable concepts of sharing in the costs of the recovery, reducing the lien for comparative negligence, considering the make whole doctrine, AND sharing proportionately in the recovery based upon the insured's and insurer's damages harken  back to the common law and needs to given effect.  These concepts developed out of equity and fairness.  Abrogating them in one-sided agreements for the reasons stated above should not be allowed to ignore scrutiny in the courts.

Now you are probably wondering what is the source of this rant.  Well, I (Michael Stevens) together with Kevin Burke were counsel for the the claimant.   It is no wonder under these circumstances that claimants would feel that the subrogor's swooping down to steal his recovery converting his policy of insurance for health benefits to nothing more than a loan and robbing him of the benefits of his UM policy.

Finally, the result was the right result.  Hopefully, this soliloquy will encourage others to challenge the subrogation/reimbursement language in policies which reduce and deny altogether one's recovery rights under a policy of insurance (UM and UIM).

The bottom line is that UIM and UM policies are designed to compensate an INSURED for losses that are not recovered against the tortfeasor who either had no liability insurance or insufficient liability insurance without allowing the insured a double recovery for the same items of damages.  UM/UIM policies are purchased to protect the individual claimant for a loss.  UM/UIM policies are not purchased to protect a health insurer.  Nor are they designed or intended to insure another insurer for losses and transfer the money to another insurance company with the net effect of DENYING the insured of any recovery whatsoever.  

Meanwhile, here's the squib with links to the full text of the decision.  Please do not misunderstand this post.  The decision as to the insurance policy is correct, but this decision (like Coleman vs. Bee Line and the Jewell decision) leaves some important issues hanging as the edges of this problem are addressed only.

Lynch v. Claims Management Corporation
2007-CA-001840 01/22/2010 2010 WL 199343

Opinion by Judge Wine; Judges Clayton and Dixon concurred. The Court reversed and remanded a summary judgment in appellee’s favor on its intervening subrogation/reimbursement claim from settlement proceeds appellant received from his uninsured motorist carrier. Appellee was the claims administrator for a disability policy purchased by appellant, an independent contractor. The Court held that the trial court erred in granting summary judgment to appellee and denying summary judgment to appellant on the intervening claim. The insurance contract was both ambiguous and subject to a reasonable interpretation that appellee would only seek reimbursement from a third-party tortfeasor, not another insurer. Therefore, appellant was entitled to summary judgment.

The following language is also noteworthy on the extent of any contractual or equitable subrogation rights or entitlements against a underinsured or uninsured motorist benefits policy.

In Suchy v. Illinois Farmers Ins. Co., 574 N.W.2d 93 (Minn. App. 1998), the Minnesota Court held a health insurer did not have an equitable subrogation right against UIM award. The Ohio Court of Appeals held in Csik v. Blue Cross & Blue Shield of Ohio, 109 Ohio App.3d 9, 671 N.E.2d 1028 (1996), that the health insurer did not possess a contractual subrogation right against the UM carrier as "responsible third party" is an ambiguous term. Likewise, in Employers Health Ins. v. General Cas. Co. of Wisconsin, 161 Wis.2d 937, 469 N.W.2d 172 (1991), the Wisconsin Supreme Court concluded that the health insurer did not possess a contractual subrogation right against the UM carrier where the health insurer was subrogated to the insured’s “right to recover damages from a responsible third party”, and further concluding that the health insurer had no equitable subrogation right against the UM carrier. Dailey v. Secura Ins. Co., 164 Wis.2d 624, 476 N.W.2d 299 (Wis. App. 1991) (health insurer did possess a contractual subrogation right against the UM carrier, as "any party who may be liable" is not limited to wrongdoers and includes other insurers).