Kentucky Law

Civil Decisions (TIPs): Court of Appeals - Feb. 17, 2006

PUBLISHED:

LEON MANUFACTURING CO. V. WILSON KUBOTA, LLC
CONTRACTS - Franchising Agreements
2004-CA-002256
PUBLISHED 
REVERSING AND REMANDING (TAYLOR)
DATE: 2/17/2006

The CA overturned the Trial Court Judgment and found that under the law at the time of the contract there was no Franchise Agreement and thus the Defendant didn't have to repurchase snow blades. 

CITIZENS BANK OF NORTHERN KENTUCKY, INC.  V. PBNK, INC.
PROPERTY - LIENS (EQUITABLE; PRIORITY)
2004-CA-001351
PUBLISHED   
AFFIRMING (MILLER)
DATE: 2/17/2006

It a general rule that where a mortgagor has previously disposed of property, his subsequent execution of a mortgage, the description of which included the land disposed of, does not create a lien upon it. Miller v. Williams, 137 S.W. 779 (1911).

GILLIAM V. PIKEVILLE UNITED METHODIST HOSPITAL OF KENTUCKY, INC.
TORTS - Defamation (elements of  compensable damage, failure to prove and summary judgment)
2004-CA-001573
PUBLISHED 
AFFIRMING (VANMETER)
DATE: 2/17/2006

Affirmed summary judgment to Pikeville United Methodist Hospital of Kentucky, Inc. (Hospital) and Danny Briscoe dismissing dismissed Gilliam’s complaint, which alleged that appellees made defamatory statements about him and breached a contractual duty of confidentiality by causing his personnel and employment records to be made public and cast in a false light because Gilliam could not establish damages in connection with the defamatory statements.

As Gilliam failed to identify compensable damages in his deposition testimony, he failed to meet this element of his defamation case. Furthermore, Gilliam’s failure to set forth his damages during his deposition constitutes a judicial admission which forecloses further dispute on the issue.

SEE:  Kentucky Employment Law Blog Note addressing this decision - Ky. COA Affirms Dismissal Of Defamation Claim That Arose In The Context Of A Labor Dispute.

NOT PUBLISHED:

CHIARAMONTE V. SEXTON
APPEALS - Final and Appealable
2004-CA-002582
NOT PUBLISHED 
DISMISSING (JOHNSON)
DATE: 2/17/2006

The CAs have jurisdiction only over final orders or judgments of circuit courts.  Here, several parties were arguing as to whom should be considered a de facto custodian of an orphaned child.  The trial court made a judgment on that issue and included within it the "magic" final and appealable language.  CAs held that this language alone does not constitute finality, that the CA must determine for itself whether an order or judgment is truly ripe for review, and that the issue of custodianship was merely an intermediate issue ancillary to the parties' various custody claims. Appeal dismissed.

SMITH V. CREWS
CIVIL PROCEDURE - Constitutional Challenges and notice to Attorney General
2004-CA-001178
NOT PUBLISHED  / AFFIRMING (BUCKINGHAM)
DATE: 2/17/2006

KRS 418.075 mandates that in any proceeding involving the validity of a statute or the constitutional validity of a statute, the Attorney General shall be served with a copy of the petition and given an opportunity to be heard.  Since the inmate who filed this petition for a declaration of rights failed to notice the AG, the CAs declined to rule on the constitutionality of the statutes he argued were not so.     

WILLIAMS V. FARMERS INSURANCE EXCHANGE
INSURANCE - Exclusion (water damaged to house from ruptured liner)
2004-CA-002554
NOT PUBLISHED   
AFFIRMING (TACKETT)
DATE: 2/17/2006

COA affirmed declaratory judgment action to determine whether homeowner’s insurance policy covered water damage to his house resulting from the rupture of a swimming pool liner.  Homeowner contended the rupture should be regarded as a covered event, and thus the exclusion for water damage in the policy should not apply.  COA disagreed.

MOTORISTS MUTUAL INS. CO. V. HOWARD
INSURANCE - Years of protracted litigation and estoppel to deny coverage risked punitives
TORTS - Insurance Bad Faith (punitive damages)
2004-CA-001174
NOT PUBLISHED  / AFFIRMING (BARBER; W/JOHNSON FILING SEP. DISSENT)
DATE: 2/17/2006

CA affirms jury verdict in favor of insured in bad faith action. (Shelby Cir. Ct., Hon. William F. Stewart, judge, presiding).

The facts of the case date back to 1991. Insured's auto policy had lapsed for nonpayment. She sent a check on advice of her local agent, which was received and cashed. Insured assumed her policy was in effect. Some weeks later, insurer sent a refund check to the agent with a notice of no coverage; the insurer sent nothing to the insured. The agent forwarded the check and letter to the insured, but it was not received before an accident occurred. Insurer denied coverage and refused to cooperate with defense counsel for 6 years as the case wound its way through Kentucky courts. The S.Ct. ultimately held in 1997 that the insurer was estopped by its actions from denying coverage and that the insured was covered as a matter of law and that this decision bound all parties. The bad faith claim was remanded; a jury verdict of $425K was returned.

On appeal, insurer tried to argue the issue already decided by the S.Ct., i.e., that coverage existed. CA held that punitives and compensatories were properly claimed and awarded.

CAUDILL, DMD   V. KENTUCKY BOARD OF DENTISTRY
PROFESSIONS -  Dentists; Licensure (Alford plea constitutes criminal conviction)
2004-CA-001595
NOT PUBLISHED  / AFFIRMING (VANMETER)
DATE: 2/17/2006

B450 PROPERTIES, LLC  V. EAP CONCEPTS, INC.
PROPERTY - Rental Agreement
2004-CA-002229
NOT PUBLISHED
AFFIRMING (MINTON)
DATE: 2/17/2006

Stranger to lease not obligated to agreement he is not a  party.

POIRIER, M.D. V. OUR LADY OF BELLEFONTE HOSPITAL, INC.
TORTS - Defenses (Immunity of members on hospital review board ); Findings of administrative review board
2004-CA-002335
NOT PUBLISHED   
AFFIRMING (BARBER)
DATE: 2/17/2006

Affirmed trial court's dismissal of doctor's complaint against hospital peer review board.  The law provides that members of a hospital review board are immune from claims for monetary damages by the Health Care Quality Improvement Act of 1986, 42 U.S.C Section 11111 if the action taken by the board is reasonable, and a fair hearing  is provided to the affected physician. Meyers v. Columbia/HCA Health Care Corp., 341 F.3d 461 (6th Cir. 2003).

The findings of an administrative body cannot be set aside unless the evidence presented by the plaintiff is so persuasive that the determination must be made in favor of the plaintiff. Kentucky Unemployment Insurance Commission v. Murphy, 539 S.W.2d 293, 294 (Ky. 1976).

VANNOVER V. VANNOVER
WILLS, TRUSTS, AND PROBATE - Fraudulent transfers and survivor's marital rights
2004-CA-001475
NOT PUBLISHED  / REVERSING AND REMANDING (EMBERTON)
DATE: 2/17/2006

Reversed and remanded lower court decision that certain transfers of funds by her husband shortly before his death did not constitute fraud on her dower interest in that property. The undisputed facts of this case fall within the purview of well-established caselaw holding that such transfers raise a rebuttable presumption of a fraud on the survivor’s marital rights.  It is clear that the trial court failed to give effect to the long-standing law of this Commonwealth that the non-probate transfer of the bulk or a substantial portion of the spouse’s property, which has the effect of diminishing the surviving spouse’s share, raises a rebuttable presumption of fraud on the survivor’s marital rights.

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions. 

Civil Decisions: Feb. 10, 2006 Court of Appeals

CIVIL DECISIONS AND TIPS (Torts, Insurance Procedural Stuff)

COURT OF APPEALS - Feb. 10, 2006

PUBLISHED:

UNITED STRUCTURAL SYSTEMS, LTC V. ERI FALLS, INC.
CIVIL - Indemnity
2004-CA-002103
PUBLISHED   
VACATING AND REMANDING (COMBS)
Date: 2/10/2006 MODIFIED BUT ORIGINALLY RENDERED ON 11/23/2005

This decision was originally rendered on 11/9/2006.  A finding of liability to the injured party is required before indemnity can arise at common law.

TOLER V. RAPID AMERICAN
CIVIL PROCEDURE - Dismissal for lack of prosecution
2004-CA-002281
VACATING AND REMANDING [HENRY, J.]
Published 
Date: 2/10/2006

COA vacated and remanded dismissal for lack of prosecution.  The two year delay was based on the Jefferson County Asbestos Master Order, and the record was unclear whether the Ward v. Housman, 809 S.W. 2d 717 (Ky. App., 1991) factors were properly considered.  See also, Scarborough v. Eubanks, 747 F.2d 871 (3d. Cir, 1984).

The following factors should be considered: (1) the extent of the party’s personal responsibility; (2) the history of dilatoriness; (3)  whether the attorney’s conduct was willful and in bad faith; (4) the meritoriousness of the claim; (5) prejudice to the other party; and (6) the availability of alternative sanctions.

'The responsibility to make such findings as are set forth in Ward before dismissing a case with prejudice falls solely upon the trial court. Accordingly, even though we understand and sympathize with the court’s desire to move the cases on its docket along in a timely and expeditious manner, we find ourselves compelled to vacate its orders as to dismissal here and to remand this action for further consideration in light of Ward. In doing so, we express no view as to whether dismissal with prejudice will ultimately be merited.'

BROCKMAN (LAVIT)  V. COM. OF KY (JUDGE GEORGE)
CIVIL PROCEDURE - Contempt
2004-CA-000982
Rendered 12/9/2006;
PUBLISHED 2/10/2006
VACATING AND REMANDING (JOHNSON, J.)

Theodore H. Lavit, Real Party In Interest, appealed order entered by Judge Doughlas M. George of the Taylor Circuit Court which held Lavit in contempt of court and fined him $825.001 for his failure to appear in court on November 10, 2003, for the trial of Commonwealth of Kentucky v. Catina Brockman.  Held the trial court erred by finding Lavit in indirect criminal contempt of court without allowing him to have a jury trial.

STEWART V. COM.
EVIDENCE - Opinion Evidence (reputation, bad acts, change of KRE 608)
2004-CA-002573
Published 
REVERSING AND REMANDING (POTTER, J.)
Date: 2/10/2006

Criminal conviction was reversed when trial judge sustained Commonwealth's objection striking opinion evidence as KRE 608 had been changed in 2003 to mirror the Federal Rules of Evidence and the evidence was admissible.  "Because Beve’s (Stewart)  trial occurred in 2004, after the effective date of the amendment to KRE 608(a), the issue of the admissibility of the testimony regarding Brenda’s truthfulness must be determined under the new rule that a witness, if qualified, can express an opinion as to another witness’s character for telling the truth. Although Kentucky has yet to address the scope of KRE 608(a), the advisory notes to the federal rule and cases applying that rule make clear that opinion testimony such as that offered in this case is admissible."

In addition to presenting two alibi witnesses, Beve called Brenda’s mother as a witness to give evidence concerning Brenda’s character for truthfulness. When asked, she responded, “I don’t know if she’ll tell you the truth or not. She might and she might not.” The trial court sustained the Commonwealth’s objection to the response and admonished the jury to disregard the question and the answer. We agree with Beve that the trial court erred when it sustained the Commonwealth’s objection. (emphasis added).

EMBRY V. TURNER
PROPERTY - Real Property (boundary line dispute, nov, new trial)
2004-CA-002040
Published 
AFFIRMING (HENRY, J.)
Date: 2/10/2006

This appeal arose from a boundary line dispute (aka the 'fence') in which the Turners prevailed with the Embrys filing a motion for new trial and judgment NOV.  The judge granted the new trial motion (one year later!), and then set aside the new trial order after the Turners so filed their own motion. (Confuses yet?)   In setting aside the order for a new trial and reinstating the trial verdict, the judge admitted in his order that he was only trying to get the litigants to settle the matter.  COA took the trial judge (Ronnie C. Dortch) to task for this misapplication of the rules.

Here is the trial judge's acknowledgement of same in his order setting aside the new trial order.  Emphasis is from the opinion of the COA.

This matter was tried before a Jury in Butler Circuit Court and the Jury returned a verdict in favor of Defendant on January 28, 2002. Prior to this matter being tried, this Court had required the Plaintiff and Defendant to attempt to settle this matter on more than one occasion. This Court had always felt that, for various reasons, this is a matter that should have been settled without the necessity of trial; however, the parties were unable settle [sic] the matter with the resultant jury trial. Thereafter, on February 11, 2003, this Court entered its Order sustaining the Plaintiff’s motion for a new trial but overruling the Plaintiff’s motion for a judgment notwithstanding the verdict. Candidly, this Court issued its Order for a new trial simply to allow the parties an additional chance to settle the case without the necessity of an appeal, with the parties incurring additional attorneys’ fees, etc. even at that point in the litigation. This Court felt that the  parties could and should be able to settle this matter but this Court was wrong. Therefore, this Court finds that it was in error when it sustained the Plaintiff’s motion for a new trial and it is therefore this Court’s prerogative to correct its earlier error. (Emphasis added by COA in their opinion).

The first issue addressed was 'minor' in that "the grant of a new trial under CR1 59.01 terminates the running of time for appeal. CR 73.02(1)(e).  In this case there was no new trial and therefore no new final judgment from which to appeal.  Nevertheless, the COA was satisfied that the court continued to have jurisdiction to enter an order setting aside its prior order granting a new trial, as was done here.  Thus, the appeal in this case was timely filed.

The next issue was 'major' after addressing the 'procedural anomalies' was the denial of the new trial motion.  In undertaking the analysis of the trial judge’s eventual decision not to allow a new trial here, the COA "must be mindful that the decision is presumptively correct, and that we cannot reverse unless it was clearly erroneous. McVey v. Berman, 836 S.W.2d 445, 448 (Ky.App. 1992) . . .; see also Prater v. Arnett, 648 S.W.2d 82, 86 (Ky.App. 1983). . . ."

In affirming the the denial of the new trial motion, the COA rejected these issues raised by the losing party - evidence not substantial and the credibility of an expert was question (rejected since function of jury is to determine questions of credibility and issues of fact where the evidence is conflicting, Woods v. Asher, 324 S.W.2d 809 (Ky., 1959));  verdict was contrary to the law (reject the loser's arguments on 'agreed boundary line' which would have allowed for parol agreements to establish the property line and which was premised on estoppel). 

The three cases addressed on the agreed boundary line issue are:  Faulkner v. Lloyd, 253 S.W.2d 972 (Ky. 1952); Redman v. Redman, 240 S.W.2d 553 (Ky. 1951); and Wolf v. Harper, 313 Ky. 688, 233 S.W.2d 409 (1950).

In addressing the impropriety of the trial judges actions, the COA stated the trial judges "interference was inappropriate at best and injudicious at worst."

Finally, we must address the major peculiarity present  in this case – the trial judge’s grant of a new trial upon grounds that he ultimately admitted that he fabricated in an effort to coerce a  settlement. It is one thing for a judge to mediate settlement of a case prior to trial, which may be done if ethical requirements are scrupulously observed. See SCR3 4.300 Canon 3 B(7)(d); Home Depot U.S.A., Inc. v. Saul Subsidiary I Ltd. Partnership, 159 S.W.3d 339, 341 (Ky.App. 2004). It is quite another to set aside an otherwise valid jury verdict for reasons of personal belief or bias. The overturning of a jury verdict in favor of a new trial is a matter of the utmost seriousness, and should only occur when the specific criteria set forth in CR 59.01 are carefully considered and met.   To flout those criteria due to one’s personal belief about a case is incompatible with our system of justice. Such conduct tends to erode public confidence in the fairness and  impartiality of our court system. Nearly four years have passed since a Butler County jury unanimously decided this case in favor of the appellees. At least two years of delay in bringing this case to its ultimate conclusion was caused by the trial judge’s improper – even if well-intentioned - intervention. His interference was inappropriate at best and injudicious at worst.

NOT PUBLISHED:

ANGEL V. COM.
CRIMINAL - RCr 11.42 Denied
2005-CA-000819
NOT PUBLISHED 
AFFIRMING (JOHNSON)
Date: 2/10/2006

SHIFERAW V. MILLS
APPEALS - Error not timely raised or addressed in lower court re proper service of motion
2004-CA-002171
NOT PUBLISHED   
Date: 2/10/2006

HARLAN COUNTY BOARD OF ED. V. INTERNATIONAL UNION
CIVIL - ADR;  Enforcement of arbitor's decision
2004-CA-002175
NOT PUBLISHED   
AFFIRMING (JOHNSON)
Date: 2/10/2006

Affirmed lower court and arbitor's award as UMWA was entitled to judgment as a matter of law.  Courts in general “have no business weighing the merits of the grievance, considering whether there is equity in a particular claim.”

WELCH V. EDDS, M.D.
CIVIL - STATUTE OF LIMITATIONS - Discovery Rule in Medical Negligence
2004-CA-002255
NOT PUBLISHED 
VACATING AND REMANDING (KNOPF)
Date: 2/10/2006

Plaintiff/patient was entitled to rely on what her physicians told her, and CJOA did not believe she should have discovered the false statements any sooner. Her claim based on the lack of informed consent is thus not barred by the statute of limitations.

However, the COA was not willing to go beyond that issue.  The parties did not treat this as an informed-consent case, and  did not present the trial court with the appropriate sources for determining whether the plaintiff/patient had raised material issues of fact on all the elements of her cause of action.  They have raised the informed-consent issue on appeal, but as a Court of review it is  generally unwilling to address matters the trial court has not had an opportunity to rule upon.  These are important and complex issues deserving of a fully developed record and the summary judgment is thus vacated and the matter remanded in light of the law of informed consent.

STEELE VL. MCDONALD
CIVIL PROCEDURE - Writ of Prohibition (denied)
2005-CA-002038
NOT PUBLISHED   
OPINION AND ORDER DENYING PETITION FOR WRIT OF PROHIBITION (KNOPF)
Date: 2/10/2006

CA denies petition for writ of prohibition preventing DNA testing of petitioner's children, finding that TC was justified in ordering this type of physical examination.  [John Hamlet]

FERRELL V. RUDD
CIVIL PROCEDURE - Costs to Prevailing Party
2005-CA-000530
NOT PUBLISHED   
AFFIRMING IN PART, VACATING IN PART, AND REMANDING (DYCHE)
Date: 2/10/2006

As a general rule, attorney fees and the costs of retaining an expert witness are not recoverable absent contractual or statutory authority, even in cases where a party is successful in litigation that was necessitated by the negligence of a fiduciary. 

CR 54.04 deals with the recovery of costs.  A prevailing party is to serve the party liable for costs with an itemized accounting of the expenses incurred in the action, and the liable party is also required to be given an opportunity to review and object to the bill of costs.  Because the trial court did not follow this procedure in awarding costs, the CAs vacated and remanded that portion of the judgment relating to costs.

LOVELACE V. HOLIDAY INN HURSTBOURNE
CIVIL PROCEDURE - Judgment NOV
2004-CA-001412
NOT PUBLISHED   
REVERSING AND REMANDING; MINTON
Date: 2/10/2006

The trial court granted j.n.o.v. to Holiday Inn Hurstbourne, setting aside a substantial jury verdict awarded to Richard Lovelace on his personal injury claim against the hotel  for a slip and fall jury verdict awarding plaintiff  $887,379.86 (subject to 15 per cent comparative).  Jefferson Circuit Court trial judge Thomas Wine was reversed after he granted judgment NOV (notwithstanding the verdict). 

COA  reversed the j.n.o.v. and remanded the case back to the circuit court with direction to reinstate the original judgment because the COA held that Lovelace presented proof at trial sufficient to create a rebuttable presumption of Holiday Inn’s liability, which precluded entry of the j.n.o.v.

A trial court may not enter judgment notwithstanding the verdict (j.n.o.v.) unless there is a complete absence of proof on a material issue or there is no dispute on issues of fact upon which reasonable jurors could differ. I

NOTE:  Judge Thomas Wine who was reversed in this decision is a candidate for Court of Appeals.

BARRISTER FARM LLC V. UPSON DOWN FARMS, INC.
CIVIL PROCEDURE - Summary Judgment (No genuine issue of material fact in hay storage case)
2004-CA-002651
NOT PUBLISHED   
AFFIRMING (SCHRODER)
Date: 2/10/2006

MERRICK V. COM.
EVIDENCE - Opinions ('collective facts rule' and lay testimony)
2002-CA-002034
NOT PUBLISHED   AFFIRMING (GUIDUGLI)
Date: 2/10/2006

This was a criminal case involving testimony by avowable that the victim was 'out of control'.  COA did not buy it, and affirmed conviction and exclusion of the opinion.   A nonexpert witness may express an opinion which is rationally based on the perception of the witness and helpful to a determination of a fact in issue. KRE 701.  A corollary to this rule is the concept known as the “collective facts rule,” which permits a lay witness to resort to a conclusion or an opinion to describe an observed phenomenon where there exists no other feasible alternative by which to  communicate that observation to the trier of fact. See R. Lawson, The Kentucky Evidence  Law Handbook § 6.05, at 275-76 (3d ed. Michie 1993).

CRAWFORD V. MARTIN
PROPERTY - Leases
2003-CA-002494
NOT PUBLISHED   
AFFIRMING IN PART, REVERSING AND REMANDING IN PART [TAYLOR]
Date: 2/10/2006

Complicated case involving default of payment on sublease.  Appeal on issue of whether a lease was mutually terminated or not.  Remanded on that issue alone. 

BRINKLEY V. WILSON
PROPERTY - Real Property (quasi-easement)
2005-CA-000892
NOT PUBLISHED   
AFFIRMING (GUIDUGLI)
Date: 2/10/2006

CA denies appeal denying Brinkley either a prescriptive or quasi easement over parcel.

MIFFLIN V. MIFFLIN
WILLS, ESTATES, PROBATE -
2002-CA-000225
NOT PUBLISHED   (GUIDUGLI)
REVERSING AND REMANDING
Date: 2/10/2006

This case was before the Court of Appeals following a remand by the Kentucky Supreme Court. The Supreme Court addressed a procedural issue and instructed the Court of Appeals to consider the appeal despite the records’ inclusion of only 28 seconds of the videotaped trial and 3 pages of testimony. It was up to the appellee to designate additional portions of the record. After summarizing the resolution of that procedural issue, the Court held that the Circuit Court had erred in calculating the damages. While sympathizing with the Circuit Court’s difficulty, the Court of Appeals remanded with a suggested strategy for the calculation. The Court of Appeals noted that the difficulty rose in part from incomplete record-keeping during the time that the family agreed on matters. The case thus serves as a reminder of the important role of a skilled, competent fiduciary even when it appears that the estate will be a harmonious one.

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Paul C. O'Bryan, Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions.

Civil (TIPs) Decisions: Feb. 3, 2006 Court of Appeasl

CIVIL DECISIONS AND TIPS (Torts, Insurance Procedural Stuff)

COURT OF APPEALS - Feb. 3, 2006

PUBLISHED:

SANDOZ PHARMACEUTICALS CORP. V. GUNDERSON
DAMAGES - Punitives not applicable to extra-territorial conduct
TORTS - Products Liability and FDA approval does not relieve duty to warn
2004-CA-001536
PUBLISHED 
Date: 2/3/2006

This was an Oct. 21, 2005 decision published but modified on Feb. 13, 2006.

NOT PUBLISHED:

GATEWOOD V. DUVALL
DAMAGES - Pain and Suffering (zero verdict for pain and suffering)
2004-CA-002508
NOT TO BE PUBLISHED 
Date: 2/3/2006

Affirmed trial court's denial of motion for new trial in reliance upon the Kentucky Supreme Court decision which held that it was not necessarily erroneous for a jury to award medical expenses without making an award for pain and suffering. Miller v. Swift, 42 S.W.3d at
602. 

Evidence was presented from which the jury could have concluded that Gatewood’s pain resulted from conditions or injuries unrelated to his accident with Duvall.  The fact that the jury awarded Gatewood some of his medical bills does not necessarily reflect that the jury believed that his claims of pain and suffering damages were warranted. As noted by Duvall, the award could simply reflect a belief that Gatewood deserved to have his medical condition fully evaluated following the accident.  Plaintiff Gatewood had a prior accident which the jury could have attributed as the cause of his pain and suffering.

COMMENT:  Miller v. Swift simply held that a zero verdict on pain and suffering (and mental anguish and inconvenience) is not clearly erroneous just be cause the jury awarded medical expenses.  The question is one of causation, and here the defendant pointed the finger to a prior accident.  It is submitted that the review on appeal may be under an abuse of discretion standard in ruling on the motion for new trial for inadequate damages, but the heart of the inquirey is one of causation and in the absence of evidence of a break in the causative link (eg., prior accident, subsequent accident, or the injury is not associated with additional or any pain and suffering) then it will not be disturbed on appeal.  Of course, as said many times in these commentaries, it is counterintuitive to affirm a trial court's denial of the new trial motion in reliance upon the trial judge's better position to weigh the evidence and witnesses but not require the trial judge to enter into the record those actual findings.  Just compare that unarticulated reliance in this situation to the typical family court reversal on appeal when the family court judge fails to adequately articulate the findings on factors mandated by the statute for making a child custody award (eg., in this issue Counts v. Counts, 2004-CA-002612).  Oddly enough the rule that the appellant cannot argue one can of worms at the trial court and another at the appellate court is not necessary when there is no can serving as the repository for those worms.

WHOBREY V. KENTUCKY RETIREMENT SYSTEMS
EMPLOYMENT - Denial of benefits was not clearly erroneous; causation of injury questioned
2004-CA-001876
NOT TO BE PUBLISHED 
Date: 2/3/2006

THOMAS V. COM.
EVIDENCE - Witnesses (weight and credibility determined by jury)
2004-CA-002354
NOT TO BE PUBLISHED 
Date: 2/3/2006

Jury, not an appellate court, has the sole responsibility to weigh the evidence and judge the credibility of all witnesses that testify before it. Dunn v. Commonwealth, 151 S.W.2d 763, 764-765 (Ky. 1941).  Affirmed criminal conviction.

SOUTH LOUISVILLE COMMUNITY MINISTRIES, INC. V. ANTHEM HEALTH PLANS OF KY, INC.
INSURANCE - Contract (ads, quotes, solicitations are invitations and not offers to be accepted)
2005-CA-000148
NOT TO BE PUBLISHED 
Date: 2/3/2006

CA affirms dismissal of South Louisville Community Ministries' contract claim against Anthem Health Plans. SLCM claimed that Anthem breached a contract when it refused to provide a PPO at an erroneously quoted rate. HELD: Rate quote is not an offer to contract that SLCM accepted by submitting an insurance application; the application is the offer that Anthem was free to reject.  [John Hamlet] 

 

WESTERFIELD V. ILER
PROPERTY - Real Property (passway determination)
2004-CA-000924 (AFFIRMING; DYCHE, J.)
NOT TO BE PUBLISHED
Date: 2/3/2006

At dispute in the real property action was the location of a passway over properties.  The determination of the location and dimensions of a passway are within the discretion of the trial court. Daniel v. Clarkson, 338 S.W.2d 691, 693 (Ky. 1960).

ENVIRONMENTAL CAPITAL INTERNATIONAL, LLC V. PBK BANK, INC.
PROPERTY - Liens (security interests and priority)
2004-CA-001616
NOT TO BE PUBLISHED 
Date: 2/3/2006

There is a dispute as to what type of relationship ECI had with PBK during their respective involvements with Maverick.  ECI claims that it had an agreement with PBK that it was the priority lien holder for accounts receivable ECI purchased from Maverick. However, PBK maintains it always insisted that it was
the priority lien holder for all Maverick’s accounts receivable due to its November 24, 1998 financing statement.

Security agreements are effective according to its terms between the parties, against purchasers of the collateral and against creditors. KRS 355.9-201 (1998). [A] security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless: (a) . . . the debtor has signed a security agreement which contains a description of the collateral . . . (b) value has been given; and (c) the debtor
has rights in the collateral. KRS 355.9-203(1)(a)-(c) (1998).

Attachment occurs as soon as all of the events specified in subsection (1) of this section have taken place unless explicit agreement postpones the time of attaching. KRS 355.9-203(2) (1998).

A financing statement must be filed to perfect all security interests. KRS 355.9-302(1) (1998).   A financing statement is sufficient if it gives the names of the debtor and the secured party; is signed by the debtor; gives an address of the secured party from which information concerning the security interest may be obtained; gives a mailing address and identification number of the debtor; and contains a statement indicating the types, or describing the items, of collateral.  KRS 355.9-402(1) (1998). A financing statement may be filed before a security agreement is made or a security interest otherwise attaches. Id. As such, actual notice of possible future advances to any would-be subsequent creditor is provided by the future advance clause appearing in the security agreement rather than the financing statement. First National Bank of Grayson v. Citizens Deposit Bank and Trust, 735 S.W.2d 328, 331 (Ky.App. 1987).

A filed financing statement is effective for a period of five (5) years from the date of filing.

PBK’s security interest in Maverick’s accounts receivable was perfected when the UCC financing statement was filed on November 24, 1998 in accordance with KRS 355.9-302(1)(1998).  Perfection of a security interest gives constructive notice to the world of the claim or interest of the one asserting it.   PBK’s lien on Maverick’s accounts receivable took priority over ECI’s lien because PBK perfected its security interest more than eight months prior to ECI’s perfection of their security interest.

Therefore, PBK was entitled to all Maverick’s accounts receivable, including those factored by ECI.

KINDRED HOMES, INC. V. COLVIN
PROPERTY - Mechanics and Materialmans Lien (insufficient notice)
2005-CA-000297
NOT TO BE PUBLISHED 
Date: 2/3/2006

Colvin and Blackburn agree that no pre-filing notice of the lien was required, but assert that the law requires that the property owner must have notice after the lien is filed for notice to be considered statutorily effective. Middletown Engineering Co. v. Main Street Realty, Inc., 839 S.W.2d 274, 275 (Ky. 1992). 

Because the lien sent to them was not stamped as filed by the clerk and was not sent within seven days after the lien was filed,  it did not satisfy the notice requirement found in KRS 376.080(1).  The language of the letter sent with the lien was too equivocal to be considered notice that a lien was filed. The letter appears to give the debtor thirty days to dispute the debt. The letter and copy of an unfiled lien was insufficient notice that a lien had been filed.

CONSOLIDATED INFRASTRUCTURE MANAGEMENT AUTHORITY, INC. V. ALLEN
TORTS - Whistleblower; KRS 61.103(2); Limitations on injunctive relief and punitives
2004-CA-001508
NOT TO BE PUBLISHED
Date: 2/3/2006

This 'whistleblower' case held the limitations under KRS 61.103(2) which created a 90 day limitation applied only to injunctive relief or punitive damages.

BRANHAM V. MAYNARD
WILLS, ESTATES, PROBATE
2004-CA-001069
NOT TO BE PUBLISHED 
Date: 2/3/2006

Affirmed unanimous jury verdict which determined that the purported will of Clinton Maynard, and a deed and transfer of two certificates of deposit by him were executed either while Clinton was of unsound mind or as a result of undue influence by Floraine.   Trial court did not err in instructing the jury or in denying Floraine’s motion to set aside the jury’s verdict, and that any improper closing arguments to the jury did not constitute reversible error.

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Paul C. O'Bryan, Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions. 

Civil Decisions (TIPs): Jan. 27, 2006 Court of Appeals

CIVIL DECISIONS AND TIPS (Torts, Insurance Procedural Stuff)

COURT OF APPEALS - Jan. 27, 2006

PUBLISHED:

HAMAEIZADEH V. KENTUCKY BOARD OF MEDICAL LICENSURE
ADMINISTRATIVE AND REGULATORY LAW - Professions and licensing (disciplinary action)
2004-CA-001768
PUBLISHED 
PJ: COMBS
VACATING AND REMANDING (Appeal from Jefferson Circuit Court, Judge Willett)
DATE:  1/27/2006

Held any physician who is aggrieved by a final order of the board denying a license or rendering disciplinary action against a licensee may seek judicial review of the order by filing a petition with the Circuit Court of the county in which the board’s offices are located in accordance with KRS Chapter 13B.

HUGHES V. LAMPMAN AND COTTON STATES MUTUAL INS. CO.
INSURANCE - UIM Benefits, Coots Advance, and Real Party In Interest at Trial
TRIALS - Failure to identify UIM carrier, not harmless error
2004-CA-002600
PUBLISHED
PJ: COMBS
REVERSING AND REMANDING
Jefferson Circuit Court, Judge Willett
DATE:  1/27/2006

This case involved a jury trial that occurred before Earle v. Cobb, but an appeal that was decided after Earle v. Cobb.  The UIM carrier advanced the liability limits and apparently participated in discovery.  At trial, the judge ruled over plaintiff's objection that the underinsured motorist carrier would not be identified to the jury.  The jury returned a defense verdict on liability.  Appeal ensued, and the appellants claimed harmless error.  Dissent was filed by Judge Dyche who opined it was harmless, but the majority relied upon Earler v. Cobb and reversed the remanded.

"While Lampman argues that the trial court’s error is harmless in view of the jury’s ultimate finding, we are not persuaded that the error is susceptible of such an analysis. In considering the parties’ arguments in Earle, the Supreme Court of Kentucky was persuaded by the decision of the Supreme Court of Florida in Medina v. Peralta, 724 So.2d 1188 (1999). The Medina Court held that the trial court’s error (in withholding full information from the jury) amounted to deception and constituted a complete miscarriage of justice, emphasizing that the error was not subject to review through a harmless error analysis. Medina at 1189-90. We agree. Earle has explicitly condemned as manifestly unjust the subterfuge or legal fiction
of disguising the alleged tortfeasor as the only real party with potential liability to the plaintiff at a trial against the plaintiff’s UIM carrier. Consequently, the error cannot be dismissed as merely harmless."

KLB COMMENTS:  This case highlights a very good trial practice trip as plaintiff's attorney Ronald  Hillerich from Louisville did not accept the normal way of doing business and agreeing or acquiescing to the defendant insurance company's bifurcation of the underinsured motorist claim.  Until Earle v. Cobb, this was considered the "de rigeur" to be followed.  However, the law changes, the objection was preserved, and a new trial will ensue with no hidden parties.  Although it is not clear in this decision, but I wondered if the insurance company participated in discovery and depositions prior to its attempt to go 'sub rosa' and bifurcate.

The other point from this case is that it highlights the law has changed and is being strictly enforced.  Of course, Judge Dyche does present a good point on harmless error since the UIM question was never legally implicated since the tortfeasor was held not at fault.  However, Judge Dyche may have missed the point that the majority grasped intuitively and expressly - truth is truth and permitting a fiction to mislead the jury as to the real parties in interest is not simply harmless but goes to the verity and truth of the trial by jury process.  Interesting question for this case which may be appealed to the Supreme Court.  However, long term implications of this decision as the Earle v. Cobb interlude is probably minimal.

NOT PUBLISHED:

LUMPKIN V. COM.
APPEALS - Specific Grounds and Directed Verdicts (Criminal Case)
2004-CA-001631
NOT PUBLISHED
DATE:  1/27/2006

Defendant properly denied motion for directed verdicts.  Cocaine residue (which is cocaine) is sufficient to entitle the Commonwealth’s charge to go to a jury when there is other evidence or the inference that defendant knowingly possessed the controlled substance.

SHIFERAW V. MILLS
APPEALS - Preserving Appeal (family court)
2004-CA-002171
NOT PUBLISHED
DATE:  1/27/2006

Wife appealed from TC's postdissolution order directing the release of funds held in escrow after the sale of the parties’ marital residence on the basis that she was not served with a copy of the motion seeking the release of funds and so was not present in court for a hearing on the motion. CA ruled that this objection was not timely raised or addressed at TC level and thus was not preserved for review.

FERRIELL D/B/A KEITH UPHOLSTERING & DESIGN  V. PODGURSKY
APPEALS - Finality
2005-CA-0000403
NOT PUBLISHED
DATE:  1/27/2006

Trial court rendered a judgment it deemed final, and it included the "there being no just cause for delay" language.  The CAs noted that the inclusion of such language does not automatically render a judgment final; what's more, the CAs have a duty to examine the record to determine if an order truly is final.  CR 54.02 states that when more than one claim for relief is presented in an action, the court may grant a final judgment as to one claim only if there is no just reason for delay.  Here, the CAs found the judgment at issue did not wholly dispose of at least one claim of either party to the action. It therefore dismissed the appeal.

HARTWICH V. TODD AND WILKEY
CIVIL PROCEDURE - Summary Judgment Reversed as Question of material fact existed
2004-CA-002371
NOT PUBLISHED
DATE:  1/27/2006

Darrell Hartwich appeals from an order of the circuit court overruling his motion for summary judgment requesting reformation of a deed, and instead granting a money judgment in his favor in the amount of $3,100.00.  Summary judgment was improperly granted.  Either there are no questions of material fact or that the movant is entitled to judgment as a matter of law. CR 56.03. Determinations remain to be made that must be made in the trial court rather than in this Court, either through further discovery and motion practice or at trial.


WINKLER V. KENTUCKY ECONOMIC DEVELOPMENT FINANCE AUTHORITY
CIVIL PROCEDURE - SUMMARY JUDGMENT (Evidence needed to prevent)
2005-CA-000080
NOT PUBLISHED
DATE:  1/27/2006

CA affirms grant of SJ to KY Economic Dev. Finance Authority on promissory note and guaranty agreement

CA holds that the promissory note and guarantee agreement signed by the appellant constituted waivers of appellant's right to claim impairment of collateral under the UCC.  Further, the loan agreement supports appellee's contention that no genuine issue of material fact existed. 

BLOYD V. KENTUCKY RETIREMENT SYSTEMS
EMPLOYMENT LAW - Standard of Appellate Review
2004-CA-002327
NOT PUBLISHED 
DATE:  1/27/2006

Since claimant has the burden of proof and since her claim was denied, COA may reverse under this standard only if the evidence in her favor is "so compelling that no reasonable person could have failed to be persuaded by it."   COA found no basis to change or modify the standard so recently set out by this court.

BLOYD V. KENTUCKY RETIREMENT SYSTEMS
EMPLOYMENT LAW - Standard of Appellate Review
2004-CA-002327
NOT PUBLISHED 
DATE:  1/27/2006

Since claimant has the burden of proof and since her claim was denied, COA may reverse under this standard only if the evidence in her favor is “so compelling that no reasonable person could have failed to be persuaded by it.”   COA found no basis to change or modify the standard so recently set out by this court.

TRI-COUNTY WOOD PRESERVING, INC.  V. 
PROPERTY - REAL PROPERTY - Materialman's Lien (perfecting)
2005-CA-000517
NOT PUBLISHED 
DATE:  1/27/2006

Tri-County appeals TC decision in favor of appellees.  Issue is whether notice of lien was provided in a timely manner pursuant to KRS 376.010 (4).  Relevant provision mandates notice to owner of intention to claim a lien within 75 days of last day of furnishing materials.  Appellant argues that statute says “within 75 days of material OR labor”.   CA finds that plain and unambiguous language of statute defines controlling event as giving notice within 75 days of providing material and that, in this case, notice was not given in time.

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Paul C. O'Bryan, Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions.

ERISA: Some Non-Kentucky Research Assistance

From the Erisa Benefits and Disability Blog is a great reference to another blog's tips:

Great Resource for ERISA Research and Updates

I recently game across The Employee Benefits Legal Resource Site maintained by Carol Calhoun. It contains a well organized resource library with a number of useful tools for attorneys handling ERISA cases. It includes, among other things, a cross-reference chart... [click on heading for entire posting]

Civil Decisions (TIPs): SCOKY (Jan. 19, 2006) and COA (Jan. 2006)

CIVIL DECISIONS AND TIPS (Torts, Insurance Procedural Stuff)
SUPREME COURT - Jan. 19, 2006
COURT OF APPEALS - Jan. 203, 2006

PUBLISHED:

STRATTON  V. KENTUCKY CABINET FOR FAMILIES AND CHILDREN
FAMILY LAW - GOVERNMENTAL IMMUNITY-DEATH OF ABUSED CHILD NOT IN CUSTODY
TORTS - Governmental Immunity
2003-SC-000580-DG.pdf
Published  Affirming Scott, J. Date: 1/19/2006

Investigation by social workers into alleged abuse are “simply discretionary, and therefore, there was no waiver of immunity”, affirming the Court of Appeals which upheld the Board of Claims’ dismissal of an action taken by the estate of the deceased minor child who had been murdered by her mother’s live-in boyfriend.  The Franklin Circuit Court of Appeals found that the duties of the Cabinet were ministerial and that governmental immunity was waived and the Court of Appeals reversed that decision.   Administrative regulations do outline the types of individuals to be interviewed when an allegation of child abuse is made.  Several allegations of abuse had been made concerning this child and at one point the child was removed from her mother’s custody.  Even at the time of the removal, however, no evidence of the actual abuser was found.  The mother cooperated with the Cabinet’s requirements and custody was returned to her.  After the return, more allegations of abuse were made to the Cabinet but these allegations included information from the child that her injuries were the results of accidents; when the regular case worker did visit two day after the last report, on a regularly scheduled visit, he limited his interviews to the child and her natural mother, both of whom claimed the injuries were accidentally inflicted by a neighbor child during play. The social worker’s visit was on May 17, 1994, and the child was murdered four days later.  The very first physical abuse, resulting in the temporary removal from the mother, was February 11, 1994.   The Court of Appeals opinion explains that the first decision is to determine whether investigation of child abuse is ministerial (applying routine duties) in which the agency has no discretion or discretionary (involving policy-making decisions and significant judgment).  Discretionary acts cannot be a basis for recovery under the Board of Claims Act.  Which witnesses to interview, which witnesses to believe, interpreting the information received, etcetera,  are acts of Cabinet social workers which require significant judgment and discretion.  The Franklin Court of Appeals had relied on the case of Collins v Commonwealth of Kentucky Natural Resources and Environmental Protection Cabinet, 10 S.W.3d 122 (Ky. 1999).  The Supreme Court distinguished Collins  which concerned the death of a child who drowned in a flooded drainage culvert because the culvert was too small to handle the expected rain run-off and found the negligent performance of  Natural Resources actionable under the Board of Claims Act; the majority in that case said that the inspection of drainage culverts to see if they conform to regulations would only require mathematical engineering calculations and no statutory interpretation, discretionary judgment or policy-making decisions.

BAKER V. JONES
Government - Open Records Statute (Inadvertent Disclosure, Waiver of exemption)
2004-CA-002126
Published   
Affirming (Vanmeter, Presiding Judge)
Date: 1/20/2006

This appeal dealt with an Open Records Request for emails, memos, and other documents pertaining to the legal bills of attorney Steven Catron to the City of Bowling Green which was identified in a local newspaper article.  When part of the request was denied based upon the vagueness of the request and the confidentiality of the emails drafted between members of the council etc., Baker filed suit.  COA held records of a public agency which are preliminary in nature are not required to be disclosed under the Kentucky Open Records Act, and the inadvertent or unauthorized disclosure of emails to a local newspaper reporter did not constitute a waiver of the disclosure exemption. Affirmed the judgment of the Warren Circuit Court.

NOT PUBLISHED:

ADKINS V. PATTON
CIVIL PROCEDURE - CR 60.02 (mistake)
2004-CA-002471
Not Published   
Date: 1/20/2006

When Paul's wife Judi Patton went to Court over a disputed parcel of land, surprise, surprise, she won the case! 

The opposing party claimed some two years after the fact that she had not received a copy of the judgment, though the Court's docket and distribution list showed it did go to her counsel.  She sought to have the Court re-enter the judgment under CR 60.02.  The CAs held that rule would not apply in this case, especially since (1) appellant had waited over two years to bring the matter up (CR 60.02 provides for a one-year limitation); and (2) that her attorney did find a copy of the judgment in some old papers of one of his paralegals sometime after receiving a note from the Court that final judgment had been entered.  The CAs focused a bit on the differences between using 60.02(a) and (f) (mistake v. extraordinary & compelling equities).

WHEELER V. EVANS
PROPERTY - Real Property (Boundary dispute, encroachment, estoppel)
2004-CA-001272
Not Published 
Date: 1/20/2006

Wheelers claimed Evan’s successor’s in interest where encroaching.  TC found against Wheelers.  Wheelers appealed.  COA finds that Wheelers joined in deed that granted land to Evan’s and, thus, argument is precluded by estoppel.

BURTON V. OUR LADY OF BELLEFONTE HOSPITAL
TORTS - PREMISES LIABILITY - 
2004-CA-002368
Not Published 
Date: 1/20/2006

CA reverses and remands dismissal of slip-and-fall claim against hospital.

Appellant was driven to hospital by daughter, who parked in a marked no parking area near a driveway leading to the ER. There was snow and ice on the ground. Appellant exited the vehicle, slipped, a fell over a 13" section of retaining wall, falling to the ground on the other side 4' below. He suffered a broken neck and other serious injuries. Appellant sued alleging: 1) negligent removal of snow and ice; 2) negligent design of the driveway; and 3) failure to install a railing on the retaining wall.  The TC tersely dismissed on SJ holding it "indisputable that [the hospital] owed no duty to [the appellant] to insure the safety of the no-parking zone as regards pedestrians or inclement weather."

CA reverses and remands, holding that the record showed that invitees regularly parked in the no parking zone and the hospital was aware of it and could reasonably foresee this happening. Also, TC failed to address the negligent design/construction and failure to install railing claims sufficiently. 

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Paul C. O'Bryan, Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions.

Civil Decisions: Court of Appeals - Jan. 13, 2006

CIVIL DECISIONS AND TIPS (Torts, Insurance Procedural Stuff)
COURT OF APPEALS - Jan. 13, 2006

PUBLISHED:

COM. V. MORRIS
BOARD OF CLAIMS - Jurisdiction (settlement and release of employee)
2005-CA-000370
PUBLISHED   
REVERSING
BUCKINGHAM
DATE:  1/13/2006

A release of the tortfeasor (cabinet employees) for personal injuries constitutes a release of the government in a board of claims action.  The cabinet  was relieved of any liability in connection with the claims due to the claimants having executed releases to its employee, Lancaster. Citing Copeland v. Humana of Kentucky, Inc., 769 S.W.2d 67 (Ky.App. 1989).  The claimants’ settlements with Lancaster inured to the benefit of the employer, the Labor Cabinet, notwithstanding attempts by the claimants in their releases to reserve the right to file claims against the Labor Cabinet.

FORD V. RATLIFF
CIVIL - INSURANCE (Settlement, release, assignment)
2004-CA-000022 PUBLISHED 
AFFIRMING
VANMETER
DATE:  1/13/2006

CA affirms TC dismissal of direct action against insurance company, citing release of tortfeasor.

In this auto collision case, plaintiff settled with tortfeasor, signing a settlement agreement and release (in exchange for policy limits under a Kentucky Farm Bureau policy) that attempted to leave open the option to sue general liability insurer Scottsdale Insurance. An agreed order dismissing "any and all" claims against the tortfeasors, with prejudice, was entered. After, plaintiff amended complaint to include general liability carrier. Carrier moved to dismiss, arguing that, under Kentucky law, plaintiff must file against tortfeasor, not directly against his carrier. Plaintiff claimed he had an executed assignment of rights, but was unable to produce it. Plaintiff moved the court to require plaintiff to sign a new one, which it declined, citing the language of the agreement. Plaintiff cannot proceed against the insurer directly; dismissal affirmed.

NOT PUBLISHED:

GREENE V. CHIPPENDALE SQUARE ASSOCIATION, INC.
APPEALS - Timeliness (no extensions per CR 60.02 to set aside, etc.)
2004-CA-000202 NOT PUBLISHED 
DATE:  1/13/2006

CAs noted plaintiff was attempting to address issues in her 60.02 motion that could have been heard in earlier motion for summary judgment, which is impermissible under CR 73.02.  That rule states that parties may not resort to 60.02 to gain an additional extension of time to prevent the application of 73.02, i.e., 30 days to appeal from a judgment.  CAs also note that issues must be preserved for appellate consideration and that 60.02 rulings will not be disturbed unless clearly erroneous.

HUTCHISON V. COWAN
CIVIL PROCEDURE - Summary Judgment (opposing evidence)
2004-CA-002279 NOT PUBLISHED 
DATE:  1/13/2006

Wayne Circuit Court, Hon. Vernon Miniard, Jr.

 

Hutchinson appealed TC's entry of SJ in a dispute between abutting landowners over the location of the boundary line. North side of property was owned by Hutchinson while south side was owned by the Cowan's who had obtained the property through a foreclosure proceeding instituted by the bank against the prior owner (Hutchinson's son to whom the property had been deeded). As part of the sale, the bank had the parcel of property surveyed. This survey revealed a boundary line that was more favorable to the south parcel that the bank ultimately sold to the Cowan's.

 

The COA upheld the entry of SJ, finding that Hutchinson had failed to identify what evidence he could have provided that would arguably have required a trial. The boundary line contained in the deed granting the south property to the son made reference to the line as determined in an earlier lawsuit, but the TC found a lack of evidence to this effect and the COA agreed.

CASE V. ISRATEX, INC.
CONTRACTS - Failure of consideration
2004-CA-002095 NOT PUBLISHED 
DATE:  1/13/2006

The trial court did not  improperly grant partial summary judgment on the failure of consideration claim because of an improper reliance on the forcible detainer proceeding. In this case.  It is clear that the trial court did not rely on the prior proceeding so as to give it a res judicata effect, but merely reached the same conclusion that the November agreement constituted a sale.  Neither failure of consideration nor default upon review of the record. Summary judgment on this issue was proper.

PRESTON V. DEPT. OF VOCATIONAL REHAB.
EMPLOYMENT - Government
2004-CA-001716 NOT PUBLISHED 
DATE:  1/13/2006

Affirmed Kentucky Personnel Board's decision for suspension as applied the law correctly and substantial evidence to support decision.

LEWIS V. C & C ENTERPRISES
EVIDENCE - Res Ipsa Loquitor
2004-CA-001936 NOT PUBLISHED 
DATE:  1/13/2006

CA affirms jury verdict for the defense in this carnival ride negligence case. (Jefferson Cir. Ct., Hon. Geoffrey P. Morris, Judge, presiding).

Child's finger was severely injured on ride that had been cited as needed repair, but OK for operation. Appellants argue the TC erred in failing to instruct the jury on res ipsa loquitur per their tendered instruction. CA holds that, as res ipsa loquitur is an evidentiary doctrine creating a rebuttable presumption, appellants could request its application to avoid or win a directed verdict, but not to instruct the jury.

MOLLETT V. WRIGHT and GRANGE MUTUAL INS. CO.
INSURANCE - Coverage (underinsured motorist benefits, resident relative)
2004-CA-001797 NOT PUBLISHED 
DATE:  1/13/2006

Mother was driving son's car with permission when injured by third party.  Settled with tortfeasor  for policy limits and made claim for UIM against son's insurer (Grange).  Grange's definition of insured for UIM benefits was restrictive and only included "you or any family member", and family member must live in the household.  Since mother did not live with her son, the COA held the UIM coverage was not available to the mother.

Comment.  Looks like Grange is following a trend started by Safe Auto of including non-standard exclusions in policies.  Most ISO policies in Kentucky include UIM benefits for those occupying the car (insured's of the second class as referred to in many cases).  This case is not one of exclusion, but one of a restrictive inclusion such that there is no insureds of the second class.  Subtle changes in policy definitions which deny or limit coverage substantially (eg., stacking, single premium, motor cycles) from previous policies should require an affirmative notice by the insurer with a documented acknowledgement by the insured.  However, this stealthy change in expectations does not seem to require confirmation.  This is not published and not binding and not to be cited in any court in this commonwealth.  This panel consisted of Judges Combs, McAnulty, and Johnson.

WILLIAMS V. STURGEON
PROPERTY - Boundary Disputes (clearly erroneous rule)
2003-CA-002281 NOT PUBLISHED 
DATE:  1/13/2006

Neighboring property owners dispute.   Master Commissioner recommends a boundary line after evidentiary hearing and TC adopts.   Williams appeals claiming numerous errors.  In order to overturn verdict, appellant must prove that decision was clearly erroneous and not supported by substantial evidence. CA upholds TC ruling finding that the Master Commissioner relied on substantial evidence, noting that Sturgeon provided testimony from expert surveyor and Williams did not.

MAGINNIS V. COM.
TORTS - Immunity (judges)
2005-CA-000256
NOT PUBLISHED   
DATE:  1/13/2006

McGinnis complains only of actions taken by Judge Horne in his official capacity when the judge, sua sponte, researched his driving record and provided the jury with information showing that he had prior traffic offenses. This was noted as grounds for reversal in the circuit court opinion vacating and remanding the conviction. The COA dismissed the claims against the judge as a  judge is immune for personal liability for acts taken while he has jurisdiction over a case. Vaughn v. Webb, 911 S.W.2d 273, 275 (Ky.App. 1995). Even where such action may be contrary to law, judicial immunity still applies. City of Louisville v. Bergel, 610 S.W.2d 292, 293 (Ky. 1980).

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Paul C. O'Bryan, Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions.

Civil Decisions: Court of Appeals - Jan. 6, 2006

CIVIL DECISIONS AND TIPS (Torts, Insurance Procedural Stuff)
COURT OF APPEALS - Jan. 6, 2006

PUBLISHED DECISIONS.

COMBS V. ALBERT KAHN & ASSOCIATES, INC.
CIVIL PROCEDURE - Statute of limitations (asbestos)
2004-CA-002178
Published  Affirming
Minton
Date: 1/6/2006

Combs appeals the TC's grant of SJ to Defendants, Albert Kahn and Turner Construction, due to expiration of statute of limitations. Combs had worked at GE's Appliance Park from 1973 to 1999, and was diagnosed with asbestosis in January 2000. He filed suit on July 27, 2000, alleging he was exposed to asbestos products at the Park and named a number of manufacturers and distributors as defendants. After being diagnosed with lung cancer in March 2003, Combs sought to amend his Complaint in April 2003 to add this to his personal injury claim and at the same time sought to add 2 new defendants, Kahn and Turner. Kahn was the architectural firm that designed the Park while Turner was a general contractor during the Park's initial construction. His claims against these defendants were that they negligently specified the use of asbestos products and/or failed to warn workers at the Park of such products' use. After allowing the amendment, the TC agreed with Kahn and Turner that Combs' cause of action against them began to accrue when he was diagnosed with asbestosis in January 2000, and that a 1-year SOL governed his claims.

 

Held: COA agreed with TC that 1-year SOL (KRS 413.140(1)) governed Combs' asbestos-related claims against Kahn and Turner. The COA dismissed the argument that these claims "related back" to the original, timely claims filed against the manufacturer and distributor defendants, as both Kahn and Turner were newly-added defendants not connected with the original defendants. As to when the cause of action began to accrue, the COA also agreed with the TC that January 2000 was the magic date. The COA reasoned that under the discovery rule, Combs first should have discovered that injury occurred from his asbestos exposure in January 2000, and it made no difference that the extent of the injury at that time (asbestosis) is not identical to the ultimate injury for which Combs seeks recovery from Kahn and Turner (lung cancer).  Combs need not fully appreciate the extent of the injury in order for a cause of action to begin to accrue, but rather only that some degree of injury has occurred. The COA recognized the application of this principle to asbestos exposure cases even though asbestosis and lung cancer are separate and distinct diseases that do not necessarily flow from one another. In this regard, Kentucky is a "one-disease" state where the first manifestation of an injury caused by toxic exposure begins a single statutory period rather than a "two-disease" state where a new cause of action accrues with each separate injury discovered. 

 

Among equitable considerations in upholding the TC's ruling, the COA noted that Combs was well aware of his increased risk of developing lung cancer upon being diagnosed with asbestosis, as this was specifically alleged in his original Complaint filed in July 2000. The COA also rejected Combs' argument that the cause of action against Kahn and Turner began to accure on July 19, 2002, the date Combs first learned of these defendants' involvement in the Park's construction, noting that Combs had offered no explanation why this information could not have been learned earlier if reasonable diligence had been employed.

DAVIS  V. DEPT. OF REVENUE OF THE FINANCE AND ADMINISTRATION CAB.
REVENUE AND TAXATION - Out of state bonds and taxability
2004-CA-001940
Published
MINTON - VACATING AND REMANDING
Date: 1/6/2006

Held Kentucky’s tax on the income derived from bonds issued outside Kentucky violates the Commerce Clause of the United States Constitution.

NOT PUBLISHED:

DARPEL V. ARNZEN
CIVIL PROCEDURE - Judgment Nunc Pro Tunc
2003-CA-001411
Not to be Published   
Date: 1/6/2006

Darpel, executor of wife's estate, appealed TC's judgment ordering partition of property held jointly by husband and wife, argung that dissolution decree could not affect wife's right to entire property upon her husband's death, which occurred prior to entry of the decree. While COA agreed with executor's argument, it held that the procedural posture of the case precluded granting him any effective remedy, and therefore affirmed the TC's judgment. The COA questioned the TC's entry of a decree nunc pro tunc, which is designed to record some act of the TC done at a former time that was not carrier into the record rather than to placing into record evidence of judical action that was not actually taken. The COA also noted that this rule cannot be used to enter an order that the TC might or should have made at some earlier time. The TC had held that the entry of the decree operated to terminate the survivorship rights of the wife by deed prior to her husband's death. The COA held, however, that the decree could not divest the wife of her interest in the property that immediately passed to her at the time of her husband's death. Procedurally, the dissolution judgment was now final and the property had already been partitioned and sold with the assets distributed. Thus, the COA was forced to affirm the TC's judgment even though the TC had improperly determined the legal effect of the entry of the dissolution decree.

EASTERN CRANE INC. V. KENTUCKY POWER CO.
CIVIL PROCEDURE - Dismissal for failure to prosecute
2004-CA-001676
Not to be Published
Date: 1/6/2006

CA held no abuse of discretion in trial court's grant of defendant's motion to dismiss for failure to prosecute under CR 41.02(1). CA's standard of review for such a decision is whether the trial court acted arbitrarily, unreasonably, unfairly or without sound legal principles.  Facts of the case revealed that the guidelines in Ward v. Housman, 809 S.W.2d 717 (Ky. App., 1991), which have been listed in the LawWire previously, warranted dismissal.

FOX V . FERNIHOUGH
CIVIL PROCEDURE - Pleadings (amendments, relating back, new parties, and statute of limitations)
2004-CA-001976
Not to be Published 
Date: 1/6/2006

Ron and Josh had an auto accident.  The last day of BRB payments was 1/14/02.  Ron sued Josh's dad Mark on 1/5/04, incorrectly alleging that JOSH, not Mark, was the father and owner of the car.  Mark was an out-of-state resident and was properly served by Ron's serving the KY Sec'y of State.  On 2/13/04, Ron moved to file an amended complaint naming Josh as a defendant.  Josh filed an answer and, later, a motion for summary judgment, arguing the amended complaint fell outside the two year SOL in KRS 304.39-230 and that the amended complaint did not "relate back" under CR 15.03.  The trial court granted summary, and this appeal followed.

 

The CA, noting the amended complaint definitely fell outside the 2 year SOL, looked to determine whether CR 15.03(2)'s notice requirement was satisfied:  an amended complaint adding a party only relates back if the new party received notice of the action within the SOL and knew or should have known of the action but for a mistake in identity of the proper party.  Here, Josh filed an affidavit stating he knew nothing of the action under 2/24/04, undisputed evidence that he had no actual notice of the suit.  Ron countered that actual notice is not necessary.  Halderman v. Sanderson Forklifts Co., Ltd., 818 S.W.2d 270, 273 (Ky. App., 1991), holds that the notice requirement can be satisfied by "actual, informal, imputed, constructive or a combination thereof, within the limitations period."  The trial court declined to find, and the CAs agreed, that the familial relationship between father and son, nor the alleged "business relationship, as owner and permitted driver" sufficed to impute notice.  Nor did the fact that Ron sent a courtesy copy of the amended complaint to Mark's insurance company, which was not a named party, suffice to impute notice to Josh of the suit.  See Gailor v. Alsabi, 990 S.W.2d 597 (Ky., 1999).   

 

CRAWFORD V. NATIONAL CITY BANK OF KENTUCY
CIVIL PROCEDURE - Law of Case
2005-CA-000247
Not to be Published 
Date: 1/6/2006

This was a pro se appeal of a foreclosure and eviction action by Marilyn W. Crawford.  Her first appeal of the lower court's decision was dismissed as untimely, and when the lower court began the eviction proceedings, she filed a second appeal.  The COA noted her status as a pro se litigant, but nonetheless dismissed the appeal noting  that as a result of the opinion and order entered by this Court in the earlier appeal, it was precluded by the law of the case doctrine from reviewing these issues in this subsequent appeal. See Grazini v. Ambrose, 201 Ky. 466, 257 S.W. 21 (1923).

JACKSON V. KY TRANSPORTATION CABINET
EMPLOYMENT LAW -  Resignations
2004-CA-001897
Not to be Published   
Date: 1/6/2006

This appeal stems from a Personnel Board (Board) action involving Steven Jackson (Jackson), and the Transportation Cabinet (Cabinet). Jackson’s employment with the Cabinet ended on July 25, 2001 after twelve years of service. The events leading up to and including July 25, 2001 are in dispute between the parties.

Jackson was issued a letter of suspension dated June 11, 2001 that stated his fifteen-day suspension was to begin June 12, 2001 and end on July 4, 2001.2 Jackson had been suspended on three prior occasions that year and was familiar with the procedure of returning to work at the end of a suspension.

The hearing officer concluded that Jackson’s July 25, 2005 resignation was moot because he could not resign from a position from which he had already been terminated. The finding by the Board that it was the intention of the Cabinet for its resignation to be effective at the close of business July 25, 2001 is not supported by substantial evidence. There was no testimony on this issue received from any witness.

A resignation pursuant to 101 KAR 2:102, Section 9(3) constitutes a penalization requiring appropriate notice be given to the employee in accordance with KRS 18A.095(9). The Board that the Cabinet’s July 25, 2001 letter failed to meet the requirements of KRS 18A.095(9).

MILLER V. CITY OF ANCHORAGE
PROPERTY - Arbitration Dispute Over Real Property (boundary line dispute)
2004-CA-000702
Not to be Published 
Date: 1/6/2006

The Millers make a convoluted argument on appeal, including that the award was obtained by fraud and that it violates public policy, and should therefore be vacated. Anchorage responds that the Millers are not entitled to relief on the grounds they claim, because the applicable statutes do not authorize setting aside an arbitration award for those reasons. The reasons alleged that are specifically authorized grounds for setting aside a reward, Anchorage argues, are not supported by the record. After a review of the record, the COA affirmed the circuit court’s decision.  The Uniform Arbitration Act provides no remedy for a violation of the deadline, and so the court made a determination that no prejudice to the Millers resulted. It was correct to do so, and that the Millers’ objection is a technical one only, which should not result in setting aside the order.

CORNETT V. EVERAGE
PROPERTY - Real Estate (Surface Rights and Mineral Rights)
2004-CA-002338
Not to be Published 
Date: 1/6/2006

COA affirmed as the trial court’s findings of fact are supported by substantial evidence.  Earlier in the proceedings the lower court had determined ownership of the surface rights, and the Cornetts did not dispute that the Everages owned the surface. The Cornetts dispute the mineral rights.  However, the Everages chain of title for the minerals is the same chain of title for the surface. The Cornetts have produced no probative evidence to challenge the Everage’s chain of title or establish that the two estates were ever severed.

PYLES V. WOODS
TORTS - Premises Liability (duties to invitees and dangerous conditions)
2004-CA-001872
Not to be Published 
Date: 1/6/2006

This is an appeal from a summary judgment granted to the Doll family in a civil action stemming from injuries Pyles received when he fell through a decayed hayloft floor in the Doll family’s barn. Held that the Doll family did not breach any duty owed to Pyles, and affirmed the dismissal.

The Doll family did not argue that Pyles was a trespasser into the barn loft. While general negligence law requires the existence of a duty, premises liability law supplies the nature and scope of that duty when dealing with injuries on realty. Thus, the duty the Doll family owed to Pyles is dependent upon the status Pyles occupied as invitee, licensee, or tenant at the time he climbed into the hayloft.

Accordingly, much of the litigation below and the arguments made on appeal concern Pyles’s status at the time of the accident. Pyles argues that he was an invitee at the time of the accident, whereas the Doll family contends that, at best, Pyles was a licensee or a tenant.

Under common law premises liability principles, the duty owed by the premises owner to an invitee is a general duty to exercise ordinary care to keep the premises in a reasonably safe condition and to warn invitees of dangers that are latent, unknown, or not obvious. The owner’s duty to invitees is to discover the existence of dangerous conditions on premises and either correct them or warn of them.

Thanks to  John Hamlet, Cherry Henault, Sam Hinkle,  Chad Kessinger,  Stephen Keller,  Paul C. O'Bryan, Bryan Pierce,  Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's CIVIL appellate decisions.

Civil: Who owns the Black Box?

Here is an interesting posting from the Hoosier Lawyer Blog on who owns the black box in your car following the accident or who's property is that anyway?

Car's "Black Box" Information Is Property of Car Owner

Civil TIPs: Court of Appeals - Dec. 29, 2005

CIVIL DECISIONS
TORTS, INSURANCE, PROCEDURE (TIPs)
COA FOR Dec. 29, 2005

PUBLISHED.   None.

NOT PUBLISHED

SMITH V. HOUSING AUTHORITY OF MIDDLESBOROUGH
CIVIL PROCEDURE - Claims Preclusion
2004-CA-002190
Not Published 
Date: 12/29/2005

The CA reverses and remands this retaliatory discharge case containing a direct and a cross-appeal.

This case, and those preceeding it, have lengthy and complex factual histories briefly described as follows. Appellant Smith sued HAM for failure to pay him as an "on-call" employee. Bell Cir. Ct. granted him SJ and awarded $28K+. The CA reversed, holding that there was a factual question as to whether Smith was an "on-call" employee or "subject to call" employee.  On remand, Bell Cir. Ct. granted HAM's motion to dismiss for lack of subject matter jurisdiction. The CA reversed, directing that Smith and co-plaintiff be allowed to proceed. The SC affirmed.

Smith was terminated for allegedly using racial slurs at work. Smith filed a dec action to review the termination; he later amended to include a claim under the Whistleblower act. Both complaints were dismissed. He later filed this action for retaliatory discharge. HAM moved to dismiss, arguing res judicata.  The TC denied this motion. A jury awarded Smith $164K on the discharge claim and $200K on an IIED. HAM filed a motion to vacate, JNOV, new trial, arguing, among other things, claim preclusion. The TC granted JNOV on the IIED claim only. Amended Judgment was entered awarding Smith $164K. Both sides appeal.

CA only addresses the issue of claim preclusion, as it is determinative of the whole case. CA agrees with HAM argument that Smith impermissibly split his common law retaliatory discharge claim after the whistleblower claim was dismissed. The parties and issues were identical and the claim was dismissed on its merits.

KALLOP V. BLOOMFIELD
PROPERTY - Realty (adverse possession)
2004-CA-001539
Not Published
Date: 12/29/2005

Appeal of TC Summary Judgment regarding small parking lot in Winchester, Kentucky,  Confusing the issue was that parcel had been included in both parties chain of title, however, the Kallop’s inclusion was erroneous.  Kallops then argued that they had title by adverse possession because they had exclusively kept and maintained it for the statutory period of time.  CA upheld SJ based on finding that Kallops deed which included parcel also simultaneously provided assignment of lease which made ownership permissive and not hostile.

Thanks to Chad Kessinger, Cherry Hennault, Mike Stevens, Bryan Pierce, and John Hamlet for assisting in digesting our Civil Decisions, to include the TIPS -  torts, insurance and procedure summaries.

Trial Practice: No Pain, No Gain and the Judicial Discounting of Pain and Suffering

The current standard for the proposition that injuries associated with medical bills and treatment do not automatically entitle the claimant to an award of pain and suffering can be found in Miller v. Swift, 42 S.W.3d 599 ( Ky.,2001) ("Because the evidence at trial supported a finding by the jury that Miller did not suffer additional pain as a result of the accident, we find the jury's pain and suffering award legally proper and hold that the trial court acted within its discretion in denying Miller's motion for a new trial.").  Since that decision, no published decision from our appellate courts has disturbed a trial judge's denial of a motion for a new trial based upon such inadequacy of damages.

In the recent decision of Bayless v. Boyer, M.D., 2003-SC-000250-DG, Justice Roach writing for the Kentucky Supreme Court has continued that streak by affirming the Court of Appeals' decision which also affirmed the trial judge's denial of the injured person's motion for a new trial following a jury's award of medicals for surgery that was needed due to a missed diagnosis of a wrist fracture.

This Bayless decision is summarized briefly, as follows:

In this medical negligence case involving a missed diagnosis of a wrist fracture by the ER doctor and the radiologist, the jury awarded the minor his medicals but nothing for pain and suffering.

Expert testimony noted that the fracture was evident on the x-rays and  if the ER doctor had examined the x-rays he would have noticed the fracture. However, the ER doctor testified there was no acute pain so he probably did not review the films.  Patient was discharged and to return as needed if pain developed.  Patient continued to be active upon discharge and played baseball (with much icing of his sore wrist).  There was no follow-up care by the minor or at direction of his parents for two months.  It was disputed whether the minor discovered the break before or after the end of the baseball season, but the orthopedist examined the wrist two months later, noted the break and calcification could not be repaired by a cast, performed surgical repair, was confident of a good result and  that he should return to normal strength with no more increased risk of arthritic pain than if had been casted properly following the injury.

At trial, the jury found no fault on the ER doctor but found the radiologist negligent.  The jury also apportioned fault on the minor and his parents combined for half the fault.

The COA then went through the basics in analyzing a zero pain and suffering verdict and rejected the contention that surgery constituted uncontroverted evidence of pain entitling the young man to those damages.  The appellate standard is a review of the motion for new trial on inadequate damages under a 'clearly erroneous' standard and further reminded us that a "new trial depends to a great extend upon factors which may not readily appear in an appellate record."  Miller v. Swift was then mentioned as a brief reminder that zero pain and suffering verdicts "may sometimes be appropriate (emphasis added).  Hazel v. Beauchamp was relied upon by the claimants (hand in a shredder case followed by surgery had inadequate/nominal damages) but distinguished by the Supremes who added a caveat that Miller v. Swift was being followed but not extended.

With all that said, Justice Roach did address the facts at trial in the form of depositions, testimony and medical records to conclude the jury had a basis to conclude no pain following the break, no pain following surgery, and no interference with his day to day activities (play baseball, do pushups etc), to name a few. "Dr. Wyrick testified that there would likely have been significant pain associated with treatment of Michael's fractured wrist regardless of the treatment option, either casting or surgery, that was used. He further testified that he could not predict  any significant difference in pain between the two options. Finally, Michael's surgery was performed under general anesthesia, preventing or limiting the acute pain directly related to the procedure . There was substantial evidence for the jury to conclude that Appellants were not entitled to a damages award for pain and suffering.

Comment: 

There are three major shortcomings in this Court's analysis of 'pain and suffering'.  First, is the willingness to overlook the actual record at trial.  Second, is the failure to understand that more than just pain is involved in pain and suffering.  Third, is that surgery does involve some emotional anguish and concern.

1. Judicial deference and assumptions that the record supports the trial judge's decision.
   The Bayless opinion reminded us again that an appellate judge can actually consider that which is not before them since there must be factors outside the record that the judge relies upon in denying the motion for a new trial.  This is not fiction but fact - a "new trial depends to a great extent upon factors which may not readily appear in an appellate record."   If the trial judge makes no special findings in his/her order, then those not-in-the-record factors are not before the Court and were not part of the lower court's decision and should not be part of the appellate court's rationale.  Of course, addressing those "factors which may not readily appear in the appellate record" is a formidable, if not impossible task, for any counsel.  A rule of judicial economy or deference should give way to a rule of record.  If the motion for a new trial is denied then state the reasons on the record.  Even simple evidentiary motions by counsel should state the reasons on the record.  No less should be allowed for new trials.
2. Pain and suffering includes anguish and emotional distress.
   Concentration on the 'pain' element of 'pain and suffering' to  the total exclusion of the other components reflect poor analysis.  Bayless made no mention at all of  the mental suffering, anguish and inconvenience associated with a missed diagnosis, delay in treatment, and an unnecessary surgical procedure (albeit sufficiently anesthetized) with its subsequent recovery and therapy.  In real life, every surgical procedure is cause for worry, plus the post-surgical worries and limitations for an additional time period following the failed recuperative time period from the missed diagnosis when the young man in Bayless thought he was well.
   
   Back to the basics might help.
       
   
   • "The words 'pain and suffering' as used in the law are a term of art meaning the 'physical pain and mental suffering' attendant to a personal injury." Department of Education  v. Blevins, 707 S.W.2d 782, 785 (Ky.1986)(emphasis added).
   • Restatement (Second) of Torts. Section 456 provides that:
     "If the actor's negligent conduct has so caused any bodily harm to another as to make him liable for it, the actor is also subject to liability for  (a) fright, shock, or other emotional disturbance resulting from the bodily harm or from the conduct which causes it, and (b) further bodily harm resulting from such emotional disturbance. (emphasis added).
3. Corrective surgery is not a novel concept within our medical or legal system and that fear and worry from surgery (especially unnecessary surgery) has happened before.  My quick research found a corrective surgery appellate decision  following a missed sponge when our Courts at an earlier time recognized "[t]hat appellant suffered some pain, discomfort and mental anguish as a result of that operation is not a matter of pure speculation and under these circumstances the mere fact that the negligence of appellee, [Dr.] Harter, caused appellant to be subjected to an additional surgical procedure, if that finding is made by a jury, is sufficient to support a reasonable recovery for pain and suffering. Laws v. Harter, 534 S.W.2d 449, Ky.,1976.
   
   It should not be beyond the kith and kin of reasonable men and women, that someone who has been advised of all the risks of surgery and signed the detailed consent form and who is about to go under anesthesiology for what should have been an avoidable procedure might/probably/should have some  worry, distress, and anguish as to his future outcome and hope another mistake is not made.  Any competent physician will advise the patient of the risks and concerns with no guaranteed result.  In this case,  the young man did achieve a good result, but only through the passage of time was it finally determined that he had no limitations or increased risk of arthritis (all during which he might very well have had some concerns whether he would return to normal).
4. Finally, after all is said and done.  Is this decision that significant?  Well,  yes and no. 
   
   Yes, because it reflects continued fuzzy and narrow thinking by courts which repeatedly ignore all the elements of pain, suffering, inconvenience, and mental anguish with a trusting regard that there must be some unarticulated and non-documented factors that the trial judge saw and relied upon to justify the deference to that judge's denial of a new trial motion. 
   
   No, because Miller v. Swift has not been extended, and the judicial analysis continues to rely upon the trial record in spite of the appellate court's stated deference to the trial judge.  The appeals courts still list those factors upon which a jury may determine no pain was associated with the medical bills and treatment.
   
   However, Miller and its progeny are really nothing more than an analysis of proximate cause of the damages associated with the injury.   These causation issues are not a pretext for jury nullification, but are a legal requirement to support the verdict as the law requires.
   
   • Was there a pre-existing condition not aggravated by the accident?
   • Was there an insignificant impact with no associated injury and nothing more than diagnostic treatment and testing?
   • Was there a subsequent injury or trauma that was the cause of the pain?
   • And in the medical negligence arena, was there really no difference in the pain associated with the second procedure compared to the missed diagnosis from the earlier procedure or was there no new or  additional pain associated with the new procedure anyway?

   In Miller v. Swift, 42 S.W.3d 599, 602 (Ky.,2001) Judge Keller wrote

   "One of the issues that this jury was empaneled to decide was whether the accident aggravated or aroused Miller's pre-existing pain, and the parties actively contested this factual issue. The trial court properly instructed the jury regarding permissible damages for pain and suffering when pre-existing conditions may have been aggravated, [footnote omitted] and the jury concluded, on the basis of the evidence submitted to it, that Miller was not entitled to compensation for this item of damages. Even though they awarded Miller over $5000 in medical expenses and lost wages, the jury made a conscious decision to award nothing for pain and suffering."
   
   "Because the parties litigated the question of whether Miller endured additional pain and suffering as a result of this collision and Swift solicited testimony which would support the jury's conclusion, we hold that the trial court did not abuse its discretion in denying Miller's new trial motion. (emphasis added)." Id.

   "The civil justice system uses juries to decide exactly these types of factual disputes, and the testimony and evidence at trial in this case contained substantial support for the jury's verdict. Both parties presented the jury with probative evidence on the issue of whether this collision caused Miller any additional pain and suffering, and the trial court properly denied Miller's motion for a new trial (emphasis added)." Id.

   And last but not least, remember that motor vehicle accidents and their injuries provide a specific statutory damage entitlement upon reaching a medical or injury threshhold for the award of "pain, suffering, inconvenience and anguish" - all of which be specifically delineated 'as the law from the judge' in the instructions  (as well as any other negligence instruction).  Furthermore, the Bayless case above will have no applicability to a surgical procedure following a car accident since the accident required the procedure in the first place.

Civil Law Decisions (TIPS): SCOKY and COA for Dec. 22, 2005

TORTS, INSURANCE, PROCEDURE (TIPs) DECISIONS
SCOKY AND COA FOR Dec. 22, 2005

PUBLISHED

CAVALIER HOMES OF ALA. V. JUDGE COLEMAN
ADR - Extraordinary Remedies 
2005-SC-000160-MR
Published
AFFIRMING
LAMBERT 
Date: 12/22/2005

Cavalier Homes sought to compel enforcement of contract's arbitration clause.  Trial court disagreed finding appellee did not have actual knowledge of the arbitration policy.  Cavalier sought extraordinary relief. Both COA and SC denied since appeal was adequate remedy.   The Uniform Arbitration Act at KRS 417.220, expressly provides that "An appeal may be taken from [a]n order denying an application to compel arbitration made under KRS 417-060. . . . The appeal shall be taken in the manner and to the same extent as from orders or judgments in a civil 
action ." Thus, the foregoing enactment, created a statutory interlocutory right of appeal where no such right would otherwise exist.

BAYLESS V. BOYER, M.D.
DAMAGES - Inadequate Damages, New Trial (medicals awarded with no pain and suffering)}
2003-SC-000250-DG
Published  
AFFIRMING
ROACH, J.
Date: 12/22/2005

In this medical negligence case involving a missed diagnosis of a wrist fracture by the doctor, the jury awarded the minor his medicals but nothing for pain and suffering. Both the radiologist and the ER doctors missed the fracture. 

Expert testimony noted that if the doctor had examined the x-rays he would have noticed the fracture. However, the ER doctor testified there was no acute pain so he probably did not review the films.  Patient was discharged and to return as needed if pain developed.  Patient continued to be active upon discharge and played baseball (with much icing of his sore wrist).  There was no follow-up care by the minor or at direction of his parents for two months.  It was disputed whether the minor discovered the break before or after the end of the baseball season, but the orthopedist examined the wrist two months later, noted the break and calcification could not be repaired by a cast, performed surgical repair, was confident of a good result and  that he should return to normal strength with no more increased risk of arthritic pain than if had been casted properly following the injury.

At trial, the jury found no fault on the ER doctor but found the radiologist negligent.  The jury also apportioned fault on the minor and his parents combined for half the fault.

The COA then went through the basics in analyzing a zero pain and suffering verdict and rejected the contention that surgery constituted uncontroverted evidence of pain entitling the young man to those damages.  The appellate standard is a review of the motion for new trial on inadequate damages under a 'clearly erroneous' standard and further reminded us that a "new trial depends to a great extend upon factors which may not readily appear in an appellate record."  Miller v. Swift was then mentioned as a brief reminder that zero pain and suffering verdicts "may sometimes be appropriate (emphasis added).  Hazel v. Beauchamp was relied upon by the claimants (hand in a shredder case followed by surgery had inadequate/nominal damages) but distinguished by the Supremes who added a caveat that Miller v. Swift was being followed but not extended.

With all that said, Justice Roach did address the facts at trial in the form of depositions, testimony and medical records to conclude the jury had a basis to conclude no pain following the break, no pain following surgery, and no interference with his day to day activities (play baseball, do pushups etc), to name a few. "Dr. Wyrick testified that there would likely have been significant pain associated with treatment of Michael's fractured wrist regardless of the treatment option, either casting or surgery, that was used. He further testified that he could not predict  any significant difference in pain between the two options. Finally, Michael's surgery was performed under general anesthesia, preventing or limiting the acute pain directly related to the procedure . There was substantial evidence for the jury to conclude that Appellants were not entitled to a damages award for pain and suffering. "

BROWN V. INDIANA INS. CO.
INSURANCE - Automobile Liability Coverage if no workers comp
WORKERS COMP - Exclusive Remedy and Liability Insurance
2004-SC-000065-DG
Published  
AFFIRMING
COOPER, J.  
Date: 12/22/2005

COMPANION CASES:
2004-SC-000067-DG
2004-SC-000070-DG
2004-SC-000071-DG

The issue presented by this appeal is whether a commercial automobile liability insurance policy affords coverage for damages sought in a tort action brought against the insured employer for the wrongful death of its employee, where the action would have been barred by the exclusive remedy provision of the Kentucky Workers' Compensation Act but for the fact that the employer failed to procure a policy of workers' compensation insurance. SC held that the automobile liability policy neither affords coverage for such an action nor requires the insurer to pay the cost of defending such an action.

HARRISON V. VALENTINI M.D.
TORTS - Medical Negligence (SOL and continuing treatment)
CIVIL PROCEDURE - Statute of Limitations (medical Negligence)2004-SC-000015-DG
Published  
LAMBERT
REVERSING AND REMANDING
Date: 12/22/2005

Continuing treatment by the Defendant physician tolls the running of the statute of limitations for the patient under rule called the "continuous course of treatment rule." Rationale is that both are afforded the opportunity to cooperate with each other to correct the problem and mitigate the damages. However, no benefit shall inur to a patient who feigns a desire to continue treatment in order to shop around for an expert or give a lawyer more time to file a complaint.

 

NOT PUBLISHED

EST. OF WILLIAM BAILEY V. JUDGE PECKLER
CIVIL PROCEDURE - Res judicata (dismissal)
2005-SC-000166-MR
NOT Published 
Date: 12/22/2005

A dismissal without mentioning with or without prejudice is considered under CR 41.02(3) as with prejudice for purposes of res judicata.  This case involved a claim asserted default on a promissory note and sought enforcement of a mortgage lien securing payment of the note. Discovery disputes occurred and the trial court placed MERS on terms to comply with discovery or risk involuntary dismissal . The court's terms were not met and dismissal of the claim was ordered. In the order of dismissal there was no indication that it was without prejudice and no appeal was taken from the order of dismissal .

CR 41 .02(3) provides that:

Unless the court in its order for dismissal otherwise specifies, a dismissal under this Rule, and any dismissal not provided for in Rule 41, other than a dismissal for lack of jurisdiction, for improper venue, for want of prosecution under Rule 77 .02(2), or for failure to join a party under Rule 19, operates as an adjudication upon the merits.

WEBB V. MALLORY
APPEALS - Failure to file brief
2004-CA-001585
Not To Be Published  
Date: 12/22/2005

Inmate's failure to file brief considered as a confession of error and reverse the judgment without considering the merits of the case. 

RITZERT CO. V. WEDDLE BROTHERS CONSTRUCTION CO.
ADR - Arbitration Agreement
 2004-CA-001629
Not To Be Published  
Date: 12/22/2005

This was an odd case to enforce an arbitration agreement by estoppel in a construction contract and applying Indiana law on estoppel.  However, the COA  reviewed the contract and correspondence and agree with the trial court that there was neither an agreement to arbitrate in the contract nor any modification thereafter. 

WRIGHT V. MAHLMANN
CIVIL - Instructions (car accident, sudden stopping)
2005-CA-000137
Not To Be Published 
Date: 12/22/2005

Trial court did not err in failing to give a 'sudden stopping' instruction. 

“The instructions given by the trial court should be confined to the issues raised by the pleadings of the case . . . and by the facts developed by the evidence[.]” Farrington Motors, Inc. v. Fidelity & Casualty Co. of New York, 303 S.W.2d 319, 321 (Ky. 1957). A party to civil litigation is entitled to have his or her theory of the case submitted to the jury if there is any evidence to sustain it. Risen v. Pierce, 807 S.W.2d 945, 947 (Ky. 1991). 

ACUITY V. GREAT WEST CAS. CO.
INSURANCE - Statute of Limitations to Recover BRB Subrogation
2005-CA-000027
Not To Be Published  
Date: 12/22/2005

Affirmed dismissal of Acuity's subrogation claim against the defendant's liability carrier (reparations obligor) for PIP/reparation benefits paid as untimely filed beyond the two-year period following last payment of PIP, and rejected claim of equitable estoppel.  It is well-established that the reliance necessary to establish a claim of equitable estoppal must be reasonable. Gailor v. Alsabi, 990 S.W.2d 597 (Ky. 1999). The last payment of BRB was on July 21, 2000; thus, the statute of limitations had yet to expire. 

H & R MECHANICAL CONTRACTORS, INC. V. CODELL CONSTRUCTION CO.
TORTS - Negligent Misrepresentation (false information required)
2002-CA-000862
Not To Be Published  
Date: 12/22/2005

CA affirms the TC dismissal of complaint in construction deal gone bad.

In hospital construction deal, contractor sued construction mgmt company and architects for negligent performance of their duties which caused contractor injury. TC dismissed, holding that each party had signed a separate contract with the hospital, so there was no contractual relationship between them. Appellants argue that the complaint states a claim for negligent misrepresentation. CA disagrees because complaint alleges negligent performance of duties, not negligent misrepresentation.

STRANGE V. ALBERT KAHN ASSOCIATES, INC.
TORTS - Professional Negligence (architects, expert testimony)
2004-CA-002204
Not To Be Published  
Date: 12/22/2005

This was a wrongful death action against architects for design of GE Appliance park and asbestos exposure.   COA affirmed summary judgment dismissing claims.  Although alternatives to asbestos were available, there is no indication that specifying the use of asbestos during the 1950 or 1960’s fell below an architect or engineers standard of care.   An expert witness with knowledge regarding design drawings and specifications for buildings built during the 1950 and 1960’s is necessary to help the fact finder determine the standard of care (of architect) and whether Kahn met that standard of care.

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

Civil Law Decisions: Court of Appeals - Dec. 16, 2005

PUBLISHED.

BISCHOFF V. LOUISVILLE AND JEFFERSON COUNTY METROPOLITAN SEWER DISTRICT
CIVIL PROCEDURE - Demand for Jury Trial
2004-CA-002545
Not Published
VACATING AND REMANDING
PJ:SCHRODER
Date: 12/16/2005

The holding in Bischoff v. LJCMSD that jury trial was not waived by failure to make timely request was specific to eminent domain actions, where right to jury trial on damages is guaranteed by both Ky. Constitution and statute.

In the absence of a timely demand under 38.02 (in cases other than eminent domain or any other type of action in which the right to jury trial could be deemed automatic under the constitution or statute), the court still has discretion to allow trial by jury under 39.02.

[thanks to David Kramer for cleaning up my summary of this decision.  this posting now reflects entirely his comments!]

STATE AUTO MUT. INS. CO. V. GREENROSE
INSURANCE - Pollution Exclusion and broken basement pipe
2005-CA-000607
Not Published
AFFIRMING IN PART, VACATING IN PART, AND REMANDING
PJ: DYCHE
Date: 12/16/2005

CA affirms in part, vacates in part, and reverses (Jefferson Cir. Ct., Hon. Martin F. McDonald, Judge, presiding).

Renter tripped in landlord's basement, dislodging an old diesel heating oil pipe and spilling old oil into the basement. Renter sued landlord for damage to his personal property; landlord sued carrier for coverage and a defense. Carrier had denied under a "pollution" exclusion. TC ordered coverage and attorney fees to landlord.

On appeal, CA holds that the exclusion is ambiguous as applied to the facts of the case, and affirms. CA vacates and remands attorney fee award because the record does not indicate the basis of such an award.

 

NOT PUBLISHED.

MARKOVICH V. FISCHER SINGLE FAMILY HOMES, LTD.
CIVIL PROCEDURE - Summary Judgment 
2004-CA-001793
Not Published 41 kb
Date: 12/16/2005

COA found no issue of material fact and affirmed summary judgment dismissing claim.

QUICK DELIVERY OF KYL. V. PAYLESS SHOE SOURCE, INC.
INDEMNITY -  Extent of agreement
2003-CA-001230
Not Published 66 kb
Date: 12/16/2005

This was an appeal of a summary judgment dismissing the plaintiff's claim that a genuine issue of material fact exists as to whether the indemnity provision of the contract intended to cover alleged negligence and cost of defense in a civil action solely against Payless on allegations of premise liability. Quick Delivery had agreed to deliver good to Payless Shoes Stores with an indemnity agreement regarding performance. One of the delivery men slipped and fell at a store and sued. Quick Delivery claimed the indemnity agreement applied, but the COA disagreed finding that “[A]n indemnity contract creates a direct, primary liability between the promissor and the promissee that is original and independent of any other obligation” In a contractual indemnity claim, an indemnitor’s liability “shall be determined by the provisions of the indemnity agreement itself.” This agreement did not cover the negligence from a slip and fall. Here is an extract of the indemnity agreement: You agree to indemnify, defend, and hold harmless from and against any and all claims (whether valid or not), losses, damages, liabilities, costs (including attorney’s fees), and expenses arising in any way out of your performance of this Agreement, including acts or failures to act of your employees and contractors, except that you are not responsible for damages caused solely by negligence or the willful conduct of Payless.

GRIMES V. SMITH
INSURANCE - Coverage (insured, member of household)
2004-CA-001756
Not Published 41 kb
Date: 12/16/2005

Daughter did not come within the definition of member of household for coverage under her mother's  homeowner's policy.

HARGROVE V. HALL
PROPERTY - Real Property Boundary Line Dispute (boundary by inaction)
2002-CA-002027
Not Published 75 kb
Date: 12/16/2005

The court applied the legal doctrine of “boundary by inaction” in determining that the fence line was the actual boundary between Dr. Hall and the Hargroves’ property.

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

Seatbeat Report Published From UK

From UK's web site, I found the following posting and link relating to use of seatbelts and resultant and potential savings of $$ and lives of secondary vs. primary enforcements.  click on heading for entire posting.  Actual link to study is at end.

Report on Impact of a State Primary Seat Belt Law [from UK's Web Site]

The report projects that a primary seatbelt law in Kentucky would result in 60 fewer traffic deaths per year, 1,400 fewer injuries.

Despite efforts in Kentucky to increase seat belt usage over the last decade, our state still trails nearly every other state in the percentage of motorists who buckle up.   Consider that:

• Kentucky ranks 47th in the nation in seat belt usage. While the nation’s average rate of seat belt usage is 82%, only 67% of Kentuckians buckle up.

• Of the 931 Kentuckians who died in motor vehicle accidents in 2003, two thirds were not restrained by seat belts. The state’s death rate in 2003 was 2 per 100 million vehicle miles traveled compared to a national rate of 1.5.18, 20
• Traffic fatalities increased from 791in 1994, the year Kentucky passed a secondary seat belt law, to 964 in 2004.

The secondary seat belt law allows police officers to charge motorists for failing to
wear a restraint only if the motorist is stopped for another reason.

[ . . . ]

We project that a primary seat belt law would result in 62 fewer fatalities per year, 388 fewer incapacitating spinal cord and traumatic brain injuries, and 1,051 fewer non-incapacitating injuries from accidents involving passenger vehicles and light trucks. Thus,

• Kentucky’s Medicaid budget would save a minimum of $40.9 million over 10 years, including $2.2 million the first year and $585,000 per year for long-term medical care.
• Overall, Kentucky would save $116 million in economic costs (wage loss, medical and administrative costs, property damage and employer costs).
• Overall, Kentucky would save $324 million in comprehensive costs (lost life years and productivity).

click here for actual PDF report from Kentucky Institute of Medicine.

         

Have NOT had a chance to read this in detail.  Anyone willing to comment or post a summary?  Please email us.  thanks.

Trial Practice: Paradigm Shift and Jury Trials After Earl v. Cobb

"The second law of thermodynamics states that heat, on its own accord, flows from regions of high temperatures to regions of low temperatures".   This basic law of physics is the key to the paradigm shift now taking place in personal injury law in the Commonwealth's courts following Earle v. Cobb, 2000-SC-000818-DG.pdf. 

The KLB previously addressed this decision in a posting styled, Earle v. Cobb and the UIM Conundrum.  However, this posting goes one step further and addresses the new dynamic from this decision.  Many insurance lawyers have already told me that verdicts will go up because of the mention of insurance, but I submit that if verdicts go up it will be because of the way the insurance company treats its insured rather than its mere identification as a party to the lawsuit.

In Earle v. Cobb, the Kentucky Supreme Court acting like Toto in the Wizard of Oz brushed back the curtain of lies and identified for the jury and the world the insurance company's real participation in underinsured motorist cases.  Following Coots v. Allstate Insurance Company (and KRS 304.39-320), the underinsured motorist carrier (UIM) must be notified and given the opportunity to advance the liability limits of the tortfeasor and preserve its subrogation rights against that tortfeasor whenever the tortfeasor's liability insurer offered the injured party their liability limits.  If the UIM company did not advance those limits, then the claimant could accept the settlement, release the tortfeasor, and proceed directly on the contractual claim against the UIM carrier as a named party. [Now with the Supreme Court's decision in KFBM v. Ryan, it is now undisputed that this is obviously a contractual claim.] 

Although the Coots  notice was a rule of subrogation, it was often applied by the UIM carrier as a rule of stealth.  By preserving its subrogation rights, the UIM advanced the liability insurer's offer to the claimaint and thus kept the tortfeasor in the lawsuit and fully exposed to the verdict.  This was bad for the tortfeasor who would still be exposed at trial for a personal judgment for any verdict in excess of the limits (eg., liable to either the claimaint or the advancing UIM carrier) but good for the UIM carrier who thus had forced not only the continued exposure of the tortfeasor but the continued duties of the liability carrier to defend and indemnify its own insured for the claim.  More importantly, the UIM carrier would not participate or be identified at trial, and thus hid under the defendant's skirts.  'Participation' was not always clear in some courts, eg. did participation include discovery (interrogatories, requests for documents, etc.), depositions of parties versus depositions for trial (and did it really make a difference since both can be used at trial anyway), motion practice....).

Earle v. Cobb changed all this.  If the UIM carrier advances the liability limits offered, then the UIM carrier is the real party in interest for its claim and will be identified at trial.   Thus the 'tipping pont' precipitating the paradigm shift. 

In 1962, Thomas Kuhn wrote The Structure of Scientific Revolution, and fathered, defined and popularized the concept of "paradigm shift".   Kuhn argued that scientific advancement was a "series of peaceful interludes punctuated by intellectually violent revolutions", and in those revolutions "one conceptual world view is replaced by another".   To put it another way, think of a Pardigm Shift as a change from one way of thinking to another. The process may be evolutionary, but the individual shift or tipping point will be a revolution, a transformation, a sort of metamorphosis.  It just does not happen, but rather it is driven by agents of change.

Earle v. Cobb was such a  moment of change in our system.  The simple outing of the underinsured motorist carrier is not a revelation of fact to the parties, the jurors, the courts, or our system of justice.  But the rules did change on how the story unfolded in the judicial courtroom arena. 

Every driver in the Commonwealth who passes his or her driving test knows that liability insurance is mandatory or they do not get an operator's license. 

Every driver knows that insurance requires a premium be paid for that service.

Every driver knows that the cost of their premiums can increase as result of accidents, driving record, and claims made against them.

And effective January 1, 2006, every uninsured driver will be reported to the Department of Insurance.  However, reporting requirements for insurance purposes is not the same as reporting the truth to the jury.

These basic premises existed before Earle v. Cobb and still exist today.  So where is this paradigm shift? The shift is not in the existence or availability of insurance, but rather the actions or inactions of a party to a lawsuit.  The plaintiff is always judged by his actions - the accident, the medical records and treatment, and finally the trial.  I once heard the remark that no matter where you go, there you are.  The plaintiff is on trial for his claim.  So is the defendant tort feasor, and so is the defendant insurance company.

The insurance industry has advertised trust and responsibility that some have likened to a fiduciary relationship with their insured.  The insured pays a premium, and the insurer will protect them and do them right.  Phrases like - "You're in good hands" and "Like a good neighbor" transcend the marketing campaigns of the individual companies involved but earmark the trust of an industry who will bear your burden and not be the source of your pain.

With the curtain pulled back, then the insurer's actions in dealing with their insured are now exposed to the jury's prying eyes.  Now the jurors realize that those good hands of that good neighbor are busily working in a business with obligations to make a profit for their shareholders and which may also be at odds with the insured who has paid a premium for a benefit that he is seeking to collect.  The insured wants and is entitled to fair and reasonable compensation in any personal injury claim - to be made whole as well as a dollar can since that is the only medium of exchange permitteded in our tort system.

Now, the insurer understands that obligation but now will be judged on how they approach and deal with a vulnerable, injured and exposed insured who has paid a premium to be protected.  You may want your insurance company to be a tiger when fighting for you, but when those claws are bared back at your when your hand is out for a payment that you believe you deserve. . . . . Now that is another story.   What may appear acceptable in protecting the insured from the world is not acceptable when dealing with the insured.  This has been the keystone to developing bad faith law in Kentucky and elsewhere.  But normal business behavior and practices falling short of punitive bad faith may not be acceptable in dealing with their own insured in a claims process.

For years, the defense bar has put the plaintiff on trial by using his own words and complaints as contained in reams and reams of medical records. statements to police and others.   A medical record in the harsh light of the courtroom under the glaring eyes of the jury now looks a little different.  Most know that not all that is said or done in the doctor's office makes it into the written office note, but when addressed in the courtroom, the patient is made to appear untrustworthy.

But in this new day,  the letters, pleadings, and dealings of the insurance company in doing its business may look differently in that same courtroom as "That's no way to treat your insured!"

That is the paradigm shift.  The revelation of the existence of insurance in the form of the identification of the insurer at trial is now the tipping point for juries and increases in verdicts.  These facts have been imbued on the collective conscience of jurors since the advent of compulsory insurance laws - knowledgeable jurors know that drivers are supposed to purchase liability insurance.  Until now, the stealth rule of UIM insurance cases engendered a different conclusion as the jurors wondered about insurance and since there was no mention of insurance at trial, then there must not be any insurance. 

By advancing the liability insurance limits, the UIM carrier had not only been able to hide its status as an insurer (irrelevant in the eyes of the jury)  but also possibly benefit from an unintended favorable inference that the tortfeasor was not insured and personally liable for every penny of the verdit.  Until Earle v. Cobb, insurance companies were able to shield their business practices and dealings with its own insured on a contractual claim for benefits from the eyes of the jury.  Not any more.   These dealings may fall short of bad faith law but not the bad smell test. 

When you are listed as a party, welcome to the party.  Any changes in verdicts will be affected not so much by the identity of the insurance company but rather the behavior of the insurance company in how they treat a paying customer. 

TIPs Decisions: Court of Appeals - Dec. 9, 2005

PUBLISHED DECISIONS.

KAPLAN V. PUCKETT
TORTS - Legal Negligence
2004-CA-001750
Published 
AFFIRMING TACKET Date: 12/09/2005

COA did not apply the Daubert rule on expert evidence in a legal negligence claim as the performance of legal counsel was not something that could be easily quantified.  Affirmed trial court.

NON-PUBLISHED DECISIONS.

CODY V. KIMSEY, DR.
CIVIL PROCEDURE - Dismissal for failure to prosecute, CR 41.02
2004-CA-001338
Not Published 
Date: 12/09/2005

Affirmed dismissal of medical negligence action for failure to prosecute.  Plaintiff had failed to respond to interrogatories and documents requests or take any depositions of the defendant.

Insurance: Uninsured and Underinsured Motorist Issues Involving Reserves and General Denials

The Insurance Scrawl Blog had an interesting analysis on the value of discovering an insurer's reserves on a claim, entitled Discovery of Insurer Reserve Information: Implied Admission of Coverage or Attorney Work Product ? Or Both?  This posting also addresses another analysis on reserves by Mark Mayerson entitled Discovery of Insurer Reserve Information .  Here is the West Viriginia Supreme Court Case mentioned above - West Virginia ex rel Erie Ins. Prop. & Cas. Co. v. Mazzone (W. Va. Nov. 30, 2005).  Keep in mind, these are pro-insurer postings.

How many times have you attempted to settle a claim for underinsured or uninsured motorist benefits, and the insurer makes an offer and draws the line forcing you to file suit.  Then when you file suit, the insurance defense lawyer throws in the boilerplate defenses of the claim is subject to all of the terms, conditions, and exclusions of the policy and even denies the tortfeasor was either under or uninsured.  News to you, eh?

Some ways to avoid this retrenching and infuriating defense is to make that an assumption during negotiations and addressed specifically in the settlement demand to the insurer, to wit: if there are any policy defenses or coverage questions, as well as any assertions or claims that the adverse driver was not uninsured, then please advise in writing immediately, else we will assume there are no fault, liability, or coverage issues.  Of course, you can try and close this door even before submitting all of the medicals and specials. If the insurer is going to hide upon a policy defense, then why do they need all these extraneous materials.  First things first.

Now, this article makes the reserves an additional bit of information in support of the elements of a contractual uninsured motorist claim, but also the foundation of a statutory unfair claims settlement claim.  Heck, it might even be a Rule 11 issue in their responsive pleading when the only thing admitted is that the defendant is an insurance company authorized to do business and everthing else is either denied or insufficient knowledge to admit or deny (and therefore denied!).

Another aspect of the kitchen sink denial in un/underinsured claims is that the insurer already has probably made medical and lost wage benefits payments and now their insurance defense lawyer avers not hurt or no causal relationship with the accident and the injuries.  But that is another thought for another time.

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.

TIPs Decisions: Court of Appeals for Nov. 23, 2005

Published decisions.

DOALL LOUISVILLE CO. V. FERRANTE
CIVIL PROCEDURE - Penalties (Appeal)
2001-CA-000848
Not to be Published 
On remand from S. Ct.
Date: 11/23/2005

This matter was on remand from the Kentucky Supreme Court per The Elk Horn Coal Corporation, where the Supreme Court held that KRS 26A.300 is unconstitutional because it denies equal protection in violation of both the Kentucky and Federal Constitutions and the separation of powers provisions of the Kentucky Constitution.  COA reconsidered its prior opinion and now conclude that the imposition of the penalty must be vacated. The judgment of the Jefferson Circuit Court imposing a penalty under KRS 26A.300 is vacated.

UNITED STRUCTURAL SYSTEMS, LTD. V. ERI FALLS, INC.
TORTS - Indemnity
2004-CA-002103
Published 
COMBS
VACATING AND REMANDING
Date: 11/23/2005

Claim for indemnity for negligent construction was premature until the alleged negligence was determined to be the proximate or contributing of the plaintiff's fall.  Accordingly summary judgment premature and inappropriate and the matter is remanded for a determination of the questions of fact pertaining to the causation of the accident.

Comment.  This presents an interesting aside in the context of the KFBM v. Ryan case decided by the Supreme Court this week which permitted an apportionment third party complaint against an unknown motorcyclist.  The heart of a third party claim in a negligence claim is usually alleged as contribution (now dead in the era of comparative negligence) or apportionment (a legal conclusion rather than a cause of action) such that why not move to dismiss the third party cause of action for failure to state a cause of action or not ripe (premature) until the determination of liability is made against the third party plaintiff.

SMITH V. HODGES
TORTS - Defenses (Absolute and qualified privilege, defamation)
2005-CA-000057
Published 
GUIDUGLI
AFFIRMING
Date: 11/23/2005

This case involved the application of the absolute privilege afforded to defamatory statements made by a witness in the course of a judicial proceeding.  A customer had sued Bob Smith dealership claiming  violation of Fair Credit Reporting Act as well as accessing his credit report during a dispute between the parties.  Bob Smith's former finance manager made statements during those proceedings as a witness that Smith found slanderous and sued over in this action. It was this second case that was the subject of this appeal for which COA found Kentucky still follows the American Rule and that the statements at issue were relevant and pertinent to the subject of inquiry and therefor absolutely privileged.

“The prevailing rule and the one recognized in this jurisdiction is is that statements in pleadings filed in judicial proceedings are absolutely privileged when material, pertinent, and relevant to the subject under inquiry, though it is claimed that they are false and alleged with malice.” Schmitt, 163 S.W.3d at 283 (citations omitted).

“On the other hand, statements which are not pertinent and material are only qualifiedly privileged, and immunity from the legal consequences of their being libelous depends on their being made in good faith.

NOT to be Published.

WEBB V. CITY OF NEWPORT
CIVIL PROCEDURE - Mootness
2004-CA-001780
Not to be Published 
Date: 11/23/2005

Since the Webbs have no sold all of their property to the city so that their claims that the neighborhood should not be declare 'blighted' are moot.

MOYERS V. ROMAN CATHOLIC BISHOP OF LOUISVILLE
CIVIL PROCEDURE - Statute of limitations
2004-CA-001886
Not to be Published 
Date: 11/23/2005

In one of the priest abuse cases, held that the plaintiff's claims were time barred by the one-year statute as she knew or should have known within one year prior to the filing of the complaint.

BROWN V. GONCHER
TORTS - No fault threshold instruction
2004-CA-001613
Not to be Published 
Date: 11/23/2005

Affirmed jury verdict finding plaintiff's medical expenses did not meet $1,000 threshold under No Fault Act and there was substantial evidence permitting judge to give jury the threshold instruction.

Comment.  The facts and procedural history of this case are a good read.  This case was a personal injury automobile accident with Brown suing the tortfeasor who offered its $25,000 policy limits which were accepted but then advanced under Coots v. Allstate by the UIM carrier.  Brown (plaintiff) amended complaint to include UIM claim against Travelers Ins. Co.   Then the Defendant filed a Third Party Complaint for indemnity and apportionment against Fout another driver.  The plaintiff objected as the statute of limitations had run for a direct personal injury claim, but the trial court permitted it since it was a claim for indemnity and apportionment (5 year sol).  Note that the plaintiff cannot recover against Fout since the statute had expired, but the jury can apportion fault against that third party driver!  However, this third party complaint issue tended to be moot since the jury found per instructions that the plaintiff had not met threshold for $1,000 in reasonably necessary medical expenses caused by the accident.

The good news for plaintiff is he gets to keep the $25,000, and the bad news for Travelers is they don't get it back and have a high defense bill. Also note that it does not appear that Travelers was identified at trial as now permitted under Earle v. Cobb.  Furthermore, this case was decided before the Supreme Court released KFBM v. Ryan which addressed apportionment of fault within the context of a UIM claim and unknown defendant.  Whether Ryan would have any applicability is doubtful but the dicta in Ryan is interesting if parsed in detail and might be useful in the personal injury claim rather than UIM claim context.

Note that the plaintiff lost a directed verdict on the medical expenses and the new trial motion.  Other defense stratagems which caused trial turbulence was the defense lawyers tactic of calling Dr. Harkess live rather than read his deposition which had already been taken.  COA found no problem with this since he had been listed as a witness.  However, the plaintiff had relied upon use of the deposition and had released his rebuttal witnesses.

Learning points to avoid being sandbagged is to plan for the worst and not to assume the obvious.  Just because the liability carrier tendered its limits and no issue existed as to causation by the liability carrier, does not mean the defense counsel is constricted by that decision at trial and can pursue the usual defense moves such as minor impact, pre-existing conditions, subsequent injury, or apportioning fault elsewhere (aka the SOD defense - some other dude).  Suggestions would be to have standard requests for admission on causation of medical expenses, pain and suffering, etc. and contention interrogatories regarding causation, fault, injuries etc.  For example, Florida has some contention type interrogatories that are standard and part of their Economic Litigation Docket.  In multiple vehicle accidents, an interrogatgory or RFA regarding fault early on might side step this problem.  However, the paper piles up and trees die as plaintiff's lawyers are forced to close off the defense's rabbit trails in advance. 

DAWSON V. STATE AUTOMOBILE MUT. INS. CO.
TORTS -  No Fault Threshold
2004-CA-001773
Not to be Published 
Date: 11/23/2005

COA affirmed jury's finding that plaintiff did not sustain at least $1,000 in reasonable medical expenses caused by the accident.  Plaintiff raised a Bolin v. Grider issue that the plaintiff should have been given a directed verdict on this issue.  However, the threshold instruction answered in the negative, as follows:

Are you satisfied from the evidence that plaintiff, Sherrie Dawson, sustained a permanent bodily injury within reasonable medical probability as a direct and proximate result of the motor vehicle accident of June 16, 2000?

A directed verdict is proper when viewing the evidence most favorable to the nonmoving party, a reasonable juror could only conclude that the moving party was entitled to a verdict. Lee v. Tucker, 365 S.W.2d 849 (Ky. 1963).

Comment.  This is the second no-threshold decision in this issue, and both cases involved a liability carrier tendering its limits.  In the other, the UIM carrier advanced the limits to preserve subrogation rights per Coots v. Allstate.  This time the UIM carrier did not advance the limits and defended a direct action and obtained a threshold verdict.  This case should be some evidence against the critics of Earle v. Cobb fearing verdicts will go awry when insurance is identified.  However, claimant's attorneys should not assumed just because they have received the liability limits that causation of injuries and medical treatment is no longer a concern. 

 

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

TIPs: SCOTUS Grants Cert in ERISA Subrogation/Reimbursement Case

Per the Erisa Blog by Janell Grenier, the U.S. Supreme Court (SCOTUS) has granted cert in a case involving ERISA plans right of subrogation and reimbursement.

Cert. Granted in the Case of Sereboff v. Mid Atlantic Medical

The US Supreme Court has again decided to shed some light on the issue of an ERISA plan's ability to obtain reimbursement from a participant who recovers a settlement from a third party. The Court announced November 28th that it will decide the issue in Sereboff v. Mid Atlantic Medical Services - a case from the Fourth Circuit Court of Appeals. Ross Runkel's Employment Law Blog has a good summary of the case and the issues here. The DOL had filed an Amicus Brief in the case which you can access here.

Those who draft subrogation provisions in plans and have had the occasion of researching the law in a particular jurisdiction with respect to this issue understand how confused the state of the law is, even after the Supreme Court's decision in Great West. There are some great resources on the topic, however, a few of which are John H. Langbein's article--"What ERISA Means by "Equitable": The Supreme Court's Trail of Error in Russell, Mertens and Great-West", David Levin's article--"Recovering Money Owed to Plans: Subrogation Agreements Can Be Enforced" and this one by James Zalewski --"Welcome to the Jungle." (The title is very apropos.)

TIPS Decisions: Court of Appeals for Nov. 18, 2005

Published decisions.

BROZOWSKI V. JOHNSON, M.D.
APPEALS - Not timely filed (substantial compliance with SCR 3.030(2) does not compel different result)
2004-CA-000256
PUBLISHED AFFIRMING
JUDGE: VANMETER
Date: 11/18/2005

Denial of Rule 60.02 relief is appealable.

UNIVERSITY OF LOUISVILLE V. RAM ENGINEERING & CONSTRUCTION
DAMAGES - Prejudgment Interest
2004-CA-001752
PUBLISHED
AFFIRMING
JUDGE:SCHRODER
Date: 11/18/2005

CA affirms award of prejudgment interest against UofL on the grounds that statute waives sovereign immunity in contract actions against the state, with the only limitation being a cap on total damages of twice the original contract price.

NOT to be Published.

RICHARDSON V. NICHOLS
APPEALS - Untimely Notice and Appeal dismissed for filing notice after 30 days
2004-CA-002071
Not Published
Date: 11/18/2005

PALMER V. CSX TRANSPORTATION, INC.
CIVIL PROCEDURE - Dismissal for failure to disclose experts timely
2004-CA-002185
Not Published
Date: 11/18/2005

In this FELA action, the COA held the trial court did not abuse its discretion in dismissing plaintiff's claims for repeated failures to comply with court ordered pretrial order and disclose expert witnesses.  Ward distinguished.

COOK V. CHRISTOPHER FAMILY, LLC
CIVIL PROCEDURE - Trial Continuance (no abuse of discretion)
2003-CA-001116
Not Published
Date: 11/18/2005

Not abuse of discretion to deny continuance under the fact of this case, noting that counsel was given a 90-minute opportunity to prepare for cross examination of witness.

STEWART V. FAST FORWARD VIDEO, INC.
TORTS -
2003-CA-002451
Not Published
Date: 11/18/2005

This case has an odd set of facts as Stewart a 50+ year Ph.D. liked to visit the video star and with the young females working there when one night some young men showed up also liking to socialize with the young girls.  At this time, one of these young men exhibited behavior Stewart believed was inappropriate (snapping one of the girl's bra strap).  Stewart was offended and intervened. The exchanged between Stewart and the young black man escalated with allegations that Stewart made racial epithets.  The young black man challenged Stewart to a fight outside, and Stewart responded "that he would not fight Hocker unless a lawyer drafted a contract stating that Hocker would not sue him."  Well, things went from bad to worse, and a fight ensued with Stewart getting the orbit of his eye broken. Stewart left and later sued the store claiming they knew that a dangerous and hazard condition had been created.  Jury deliberated for 13 minutes, returning a verdict in favor of the store.

COA found Stewart the aggressor and affirmed the verdict as bit being flagrantly against the evidence.

Note.  Not much law, but a story on interest nonetheless.

CHILDERS V. CHILDERS
TORTS - Undue influence (real estate transaction)
2004-CA-001333
Not Published
Date: 11/18/2005

Other heirs not to happy with son's development of close relationship with  Ruth, his mother,  when she got ill and claimed undue influence when mom gave him power of attorney.  Ruth’s condition continued to deteriorate, and she soon became entirely dependent upon Danny and his wife for her personal care. Danny became intimately involved in Ruth’s finances.  Danny undertook so close a fiduciary and confidential relationship with Ruth as to suffice to create a climate of undue influence. See Hall v. Orme, 146 Ky. 467, 142 S.W. 1077 (Ky. 1912); Sword v. Fields, 192 Ky. 629, 234 S.W. 202 (Ky. 1921).

CAHILL V. CITY OF ELIZABETHTOWN
TORTS - Defenses (Qualified immunity of police officers)
2005-CA-000023
Not Published
Date: 11/18/2005

CA affirms SJ dismissing false imprisonment claims.

Appellant deposited a $15,000 check in his account at First Federal within the WalMart in Elizabethtown. (The money was proceeds of a casualty insurance policy). He withdrew the money a few days later. About a week later, a bank clerk informed him the account was overdrawn b/c First Federal believed the check was forged and dishonored it. The bank filed a civil suit shortly thereafter.

About a month later, a bank employee saw the appellants shopping in the WalMart and called the police claiming the bank had had a warrant issued for Cahill's arrest out of another county. A bank security officer later called the police and erroneously confirmed the warrant's existence. A dispatcher in the allegedly-issuing county also erroneously confirmed the warrant's existence, saying it would be faxed to the local police shortly. A police officer caught up with Cahill at a gas station down the street and held him, handcuffed, in his cruiser for about 10 minutes while local dispatch confirmed that no such warrant ever existed.

CA disagreed with TC, holding that this was an arrest, not just an investigatory stop, but affirmed, holding that the officers were entitled to qualified immunity.

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

Insurance: Stranded without Recourse: FEMA Halts Payment of Flood-Insurance Claims

From the Insurance Scrawl is the following piece on FEMA and flood insurance and ...

Stranded without Recourse: FEMA Halts Payment of Flood-Insurance Claims

TIPS: Medicare / Medicaid Subro Case Given Cert by SCOTUS

From an ATLA email:

On September 27, 2005, the U.S. Supreme Court granted certiorari in Arkansas Dept. of Health & Human Services v. Ahlborn, Docket No. 04-1506, (397 F.3d 620 (8th Cir. 2005)), on the important question of whether Medicaid - or Medicare - liens entitle states to 100% "reimbursement from personal injury settlement proceeds of [the] benefits paid on the recipient’s behalf, regardless of which portion of the settlement proceeds are designated as compensation for medical care," and before any proceeds from a settlement or judgment can go to the plaintiff.

TIPS (Civil) Decisions: Court of Appeals for Nov. 10 (11), 2005

TIPS: Court of Appeals Decisions for November 10, 2005

Published Decisions:

GAINES V. WORKFORCE DEVELOPMENT CAB.
TORTS - Whistleblower Act
2004-CA-001146
Published
AFFIRMING IN PART, VACATING AND REMANDING IN PART
PJ: McANULTY
Date: 11/10/2005

Gaines blew the whistle on the Workforce Development Cabinet.  The trial court granted partial summary judgment because it did not believe that Gaines qualified as a whistleblower. Because the COA concluded that under the facts alleged, Gaines did blow the whistle internally, it vacated and remanded the partial summary judgment in favor of the Cabinet. The Kentucky Supreme Court recently concluded, however, that the language of KRS 61.101(2) does not impose individual civil liability under Kentucky’s Whistleblower Act, and COA then affirmed the summary judgment as to individual appellants Hunt, Redmon, DeName and Thompson

Not to be Published Decisions:

JONES V. FENLEY
CIVIL PROCEDURE - Trial Continuance (Abuse of Discretion)
2004-CA-001600
Not To Be Published
Date: 11/10/2005

SMITH V. GAINES
CIVIL PROCEDURE  - STATUTE OF LIMITATIONS
STATUTE OF LIMITATIONS - (Tolling for "unsound mind")
2005-CA-000339
Not To Be Published
Date: 11/10/2005

BLAKELY V. SAFE AUTO INS. CO.
INSURANCE - UIM Exclusion for cohabiting non-relatives
2004-CA-001455
Not To Be Published
Date: 11/10/2005

Affirmed Safe Auto's exclusion of underinsured motorist benefits regarding cohabiting non-relatives.  UIM coverage is available to the named insured and his or her resident relatives.

Thanks to Louisville attorneys John Hamlett, Ched Kessinger, Cherry Hennault for assistance in digesting civil procedure and torts decisions.

TIPs Deciscions (Civil): Court of Appeals, Nov. 4, 2005

Published Decisions.

• TOCHE V. THE AMERICAN WATERCRAFT ASSOCIATION
  CIVIL PROCEDURE - Statute of Limitations
  2004-CA-001074
  Published  AFFIRMING - JUDGE: SCHRODER
  Date: 11/4/2005

  Held the one-year statute of limitations applied to injuries suffered in a personal watercraft accident (and not five year period).  KRS 413.140(1)(a) and not KRS 413.120 applies.
     

• HORNBACK V. BANKERS LIFE INS. CO.
  INSURANCE - Contract interpretation
  2004-CA-001724
  Published  AFFIRMING - JUDGE: BUCKINGHAM
  Date: 11/4/2005
  
  COA did not find the terms "treated", "diagnosed" and "disease" as ambiguous terms not defined in the application."  Affirmed denial of coverage for pre-existing condition.  Hornbacks’ claim that they are entitled to coverage based on the doctrine of reasonable expectations. was rejected.  See Woodson v. Manhattan Life Ins. Co. of New York, 743 S.W.2d 835, 839 (Ky. 1987).

Not published decisions.

• LANIER V. LANIER
  APPEALS - Timely
  2004-CA-001291
  Not to be Published
  Date: 11/4/2005

  Appeal may not be taken from an order correcting a clerical mistake in a judgment.  Where the time for taking an appeal has expired, entry of an order correcting a clerical mistake does “not operate to revitalize the judgment in such a way as to start anew the running of the period for taking an appeal.”

• WALKER V. WEINSTEIN, M.D.
  APPEALS - Failure to name party
  2004-CA-001654
  Not to be Published
  Date: 11/4/2005
  

  This case arose from defamation claims against the Kentucky Board of Medical Licensure and their investigator Loyd Vest as well as Walker's doctor pertaining to the release of information and defamatory remarks contained in medical records.  The Walkers allege that in the course of investigating and bringing a disciplinary action against Dr. Michael Pravetz, the Walkers’ former psychiatrist, Wilson, Vest, and Weinstein invaded the privacy of the Walkers’ medical records and made defamatory statements regarding their mental health, their use of medications, and their relationship with Dr. Pravetz.  The trial court erred, they contend, by ruling that Wilson and Vest had limitations and immunity defenses to all of the Walkers’ claims and that the claims against Weinstein had been dismissed. Because the Walkers failed to name Wilson and Vest in their notice of appeal, this Court did not acquire jurisdiction to address the Walkers’ contentions with respect to them. With respect to Weinstein, affirmed the trial court’s order upholding his dismissal.
  
  As a general rule, “[w]ithout authority from the client, a lawyer has no right to settle a case.” Whether the client authorized a settlement is a question of fact to be determined from the totality of the surrounding circumstances.

• JOHNSON V. HOMEQ SERVICING CORP.
  CIVIL PROCEDURE - Summary Judgment
  2004-CA-001226
  Not to be Published
  Date: 11/4/2005

  Reversed lower court summary judgment as fact did not support it. 
  
  It is undisputed that a mortgage insurance policy was put in place for the period from October 23, 2000, to October 23, 2001, but that the policy was cancelled effective May 14, 2001, and the unused, unearned premium for the remainder of the term was credited to appellant’s escrow account. Thus, by appellee’s own admission, the property was not uninsured for the four-month period found by the trial court, but was covered by insurance purchased by appellee and charged to appellant as provided for in the security instrument.

  Under these provisions, appellee was entitled to “force-place” an insurance policy on the mortgaged property and to charge the costs of obtaining that policy to appellant’s escrow account.

• YAZELL V. FOREMOST INSURANCE CO.
  CIVIL PROCEDURE - Mistrial
  2003-CA-002155
  Not to be Published
  Date: 11/4/2005

  This trial involved breach of contract, bad faith andUnfair Claims Settlement Practices Act claim involving a denial of the Yazell's claim under a homeowner's insurance policy following a fire that destroyed their home.

  During the trial the jury had mistakenly been allowed to hear evidence of the insured's (Yazells) refusal to take a polygraph.  The trial court denied motion for a mistrial.

  The polygraph evidence had been excluded in a Daubert challenge, but had inadvertantly made its way into the trial exhibits and was seen by the jury.  However, since the parties were ordered by the judge to delete and redact evidence of the polygraph, Yazell was estopped to take advantage of the error produced by his own act.

  In holding the trial judge did not abuse its discretion in denying the mistrial, the COA noted that Wright v. Jackson, 329 S.W.2d 560 (Kyl. 1959) held a party is estopped take advantage of error produced by his on act (proffered instructions on pain and suffering contained 'if any') and distinguished In Re Beverly Hills Fire Litigation, 695 F.2d 207 (6th Cir. 1981) which impeached a verdict when extraneous evidence (police report) was brought to bear on the jury's deliberations.  However, the polygraphy did not constitute an improper outside influence.

• AZEROT V. ROMAN CATHOLIC BISHOP OF LOUISVILLE
  CIVIL PROCEDURE - Statute of limitations
  2004-CA-000666
  Not to be Published
  Date: 11/4/2005
  
  Affirmed trial court's dismissal of adults claim of sexual abuse by priest when he was a student on grounds of time barred under statute of limitations.
• JYL LAND AND CATTLE CO. V. P.N.C., N.A.
  SETTLEMENT AND RELEASE - 
  2004-CA-001477
  Not to be Published
  Date: 11/4/2005
  
  This appeal arose from a settlement agreement to resolved a roadway and property dispute.  Litigation had arose, and the parties met for a deposition.  The parties agreed to settle the case and recorded it on video tape.  One of the parties (Longmire) was a shareholder and director of JYL who made it clear he had no authority so a procedure was set up to notify the shareholders and permit objections.  Time period elapsed and no objections. 
  
  Having reviewed the videotape,  COA found no error in the court’s ruling. It is clear that Longmire agreed on behalf of JYL that the other shareholder would enter any objection he had by a date certain. No objection was communicated by that date.  COA held valid agreement, and noted in a footnote that noone had raised the issue regarding Longmire's authority or lack of authority on appeal.

Thanks to John Hamlet, Cherry Henault, Chad Kessinger for assistance in digesting cases.

TIPS: Court of Appeals Decisions for Oct. 28, 2005

TIPS - Torts, Insurance and Procedure Decisions from Court of Appeals for Oct. 28, 2005

PUBLISHED

• BELL V. BELL
  CIVIL PROCEDURE - Jurisdiction over the person
  2004-CA-001350
  PUBLISHED
  JUDGE: KNOPF
  AFFIRMING
  Date: 10/28/2005

When hubby died, his second wife filed for insurance proceeds, which he had already changed from his first wife to her.  The insurance company refused to pay Wife 2 b/c hubby had used an incorrect form in changing his beneficiary.  The proceeds went to wife 1, who filed for them in her now-home state of Florida.  Wife 2 sought a declaratory judgment, but the trial court ruled it had no personal jurisdiction over wife 1.  It cited Wilson v. Case, Ky., 85 S.W.2d 589 (2002), which has the three pronged test for determine the outer limits of personal jurisdiction based on a single act.  The trial court found the cause of action did not arise from in-state activities.  It also found KRS 434.210 did not allow personal jurisdiction, as the "personal business" wife 2 conducted, i.e, visiting friends in KY every year or so, did not qualify under the statute.  The CA affirmed, also finding general jurisdiction would not apply, as wife 1 had not had continuous and systematic contacts with KY.  Wife 1's connections with this state were simply too tenuous to allow the court to find it had personal jurisdiction over her. 

• LOUISVILLE METRO HOUSING AUTHORITY V. BURNS
  DAMAGES - PunitIve (against taxpayer funded government agency)
  2004-CA-001489
  PUBLISHED
  JUDGE: TACKETT
  AFFIRMING IN PART, REVERSING AND REMANDING IN PART
  Date: 10/28/2005

CA affirms in part and reverses and remands in part a jury verdict awarding $500K in compensatory and $3 mil in punitive damages in this lead exposure case involving public housing. (Jefferson Cir. Ct., Hon. Ann O'Malley Shake, Judge, presiding).

Louisville Metro Housing Authority appeals, arguing that the TC erred in allowing the jury to consider punitives and the compensatory award was speculative.

CA holds that public policy considerations concerning the nature and purpose of the housing authority affords it the protections available to local governments, including the prohibition of punitive damages. CA finds no error with compensatory award. 

• BAKER V. CAMPBELL COUNTY BOARD OF EDUCATION
  EMPLOYMENT - Retaliatory Failure to Hire (Not recognized in Ky.)
  TORTS - No cause of action for retaliatory failure to hire
  2004-CA-001928
  PUBLISHED
  JUDGE:MINTON
  AFFIRMING
  Date: 10/28/2005

NOT TO BE PUBLISHED

• CLIFTON V. KENTUCKY SPEEDWAY, LLC
  DAMAGES - Nuisance (permanent; temporary)
  2004-CA-001271
  NOT PUBLISHED 47
  Date: 10/28/2005

CA affirms TC grant of SJ dismissing claims against Gallatin County and the Kentucky Speedway, LLC.

Plaintiff-appellants live 100 yards from the Speedway, which operates on land owned by Gallatin County. Due to noise, lighting, trespass and litter, appellants filed this action seeking to compel the county to comply with local ordinances governing nuisances. The Speedway intervened.

The TC heard the action as a writ of mandamus; CA affirmed dismissal because the county's interest in the property is nominal and the appellants have other remedies. As to the nuisance claim against the Speedway, CA affirmed that appellants have no damages as the fair market value of their property has actually increased. 

Thanks to John Hamlett of Louisville, Kentucky for his assistance in digesting these decisions.

 

 

TIPS: The Technology You'll Need to Present Your Case at Trial

From the Illionois Trial Practice blog is a tip for all  you litigators:

The Technology You'll Need to Present Your Case at Trial
Using computers at trial takes technological know-how and plenty of practice before you've actually set up your equipment in court. A basic set-up includes the following elements: * * *  (click on heading for entire posting)

TIPS: Court of Appeals Decisions for Oct. 21, 2005

Torts, Insurance, Procedure Decisions from Court of Appeals
Oct. 21, 2005

PUBLISHED

• SANDOZ PHARMACEUTICALS CORP. V. GUNDERSON
  EVIDENCE - Experts (Daubert)
  DAMAGES - Punitives
  2004-CA-001536
  PUBLISHED 
  AFFIRMING IN PART, VACATING IN PART, AND REMANDING
  KNOPF
  Date: 10/21/2005
  
  Although experts are not permitted merely to speculate, if their opinions are supported by good grounds based on what is known, it is for the fact finder to decide if they are deserving of credence.  Kentucky's Supreme Court has held, however, that the trial court need not conduct a Daubert hearing if the record before it is complete enough to measure the proffered testimony against the proper standards of reliability and relevance.
  
  The punitive damages instruction was fatally flawed, and COA vacated the award of punitive damages and remanded the matter for additional proceedings.

NOT TO BE PUBLISHED

• MARLOW V. CONNELLY, JR.
  TORTS - Legal Negligence
  2004-CA-001448
  NOT PUBLISHED
  Date: 10/21/2005
  
  Legal negligence claim was barred by one-year statute of limitations in a claim regarding representation of an estate.  The administrator cleaned out the estate's bank accounts and a public administrator was appointed.  One of the heirs of the estate sued the estate's attorney nearly 6 years later but within one year of the closing of the estate.  However, the cause of action accrued when the heir/beneficiary knew that the bank account had been emptied rather than the settlement.
        
• OLIVAS V. MUIR STATION, LLC
  TORTS - Premises Liability
  DISCOVERY
  2004-CA-001885
  NOT PUBLISHED
  Date: 10/21/2005
  
  Part-time nanny fell from second-floor balcony when trying to crawl down after being locked out by the automatic doors.  Her claim was dismissed one day prior to her inspection of the premises.  Held she was denied meaninful discovery, and summary judgment reversed.

TIPS: Kentuck Supreme Court Speaks on Environmental Coverage

From the "Insurance Scrawl" blog, I found a discussion of a recent Kentucky decision on environmental coverage. 

"In Aenta Cas. & Sur. Co. v. Commonwealth, (Ky. Sept. 22, 2005), the Kentucky Supreme Court held that coverage applies to “any claim asserted against the insured arising out of property damage, which requires the expenditure of money, regardless of whether the claim can be characterized as legal or equitable in nature.” Slip op. at 13. The ordinary meaning of “damages” to which CGL-type policies apply includes response or cleanup costs “as long as the purpose is to rectify, correct, control, lessen or stop ongoing injury of the premises.” Id. The court further ruled that measures undertaken onsite (that is, at the insured’s own property) were covered “when the primary intent is to prevent additional harm to the property of others or to public waters.” Id. at 16."

"The Kentucky Supreme Court recently had the opportunity to address a number of the key environmental coverage issues in an insurance dispute commenced in 1987. In an opinion challenged by a lengthy dissent, the Kentucky high court addressed (among others): (i) whether response costs represent covered “damages” on account of property damage indemnifiable by CGL policies; (ii) whether administrative enforcement proceedings were “suits” to which the duty to defend applied; and (iii) how the (equivalent of an) owned-property exclusion applies. It also addressed whether the insured knew of the risk of injury such that coverage should be denied. And the court addressed whether the insurers’ payment of damages for breach of the duty to defend was subject to policy limits, which would have been the case had the insurers performed initially. This last issue, especially as resolved by the Kentucky high court, is not typical fodder in environmental-coverage cases."

For the entire posting, then CLICK HERE.

TIPS: Elsewhere - Punitive Damages Posting

From the "Insurance Scrawl" Blog:

It’s Good to Be a Bad Insurance Company in America

The most recent Supreme Court decision on the constitutionality of punitive damages was a third-party insurance bad-faith case. State Farm Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). In that case, the Supreme Court gave strong indications that in insurance cases the maximum punitive damages that may be constitutionally awarded is predicated on a one-to-one ratio between the punitive damages and the compensatory damages, i.e., they must be (nearly) equal to one another. However, on remand from the US Supreme Court the Utah Supreme Court held that, considering the facts involving State Farm and the Campbells, the insurer’s conduct and the injury involved merited punitive damages that were nine times the compensatory-damages award. 2004 UT 34. * * *

Click on heading for rest of posting.

TIPS Update: Decisions from Oct. 14, 2005

Tort, Insurance and Procedural Stuff from Decisions of 10/14/2005

HINES V. FURLONG
CIVIL PROCEDURE - STATUTE OF LIMITATIONS (Notes)
2004-CA-000901
NOT PUBLISHED
Date: 10/14/2005

BROWN V. LOWE'S HOME CENTERS, INC.
CIVIL PROCEDURE -  Dismissal
2004-CA-001006
NOT PUBLISHED
Date: 10/14/2005

Dismissal with prejudice should be granted only in the most extreme cases.  The trial court below failed to provide sufficient findings showing that it considered all of the factors listed in Ward v. Housman, 809 S.W.2d 717 (Ky. App., 1991), before granting a dismissal without prejudice.  The CAs therefore vacated and remanded the dismissal due to the trial court's lack of findings in either its written orders or oral statements. 

FELIX V. LYKINS ENTERPRISES, INC.
CIVIL PROCEDURE - Conflicts of Law (Kentucky law vs. out of state)
2004-CA-001305
NOT PUBLISHED
Date: 10/14/2005

The majority of the CA panel ruled that the trial court below wrongfully entered an order for summary judgment on a case whose parties also had litigation over a lease dispute pending in an Ohio court.  The CA majority held that the trial court should have considered the doctrine of forum non conveniens before ruling on the matter.  The CA held that Kentucky had no interest in the action and bore no significant relationship to the parties, the transaction or the res in question.  It vacated the summary judgment and remanded for an order dismissing.  Judge Miller dissented, stating that forum non conveniens was inapplicable to this case and that simply because the Ohio court was working on this case did not mean the Kentucky court automatically had to dismiss its case. He also addressed the merits of the Kentucky court's decision and found the court had both jurisdiction and sufficient cause to order a summary judgment.

TURNER V. DEPT. OF CORRECTIONS
TORTS - Defense (Sovereign Immunity)
2004-CA-000861
NOT PUBLISHED
Date: 10/14/2005

CA affirms TC dismissal of inmates' claims for assault & battery for seizure of blood samples for failure to state a claim on which relief could be granted.

Authorizing statute was in effect for both inmates and officials were protected by sovereign immunity. Also, inmates failed to notify the Attorney General of challenge to statute's constitutionality.

TIPs: How Illinois Claimants Obtain Insurance Information PRIOR to Filing Suit

From the Illinois Trial Practice Blog on 10/26/2005:

According to 215 ILCS 5/143.24b, an automobile insurer must provide policy limits if a claimant takes the steps described in the statute, as follows:

Any insurer insuring any person or entity against damages arising out of a vehicular accident shall disclose the dollar amount of liability coverage under the insured's personal private passenger automobile liability insurance policy upon receipt of the following: (a) a certified letter from a claimant or any attorney purporting to represent any claimant which requests such disclosure and (b) a brief description of the nature and extent of the injuries, accompanied by a statement of the amount of medical bills incurred to date and copies of medical records.

The letter must be by certified mail, return receipt requested. Below the fold is a sample letter that tracks the statute.

DATE

VIA CERTIFIED MAIL          
RETURN RECEIPT NUMBER XXX

Re: [Claimant/Insured]

To Whom It May Concern:

Please be advised that I represent [claimant] in his/her claim against [insured].  Pursuant to 215 ILCS 5/143.24b, please provide the dollar amount of any liability coverage which you provide for [insured].  You are required to provide this information within thirty (30) days of receipt of this letter.

In accordance with Section 143.24b, I am also providing the following information. [Insert a brief description of the nature and extent of the injuries.]   A copy of my client's medical records are enclosed for your review. To date, the medical bills incurred by my client total $_________.  I am also enclosing a copy of the medical bills for your review.

I look forward to your prompt response.

Yours very truly,

KLB Side Bar:

• Kentucky continues to play "hide the ball" on liability insurance information prior to the filing of a lawsuit.  We have manadatory minimum limits coverage, and insurers typically will either admit or deny if there is coverage for the tortfeasor but not disclose the amount without the insured's consent.
• If there is a mandatory insurance to protect the public, then why not mandatory disclosure of the limits (not the dec page, policy, drivers, other vehicles covered, umbrella policies, etc.)?
• The insured's consent is not aggressively obtained not knowingly refused since the insured probably considers this a privacy issue rather than a 'protect the public' issue.  Furthermore, timely disclosure of the limits quite probably encourages settlement within policy limits and without personal exposure of the insured.  Forcing suit changes the settlement dynamics, and not only permits disclosure of the liability limits but other information also probably considered personal, private, but relevant to the claim aka lawsuit.
• Kentucky has no statute, but the Rules of Civil Procedure 26.02 discusses disclosure of information AFTER suit has been filed.  However, more is diclosed than just the limits but the existence AND contents of ANY insurance agreement.
  
  

  A party may obtain discovery of the existence and contents of any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of a judgment which may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment. Information concerning the insurance agreement is not by reason of disclosure admissible in evidence at trial. For purposes of this Section, an application for insurance shall not be treated as part of an insurance agreement.

  (2) Insurance agreements.

KLB Wishlist:

Wouldn't it be nice if this information were obtainable by a simple certified letter with the provision of some medical information on the injury without escalation to a lawsuit?  The claimaint learns minimal information regarding his likelihood of being made whole for injuries, evaluates the applicability of his own underinsured motorist benefits, and can move forward informally.  The liability insurer learns of the claim, sets reserves, and with the medical information can begin to evaluate the claim, potential exposure, and plan for the defense.  This is a WIN-WIN disclosure for all and reduces litigation.  The price of a lawsuit is the cost of obtaining it now.  It should be less expensive and more conducive to settlement.

TIPS From Outside the State

Here are some TIPS - torts, insurance and procedural stuff, from other jurisdictions. Thanks to www.Findlaw.com and others:

• Quintanilla v. Dunkelman (10/06/05 - No. B171789)
  In a suit alleging negligent medical care, the apportionment of damages between the defendants is reversed where the trial court improperly used a general verdict form which did not distinguish between medical negligence and informed consent.
  http://caselaw.lp.findlaw.com/data2/californiastatecases/b171789.doc
• Flury v. Daimler Chrysler Corp. (10/05/05 - No. 04-15182)
  In a personal injury action, a jury award is reversed where the district court failed to impose meaningful sanctions for plaintiff's spoliation of critical evidence.
  http://caselaw.lp.findlaw.com/data2/circs/11th/0415182p.pdf [PDF File]

TIPS: Elsewhere - Defense Litigation Costs Attacked

From the "Insurance Scrawl" blog, I found a posting on "Defending Defense Costs: Parrying the Attack of the Legal-Fee Auditors"

TIPS - COA Decisions of Oct. 7, 2005

TIPS - Torts, Insurance and Procedure Update Decisions for COA Oct. 7, 2005

PUBLISHED: None.

NOT TO BE PUBLISHED

• DEAN V. BONDURANT
  LEGAL NEGLIGENCE
  2004-CA-001345
  This appeal involves a legal negligence claim against a law firm's representation from an antenuptial agreement prepared by the lawfirm for the decedent husband and the law firm's subsequent representation of the wife in a declaratory judgment action involving the estate.  The trial court granted summary judgment dismissing the legal negligence claim. Having concluded that there is no genuine issue as to any material fact regarding the legal cause of the appellants’ alleged damages, and that the attorneys are entitled to summary judgment as a matter of law, the summary judgment is affirmed.
• MILLER V. JEWISH HOSPITAL HEALTHCARE
  EVIDENCE
  2004-CA-001832
  Trial court did not abuse discretion in various evidentiary rulings, to wit:  (1) that the testimony of Dr. Rouben was not admissible because he violated The Health Insurance Portability and Accountability Act of 1996 (HIPPA) and the Kentucky Rules of Medical Ethics; (2) that it was an abuse of discretion for the trial court to exclude the testimony of her proffered expert witness, William  Nellis; and (3) that the trial court abused its discretion in excluding from evidence, certain of Jewish Hospital’s business documents.  The claim of a violation of medical ethics was not preserved for appeal and the HIPPA objections were not timely presented under KRE 103.  The trial court disallowed the plaintiff's expert testimony after conducting a Daubert hearing because it would be speculation.
  
  "[A]buse of discretion is the proper standard of review of a trial court’s evidentiary rulings" [citations omitted]."Rulings upon admissibility of evidence are within the discretion of the trial [court]; such rulings should not be reversed on appeal in the absence of a clear abuse of discretion." "The test for abuse of discretion is whether the trial [court’s] decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles" [citations omitted].

TIPS - Torts, Insurance and Procedure Update Decisions for COA Sept. 30, 2005

Court of Appeals Decisions for Sept. 30, 2005

PUBLISHED

• None.

NOT PUBLISHED

• CNF, INC. V.  AAF-MCQUAY, INC.
  ADA AND BREACH OF CONTRACT CLAIM
  2003-CA-001446
• HARROD V. BUTLER & ASSOCIATES, PSC
  CIVIL PROCEDURE - Evidence (Error using affidavits as substantive evidence)
  2004-CA-000937
• BUSH V. MERRILL LYNCH
  RES JUDICATA - Mutuality of obligation not required; Non-mutual collateral estoppel
  2004-CA-001011
• MCLENDON V. MORGAN
  APPEALS - Preserving appeal and affording lower court opportunity to rule
  2004-CA-001765

TIPS - Tort, Insurance, Procedure Update - Sept. 22 & 23, 2005

Torts, Insurance and Procedure Update for Sept. 22 & 23, 2005:

SUPREME COURT - Sept. 22, 2005

PUBLISHED

• PATTERSON V. BLAIR
  2003-SC-000646-DG.pdf
  Intentional torts and respondeat superior.
  
• COOMER V. PHELPS
  2004-SC-000294-DG.
  Settlement and release for personal injury claim alleging mutual mistake, fraud, and bad faith.
  
• KENTUCKY FARM BUREAU INS. CO. V. RODGERS
  2002-SC-001044-DG.pdf
  Bad faith against insurance company and admissibility of other acts of bad faith by the insurance company in unrelated claim.
  
• AETNA CAS. & SURETY CO. V. NATURAL RESOURCES CABINET
  2002-SC-000307-DG.pdf
  Insurance coverage and "fortuity".
  
• BENTLEY V. BENTLEY
  2003-SC-001051-DG.pdf
  Abolished immunity and allowed parent to prosecute tort action against unemancipated minor.
  
  Supreme Court REVERSED Thompson v. Thompson , 264 S.W.2d 667 (Ky . 1954) and now hold that a parent could maintain an action in tort against his or her unemancipated minor child for injuries arising out of the child's negligent operation of a motor vehicle . SC now concluded Kentucky should depart from this aspect of intra-family immunity, and overrule Thompson.
  
• COMMONWEALTH V. BABBITT
  2003-SC-000556-DG.pdf
  2003-SC-000586-DG
  Board of claims addressing state liability for guard rails and respondeat superior not apply to state employees. 

NOT PUBLISHED

• BROWN V. ABRAMSON
  2005-SC-000396-MR.pdf
  Writ of prohibition dismissed as adequate remedy at law was available.

COURT OF APPEALS - Sept. 23, 2005

PUBLISHED

• Hudson v. Old National Trust
  Wills, Estates and Probate - Exercise of Power of Attorney in Will
  2004-CA-001468
  
  Consistent with the presumption of KRS 394.060 favoring exercise rather than non-exercise, of a power or appointment, Court of Appeals held that where a donor requires some sort of specific reference to a power of appointment to exercise the power, substantial compliance by the donee with the donor’s requirements will suffice.  In his will, Nace had prescribed that Laura exercise her power of appointment by will, and she did so. Because Laura’s will expresses her intention to dispose of all property which she had the right to dispose of by will, including any as to which she may have had a general power of appointment, there can be no other conclusion but that she effectively exercised her power of appointment.  Although she did not specifically reference Nace’s will in her devise, Laura substantially complied with the terms of Nace's will.
  
  Kentucky is among the minority of jurisdictions that hold that a conventional residuary clause disposing of the testator’s remaining assets exercises a power of appointment even if the will makes no reference to the power. See Lilly v. Citizens Fidelity Bank & Trust Co., 859 S.W.2d 666, 671 (Ky.App. 1993).

NOT PUBLISHED

• UPPAL V. GATEWAY REGIONAL HEALTH SYSTEM
  2004-CA-000393
  Affirmed summary judgment dismissing physician's claim for breach of contract per waiver, but found genuine issues of material fact on tortious interference with independent contract agreement with hospital.
• MIRACLE V. KENTUCKY FARM BUREAU MUT. INS. CO.
  2004-CA-001121
  Insurance coverage questions relating to intentional acts of shooting in which declaratory summary judgment found KFBM had no duty to indemnify or defend.
• POOLE V. DOLLAR GENERAL CORP.
  2004-CA-001334(NP)
  Reversed trial court's entry of judgment NOV in defamation action and reinstated verdict, jointly and severally.
• POPIELSKI V. CITY OF BELLEVUE
  2004-CA-001672
  Party waived objections to discovery by not raising objections.  Flawed discovery requests are not void.

Torts, Insurance, and Procedural Appellate Update from COA for 9/16/2005

Court of Appeals decisions on torts, insurance, procedure (civil stuff) on Sept. 16, 2005:

• Published
  • Metro Medical Imaging, LLC v. Commonwealth of Kentucky
    2004-CA-001463
    Suit by administrative agency and issuance of summons.
  • Benningfield v. Petit Environmental, 2004-CA-001632 
    Wrongful discharge cause of action by employee.
• Not published
  • Clark v. City of Frankfort, 2004-CA-001202
    Cause of action not revived timely.
  • Johnson v. Johnson, 2004-CA-001622
    Abated appeal pending entry of final order in family court matter.
  • Dixon v. Brown, 2004-CA-002039
    Review of new trial motion in context of zero damages award for medicals and lost wages (concurring opinion by J. Knopf who was troubled with jury's award but acknowledged limitations of review on appeal).
  • Shimkowiak v. Yucatan at the Landing, 2004-CA-002093
    KRS 244.080 and cause of action for selling alcohol.  Dram shop.
  • Mahanes v. Loeb, 2004-CA-002195
    Discovery.  Reversed denial of motion to withdraw admissions made by Plaitiff in medical negligence action.

Links are to www.Kycourts.net site.

Medicare Subrogation

Medicare subrogation is an issue in many personal injury cases, and the following information found at the firm site of Matthew Garretson may be useful to many practitioners:

In early December 2003, President Bush signed Public Law 108-173, ultimately giving the government the right of reimbursement that it had been seeking in Thompson v. Goetzmann, 5th Circ. (12/17/02); Brown v. Thompson, 4th Circ (3/20/03) and U.S. v. Baxter, 11th (9/15/03).

How does this legislation affect plaintiff attorneys handling individual and mass tort cases? It means that a firm can no longer rely on a process of reacting only after receiving notice of a potential claim from Medicare or Centers for Medicare & Medicaid Services (CMS). Medicare is not required to send notice; therefore, the obligation is on the clients and their lawyers to be proactive. In addition, the Medicare Secondary Provider (MSP) regulations mandate that lawyers must satisfy Medicare's interest prior to distributing any settlement proceeds.

With this legislation, the exposure for the plaintiff attorney can be twice the amount owed to the agency. In order to avoid Medicare-related liability, client dissatisfaction and "cash flow" pitfalls, the plaintiff attorney must now:

And if that's not enough to manage, more is on the way. Experts predict that Medicare will soon require attorneys who settle liability claims to calculate a "set aside" amount that the client must spend down before Medicare picks up the tab again.

1. Determine if clients are/were recipients of a government assistance program
2. Determine if these programs have liens against the client's settlement
3. Compromise, settle or execute a release of the program's claim

Mr. Garretson also co-authored a paper with Jason Wolf, "Settlements: Addressing Claims for Reimbursements and Preserving Benefits", posted at the Utah Bar site.  Click here to read the article in PDF format.

Torts, Insurance, and Procedural Appellate Update - Week Ending Sept. 9, 2005

Court of Appeals Decisions from September 9, 2005 dealing with Torts, Insurance, Procedure Stuff (TIPS).  Links are to the AOC's Site at www.KyCourts.net.

PUBLISHED DECISIONS

• John Doe v. Golden & Walters, PLLC
  2004-CA-000639
  Circuit court had no subject matter jurisdiction in class action for attorney malpractice, etc. as filed prematurely befor any cause of action accrued for any member of class.
• Riggins v. Floyd
  2004-CA-001486
  Will revocation by operation of law (marriage).
  

NONPUBLISHED DECISIONS

• Brewster v. Brewster
  2003-CA-002524
  Brief stricken and appeal dismissed for failure to comply with CR 76.12(4)(c)(v) regarding showing preserving the error in the record.
  
• Waggoner v. Mortgage Electronic Registration Systems, Inc.
  2003-CA-002666
  Summary judgment dismissing claim affirmed, appellant failed to preserve objection to court's ruling.
  
• Young v. Espinoza
  2004-CA-000111
  Affirmed award of punitive damages even though no compensatory damages awarded or proven.
  
• Jett v. Peoples Bank and Trust of Hazard
  2004-CA-001223
  No damages for failure to publish notice regarding sale of repossessed mobile home under KRS 355.9-625.
  
• Parks v. Walden
  2004-CA-001243
  Directed verdict on breach of contract claim clearly erroneous.
  
• Aponte v. Stock Yards Bank
  2004-CA-001393
  Job discrimination case.
  
• Thomas v. Yost Legal Group
  2004-CA-001723
  Legal malpractice dismissal affirmed.
  
• Cummins v. SDS Services, Inc.
  2004-CA-001844
  Statute of limitations dimissal for personal injury claim affirmed.
  
• Harrison v. Glen Meadows Homeowners Association
  2004-CA-001904
  Final court of appeals action is law of the case, whether right or wrong.
  
  

Supreme Court Rules Medicare Payments are Collateral Source

The Kentucky Supreme Court recently held that the Medicare payments made to an injured claimant were considered collateral source such that the plaintiff could recover the full amount of her medical bills even though Medicare paid a smaller amount per their fee schedules.

Lexington attorney Fred Peters tried the case and took it up through the Court of Appeals to the Supreme Court.  Here is a link to an article in the Herald-Leader showing the human internest side of the case - CLICK HERE.

Here is an extract from the Herald-Leader article:

Lexington crafter's award upheld
NERVE DAMAGE MEANT SHE COULDN'T WORK WITH HANDS
By Beth Musgrave
HERALD-LEADER STAFF WRITER (Aug. 25, 2005)

A Lexington woman who suffered nerve damage at the hands of a Central Baptist Hospital phlebotomist in 1997 may finally receive a settlement of more than $100,000.

The state Supreme Court voted 6-1 to uphold a 2001 Fayette County jury verdict awarding Golda Miller more than $100,000 for losing the ability to stitch the crafts she loved. * * *

Yesterday's verdict has widespread implications for all personal injury cases in Kentucky, said Miller's lawyer, Fred Peters.

At issue was how much money the jury could award Miller: the cost of the actual surgery -- more than $30,000 -- or the amount Medicare paid the doctor, a little more than $3,300.

Chief Justice Joseph Lambert, writing for the court, said Miller should not be punished because Medicare negotiated for a lower rate. Those negotiations do not relieve Central Baptist from "negligence or the duty to pay the reasonable value of Ms. Miller's medical expenses." * * *

"It's a huge victory for plaintiffs," said Jay Vaughn, a plaintiff's lawyer and member of the Kentucky Academy of Trial Lawyers. "It allows them to keep their access to the courts and still allows them to receive justice."

Vaughn and E. Andre Busald, a past president of the academy, wrote an amicus brief supporting Peters' case.

Busald said they were surprised with the court's 6-1 decision -- especially in light of two recent additions to the court -- Will T. Scott and John Roach, both considered conservative.

Justice William Cooper offered the lone dissent in the case. * * *

Here is a link to the Supreme Court's opinion with an extract of the opinion:

Baptist Healthcare v. Miller

2003-SC-000471-DG.pdf

Central Baptist's second argument is that the trial court should have granted a directed verdict on the issue of Ms. Miller's medical expenses. Central Baptist seeks to limit Ms. Miller's recovery to the amount actually paid or the amount actually collectable as a matter of law. It asserts that this is not a collateral source issue ; rather it claims that the amount of alleged damages for which there is no obligation to pay is not a valid item to be submitted to the jury and awarded as damages.

The jury awarded Ms. Miller $34,000 for medical expenses reduced to $22,100 by a 35 percent fault apportionment . She had sought $40,922.08 in medical expenses.

The sum of $31,840 was billed by the doctor, but he received only $3,356.38 from Medicare . Central Baptist claims that Ms . Miller was only responsible for paying $3,356.38 (the amount actually paid by Medicare), and the remaining $28,483.80 was classified as a Medicare adjustment or Medicare write off. Central Baptist claims that the Medicare adjustment was Ms. Miller's windfall.

It is improper to reduce a plaintiff's damages by payments for medical treatment under a health insurance policy if the premiums were paid by the plaintiff or a third party other than the tortfeasor's.  The collateral source rule, as this rule is commonly known, allows the plaintiff to (1) seek recovery for the reasonable value of medical services for an injury, and (2) seek recovery for the reasonable value of medical services without consideration of insurance payments made to the injured party .  The collateral source rule has long been followed in Kentucky." Medicare benefits are governed by the collateral source rule and are treated the same as other types of medical insurance.

In O'Bryan v. Hedgespeth, we stated that "[coolaateral source benefits may relate to the plaintiff's need to recover damages from the wrongdoer, but they have no bearing on the plaintiff's right to recover such damages ."  We held in O'Bryan that a liability insurance company should not receive a windfall for benefits the plaintiff is entitled to . We reasoned that because the insured procured a policy and paid the premiums that the benefits, including a windfall, inured to them.   The recent Court of Appealdecision in Schwartz v. Hasty reiterates the reasoning in favor of providing an injured party with any windfall associated with collateral source payments.

First, the wrongdoer should not receive a benefit by being relieved of payment for damages because the injured party had the foresight to obtain insurance . Second, as between the injured party and the tortfeasor, any so-called windfall by allowing a double recovery should accrue to the less culpable injured party rather than relieving the tortfeasor of full responsibility for his wrongdoing. Third, unless the tortfeasor is required to pay the full extent of the damages caused, the deterrent purposes of tort liability will be undermined, fees does not relieve a tortfeasor from negligence or the duty to pay  the reasonable value of Ms. Miller's medical expenses. Therefore, we hold that evidence of collateral source payments or contractual allowances was properly withheld from the jury and her award of medical expenses was proper.

Earle v. Cobb and the UIM Conundrum

Earle v. Cobb and What Do We Do Now?
Here is an analysis, commentary, opinion piece for lawyers trying car accident cases.

Sometimes, it is simply easier said than done.  When the Kentucky Supreme Court held in Earle v. Cobb, 2000-SC-000818-DG.pdf, on December 16, 2004 that an underinsured motorist (UIM) carrier must be identified at trial when it chooses to preserve its subrogation rights by means of the procedure set forth in Coots v. Allstate Ins. Co.  (the "Coots procedure"), it left some questions unanswered. 

I took a detailed look at Earle v. Cobb in the LawWire (click here for the commentary) addressing why the decision was correctly decided, the judiciary's antiquated fears and distrust of our juries regarding the mention of insurance,  and a multitude of other issues to put this decision in perspective.  The 'PowerPoint' presentation of these issues are:

• Exposing the "Coots Lie" which is that insurers do not advance to preserve subrogation rights but rather to hide behind the defendant's coat tails and minimize their exposure.
• Letting the jury know the entire truth since we live in a world that we want educated jurors who presumably comply with the law and purchase compulsory insurance for their own cars.
• KRE 411's evidentiary prohibition applies only to liability.
• Since the legislature allows for PIP subrogation by the insurance companies, then there is no absolute proscription about the mention of insurance and that the plaintiff and the defendant may very well have complied with the law and purchased insurance.
• The appellate court's conclusions that what works for UM works for UIM is naive and ill-conceived.
• The law is not static and grows with the times.  Just look at the opinions of Justice Liebson, Brandeis, and Harlan.

At the time of my original comment, the hot-button issue was whether the underinsurance carrier would be identified in all UIM cases whether or not the liablity limits were advanced.  Now, this issue has not left us, but sometimes we forget about the practicalities of implementing the decision such that if the insurer is going to be identified, then what are the limits to be placed upon the parties and counsel at trial? 

If you wish to read a "real" order in a "real" case that was just issued here in Jefferson Circuit Court by Judge Kathleen Voor Montano on Aug. 22, 2005, then click here.  Judge Montano had an excellent analysis of Cobb, 411, and 403 in her opinion, and issued an order with the following three limitations:

1. The UIM carrier "may, at its discretion, participate at trial and must produce a company representative for testimony if called by opposing counsel, and
2. No party shall reveal to the jury the policy limits for either insurance policy, and
3. It may be revealed to the jury that [UIM carrier] is the insurer of Plaintiff and may be entitled to recovery from Defendant . . . of any funds paid in regard to the accident."

Numbers 2 and 3 go without saying for the simple reason that the amounts of insurance are clearly not relevant to any claim of the Plaintiff or the subrogation claim of the UIM carrier and that the essence of a subrogation claim is that there might be a recovery of same against the defendant.

Number 1 is a tad hard to understand, however.  It seems that the UIM carrier has the option of cutting and running at trial or simply having a lawyer suit up but no insurance company representative.  This cannot be so.  If nobody shows up for the UIM carrier, than the defendant should move to dismiss the subrogation claim, and this will never happen if the UIM company has advanced monies to preserve that subrogation right in the first place.  Therefore, the lawyer will be present, but there will be an "empty chair" unless the plaintiff plans in advance to request the name of the company representative and that he/she be produced for testimony.

But will there really be an empty chair, and would an insurer thrust its counsel into the position of pursuing a subrogation claim while holding its own insured to the fire but deigning to be absent from the affray.  Any remarks by the UIM attorney that it shall recover its claim against the defendant should ring hollow.

Here are some preliminary thoughts for the plaintiff's attorney:

1. Submit comprehensive discovery (interrogatories, document requests, admissions) to the defendants on the injuries, the medical bills and expenses, causation, damages (eg., pain, suffering, anguish, inconvenience, etc.) and see if the UIM adjuster disagrees with the counterpart PIP adjuster.  A Kodak moment  could be in the offing when $10,000 in causally connected medical expenses and any concommitant pain and suffering and inconvenience are disputed by UIM after being paid by PIP from the same company.  Can you hear the lawyer at trial saying "Imagine this very same company accepted insurance premiums but refuses to acknowledge that their own insured was inconvenienced one iota when he/she was hit and received medical treatment or even had to stuggle for payment of those late lost wage and medical payments."
2. The UIM carrier's conduct in handling the PIP claims (late, questioning, paying, etc. for lost wages and medicals; IME) should be closely scrutinized between the pretrial and trial postures for inconsistencies.
3. With bareboned instructions, the lawyer for the plaintiff has the obligation to give the jurors an explanation of the mechanics of why the UIM carrier is there in the first place (a/k/a the Coots procedure) and that there is liability insurance but not enough to make the plaintiff whole so he is looking to his own carrier for the benefit of that contract for which he has paid premiums for 1, 2, . . 10 years.  And how much were those premiums by the way?  $1,000. . . $10,000 . . . more?

Now the insurance defense attorney will and should keep the focus of the trial on the value of the insured's damages which is the issue before the jury (assuming no liability, apportionment or other issues in the case), avoid saying the word insurance altogether, keep the representative away from the view of the jury, and otherwise be silent, sterile, and solemn.  Avoid the emotion and become the alter ego of the tortfeasor's lawyer.

And the plaintiff's lawyer will/should focus on the nature of the insurance contract as an element of his claim for UIM to include proving the elements of any contract (consideration, promises, quid pro quo, etc.).  Will the defense be able to diffuse this by admitting these elements of the case?  Possibly.  But take a look at that original answer filed by the UIM Defendant and note how there probably are a series of denials and  references to the actual contract and applicability of all the "terms, conditions, limitations, and exclusions" of that contract.  And if they have changed their position now, why and why not then? 

Admittedly, this is a full-disclosure approach to the issues in the case.  Rather than insult the jury's intelligence, embrace the fact that many drive cars and pay insurance bills.  If UIM must be offered, and UM rejected, do not be suprised if someone (eg., insurance agent) has already explained this aspect of insurance law to the jurors outside of the jury box.  Could it be possible that this explanation was incomplete, biased, or wrong?

In conclusion, we  have juries.  Trust them to do their duty, the job, their responsibility.  If you cannot trust a juror to follow his oath, then can we trust you to do the same?

"I consider [trial by jury] as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." --Thomas Jefferson to Thomas Paine, 1789. ME 7:408, Papers 15:269

With regard to trial by jury, Sir William Blackstone wrote "This, therefore, preserves in the hands of the people that share which they ought to have in the administration of general justice, and prevents the encroachment of the powerful and wealthy citizens."  Sir William Blackstone, Commentaries on the Laws of England (1765)

Hey folks, provide us with your comments, read the order above, and share and share alike.  Thanks.

Feb. 17, 2005 - Supreme Court - TIPS (Civil)

To get our BLAWG (Web Law Blog) up and running short-term.  I am going to revisit and post the published decisions of the Kentucky Supreme Court dealing with TIPS only (Torts, Insurance & Procedural Stuff).

In February, the Kentucky Supreme Court issued three published decisions dealing with statute of limitations, insurance coverage, and sovereign immunity.

• PEDIGO   V.   BREEN
  Accrual of legal negligence claim following representation in defective products claim.
• YORK  V.  KENTUCKY FARM BUREAU MUT. INS. CO.
  Affirmed "non-permissive" use exclusion in automobilie liability policies.
• GRAYSON COUNTY BOARD OF ED.   V.   CASEY
  Boards of Education are state instrumentalies covered by sovereign immunity with jurisdiction in Board of Claims.  Dismissed circuit court action.

PEDIGO   V.   BREEN
CIVIL PROCEDURE - STATUTES OF LIMITATION (Legal Negligence)
2003-SC-000028-DG.pdf
Judge: LAMBERT
REVERSING AND REMANDING
Date: 10/21/2004
Modified: 2/17/2005
PUBLISHED
Ms. Pedigo retained the legal services of Mr. Breen way back in 1992 when he advertised his plans to pursue a class action lawsuit against breast implant manufacturers for defective products.  She claims she took her original medical records to his office for review, and that later he declined to represent her yet never returned her records, despite repeated requests that he do so (he claims she never brought him those records).  Several years passed, during which time Ms. Pedigo sought the services of other attorneys for her medical problems, but the lack of her original medical records precluded her from joining class action suits against the manufacturers.  She eventually settled with 3M for $50,000 in 1998 but later discovered her settlement would have been five times that amount had she been able to participate in the class action suit. 

In 1999, she brought suit against Mr. Breen for legal negligence, arguing that the date of her 1998 settlement was when he damages ceased to be speculative and thus began the statute of limitations.  The trial court and the CA both ruled she filed against Mr. Breen outside the SOL of one year as per KRS 413.245.  The Supremes took discretionary review and held that professional negligence claims do not accrue until there has been a negligent act and reasonably ascertainable damages are incurred.  It found that she was unable to ascertain her damages until she reached a settlement with 3M, and since she had filed against Mr. Breen within one year of that settlement, her suit against him fell within the applicable SOL.  The Court noted that this ruling illustrates the desirability of strictly construing the occurrence rule and requiring that all tort elements be fully developed.   It also serves public policy by allowing parties an opportunity to seek mitigation of damages by pursuing an underlying claim and by leaving the professional negligence claim open until the underlying claim is concluded.

The COA decision dismissing the malpractice claim was reversed and remanded.

YORK  V.  KENTUCKY FARM BUREAU MUT. INS. CO.
INSURANCE - Coverage (Automobile, Non-Permissive User Exclusion)
2003-SC-000334-DG.pdf
Judge: GRAVES
AFFIRMING
Date: 2/17/2005
PUBLISHED
COMPANION CASE
2003-SC-000338-DG.pdf

The Supreme Court affirms the CA holding that a non-permissive user exclusion applied to absolve Kentucky Farm Bureau of providing liability coverage.

As folks socialized in the "Chat and Chew" parking lot, Driver-Appellant insisted on test driving Camaro despite owner's repeated and absolute refusal. Driver had a single-car wreck, injuring Passenger-Appellant.

Both Driver and Owner were insured by KFB. KFB moved for SJ arguing that both policies had a non-permissive user exclusion. TC granted SJ against KFB, holding that the exclusion applied in Owner's policy, but did not apply in Driver's policy. TC held that the exclusion for "any" non-permissive user did not specifically reference insureds under the policy, so Kentucky public policy favored a liberal construction in favor of coverage. A unanimous CA reversed.

The Supreme Court finds no ambiguity in the exclusion; "any" non-permissive driver is excluded.

Justice Lambert wrote a dissenting opinion joined by Scott and Wintersheimer: "Kentucky law and public policy considerations mandate that we find coverage in cases involving the injury of an innocent 3rd party."

GRAYSON COUNTY BOARD OF ED.   V.   CASEY
TORTS -  DEFENSES  - SOVEREIGN IMMUNITY
2003-SC-000208-DG.pdf
Judge: COOPER
REVERSING
Date: 2/17/2005
PUBLISHED

SC reinstates SJ for Board of Education entered by TC, overturning CA reversal.
Appellee was injured by the negligent operation of a forklift by a Grayson Cty. Board of Ed. employee. TC entered SJ for the Board, which was reversed by the CA. SC reviews and reverses.

"A board of education is an agency of state government and is cloaked with governmental immunity; thus, it can only be sued in a judicial court for damages caused by its tortious performance of a proprietary function, but not its tortious performance of a governmental function, unles the General Assembly has waived its immunity by statute." The Board of Claims Act is a partial waiver of immunity that permits a person damaged by a board of education's negligent performance of a governmental function to file a claim for damages in the Board of Claims, including a claim premised upon vicarious liability for the torts of the board of education's employees. Since Appellee's action was brought in the circuit court and not the Board of Claims, it was properly dismissed because there was no waiver under KRS 160.310.

Thanks to Cherry Henalt, John Hamlett, and Chad Kessinger for digesting these opinions.
Michael Stevens, Editor