Aug. 2012 SCOKY Monthly Case Summary of Published Decisions

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Tort Report:


Michael Schnuerle, Amy Gilbert, Lance Gilbert and Robin Wolff v. Insight Communications, Company, L.P. and Insight Communications Midwest, LLC
2008-SC-000789-DG August 23, 2012
2009-SC-000390-DG August 23, 2012
Opinion by Justice Venters. All sitting. Minton, C.J., Abramson, Cunningham and Scott, JJ., concur. Schroder, J., concurs in part and dissents in part by separate opinion in which Noble, J., joins. Civil/Arbitration. Questions Presented – (1) does Kentucky law rather than New York law govern construction of internet service agreement notwithstanding a New York choice of law provision in agreement; (2) is agreement’s ban on class action litigation enforceable under federal arbitration law; (3) is the general arbitration clause procedurally unconscionable; is (4) general arbitration clause substantively unconscionable; and (5) is confidentiality provision in arbitration clause substantively unconscionable. Held: (1) Kentucky law rather than New York law governs construction of internet service agreement notwithstanding a New York choice of law provision in agreement because customers executed agreements in Kentucky, Kentucky had a substantial interest in the protection of its residents in the area of commercial transactions, one of the principal claims arose under the Kentucky Consumer Protection Act, and New York had no discernible connection or interest in the subject matter of the litigation.; (2) agreement’s ban on class action litigation is not enforceable under federal arbitration law pursuant to AT & T Mobility LLC v. Concepcion, ––– U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011); (3) the general arbitration clause was not procedurally unconscionable because its terms were reasonably disclosed; (4) the general arbitration clause is not substantively unconscionable; and (5) the confidentiality provision in the arbitration clause is substantively unconscionable because provision in effect favored internet service provider as a repeat participant in the arbitration process, and provider failed to identify any practical social utility to the provision.

Donna Ping, Executrix of the Estate of Alma Calhoun Duncan, Deceased v. Beverly Enterprises, Inc. et al.
August 23, 2012
Opinion of the Court by Justice Abramson. All sitting; all concur. The nursing- home Defendant in a tort action brought by the estate of a former resident moved to enforce an arbitration agreement signed at the same time as the resident’s admissions agreement by the resident’s attorney-in-fact, her daughter. The trial court concluded that the resident’s daughter had not had authority to agree to arbitration and denied the motion. The Court of Appeals reversed. Reversing the Court of Appeals’ decision and reinstating the trial court’s denial, the Supreme Court held that the daughter’s authority under a durable power of attorney to make financial and health care decisions for her mother did not extend to an optional arbitration agreement and that the agreement was not otherwise enforceable under theories of apparent authority, equitable estoppel, or third-party beneficiary. The Court also held that even if the arbitration agreement had been valid, it would not have applied to the claims brought by the deceased resident’s wrongful death beneficiaries.


Dahlenburg Bonar, P.S.C.; And Barbara D. Bonar v. Waite, Schneider, Balyess & Chesley Co., L.P.A.; Stanley M. Chesley; And Robert A. Steinberg
August 23, 2012
Opinion of the Court by Justice Cunningham. Justices Noble and Schroder not sitting; all concur. Where attorney voluntarily withdraws from representation, and no good cause exists for said withdraw, the attorney is not entitled to fees, either by contract or under a quantum meruit calculation. This rule applies when the attorney’s fee agreement is directly with a client, as well as a fee-splitting agreement with co-counsel.


State Farm Mutual Automobile Insurance Company v. James Baldwin
August 23, 2012


Ronda Reynolds v. Safeco Insurance Company of Illinois
2010-SC-000665-DG August 23, 2012

Opinion of the Court by Chief Justice Minton. All sitting. Abramson, Cunningham, Noble, Schroder, and Venters, JJ., concur. Scott, J., concurs with statement. James Baldwin and Ronda Reynolds allegedly sustained injuries in separate highway incidents after objects came loose from unidentified vehicles and collided with their vehicles. A plastic sheet flew from an unknown truck and wrapped itself on the front of Baldwin’s vehicle. And, in Reynolds’s case, a sheet of ice broke free from an unknown tractor-trailer and struck her vehicle. Both Baldwin and Reynolds sought uninsured motorist (UM) coverage for hit-and-run accidents through their automobile insurance policies. Baldwin’s State Farm policy provided coverage when an uninsured motor vehicle “strikes” the insured vehicle. And Reynolds’s Safeco policy covered damages when an uninsured motor vehicle “hits” the insured vehicle. The Supreme Court held that the “strike” and “hit” requirements in State Farm’s and Safeco’s UM clauses are satisfied if the uninsured vehicle, or an integral part it, makes physical contact with the insured’s vehicle; or if the uninsured vehicle exerts force upon an intermediate object, which then makes physical contact with the insured’s vehicle in a chain-reaction accident. The Court determined that neither the uninsured vehicles nor integral parts of them struck or hit Baldwin’s or Reynolds’s vehicles. Nor did the uninsured vehicles cause the plastic sheet or ice to strike or hit the insured vehicles by exerting force upon them. So the impact requirements in the UM clauses of Baldwin’s and Reynolds’s insurance policies were not met.


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