The complete set of summaries of published decisions for this month are as follows at the bottom of this post. However, here are selected published decisions dealing with torts, insurance, and civil matters of note from the Court of Appeals of Kentucky as summarized by the AOC.
Please note some of these published decisions may have pending motions for discretionary review so you are cautioned to confirm finality of disposition by going to the AOC’s web site.
Icon-Lex Development, LLC v. REI Real Estate Services, LLC
2014-CA-001643 05/13/2016 2016 WL 2855298
Opinion and order dismissing by Judge VanMeter; Judges Combs and J. Lambert concurred. Upon review of an order granting judgment on the pleadings in a case involving an easement, the Court of Appeals dismissed the appeal, finding that the Court had no jurisdiction. The Court held that when an easement has been judged to be appurtenant, and thus benefits a specific piece of land rather than a specific person, the current owner of the benefitted parcel is undoubtedly affected by the Court’s decision on appeal and, therefore, is an indispensable party to the appeal. Under the appellate civil rules, failure to name an indispensable party on appeal is an incurable jurisdictional defect requiring dismissal. Consequently, because the current owner of the subject property was not made a party to the appeal, dismissal was merited.
DKM Coal Corporation, Inc. v. Crawford
2013-CA-001936 05/13/2016 2016 WL 2855871
Opinion by Judge J. Lambert; Judges Maze and Taylor concurred. Determining that no material issue of fact existed with regard to the ownership of coal tippling rights, the Court of Appeals affirmed the circuit court’s entry of summary judgment in favor of appellees. Notably, the Court held that a sublessee’s shareholders’ admission, in open court at a hearing before the circuit court, that they owed damages to a sublessor’s shareholder, was a judicial admission that could be used against sublessee’s shareholders under the Kentucky Rules of Evidence. The Court further held that its prior holding in the same matter that a sublease contract’s reference to “personal liability” imposed liability on the corporate sublessee’s individual shareholders was the law of the case on a subsequent appeal in the same case, regardless of any discussion of the applicability of the term “person” to corporations in the later-decided United States Supreme Court case of Citizens United v. Federal Election Commission, 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010). The Court also held that a delay of approximately four years after the Court issued its opinion in a prior appeal did not require dismissal of sublessors’ breach of sublease action for failure to prosecute. Most of the delays were attributable to the sublessees, an extensive delay occurred when the sublessees appealed from an interlocutory order, and further delay occurred when the sublessees obtained a new attorney who later withdrew.
FEES AND COSTS.
Hencye v. White
2013-CA-002079 05/27/2016 2016 WL 3050079
Opinion by Judge Thompson; Judge D. Lambert concurred; Judge Dixon dissented. Appellant challenged an order directing her to pay $8,000 of her ex-husband’s attorneys’ fees incurred as a result of alleged discovery violations after she requested appointment of a parenting coordinator. The Court of Appeals reversed, holding that under KRS 403.220, attorneys’ fees cannot be awarded absent a finding of a disparity in income between the parties and, further, that the conduct of the party seeking attorneys’ fees must be considered. Additionally, the Court held that CR 37 cannot justify an award of attorneys’ fees where there was not a “pending” action, and that a request for the appointment of a parenting coordinator, standing alone, did not satisfy this requirement in the absence of any motion to modify custody or parenting time. The Court also held that appellant could not be ordered to pay attorneys’ fees incurred as a result of her current husband’s noncompliance with the family court’s orders to produce a HIPPA release.
Beward v. Whitaker
2013-CA-000773 05/06/2016 2016 WL 2609308
Opinion by Judge J. Lambert; Judges Jones and Stumbo concurred. On remand from the Supreme Court of Kentucky, the Court of Appeals reversed its original holding in which it affirmed the circuit court’s interlocutory decision that two high school principals were not entitled to qualified official immunity for injuries a student sustained in a hallway that was left unsupervised because the teacher assigned to supervise that station pursuant to the supervision schedule was absent that day. The Court originally held that the principals’ duty to enforce the supervision schedule and to supervise the hallway was ministerial, and thus they were not entitled to immunity. However, on reconsideration in light of the Supreme Court’s holding in Marson v. Thomason, 438 S.W.3d 292 (Ky. 2014), the Court held that because the supervision schedule did not include any direction or rule to address when a teacher or administrator assigned to a post was absent, it did not create a ministerial duty to ensure that the station was manned in the absence of a teacher. The principals had a general supervisory duty to make the hallway assignments and to walk the hallways as part of their job requirements. In the absence of a clear directive as to what to do when a teacher assigned to a post was absent, it was left to the principals’ discretion as to how to proceed, entitling them to qualified official immunity.
Rasche v. Berman
2012-CA-001766 05/20/2016 2016 WL 2981636
Opinion by Judge J. Lambert; Judges Kramer and VanMeter concurred. On remand from the Supreme Court of Kentucky for further consideration in light of Marson v. Thomason, 438 S.W.3d 292 (Ky. 2014), the Court of Appeals affirmed the circuit court’s determination that various employees of the Jefferson County Board of Education were entitled to qualified official immunity. The Court held that the employees’ decision as to whether to close school due to inclement weather and the manner in which school parking lots were cleared amounted to discretionary functions. As such, qualified official immunity attached.
Brown v. Mitsui Sumitomo Insurance Company
2013-CA-001191 05/06/2016 2016 WL 2609303
Opinion by Judge Nickell; Judges Dixon and Kramer concurred. Appellant was injured in a work-related motor vehicle accident while riding in his employer’s vehicle. Appellant filed for and received workers’ compensation benefits from his employer’s workers’ compensation carrier. Knowing the Workers’ Compensation Act provides an exclusive remedy, appellant mistakenly believed that his employer, Trim Masters, Inc., and its underinsured motorist (UIM) carrier, Mitsui Sumitomo Insurance Company, were immune from suit. However, KRS 342.690(1) does not prohibit suit against a UIM carrier after payment of a workers’ compensation claim. Two days shy of two years from the collision, appellant filed suit against the tortfeasor and against his own UIM carrier, State Auto; he did not file suit against Mitsui. In response, State Auto asserted that its UIM coverage was secondary to that provided by Mitsui and sought leave to file a third-party complaint against Mitsui. Appellant initially opposed the motion, but then conceded that Mitsui should have been named as a defendant and moved to file an amended complaint to add them. State Auto also moved for summary judgment. The circuit court sustained both motions and named Mitsui as a defendant. Mitsui answered the complaint asserting that Trim Masters’ insurance policy required a UIM claim to be filed within two years of accrual and moved for judgment on the pleadings since the amended complaint was filed nearly three years after the collision. The circuit court found that: (1) two years was a reasonable contractual window in which to file suit; (2) appellant’s failure to name Mitsui as a defendant when he filed against the tortfeasor and his own personal UIM carrier was fatal because he had to exhaust UIM benefits from Mitsui (the primary carrier) before he could pursue benefits from State Auto (the secondary carrier); and (3) as a third-party beneficiary under his employer’s policy, appellant could enforce the policy’s terms, but he had to enforce all of its terms and not only the ones that benefitted him. Thus, UIM benefits had to be claimed within two years of accrual. The Court of Appeals affirmed. Since appellant had filed suit against the tortfeasor and his own UIM carrier within two years, there was no reason he could not have filed against his employer’s UIM carrier at the same time. The Court noted that appellant’s counsel need not have waited until his investigation was complete before filing suit; so long as he did due diligence to believe Mitsui was potentially liable, the complaint could have been filed.
Eberle v. Nationwide Mutual Insurance Co.
|2013-CA-000898 05/06/2016 2016 WL 2609311
Opinion by Judge Jones; Judges J. Lambert and Stumbo concurred. This appeal concerned coverage under a homeowner’s insurance policy issued by Nationwide Insurance Company to Michael Bishop. The circuit court determined that Nationwide was not obligated to provide coverage for injuries appellant sustained when Bishop shot him because the injuries were caused by conduct expressly excluded from coverage in Nationwide’s policy. On appeal, the Court of Appeals determined that Nationwide’s criminal acts exclusion applied to an “act or omission which is criminal in nature” such that it constituted a felony or misdemeanor under Kentucky’s Penal Code. Under this definition, offenses punishable only by a fine would not be covered by the criminal acts exclusion because such offenses are violations, not misdemeanors or felonies. See KRS 500.080; KRS 431.060. Traffic infractions are likewise excluded from Kentucky’s definition of a misdemeanor. See KRS 500.080. Bishop pled guilty to wanton endangerment in the first degree, a Class D felony. The Court noted that intentionally pointing a gun at an unarmed child is the type of conduct every citizen should know is wanton and criminal. The Court refused to accept that Bishop could have reasonably expected such core criminal conduct to fall outside of Nationwide’s criminal acts exclusion. Accordingly, the Court held that the exclusion applied in this case. The Court then determined that Bishop’s Alford plea collaterally estopped him from denying civil liability and that the conviction established Bishop’s factual guilt irrespective of the fact that the conviction was obtained through entry of an Alford plea.
Burchett v. Burchett
2015-CA-000198 05/13/2016 2016 WL 2855384
Opinion by Judge D. Lambert; Judges Combs and VanMeter concurred. This appeal was brought from an order finalizing dismissal of a wrongful death suit against an automotive dealer and his insurer. Amanda Burchett and Erick Blair (Blair) bought an automobile from David Perry, d/b/a Louisa Auto Mart (Perry). Blair crashed the automobile six days later while driving intoxicated. Amanda Burchett and Benjamin Burchett II were riding with Blair at the time. Benjamin was killed in the crash. Sandra Burchett, as the representative of Benjamin’s estate, later filed a wrongful death action against Blair and Perry. In the complaint, she alleged: (1) that Perry violated KRS 186A.220 because he sold the automobile to Blair and Amanda and neither one had insurance; (2) that Perry violated KRS 186.620 by authorizing and permitting a person without a driver’s license to drive an automobile; (3) that Perry negligently entrusted the automobile to Blair and Amanda; and (4) that Perry remained the owner of the automobile because he sold it to individuals who did not have insurance in violation of KRS 186A.220. The circuit court granted Perry’s motion for summary judgment as to the violations of KRS 186A.220 and held a jury trial to decide two issues: whether Perry delivered title documents to Blair and Amanda on the day of the sale (yes), and whether Amanda had a driver’s license (no). Based on the jury’s determination, the circuit court ruled that title to the automobile transferred on the day of the sale, eliminated any issues relating to Perry’s alleged liability, and dismissed Perry from the action. On appeal, Sandra argued: (1) that Perry breached a statutory duty of care by authorizing or knowingly permitting Blair to drive the automobile because Blair did not have a driver’s license; (2) that Perry had a duty to verify that Blair and Amanda were insured; and (3) that a jury issue remained as to whether Perry negligently entrusted the vehicle to Blair and Amanda because he should have known that neither Blair nor Amanda had a driver’s license or insurance. The Court of Appeals rejected all three arguments and affirmed. Because Perry delivered the necessary title documents to Blair and Amanda on the day of sale, Blair and Amanda became the owners of the automobile on that day. Moreover, since Perry was no longer the owner, he was under no duty to prevent either Blair or Amanda from driving the automobile on the day of the accident. Finally, because Perry transferred the title documents to Blair and Amanda directly, and did not retain the certificate of title with the consent of the new owners to file it with the county clerk, he did not have to verify whether Blair or Amanda was insured. The Court further held that because the accident occurred after the sale, the negligent entrustment claim against Perry failed as a matter of law.
DeMoisey v. Ostermiller
2014-CA-001827 05/06/2016 2016 WL 2609321
Opinion by Judge Jones; Chief Judge Acree and Judge Clayton concurred. This appeal and cross-appeal arose out of a civil action wherein appellants/cross-appellees, J. DeMoisey Fox and the DeMoisey Law Office, PLLC (“DeMoisey”), asserted claims against appellee/cross-appellant, attorney Peter L. Ostermiller, for tortious interference with contractual relations, tortious interference with prospective contractual relations/business advantage, and abuse of process. The claims arose out of Ostermiller’s advice to and representation of Infocon Systems, Inc. (“Infocon”), a former client of DeMoisey. The Court of Appeals held that DeMoisey could not rely on an alleged contingency fee agreement that had previously been determined to violate the Kentucky Rules of Professional Conduct to support a tortious interference with contractual relations claim. The Court also held that DeMoisey had failed to allege a cognizable tortious interference with prospective contractual relations/business advantage claim because in the absence of a valid contingency fee agreement, his only expectancy was to receive a fee in quantum meruit. With respect to the cross-appeal, the Court determined that the abuse of process claim should have been dismissed with prejudice because it was time barred. The Court held that successful termination of the underlying action is not an element of an abuse of process claim and, therefore, the statute of limitations on such a claim begins to run when the conduct comprising the abuse takes place.
Goins v. Lafoe
2014-CA-001476 05/27/2016 2016 WL 305023
Opinion by Judge Dixon; Judges Combs and D. Lambert concurred. The Court of Appeals affirmed an order granting summary judgment for appellees on the grounds that appellant’s tort claims were time-barred. Appellant asserted that the five-year limitations period set forth in KRS 413.120(2) applied to her claims, which she characterized as statutory violations of the penal code. The Court held that appellant could not circumvent the applicable statute of limitations (KRS 413.140(1)(a)) by characterizing her tort claims in this manner. Appellant’s cause of action concerned physical injuries she allegedly suffered at the Lexington-Fayette Urban County Government Detention Center. Consequently, the one-year statute of limitations applicable to personal injury actions applied. Since appellant waited nearly five years before filing suit, her claims were time-barred. The Court also held that appellant’s plea agreement in a related criminal action barred her subsequent claim of malicious prosecution as a matter of law.
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