COA 2010 Minutes: January 22, 2010 (Nos. 49-85)

  • 37 decisions
  • 9 published

Published Decisions with digest and link to full text decision at AOC:

49
SETTLEMENT AGREEMENTS, RECISSION, MISTAKE OF FACT
BOBBITT VS. COLLINS
OPINION REVERSING AND REMANDING ** ** ** ** **

BEFORE: STUMBO, THOMPSON, AND WINE, JUDGES. WINE, JUDGE: Rosalene
Bobbit, Administratrix of the Estate of Robert Boyd (“the Estate”),
appeals from summary judgment orders dismissing Boyd’s personal injury
claims arising from a multi-vehicle collision which occurred on
November 28, 2003. We agree with the trial court that the clear
language of the release with one tortfeasor operates to discharge the
other joint tortfeasors. However, we disagree with the trial court that
the written release precluded Boyd from seeking rescission of the
release based on mutual mistake. Furthermore, since the parties to the
release agree that the general release term was included by error, we
find that the Estate is clearly entitled to rescission of the release.
Hence, we reverse the trial court and remand for further proceedings.

51
SUBROGATION, CONTRACTUAL AMBIGUITY AS TO WHO IS "THIRD PARTY" AND UNINSURED MOTORIST  BENEFITS
LYNCH V. CLAIMS MANAGEMENT CORP.

OPINION REVERSING AND REMANDING
BEFORE: CLAYTON, DIXON, AND WINE, JUDGES.
WINE, JUDGE: Charles D. Lynch (“Lynch”) appeals from a Jefferson
Circuit Court summary judgment awarding Claims Management Corporation
(“CMC”) $66,172.96 from the settlement proceeds Lynch received from
Kentucky Farm Bureau (“KFB”), his uninsured motorist carrier. Lynch
further appeals the court’s denial of his cross motion for summary
judgment seeking dismissal of CMC’s intervening complaint. For the
reasons stated herein, we reverse and remand. * * *

Lynch argues persuasively that the language in paragraph 26 of the
General Provisions of the Plan is both ambiguous and subject to a
reasonable interpretation that Lloyds would seek reimbursement from a
third party tortfeasor.

Included in paragraph 26 is the following language: Conditional Claim Payment
If an Insured Person suffers a covered injury received in an Accident;
and for which, in the opinion of the Underwriters’, a third party may
be liable; the Underwriters’ will pay the amount of the benefits that
would be paid under the Master Policy. However, the Insured Person must
first agree in writing to refund the lesser of:
a.    the amount actually paid by the Underwriters’ for such covered
Accident; or
b.    an amount equal to the sum actually received from the third party for such
covered Accident.
At the time such third party liability is determined and satisfied,
this amount shall be paid whether determined by settlement, judgment,
arbitration or otherwise. If the Insured Person does not receive
payment from a third party for such Covered Accident, the Underwriters
reserve the right to subrogate against the Third Party.
We are mindful that Kentucky courts have consistently held that
“[w]here the terms of an insurance policy are clear and unambiguous,
the policy will be enforced as written.” Kemper Nat. Ins. Companies v. Heaven Hill Distilleries, Inc., 82 S.W.3d 869, 873 (Ky. 2002).
The meaning of the term “third party” is not defined in the section
styled “definitions,” nor in any subsection of the general provision
segment of the policy. Confusion is created by the language which
allows the Underwriters to determine when a third party may be liable.
Additionally, it is not clear whether liability is confined to tortious
acts or contractual obligations.

Further, both the letter and the Reimbursement Agreement from CMC
strongly imply that it would seek recovery from an at-fault party. The
first sentence of the December 11, 2003 letter states, “The
Occupational Accident Plan provides for reimbursement if a third Party
who may be responsible for your injury or illness is involved.” The
Reimbursement Agreement is couched in terms of “injuries and damages
sustained by BENEFICIARY as a result of an occurrence on or about
12-1-2003 . . . to have been caused by Accident.”

A reasonable person may well expect that the language “third party”
would be limited to tortfeasors, not one’s own insurer. Under the
“reasonable expectations” doctrine, ambiguous terms in an insurance
contract must be interpreted in favor of the insured’s reasonable
expectations and construed as an average person would construe them.
But “[o]nly actual ambiguities, not fanciful ones, will trigger
application of the doctrine.” True v. Raines, 99 S.W.3d 439, 443 (Ky.
2003). We find the conundrum of who is defined as a third party to be a
real ambiguity and one created by Lloyds and CMC. A simple definition,
or even additional language in paragraph 25 dealing with limitation on
recovery under the Plan when other policies are involved, could have
resolved the issue. Leingang v. Pierce County Medical Bureau, Inc., 131
Wash.2d 133, 137, 930 P.2d 288, 291 (Wash. 1997). (Language in an
insurance contract excluding recovery when uninsured or underinsured
motorist coverage benefits are paid.)
Not only does this appear to be a case of first impression in Kentucky,
but we recognize there is no clear consensus in other jurisdictions as
to whether a health care contractor has a subrogation right (under
contractual or equitable terms) against a UIM/UM carrier or UIM/UM
proceeds.

59
REVENUE AND TAXATION
ENERGY AND ENVIRONMENT CABINET VS. SPURLOCK

OPINION REVERSING AND REMANDING
** ** ** ** ** BEFORE: CAPERTON, THOMPSON, AND WINE, JUDGES.
THOMPSON, JUDGE: The Commonwealth of Kentucky, Energy and Environment
Cabinet (formerly Environmental and Public Protection Cabinet), appeals
from two orders of the Clay Circuit Court declaring the Cabinet’s final orders
entered against Vernon Spurlock d/b/a Vernon Spurlock void based on its
interpretation of the Kentucky Supreme Court’s decision in Commonwealth
of Kentucky, Natural Resources and Environmental Protection Cabinet v.
Kentec Coal Co., Inc., 177 S.W.3d 718 (Ky. 2005). We conclude that the
trial court was incorrect in its application of the law. We reverse and
remand.

60
CRIMINAL
BARKER VS. COM.

OPINION AFFIRMING
** ** ** ** **
BEFORE: NICKELL AND VANMETER, JUDGES; LAMBERT,1 SENIOR JUDGE.
VANMETER, JUDGE: Gerald Barker appeals from an order of the Graves
Circuit Court revoking his probation. For the following reasons, we
affirm.

62
BUSINESS LAW – CORPORATE VEIL
BEAR, INC. VS. SMITH

OPINION AFFIRMING IN PART, REVERSING IN PART AND REMANDING
** ** ** ** ** BEFORE: KELLER, MOORE, AND TAYLOR, JUDGES.
MOORE, JUDGE: Bear, Inc., d/b/a Laker Express, appeals from a judgment
of the Laurel Circuit Court dismissing its action to collect unpaid
fuel charges from Tony H. Smith and an unrelated entity, Smith Heating
and Air Conditioning, LLC; its claims against Tony H. Smith for fraud
relating to these charges; and its action to pierce the corporate veil
of Smith Services, Inc., as an alternate basis of liability for its
sole shareholder, Tony H. Smith. For the reasons herein stated, we
affirm the circuit court regarding Laker Express’s claims of fraud and
the liability of Smith Heating and Air Conditioning, LLC. We reverse
the circuit court as to the issues of Tony H. Smith’s individual
liability for these charges.

72
QUALIFIED PRIVILEGE, ATTORNEY
FLINT V. STILGER

OPINION REVERSING AND REMANDING
** ** ** ** ** BEFORE: CAPERTON AND DIXON, JUDGES; HENRY,1 SENIOR JUDGE.
CAPERTON, JUDGE: Edward Flint, pro se, appeals the Jefferson Circuit
Court’s order which granted Dennis Stilger’s motion for summary
judgment against Flint’s defamation claim. Flint contends that summary
judgment was improper as there were material issues of fact to be
resolved and that the law does not support the trial court’s legal
conclusions. Stilger disagrees. We conclude that Stilger was only
entitled to a qualified privilege, not absolute as found by the trial
court. Accordingly, we reverse and remand to the trial court for a
determination on whether Stilger acted with actual malice.

77
FAMILY LAW – TERMINATION OF PARENTAL RIGHTS
CABINET FOR HEALTH AND FAMILY SERVICES VS. R.(D.G.)

OPINION REVERSING
** ** ** ** **
BEFORE: LAMBERT AND VANMETER, JUDGES; HENRY,1 SENIOR JUDGE.
LAMBERT, JUDGE: The Cabinet for Health and Family Services appeals from
an order of the Caldwell Circuit Court which denied the Cabinet’s
petition to terminate the parental rights of D.G.R. and T.B.H. to their
minor child, A.T.H. After careful review, we reverse.

82
WORKERS COMP
JONES VS. AEROTECK STAFFING

OPINION AFFIRMING
** ** ** ** ** BEFORE: KELLER AND WINE, JUDGES; LAMBERT,1 SENIOR JUDGE.
KELLER, JUDGE: Louis Jones (Jones) appeals from the Workers’
Compensation Board’s (the Board) opinion affirming the Administrative
Law Judge’s (ALJ) opinion and order on reconsideration. On appeal,
Jones argues that the ALJ erred when she altered her opinion on
reconsideration regarding her award of enhanced permanent partial
disability benefits based on a safety violation. Jones also argues that
the ALJ erred by not enhancing his temporary total disability benefits
based on that safety violation. For the following reasons, we affirm.

85
WORKERS COMP
QUEBECOR BOOK CO. VS. MIKLETICH

OPINION AFFIRMING
** ** ** ** **
BEFORE: COMBS, CHIEF JUDGE; TAYLOR, JUDGE; HENRY,1 SENIOR JUDGE.
COMBS, CHIEF JUDGE: Quebecor Book Company appeals a decision of the
Workers’ Compensation Board that affirmed an administrative law judge’s
opinion and award of benefits to Lou Mikletich for cumulative,
work-related hearing loss.  Quebecor argues that the Board misconstrued
controlling law by failing to exclude from the award a portion of
Mikletich’s impairment attributable to a non- compensable hearing loss.
After our review, we affirm.