March 15, 2013 COAKY Minutes — Re: Economic loss rule applied; final and appealable of dec action and question fact re application of owned/furnished but not insured vehicle

Published and Unpublished Decisions for COAKY
March 15, 2013

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No. 267 – 298;  32 decisions


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267 Damages. Commercial and “economic loss rule” applied.
Cincinnati Ins. Cos.  v. Staggs and Fisher Consulting

DIXON, JUDGE: Appellant, Cincinnati Insurance Companies, appeals from an order of the Campbell Circuit Court dismissing its action against Appellees, Staggs & Fisher Consulting Engineers, Inc. (“S & F”) and Omni Associates, Ltd., forfailure to state a claim upon which relief can be granted. For the reasons set forth herein, we affirm.

This matter concerns a construction project in Nunn Hall on the campus of Northern Kentucky University. The Commonwealth of Kentucky contracted with Omni Associates to design the project who, in turn, subcontracted with S & F to also work on the project. The Commonwealth separately contracted with Messer Construction for the construction of the project. Messer Construction thereafter entered into a sub-contract with Banta for the electrical work on the project. In January 2007, Nunn Hall incurred damage that was attributed to Banta’s electrical work. As a result, Banta’s insurer, Cincinnati Insurance Companies, paid the Commonwealth $18,460.19 for the property damage.

In September 2008, Cincinnati filed the instant action in the Campbell Circuit Court against Omni and F & S, claiming that it was their negligent installation of a faulty transformer that caused the damage to Nunn Hall. Cincinnati sought to recover the amount it was required to pay on behalf of Banta. Rather than filing an answer, Omni and F & S filed a motion to dismiss for failure to state a claim under CR 12.02, arguing that the economic loss rule precluded the legal action. Following a hearing, the trial court granted the motion and dismissed Cincinnati’s complaint. In so doing, the trial court held, “Kentucky adopted the economic loss doctrine in Real Estate Market, Inc. v. Franz, [885 S.W.2d 921 (Ky. 1994)]. Kentucky expressly joined the majority rule prohibiting tort recovery for economic losses absent contractual privity.”

Cincinnati thereafter filed an appeal in this Court. On July 17, 2010, on this Court’s own motion, the matter was held in abeyance pending the Kentucky Supreme Court’s decision in Giddings & Lewis, Inc. v. Industrial Risk Insurers, 348 S.W.3d 729 (Ky. 2011). Such opinion became final in June 2011, and the matter herein was returned to the active docket.

On appeal, Cincinnati argues that the trial court erred in granting the motion to dismiss. As it did in the trial court, Cincinnati contends that Kentucky has not, in fact, adopted the economic loss rule. However, even if such rule has explicitly been adopted, Cincinnati maintains that it does not apply in this case because of the existence of a “damaging event.” In light of the decision in Industrial Risk Insurers, we must find that Cincinnati’s claims are without merit.

272. Insurance. Exclusion for “owned or regularly furnished but not insured motor vehicle”.  Finality for appeal re declaratory judgment action on insurance coverage.
Metropolitan Direct Property & Cas. Ins. Co. v. Angela Moore

COMBS, JUDGE: Metropolitan Direct Property and Casualty Insurance Company brings this appeal from the April 14, 2011, order of the Greenup Circuit Court holding that its automobile insurance policy provided coverage to Lynn–Taylor Howell (“Howell”). Howell was operating a motor vehicle owned by another person on January 25, 2009, when an accident occurred. Since Howell was not entitled to judgment as a matter of law, we vacate and remand for further proceedings.

In the case before us, the finality language of the trial court’s summary declaratory judgment contained all of the language required by the provisions of CR 54.02, including that “there is no just reason for delay.” Moore’s arguments to support her position that the order and judgment disposing of the declaratory action are interlocutory were specifically — albeit narrowly — rejected by the Supreme Court of Kentucky. Because we are bound by precedent, we cannot dismiss the appeal as interlocutory.

Under the circumstances, the question of whether the Silverado had been furnished or made available for Howell’s regular use could not be answered as a matter of law. Instead, because of the various inferences that might reasonably be drawn from the facts, this issue was also one to be decided by a trier of fact. Consequently, we must conclude that summary judgment was inappropriately granted by the trial court.

Accordingly, we vacate the order of summary judgment and remand this matter to the trial court for further proceedings consistent with this opinion





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