May 18, 2012 COA Minutes — Nos. 419-445 (27 decisions; 4 To Be Published)

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PUBLISHED DECISIONS OF COA:

419. GUARDIAN AD LITEM.  FEES TO BE PAID BY PLAINTIFF AS COSTS.  ESCROWED FUNDS.
MULLINS (MAURICE)
VS.
CONSOL OF KENTUCKY, INC., ET AL.
OPINION REVERSING AND REMANDING
NICKELL (PRESIDING JUDGE)
TAYLOR (CONCURS) AND COMBS (CONCURS)
2007-CA-001017-MR
TO BE PUBLISHED
KNOTT

NICKELL, JUDGE: Maurice W. Mullins appeals from the March 9, 2007, and May 1, 2007, orders of the Knott Circuit Court which mandated that guardian ad litem (GAL) fees be paid from a court ordered escrow account. Because we hold that the trial court abused its discretion, we reverse and remand.

STD OF REVIEW: “We review a trial court’s denial of a motion to alter, amend, or vacate pursuant to CR1 59.05 for an abuse of discretion. Batts v. Illinois Central Railroad Co., 217 S.W.3d 881, 883 (Ky. App. 2007). An abuse of discretion can be found when the trial court’s decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles. Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000).”

KRS2 453.060 provides that “[a] guardian ad litem or warning order

attorney shall be allowed by the court a reasonable fee for his services, to be paiD by the plaintiff and taxed as costs.” KRS 453.060(2) (emphasis added). While the money held in escrow by the trial court was technically being paid by the plaintiff at the time of deposit, the money will theoretically be determined to belong to one of the defendants when the lawsuit concludes. Therefore, the prevailing party of the underlying lawsuit is the party that would have actually paid the GAL fees. Assuming that the prevailing party was entitled to the entirety of the payments being deposited by Consol, it would then become the burden of the prevailing party to recover any sums deducted for the GAL fees. We do not envision that such a result was intended by the legislature in its enactment of KRS 453.060, but rather that the plaintiff should directly bear the cost of any awarded GAL fees.

Furthermore, trial court escrow accounts are governed by CR 67.03, which reads:

[w]here the money is paid into court to abide the result of any legal proceeding, the judge may order it deposited in one or more designated federally insured state or national banks or savings banks, to the credit of the court in the action or proceeding in which the money was paid. The money, including earned interest, so deposited shall be paid only upon the check of the clerk of the court, annexed to its certified order for the payment, and in favor of the person to whom the order directs the payment to be made. Any interest which may have accrued shall also be paid to that same person.

CR 67.03 specifically addresses money paid “to abide the result of any legal proceeding.” The escrow account in the case before us clearly falls under this purview, as evidenced by the trial court’s order which required the deposit of “all payments which are due under leases from any of the Defendants which have accrued and may in the future accrue, and which are otherwise the subject of this proceeding.” (Emphasis added). The language of CR 67.03 mandates payment of the deposited money, and any accrued interest, to the same person. This language implies that the escrow shall be withdrawn only to satisfy the trial court’s final judgment, and not for other costs and fees. Accordingly, we hold that the trial court’s denial of Mullins’s motion to amend, alter, or vacate the March 9, 2007, judgment was unsupported by sound legal principles.

For the foregoing reasons, the March 9, 2007, and May 1, 2007, orders of the Knott Circuit Court are reversed to the extent that they mandate payment of the GAL fees from the court ordered escrow account, and remanded with instructions to order the GAL fees be paid directly by plaintiff, Consol.

422.  CRIMINAL LAW
BUTLER (JERMAINE)
VS.
COMMONWEALTH OF KENTUCKY
OPINION AFFIRMING IN PART, VACATING IN PART, AND REMANDING
CLAYTON (PRESIDING JUDGE)
DIXON (CONCURS) AND LAMBERT (CONCURS)
2010-CA-001578-MR
TO BE PUBLISHED
JEFFERSON

CLAYTON, JUDGE: Jermaine Butler appeals from the July 22, 2010, judgment of conviction and sentence of the Jefferson Circuit Court which found him guilty of one count of trafficking in a controlled substance and sentenced him to seven and one-half years of incarceration. Appellant challenges the introduction of certain evidence at trial, a jury admonition, and the trial court’s imposition of conditional court costs and fees. We affirm in part, vacate in part, and remand.

426.  CRIMINAL LAW
DAY (PAUL R.)
VS.
COMMONWEALTH OF KENTUCKY
OPINION AFFIRMING
ACREE (PRESIDING JUDGE)
COMBS (CONCURS) AND KELLER (CONCURS)
2010-CA-002035-MR
TO BE PUBLISHED
CHRISTIAN

ACREE, JUDGE: The sole issue before us is whether Appellant Paul Day, Jr.’s conviction both for first-degree robbery under Kentucky Revised Statutes (KRS) 515.020 and for first-degree unlawful access to a computer under KRS 434.845 violates double jeopardy. We find it does not. Accordingly, we affirm.

427.  CRIMINAL LAW AND PROCEDURE.
LEE (JOHN SCOTT), ET AL.
VS.
TIPTON (CALVIN)
OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
TAYLOR (PRESIDING JUDGE)
NICKELL (CONCURS) AND COMBS (CONCURS IN RESULT ONLY)
2010-CA-002189-MR
TO BE PUBLISHED

TAYLOR, CHIEF JUDGE: John Scott Lee and Amanda Lee (collectively referred to as the Lees) bring this appeal from a September 17, 2010, Order of the Estill Circuit Court adjudicating a boundary line dispute between the parties and awarding Calvin Tipton damages of $18,333, representing his one-third interest in certain real property known as Muncy Bottom. We affirm in part, reverse in part, and remand.

TORT REPORT  FOR NONPUBLISHED DECISIONS (MINUS WORKERS COMP):

IF YOU WANT

PUBLISHED:

SEE, Mullins v. Consul of Kentucky, above, re guardian ad litem fees.

NOT PUBLISHED:

423. CIVIL PROCEDURE. SETTING ASIDE DEFAULT JUDGMENT.
ZIMMERMAN (CHAD), ET AL.
VS.
THE BANK OF NEW YORK MELLON TRUST CO., N.A.
OPINION AFFIRMING
MOORE (PRESIDING JUDGE)
COMBS (CONCURS) AND LAMBERT (CONCURS)
2010-CA-001598-MR
NOT TO BE PUBLISHED
HENRY

MOORE, JUDGE: Chad and Sandra Zimmerman appeal from the Henry Circuit Court’s order denying their motion to set aside the default judgment in favor of the Bank of New York Mellon Trust Company, NA (Bank of New York). Because the Zimmermans failed to demonstrate good cause as to why the default judgment should be set aside, we affirm.

424.  INSURANCE COVERAGE.  ASSOCIATION AND INDEMNITY EXCLUSION.
LAKE CUMBERLAND RESORT COMMUNITY ASSOCIATION, INC., ET AL.
VS.
AUTO OWNERS INSURANCE COMPANY
OPINION AFFIRMING
COMBS (PRESIDING JUDGE)
KELLER (CONCURS) AND STUMBO (CONCURS)
2010-CA-001725-MR
NOT TO BE PUBLISHED
PULASKI

COMBS, JUDGE: Lake Cumberland Resort Community Association, Inc., (the “community association”), Dave Remley, Gary Seagraves, Robert Keiser,  Anthony Rogers, Greg Lucas, Keith Stockberger, and Steve Miklavic appeal from a final order of the Pulaski Circuit Court entered August 3, 2010, which finalized a summary judgment entered in favor of Auto Owners Insurance Company (“Auto Owners”) on May 17, 2010. After our review, we affirm.

STD OF REVIEW:

Summary judgment is proper where there exists no material issue of fact and the movant is entitled to judgment as a matter of law. Kentucky Rule(s) of Civil Procedure (CR) 56. The interpretation of an insurance policy is a question of law that we review de novo. K.M.R. v. Foremost Ins. Group, 171 S.W.3d 751 (2005) citing Cinelli v. Ward, 997 S.W.2d 474 (Ky.App.1998). In undertaking our review, we are mindful of two cardinal principles:

(1) the contract should be liberally construed and all doubts resolved in favor of the insureds; and (2) exceptions and exclusions should be strictly construed to make insurance effective.

Kentucky Farm Bureau Mutual Ins. Co. v. McKinney, 831 S.W.2d 164 (Ky.1992), quoting Grimes v. Nationwide Mutual Ins. Co., 705 S.W.2d 926 (Ky.App.1985) and Tankersley v. Gilkey, 414 S.W.2d 589 (Ky.1967). However, where the terms of the policy are clear and unambiguous, we must accord them their “plain and ordinary meaning.” Nationwide Mutual Ins. Co. v. Nolan, 10 S.W.3d 129, 131-32 (Ky.1999). The material facts of this case are undisputed. Therefore, we must determine from an examination of the provisions of the insurance policy whether Auto Owners is entitled to judgment as a matter of law.

The directors’ and officers’ liability endorsement of the disputed policy provides as follows:

We will pay those sums the insured becomes legally obligated to pay as “damages” because of any negligent act, error, omission or breach of duty directly related to the management of the premises, shown in the Declarations, which occurs during the policy period. We will settle or defend, as we consider appropriate, any claim or “suit” for damages covered by this policy. We will do this at our expense, using attorneys of our choice. This agreement to settle or defend claims or “suits” ends when we have paid the limit of our liability.

In an article entitled “Exclusions,” the endorsement provides that the coverage does not apply, “[t]o any claims for which your officer or director receives indemnity from [the community association] or has a right to be indemnified by [the community association].” It is undisputed that the community association’s articles of incorporation provide for the mandatory indemnification of its directors and officers “to the fullest extent of the law, from and against any and all the expenses or liability incurred in defending a civil or criminal proceeding. . . .”

Auto Owners argues that this policy provision clearly excludes coverage of claims for which an officer or director of the community association receives indemnity from the association or has a right to be indemnified by the association. And the appellants contend that the indemnity exclusion cannot be enforced because it renders the coverage provided by the policy completely illusory and contravenes public policy. They contend that the exclusion defeats their reasonable expectations for coverage. We disagree with each of these contentions.

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