COA 2011 Minutes for June 10, 2011 — Nos. 558-580 (23 decisions)

COA 2011 Minutes for June 10, 2011 —      Nos. 558-580 (23 decisions)

559.  Business law, LLC, immunity;  Corporate Veil; Contracts, substantial performance.
REDNOUR PROPERTIES, LLC., ET AL.
VS.
SPANGLER ROOF SERVICES, LLC.
OPINION AFFIRMING
LAMBERT (PRESIDING JUDGE)
STUMBO (CONCURS) AND SHAKE (DISSENTS AND FILE SEPARATE OPINION)
2009-CA-001159-MR
TO BE PUBLISHED
CLARK

LAMBERT, JUDGE: Rednour Properties, LLC; Rednour Blake, LLC; and Ritchie R. Rednour II have appealed from the Clark Circuit Court’s opinion, order, and judgment entered May 20, 2009. That order awarded damages, interest, and attorney fees related to their failure to pay an outstanding balance due pursuant to several change orders to a contract with Spangler Roof Services, LLC, for roof and gutter replacement in an apartment complex. The parties also contest the circuit court’s failure to dismiss Ritchie Rednour as a defendant to the action. Having carefully reviewed the record, the parties’ briefs, and the applicable law, we affirm the judgment on appeal.

Based upon our review of the circuit court’s ruling at the conclusion of the trial as well as its finding in the written judgment, we hold that there is substantial evidence to support the circuit court’s decision to pierce the corporate veil in this action. While the record establishes the corporate existence of the entities at issue (Rednour Blake and Rednour Properties, which both list Rednour as the registered agent), it is obvious that these entitles were “dummy” corporations designed to protect Rednour from personal liability. Rednour is the sole member and agent of those companies as well as several others, at least one of which is a subsidiary of another LLC, and Rednour admits to having set up the LLCs for tax purposes. Under these circumstances, we are unable to discern any difference between Rednour and his various LLCs. Accordingly, we must hold that the circuit court did not commit any error when it held Ritchie Rednour individually liable for the corporate debts and declined to dismiss him as a defendant.

 

560. TORTS, MEDICAL NEGLIGENCE, NEGLIGENT CREDENTIALLING – NEW TORT
THE ESTATE OF JUDITH BURTON
VS.
THE TROVER CLINIC FOUNDATION, INC., ET AL.
OPINION REVERSING AND REMANDING
CAPERTON (PRESIDING JUDGE)
CLAYTON (CONCURS) AND ACREE (CONCURS WITH SEPARATE OPINION)
2009-CA-001595-MR
2009-CA-001726-MR
2009-CA-001735-MR
TO BE PUBLISHED
HOPKINS

CAPERTON, JUDGE: The Estate of Judith Burton (hereinafter “Burton”) appeals from a judgment in the Hopkins Circuit Court whereby the jury found in favor of the Appellee, the Trover Clinic Foundation, Inc. (hereinafter “TCF”), in the first phase of a bifurcated medical negligence and negligent credentialing trial. Thereafter, the remaining claims against TCF and the third-party defendant, Dr. Philip Trover, were dismissed. Burton asserts numerous trial errors which are discussed infra. TCF and Dr. Trover cross-appeal from the trial court’s denial of their motion for a change in venue and assert that the trial court committed error in admitting testimony regarding Dr. Trover’s workload and speed with which he interpreted radiological film. After a thorough review of the parties’ arguments, the record, and the applicable law, we find reversible error and, accordingly, reverse and remand for further proceedings.

On appeal, Burton presents six arguments, namely, (1) bifurcation of Burton’s medical negligence claims from Burton’s remaining claims against TCF was reversible error; (2) the trial court erred in excluding the Ad Hoc and MEC reports and minutes; (3) the MEC members should have been able to speak as to paragraph 7 of the MEC report; (4) the trial court erred in granting summary judgment in Appellees’ favor on Burton’s claim of fraud; (5) the trial court committed prejudicial error by depriving Burton of the right to cross-examine an indentified expert as to his qualifications; and (6) the court improperly limited Burton’s cross-examination of Kim Robinson.

TCF and Dr. Trover both present two arguments, namely, (1) that the trial court erred in admitting testimony regarding Dr. Trover’s workload and speed of film interpretation; and (2) that the trial court erred in failing to grant a change of venue. With these arguments in mind, we now address the parties’ arguments in turn.

As a preliminary matter, we note that the tort of negligent credentialing has not been formally recognized in Kentucky. At least 28 states recognize this cause of action and the parties in the matter sub judice proceeded under the assumption that negligent credentialing would be recognized in this Commonwealth. We believe it is proper for this Court to now recognize the tort of negligent credentialing in Kentucky. See Oakley v. Flor-Shin, Inc., 964 S.W.2d 438, 441 (Ky.App. 1998) (wherein this Court recognized the tort of negligent hiring in
Kentucky).5    As such, we now set out the elements of the tort of negligent credentialing as noted by Peter Schmit in 18 Causes of Action 2d 329:
In order to establish a prima facie case based on negligent credentialing (also known as negligent privileging) the plaintiff must prove:
1. The defendant hospital owed the patient a duty to insure a competent medical staff.
2. The hospital breached that duty by granting privileges to an incompetent or unqualified physician.
3. The physician caused harm to the patient. The underlying medical malpractice claim must be proved.6

561.  ADMINISTRATIVE/REGULATORY LAW.  CERTIFICATE OFNEED.
PROFESSIONAL HOME HEALTH CARE AGENCY, INC., ET AL.
VS.
COMMONWEALTH OF KENTUCKY, ET AL.
OPINION VACATING AND REMANDING
WINE (PRESIDING JUDGE)
VANMETER (CONCURS) AND SHAKE (CONCURS)
2009-CA-001846-MR
TO BE PUBLISHED
FRANKLIN

WINE, JUDGE: Professional Home Health Care Agency, Inc. (“Professional”) and the Whitley County Health Department d/b/a Whitley County Home Health (“the Health Department”) (collectively, “the appellants”) appeal from an opinion and order of the Franklin Circuit Court remanding a Certificate of Need (“CON”) application for an additional hearing based upon a finding that the Commonwealth of Kentucky, Cabinet for Health and Family Services (“the Cabinet”), denied the appellants due process in the hearing on their challenge to an application for a certificate of need filed by Comprehensive Home Healthcare Services, Inc. d/b/a Family Home Health Care (“Family”). The limited issue raised on appeal by the appellants is whether the circuit court’s limitation on remand was in error. We find that it was.

575. CRIMINAL. PROBATION REVOCATION.
BURKE (KENNETH WAYNE)
VS.
COMMONWEALTH OF KENTUCKY
OPINION AFFIRMING
CLAYTON (PRESIDING JUDGE)
NICKELL (CONCURS) AND ISAAC (CONCURS)
2010-CA-000655-MR
TO BE PUBLISHED
LETCHER

CLAYTON, JUDGE: This action is before us as an appeal of the revocation of Appellant, Kenneth Wayne Burke’s probation. We affirm the decision of the trial court.

577.  FAMILY LAW, CHILD SUPPORT
BENNETT (ROBERT LAWRENCE)
VS.
BENNETT (THERESA RENEE)
OPINION AFFIRMING IN PART, REVERSING IN PART AND REMANDING
ACREE (PRESIDING JUDGE)
TAYLOR (CONCURS) AND COMBS (CONCURS BY SEPARATE OPINION)
2010-CA-001016-ME
TO BE PUBLISHED
SCOTT

ACREE, JUDGE: Appellant, Robert Bennett, appeals an order of the Scott Circuit Court1 denying his motion to modify his child support obligation and calculating a child support arrearage of $35,038.14 in favor of appellee, Theresa Bennett.
Three questions are presented by this appeal.

First, did the circuit court commit reversible error when it adopted in toto the Scott County Domestic Relations Commissioner’s report without allowing exceptions to be taken and without a hearing? Because the court did not comply with former Kentucky Rules of Civil Procedure (CR) 53.06(1) and (2),2 we find reversible error and remand for a hearing and consideration of those exceptions.

Second, did the court err by denying Robert’s motion to modify his child support obligation for the period beginning on the date he filed it (June 16, 2005), prior to which two of the three children covered by the prevailing child support order were emancipated? The circuit court failed to properly consider this motion; this was error. Upon remand, the court will have the opportunity to correct the error by considering these changed circumstances and determining a support obligation for the period following the filing of the motion.
Third, did the court err in calculating the child support arrearage that accrued before Robert filed his motion to modify child support by refusing to consider the emancipation of fewer than all of the parties’ children? We conclude the circuit court did not err in this regard. However, the circuit court calculated the total arrearage as though Robert’s support obligation did not change even after he filed his motion to modify. Therefore, if proper consideration of Robert’s motion to modify results in a change in that obligation for the period from June 16, 2005, to May 31, 2006, the total arrearage will have to be recalculated.

TORT REPORT  FOR NONPUBLISHED DECISIONS (MINUS WORKERS COMP):

IF YOU WANT

• WORKERS COMPENSATION LAW UPDATES, I RECOMMEND YOU GO TO THE COMP ED WEB SITE AT http://www.comped.net/.
• FAMILY LAW UPDATES, I RECOMMEND YOU GO TO Diana Skaggs' Divorce Law Journal at http://www.divorcelawjournal.com

566.  MEDICAL NEGLIGENCE.  FAILURE TO DIAGNOSE.
SONNE (BLAIR)
VS.
COMMUNITY MEDICAL ASSOCIATES, INC., ET AL.
OPINION AFFIRMING
TAYLOR (PRESIDING JUDGE)
LAMBERT (CONCURS) AND STUMBO (DISSENTS)
2010-CA-000031-MR
2010-CA-000126-MR
NOT TO BE PUBLISHED
JEFFERSON

TAYLOR, CHIEF JUDGE: This appeal is a medical malpractice action that arose from the alleged delay in the diagnosis of colorectal cancer. Blair Sonne, as executrix of the estate of Allan Schmidt (collectively referred to as appellant) brings Appeal No. 2010-CA-000031-MR and Community Medical Associates, Inc. and H. Lynn Speevak, M.D. (collectively referred to as appellees) bring Cross- Appeal No. 2010-CA-000126-MR from an October 26, 2009, judgment of the Jefferson Circuit Court upon a jury verdict in favor of Speevak and Community Medical Associates, Inc. We affirm Appeal No. 2010-CA-000031-MR and Cross- Appeal No. 2010-CA-000126-MR.

568.  ARBITRATION.
COLDWELL (STEVE), ET AL.
VS.
PEDLEY,ZIELKE, GORDINIER, AND PENCE, PLLC , ET AL.
OPINION AFFIRMING
MOORE (PRESIDING JUDGE)
LAMBERT (CONCURS) AND ISAAC (CONCURS)
2010-CA-000251-MR
NOT TO BE PUBLISHED
JEFFERSON

MOORE, JUDGE: The above-referenced appellants (collectively, the “Coldwell Appellants”) appeal the decision of the Jefferson Circuit Court denying them leave to file a Civil Rule (CR) 14.01 complaint in a post-arbitration dispute with the Estate of Lawrence Pedley (the “Pedley Estate”) and Lawrence Pedley’s former law firm, Pedley, Zielke, Gordinier, and Pence, PLLC, f/k/a Pedley, Zielke, Gordinier, Olt & Pence, PLLC (“PZGOP”). The substance of the Coldwell Appellants’ proposed complaint sought a determination from the circuit court regarding whether, and to what extent, the arbitrator had awarded damages based upon the conduct of Lawrence Pedley and PZGOP, as it related to the rendering of professional legal services. The circuit court denied the Coldwell Appellants leave to file their complaint because, as it reasoned, it had no jurisdiction to allow the Coldwell Appellants to file it.

571.  UNDERINSURED MOTORIST BENEFITS
ESTATE OF JOSEPH COX, BY AND THROUGH ITS ADMINISTRATOR
VS.
SECURA INSURANCE COMPANY, ET AL.
OPINION AFFIRMING
WINE (PRESIDING JUDGE)
CLAYTON (CONCURS) AND COMBS (CONCURS)
2010-CA-000440-MR
NOT TO BE PUBLISHED
HENRY

WINE, JUDGE: The Estate of Joseph Cox, by and through its Administrator with Will Annexed, D. Berry Baxter (hereinafter, “the Estate”), appeals from a summary judgment of the Henry Circuit Court dismissing its claims against Secura Insurance Company, Inc. (“Secura”) and Insuramax, Inc. (“Insuramax”). The
Estate’s claim arose from Secura’s denial of its claim for underinsured motorist (“UIM”) benefits on a policy issued to Cox’s business, In-N-Out, Inc. (“In-N- Out”). The Estate argues that Cox reasonably expected that coverage would include personal UIM coverage. The Estate further argues that Insuramax undertook a duty to advise Cox about his insurance needs and breached that duty by insuring Cox’s personal vehicle under In-N-Out’s policy. Consequently, the Estate maintains that the policy should be reformed based on Insuramax’s negligence. However, the clear language of the policy excludes UIM coverage under the circumstances present in this case. Furthermore, we agree with the trial court that there are no genuine issues of material fact concerning the extent of Insuramax’s duty or breach of that duty. Therefore, the trial court properly granted summary judgment to Secura and Insuramax. Finally, since we are affirming on other issues, the Estate’s claim that it was denied discovery is now moot.

The Estate primarily argues that there were disputed factual issues concerning whether Insuramax owed a duty to Cox to advise him about applicable UIM coverage and whether Insuramax breached that duty. If Insuramax and Stewart were negligent, the Estate asserts that the policy may be reformed. The Estate’s negligence action against Insuramax requires proof of: (1) a duty on the part of Insuramax; (2) a breach of that duty; and (3) consequent injury. Illinois Central Railroad v. Vincent, 412 S.W.2d 874, 876 (Ky. 1967).    The Estate retained an expert witness, Dr. Peter Kensicki, who was of the opinion that the Ford F-350 did not have any insurance coverage because it was not owned by the named insured, In-N-Out. The Estate points out that Stewart was aware the Ford F-350 needed to be either leased to or titled to the company, but failed to ensure that Cox executed the necessary paperwork. Consequently, the Estate argues that Insuramax was negligent in failing to obtain any effective coverage for the truck.
Whether Insuramax owed a duty is a question of law for the court to decide. Pathways, Inc. v. Hammons, 113 S.W.3d 85, 89 (Ky. 2003). As the trial court noted, Secura did not deny the UIM claim because the Ford F-350 was not leased to or titled in the name of In-N-Out. Consequently, even if Stewart was negligent in failing to ensure that Cox had executed a lease, his negligence was not the reason that the claim was denied. As a result, the contested factual issues concerning the proposed lease agreement are not relevant to the issues presented on summary judgment.