Tort, Insurance and Civil Procedure Cases this month:

Civil Procedure.  Timely filing of appeal of local planning decision.
Ken Isaacs, et al. v. Jeff Caldwell et al. 
2015-SC-000265-DG November 2, 2017 

Opinion of the Court by Justice Venters. All sitting. Minton, C.J.; Hughes, Keller, and VanMeter, JJ., concur. Wright, J., concurs in part and dissents in part by separate opinion in which Cunningham, J., joins. Following an adverse decision by the local planning commission, subdivision residents sought to appeal the decision to circuit court pursuant to KRS 100.347, filing the appeal at the last hour of the appeal period. Deputy clerk erroneously failed to issue summons on time. Counsel secured issuance of summons one day late but failed to make a diligent effort to serve the summons on an indispensable party for three weeks. Trial court granted dismissal of appeal. Upon review the Supreme Court held: (1) Deputy clerk error in failing to issue the summons forthwith justified application of equitable tolling to validate late issuance of the summons under Nanny v. Smith, 260 S.W.3d 815, 817 (Ky. 2008); (2) Pursuant to statutory directive, judicial review of administrative actions is governed by the procedural rules applicable to original actions. Rule that commencement of an action occurs upon issuance of summons in good faith applies appeal of administrative action; (3) Commencement of the action requires a contemporaneous intention on the part of the initiating party to diligently attend to the service of the summons. Counsel’s unreasonably delay in attempting to serve the summons fails to establish the issuance of summons in good faith.” Accordingly, the appeal was not timely commenced.

Sovereign Immunity.

Big Sandy Regional Jail Authority v. Lexington-Fayette Urban County Government 
2016-SC-00008-DG November 2, 2017 

Opinion of the Court by Justice Keller. All sitting. Minton, C.J.; Cunningham, Hughes, and Keller, JJ., concur. Venters, J., concurs in result only by separate opinion which VanMeter, J., joins. Wright, J., dissents by separate opinion. Big Sandy Regional Jail Authority (Authority) sued the Lexington- Fayette Urban County Government in district court seeking reimbursement for the cost of housing prisoners held pursuant to warrants issued by Fayette County courts. The district court found that the Urban County Government was entitled to sovereign immunity and dismissed the action. The Authority appealed to the circuit court. The circuit court did not address the issue of sovereign immunity but affirmed the district court in finding that the county of arrest controls responsibility for the costs of incarceration. The Court of Appeals denied discretionary review, and this Court granted discretionary review. 

Resolution of this case involves interpretation of KRS 411.025. KRS 411.025 states: “The fiscal court of each county shall provide for the incarceration of prisoners arrested in the county or sentenced or held by order of the courts in the county.” The Court held that this statute is not completely applicable to the situation presented. Nonetheless, pursuant to the language of the statute, the county responsible for the costs of incarceration is the county in possession of the prisoner. In this case, the Authority is responsible for incarceration costs because they were in possession of the prisoners arrested in the counties serviced by the Authority. Z

University of Louisville v. Mark Rothstein 
2016-SC-000220-DG November 2, 2017 

Opinion of the Court by Justice Keller. Minton, C.J.; Cunningham, Keller, VanMeter, Venters and Wright, JJ., concur. Hughes, J., not sitting. University of Louisville (U of L) hired Mark Rothstein (Rothstein) as a professor of medicine in 2000. He was granted tenure and appointed as Herbert F. Boehl Chair of Law and Medicine and appointed as a Distinguished University Scholar under a five-year renewable contract. His contract was ultimately terminated and Rothstein sued U of L for breach of the contract. U of L claimed the defense of sovereign immunity as a bar to all claims. Franklin Circuit Court found that U of L had no immunity in this case and the Court of Appeals affirmed. The Supreme Court of Kentucky granted discretionary review and affirmed the Court of Appeals. The Court held that Kentucky Revised Statute (KRS) 45A.245 waives immunity for all claims against the agencies of the Commonwealth arising out of lawfully authorized written contracts with those agencies. The Court also held that this waiver is not limited to contracts entered into pursuant to Kentucky’s Model Procurement Code but instead applies to all lawfully authorized written contracts with the Commonwealth’s agencies.

TORTS:

Angela Ford, et al. v. Harold Baerg, Jr., et al.
2016-SC-000136-DG November 2, 2017 

Opinion of the Court by Chief Justice Minton. All sitting; all concur. In a 7-0 decision, the Court affirmed the Court of Appeals, holding that the appellant’s conversion claim against two different parties failed as a matter of law. To assert a successful claim of conversion, the plaintiff must satisfy seven elements. In this case, the plaintiff failed to satisfy the first two elements—(1) having legal title to the alleged converted property and (2) the right to the possess the property. The appellant granted the “thief” in this case signatory rights on her bank accounts. By virtue of this signatory status, the “thief” possessed apparent authority to transfer the appellant’s funds to innocent third parties using a wire transfer and a negotiated check. 

Regarding the wire transfer, as a matter of law, title to funds passes to the beneficiary bank upon acceptance of a payment order, as long as the beneficiary bank has no reason to know that the alleged converted property has been obtained through commission of a theft offense. In this case, the bank had no reason to know of the thief’s actions, whereby title and the right to possess the property transferred, causing the appellant’s conversion claim to fail. Regarding the negotiated check, as a matter of law, once a payee receives the funds from a negotiated check, the drawer loses title and the right to possess those funds, and the appellant’s conversion claim fails.

Lake Cumberland Regional Hospital, LLC v. Helan Adams 
2016-SC-000181-DG
AND
Spring View Hospital, LLC v. Karen Jones (Now Epley) 
2016-SC-000189-DG
AND
Spring View Hospital, LLC v. Joyce Spalding, Etc., et al. 
2016-SC-000259-DG
AND
Joyce Spalding, Etc. et al. v. Spring View Hospital, LLC 
2016-SC-000277-DG November 2, 2017 

Opinion of the Court by Justice Keller. Minton, C.J.; Cunningham, Hughes, Keller, VanMeter, and Wright, JJ., concur. These consolidated cases asked the Court to recognize negligent credentialing as a new tort in the Commonwealth. Plaintiffs brought medical negligence claims against their respective doctors and the hospitals in which the doctors were granted privileges. The trial courts dismissed plaintiffs’ claims against the hospitals finding that negligent credentialing was not a recognized cause of action in this State. The Court of Appeals reversed, holding that such a claim did exist. 

The Court declined to recognize a stand-alone cause of action of negligent credentialing. However, the law of the Commonwealth has long supported a plaintiff’s claim of negligence against a hospital for the staffing of its physicians. Plaintiffs have an avenue of recovery through common law negligence.