Kentucky Law Summaries
FREQUENTLY CITED KENTUCKY STATUTES
K.R.S. § 304.9-503
Types of Insurance That Rental Vehicle Agent May Handle at Company Office - Coverage is Primary Over Other Coverage
A rental vehicle agent may sell, solicit, or negotiate insurance at the rental vehicle company office for insurance that covers the risk of travel, including accident and health insurance, liability insurance, personal property insurance, roadside assistance, emergency sickness protection programs, and any other insurance incidental to the rental of a motor vehicle and approved by the executive director. The rental vehicle insurance will be the primary coverage over any other coverage which may be available to the renter or authorized driver covering the loss.
K.R.S. § 304.20-020
Uninsured Vehicle Coverage
No automobile insurance policy shall be issued unless it provides coverage for injuries caused by the owners or operators of uninsured motor vehicles. An insured shall have the right to reject such coverage in writing. The term “uninsured motor vehicle” shall be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured due to insolvency.
K.R.S. § 304.39-320
Underinsured Motorist Coverage
A tortfeasor’s liability insurance is the primary coverage and the underinsured motorist coverage insurance is the secondary or excess coverage. Therefore, UIM coverage is payable only to the extent that judgment exceeds the tortfeasor’s liability coverage. Kentucky Farm Bureau Mut. Ins. Co. v. Rogers, 179 S.W.3d 815, 818 (Ky. 2005).
- Every insurer shall make available upon request to its insureds underinsured motorist coverage.
- If an injured person agrees to settle a claim with the liability insurer and the settlement would not fully satisfy the claim for personal injuries so as to create an uninsured motorist claim, then written notice of the proposed settlement must be submitted by certified or registered mail to all underinsured motorist insurers that provide coverage.
- The underinsured motorist insurer then has a period of 30 days to consent to the settlement or retention of subrogation rights.
- The underinsured motorist insurer is entitled to a credit against total damages in the amounts of the limits of the underinsured motorist liability policies in all cases. Nothing, however, including any payments or credits, reduces or affects the total amount of underinsured motorist coverage available to the injured party.
K.R.S. § 44.072
Limited Waiver of Sovereign Immunity in Negligence Claims
It is the intent of the General Assembly to preserve the sovereign immunity of the commonwealth, except in limited situations set forth in the statute. Except as specifically indicated otherwise, the Board of Claims shall have exclusive jurisdiction to hear claims for damages against the commonwealth.
K.R.S. § 186.590
Minor’s Negligence Imputed to Person Signing Application or Allowing Him to Drive
Any negligence of a minor under the age of eighteen (18), who has been licensed upon an application as provided by K.R.S. 186.470, will be imputed to the person who signs the application and they will be held jointly and severally liable for any damages caused by the minor’s negligence. Motor vehicle owners who cause or knowingly permit a minor under age eighteen (18) to drive the vehicle on the highway, or who furnish a vehicle to the minor, will be jointly and severally liable for the damage caused by the minor.
K.R.S. § 405.025
Parent or Guardian Liable For Willful Damage to Property Caused by Minor
The parent or guardian of any minor, in his care and custody, against whom judgment has been rendered for the willful marking upon, defacing or damaging of any property, shall be liable for the payment of that judgment up to an amount not to exceed $2,500.00 and not to exceed $10,000.00 in a cumulative amount.
K.R.S. § 411.82
Apportionment of Fault
In cases involving more than one alleged wrongdoer, the jury is to consider the fault not only of the defendants remaining in the case but also of any parties who may have been dismissed or were never joined as parties. Each defendant is liable only for their proportionate share of fault.
K.R.S. § 411.186
Assessment of Punitive Damages
In any civil action where claims for punitive damages are included, the jury, or judge if the jury trial has been waived, shall determine concurrently with all the other issues presented whether punitive damages may be assessed.
In determining the amount of punitive damages to be assessed, the trier of fact should consider the following factors:
- The likelihood at the relevant time that serious harm would arise from the defendant’s misconduct;
- The degree of the defendant’s awareness of that likelihood;
- The profitability of the misconduct to the defendant;
- The duration of the misconduct and any concealment of it by the defendant; and
- Actions by the defendant to remedy the misconduct once it became known to the defendant.
K.R.S. § 411.190
Obligations of Owner to Persons Using Land For Recreation
An owner of land owes no duty of care to keep the premises safe for entry or use by others for recreational purposes, or to give any warning of a dangerous condition, use, structure, or activity on the premises to persons entering for such purposes.
Nothing in this section limits in any way any liability which otherwise exists for willful or malicious failure to guard or warn against a dangerous condition, use, structure, or activity.
K.R.S. § 411.310
Statute of Repose
- In any product liability action it shall be presumed that the subject product was not defective if the injury occurred more than five years after the date of sale to the first consumer or more than eight years after the date of manufacture.
- In any product liability action it shall be presumed that the product was not defective if the design, methods of manufacture and testing conform to the generally recognized and prevailing standards or the state-of-the-art in existence at the time the design was prepared and the product was manufactured.
K.R.S. § 411.310
Presumptions in Product Liability Actions
- In any product liability action, it shall be presumed, until rebutted by a preponderance of the evidence to the contrary, that the subject product was not defective if the injury, death or property damage occurred either more than five years after the date of sale to the first consumer or more than eight years after the date of manufacture.
- State of the Art Defense.
K.R.S. § 413.241
Liquor Liability
The consumption of intoxicating beverages, rather than the serving, furnishing, or sale of such beverages, is the proximate cause of any injury, including death and property damage, inflicted by an intoxicated person upon himself or another person.
No person holding a permit under K.R.S. 243.030, 243.040, 243.050, nor any agent, servant, or employee of the person, who sells or serves intoxicating beverages to a person over the age for the lawful purchase thereof, shall be liable to that person or to any other person or to the estate, successors, or survivors of either for any injury suffered off the premises including, but not limited to, wrongful death and property damage.
K.R.S. § 227.220
Duties of State Fire Marshal and Chief State Building Official Relating to Fire Loss
Details actions the State Fire Marshal shall or may take in the event of a fire loss.
K.R.S. § 227.250
Duty of Insurers to Report Losses From Fire, Lightning, Hazardous Materials, Flammable Liquids or Explosions
Insurers must report to the State Fire Marshal loss or damage caused by fire, lightning, hazardous materials, and flammable liquids or explosions that occur in or on property insured by the insurer in a manner prescribed by the State Fire Marshal. The State Fire Marshal may waive the reporting if, in his discretion, the losses are unimportant due to the small amount involved and to save time and expense.
K.R.S. § 227.260
Records of Fire Inspections, Investigations and Losses
State Fire Marshal shall keep a record of all fire inspections, investigations and fire losses occurring in this state and of facts concerning them. The records shall be public except for limited circumstances.
K.R.S. § 227.370
Inspection of Property by Fire Chief or Other Department Personnel - Inspection and Investigation Reports
Fire department is authorized to inspect all property for the purpose of ascertaining and causing to be corrected any conditions likely to cause fire loss, or determining the cause or origin of any fire loss, or discovering any violation of a law or ordinance relating to fire prevention and protection.
K.R.S. § 304.12-230
Unfair Claims Practices Act
This statute imposes duties on insurers on both first-party and third-party insurance claims. Under the statute, claims are to be paid within thirty (30) days upon notice and proof of claim unless the insurer is able to demonstrate why the claim cannot or should not be paid. The statute imposes interest at an annual rate of twelve percent (12%) after the expiration of the thirty (30) day period. The statute also allows an insured to recover attorneys’ fees for violations of this statute.
K.R.S. § 304.14-100
Application as Evidence
If the insurer does not furnish a copy of the insurance application to the insured within thirty (30) days after the insurer has received written demand from the insured, then the application of insurance is not admissible in evidence in any action between the insured and the insurer that arises out of the policy.
K.R.S. § 304.14-110
Representations in Applications
All statements and descriptions in any application for an insurance policy will be deemed representations and not warranties. Misrepresentations, omissions, and incorrect statements will not prevent a recovery under the policy unless they are fraudulent, material to the acceptance of the risk or to the hazard assumed by the insurer, or if the insurer in good faith would not have issued the policy, issued it at a different premium rate, not have issued a policy in as a large amount, or would not have provided coverage for the hazard resulting in the loss if insurer had been informed of the true facts.
K.R.S. § 304.14-270
Forms For Proof of Loss Furnished
Upon written request by any person claiming to have a loss under any insurance contract, the insurer must provide forms of proof of loss to the insured. The insurer has no responsibility or liability for the completion of the proof of loss forms.
K.R.S. § 304.14-280
Claims Administration Not Waiver
Acknowledgment of the receipt of notice of loss or claim under the insurance policy, furnishing forms for reporting a loss or claim and receiving any such forms or proofs completed or uncompleted, investigating any loss or claim or engaging in negotiations for a possible settlement of a loss or claim, and making advance or partial payments under insurance policies, does not constitute a waiver of any provision of a policy or of any defense the insurer may assert.
K.R.S. § 304.20-160
Power of Authorized Agency to Require Insurer to Furnish Information Concerning Fire Loss
An authorized agency may require an insurer to release information or evidence in the insurer’s possession deemed important to the investigation of a fire loss of suspicious origin. Such information may include, but is not limited to:
- Pertinent insurance policy information pertaining to such fire loss and any application for such a policy;
- Policy premium payment records;
- History of previous claims made by the insured;
- Material relating to such loss or potential loss.
Furthermore, when an insurer has reason to believe a fire loss may be of other than accidental cause, the insurer shall notify, in writing, an authorized agency.
Any insurer, or person acting in its behalf, or authorized agency who in good faith releases information in compliance with this section, shall not be held civilly or criminally liable.
K.R.S. § 304.47-060
Immunity For Cooperation With Law Enforcement
Under this statute an insurer is immune from civil liability if it notifies law enforcement authorities of suspected insurance fraud.
K.R.S. § 304.47-080
Special Investigative Units
All insurers licensed in Kentucky must have a special investigative unit to investigate possible insurance fraud. The unit may be staffed either by employees of the insurer or individuals specifically contracted by the insurer to investigate.
K.R.S. § 304.1-090 (2010)
“Principal Office” Defined
This statute defines “principal office” as the office from which the general affairs of the insurer are directed or managed.
K.R.S. § 304.14-060
Insurable Interest, Property
“Insurable interest” means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment. Contracts of insurance of property or of any interest in or arising from property are only enforceable for the benefit of those who have an insurable interest in the things insured at the time of the loss.
K.R.S. § 304.14-360
Construction of Policies
Every insurance contract will be construed according to the entirety of its terms and conditions as set forth in the policy, and as amplified, extended, or modified by any rider, indorsement, or application attached to and made a part of the policy.
K.R.S. § 304.14-380
Venue of Suits Against Insurers
Suits based on causes of action against an insurer upon an insurance contract must be brought in the county where the cause of action arose or in the county where the policy holder resides.
K.R.S. § 304.20-050
Arbitration Provision Not Binding
A provision agreeing to arbitrate any or all disputes contained in an automobile liability or motor vehicle liability insurance policy delivered, issued for delivery or renewed in Kentucky, is not binding upon the named insured or person claiming under him.
K.R.S. § 342.690
Exclusiveness of Workers’ Compensation Remedy
If an employer secures payments of Workers’ Compensation for his employees, the liability of the employer shall be limited to such Workers’ Compensation payments and shall be exclusive and in place of all other liability.
K.R.S. § 405.025
Parent or Guardian Liable For Willful Damage to Property Caused by Minor
The parent or guardian of any minor, in his care and custody, against whom judgment has been rendered for the willful marking upon, defacing or damaging of any property, shall be liable for the payment of that judgment up to an amount not to exceed $2,500.00 and not to exceed $10,000.00 in a cumulative amount.
K.R.S. § 411.182
Allocation of Fault in Tort Actions - Award of Damages - Effect of Release
In tort actions when more than one party is at fault, the court will instruct the jury to answer interrogatories, and if no jury, will make findings indicating the amount of damages each claimant would be entitled if contributory fault is disregarded, and the percentage of total fault of all parties. In determining the percentage of fault, the trier of fact will consider the nature of the conduct of each party at fault and the extent of the causal relation between the conduct and the damages claimed and the court will also determine the award of damages to each claimant in accordance with the findings and determine and state in the judgment each party’s equitable share of the obligation to each claimant. A release, covenant not to sue, or other agreement between the claimant and a liable person, will discharge the liable person from all liability for contribution but will not discharge the liability of other liable persons unless it so provides and the claim of the releasing person against other persons will be reduced by the released persons’ equitable share of the obligation.
K.R.S. § 411.184
Definitions - Punitive Damages - Proof of Punitive Damages
Punitive damages include exemplary damages and are damages other than compensatory and nominal damage, they are awarded to punish and to discourage the defendant and others from similar conduct in the future. The plaintiff must prove by clear and convincing evidence that the defendant acted toward the plaintiff with oppression, fraud, and malice. Punitive damages will not be assessed against a principal or employer for the act of an agent or employee unless they authorized, ratified, or should have anticipated the conduct. Punitive damages are not available for a breach of contract.
K.R.S. § 411.188
Collateral Source Payment Rule
Collateral source payments, except life insurance, the value of any premiums paid by or on behalf of the plaintiff for same, and known subrogation rights shall be an admissible fact in any civil trial.
K.R.S. § 413.120
Actions to be Brought Within Five Years
The following actions shall be commenced within five years after the cause of action accrued:
- An action upon a contract not in writing, express or implied.
- An action for personal injuries suffered by any person against the builder of a home or other improvements. This cause of action shall be deemed to accrue at the time of original occupancy of the improvements which the builder caused to be erected.
Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69
Insurance Policy Coverage Due to Substandard Work Performance of Subcontractor
Homeowners purchased a new house constructed by the home builder. The homeowners filed a claim with the builder's insurance company for property damage resulting from faulty workmanship. The insurance company denied the claim because “shoddy workmanship” did not constitute an "occurrence" for which coverage was afforded. The homeowners subsequently filed suit. The trial court granted summary judgment in favor of the builder's insurance company, finding that coverage was not afforded by the insurance policy, and the appellate court affirmed. On review, the court held that Kentucky joined the majority of states that had considered the issue and held that a claim of defective construction against a home builder, standing alone, was not a claim for property damage caused by an "occurrence" under a commercial general liability insurance policy because a failure of workmanship did not involve the fortuity required to constitute an accident. As such, summary judgment in favor of the builder's insurance company was properly granted.
Kentucky Farm Bureau Mutual Insurance Company v. Shelter Mutual Insurance Company, 2008-SC-000781-DG
Excess Insurance Clauses
This case stems from a two car accident in which the at fault driver, a Kentucky Farm Bureau insured, was the non-owner but permissive driver of the motor vehicle. The motor vehicle was insured by Shelter. Shortly after the accident, Shelter paid damages to the injured party through the policy covering the vehicle. They then requested from Kentucky Farm Bureau reimbursement of the monies paid out to the victim.
Both policies contained what is known as an “excess insurance clause” purporting only to provide coverage in excess of the other’s coverage. At that point, the issue became which policy was the primary, which was excess and how the damages should be pro-rated. At the trial court level, the court determined that Shelter was in fact the primary insurer and liable for all damages. This was overruled at the Court of Appeals level as the Court of Appeals held that because the excess clauses were mutually repugnant, each insurer should be held liable for the loss.
The Supreme Court in this Decision goes into great detail as to how the courts have previously determined what to do in cases of mutually repugnant excess clauses and the two-step framework and analysis the courts have gone through to determine the pro-rata shares each company would owe. However, the court also discusses the fact that this mutually repugnant determination prompts insurers to engage in a “drafting battle” to try to one-up one another in reference to the excess clauses. In order to avoid such instances in the future and the problematic concerns with pro-rata apportionment the court determined in cases where there is an insurer of a vehicle and an insurer of the non-owner permissive driver, the insurer of the vehicle will at all times be the primary insurer.
Auto Owners Ins. Co. v. Omni Indemnity Co., 298 S.W.3d 457
Subrogation Rights Amidst Bankruptcy
Plaintiff was injured in a motor vehicle accident and sued the tortfeasor and her UIM insurer. The UIM insurer filed a third-party complaint against the tortfeasor’s liability insurer asserting subrogation rights. The tortfeasor filed a Chapter 13 Bankruptcy. Neither the plaintiff nor UIM insurer filed a proof of claim. Based on the discharge in bankruptcy, the trial court dismissed all claims against the tortfeasor including the UIM carrier’s subrogation claim against the tortfeasor’s liability insurer. The Court of Appeals affirmed.
The Kentucky Supreme Court reversed and held the insurer’s inability to subrogate against the tortfeasor had no bearing on its statutory right to seek subrogation recovery from the tortfeasor’s liability insurer. Further, the bankruptcy of a tortfeasor does not prevent the plaintiff’s claims from being heard; rather, any judgment obtained is only collectable against the tortfeasor’s insurance company.
Kentucky Farm Bureau Mut. Ins. Co. v. Young, 317 S.W.3d 43
Defective Coots Notice
The plaintiff was insured when a tractor-trailer struck his car. After mediation, plaintiff agreed to settle with the other driver for his policy’s limits. In accordance with Coots, plaintiff’s attorney sent a letter to Kentucky Farm Bureau (KFB) notifying them of the settlement. However, KFB received conflicting information on how much money to advance plaintiff per K.R.S. 304.39-320(4) in order to reserve subrogation rights. KFB sought clarification of the amount from plaintiff’s counsel but failed to receive it.
The sole issue in this case is whether an inaccurate Coots settlement notice relieved KFB from its obligation to pay UIM benefits to plaintiff. The Supreme Court held that the notice of settlement agreement must be accurate. Therefore, the notice given by plaintiff’s attorney was defective. The plaintiff’s attorney was responsible for providing clarification regarding the settlement agreement when the information was requested by KFB. The court also held, however, that KFB had a duty to request clarification before the burden would shift back to the plaintiff.
State Farm Mutual Automobile Insurance Company v. Carlene Slusher, Administratix of the Estate of Donald Slusher, 2009-SC-00513-DG
UM/UIM Coverage, Policy Language and Statutory Limitations
Donald Slusher was at work when a co-worker negligently parked his Mack Truck causing the truck to roll into the building killing Mr. Slusher and another worker. The cause of the accident was the co-worker’s negligence in parking the truck. The parties stipulated that Mr. Slusher’s death occurred during the course of his employment and the accident was covered by the Kentucky Workers’ Compensation Act, KRS Chapter 342, and the Estate could not directly assert a wrongful death claim against the tortfeasor/co-worker or his employer.
At the time of his death, Mr. Slusher had an automobile insurance policy through State Farm which provided UM/UIM coverage. However, when the Estate sought payment under these provisions State Farm denied the claim on the grounds that the policy language limited UM/UIM damages of the Estate to those they were “legally entitled to collect” from an owner or operator of an uninsured or underinsured motorist’s vehicle. The Estate filed suit against State Farm seeking payment of the UM/UIM policy limits. The trial court ultimately determined the exclusive remedy provisions of the Workers’ Compensation Act did not bar the Estate from asserting a claim against State Farm under the policy. The Court of Appeals affirmed that decision concluding to recover UM/UIM benefits an insured only need to prove, (1) the fault of the uninsured or underinsured motorist, and (2) the extent of damages caused by the uninsured or underinsured motorist.
The Supreme Court overturned the lower court’s rulings and ultimately held because of the exclusive remedy provisions of the Workers’ Compensation Act, a worker is not legally entitled to collect any further amounts from either his employer or co-worker, thereby barring any recovery for UM/UIM coverage. The court reasoned by a plain reading of the insurance contract (specifically the language “legally entitled to collect”) ultimately recovery would not be possible due to the exclusive remedies found in the Workers’ Compensation Act. The court distinguished that this applies strictly to a person being able to recover from their co-worker and/or employee. If there is an independent third party tortfeasor, entitlement to UM/UIM benefits are analyzed differently.
Kentucky River Medical Center, et al. v. Irene McIntosh, 319 S.W.3d 385
Open and Obvious Doctrine
Plaintiff-Appellee was a paramedic working at the hospital of the defendants-appellants. She and two EMT’s were transporting a critically ill patient from the ambulance dock to the emergency room. An 11 foot wide surface was adjacent to the emergency room to allow stretchers to be wheeled from the ambulance dock to the emergency room. The flat surface had curbs on both sides, which were unmarked and unprotected. The plaintiff had previously assisted in transporting some 400 patients through the same area. On the occasion in question, however, she tripped and fell over the adjacent curb. She stated her attention was focused not on the curb, but on the patient, consistent with her duties as a paramedic. The hospital moved for summary judgment, arguing the Open and Obvious Doctrine negated any duty the hospital owed to the plaintiff. The trial court overruled the motion. When the case proceeded to trial, the jury awarded a verdict in favor of the plaintiff. The Court of Appeals affirmed the jury verdict, and the hospital appealed to the Kentucky Supreme Court.
The court determined the trend of the decisions of other states is to treat the Open and Obvious Doctrine not as a question of law, but rather a question of fact. In states whose courts have ruled the Open and Obvious Doctrine is a question of fact, courts allow the jury to apply the Open and Obvious Doctrine to evaluate the comparative fault of the parties, rather than to absolve the premises owner/occupier of fault based solely on the open and obvious condition of the premises. In applying its ruling to the facts of the case, the court concluded the hospital did owe a duty to the plaintiff, notwithstanding the curb presented an open and noticeable condition.
Associated Insurance Services, Inc. v. Garcia, 307 S.W.3d 58
Assignment of Professional Negligence Claims
The Garcias suffered injuries aboard “The Star of Louisville,” an Ohio River based pleasure craft, and subsequently filed a personal injury suit. The pleasure craft was insured by HIH who had been referred by Associated Insurance, who, in turn, had solicited a quote from AON Risk Services. While the suit was pending HIH became insolvent and unable to pay any potential judgment. At arbitration, the Star and the Garcias agreed to a $742,193.00 settlement wherein the Garcias agreed to forebear collection of the award against the Star, which agreed to assign all of its claims against Associated Insurance and AON to the Garcias. The Garcias subsequently filed suit against Associated Insurance and AON.
In a case of first impression, the Kentucky Supreme Court held professional negligence claims against insurance agents and brokers are assignable and do not violate public policy. The court noted professional negligence claims against attorneys are not assignable, but distinguished between the attorney-client relationship and the relationship between an insurance agent and its customer. The court further held the Garcias should bear the burden of presenting prima facie evidence of the reasonableness of the arbitration award, which Associated Insurance and AON would have the opportunity to rebut.
Blankenship v. Collier, 302 S.W.3d 665
Medical Malpractice Summary Judgment
Plaintiff filed a suit against defendants claiming they were negligent in the diagnosis and treatment of his appendicitis. Over a year after suit was filed, and after an extension had been granted and time expired, Collier still had not identified an expert witness to establish causation. The trial court subsequently granted defendant’s summary judgment motion. The Court of Appeals reversed, holding the trial court must first make a separate ruling on the necessity of such expert testimony. The Kentucky Supreme Court held where a plaintiff creates a legitimate dispute about the need for an expert witness, the trial court must make a separate finding about the need for such testimony. However, where the need is never disputed by the plaintiff, no separate ruling is required before considering defendant’s motion for summary judgment. Since Collier never disputed the need for expert testimony, the trial court did not abuse its discretion in granting summary judgment.
CertainTeed Corp. v. Dexter, 2010 Ky. LEXIS 299, 2008-SC-000886-DG (Dec. 16, 2010)
Quantum of Proof For Apportionment Against Empty Chair Defendants
This decision addresses the issue of what quantum of proof is necessary to justify apportionment against empty chair defendants. This case involved an asbestos related products liability negligence suit against nineteen corporate defendants. Prior to trial, all defendants with the exception of two, Garlock and Certainteed, either settled or were dismissed. At the trial, the defendants tried to show fault against the empty chair defendants. The case was submitted to the jury with the empty chair defendants appearing on the verdict form for purposes of apportionment of fault. The jury returned a verdict awarding the plaintiff’s estate damages but allocating no fault to any of the empty chair defendants. The trial court granted a new trial. The Court of Appeals reversed.
The Supreme Court reversed the appellate court’s holding, holding that empty chair defendants who have settled are to be treated no differently than participating defendants in regard to what needs to be proved to apportion fault against them. Although an empty chair defendant will not actually be held liable in the trial, participating defendants still must prove liability on the part of the tortfeasor on to whom it seeks to shift some of the blame. Therefore, the burden of proof necessary for a plaintiff to find a defendant liable in a civil case (preponderance of evidence) is also the standard that should be applied to defendants that are seeking for a jury to allocate apportionment to an empty chair defendant.
Davis v. Scott, 320 S.W.3d 87
Assignment of Proceeds from a Malpractice Claim
Appellants were sued by other parties in federal district court for violation of a non-solicitation agreement. There were allegations regarding the attorney's advice given to the president about solicitation. A settlement agreement was reached with one of the parties that required appellants to pursue a legal malpractice claim against the attorney and to assign a percentage of the proceeds of the claim to the settling party. The court affirmed in part, noting that both the president and the settling party contended that it was their intention to assign merely the proceeds of the malpractice claim. However, the settling party retained control over the initiation, continuation and/or dismissal of the malpractice claim. This level of control over a lawsuit was consistent with an assignment of the entire cause of action. However, the court held that the invalidity of the assignment provision did not automatically void the entire agreement. Therefore the court remanded to the trial court with directions to dismiss appellants' complaint.
Henson v. Klein, 319 S.W.3d 413
Sudden Emergency Doctrine
Plaintiff and defendant were operating two Sea-Doos in the wingman formation with plaintiff in the lead and defendant following when plaintiff suddenly turned sharply to the left and abruptly decelerated to a stop directly in defendant's path. Defendant attempted to avoid a collision, but one nevertheless occurred, and plaintiff sustained serious injury. She filed suit against defendant, but the jury returned a verdict in defendant's favor. On appeal, the court held that the trial court properly instructed the jury that defendant's reaction to the sudden emergency could be considered only if the emergency was not brought about by any negligence or breach of a duty of care on his part. Whether defendant was negligent and whether his own negligence was a factor in creating the emergency were issues of fact to be determined by the jury. The court held that the instruction given did not impede the jury's ability to perform its role as the arbiter of the facts. The jury could have properly concluded that plaintiff created the sudden emergency and that defendant reacted reasonably in response.
Jewell v. Ky. School Board Association, 309 S.W.3d 232
Workers Compensation
A negligent driver struck the school bus in which plaintiff was riding. When she settled her injury claim with the Workers’ Compensation carrier and health care insurer, they assigned to her their third-party subrogation rights. After settling her tort claim against the negligent driver, the employee sued the administrator for UIM coverage. The court held the employee, as assignee of her Workers’ Compensation carrier’s subrogation rights, could not enforce those rights against her UIM provider because the Workers’ Compensation carrier had no right to recover from the UIM provider. Furthermore, the employee was precluded from recovering from a negligent driver, or her UIM provider, the same elements of damages for which she had already recovered Workers’ Compensation benefits.
Martin v. Ohio County Hosp. Corp., 295 S.W.3d 104
Wrongful Death and Loss of Consortium
The decedent sustained critical injuries in an automobile accident. She was transported to the hospital, but the hospital was unable to perform the surgery and delayed transferring her to a hospital that could have performed the necessary treatment. The decedent’s husband was awarded loss of consortium damages for the period of time following the accident until the decedent’s death. The hospital challenged the damages award under the Emergency Medical Treatment and Active Labor Act. The court held the spouse was entitled to damages for loss of consortium because loss of consortium damages under K.R.S. 411.145 did not cease upon the death of a spouse.
Woolum v. Hillman, 2008-SC-000396-DG, 2010 Ky. LEXIS 262
Admissibility of Evidence of Commonality of Insurance of Expert Witnesses
In a wrongful death medical malpractice claim, the plaintiff appealed, claiming that it was improper for the trial court to admit evidence that he shared the same malpractice insurer with his expert witness. The plaintiff argued that the expert doctor was therefore biased, because he believed that a judgment against his insurance company could adversely affect his own premiums. On appeal, the Kentucky Supreme Court held that the evidence rule preventing the admissibility of a defendant’s insurance policy to imply liability does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as bias or prejudice of a witness. Therefore, the court affirmed the trial court’s admittance of the evidence.
Cain v. American Commerce Insurance Company, Inc., 2009 Ky. App. LEXIS 211, 2009 WL 3486701 (Ky. App. 2009)
Reparation Benefits
The insured was injured in an accident caused by the other driver. At issue was the amount of added reparation benefits owed to the insured. The Court of Appeals held the insured was not entitled to added reparation benefits which she did not request. Even though by statute the insurer had been required to offer the lesser of $40,000.00 or $80,000.00 in added reparation benefits, (based on “stacking” as applied to the limits in question) the insured was entitled to only $20,000.00 per vehicle, the amount the insured selected. The insurer was required by statute to provide the insured $40,000.00 in added reparation benefits “upon the request of a reparation insured,” and was not required to actually provide it in every policy even if not requested.
Stewart v. Elco Administrative Services, Inc., 313 S.W.3d 117
Rental Vehicles and Basic Reparations Benefits
Passenger injured while riding in a rental vehicle owned by Enterprise filed suit against Enterprise and its subsidiary, Elco Administrative Services, claiming that they wrongfully refused to pay him basic reparations benefits (BRB) under the Motor Vehicle Reparations Act (MVRA). Elco denied Stewarts’ claim on the ground that his vehicle was uninsured at the time of the accident, prohibiting him from claiming BRB from Enterprise.
The court said to create a blanket rule that an uninsured person is prohibited from claiming BRB under any circumstances counteracts the intent of the MVRA and is against Kentucky’s public policy. The passenger did not constructively waive his right to BRB on the basis that his vehicle was uninsured. K.R.S. 304.39-050(1) provides that basic reparation insurance applicable to bodily injury is the security covering the vehicle occupied by the injured person at the time of the accident. The plaintiff’s own inoperable vehicle was uninsured at the time of the loss, and, further, he was only a passenger in the rental car. Therefore, the passenger is entitled to BRB from Enterprise. However, if the plaintiff had been the driver, he would not have been eligible for BRB.
Western Leasing, Inc. v. Acordia of Kentucky, 2010 Ky. App. LEXIS 81
Certificate of Insurance and Negligent Misrepresentation
Acordia, an insurance broker, issued a certificate of insurance (COI) to Western Leasing’s predecessor in interest. The COI contained several errors: (1) it stated the policy was a “blanket” policy when it was actually a scheduled policy that required each item needed to be listed in order to have coverage; (2) the COI contained a disclaimer stating that the COI did not confer any rights upon the certificate holder nor did it alter the actual policy. The equipment covered by the policy was damaged, and the submitted claim was denied. Western Leasing then filed a claim of negligent misrepresentation against Acordia, which the trial court dismissed by order of summary judgment.
The court found that all persons have a duty to exercise reasonable care when they obtain or communicate information in the course of business. The COI at issue was requested by the client, and its purpose was to inform interested parties that the coverage was in force. Acordia knew that the COI would guide the business transactions of interest parties. Therefore, Acordia had a duty to exercise reasonable care in issuing the COI. Further, the court found that the conflicts between the COI and the actual policy were affirmative misrepresentations. The court reversed the portion of the summary judgment relating to negligent misrepresentation in favor of Western Leasing.
Bryant v. Hopkins, 2009 Ky. App. LEXIS 193
Settlement and Subsequent Recovery
Plaintiff sustained injuries while driving her parents’ vehicle and claimed her injuries exceeded $100,000.00. The liability insurer of the other driver offered his policy limit of $100,000.00 to settle all claims against him for negligence. Plaintiff accepted the offer. Plaintiff then sought underinsured motorists (UIM) benefits from her parents’ automobile insurer. She claimed her parents’ insurer should be estopped from denying UIM coverage to her after the insurer elected to substitute payment for the other driver and admitted UIM coverage in its initial answer.
The court found an injured party with a UIM claim may settle its underlying claim with the tortfeasor for the tortfeasor’s policy limits without waiving the right to seek additional benefits under a UIM insurance policy. This can be accomplished by giving notice to his or her UIM insurer of the party’s intent to settle and by affording the UIM insurer the opportunity to preserve its subrogation rights against the tortfeasor by paying the insured party the amount of the tortfeasor’s policy limit. Further, an insurer’s initial admission of liability in its answer does not estop the insurer from denying liability.
Lynch v. Claims Management Corp, 306 S.W.3d 93
Reimbursement of Disability Insurer
The insured was an independent contractor with only UM and disability coverage. He was injured in an automobile accident. Before his disability insurer would release any funds, it required the insured to sign a form allowing for reimbursement to the fund from any third party who might be responsible. The insured then sued his UM insurer, the disability insurer intervened, and the insured subsequently obtained a settlement from the UM carrier. The court of Appeals held, as a matter first impression, the insured was not required to reimburse his disability insurer after receiving a settlement from a UM insurer. Further, the language of the insurance contract was ambiguous and a reasonable person might expect the term “third party” to mean only a tortfeasor.
Kentucky Associated General Contractor Self-Insurance Fund v. Lowther, 2010 WL 323199
Workers Compensation Penalty
The court affirmed a judgment of the trial court upholding a $10,000.00 penalty imposed by the Kentucky Office Workers’ Claims on an insurer and claims administrator for their failure to pay a claim. The court held after a final utilization review decision ended in a dispute, the obligor was required to file a Form 112 medical dispute within 30 days. This is true whether services have been rendered and a bill sent, or whether pre-authorization has been denied. Because the insurer did not seek reopening of the claim, it was in violation of its duty under the Workers’ Compensation laws to promptly pay or contest a claim, and the $10,000.00 fine was appropriate.
Faller v. Endicott-Mayflower, 2009 Ky. App. LEXIS 234
Open and Obvious
Plaintiff invitee tripped, fell, and injured her leg exiting defendant’s restaurant. The defense argued the hazard was open and obvious. The court found for the defendant. The plaintiff had been to the restaurant on several previous occasions. The plaintiff admitted she was not paying attention to where she was stepping. Further the plaintiff testified she knew of the step’s elevation change from her previous experiences at the restaurant and continued to patronize the restaurant knowing the risk. The court also found the restaurant had no reason to believe the plaintiff would fall after numerous visits, without incident, and considering plaintiff’s knowledge of the risk.
Aull v. Houston, 2010 WL 1814839 (Ky. App.)
Damages For Future Earning Capacity
This case began as an action for personal injury and wrongful death of William Blake Aull allegedly resulting from treatment rendered by defendants. Aull had Leigh’s disease, and the doctor had given the family a poor prognosis. Aull had complications when receiving his vaccinations and died four days later.
The appellants concentrated their challenge of the partial summary judgment on its elimination of their claim for the destruction of Aull’s future earning capacity. The court said damages under K.R.S. 411.130 are measured by the loss resulting from the destruction of the decedent’s power to labor. Aull experienced no destruction of his power to labor. Therefore, the appellants could not recover damages for the destruction of his power to labor and earn money under K.R.S. 411.130.
Rawlings v. Interlock Indus., Inc., 2010 Ky. App. LEXIS 60
“Use” Under MVRA
Plaintiff, a truck driver, delivered a load of scrap metal to defendant on a flatbed truck. Upon delivery, plaintiff unhooked straps and proceeded to roll up the straps in order to ready his tractor-trailer for return to the road. While plaintiff was rolling up the straps, a forklift driver began to unload the scrap metal and plaintiff was pinned and injured by a falling bundle. Plaintiff commenced suit 13 months after the accident. Whether suit was barred by the one year statute of limitations for personal injury claims, or allowed under the two year statute of limitations under the MVRA, turned on the definition of “use of a motor vehicle” under the MVRA. After a thorough fact specific inquiry, the court found the plaintiff’s actions were not integral to the unloading of the truck, but instead were in furtherance of the return of his tractor-trailer to its “use” as a cargo hauler. Furthermore, actions properly characterized as having a “dual character” should favor application of the MVRA as the statute is to be liberally construed. The court held the two year limitations period applies, as per IRS 304.39-230.
Baldwin v. Doe, appealed from 2010 Ky. App. LEXIS 29 (Ky. App. Feb. 5, 2010)
Uninsured Motorist Coverage
Insured filed suit against his insurer and an unknown driver, seeking uninsured motorist coverage, alleging that he sustained injuries as the result of a hit-and-run from an unknown driver. He alleged that he was driving his truck on an interstate when a large tarp from the flatbed truck in front of him flew onto his vehicle. He continued traveling to the next truck stop to remove the tarp. As he was dismounting, he alleged that he slipped, fell, and injured his back. He argued that the policy provided for coverage if any part of an unknown vehicle came into contact with any part of his vehicle. The trial court granted the insurance company’s motion for summary judgment. The appellate court reversed and remanded, finding that any part of the vehicle, including an object coming off the vehicle, that impacted the insured’s vehicle satisfied the “strike” requirement of the UM policy.
On appeal, the Kentucky Supreme Court will review the case and determine whether the “strike” requirement of the UM policy was satisfied when the unknown driver’s tarp came in contact with the insured’s vehicle.
Benningfield v. Zinsmeister, appealed from 2009 Ky. App. Unpub. LEXIS 78 (Ky. App. Sept. 11, 2010)
Landlord Liability For Dog Bite Injury
Plaintiff sued the landlord of a property for injuries sustained from a dog bite, alleging strict liability and negligence. Plaintiff argued that the landlord should be strictly liable since he was aware of the dog’s presence on the property, and urged the court to follow this interpretation of the Indiana dog bite statute. The court, however, refused to extend strict liability this far, stating “To apply the plain meaning suggested by Benningfield would create a society in which property owners would no longer allow dogs on public and private property, for fear of being sued.” The court held that to be liable under a negligence standard, a landlord must be in control of the area where the injuries take place and aware of a dog’s dangerous propensity. Here, the defendant was not aware of the dog’s dangerous propensity. The appellate court affirmed summary judgment granted by the trial court.
On appeal, the Kentucky Supreme Court will review the case to determine whether summary judgment as proper.
Childers v. Geile, 2009 Ky. App. LEXIS 226 (Ky. App. Nov. 6, 2009).
The Tort of Outrage
In a medical malpractice claim involving a miscarriage, the plaintiff sued under the tort of outrage (intentional infliction of emotional distress). The trial court granted summary judgment for the defendants. The appellate court affirmed, holding that the tort of outrage could not be brought where an actor's conduct amounted to one of the traditional torts, such as negligence, for which recovery for emotional distress was allowed.
On appeal, the Kentucky Supreme Court will determine whether this holding as proper.
Gaes v. Jones, appealed from 2009 Ky. App. Unpub. LEXIS 794 (Ky. App. Sept. 11, 2009)
Medical Malpractice and Expert Witness Testimony
Plaintiff appealed from the trial court’s grant of summary judgment against her medical malpractice claim regarding a perforated colon resulting from a colonoscopy. The appellate court reversed summary judgment, holding that it would not be impossible for plaintiff to prevail even without using an expert witness at trial. Here, plaintiff claims that she was not properly cared for post-op and was not advised of the need for an x-ray. The court held that admissions from the defendant regarding what would be standard post-op advice and procedure would meet the expert witness testimony requirement.
The Kentucky Supreme Court will review this case to determine whether summary judgment was proper.
Indus. Risk Insurers v. Giddings & Lewis, Inc., appealed from 2009 Ky. App. LEXIS 106 (Ky. App. July 2, 2009)
Economic Loss Rule and Destructive or Calamitous exception
Insurance company sued for subrogation for payments made for replacement and repair of damaged machinery, overtime pay, and other related expenses arising from a machinery malfunction accident. The trial court granted summary judgment for the manufacturer. On appeal, the appellate court found that the subrogees’ tort claims were to be barred by the Economic Loss Rule, and that the destructive or calamitous exception does not apply in Kentucky. The court found that the claims arising out of negligence and breach of warranty were contractual in nature and fell within the rule, but the negligent misrepresentation and fraud claims arose out of common law tort theories and did not fall within the rule. The court therefore affirmed dismissal of the negligence and warranty claims, but reversed the dismissal of the negligent misrepresentation and fraud claims.
The Kentucky Supreme Court will review this case to determine whether the appellate court’s holding as correct.
Ky. Associated Gen. Contrs. Self-Insurance Fund v. Lowther, appealed from 2010 Ky. App. LEXIS 18 (Ky. App. Jan. 29, 2010)
Failure to Pay a Claim and the OWC
The trial court affirmed a determination of the executive director of the Kentucky Office of Workers’ Claims that a fine of $10,000.00 was appropriate for the failure to pay a claim. On appeal, the appellate court affirmed. An employee settled his claim for work-related injury and was entitled to payment of covered medical expenses. When his treating physician requested pre-authorization, the review physician determined that the treatment was not reasonable and necessary and denied pre-authorization. When the claim was not paid, the employee or his physician contacted the OWC. The court determined that when a dispute arose, an administrative law judge was to make the determination rather than a review physician or insurance carrier. Further, the regulations placed the burden on the self-insurance fund to seek reopening. The fine was therefore appropriate.
On appeal, the Kentucky Supreme Court will review and determine whether the fine was appropriate.
Progressive Max Ins. Co. v. Nat'l Car Rental Sys., appealed from 2009 Ky. App. Unpub. LEXIS 199 (Ky. App. May 8, 2009)
Insurance Coverage of Rental Vehicle
The insured (who was insured by Progressive on his personal vehicle) was driving a rented vehicle when he was involved in an accident in which his passenger was injured. The passenger filed a personal injury lawsuit against the insured, and received $10,000.00 in basic reparation benefits from the rental company. Her personal injury action against the insured was dismissed, but she had never notified the rental company of the lawsuit, nor informed that it had been dismissed. Therefore, the rental company did not intervene in the lawsuit, and filed suit against both the insured and Progressive. The trial court found in favor of the rental company. The appellate court affirmed, finding that under the insured’s policy with Progressive, he had coverage on rented vehicles.
The Kentucky Supreme Court will review this case on appeal to determine if summary judgment in favor of the rental company was proper.
Rawlings v. Interlock Indus., Inc., appealed from 2010 Ky. App. LEXIS 60 (Ky. App. March 19, 2010)
Statute of Limitations and the Motor Vehicle Reparations Act
Plaintiff, a tractor-trailer driver, was injured when materials fell off his truck. The trial court granted summary judgment in favor of the party contracted to deliver the materials and the party receiving the delivery.
The plaintiff driver argued that his claims were not subject to a one-year statute of limitations for personal injury claims, but were subject to the two-year statute under the Motor Vehicle Reparations Act. On appeal, the court held that the focus in determining whether the MVRA applied was whether the driver was using the tractor-trailer as a vehicle at the time of the accident as opposed to unloading. Unloading would exclude his claims from the MVRA. The court determined that the driver’s actions, while in proximity to his tractor-trailer in preparing it for continued use as a transport vehicle were encompassed with the term “use.” Therefore, he was engaged in an activity covered by the MVRA, and the two-year statute of limitations applied.
The Kentucky Supreme Court will review this decision on appeal.
Stapleton v. Citizens Nat'l Corp., appealed from 2010 Ky. App. Unpub. LEXIS 81 (Ky. App. January 29, 2010)
Open and Obvious Doctrine
Plaintiff sustained injuries from slipping and falling in defendant’s parking lot in which there were several icy spots. Although it had recently snowed and sleeted a few days prior, on the day of the fall the weather was sunny. The trial court entered an order stating that the case law in Kentucky makes clear that the defendant would not be liable to Stapleton for failing to warn of a naturally occurring outdoor hazard unless it (1) did anything to make the natural hazard less obvious; or (2) did anything that otherwise increased the likelihood that the customer would fall. The trial court granted summary judgment after additional discovery failed to prove these elements. The appellate court affirmed summary judgment, finding that the natural condition was open and obvious and that there was no evidence that the defendant attempted to conceal the condition.
The Kentucky Supreme Court will review this decision to determine whether the lower courts correctly found that the defendant had no duty to warn and properly granted summary judgment.