Kentucky Court Report - SCOKY & COAKY

WORKERS COMPENSATION - Estoppel: Journey Operating, LLC v. Zurich American Insurance Company (COA 11/6/2009)

Journey Operating, LLC v. Zurich American Insurance Company
2009-CA-000279 11/06/09 2009 WL 3673007

Opinion by Senior Judge Lambert; Judges Clayton and Thompson concurred. The Court reversed an opinion and order of the Workers’ Compensation Board reversing a decision by the Chief Administrative Law Judge reopening a final decision and finding that an insurer was estopped from terminating benefits. The Court held that KRS 342.125 provided authority for reopening to protect the verity of the administrative proceeding. The Court distinguished the holding in Custard Ins. Adjusters, Inc. v. Aldridge, 57 S.W.3d 284 (Ky. 2001), as this was not simply an attempt to enforce the prior judgment but was necessary to determine whether the insurer had committed constructive fraud in the original proceeding.

CIVIL PROCEDURE - Mootness: Lexington-Fayette Urban County Government v. LEXHL, LP (COA 11/13/2009)

Lexington-Fayette Urban County Government v. LEXHL, LP
2008-CA-002145 11/13/09 2009 WL 3786630

Opinion by Judge Wine; Judges Stumbo and Thompson concurred.
The Court affirmed a summary judgment entered in favor of the appellee newspaper on the appellant county government’s declaratory judgment action seeking a declaration that the litigation exception to the Open Meetings Act allowed it to close council meetings in order to answer requests for information propounded by administrative agencies. The Court held that the trial court correctly concluded that the matter was moot because the underlying action was no longer pending before the agency. Given the unique and specific nature of the controversy, the county government did not show that a similarly-situated party would be subject to the same action again or even that the precise factual scenario could be duplicated so as to show the issue was capable of repetition, yet evading review, in order to meet the exception to the mootness doctrine.

UNDERINSURED MOTORIST BENEFITS - UIM, advances, estoppel/waiver of coverage: Bryant v. Hopkins (COA 10/9/2009)

Bryant v. Hopkins
2008-CA-002099 10/09/09 2009 WL 3231220 DR Pending
Opinion by Judge Lambert; Senior Judge Henry concurred; Judge Stumbo dissented by separate opinion.

The Court affirmed an order of the circuit court granting summary judgment and dismissing appellant’s complaint against the appellee insurer for underinsured motorist (UIM) benefits. The Court held that the trial court did not err in ruling that the insurer was not estopped from denying liability for UIM insurance benefits. The insurer’s election to protect its subrogation rights under Coots v. Allstate Insurance Company, 853 S.W.2d 895 (Ky. 1993), and KRS 304.39-320 by advancing payment, did not create a presumption or acknowledgement that the UIM insurance carrier had admitted coverage to the injured party beyond the amount advanced under its policy or that it waived any defense of non-coverage in any subsequent litigation. Simply discussing the claim prior to the initiation of litigation did not imply or create a reasonable presumption that the claim was accepted or admitted. Further, once the trial court permitted the insurer to amend its answer, the existence of an admission upon the record was essentially extinguished. Finally, the contract of insurance could not be created or enlarged by estoppel or waiver. Since appellant was not entitled to UIM benefits in the first place, estoppel was not available to provide benefits.

CIVIL PROCEDURE, Board of Claims SOL: Nelson County Board of Education v. Forte (COA 10/9/2009)

Nelson County Board of Education v. Forte

2008-CA-001958 10/09/09 2009 WL 3231646 DR Pending

Opinion by Judge Taylor; Chief Judge Combs and Judge Nickell concurred. The Court affirmed an order of the circuit court which vacated and remanded an order of the Board of Claims dismissing an action as time barred under KRS 44.110(1). The Court held that the circuit court properly vacated and remanded. The term “court” as used in KRS 413.270(1) included the Board of Claims and therefore, the tolling provision of KRS 413.270(1) was applicable to an action filed in the Board of Claims.

Civil Procedure - Statute of limitiations (SOL), tolling, deception: Tim Emberton v. GMRI Inc. (d/b/a Red Lobster Restaurant #349) (SC 10/29/2009)

Tim Emberton v. GMRI Inc. (d/b/a Red Lobster Restaurant #349)
2007-SC-000443-DG October 29, 2009
2008-SC-000109-DG October 29, 2009
Opinion by Justice Scott; all sitting.

Emberton sued GMRI after he contracted the hepatitis A virus at one of its Red Lobster restaurants. Following trial, the jury awarded Emberton $8666 in medical expenses, plus $225,000 for pain and suffering. The Court of Appeals reversed on the grounds that Emberton’s suit was barred by the one-year statute of limitations. The Court of Appeals ruled Emberton “failed to investigate the source of his illness when reasonable diligence could have revealed the likely tortfeasor within the statutory period.”

The Supreme Court reversed and reinstated the jury’s award, holding that the statute of limitations on Emberton’s claim was tolled under KRS 413.190(2) since GMRI, through its district manager, engaged in conduct that was “intentionally deceptive and designed to prevent public disclosure of [the GMRI employee’s] infection though the health department, the restaurant’s employees and its patrons.” The Court rejected GMRI’s challenge to the constitutionality of KRS 360.040—which establishes Kentucky’s post-judgment interest rate. The Court also ruled against GMRI’s appeals of evidentiary issues, the pain and suffering award and its claim of an inconsistent verdict at trial.

Chief Justice Minton and Justice Abramson concurred in result only.

CIVIL PROCEDURE - Statute of Limitations (SOL) tolled by conduct of defendant: Tim Emberton v. GMRI Inc. (d/b/a Red Lobster Restaurant #349), et al. (SC 10/29/2009)

Tim Emberton v. GMRI Inc. (d/b/a Red Lobster Restaurant #349), et al.
2007-SC-000443-DG October 29, 2009
2008-SC-000109-DG October 29, 2009
Opinion by Justice Scott; all sitting.

Emberton sued GMRI after he contracted the hepatitis A virus at one of its Red Lobster restaurants. Following trial, the jury awarded Emberton $8666 in medical expenses, plus $225,000 for pain and suffering. The Court of Appeals reversed on the grounds that Emberton’s suit was barred by the one-year statute of limitations. The Court of Appeals ruled Emberton “failed to investigate the source of his illness when reasonable diligence could have revealed the likely tortfeasor within the statutory period.” The Supreme Court reversed and reinstated the jury’s award, holding that the statute of limitations on Emberton’s claim was tolled under KRS 413.190(2) since GMRI, through its district manager, engaged in conduct that was “intentionally deceptive and designed to prevent public disclosure of [the GMRI employee’s] infection though the health department, the restaurant’s employees and its patrons.” The Court rejected GMRI’s challenge to the constitutionality of KRS 360.040—which establishes Kentucky’s post-judgment interest rate. The Court also ruled against GMRI’s appeals of evidentiary issues, the pain and suffering award and its claim of an inconsistent verdict at trial.

Chief Justice Minton and Justice Abramson concurred in result only.

WILLS & ESTATES - Illegitimates claim to father's property barred by SOL: Combs v. Mullins (COA 9/18/2009)

Combs v. Mullins
2008-CA-000776 9/18/09 2009 WL 2971636 DR pending

Opinion by Judge Moore; Judge Lambert concurred; Judge VanMeter dissented by separate opinion. The Court affirmed an order of the circuit court dismissing appellant’s claim for an interest in property filed over thirty years after his father’s death.

Appellant argued that Pendleton v. Pendleton, 560 S.W.2d 538 (Ky. 1977) (Pendleton II), holding KRS 391.090 (prohibiting an illegitimate child from inheriting from his father) unconstitutional, did not have a retroactive effect on the devolution of a title and that establishing a firm date for the application of retroactivity resulted in a violation of his federal equal protection rights and unjustifiably stripped him of his right to inherit from his father. The Court held that it was bound by the holding in Turner v. v. Perry County Coal Corp., 242 S.W.3d 658 (Ky. App. 2007), and Pendleton II, as the Court had considered whether to overrule Turner but the majority had refused to do so. Therefore, because the father died intestate in 1975, before the Pendleton II decision was rendered, title to the property properly passed to the legitimate children on that date and appellant did not inherit an interest in the property. Thus, the trial court properly dismissed the complaint.

TORTS - FELA, SOL, judicial admissions: Zapp v. CSX Transportation, Inc. (COA 9/25/2009)

Zapp v. CSX Transportation, Inc.
2008-CA-001362 9/25/09 2009 WL 3047630 Rehearing pending

Opinion by Judge Taylor; Chief Judge Combs and Judge Nickell concurred. The Court reversed and remanded an order of the circuit court granting a motion for directed verdict for an employer on an employee’s claim under the Federal Employers’ Liability Act (FELA).

The circuit court found that the claim was barred by the statute of limitations. The Court held that the circuit court erred by deeming the employee’s testimony a judicial admission and by usurping the prerogative of the jury to decide a disputed issue of fact - when the statue of limitations was triggered. While the employee testified that his hand symptoms worsened while working in 1999, the circuit court erroneously inferred that the employee knew or should have known that the injury was caused by work duties in 1999.

CIVIL - SOL for claims against gov't employees is one year even if mva: Wagoner v. Bradley (CPA 9/4/2009)

Wagoner v. Bradley
2008-CA-001179 9/4/09 2009 WL 2835122 Released for pub.

Opinion by Judge Lambert; Judge Stumbo and Senior Judge Henry concurred. The Court affirmed an order of the circuit court dismissing appellant’s complaint related to a single-car accident in which she claimed that the appellees negligently erected a stop sign.

The Court held that the trial court did not incorrectly apply the one-year statue of limitations in KRS 44.110(1) and that the Motor Vehicle Reparations Act (MVRA) did not extend the one-year statute of limitations. The Court further held that the same statute of limitations applied to the Commonwealth and its employees, regardless of whether the alleged negligence involved discretionary or ministerial acts.

GOVERNMENT IMMUNITY - Lexington Airport Authority coverered by gov't immunity for Comair crash negligence: Comair, Inc.; and Comair Services, Inc. v. Lexington-Fayette urban County Airport Corporation et. Al (SC 10/1/2009)

Comair, Inc.; and Comair Services, Inc. v. Lexington-Fayette urban County Airport Corporation et. Al
2007-SC-000602-TG October 1, 2009
Opinion by Justice Noble. All sitting; all concur.

The estates of persons killed in a commercial airplane crash sued Comair, the flight operator. Comair then filed a third-party complaint against the Lexington-Fayette Urban County Government Airport Board, the LFUCG Airport Corporation and members of the board in their official capacities alleging negligence in operation of the airport where the accident occurred. The circuit court granted the third-party defendants motion to dismiss, holding they were entitled to immunity. Comair appealed and the Supreme Court transferred the case to its docket from the Court of Appeals.

The Court affirmed, holding that the airport board and airport corporation were both agencies of the LFUCG, exercising a function integral to state government by providing essential transportation infrastructure—and thus immune from suit. In reaching this decision, the Court moved away from the two-pronged test for sovereign immunity set forth in Berns (1: direction and control by central state government; 2: supported by funds from the state treasury).

The Court concluded the Berns test was overly simple and limiting and that it did not lend itself to analyzing municipal entities. Instead, the Court held a preferable approach is a case-by-case analysis of a) the origins of the organization seeking immunity (i.e. state, county, municipal) to determine the level of immunity enjoyed by the “parent” entity; and b) whether the organization exercised a function integral to state government. The Court rejected Comair’s argument that the airport board was engaged in a purely proprietary function—distinguishing providing transportation services from providing transportation infrastructure (terminals, runways, etc.). The Court concluded that the latter was a “quintessentially governmental function.”