April 2009
Supreme Court
Insurance - UIM - Earle v Cobb does not Apply Without a Coots Settlement
Mattingly v. Stinson , 281 S.W.3d 796 (Ky. April 23, 2009)
The high Court has now clarified an issue which has been giving UIM carriers and defense counsel fits since its decision in Earle v. Cobb, where the Court held that the UIM carrier had to be identified at trial. Very few UIM carriers fronted the settlement money because they really wanted subrogation, but rather saw this as a way to require the liability carrier to pay for the defense and hide the UIM issues. After Earle, there was rarely a reason to front the money, but the question still remained - should the UIM carrier be identified at trial? In Mattingly, the Court said that Earle only applies where there is no Coots settlement. While the original opinion in Earle was as misguided as Coots itself was, at least this opinion reaffirms the general principle that the jury should not be advised of insurance in a tort case.
Medical Malpractice - Court Rejects Negligence Per Se Rule in Retained Objects Cases
Nazar v. Branham , 291 S.W.3d 599 (Ky. April 23, 2009)
The Court overruled Laws v. Harter, 534 S.W.2d 449 (Ky. 1975), in which the Court held that a surgeon was negligent as a matter of law when he left a sponge in the patient. The Nazar Court held that leaving a foreign body in the patient raises an inference of negligence, but that the surgeon may introduce proof that he complied with the standard of care. Once this has occurred, the jury may then decide whether the surgeon met the standard of care. This result was long overdue as the Laws theory simply cannot be squared with the idea of fault based compensation. The opinion also deals with the question of whether the surgeon was vicariously liable for any negligence of the nurses. The holding is actually very narrow, as the Court actually only found that the requisite relationship had not been established as a matter of law. It will likely be read by some more broadly, but there is no reason to think a major change in agency law was intended. It should be noted that the opinion, as many recent opinions do, treat the principal-agent relationship as interchangeable with the master-servant relationship. The latter is necessary to support the application of respondeat superior, while the former would include both servants and independent contractors.
Court of Appeals
Arbitration - Unenforceable where agreement was signed by daughter who was not the attorney-in-fact
Beverly Health and Rehabilitation Services, Inc. v. Smith, 2009 WL 961056 (Ky.App. April 10, 2009), ordered depublished August 18, 2010 (2009-SC-759-D)
There was no dispute that the signor was not the attorney-in-fact. The nursing home argued that since the estate benefitted from the agreement it was a third party beneficiary. The Court rejected this argument on the ground that only a stranger to the contract can be a third party beneficiary.
Medical Malpractice - Physician testifying on nurse’s standard of care
Tapp v. Owensboro Medical Health System, Inc., 282 S.W.3d 336 (Ky.App. April 10, 2009)
The Court affirmed the trial court’s ruling that allowed a physician to testify that a nurse met the standard of care expected of a nurse.
Prisoners - Duty to Pay for Medical Expense
Hospital of Louisa v. Johnson Cty. Fiscal Court, --- S.W.3d ----, 2009 WL 961145 (Ky.App. April 10, 2009), reversed March 24, 2011 (2009-SC-280-D)
Jailer was not liable for medical expenses incurred while prisoner was released from custody for the purpose of obtaining the medical treatment even though he remained on bail and was required to return to custody once treatment was obtained.
Product Liability - Foreign Manufacturers and the Middleman Statute
Turpin v. Stanley Schulze, 2009 WL 875218 (Ky.App. April 3, 2009), Motions for Review filed on May 4, 2009 and May 23, 2009
Under the Kentucky Product Liability Act, a distributor or seller can escape 402A liability if the manufacturer is subject to the jurisdiction of the Court. The Court of Appeals held that a Taiwanese manufacturer who sold through a California distributor was not subject to personal jurisdiction, rejecting the stream of commerce basis for personal jurisdiction. If this view becomes Kentucky law, there would be no relief for retailers or other middlemen in many cases involving consumer goods, and the sole recourse would be to assert an indemnity claim in the state where the distributor resides. This would seem to be an issue that would interest the Supreme Court if review is sought.
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