November 2009
Supreme Court
Municipal Corporations - Notice of Injury
Denton v. City of Florence , 301 S.W.3d 23 (Ky. November 25, 2009)
By statute, KRS 411.110, one who is injured by a defect in a public way must give notice within 90 days of the injury, and this is considered to be a condition precedent to the bringing of a civil action against the city. In this case, notice was timely given, but related the wrong date. The Court held that the notice was sufficient compliance since it stated “on or about” the wrong date, but did not expressly overrule prior case law holding that the statute required literal compliance.
Insurance - UIM - Coots Auto Owners Insurance Co. v. Omni Indemnity Co., 298 S.W.3d 457 (Ky. November 25, 2009)
The liability insurer offered its limits, and the UIM carrier invoked Coots and fronted the settlement amount of $25,000.00. The claimant then filed suit against the tortfeasor, who subsequently filed for bankruptcy protection. Thus ended the UIM carrier’s right of subrogation against the tortfeasor, but the liability carrier declined to refund the initial settlement amount. The Court rejected the argument that the right to recover the settlement amount for the liability insurer was related to the ability to recover subrogation from the tortfeasor, noting that the right against the liability insurer is based on statute. However, that right to recovery remains predicated on a finding of liability and damages in that amount, so the risk of overpayment remains on the UIM carrier.
Professional Negligence - Medical - Peer Review Saleba v. Schrand , 300 S.W.3d 177 (Ky. November 25, 2009)
The Court held that Kentucky law concerning the protection of peer review documents applied even though the services were rendered in Ohio by a physician at an Ohio hospital. Once this result was reached, the Kentucky Court’s longstanding and perhaps unconstitutional refusal to defer to the legislature on this subject required production.
Court of Appeals
Premises - Open and Obvious Conditions
Faller v. Endicott-Mayflower, LLC, 2009 WL 3878062 (Ky.App. November 20, 2009), remanded on October 13, 2010 for consideration of Kentucky River Medical Center v McIntosh (2009-SC-824)
The plaintiff’s testimony in a deposition that there was no break in the threshold that caused her fall, that she was not looking where she was going as she crossed the threshold, that she knew the elevation fell at the the threshold prior to falling, and that she was aware of the yellow and black striped caution tape marking the threshold before her fall constituted a judicial admission that the condition in question was known to her. This left only the question of whether the occupier of the premises should have expected an invitee such as her to be injured by the threshold. She pointed to testimony by the restaurant representative that he had seen about ten instances of patrons stumbling on the threshold. Citing Restatement (Second) of Torts section 343A, comment e, the Court held that the occupier had the right to reasonably assume that a patron with knowledge of the condition would protect herself. The Court also addressed an issue that has been a source of confusion since Kentucky adopted comparative fault. Plaintiff’s have often argued, as did Rader, that her negligence could not be considered since the fact of negligence on her part could not be a total bar to recovery. The Court properly noted that this was not a consideration where the duty of one person is tied to the danger to one who is exercising ordinary care for their own safety. This is a consideration in most premises cases as well as warning cases.
Factual Overview
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
This most interesting case involves a number of legal issues and may be a good example of “hard cases make bad law”. Assuming that the claims were not barred by the exclusive remedy provisions under the Workers’ Compensation Act as held by the Court, it should have been a simple case of negligent training. However, the Court went much further in trying to stretch other theories to cover the case, and in that sense portions of the opinion may cause problems in the future. You may recall news accounts of a recurring hoax call to various McDonald’s in which the caller poses as a police officer and instructs the manager to conduct strip searches and sexual assaults. This had occurred at 30 different McDonald’s including five in Kentucky. The opinion says that McDonald’s had made a conscious decision not to train or warn store managers, but does not say why. A McDonald’s employee, Ogborn, after finishing her afternoon shift, was asked to working a second shift, and she agreed to do so once she finished her meal. Shortly after that, a caller spoke to an assistant manager, Summers, and identified himself as a police officer investigating the theft of a purse or wallet. She felt the description of the suspect fit Ogborn, who was given a choice of being searched in the office or police station. Ogborn spoke to the caller and agreed to be searched in the office. Following the caller’s instructions, Summers had Ogborn gradually disrobe and she removed the clothes and other belongs from the office. Another manager provided Ogborn an apron to wear. The caller instructed Summers to have a male employee sit with Ogborn in the office, but he left after a few minutes because he found the situation unacceptable. The caller then asked Summers if she was married, and she responded that she was engaged. She was instructed to have her fiancé, Nix, come in and sit with Ogborn. At the caller’s instruction, Nix conducted a cavity search, spanked her and ultimately sexually assaulted her. According to the opinion, during this process Ogborn objected and asked to leave but this was denied. Ultimately, other employees determined the call was a fraud. Summers was fired and both Summers and Nix were charged criminally.
Workers’ Compensation Exclusive Remedy - Waiver
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
An employer seeking to invoke the exclusive remedy provision of the Workers’ Compensation Act has the burden of proving that it provided insurance or security for its liability under that Act. Apparently, McDonald’s failed to make this showing at trial, although no reasonable person would doubt that a company of this size would fail to have in place such insurance. Moral of the story - just because it is obvious doesn’t mean you don’t have to prove it.
Workers’ Compensation Exclusive Remedy - Scope and Course
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
Even though the Court held that the exclusive remedy defense had been waived, it proceeded to discus the application of the defense to the facts. The Court only discussed one actual fact, and that was that Ogorn had clocked out. The Court ignored the fact that she and agreed to work another shift. Further, the Court ignored that this same argument would have applied to Summers in that her replacement came to work and assumed her duties early in this process, and under the rationale of the Court McDonald’s would not have been vicariously liable for most of the events at issue.
Employment - Preemption
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
The Court held that Ogborn’s claims were not subsumed by the Kentucky Civil Rights Act. The stated basis was that the common law claims of premises liability (a phrase of no legal significance), negligence and false imprisonment stood independent of the KCRA. That is a meaningless statement since all torts stand independent. The real issue is whether the nature of the claim brings it within the KCRA. The correct answer is that the claims are not preempted because, from Summers perspective, the conduct was not based on sex or any other protected status. If the conduct were sexual harassment, then clearly the claims, whatever the legal theory, would have been preempted. Of course, a finding of viability would have precluded the next finding of the Court, which was that these facts did state a claim under the KCRA.
Employment - Sex - Harassment
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
The Court never really confronted the issue of whether these facts could constitute sexual harassment, perhaps because of the way the parties framed the issue. McDonald’s argument seemed to be that since the jury found both McDonald’s employees to have been free of negligence, McDonald’s could not have been vicariously liable for their conduct. The Court’s response was simply that a finding of no negligence did not rule out a finding of intentional conduct, and an action under the Kentucky Civil Rights Act is based on intentional conduct. But this is not always true, and many acts of negligence are based on acts or omissions which were purposefully carried out but without the intent to cause harm. There is no evidence in the opinion to suggest that Summers was motivated by anything other than a belief, foolish as it may have been, that she was obeying a police officer. This claim should have been dismissed because there was no evidence that any of the conduct was based on sex from the standpoint of anyone other than the caller.
False Imprisonment
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
A claim of false imprisonment was supported, even though the employee agreed to be searched, where her clothes and belongings were removed and she was faced with the authority of her employer and the false authority of a hoax caller posing as a police officer.
Duty - Protection of Invitee from Acts of Third Persons
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
The opinion refers to “premises liability” as though it was a tort, when it actually is just a shorthand term for the application of the tort of negligence to factual situations occurring on real property owned or controlled by the defendant. There is simply no comparison between the duty to protect patrons from other patrons and the facts of this case, as there was no notice of that these particular events were about to occur. A general knowledge that criminal conduct may occur exists with respect to all commercial enterprises that can be robbed. This portion of the opinion adds nothing to the case and will do nothing but create problems in the handling of cases involving criminal activity on commercial premises.
Duty - Training of Employees
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
This issue goes to the heart of the McDonald’s case. McDonald’s argued that Kentucky did not recognize a duty to train employees, which is odd since it was a mainstay of personal injury actions prior to worker’s compensation in the early 1900s. Because the opinion does not describe the reason McDonald’s, the reader can make no assessment as to whether the evidence supported a finding of negligence, but the Court clearly thought a jury could have found the reasons for not divulging the prior calls to managers unreasonable.
Causation - Intervening Superseding Cause
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
The Court rejected the argument that McDonald’s could not be liable for the criminal activity of Nix. If the only facts were that Nix came into contact with Ogborn at McDonald’s this would have some merit. But here, Nix followed the lead of the hoax caller, which would have not occurred had Summers been trained or warded to be suspicious of such calls. It is this direct connection with the original negligence that renders the criminal activity reasonably foreseeable.
Intentional Infliction of Emotional Distress
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
Summers, the assistant manager who foolishly fell for the hoax after it should have been clear that a police officer would never make such requests, also brought a claim for intentional infliction of emotional distress. The Court upheld the claim, and incredibly did so on the ground that it was on notice of the hoax calls and did not train Summers to handle them. The facts set forth in the opinion are not even close to describing an intentional tort such as this, which requires intent to cause sever emotional distress. This opinion demonstrates the danger in loosely defined torts, as if this opinion were correct a tort which was intended as a very narrow “gap-filler” is now just another negligence theory.
Punitive Damages - Vicarious Responsibility
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
KRS 411.184(3) precludes the imposition of punitive damages against an employer for the acts of an employee unless the conduct is authorized, ratified or the employer should have anticipated the employee’s conduct. Since McDonald’s terminated Summers no ratification argument could be made, leaving the issue as whether McDonald’s should have anticipated the conduct. The Court says there was evidence to support this finding, but does not tell us what that evidence was. While it seems clear that McDonald’s could have anticipated the possibility of a hoax call, the opinion does not provide a basis for believing that the prior calls led to any conduct of the type described in this case. In short, this opinion does nothing to clarify the meaning of the statute, and seems to suggest that the employer need only be negligent in some respect to impose punitive damages for the conduct of employees. This would clearly be inconsistent with the purpose of the statute and the concept of punitive damages generally.
Punitive Damages - Reckless Disregard
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
The Court also upheld punitive damages based on the failure to train or warn employees. This opinion is again of little precedential value because the reader cannot discern what conduct separated a negligence claim and reckless disregard. For example, if McDonald’s did not train or supervise its managers because it believed that this information would make it more difficult to catch the person engaged in the hoax, it may have been negligent in making that decision but it could not be said that it was reckless. On the other hand, if it simply dismissed the prior incidents, its failure to train may have been sufficiently aggravated to support a punitive damage claim. Thus, we have to assume the latter, or something close to it.
Punitive Damages - Constitutional Limitations
McDonald’s Corp. v. Ogborn, 309 S.W.3d 274 (Ky.App. November 20, 2009)
The Court upheld a ratio of 4.5 to 1 in the case of Ogborn, but reversed the ration of 10:1 in the case of Summers. Summers was awarded compensatory damages of $100,000.00 and the Court reduced the award of punitives to $400,000.00. The most troubling aspect of the opinion concerns the analysis of reprehensibility. The opinion acknowledges that the mere failure to provide information to managers did not appear to constitute “behavior marked by violence, the threat of violence, trickery or deceit” as required by US Supreme Court cases. The Court’s answer is that managers were trained to cooperate with police, and were not told that a hoax call was an exception. This adds nothing to the deficiency in the punitive claim. More importantly, the Court defers to the jury determination that punitives were warranted, when the Constitution requires a judicial assessment.
Arbitration - Confirmation of Award FIA Card Services v. Callahan, 298 S.W.3d 463 (Ky.App. November 13, 2009)
Arbitration proceedings were brought to enforce a credit card debt. The trial Court refused to enforce the arbitration award because FIA had produced no signed agreement. The Court held that the time to challenge the validity of the arbitration was in a suit brought under KRS 417.060 to stay the arbitration.
Employment - Disability Discrimination - Qualified Individual
Bohl v. City of Cold Spring, 2009 WL 3786633 (Ky.App. November 13, 2009), ordered depublished September 15, 2010 (2010-SC-110-D)
The fact that a police officer continued to work in a manner satisfactory to his employer after he was diagnosed with multiple sclerosis made a prima facie showing that he was qualified to perform the essential functions of his job notwithstanding his disease. This was true even though he was allowed to continue on a temporary basis and when he obtained a doctor’s note, it said he was unable to perform the duties. While this holding was in the context of the burden of production, it still seems to discourage an employer from trying to accommodate an employee’s disease.
Employment - Disability Discrimination - Adverse Employment Action Bohl v. City of Cold Spring, 2009 WL 3786633 (Ky.App. November 13, 2009), ordered depublished September 15, 2010 (2010-SC-110-D)
Upon receipt of a letter from a physician that a police officer could no longer perform the duties of a detective or police officer, removal from the detective position constituted an adverse employment actions as such was a diminishment of material responsibilities.
Employment - Disability Discrimination - Legitimate Business Reason Bohl v. City of Cold Spring, 2009 WL 3786633 (Ky.App. November 13, 2009), ordered depublished September 15, 2010 (2010-SC-110-D)
Where a police office was diagnosed with multiple sclerosis and a physician advised that the employee could no longer perform his duties reliance on same in removing the employee from his position as a detective was a legitimate business decision.
Employment - Disability Discrimination - Harassment Bohl v. City of Cold Spring, 2009 WL 3786633 (Ky.App. November 13, 2009), ordered depublished September 15, 2010 (2010-SC-110-D)
Jokes made by the Chief of Police about an employee’s diagnosis of multiple sclerosis were not severe and pervasive where they stopped when the Chief was advised of offense, did not interfere with work, were neither frequent, severe or physical in nature, and the employee himself made light of his condition and allowed friends to do so.
Professional Negligence - Medical - Informed Consent
Moore v. Saint Joseph Healthcare, Inc., 2009 WL 3672900 (Ky.App. November 6, 2009), ordered depublished August 18, 2010 (2009-SC-795-D)
A patient’s consent to ultrasound compression included a thrombin injection where it was explained that if the ultrasound compression were unsuccessful, the injection may occur. The Court did not reach another issue which was whether a hospital owes a duty to obtain informed consent under KRS 304.40-320 and KRS 304.40-260.
Defamation - Quasi-judicial/administrative proceeding Hawkins v. Miller, 301 S.W.3d 507 (Ky.App. November 6, 2009)
Statements made in responsive filings to the Unemployment Commission or EEOC are the subject of a qualified privilege, and to avoid this privilege a plaintiff must produce evidence of an improper purpose.
Intentional Torts - Outrage Childers v. Geile, 2009 WL 3672891 (Ky.App. November 6, 2009), review granted December 9, 2010 (2009-SC-790-D)
The plaintiff was taken to the emergency room with complaints of profuse vaginal bleeding, and was treated by Dr. Geile. Dr. Geile concluded that plaintiff had suffered a miscarriage. Dr. Geile administered Atvian to calm plaintiff, ordered a hGC test, and gave plaintiff a prescription for Methergine to stop the bleeding. After taking the Methergine, plaintiff followed with her physician, who determined that she had not suffered a miscarriage, but was in a breach presentation with a heart rate of 162 beats per minute. Her doctor told her that a pregnant woman should not have been prescribed Methergine since it causes contractions. Subsequently, plaintiff did suffer a miscarriage. Originally, the complaint sought recovery for both negligence and the tort of outrage, and subsequently the negligence claim was dropped. The opinion does not say why, but the most common reason would be statute of limitations. The Court held that the tort of outrage was not available since the claims would be covered by a negligence claim if brought. There is really little controversy about this holding. What is amazing and troubling is that the panel of the Court of Appeals take no note of the total absence of any facts which would comprise the type of conduct required to make out a claim of outrage. At best it is a negligence case, and probably a defensible one at that. The tort of outrage is a dangerous one because it is so ill-defined, and cases like this do nothing to prevent its abuse as a catch-all cause of action.
Sixth Circuit
Duty - Negligent Hiring and Retention - Causation
Dortch v. Fowler , 588 F.3d 396 (6th Cir. November 30, 2009)
A cause of action for negligent hiring and/or retention of an employee could not proceed absent a finding that the negligence or intention act of the employee was responsible for the injury to the plaintiff.
Subrogation - ERISA Lien
The Longaberger Company v. Kolt , 586 F.3d 459 (6th Cir. November 16, 2009)
Kolt represented Biltner in a civil action seeking damages for personal injury, and ultimately achieved a settlement with two insurers in the sum of $135,000.00. The settlement proceeds were distributed with the exception of $1000.00. Biltner was at the time of the accident insured by an ERISA plan (Longaberger) provided by his employer, and the plan provided for a “first priority lien” on any recovery from a third person. Medical expenses in the sum of $113,668.31 had been pain by Longaberger. The right of an ERISA plan to the equitable remedy of restitution had been previously established by the US Supreme Court in Sereboff v. Mid Atl. Med. Servs., 547 U.S. 356 (2006). Biltner did not appeal from the grant of restitution. Kolt argued that since the funds had been disbursed at the time Longaberger asserted its claim there was no longer an identifiable fund from which to award restitution and he was not a plan fiduciary or beneficiary. This argument was rejected, as it was Kolt’s commingling of funds which rendered them unidentifiable. ERISA - Accident and Intoxication
Kovach v. Zurich American Insurance Company , 587 F.3d 323 (6th Cir. November 13, 2009)
Kovach was enrolled in her employer’s ERISA plan which provided an AD&D coverage administered by Zurich. Her husband was involved in a motorcycle accident and made a claim for dismemberment benefits. Zurich denied the claim because Mr. Kovach was intoxicated at the time he ran a stop sign and struck a car. The Circuit Court agreed that the trial Court had properly used the arbitrary and capricious standard of review as to Zurich’s actions. The Court also rejected the argument that by involving counsel to review the facts changed the standard as such was not a delegation of responsibility for the decision. The Court, however, distinguishing Lennon v. Metropolitan Life Insurance Co., 504 F.3d 617 (6th Cir. 2007), rejected the notion that intoxication and running a stop sign did not rise to the level of conduct so likely to result in injury so as to render the event a non-accident. Specifically, it held that Zurich’s definition of accident which excludes “drunk driving” wrecks was arbitrary and capricious, at least where the facts are not extreme. The Sixth Circuit decided that going forward the test for “accidental” turns on whether a reasonable person, with background and characteristics similar to the insured, would have viewed the injury as highly likely to occur as a result of the insured’s intentional conduct. Civil Rights - 1983 - Schools - First Amendment
Lowery v. Jefferson County Board of Education , 586 F.3d 427 (6th Cir. November 12, 2009)
School Board policy provided for individuals to apply for five minute slots to speak so long as the appearance is not frivolous, repetitive, nor harassing. The plaintiffs were the parents of three boys who had been dismissed from the football team for challenging the coach’s authority. The dismissal did not violate any constitutional rights. See Lowery v. Euverard, 497 F.3d 584 (6th Cir. 2007). The parents were granted five minutes and delegated their time to their attorney. The attorney was critical of certain school officials and threatened legal action if their concerns were not addressed. A second request was denied because it was repetitive. The Court approved of the policy as striking the balance required in a designated or restricted speaking context. While there was some evidence that would have supported a finding that the application was denied because of disagreement with the view (criticism of officials), the jury had ample basis for concluding that it was repetitive or that the application would have been denied in any event. Civil Rights - 1983 - Police - High Speed Chase
Jones v. Byrnes , 585 F.3d 971 (6th Cir. November 9, 2009)
A high speed chase ended with an armed robbery suspect colliding with a third person resulting in his death. During the chase, the suspect had turned off his lights and plaintiff claimed that failing to call off pursuit at this point violated the decedent’s substantive due process rights. The trial Court had found that no violation occurred, and if it did, the officers were entitled to qualified immunity. The Sixth Circuit first noted that Pearson v. Callahan, __ U.S __, 129 S. Ct. 808, 129 S.Ct. 808, 172 L.Ed.2d 565 (2009) did away with the requirement that the Court apply the two prong test for qualified immunity sequentially. The Court found that plaintiff had failed to make out a prima facie case against the officers as they acted for the sole purpose of trying to apprehend dangerous suspects rather than to cause any type of harm. Having made this finding, it must follow that there was no clearly established guidance that would have advised the officers that they were violating constitutional rights. Civil Rights - 1983 - Police - Shooting of Armed Suspect
Chappell v. City of Cleveland , 585 F.3d 901 (6th Cir. November 4, 2009)
In conducting a protective sweep officers encountered a boy in a closet, who emerged with a knife. The boy ignored instructions to drop the knife and continued to move towards the officers, at which time he was shot. The Circuit Court held that the officer’s conduct was objectively reasonable and thus they were entitled to qualified immunity.
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