Kentucky Court of Appeals - Unpublished
Premises - Open and Obvious Conditions
Case Name, 2010 WL 2976926 (Ky.App. July 30, 2010), review granted March 16, 2011 and remanded for further consideration in light of Kentucky River Medical Center v McIntosh

The Plaintiff’s husband was admitted into Cardinal Hill Rehabilitation Hospital which was operated by the defendant. After five weeks of visiting her husband every day, she tripped on wires near the bed as she approached her husband to kiss him good bye. The trial court granted summary judgment based on the open and obvious nature of the condition. There was also a great deal of proof that plaintiff actually knew of the wires and had been warned that they were dangerous. The Plaintiff argued that her case came within one of two exceptions. One injured by an open and obvious condition may nonetheless recover where the possessor of the land should anticipate the harm despite the knowledge or obviousness of the condition. For example, if it is expected that the invitee may be so distracted that he may forget what he has discovered of failed to protect himself, the possessor should anticipate the injury. The Court held that this case did not fall within the exception since conditions were no different on the day of the fall than they had been each day of the prior five weeks and she pointed to nothing that distracted her. Such a plaintiff may also recover where the possessor should know that the invitee will proceed to encounter the known or obvious danger. This usually requires a showing that the invitee encountered the known or obvious condition because of a necessity or urgency to do so. The fact that plaintiff wished to kiss her husband before leaving was not a necessity or urgency.

Kentucky Court of Appeals - Unpublished
Subject
E.H. Construction, LLC v. Alpha Concrete Construction, LLC, 2010 WL 2977035 (Ky.App. July 30, 2010)

E.H. was the general contractor engaged to build a new Kroger store. E.H. subcontracted with Alpha Concrete to install a cement floor, and they in turn contracted with Congleton to provide material and labor. The construction contract included an arbitration provision. Alpha claimed that it had terminated the contract due to E.H.’s failure to make payments as scheduled, and therefore the arbitration provision had ceased. The court held that the arbitration provision survived the termination of the contract, which appears to be the majority view.

Kentucky Court of Appeals
Premises - Landlord Tenant - Duty to Repair
Jaimes v. Thompson, 318 S.W.3d 118 (Ky.App. July 30, 2010)

Where a tenant leases an entire premises the landlord, absent a contractual or statutory obligation, owes no duty to repair the premises. The landlord’s duty is limited to a duty to disclose known latent defects at the time of the lease. The court observed that a defect in the stairs leading to the front door could not be considered latent where the plaintiff had known of the defect for two years. The determination of whether a defect is latent or patent is not dependent on the knowledge or actual observation of a particular tenant or guest, and this opinion should not be read as suggesting such to be the case. One final interesting note: The court stated that if there was a contractual duty to repair, the remedy would lie in breach of contract and not a tort claim for personal injury of a guest.

Kentucky Court of Appeals
Bonds - Performance and Payment - Contractual Limitations of Action
Five Star Lodging, Inc. v. George Construction, LLC, 344 S.W.3d 119, 2010 WL 2976524 (Ky.App. July 30, 2010)

In this case the owner of a property sought to recover under a Performance and Payment Bond where the suit was brought outside the contractual limitations period set forth in the bond itself. The bond required that suit be brought within two years from the completion of the contract or the date of occupancy, whichever is earlier. A certificate of occupancy was issued on August 31, 2000, and the architect certified substantial completion occurred on August 28, 2000. Guests were lodged in the hotel as early as June of 2000. The owner was dissatisfied with the construction, and there was a series of communication between the owner, the contractor and the surety’s agent. In the course of this communication the contractor was reminded of the contractual limitations period. On May 31, 2002, the owner filed suit against the contractor, and the case was abated pending arbitration. Nearly five years later, the owner moved for and was granted a default judgment. On March 1, 2007, the owner amended its complaint to name the surety but erroneously named the surety’s agent. The surety was then substituted. The trial court dismissed the case as barred by the contractual limitations period.

The owner first argued that the surety had notice of the claim within the limitations period. The court held that this was not relevant to the issue of whether a suit was timely filed. Next, the owner then argued that it was not bound by contractual provisions contained in a contract to which it was not a party. The court observed that the owner accepted the bond by proceeding with the construction contract. Finally, the owner asserted that, in effect, the surety was bound by the default judgment entered against the contractor. Three different concepts were discussed, law of the case rule, estoppel and res judicata, and the opinion contains some interesting discussion about the differences between these concepts. In the end, however, a default against the principal does not in any way limit the surety’s right to assert any defenses it may have under the bond.

Kentucky Court of Appeals
Professional Liability - Insurance Agent
Celina Mutual Ins. Co. v. Harbor Ins. Agency, LLC, 332 S.W.3d 107, 2010 WL 2788164 (Ky.App. July 16, 2010)

The insured failed to disclose a prior fire loss in an application for a farm security policy. He told the agent about the loss but advised that the fire was not attributed to him and would not show up in his loss history. There was a dispute as to the facts leading to the non-disclosure. A fire ensued about a month after the policy was issued. The Court held that expert testimony was required to establish a negligence claim against the agent. The interesting aspect of the opinion is the suggestion that the trial court was entitled to some deference on the question of whether an expert was necessary. This might be true as to the enforcement of deadlines but should never be true on the issue of whether an expert is necessary.

Kentucky Court of Appeals
Indemnity
Celina Mutual Ins. Co. v. Harbor Ins. Agency, LLC, 332 S.W.3d 107, 2010 WL 2788164 (Ky.App. July 16, 2010)

An insurer brought suit against the procuring agent seeking damages arising from the failure of an application for insurance to disclose a prior fire loss. The insurer claimed a right of recovery through indemnity. There was no express indemnity provision in the agency agreement. The Court held that common law indemnity could not apply because the insurer’s liability arose out of its insurance contract, not the conduct of the agent. Indemnity is a loss shifting mechanism, not a substitute for a tort claim. However, implicit in this holding is a finding that the procuring agent was acting on behalf of the insurerd, not the insurer. Otherwise, an agent is always liable to his primcipal for errors of this type.

Kentucky Court of Appeals
Hospital - EMTALA
Thomas v. St. Joseph Healthcare, Inc., 335 S.W.3d 460 , 2010 WL 2812967 (Ky.App. July 16, 2010), Prior Opinion

This case was remanded for reconsideration in light of the Supreme Court’s decision in Martin v. Ohio County Hosp. Corp. The hospital argued that in light of Martin the hospital could not be held liable under EMTALA for failing to detect the patient’s duodenal ulcer. The Court of Appeals agreed that the EMTALA duty to stabilize applied only to conditions which were actually detected. However, the Court held that the facts supported a claim where there was evidence that at the time of discharge the patient was still in distress. It was not necessary that the hospital know why to violate its duty to stabilize. The Court also rejected the argument that the Martin opinion required damage caused by the EMTALA violation and unrelated to any negligence claims, holding that such claims could overlap.

Kentucky Court of Appeals
Fraud - Damages
Gibson v. Kentucky Farm Bureau Mutual Insurance Company, 328 S.W.3d 195 (Ky.App. July 9, 2010)

This case began with an insurance claim for a stolen automobile. Later in the year a man named Mendez attempted to register the vehicle. The investigation revealed facts which suggested the claim of theft was false. KFB filed a claim against the insureds alleging fraud. Of the award made by the jury, $33,700 was for the costs incurred in the investigation, including attorneys fees. The Court reversed as to attorney fees, but allowed the award as to investigative costs. The Court held that investigative costs could properly be recovered where incurred as a result of the reliance upon the fraudulent statement. The Court further found the evidence sufficient even though based on estimates. In this regard the Court may be on thin ice, since this is the type of expense that could in fact be calculated. While uncertainty as to amount will not by itself defeat the claim, this typically applies to claims where the damages are not subject to precise calculation.

Kentucky Court of Appeals
Employment - Age - Prima Facie Case
Flock v. Brown-Forman Corporation, 344 S.W.3d 111, 2010 WL 2629581 (Ky.App. July 2, 2010)

While the employee failed to prove that he had been treated differently than similarly situated employees from outside the protected class, he was able to make out a prima facie case by showing that he was replaced by a younger employee. The employer argued that this test was not available since his duties were given to two current employees. The Court held that this exception was only available where it occurs in the context of a reduction in force.

Kentucky Court of Appeals
Employment - Age - Pretext
Flock v. Brown-Forman Corporation, 344 S.W.3d 111, 2010 WL 2629581 (Ky.App. July 2, 2010)

In an effort to demonstrate the employer’s stated basis for an adverse employment action to be a pretext, the employee argued that his conduct was minor, the decision maker had decided to punish him before the investigation was complete, the employer changed its position in litigation admitting that he had merely advised others, and that some statements were made which he asserted showed an ageist bias. The Court found this evidence to be insufficient, in that none of it showed age to have been a motivating factor.

Kentucky Court of Appeals
Employment - Sex - Reverse Discrimination
Flock v. Brown-Forman Corporation, 344 S.W.3d 111, 2010 WL 2629581 (Ky.App. July 2, 2010)

In order for a man to establish a prima facie case of sex discrimination, he must show 1) that his employer is the unusual employer that discriminates against men, and 2) that he was treated differently than employees who were similarly situated but outside the protected class. The Court found the first prong lacking, and noted specifically that the management involved in the decision making were also male, and females who received less punishment were lower ranking. Implicit is the suggestion that a smaller error or role by a high level employee may be treated more harshly than similar misconduct by a lower level employee.