Kentucky Court of Appeals
Professional Liability – Hospitals – DCBS Report re Adult Abuse, Neglect or Exploitation
Engle v. Baptist Healthcare System, Inc., 336 S.W.3d 116, 2011 WL 832460 (Ky.App. February 25, 2011)

The decedent was admitted to the defendant facility for surgery to repair a broken hip, and thereafter she became constipated and developed bowel problems. This resulted in removal of portions of her large and small intestines, the extent of which was not described. About a month later she was discharged to a nursing home, and almost three months later she dies from septic shock. The Department for Community Based Services (DCBS) conducted an investigation and prepared a report which found no abuse, neglect or exploitation. The Court of Appeals held that the admission of this report was error and reversed the defense verdict. Relying on Prater v Cabinet for Human Resources, 954 S.W.2d 954 (Ky. 1997), the Court held that such a report could not be admitted as a public record under KRE 803(8), but had to meet the requirements of KRE 803(6) relating to record of a regularly conducted activity. The report contained the opinions of the person who conducted the investigation, which the Court held was inappropriate. The opinion did not discuss whether the portions of the report discussing facts found by the department would be admissible, but this should be inadmissible as well. The report would pass muster if the issue was what the reporter actually saw or observed, but to the extent the report contains statements by third persons another hearsay exception would be needed for that layer of hearsay in order to prove the truth of statements made to the reporter.

Kentucky Court of Appeals
Insurance – Uninsured Motorist - Accident
Stamper v. Hyden, 334 S.W.3d 120, 2011 WL 557796 (Ky.App. February 18, 2011)

In this case the insured had been injured in an automobile by her former boyfriend. He initially ran his car into hers, and then forced his way into the car and possible caused further injuries. In order to qualify for uninsured motorist coverage it must be shown, among other things, that the injury was caused an accident. The Court decided that the determination of whether conduct was an accident had to be made from the point of view of the insured, not the tortfeasor. This apparently is the majority view in other jurisdictions. But this rationale misses the boat on a couple of levels. There is nothing in the policy which supports the conclusion reached by the Court. More importantly, the Court’s decision focuses on broadening coverage at the expense of the purpose of uninsured motorist coverage. The purpose of such coverage is to replace liability coverage where the tortfeasor has failed to procure it. If the tortfeasor in this case had procured liability insurance, this event would not have been an accident. The Court fails to explain why uninsured motorist coverage should apply to an event that would not have been covered by a liability policy. If there were a rationale for coverage in a case of this type, it would be based on financial responsibility, not the contract language itself.

Kentucky Court of Appeals
Professional Liability – Attorneys – Breach of Fiduciary Duty
Cunningham v. Abbot, 2011 WL 336459 (Ky.App. February 4, 2011), motion for discretionary review granted December 14, 2011 (2011-SC-291-DG)

This opinion arises from one of the civil actions brought against three Lexington lawyers who were convicted on criminal charges relating to their handling of a class action settlement of Fen-Phen claims. The opinion deals with several interesting issues that are outside the scope of this blog. However, the Court did reverse the granting of a summary judgment in favor of the plaintiffs. The simple analysis is that an expert affidavit immunizes a party from summary judgment. Too often the allergy the Kentucky Courts have to Rule 56 causes the court to look for reasons to avoid its responsibility instead of performing its gatekeeping function. That may have occurred here. For example, the portions of an “expert” affidavit cited in the opinion for the most part doesn’t even address the issues on which the summary judgment was based. The opinion concludes that there are issues of fact, but misses the point that they were not material issues. The panel says that the affidavit supported a finding that the settlement was intended to pay more than just the claims of the 431 plaintiffs. It supported a finding that plaintiffs were fairly compensated. It supported a finding that the “foundation” was properly funded. The affidavit then made conclusory assertions that nobody did anything wrong.

Perhaps here would be a good time to remind the reader that the same conduct has resulted in the incarceration of two of the three attorneys and disbarment of all three. But if some lawyer from out of state will sign an affidavit offering his opinions on legal principles and ethical issues, the Kentucky Court will defer to him? Isn’t it the Court’s job to determine what the law is and what conduct is ethical? It was undisputed that the attorneys paid themselves more than they were entitled under their retention agreements. Their defense was that the trial judge approved the payments. The record did not reveal that the trial judge was sufficiently advised of the facts to make an approval. The same trial judge was then paid money from the “foundation”. All of this was without the knowledge of the clients. Other than the conclusory statements of approval, nothing in the affidavit controverted the self-dealing and lack of candor with the clients. On one hand it is troubling that the Court could find a way to see the conduct in question as acceptable. On the other, it may be even more troubling that the Court is willing to allow a paid expert to determine the law and ethical standards in Kentucky. The good news is that this case is almost certain to be reviewed by the Supreme Court. The bad news is that the fundamental problem, the unwillingness to render a critical review of proffered evidence, is one of the Supreme Court’s creation.

Kentucky Court of Appeals
Defamation – Absolute Privilege - City Council Proceedings
Smith v. Martin, 331 S.W.3d 637, 2011 WL 336859 (Ky.App. February 4, 2011)

In a city council meeting, the mayor and the former mayor, now a council member, demonstrated a certain amount of animus towards one another. The former mayor and other citizens voiced exception to the mayor’s decision to remove some trees from the cemetery. In response, the mayor asked about a $30,000 expenditure which occurred on the former mayor’s watch, and wanted to know where the equipment purchased with the money was. An analysis of whether the statements were defamatory would have been interesting, but the opinion just assumes that they were. The court instead focused on privilege, which had been the basis of the trial court’s decision. Specifically, KRS 83A.060(15) extends legislative immunity to secondary legislative bodies, such as a city council. The Court held that such immunity would extend to the mayor, who presides over the council and votes in case of a tie.

Kentucky Court of Appeals
Defamation – Reporting of City Council Proceedings
Smith v. Martin, 331 S.W.3d 637, 2011 WL 336850 (Ky.App. February 4, 2011)

While comments made the mayor in a city council meeting were absolutely privileged, his recounting of them in a newsletter was not. Instead, that publication should have been analyzed under KRS 411.060, which provides a qualified privilege for fair and impartial reporting executive or legislative proceedings. The Court did not decide how the statute should be applied to the facts, and remanded the case to the trial court for that determination.