Kentucky Supreme Court
Procedure – Personal Jurisdiction - eCommerce
Hinners v. Robey, 336 S.W.3d 891, 2011 WL 1089593 (Ky. March 24, 2011)

This case involved a slip and fall injury sustained by a Kentucky resident at an Indiana casino. The case was dismissed because the claim did not satisfy any of the requirements for jurisdiction under the Kentucky Long Arm statute, KRS 454.210. The large point made by the decision is that personal jurisdiction involves a two-step process. First, there must be compliance with the long arm statute, and then, if the answer is affirmative, the Court must evaluate whether the application of the Long Arm statute comports with procedural due process. The Long Arm statute lists nine activities, and the claim in question must arise out of one of those activities in order for the statute to apply. While the Indiana casino advertised in Kentucky and otherwise engaged in business in Kentucky, the accident in question arose instead out of the operations in Indiana. Thus, since the plaintiff had not shown the Long Arm statute to be applicable, it did not matter whether Kentucky could exercise jurisdiction since it had chosen not to.

Kentucky Supreme Court
Procedure – Personal Jurisdiction - Injury in Foreign State
Caesars Riverboat Casino, LLC v Beach, 336 S.W.3d 51, 2011 WL 1089598 (Ky. March 24, 2011)

The Court held that a non-resident who advertises a product (used car) on eBay.com is not subject to personal jurisdiction in Kentucky just because the product was purchased by a Kentucky resident. Having won the auction, the plaintiff traveled to Missouri to complete the transaction. The vehicle also came with a warranty of sorts. The Court first held that the transaction met the requirements of the Kentucky Long Arm statute, specifically “Contracting to supply services or goods in this Commonwealth". The Court noted that to satisfy this provision, it was not necessary that the contract be entered into in Kentucky, and was met here because the parties anticipated that the vehicle would be transported to and used in Kentucky. Further, the Court noted that the claims, fraud and breach of warranty, clearly arose from the contract in question. Having concluded that the allegations satisfied the terms of the statute, the Court turned whether application of the statute violated due process.

The minimum contacts requirement of due process can be met by a showing that the defendant has purposefully directed his activities at residents of Kentucky. Recognizing that the case was a “single contact” case, the Court found controlling the three prong test enunciated by the Sixth Circuit. That test is: The first prong of the test asks whether the defendant purposefully availed himself of the privilege of acting within the forum state or causing a consequence in the forum state. The second prong considers whether the cause of action arises from the alleged instate activities [or consequence] The final prong requires such connections to the state as to make jurisdiction reasonable . The Court held that the first and third prong had not been met.

First, the Court observed that the web listing on eBay was not directed at anyone in Kentucky directly, and thus it could not be said that the defendant had purposefully availed himself of the privilege of acting in the state. Second, the Court considered whether it could be said that the defendant purposely availed himself of the privilege of causing a consequence in Kentucky. The Court held in the negative, because the buyer’s home state was entirely fortuitous and in fact was not known until after a contract was created by the plaintiffs acceptance of the offer.

The Court then addressed the third prong in the context of internet connections with the forum state. The court acknowledged the existence of sliding scale. At one end of the scale, jurisdiction will clearly lie where a defendant does business over the internet and enters into contracts with residents of a foreign state that involves knowing and repeated transmissions of files over the internet. At the other is a passive web site which is merely available to persons in other jurisdictions. Where a user can exchange information with the host computer, the focus is on the level of interactivity and commercial nature of the information exchange. The Court found the posting of an offer on eBay to be in the passive web site category. The Court pointed out that the result might be different where the seller maintains a large scale web site which is intended to and does attract Kentucky business.

Kentucky Court of Appeals
Premises Liability - Innkeeper
Jones v. Abner, 335 S.W.3d 471, 2011 WL 831670 (Ky.App. March 11, 2011)

The defendant in this case was a motel in Powell County, and Plaintiff was a guest with her husband over the weekend. On the third day of her stay, she fell while getting into the shower, and sustained serious injuries. Plaintiff argued that the motel was negligent in two respects. First, the bathtub had no handrails installed. Second, Plaintiff claimed the anti-skid strips were old and frayed. The Court first concluded that Plaintiff, as a business visitor, was owed the duties of an invitee, which would include the duty maintain the premises is a reasonably safe condition. The opinion contains no mention of the rule that a guest of an innkeeper is owed the highest degree of care, but in this case it should not have made a difference. In any event, the Court rejected the handrail argument due to an absence of any proof of any code, standard, or statute requiring such a handrail. It is not clear whether the result would have been different if plaintiff had retained an “expert”, but it should not have been and in fact it is hard to see why an “expert” in a case of this type should even be admissible since almost all jurors are familiar with bathtubs and the hazards posed thereby.

The more interesting aspect of the case is how the anti-skid issue was handled. The husband testified that there were just a few strips and that they appeared worn. The majority opinion held, however, that this did not raise an issue of fact because of the open and obvious rule. The Court observed that reasonable care does not require precautions or warnings where the danger is open and obvious. This has long been the rule, but here the Court correctly noted that the open and obvious rule has nothing to do with negligence by the plaintiff, but rather defines the duty in the first place.

Keep in mind that the Supreme Court recently issued a muddled and confusing opinion that left it unclear where the Court was going on the open and obvious rule, and in fact treating it as though it were a contributory negligence defense. This opinion contains a concurring opinion which specifically deals with McIntosh and reaches the same conclusion that Green’s View did when the opinion came down. For all the dictum in the opinion, it actually just recognizes what has long been the rule – that a duty may exist as to an open and obvious condition where the possessor of land has reason to believe that a reasonable person who is exercising ordinary care for his safety may not see the condition. This concurring opinion will prove very helpful to circuit court judges who may struggle to discern the meaning of the McIntosh opinion. One last point of interest is that the Court also addressed Plaintiff’s testimony that the tub seemed slicker and attributed that to how the tub was cleaned. The Court rejected this testimony as speculation and conjecture, which seems obvious since there was no proof that anything unusual had been done in the cleaning.

Kentucky Court of Appeals
Sovereign Immunity - Public Employees
Faulkner v. Greenwald, 358 S.W.3d 1, 2011 WL 831714 (Ky.App. March 11, 2011)

Plaintiff was injured while serving customers in a concession stand during a high school soccer game, and brought suit against the athletic director. The allegation was that the concession stand was designed in a dangerous way. The issue before the court was whether the act in question was discretionary or ministerial. The Court held that maintenance of the concession stand was ministerial and accordingly immunity did not apply. The fact that the defendant had some discretion as to the configuration of the concession stand did not render the duty discretionary.

Kentucky Court of Appeals
FELA - Collateral Source Rule
Leighton v CSX Transportation, Inc., 338 S.W.3d 818, 2011 WL 831433 (Ky.App. March 11, 2011)

The Court determined that payments of medical expenses made by the employer under The Railroad Employees National Health and Welfare Plan were not a collateral source, at least where the collective bargaining agreement so provides. The Court did not reach the question of whether an FELA plaintiff would be able to introduce evidence of the medical expenses paid under such a plan as proof of other elements of damages. It might be noted that similar payments under state law would clearly be outside the collateral source rule.

Kentucky Court of Appeals
Defamation - Qualified Privilege - Employment
Harstad v. Whiteman, 338 S.W.3d 804, 2011 WL 744287 (Ky.App. March 4, 2011)

This well reasoned opinion should serve as a model for legal analysis as well as how a Court properly decides whether a party has met the burden of producing sufficient evidence before deciding that a jury issue is raised. Harstad was a tenured professor at Asbury College, a religious institution. Its faculty manual provided for termination for behavior causing the perception of a dating or amorous relationship with a student. The administration received numerous complaints concerning his relationship with a graduate student. He was advised that he was creating the perception of an improper relationship, but he refused to alter his behavior. While he admitted to a relationship he denied that it was inappropriate. Further, Harstad demanded to know who had complained. When this demand was denied, he retained an attorney who demanded in writing the names of all persons who claimed to have witnessed an improper relationship. The school did not respond to the attorney, but instead urged Harstad to meet with the school president. Harstad responded by filing suit seeking an injunction against his termination, and his termination followed. Harstad pursued his administrative remedies, and the fact finding body found a lack of certainty as to whether the relationship was inappropriate. The decision belonged to the president, however, who upheld the decision to terminate. Harstad then filed suit against the individuals involved in the investigation alleging defamation and interference with contract, and against the school alleging breach of contract. Because the alleged statements suggested Harstad was unfit for his position they were treated as slander per se, which meant that malice was to be presumed.

However, since the statements were made by persons with an interest in compliance with school policy and in the context of an employment relationship, a qualified privilege was implicated and the presumption of malice accordingly dissipated. This meant that the plaintiff had the burden to produce substantial evidence that the qualified privilege had been abused. A privilege may be abused by exceeding its scope in several ways, but the primary focus in the case was whether the statements were made with knowledge of or reckless disregard of their falsity. The plaintiff argued that his testimony that there was no improper relationship raised an issue of fact as to the abuse of the privilege. The Court correctly observed that the truth or falsity of the statements was not the issue – the issue was whether the defendant knew they were false or acted recklessly as to the falsity. As with any issue involving good or bad faith, the focus is not the facts themselves but the state of mind of the defendant in connection with those facts. The statements made by the defendants were based on reports by witnesses and therefore the record presented a factual basis for believing in their truth.

Harstad did offer a conspiracy theory as “proof” of an improper purpose by the defendant, but this was dismissed as pure conjecture and speculation. There certainly was nothing offered that would allow one to conclude that such a conspiracy was probable from the fact that statements were made.

Kentucky Court of Appeals
Interference with Contract - Employment
Harstad v. Whiteman, 338 S.W.3d 804, 2011 WL 744287 (Ky.App. March 4, 2011)

In order to commit the tort of interference with contract, the interfering party must be a stranger to the contract. Agents or employees of the party who entered into the contract are not strangers, and accordingly no tort action will lie against the employees or agents of an employer who participate in the investigation and/or termination of another employee.