Kentucky Supreme Court
Insurance – Uninsured Motorist – Hit and Run
State Farm Mutual Automobile Insurance Company v Baldwin , 373 S.W.3d 424, 2012 WL 3631393 (Ky. August 23, 2012)

This opinion is a must read for anyone working with UM coverage, and goes a long way to clarifying the limits of coverage where the uninsured motor vehicle is unidentified. The Court dealt with two Court of Appeals opinions which were reported her, Baldwin v. Doe and Reynolds v. Safeco Insurance Company of Illinois. In the former case, the Court of Appeals permitted recovery where a tarp came off of a truck and made contact with the front of the claimant's vehicle, while in the latter recovery was denied when a piece of ice came loose from a truck and struck the claimant's vehicle. The Supreme Court found that neither met the contractual requirements for coverage in a hit and run context, and reinforced the right of insurers to require contact as an anti-fraud measure, even if the claimant can establish in a particular case alternative badges of corroboration.

In addition to the two intermediate opinions, the Court considered two of its prior opinions which many considered to be in conflict. In Masler v. State Farm Mutual Insurance, 894 S.W.2d 633 (Ky. 1995), the Court rejected indirect contact, which in that case was a rock thrown up by an unknown vehicle. Ten years later, however, the Court approved the imposition of liability where the unknown vehicle struck not the insured vehicle but a third vehicle which in turn struck the insured vehicle. Shelter Mutual Insurance Company v. Arnold, 169 S.W.3d 855 (Ky. 2005).

The opinion describes three circumstances that will satisfy the contact requirement for phantom vehicles. The first is the most obvious, where a hit and run driver's vehicle physically strikes the insured's vehicle. The Court reaffirmed its decision in Arnold, finding that the second circumstance is the chain collision. The Court held that the key is that the force which inflicts damage to the insured vehicle is initiated by the unknown vehicle through the intermediary vehicle or object. If this circumstance were limited to vehicles, it might be workable. It may be that the Court meant to limit it to other vehicles, but some language in the opinion makes no sense if that was the intent. Accordingly, we predict the Court will have difficulty with this part of the opinion as worded. It seems that the rock in Masler is precisely such an object, that force was initiated on the rock by the unknown vehicle, and it struck the insured vehicle. Most likely in a subsequent case this circumstance will be limited to other vehicles.

The new circumstance involves what has been called the integral-parts test. The Court will now find contact between the unknown vehicle and the insured vehicle where the contact is by a part from the unknown vehicle which forms an integral part of the unknown vehicle. The Court anticipated that the term integral will be problematic, and thus offered what it likely intended to be guidance. We know from the opinion that the Court sees integral as meaning "essential to completeness" or "formed as a unit with another part." The Court suggested that mechanical parts and factory installed components are integral. It also suggested that permanency can bear on the issue. In the Baldwin case, the Court concluded that the tarpaulin was not an integral part since there was no evidence that it was statutorily required, implying that a statutory requirement would further suggest a part to be integral. We expect to be writing about this subject in the future.

Kentucky Supreme Court
Arbitration – Nursing Homes
Ping v. Beverly Enterprises, 376 S.W.3d 581, 2012 WL 3631399 (Ky. August 23, 2012)

While the opinion in this case is lengthy, it boils down to a simple rule. Where a person signs a contract that includes an optional arbitration agreement for another pursuant to a durable power of attorney, that person acts outside their authority. Under this rule, absent a specific statement of power to enter into an arbitration agreement, the nursing home or other facility needs to require a guardian be appointed. The Court did suggest that a durable power of attorney would extend to an arbitration agreement that was a condition of admission. Thus, the assault on those that care for the elderly shall continue, probably until they exist no longer.

Kentucky Court of Appeals
Wrongful Use of Civil Proceedings
Bates v. Curtis , 2012 WL 3538271 (Ky.App. August 17, 2012), motion for discretionary review denied April 17, 2013 and opinion ordered de-published.

Bates' teenage son was found hanged in a small shed on property rented by the Curtises. While law enforcement ruled the death a suicide, Bates conducted his own investigation from which he concluded there was foul play. He was appointed administrator of his son's estate and filed suit against the Curtises alleging a failure to protect his son from unsavory characters. After a summary judgment was entered in favor of the Curteses, a "malicious prosecution" action was brought by the Curtises.

The Court first restated the now well settled principle that "malicious prosecution" applies to criminal actions, while civil actions are governed by the tort of wrongful use of civil proceedings. One key difference is that malice is the central theme of the former while improper purpose is the central theme of the latter. The improper purpose must be one other than to secure a proper adjudication of the underlying claim. The opinion primarily turned on the element of probable cause, however, and dealt with two important issues.

First, the Court discussed at some length the interplay between court and jury in a wrongful use case. The issue of probable cause is a question of law, which means that it is often going to be an appropriate issue for a summary judgment motion once discovery is completed. If there is a factual dispute, then those facts should be submitted to the jury, but the question of whether the facts show probably cause remains a question for the Court to decide. If plaintiff produces no evidence negating probable cause, then the plaintiff has failed in his burden of production and the claim should be dismissed.

Second, the Court discussed the role of advice of counsel in the probable cause analysis. This is obviously in the context of a claim brought against a prior litigant. While the advice of counsel is considered an absolute defense, it is predicated on full disclosure of all relevant facts to the attorney made in good faith. In the sense it behaves more like a qualified privilege. In this particular case, the attorney who had represented plaintiff in the underlying action had passed away, and accordingly the client's testimony concerning advice was uncontroverted.

Kentucky Court of Appeals
Professional Liability – Medical - Experts
Walker v. Love , 2012 WL 3538280 (Ky.App. August 17, 2012), discretionary review granted (2012-SC-602-DG)

In this 2-1 opinion, the majority missed the boat altogether, even if the premise that late identification can defeat a summary judgment motion. The reason is that if the late offering is accepted, the plaintiff did present an expert basis for her theory of the case, so the issue resolved by the majority was not presented by the facts. While this opinion, assuming it stands, will add nothing to the law on this point, it will be used in the future to confuse the trial judges in contesting summary judgment motions.

The plaintiff had experienced adverse effects subsequent to a thyroidectomy. She had been treated prior to the surgery for hypothyroidism, and she signed a consent form which showed her condition as thyroid nodule, thyroid storm. There was medical testimony that surgery was not the appropriate treatment for hyperthyroidism. Subsequently, plaintiff offered expert filings which clearly created an issue of fact, at least at that point. The opinion is best read as an effort to save a plaintiff from the "error" of his attorney, notwithstanding the majority's discussion of res ipsa loquitor and other immaterial rules.

Kentucky Court of Appeals
Dram Shop – Landlord Liability
Carruthers v. Edwards, 395 S.W.3d 488, 2012 WL 3236604 (Ky.App. August 10, 2012), motion for discretionary review denied April 17, 2013.

The defendants owned premises which they leased to Foolish Heart, Inc., which in turn operated a bar under the assumed name Froggy's Sports Bar. A patron who was allegedly "over-served" struck the plaintiff in the parking lot with his vehicle. The plaintiff sought to establish liability on the landlord through the Dram Shop Act, KRS 413.241. This attempt to extend dram shop liability to landlords was rejected, and the decision was based on the plain language of the statute. In section (2), the statute imposes liability on the person who holds a permit to sell alcohol, its agents, servants and employees.

Kentucky Court of Appeals
Premises Liability - Landlord Liability for Acts of Tenant
Carruthers v. Edwards, ___ S.W.3d ___, 2012 WL 3236604 (Ky.App. August 10, 2012)

The general rule is that a landlord is not vicariously responsible for the negligence of the tenant. An exception will lie where the tenant's use of the premises is so potentially harmful that the court will not allow the owner to hide behind a lease. This court made reference to the provisions of the Restatement (Second) of Torts §379A (1965). That text requires a showing that 1) the landlord consented to the activity or knew it was going to occur when the lease was executed, and 2) the landlord knew or had reason to know that the use would unavoidably involve an unreasonable risk or that precautions would not be taken. The court held that a licensed bar did not fit that criterion.

Kentucky Court of Appeals - Unpublished
Ecclesiastical Abstention Doctrine
Crymes v Grace Hope Presbyterian Church, Inc., 2012 WL 3236290 (Ky.App. August 10, 2012)

A pastor who was terminated brought suit against his employer church, and the trial court dismissed the complaint relying on the ecclesiastical abstention doctrine. The Court of Appeals reversed, holding the doctrine inapplicable to a claim seeking compensation for past service performed. The opinion does not suggest any issue as to the performance of those services.

Kentucky Court of Appeals - Unpublished
Professional Liability – Attorneys - Causation
Bridges v Earhart, 2012 WL 3136810 (Ky.App. August 3, 2012)

The defendant represented the two plaintiffs in bankruptcy related cases. In one case it was alleged that the attorney failed to call two witnesses and made mistakes on appeal. One of the plaintiffs, also an attorney, was also an attorney. In the other case, the claim was that the defendant attorney was negligent in failing to request an en banc hearing at the Sixth Circuit. The trial judge found this to be negligence, which is itself an absurd suggestion based on the fact that the Sixth Circuit rarely accommodates such a request. Summary judgment was granted based on the absence of proof of causation.

The trial was affirmed, even though the plaintiff who was an attorney had opined that the alleged negligence would have made a difference. Because the opinion is a bit muddled it is difficult to see how significant this is. However, if the case stands for the proposition that causation must be proven by more than a conclusory opinion, it is a break from the general reluctance to require actual proof to avoid summary judgment.