United States District Court
Insurance - UM/UIM - Contractual Limitations
Hill v. State Farm Mutual Automobile Insurance Company, 939 F.Supp.2d 754, 2013 WL 1332611 (E.D.Ky. March 29, 2013)

The plaintiff filed a declaratory judgment action seeking a determination of coverage for underinsured motorist (UIM) benefits under a policy with State Farm. The policy contained a provision requiring that such an action be brought within two years of injury, death or last no-fault payment. The accident occurred in November of 2007, and suit was filed against the tortfeasor in August of 2009. The last no-fault payment was made January 30, 2008. The tortfeasor was also insured by State Farm. State Farm requested and was given several extensions of time to answer, but a demand package relating to both claims was not tendered until February of 2010. The UIM claim was denied on the limitations ground, and an amended complaint was filed asserting a UIM claim on April 7, 2010.

The Court first observed that the contractual limitations was the same as the limitation applicable to personal injury actions arising out of motor vehicle accidents, and was therefore valid. The UIM claim was clearly barred by the two year period if literally applied. The plaintiff, however, argued that the company waived the limitation defense. There was no discussion about the limitation issue, but plaintiff thought that the submission and consideration of the demand package was a waiver. The Court noted that KRS 304.14-28(3) precluded investigation and or negotiations from acting as a waiver. The Court likewise rejected the argument that the claims handling resulted in an estoppel defense.

Kentucky Court of Appeals - Unpublished
Insurance - UM/UIM - Named Insured
Mooneyham v. State Farm Mutual Automobile Insurance Co., 2013 WL ________ (Ky.App. March 29, 2013)

Mooneyham was injured in two separate accidents while riding as a passenger in a vehicle not insured by State Farm, and filed this action in an effort to recover UM/UIM benefits under three State Farm policies. The policies were issued to his wife and/or her parents. Since he was not listed on the policies, the issue was whether he was a family member under the State farm policies.

His wife's parents resided at one address, while Mooneyham and his wife lived in a house on an adjacent lot. His wife's policy did not have UM/UIM coverage, so his efforts were directed to convincing the court that he was a resident of both households. The trial Court found that his primary residence was with his wife. While his wife was listed as an insured on her parent's policies, the Court held that Mooneyham could not bootstrap onto his wife's status to become an insured under her parent's policy.

Kentucky Court of Appeals - Unpublished
Premises - Landlord - Assumption of Duty to Repair
McKenzie v. Turner, 2013 WL ________ (Ky.App. March 29, 2013)

The plaintiff was a tenant in a rental home owned by the defendant. A side entry to the home had five steps, and at the time the plaintiff moved in there was a railing. A few weeks later plaintiff noticed the railing was broken. She contacted the defendant and he had it repaired. Shortly thereafter it broke again. The plaintiff says she contacted defendant and he agreed to repair it, while defendant denied agreeing to fix it again. A year later, plaintiff fell on the stairs, and the railing had not been repaired.

The plaintiff sought to avoid the rule that a tenant takes the premises as she finds them by arguing that the defendant had assumed the duty to repair. The Court rejected the contention that making repairs on one occasion created a duty to repair subsequently.

Kentucky Court of Appeals
Trespass - Proof Supporting Wilful Trespass
Crutcher v. Harrod Concrete and Stone Co., ___ S.W.3d ___, 2013 WL 1163945 (Ky.App. March 22, 2013), petition for denied filed July 16, 2013, motion for discretionary review granted June 11, 2014 (2013-SC-549-DG)

The plaintiff filed suit against Harrod alleging that underground limestone mining operations had trespassed on his land. Harrod admitted the trespass, but claimed the trespass was an "honest mistake". The determination of whether a trespass was innocent or wilful can impact the measure of damages as well as decide whether punitive damages can be awarded.

In this case the Court held that there was sufficient evidence to support a jury's finding that the trespass was wilful. This evidence was 1) Harrod had no survey done even though he knew the mining was heading towards the Crutcher property; 2) the encroachment covered 1.8 acres; 3) GPS could have been used to relate the subsurface mining activity to the surface boundary; and 4) Harrod had encroached on another property. This hardly seems enough to justify the wilful determination, particularly where the object of the mining was not a valuable mineral like coal. It seems that there should be some "red flag" to put Harrod on notice of a potential trespass, and that it was ignored. Knowing that operations are heading toward a boundary, which seems like it would always be the case, is a weak substitute for reckless disregard or intent.

Kentucky Court of Appeals
Trespass - Measure of Damages
Crutcher v. Harrod Concrete and Stone Co., ___ S.W.3d ___, 2013 WL 1163945 (Ky.App. March 22, 2013)

This Court of Appeals panel determined, for the first time, that limestone would be the equivalent of coal for purposes of the measure of damages. Therefore, given the jury finding of wilful trespass, the plaintiff was entitled to recover the fair market value of the limestone removed. Had the trespass been innocent, the royalty value would have also been admissible.

Kentucky Court of Appeals - Unpublished
Employment - Police Officers
Murphy v. City of Richmond, 2013 WL 1163802 (Ky.App. March 22, 2013)

This case involved the termination of a police officer by a city government for off duty conduct. The officer in question was one of several who engaged in consensual group sex with a female. Someone other than the female participant complained, and the conduct became public. The Court upheld his termination based on charges of conduct unbecoming of an officer. The moral of the otherwise immoral story is that private conduct that would be embarrassing to the police department if it became know is no longer private once it becomes known.

Kentucky Supreme Court
Punitive Damages
Gibson v. Fuel Transport, 410 S.W.3d 56, 2013 WL 1181793 (Ky. March 21, 2013), petition for rehearing denied October 24, 2013.

The decedent was killed following an accident in which the vehicle she was occupying was struck by a coal truck that overturned. The jury awarded substantial punitive damages, and in this opinion the Court held that the defendant was entitled to a directed verdict on punitive damages.

Fuel Transport had purchased the truck in a question a few weeks before the accident, and the seller testified that he believed the truck had a defective fifth wheel. He said he told the new owner about the defect. However, the plaintiff offered no proof that a problem with the fifth wheel, if it existed, was a cause of the overturning of the coal truck. The most favorable view of the testimony of plaintiff's expert was that a problem with the fifth wheel coupled with speeding could cause a truck to overturn. Absent causation, conduct cannot support an award of punitive damages.

U.S. District Court Western District - Unpublished
Insurance - Occurrence - Construction Defects
The Netherlands Insurance Company v. Jeffries Construction, Inc, 2013 WL 1151974 (W.D.Ky. March 18, 2013)

The Wrights contracted with Jeffries to design, plan, construct and supervise a construction project save for HVAC and carpet installation. Shortly after they moved into the house, the Wrights claimed that they began to experience numerous problems. Netherlands insured Jeffries under a CGL policy, and brought a declaratory judgment action relating to its duty to defend and to pay.

The Court began by observing that, under Cincinnati Insurance Co. v. Motorist Mutual Insurance Co., 306 S.W.3d 69 (Ky. 2010), Netherlands owed no duty to indemnify Jeffries for its faulty workmanship. The Court next observed that the Cincinnati case strongly suggested the same result applied to faulty workmanship by subcontractors, and in this case Judge Simpson so held. The Court further held that this result was not changed because of how the theory of recovery is described, and in this case the Court held that claims for negligent supervision were also outside coverage.

The insured tried to argue that an intent to provide coverage could be gleaned from the "your work" exclusion, which by its terms does not apply to the work of a subcontractor. This was rejected because an exclusion operates as a limitation on the coverage grant, and does not grant coverage itself.

As in many of these cases, there was also some claim for damage to the personal property of the insured's customer other than the need to repair or replace the work. The parties agreed that Netherlands owed a duty to defend because of those allegations, but noted that once those claims resolved the duty to defend would terminate.

Kentucky Court of Appeals - Unpublished
Subrogation - Economic Loss Doctrine
Cincinnati Insurance Companies v. Staggs & Fisher Consulting Engineers, Inc., 2013 WL 1003543 (Ky.App. March 15, 2013)

This was a subrogation claim brought a commercial insurer to recoup payments made for damage to a construction site. It insured an electrical company, and the claim was made against two other contractors on the project who allegedly installed a faulty transformer. The Court held that since there was no contract between the subrogor's insured and the defendants, the economic loss doctrine precluded any recovery in tort. There is a logical inconsistency to this determination since the economic loss doctrine is just a fancy way of distinguishing where contract law ends and tort law begins. In this situation there was no contract, and thus the loss has nothing to do with the benefit of any bargain.

That does not mean that the insurer's claim was meritorious. The opinion suggests that the payment was a liability payment. If so, then the claim to which the insurer was subrogated was actually an contribution claim, and the Kentucky Court has not squarely decided whether contribution can lie where apportionment is not available. Ultimately the Court should recognize that contribution in this context remains a statutory remedy. However, it appears the issues were framed as though the subrogated interest was a first party loss, and given that approach, the Court had no opportunity to consider the actual issues raised by such a subrogation claim.

Kentucky Court of Appeals - Unpublished
Limitations - Medical Malpractice - Discovery Rule
Taylor v. University Medical Center, Inc, 2013 WL 761802 (Ky.App. March 1, 2013)

Plaintiff was admitted to deliver her first child on August 12, 2008. Plaintiff received an epidural, and experienced back pain immediately, which became chronic. She claimed that she did not know the cause of the back pain until she was told by a physician on June 30, 2010. The Court held the onset of pain itself was not sufficient to satisfy the discovery rule.

It will be interesting to see if the Supreme Court reviews this decision. The panel was correct in observing that the cause of action accrues when the plaintiff 1) he had been wronged and 2) by whom. But it seems like plaintiff had all she need to investigate on August 12, 2008. She knew she had pain, and knew that it was temporally related to her delivery. It's not much of a stretch to say she should have at least suspected the epidural since it was directly related to her back. While it's true that plaintiff lacked the medical knowledge of a physician, the idea of temporal causation is not a medical one. Further, one would think that plaintiff would have at least asked someone about it.

Kentucky Court of Appeals - Unpublished
Fraud - Measure of Damages
Oliver v. J.J.B. Hilliard, W.L. Lyons, Inc., 2013 WL 762593 (Ky.App. March 1, 2013)

The measure of damages for the tort of fraud (deceit) is the pecuniary loss resulting from the misrepresentation. Emotional distress cannot be recovered for fraud, and the Court held that it was appropriate to exclude evidence of same, even on the issue of punitive damages.

Kentucky Court of Appeals - Unpublished
Sovereign Immunity - Jailer and Judge Executive
Yates v. Benningfield, 2013 WL 781098 (Ky.App. March 1, 2013)

Both the jailer and county judge executive are elected officers of the county and thus they are entitled to sovereign immunity when sued in their official capacities.

Kentucky Court of Appeals - Unpublished
Sovereign Immunity - Jailer - Qualified Immunity
Yates v. Benningfield, 2013 WL 781098 (Ky.App. March 1, 2013)

Plaintiff was an inmate at the county detention center, and fell and injured his hand while detained. He brought suit claiming inadequate medical care, and sued the jailer in his individual capacity. Yates argued that since a jailer has a statutory duty to provide for the care of all inmates in his facility, KRS 71.020, there was a duty to provide medical care. The jail contracted with a third party to provide medical care, and the Court viewed the claim as essentially a negligent hiring and supervision claim. The Court agreed that the hiring of an incompetent person could be a breach of a ministerial duty, but held that there was no evidence that this had occurred.