Kentucky Court of Appeals - Unpublished
Professional Liability - Attorneys - Liability for Class Action Settlements
Simpson v. Chesley, 2013 WL 6210254 (Ky.App. November 27, 2013)

This suit arises from the representation of a class by Stan Chesley of Fen-Phen infamy. The class action itself was brought against the Catholic church alleging negligence with respect to the misconduct of priests, and the class action was settled as a class, with court approval. This suit alleged that as a result of the negligence and breach of fiduciary duty by class counsel they received less than they should have. They argued that they should have been placed differently in the matrix that determined settlement amounts for the parties. The Court held that they could not proceed because these issued had been determined by the approving court and thus plaintiff was collaterally estopped from making the same claims against the attorney.

One could be forgiven for wondering how this could be in light of the Supreme Court opinion in Abbott v. Chesley, where the Court allowed plaintiffs to proceed against counsel in the class action context. This Court distinguished the Abbott decision on two grounds. First, the panel stated that the Abbott court did not address collateral estoppel, but this is disingenuous since the argument was clearly made and the Court disregarded the argument. Second, the Court noted that the Abbott case was not settled as a class action, which is true and may very well be the true distinction. A third possible basis for distinction is that the attorneys in Abbott had contracts with the plaintiffs while in this case the claim was asserted against class counsel. It will be interesting to see if the Supreme Court desires to explain.

Kentucky Court of Appeals - Unpublished
Arbitration - Authority to Enter Into Contract
Kindred Nursing Centers Limited Partnership v. Bullock, 2013 WL 6198354 (Ky.App. November 27, 2013)

This case continues the refusal to accept arbitration in nursing home cases based on Ping v. Beverly Enterprises, 376 S.W.3d 581 (Ky. 2012)(Report). In this case, the power of attorney clearly provided the power to enter into contracts of this type, but was simply ignored. This opinion also makes clear that the Court is in the process of redefining an action for death in such a way as to make it impossible for arbitration to apply to death cases. Stay tuned. This is what a mess looks like while it is being made.

Kentucky Court of Appeals
Open Records - Preliminary Communications
University of Louisville v. Sharp, 2013 WL 6145391 (Ky.App. November 22, 2013)

The ACLU requested documents relating to a pending merger between University of Louisville Hospital and two other hospital systems. The university identified thirteen email communications which it withheld on the ground that they were preliminary communications within the meaning of KRS 61.878(1)(i) and (j) (three were also subject to attorney client privilege). The Attorney General ruled that four of the emails (three draft agenda and one invitation to a "communications meeting" lost their exemption by being incorporated into final agency action and related to a "communications meeting" that actually occurred. On appeal, the Circuit Court affirmed the Attorney General's view.

The Court of Appeals disagreed, the decision turned on what constitutes a final agency action. The "communications meeting" referred to was convened to discuss the pending merger, and thus by definition was preliminary to the objective, to-wit: the merger. The Court rejected the argument that the holding of the "communications meeting" was a final agency action itself. The key appears to be that the "communications meeting" did not resolve the merger issue, and if that fact were different the result may have been different as well.

Kentucky Court of Appeals - Unpublished
Employment - KCRA - Burden Shifting Analysis
Weickgenannt v. The Board of Regents of Northern Kentucky University, 2013 WL 6157134 (Ky.App. November 22, 2013), motion for discretionary review granted August 13, 2013 (2013-SC-820-DG)

Weickgenannt was hired in 2000 as an Instructor and in 2002 was promoted to Assistant Professor, which placed her on the tenure track. The position had a scholarship requirement, which could be in the form of research and discovery scholarship, the scholarship related to public engagement, or the scholarship of teaching, with a preference for peer reviewed activities. The University handbook required that "All works should be refereed, published in recognized academic or professional outlets, publicly available, and of good quality. The number of authors for each work will be taken into account." The College by which she was engaged additionally required that all works be peer reviewed and publicly available. The College required an applicant for tenure to show completion of ten total works, which included having been a "major contributing author of at least three journal articles".

In the five academic years following her appointment as an assistant professor, she had three years with appropriate evaluations but two years in which her scholarship was noted to be insufficient. She applied for tenure and promotion to Associate Professor, she identified the required ten scholarly works, which included three articles published in peer-reviewed journals, all of which had been co-authored with other members of the her department. The tenure committee recommended tenure, but the Dean and Provost disagreed on the ground that her scholarship was inadequate. Of course, Weickgenannt alleged she was denied tenure because of her sex. The trial Court granted summary judgment because there was no evidence of a sexual animus. The Court of Appeals reversed, and in so doing watered down the burden shifting test to the point that it requires, if followed, virtually no reason to believe that sex was a motive at all.

Prima Facie Case

To make out a prima facie case under the KCRA, a plaintiff must show that he or she was: 1) a member of a protected class; 2) subjected to an adverse employment action; 3) qualified for the job; and 4) replaced by a person outside of the protected class, or treated differently from employees outside the protected class for the same or similar conduct. The trial Court concluded that Weickgenannt had not shown that she was qualified or that she was treated differently from similarly situated males, thus finding that a prima facie case had not been shown. The panel opined that the trial Court applied the prima facie case elements too stringently.

According to this panel, the term qualification in this context means only that the plaintiff was among the candidates who could be properly considered for the job. In other words, it was sufficient that Weickgenannt could show that she had met the minimal requirements set out in the handbook, not whether her qualifications made her a good or acceptable candidate for tenure.

The trial Court was also chastised for undertaking an analysis of whether the males who received tenure were similarly situated to Weickgenannt. It was, the panel held, sufficient to show that male faculty members had been given tenure by the university and promoted to higher positions as Associate Professors in the few years surrounding Weickgenannt’s application. Generally speaking, the panel was correct in this aspect, but for one thing. While it is not necessary to show that similarly situated males were tenured and promoted, it is necessary that the conduct be the same or similar. Since the standards were different in the College of Business than in the University at large, the inquiry should have been limited to the College of Business, Otherwise the prong of the test is meaningless unless plaintiff was the only person promoted or tenured. It is not clear whether Weickgenannt actually met this test.

Pretext

The panel agreed that the employer had demonstrated a legitimate non-discriminatory basis for its decision not to promote or grant tenure. This panel seemed to defer to the employer in its judgment about the quality and quantity of the scholarly work done.

Rebuttal

The trial Court had found that Weickgenannt had failed to produce evidence of any similarly situated male employee that was treated more favorably than she was. The panel held that it was not necessary that the male be in the same department, because the standards were not based on departments. In other words, the pool from which similarly situated employees was as broad as the standards at issue, in this case the College of Business. Weickgenannt had identified a male that had published only three peer reviewed and co-authored works, but was promoted and tenured. This satisfied the panel, but this seems too broad. The Court ignores other key components, such as Weickgenannt's evaluations which showed a chronic problem with scholastic work. Also ignored is the nature of the two employee's contribution, as well as the seriousness of the work.

At the end of the day, a test such as the burden shifting test is designed to assist the Court in determining whether the facts proven support an inference of animus against the protected class. This opinion treats the test as the answer, rather than as a tool to reach the answer. This application of the test permits a case to go to the jury where there is no reason to suspect that sex had anything to do with the employment decision. For example, if the roles were reversed and the male was not promoted, the male could prove his case using the exactly same facts. The mere fact that a male was promoted in this context does not make it more likely than not that the employer acted with animus towards females, as there remain a number of viable reasons for the difference. Used in this fashion, the burden shifting test produce speculation, not evidence. An employer cannot win at this game, which means that an employer cannot control the quality of its employees.

Kentucky Supreme Court
Premises Liability - Open and Obvious Conditions
Shelton v. Kentucky Easter Seals Society, Inc., 413 S.W.3d 901, 2013 WL 6134212 (Ky. November 21, 2013)

This long awaited case is intended to clarify and restate the Court's prior decision in Kentucky River Medical Center v.McIntosh, 319 S.W.3d 385 (Ky. 2010), which created little more than confusion about premises liability and was largely ignored or distinguished by lower courts. While the opinion is better expressed, it tells two contradictory stories, and the primary story continues the trend of delegating responsibility for the law to ad hoc groups called juries. Many will read it as barely falling short of imposing strict liability on a premises owner for invitees who come on it premises. The secondary story is that summary judgments are still an option in open and obvious cases, and it will require a great deal more litigation to determine what impact this opinion will have on the liability of landowners to persons who cannot ambulate properly in public.

In theory, the holding of the case would alter the result in these cases very little. All the opinion really changes is that in determining whether there is liability the analysis should focus on breach of duty rather than duty itself. In reality, that has been the case all along, and the Court is correct that the use of the word duty has always led to some confusion. In fact, the Court says that this is not a major change in the law, and in theory the Court is correct. Generally, no duty was owed as to an open and obvious condition because an open and obvious condition, while possible dangerous, was not as a matter of law unreasonably dangerous. So in this context, the word duty was not used in its traditional sense, but rather as a description of circumstances in which the premise owner met his duty with respect to a condition on land. Changing the focal point of the analysis from duty to breach of duty should not change the fact that the condition in question is not unreasonably dangerous. Unfortunately, the holding is much more insidious than the Court openly concedes, largely because the Court assumes that the open and obvious rule, as it relates to the duty of a landowner, is related to contributory negligence, which is a total misunderstanding of both the defense and the tort itself.

The problem with this "modernization" as described by the Court is that the Court does not understand the realities of the day to day practice in these cases, and therefore does not understand the practical implications of its holding. The position of the Court is that once the focus is shifted from duty to breach, then the question becomes for the jury rather than for the court. The perspective of the Court is revealed when early on it frames the issue as removing an obstacle to legitimate claims, which reveals more than is obvious. The Court no longer views the tort system as allocating responsibility for conduct, but as a welfare delivery system. If you are injured, you should recover with that recovery reduced to the extent of your fault contributed to the injury. The defendant and/or its insurer is not a party entitled to justice before being deprived of its property, but a source of revenue to finance this redistribution plan. This type of thinking will eventually bring an end to the tort system, not because the Court's objectives are improper, but because the tort system perverted in such a way is a terribly inefficient way to accomplish the objective. It would make much more sense to create a no-fault system for property owners, and in so doing cut out the attorneys and the limit recovery to economic loss. Of course, this same Court would likely find an excuse to find such a substitute to be unconstitutional. At the end of the day, a broken tort system will just be one more reason for Kentucky to stay in the cellar of every economic metric that matters.

The Court does include in its opinion contrary language that allows some hope that in fact the decision does not change much, and does not in fact undermine the basic tenets of the tort system. The Court says that summary judgment is still available in these cases if reasonable minds cannot differ on whether the owner breached his duty. The Court does say that it is not altering the rules regarding status on land, and presumably notice remains an element where the condition is created by a third person.

Going forward, defendants will need to focus on the factors identified in McIntosh. An open and obvious condition may result in liability if the premises owner has reason to believe the invitee may be distracted and not be able to discovery the condition, or when the owner has reason to believe that an invitee will encounter the danger even though it is known. As we have discussed before, these factors were true before McIntosh, and offer nothing new. What is new is broad and perhaps reckless language concerning foreseeability, because all injuries are at some level foreseeable. Using foreseeability as a standard is no standard at all. And the Court offers nothing to explain how a jury could possibly be instructed on the issue, leaving us to conclude that the jury won't be told what it is to decide beyond a general description of ordinary care. It is here that theory separates from practice and reality.

On the other side of the coin, the Court suggests that there are certain cases where summary judgment will be a likely result. By way of examples the Court notes that there may be no liability for a small pothole in the parking lot of a shopping mall, steep stairs, or a curb. No mention is made of natural accumulations.

The Court opines that there will not be an increase in litigation, and may be correct. The effect is that premium payers will finance more payments to persons who should not be entitled to payments before suit ever occurs. This is just a less obvious failure of the tort system. But between the examples of where there may be liability and where there may not, there is a great deal of litigation to come, and it will require a number of decisions to flesh out the parameters of premises liability. But we can rest assured that this decision will have the effect of making a premises open to the public more expensive and will make the plaintiff's bar a little more money. That seems to be the two objects of the law in these times, so in that sense this appears to be a job well done.

Kentucky Supreme Court
Premises Liability
Dick's Sporting Goods, Inc. v. Webb, 413 S.W.3d 891, 2013 WL 6134186 (Ky. November 21, 2013)

This is a slip and fall case that was reversed following the Supreme Court decision in Kentucky River Medical Center v. McIntosh, 319 S.W.3d 385 (Ky. 2010). While the Court determine that the facts did not present an open and obvious situation at all, the Court made it very clear that Kentucky is moving in the direction of a strict liability standard for slip and fall cases, at least where commercial properties are concerned. Rather than taking the opportunity to clarify the clumsy McIntosh opinion, the Court doubled down on the idea that it changed the law and, using its words, modernized the law. The Court does confirm what we suspected when the McIntosh opinion was rendered, that the Court does not understand what an open and obvious condition is in the context of duty. The Court articulates its view that there must be a subjective awareness by the plaintiff of the condition, which has never been the case in evaluating duty. Duty must viewed from the perspective of the landowner, and there historically was no duty because an open and obvious condition does not generally create an unreasonable risk of harm. Where the condition remained dangerous even though open and obvious, there has always been an exception, as where a shopper is intended to be distracted by a display.

What the Court is actually doing in this case, while not explicitly saying so, is making the standard of liability the negligence of the plaintiff. The store has a duty to maintain the floor, so the store is liable except to the extent the plaintiff was at fault. The Court has totally abdicated its responsibility as gatekeeper and supervisor of the jury system, which means strict liability in some counties and a roll of the dice in others. It is hard to see how this is progress, although it is consistent with the general cultural trend of entitlement and lack of personal responsibility.

Kentucky Supreme Court
Professional Liability - Attorneys - Relationship
Pete v. Anderson, 413 S.W.3d 291, 2013 WL 6145149 (Ky. November 21, 2013)

The defendant attorneys brought a wrongful death action, and the widow was the personal representative. There were two minor children of the decedent. The attorneys failed to file a loss of affection claim on behalf of the children, and they lost the death claim because their experts on causation failed to meet the Daubert standard. The widow waited too long to bring a professional negligence claim, so the claim was brought by the minor children.

The first holding of the Court emphasizes the need for a written engagement that defines the relationship. The Court held that a jury question was raised as to whether the minor children were clients because the mother, by self-serving affidavit, suggested that she may have believed the attorneys were representing the sons as well. The affidavit was equally consistent with representing the estate alone, as the references to money for the children invoked their status as beneficiaries, so in reality the Court allowed speculation to substitute for proof in this regard.

The Court further held that an attorney representing the estate in a death action owes duties to the beneficiaries. Accordingly, they have standing to bring a professional negligence action. The Court did not explain, however, how this would entitle them to claim negligence in connection with whatever derivative claim they may have had personally.

Kentucky Supreme Court
Slander of Title - Lis Pendens - Privilege
Ballard v. 1400 Willow Council of Co-Owners, Inc., ___ S.W.3d ___, 2013 WL 6134150 (Ky. November 21, 2013), petition for rehearing filed December 12, 2013.

The Court in this case held that slander of title is not absolutely privileged as part of a judicial proceeding, but is subject only to a qualified privilege.

Kentucky Supreme Court
Limitations - Slander of Title
Ballard v. 1400 Willow Council of Co-Owners, Inc., ___ S.W.3d ___, 2013 WL 6134150 (Ky. November 21, 2013)

The plaintiff in a dispute with the condominium association made a claim for slander of title as a result of the filing of a lis pendens filed by the association. The Court of Appeals held that the claim was time barred, holding that such a claim was subject to the one year limitation applicable to libel and slander found at KRS 413.140(1)(d). Reversing, and overruling Montgomery v. Milam, 910 S.W.2d 237 (Ky. 1995), the Supreme Court held that slander of title was not a subset of slander, but rather would be governed by the five year limitation set out in KRS 413.120(7).

Sixth Circuit Court of Appeals - Unpublished
Insurance - CGL - Occurrence
Liberty Mutual Fire Insurance Company v. Kay & Kay Contractors, LLC, 2013 WL 6084276 (6th Cir. November 19, 2013)

In this case the Sixth Circuit considered the application of Cincinnati Insurance Company v. Motorists Mutual Insurance Company to a different set of facts. Walmart contracted with MW Builders to construct a store, and MW contracted with Kay & Kay to prepare the site for foundation and building pad. Following the erection of the building Walmart noticed cracks which it attributed to settlement in an area prepared by Kay & Kay. Liberty Mutual had a CGL policy in place in which Kay & Kay was the named insured and MW was an additional insured. Liberty denied coverage on a number of grounds, including the lack of an occurrence.

In Cincinnati, the Court described in detail how the existence of fortuity was tied into control, and left open the question of whether its holding would extend to damage to property of third persons. Kay & Kay argued that the structures built on the prepared area was the property of third persons, and the defective work should therefore be treated as an occurrence. The Sixth Circuit assumed that the Kentucky Court would adopt the rule that there was an occurrence when the damage was to property of third persons, but that the rule would not apply in this case. Essentially, the Court determined that control trumped all else, and in this case the damage which occurred was the very damage Kay & Kay was hired to prevent. This the Court held, gave Kay & Kay control so as to render the damage non-fortuitous.

The Court distinguished a District Court opinion, Global Gear & Machine Company v. Capitol Indemnity Corporation, 2010 WL 3341464 (W.D.Ky. 2010), without deciding whether it was correct. In that case the insured had performed repair work on the gear boxes of several vessels, which allegedly damaged other parts of the vessels. The District Court held that under Cincinnati this constituted an occurrence. The Sixth Circuit opined that while it was plausible that the repair of one part of a property could lead to unintended damage to others and constitute an occurrence, that was different than a contractor performing work intended to support a building in such a way as to fail to properly support the building.

Kentucky Court of Appeals - Unpublished
Causation - Sufficiency of Expert Testimony
Powers v. Murphy, 2013 WL 5886810 (Ky.App. November 1, 2013)

In this wrongful death case, the estate claimed that a 911 operator was negligent. The claim was that the failure to properly take the call and direct EMS to the caller's location caused her death. She was found dead the next day. The question was whether the plaintiff had proven "but for" causation, or in other words, had the EMS been properly directed would the caller have survived? The plaintiff attempted to make this case through expert opinion.

The plaintiff offered the testimony of Dr. George Nichols, a/k/a Doctor Death. He testified that the decedent died from decompensation of COPD. He testified that if the EMS had arrived and "effectively" supplied oxygen, then she most likely would have survived. But he could not say that prompt emergency treatment would have been effective, and described it as unknown. There Court held that this testimony was insufficient to justify a finding of liability.

Sixth Circuit Court of Appeals - Unpublished
Insurance - Bad Faith - UCSPA
Gale v. Liberty Bell Agency, 2013 WL 5942131 (6th Cir. November 1, 2013)

The Sixth Circuit affirmed the District Court decision dismissing this UCSPA case, and adopted the District Court opinion. Gale v. Liberty Bell Agency, Inc., 911 F.Supp.2d 488 (W.D.Ky. 2012).

The underlying claim was a collision between and automobile and a truck, and although the claim was settled the parties continue to dispute the issues surrounding relative fault. The claim was handled by Liberty Bell as a third party administrator for National Union. The key issue before the court was the nature of the threshold showing that must be made by a plaintiff, particularly in light of the Sixth Circuit's decision in Phelps which muddled the issue considerably. In this opinion, the District Court, with the approval of the Sixth Circuit, explained some of the issues that troubled the Phelps Court, and reaffirmed that the standard for bad faith was not watered down by Farmland Mut. Ins. Co. v. Johnson, 36 S.W.3d 368, 376 (Ky. 2000), allowing a mere showing of unreasonableness, as suggested by the Phelps panel. The threshold remains outrageous conduct driven by evil motives or indifference to the rights of the insured. Insurers and their counsel will undoubtedly be faced with the Phelps decision in future bad faith cases, and this opinion provides support in turning back such an attack.