Kentucky Supreme Court
Insurance - UIM - Public Policy
State Farm Mutual Automobile Insurance Company v. Hodgkiss-Warrick, 413 S.W.3d 875, 2013 WL 5406623 (Ky. September 26, 2013)

This case touches upon several issues, but the important one is the application of "public policy" to rewrite under insured motorists coverage contained in automobile liability policies. As we suggested in our review of the Court of Appeal's opinion, UIM is an optional coverage and thus financial responsibility cannot provide a basis for rewriting the policy based on public policy.

In the policy in question, the term underinsured motorist was defined so as to be inapplicable to a motor vehicle owned or regularly used by a resident relative. The Court of Appeals, apparently seeing no difference between UM and UIM coverages, concluded that such a term violated the public policy of Kentucky. That Court could be forgiven for finding the prior decisions in this area confusing, because generally the term public policy has been used in many cases as a synonym for the personal dislike by the judge in question. To the extent that there is an actual basis, it has been no more than that the coverage in question is mandatory. That rationale clearly does not apply to an optional coverage such as UIM, and this case makes that clear. Next the Court needs to start walking back the abuse of the phrase public policy in other contexts as well.

Kentucky Court of Appeals
Governmental Immunity - Governmental Agencies - Transit Authorities
Transit Authority of River City v. Bibelhauser, 2013 WL 5423061 (Ky.App. September 27, 2013)

This panel considered whether the Transit Authority of River City (TARC) is a government agency for purposes of immunity from a suit in tort. TARC was created pursuant to KRS 96A.020(1), which states that a transit authority is an "agency and instrumentality for accomplishing essential governmental functions of the public body ... creating and establishing the same, ...". In this case the creator was a political subdivision of the state, which would suggest an intent on the part of the legislature for immunity to apply. The Court determined that TARC was not, however, a governmental agency and that therefore no immunity was applicable.

The first basis offered by the Court for its conclusion was that the enabling statute gave such an agency the power to sue and be sued. The Court cited a case from 1899, but the Court's view of immunity has changed many times since then, and may be in the process of changing once again. However, the modern view is clearly that sue or be sued language is not pertinent to the question of immunity, Grayson County Bd. of Educ. v. Casey, 157 S.W.3d 201 (Ky. 2005), so this offered basis is clearly insufficient.

The second basis deals with the definition of a government agency. The Court decided to apply the version of the test adopted in Comair, Inc. v. Lexington-Fayette Urban County Airport Corp., 295 S.W.3d 91 (Ky. 2009). This Court articulates the Comair test to be a two part test. First, is the agency's parent entitled to immunity, and if so, does it serve a function integral to government. Since TARC was created by an urban county government, the first test is met easily. The Court here, however, determined that TARC did not serve a function integral to state government. Instead, the Court determined that mass transportation in this context served only a local concern. While this is true, it was equally true of the local airport in Comair.

Kentucky Court of Appeals - Unpublished
Class Actions - Commonality - Wage and Hour Claims
Hughes v. UPS Supply Chain Solutions, Inc., 2013 WL 4779746 (Ky.App. September 6, 2013), petition for rehearing denied October 28, 2013, motion for discretionary review denied February 12, 2014

This putative class action was brought against UPS alleging violations of the Kentucky Wage and Hour Law. While it is clear that the alleged violation was connected to the compliance with security procedures, the precise nature of the claims is not precisely defined. The quoted portions of the complaint suggest the claim was for time spent between clocking in and the security process, while the opinion suggests the claim was for time spent going through the process itself. The opinion does not address the merits of the claim in any way.

In the original complaint the class was defined as all current and former employees of UPS employed in Kentucky during the limitations period. The Court affirmed the denial of class certification of this putative class because there was proof that two facilities in Kentucky did not have security procedures. While that appeal was pending, the plaintiff amended the Complaint.

In the amended complaint, the class was defined as before except it was limited to three distinct facilities, each of which had similar security procedures. The Court reversed the trial Court's determination that the putative class lacked commonality, finding the procedures were substantially similar and each member of the class had the same basic injury, unpaid work time. The Court rejected the concern that the amount of time unpaid could differ from employee to employee based on whether alarms sounded.