Vol. 2003/21       

•  KBA Proposed Advertising Regulations

  • All comments should be sent to the KBA no later than September 1, 2003 - the Attorneys' Advertising Commission, c/o Bruce K. Davis, KBA Executive Director, 514 West Main Street, Frankfort, KY 40601-1883.
  • Proposed Rule Changes - In PDF  <<<--- Here's a link to the proposed changes. 
     

• KENTUCKY APPELLATE DECISIONS 
  FOR JULY 7 - JULY 11 2003
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• Kentucky SUPREME COURT Decisions 
  PUBLISHED - None
   

• Kentucky SUPREME COURT Decisions
  NOT TO BE PUBLISHED - None
   

• Kentucky COURT OF APPEALS Decisions
  PUBLISHED - July 11, 2003
   

  2001-CA-002461.pdf Size: 39 kb Date: 7/9/2003

  Fister v. Com. Criminal, Attorney Conflict of Interest CA affirmed Defendant's conviction for one count of 1st Degree Wanton Endangerment.  Inconsistent verdicts, whether rendered by judge or jury, are not subject to reversal merely because they are inconsistent.  Here, the Defendant was acquitted of two counts of 1st Degree WE, and therefore, argued that finding of guilt on one count during bench trial rendered verdicts inconsistent.  CA stated that Kentucky approach has been that consistency of verdicts is not necessary.  Lastly, Trial Court properly denied post-trial motion that courtroom observer was improperly signaling witness during trial.

  2002-CA-001461.pdf Size: 32 kb Date: 7/9/2003

  Lexington-Fayette Urban County Human Rights Commission v. Wal-Mart Stores, Inc. Discrimination Court of Appeals reversed trial court, affirming holding of Human Rights commission, regarding Default Judgment against Wal-Mart. Claimant filed complaint against Wal-Mart after she was improperly detained.  Wal-Mart was served with the claim but failed to respond to multiple pieces of correspondence the Commission sent to Wal-mart.  A default judgment was entered against Wal-Mart and a monetary award was entered in favor of the claimant.  Wal-Mart appealed to the Circuit Court.  Circuit Court held reversed the judgment saying that they favor the policy of having cases decided on the merits.  Human Rights Commission appealed and Court of Appeals reversed Circuit Court.  Default Judgment was proper.  Wal-Mart's lack of organization in receiving mail after paralegal leaves is no excuse to not respond to notices of hearings.

• Kentucky COURT OF APPEALS Decisions
  NOT TO BE PUBLISHED - July 11, 2003

  1999-CA-002112.pdf Size: 20 kb Date: 7/9/2003	Engle v. Com. Criminal On remand from SC to consider in light of Kirkland v. Commonwealth, Ky., 53 S.W.3d 71 (2001), which states there is no presumptive conflict of interest when Trial Court fails to execute an RCr 8.30 waiver.  Here, the two defendants were represented by separate individual attorneys, but both attorneys worked for the public defender’s office.  The failure of the Trial Court to secure waiver did not result in prejudice to the Defendants, and accordingly, was harmless error.
  2002-CA-000001.pdf Size: 26 kb Date: 7/9/2003	Smith v. Com. Criminal CA affirmed Trial Court's denial of pro se Defendant's motion to vacate pursuant to CR 60.02.
  2002-CA-000055.pdf Size: 18 kb Date: 7/9/2003	Caldwell v. Caldwell Divorce, Attorneys Court of Appeals held it was no error to make attorney who previously represented husband in divorced action pay half of money to wife that attorney was holding for both spouses to pay toward mortgage after no payment was made and foreclosure proceedings were instituted.
  2002-CA-000094.pdf Size: 25 kb Date: 7/9/2003	Mattie v. Com. Criminal CA affirmed Defendant's convictions for WE, TBUT Over, and PFO 2nd.  Defendant was not entitled to instruction on Voluntary Intoxication and Unlawful Use of Vehicle.  No error in permitting claustrophobic juror to briefly leave jury room.  Prosecutor's closing argument not improper.  Trial Court properly denied Defendant's motion for continuance.
  2002-CA-000367.pdf Size: 18 kb Date: 7/9/2003	Webb v. Kentucky Farm Bureau Mut. Ins. Co. Insurance, Insurable Interest “A fire insurance policy insures an ‘interest in’ property, not the property itself.” Allstate Insurance Company v. Kentucky Central Insurance Company, Ky. App., 700 S.W.2d 76, 77 (1985).  Therefore, KFBM only obligated to pay one-half the value of the property (not the full value) to the joint owner who had purchased the property.  CA affirmed TC's SJ in favor of insurer. Note:  The other owner not on the property and no loss payable provisions in the policy.
  2002-CA-000422.pdf Size: 22 kb Date: 7/9/2003	Ramsey v. Com. Criminal  CA affirmed Defendant's convictions for 1st Degree Fleeing and Driving on Suspended License.  Defendant was not denied fair opportunity to cross-examine witness; Defendant was not entitled to mistrial; and Defendant waived any objection concerning admission of prior conviction during sentencing.
  2002-CA-000424.pdf Size: 22 kb Date: 7/9/2003	Brown v. Com. Criminal, Reasonable Suspicion CA affirmed Trial Court's denial of Defendant's motion to suppress based upon illegal stop.  Prior to making traffic stop of vehicle, police officer is not required to verify ownership of vehicle thought to be stolen.  Officer had reasonable suspicion to stop vehicle.
  2002-CA-000428.pdf Size: 21 kb Date: 7/9/2003	Price v. Com. Criminal, Admissibility of Business Record CA affirmed Defendant's convictions for TBUT Over and PFO 1st.  Insurance document was not improperly admitted under the business records exception to the hearsay rule.
  2002-CA-000455.pdf Size: 32 kb Date: 7/9/2003	Kentucky Real Estate Commission v. Cook Real Estate Seller made claim against KREC (and also sued in civil court) pursuant to KRS 324.410 which allows recovery of up to $20,000 for fraudulent violations of KRS 324.160 by real estate licensees. The sole issue on appeal is whether the buyer of the business was acting as a real estate licensee when he purchased the business.  Buyer was a listing agent for a realtor, listed the restaurant for sale, reduced the price, and the agent eventually bought the property himself from the seller for the reduced price.  Seller financed the purchase, no commissions were paid, and the buyer made one payment on loan and 'gutted' the property by selling the contents.  CA reversed  the circuit court holding it had erred in overturning the finding of the KREC that the buyer was not acting as a licensee when he purchased the business. Reversed and remanded.
  2002-CA-000657.pdf Size: 20 kb Date: 7/9/2003	Underwood v. Regal Nails, LLC Statute of Limitations, Amended Complaint CA affirmed TC's dismissal holding amended complaint alleging negligence against a party did not relate back relying upon CR 15.03 and Reese v. General American Door Co., 6 S.W.3d 380  Ky.App.,1998.  Amended complaint added a new party who did not have notice of the original claims. Comment.  These facts are interesting and can pop up in many personal injury cases.  Plaintiff alleged negligence against a nail salon at Wal-Mart;  filed complaint with Wal-Mart who advised Plf that Linh Than, owner of Nail Graphics, a Wal-Mart vendor, should be notified. Plaintiff's attorney then notified Than's insurer who advised her that Regal Nails, LLC was the insured.  Plaintiff found no listing of Regal Nails, LLC with the secretary of state in Frankfort.   Suit was filed, however, against Nail Graphics, Inc. rather than Regal Nails, LLC within the statute of limitations.    Defense investigated and found no affiliation between Nail Graphics and Regal Nails business entities.  Plaintiff amended her complaint to name Regal Nails after the statute of limitations had expired.  Trial court dismissed complaint against Regal Nails since amendment was filed after statute of limitations expired and did not relate back per CR 15.03. The CA was a tad perplexed noting that Wal-Mart may have given the plaintiff the impression Nail Graphics was the owner but that the insurer stated Regal Nails LLC was the owner. But Regal Nails LLC may not have been listed as a business with Secy of State.  CA concluded failing to identify the owner was no excuse and held amendment not relate back to the original complaint. This one 'piqued' my curiosity since what are you supposed to do if no one is going to come clean and tell you who the owner really is?  Of course, AFTER the s/l expires it is easy to put all the pieces of the puzzle together since the real owner has less reason to hide.  Yes, it was Regal Nails, LLC but per the opinion they were not to be found with the Secretary of State.  For what it is worth, there is only one 'Regal Nails, L.L.C' listed in Frankfort, and it is listed as a foreign LLC as of 10/29/2002.  'Nail Graphics, Inc.' is listed in Frankfort but was administratively dissolved on 11/1/2001.  None of the names of the organizers of Nail Graphics match up to the 'Regal Nails, LLC' registered in Louisiana which franchises salons throughout the U.S (www.RegalNails.com).   No mention was made in the decision regarding the failure to be registered as a foreign corporation with the possibility of tolling under Munday v. Mayfair Diagnostic Laboratory, 831 S.W.2d 912 (Ky.,1992)(Failure of partners doing business under assumed name to comply with statute requiring filing of certificate of assumed name was sufficient to create estoppel under tolling statute, thereby tolling statute of limitations during period of noncompliance, in medical negligence action against partnership.  The defendants had not complied with the statute and the plaintiff sued the wrong entity after consulting the assumed name records of both the Secretary of State and the Daviess County Court Clerk.) The 'unnamed defendant' is an option used frequently to obtain an apportionment instruction but is not without risks either. See,  Richmond v. Louisville and Jefferson County Metropolitan Sewer Dist., 572 S.W.2d 601 (Ky.App.,1978)("CR 4.15 allows an action to be filed against an unnamed defendant. However, it requires that the complaint describe the unnamed party. The appellant's complaint did not describe the "John Does" by function or relationship to the plaintiff's claim or in any other manner. Furthermore, CR 4.05 provides that an unknown defendant shall be the subject of constructive service of process. However, KRS 454.165 provides that the court can not achieve in personam jurisdiction over persons who are the subject of constructive service of process. Therefore, even had the appellant described the defendant, the court could not have achieved jurisdiction over his person until long after the statute of limitations had run.") Ouch. (For what it is worth, the unknown defendant route is a technique often used in defending claims to get the apportionment of fault instruction such as a third-party complaint filed against the unknown driver who left the scene since personal jurisdiction is not the issue for apportionment.) More importantly, would the local salon have been a company- owned franchise out of Louisiana or an independent business, and if it was an independent business did the owner register as a 'dba' in the county or the state?  For what it is worth, the organizer of the FLC of Regal Nails, LLC in Kentucky was also listed as a member of the Regal Nails, LLC in Louisiana where it was organized, and the Regal Nails, LLC was not added to the Kentucky Secy of State site until 10/29/2002 and is currently in a 'bad status.' Another thought under CR 15 is the literal elements for relating back, to wit:   "an amendment changing the party against whom a claim is asserted relates back if [arising from same transaction or occurrence in original complaint] and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (a) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (b) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him." Does knowledge by the party's insurance company or attorney representing the insurance company constitute notice?  Probably not in light of Gailor v. Alsabi, 990 S.W.2d 597 ( Ky.,1999). Sorry to ramble.  But how many people are going to give you their name or identify their legal name so you can sue them??  Simply saying we insure Regal Nails is not enough.  No good solution for this one.  Hide and seek is not an affirmative defense under CR 8.03, but it worked here.   FYI - case cited by CA - Reese v. General American Door Co., 6 S.W.3d 380 (Ky.App.,1998) "Here, the Reeses make no claim that their failure to sue GADCO within the limitations period or their suing Overhead Door of Covington instead involved a mistake induced in any way by GADCO or resulting from anything but their own failure to identify GADCO sooner. The mere failure to identify a potential defendant within the limitations period, however, is not the sort of mistake contemplated by *384 part (2)(b) of CR 15.03." I fully expect to get some feedback on this one.  Let me have it folks. stevens@lawyer.com.
  2002-CA-001093.pdf Size: 22 kb Date: 7/9/2003	Com. v. Porter Criminal, Use Minor In Sexual Performance CA reversed Trial Court's dismissal of indictment following stipulation of facts entered by parties.  Defendant was charged with 8 counts of complicity to use minor in sexual performance.  Parties stipulated that Defendant posed nude with minor in photographs taken by 3rd party, but did nothing to encourage minor's participation in photo session.  Trial Court dismissed, holding that KRS § 531.310 required an overt act on the part of the Defendant.  First, CA rejected Commonwealth's argument that court had no authority to dismiss charges.  Trial Court has authority to dismiss when stipulations exonerate defendant as matter of law.  However, this was not the case.  Defendant's participation was evidence of consent, and the statute does not require an affirmative act.
  2002-CA-001204.pdf Size: 24 kb Date: 7/9/2003	Osborn v. Cougar Coal Co. Workers Compensation - Salary Continuation Credit  - KRS 342.730(6)  Osborn, injured in 1999, was awarded TTD benefits for the period of January 29, 1999, to March 15, 1999 that he did not returned to work following the injury, and PPD benefits.  Osborn's employer paid him "salary continuation" on a bi-weekly basis during his absence for which it claimed  credit against any benefits awarded.  Osborn argued that KRS 342.730(6) does not allow credit for payments made in the form of salary continuation."  (KRS 342.730(6) entitles an employer to credit for disability or sickness and accident plan payments made in lieu of workers’ compensation benefits, provided certain conditions are satisfied). The ALJ awarded the credit, denied Osborn's petition or reconsideration, and was affirmed by the Board.   The Court affirmed granting of the credit on the grounds that the parties had stipulated at the  Benefit Review Conference that "salary continuation" had been paid in lieu of TTD benefits. If in fact those payments were from some type of employee disability benefit, then Osborn waived his right to have those payments analyzed pursuant to KRS 342.730(6) when he entered into the stipulation.   The Court of Appeals' opinion includes a very good review of the development of the case law regarding employer credit for compensation paid to employees against workers' compensation benefits otherwise payable before and after the enactment of KRS 342.730(6) in 1996.  However, the Court did not decide the dispute in this claim on this basis of whether Cougar was entitled to credit for its "salary continuation" as a matter of law.   Note:  If an employee stipulates to the payment of salary or wage continuation benefits that have been made but nevertheless wants to challenge the employer's right to take credit for those payments, the employee should designate that dispute as an issue to be decided by the ALJ at the Benefit Review Conference.  TH
  2002-CA-001409.pdf Size: 18 kb Date: 7/9/2003	Massey v. Com. Criminal, Probation Revocation CA affirmed Circuit Court's revocation of Defendant's probation.  Defendant was not entitled to 3rd opportunity at drug and alcohol rehabilitation and had no constitutional right to continue probation.
  2002-CA-001463.pdf Size: 19 kb Date: 7/9/2003	Morrow v. Carnes Real Estate, Foreclosure, Bankruptcy CA affirmed trial court that the buyers were entitled to judgment against the seller in the amount of $17,815.66, plus pre-judgment and post-judgment interest. The Carneses and the Morrows entered into an enforceable contract for the sale of the property that the Morrows/sellers breached when they filed bankruptcy making it impossible to deliver a warranty deed free of all liens and encumbrances. In order to prevent foreclosure on the property on which the Carneses/buyers had made substantial improvements, they paid off the loan secured by the property. The trial court applied the correct measure of damages.
  2002-CA-001493.pdf Size: 18 kb Date: 7/9/2003	May v. Johnson Family Coal Co. Mining Lease, Royalties, Sublease CA affirmed TC.  Lessee could not get out of a 44 year old coal lease simply because it was now a bad bargain.  The lease allowed for subleasing, and the lessee paid 25 cents per ton and subleased to another receiving $2.00 per ton for the coal.  Bad bargain does not equal unconscionability. CA cited Louisville Bear Safety Service, Inc. v. South Central Bell Telephone Company, Ky. App., 571 S.W.2d 438, 440 (1978) - "The doctrine of unconscionability is used by the courts to police the excesses of certain parties who abuse their right to contract freely. It is directed against one-sided, oppressive and unfairly surprising contracts, and not against the consequences per se of uneven bargaining power or even a simple old-fashioned bad bargain . . . " quoting Wille v. Southwestern Bell Telephone Co., 219 Kan. 755, 549 P.2d 903 (1976)
  2002-CA-001532.pdf Size: 17 kb Date: 7/9/2003	Williams v. Ky Dept of Corrections Statute of Limitations, Declaratory Judgment CA affirmed dismissal of declaratory judgment action pertaining to prison segregations as time barred under statute of limitations (one year).
  2002-CA-001687.pdf Size: 19 kb Date: 7/9/2003	Tayler v. Dept. of Highways Board of Claims, Guardrail CA affirmed dismissal of wrongful death claims alleging negligence of state regarding guard rails.  "The Department had a duty to maintain the highway in a reasonably safe condition for those members of the traveling public exercising due care for their own safety. Its duty, however, does not include guarding against all reasonably foreseeable and reasonably preventable harm to travelers, including those who fail to exercise reasonable care but whose lack of due care is not so extreme as to be unforeseeable." citing Commonwealth of Kentucky, Transportation Cabinet v. Shadrick, Ky., 956 S.W.2d 898 (1997).
  2002-CA-001892.pdf Size: 20 kb Date: 7/9/2003	Ferrel v. Com. Criminal, Probation Revocation  CA affirmed Defendant's sentence following probation revocation.  Defendant's probation was revoked following new conviction for Robbery.  However, Commonwealth failed to comply with time limitations contained in KRS § 533.040(4), and therefore, Defendant argued his original sentence must run concurrent with new sentence.  CA disagreed, citing KRS § 533.060(2), which prohibits Defendant's request.  CA acknowledged conflicting provisions contained in two statutes, but followed Brewer v. Commonwealth,Ky., 922 S.W.2d 380 (1996), which held KRS § 533.060(2) controlled.
  2002-CA-001953.pdf Size: 19 kb Date: 7/9/2003	Bradford v. Com. Criminal, Credit for Time Served  CA affirmed Circuit Court's denial of Defendant's motion for credit for time served following probation revocation.

   

• Western District Court - Kentucky
  these opinions are from official site and require opening or saving the 'pl' files and editing with MS Word.
  

  Kathy L. Corum, et al. v. Fifth Third Bancorp and Fifth Third Bank, Kentucky   Plaintiff Kathy Corum sued Defendants Fifth Third Bancorp and Fifth Third Bank, Kentucky alleging that they violated the federal Consumer Leasing Act when they charged $20.00 late payment fees in connection with her motor vehicle lease. Defendants moved for dismissal pursuant to Fed. R. Civ. P. 12(b)(6) on the grounds that the late payment fees at issue fall outside the scope of the Consumer Leasing Act. The Court held that section 1667b(b) of the Consumer Leasing Act requires that all late fees imposed by a lessor of consumer goods be reasonable, and that the reasonableness of the fees charged is more properly an issue for summary judgment. CAM I, INC. V. LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT   The preliminary injunction and restraining order will be amended to allow the constitutional location provisions of the ordinance to be severed from the unconstitutional liscensing provisions. Critchfield v. Continental Casualty Co.   Cross-motions for summary judgment in this ERISA action challenging the denial of long-term disability benefits. Held: Summary judgment granted for the plaintiff. The denial of benefits by the plan administrator was arbitrary and capricious in light of the medical evidence suggesting that the plaintiff did not possess the functional ability to perform the occupations for which the vocational specialist had found him qualified.

• Sixth Circuit Court of Appeals from Kentucky
  (opinions on official site)
  

  Opinion DocketSheet Pub Date Short Title/District 03a0230p.06 01-6390 2003/07/15  Westfield Ins v. Tech Dry Inc     Eastern District of Kentucky at Covington Kentucky courts would likely find that negligent hiring and retention of an employee constitutes an "occurrence" under the terms of an employer's insurance liability contract, thus an insurer was obligated to defend the employer in a negligence action arising from a murder committed by an employee. 03a0233p.06 02-5473 2003/07/17  Gibson v. City of Louisville     Western District of Kentucky at Louisville

• Some recent US Supreme Court Cases of interest
  • Punitive Damages

    04/07

    01-1289

    State Farm Mut. Automobile Ins. Co. v. Campbell

    K

    538/2

  •  

Insurance,  Loss of Use

• KRS 304.39-115
  "Loss of use of a motor vehicle, regardless of the type of use, shall be recognized as an element of damage in any property damage liability claim. Such a claim for loss of use of a motor vehicle shall be limited to reasonable and necessary expenses for the time necessary to repair or replace the motor vehicle."
• Anderson v. Shields, 314 Ky. 228, 234 S.W.2d 739 (1950)
  A tort claim against an offending motorist for compensatory damages for "loss of use" of a damaged vehicle extends only to the period reasonably necessary to make repairs, and applies only to a vehicle with a business use. Decided prior to KRS 304.39-115.
• Deaton v. Allstate Ins. Co., 548 S.W.2d 162 (Ky.App. 1977)
  "'[L]oss of use' of a vehicle, as was involved in Howard, is not to be considered consequential or punitive damages, but more akin to a contractual obligation under the insurance policy. However, should "loss of use" be construed as a consequential damage, then appellants are still not entitled to their alleged damages since this court can find no evidence of unreasonable delay."
• Howard v. Adams, Ky., 246 S.W.2d 1002 (1952)
  Loss of use claims of this nature do not cover inconvenience in being without a vehicle until one replaces it, or time consumed in negotiations for a settlement.  "His own unnecessary delay before attempting to have the repairs made cannot properly be computed, as he is under a duty to mitigate damages. Nor may time consumed in the negotiations for a settlement be computed as part of the reasonable time within which to effect the repairs."
• Pope's Adm'r v. Terrill, 214 S.W.2d 276 (Ky.,1948)
  "The rental value of a vehicle may not always be the equivalent of the amount of loss from being deprived of the use of a given machine.  But it is always a material and relevant factor in helping to ascertain the value of the loss of use. And where a commercial automobile is involved, the market rental value of such a machine is probably as accurate a measurement as may be produced. The question is whether this covers mere potential loss, or the value of potential use, as where the owner does not hire another truck during the process of repair. It is generally held that such failure does not preclude recovery, although the good faith intention of actually using, or the character of such intended use, may affect the amount of recovery." 
  

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• Contributors:
  • Jeri Barclay - Business Law
  • Scott Byrd - Criminal
  • Tim Hatfield - Workers Comp.
  • Paul Schurman - Employment/Discrimination
  • Mike Stevens - Torts and Insurance
  • Jim Worthington - Wills, Estates, Probate
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Thank you, 

Mike Stevens