Westfield Companies, Inc. (Westfield) and Kentucky Associated General Contractors Self Insurers’ Fund (Kentucky Associated) appeal from a judgment determining that they have a duty to defend, and a potential duty to indemnify, Quality Signs & Service, Inc. (Quality Signs) in an action brought by the Estate of Christopher House in Clermont County, Ohio, seeking recovery of damages for Christopher’s accidental death while acting in the scope of his employment with Quality Signs. The Estate pled causes of action under Ohio’s common law workplace intentional tort precedents. 

While performing a repair job at a motel located in Clermont County, House was killed while acting within the scope of his employment when he was thrown from a crane basket while working on a sign approximately 55 feet 
above ground level.

The Estate filed suit against Quality Signs in Ohio, seeking recovery under Ohio’s common law workplace intentional tort precedents. The action alleged counts for wrongful death, for survivorship damages, and for punitive damages. 

At the time of House’s death, Quality Signs was covered by insurance policies issued by Westfield and Kentucky Associated. The Westfield policy provided a primary Comprehensive General Liability Policy (CGL), and a Commercial Umbrella Policy. Quality Signs seeks coverage related to the Ohio lawsuit under the umbrella policy only. 

Kentucky Associated provided Quality Signs with a Workers’ Compensation Policy and an Employers’ Liability Policy. 

Kentucky Associated agreed to payment under the Workers’ Compensation section of the policy, and workers’ compensation coverage was not an issue in this case. However, Quality Signs claimed coverage related to the Ohio action under the Employers’ Liability section of the Kentucky Associated policy.

The Kentucky circuit court rendered an order determining that Westfield and Kentucky Associated had a duty to defend, and a potential duty to indemnify, Quality Signs in the Estate’s Ohio intentional tort lawsuit.

The causes of action in the Ohio case sounded in Ohio’s “substantial certainty” employer intentional tort law. This type of employer intentional tort occurs when the employer does not directly intend to injure the employee, but acts with the belief that injury is substantially certain to occur. See Van Fossen v. Babcock & Wilcox Co., 36 Ohio St.3d 100, 522 N.E.2d 489 (1988). 

The “expected” exception contained in the Westfield umbrella policy was held not to operate to deny coverage to Quality Signs in the Ohio action.

The duty to defend is separate and distinct from the obligation to pay any claim. Brown Foundation at 279. If, in the Ohio action, there were to be a finding by the jury that Quality Signs deliberately intended House’s death, the exclusion would apply to Westfield’s obligation to pay the resulting judgment. However, pursuant to Brown Foundation, the exclusion cannot be applied at this stage to avoid providing Quality Signs with a defense in the Ohio litigation.

Kentucky Associated contends that Ohio case law prohibits insurance coverage for this claim referring to holdings in Ohio to the effect that “expected or intended” exclusions in an insurance policy provide a valid exclusion in “substantially certain” employer tort cases.  In essence, these cases equate expected with “substantial certainty.” However, Kentucky does not follow this interpretation of these terms. See James Graham Brown Foundation, Inc. v. St. Paul Fire & Marine Ins. Co., 814 S.W.2d 273 (Ky. 1991). As "we are applying Kentucky law in our interpretation of these insurance policies, and since our Supreme Court has spoken on the issue, the holdings of the Ohio courts in this area are not pertinent."

2004-CA-000418.pdf
Judge:  EMBERTON
AFFIRMING
Date: 4/8/2005

BACK   V.   CORNETT (LETCHER COUNTY JAILER)
EMPLOYMENT LAW - HOSTILE WORK ENVIRONMENT

COA affirms TC's grant of motion for summary judgment against Appellant because she failed to present prima facie case of sexual harassment.  The COA held Appellant's evidence lacked a pattern of gender based conduct which was parvasive and severe enough to interfere with the conditions of Appellant's employment.  Key problems with incidents cited by Appellant: lack of gender based events and failure to report the offensive behavior to her supervisors/Appellee. 

2003-CA-000537.pdf
Judge:  EMBERTON
AFFIRMING
Date: 4/8/2005

BURCHETT  V.  KENTUCKY RETIREMENT SYSTEMS
EMPLOYMENT LAW - GOVERNMENT DISABILITY

COA affirms denial of Appellant's disability retirement benefits on the basis denial was supported by substantial evidence.  Appellant had worked as an Environmental Inspector III - a job which regularly required light to moderate physical exertion. While on the job, she twisted her ankle and was later on medical leave.  She also had physical ailments which were not the result of her work injury and while on medical leave (but seven months after the last date of paid employment) suffered a fractured right ankle.   At the disability hearing, the officer ruled she was not permanently disabled. 

The COA found conflicting medical evidence existed and extended its sympathy to Appellant.  However, it refused to substitute its opinion for that of the agency citing Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298, 307 (Ky. 1972) which held that "conflicting evidence or the possibility of drawing inconsistent conclusions from that evidence does not deprive an agency's determination of the support of substantial evidence."

CA vacates and remands because the TC did deviate from the guidelines and did not make a finding that it was appropriate to do so in this case. CA vacates TC’s order as to the division of the equity in the mobile home because it was an abuse of discretion given Joe’s assets and financial situation after the divorce. CA affirms the part of the order that pertains to Joe’s responsibility for the monthly mobile home loan payment.

CA quoted CR 54.01 that states: “A final or appealable judgment is a final order adjudicating all the rights of all the parties in an action or proceeding under, or a judgment made final under Rule 54.02.”  FC’s order did not adjudicate all of the rights of the parties.  Nor did it contain finality language nor did it recite that there was no just reason for delay.  FC noted that its ruling was dependent on additional information to be provided by Robert.

As distinguished from Murphy, in the present case there was testimony that the “angry patron” had been behaving in a belligerent manner for a time preceding the altercation with Baxter. It is possible that the jury reasonably believed that the “angry patron” had been steaming for a sufficient amount of time that Jim Porter’s should have foreseen a growing danger.

For the Non-Workers Comp Folks:
"ALJs GONE WILD". Procedural rules were stretched nearly beyond recognition in this case. For those not in the know, the attorneys in workers comp do not have the latitude to put on their cases the way a trial lawyer would, because the ALJ considers the whole record, despite designating evidence they wish to rely on, or agreeing not to use it.  That being said, this conscientious ALJ probably did not want to ignore evidence that was actually in the record, and issued a decision without checking for the motion for extension of time.  The Petition for Reconsideration probably cannot be used to change a decision on the merits, but a re-opening can.  The Board covered for what were obviously procedural mistakes, but reconfiguring a Petition for Reconsideration as a sua sponte re-opening, without giving notice to the parties, calls into question the finality of any decision.

In this case, Mr. and Mrs. True appealed a judgment of the circuit court directing them to remove all structures from their property for which they had not been granted a variance by the Danville/Boyle County Board of Adjustments. 

Earlier, the Trues had almost completed a swimming pool complex on their property before realizing that they had not obtained a building permit.  The applied for a permit, but were told one could not be issued without obtaining a variance.  After a hearing on the application for a variance, the application was denied.  However, no order was given to remove the structures.  Both the circuit court and the court of appeals affirmed the denial of the variance. 

After all administrative remedies were exhausted, the Board of Adjustments moved the circuit court to direct the Trues to remove the structures.  The Trues argued that the circuit court did not have authority to do so without a hearing and decision by the Board of Adjustments.  The circuit court entered the requested order, and the Trues appealed.