SCOKY Decisions - Mar. 23, 2006 (Vol. 2006:14)

KENTUCKY BAR ASSOCIATION V. CAROLINE LAURIE GRIFFITH
ATTORNEYS
2005-SC-000971-.pdf
PUBLISHED 258
DATE: 3/23/2006

Opinion and order suspending respondent from the practice of law for a period of 1 year and that this suspension be served consecutively with respondent’s current 5 year suspension.

ROBERT W. STEVENS V. KBA
ATTORNEYS
2006-SC-000094-.pdf
PUBLISHED
DATE: 3/23/2006

Opinion and order finding that movant be publicly reprimanded.

KENTUCKY BAR ASSOCIATION V. KEVIN M. CALLIHAN
ATTORNEYS
2004-SC-000722-KB
ENTERED: MARCH 23, 2006

Opinion and order suspending respondent from the practice of law for 181 days, with the suspension to be probated for 2 years according to the conditions set forth.

In this highly publicized murder case, Shane Ragland won a new trial following his conviction for murdering UK athlete Trent Diguiro in 1994. In the 52 page opinion, a divided SC reversed and remanded Defendant's conviction due to the admission of expert testimony with respect to the results of comparative bullet lead analysis (CBLA) tests. The trial court erroneously confined its Daubert analysis to the ICP methodology of CBLA and failed to consider the scientific reliability of the conclusions drawn by the Commonwealth's expert, Lundy, ipse dixit from the CBLA results. No need to remand for a new Daubert hearing because of the FBI Laboratory's current position that such evidence is of insufficient reliability to justify continuing to produce it. Thus, the trial court could not conclude that the evidence is both scientifically reliable and relevant and would be helpful to the jury.

TC properly denied Defendant's motion to suppress the evidence seized as a result of the federal search warrants. The affidavit supporting the warrants was sufficient to establish probable cause. Further, the warrants were not procured by deliberate falsehood or a reckless disregard for the truth. TC properly ruled on Defendant's Miranda challenges. Alleged hearsay statements were either not hearsay or proper exceptions to the rule. Finally, the majority of this Court believes that, at worst, the prosecutor's brief and isolated comment could be construed as an indirect comment upon Defendant's failure to take the stand, but in context, and in light of the prosecutor's immediate clarification, the statement carried no such implication and certainly did not suggest that the jury should draw an inference of guilt from Defendant's failure to testify.

Note: Interestingly, Justice Cooper wrote the majority opinion but dissented from the ruling that the prosecutor's comments did not warrant a new trial. Justices Lambert and Johnstone joined in this dissent. Justice Roach wrote separately because he believed the majority opinion painted too broad of a brush in concluding that comparative bullet lead analysis ("CBLA") evidence could never be scientifically reliable and relevant. Roach felt the prosecutorial misconduct issue should not have been addressed because it was unlikely to happen again at retrial. Justices Wintersheimer and Graves felt the conviction should have been affirmed.

This case demonstrates how good attorneys with deep pockets funding the defense (Ragland's father reportedly spent over a million dollars on the defense) can take the government to task with their "expert" analysis. In the end, it is this editor's humble opinion that the absence of the CBLA evidence will have no effect on the final outcome and Ragland will again be convicted upon retrial.

In a blistering 41 page dissent, Justice Cooper expressed (1) why the majority opinion violates principles of statutory construction; (2) why it violates the doctrine of stare decisis; (3) why its new interpretation of former KRS 218A.1432(1)(b) renders the statute void for vagueness; and (4) why the General Assembly's 2005 amendment of the statute does not affect the interpretation of the 1998 enactment.

SC reversed the convictions of Haydon and Jackson pursuant to their conditional guilty pleas and remanded for further proceedings. Haydon and Jackson were charged with Attempted Murder, Robbery, and related offenses stemming from a robbery which the Commonwealth alleged that the two men had perpetrated. During the ensuing investigation, both gave statements to police. Before trial, Haydon and Jackson filed motions for separate trials, for suppression of their statements, and, in the alternative, for redaction of their co-defendant's statements for use in trial. After conducting an evidentiary hearing and allowing counsel to brief the issues, the trial judge denied the motions. The primary issue on appeal was whether the trial court erred by declining to award separate trials (and to redact the defendant's statements) because of its conclusion that the statements at issue contained "particularized guarantees of trustworthiness" that made it unnecessary to redact the statements or to hold separate trials. The majority held that, although the trial court's reasoning was sound at the time (pursuant to Gabow v. Commonwealth, 34 S.W.3d 63 (Ky. 2000)), the United States Supreme Court's ruling in Crawford v. Washington, 541 U.S. 36 (2004) compelled reversal. Specifically, under Crawford, all out of court hearsay statements which are "testimonial" can no longer be admitted against a defendant even if they contain particularized guarantees of trustworthiness. Therefore, the trial judge should have granted the motions for separate trials and/or the motions for redaction of the co-defendant's statements. The majority also rejected the Commonwealth's argument that the harmless error doctrine saves the day. The harmless error analysis is appropriate to use only when a trial has actually occurred.

See the Haydon opinion above which was consolidated with Jackson for purposes of appeal.

This is an appeal of a jury verdict in a personal injury action that was brought by Amanda Baker against Theresa Kammerer. At trial, Baker was not permitted to cross-examine Hope Frost, an investigator employed by Kammerer's insurance carrier, about possible bias stemming from the fact that the investigator was hire/employed by the insurance company. The Court of Appeals affirmed the trial court. SCOKY held the trial court abused its discretion in limiting the cross-examination of the insurance adjuster regarding possible bias by her employment by the insurance company and thus reverse.

Gainsco, H&H Auto and David Holder appeal Barren Circuit Court's entry of Summary Judgment for Gentry, Booth and Ky Farm Bureau. COA affirmed the TC's ruling, and the Supreme Court granted review.

The case involves the sale of an auto on 4/15/00 by H&H Auto to Joe Booth. The auto in question had been purchased just 9 days prior from Philip Duke Motors in Alabama, although Duke was unable to immediately transfer the auto's certificate of title. Holder, president of H&H Auto, personally negotiated the sale to Booth, but was unable to immediately assign title to Booth. Booth nevertheless took possession of the auto on 4/15/00 without title. Booth's son lost control of the vehicle and caused an accident on 4/20/00 that resulted in his passenger Gentry sustaining permanent, disabling injuries. Gentry initiated suit against Booth, KFB, H&H Auto, Holder and Gainsco (Holder's insurer). Gentry filed a MSJ asserting that H&H Auto was the owner of the auto on the accident date for purposes of insurance coverage, which the TC granted. Gainsco was therefore deemed to have primary coverage while KFB (Booth's insurer) was held secondarily liable. This appeal followed.

In a 4-3 decision, the Supreme Court upheld the COA's ruling that affirmed the entry of Summary Judgment. Justice Johnstone wrote the majority opinion, and identified the sole issue on appeal as whether H&H Auto was the owner of the auto for insurance purposes at the time of the accident. The opinion discusses KRS 186.010(7)(c) and the requirements placed on a licensed auto dealer in order to effectively transfer ownership of the auto in those instances where the title is not immediately transferred to the buyer at the time of purchase. Those requirements as set forth in KRS 186A.220 are two-fold: 1) the dealer must obtain the purchaser's consent to file the certificate of title on his behalf; and 2) he must verify that the purchaser has obtained insurance on the auto before relinquishing possession. The majority felt that H&H Auto failed to satisfy the second prong since Holder did not request any form of proof of insurance from Booth on 4/15/00 (a Saturday) even though he did verbally verify coverage with Booth's insurance agent on 4/17/00, the next business day. Of importance was the fact that the title documents were not signed by Booth until 4/24/00. Also of importance is the fact that KFB conceded that Booth had valid insurance coverage on 4/15/00 and 4/20/00. The majority side-stepped this fact by ruling that this alone is not enough in that the statute also requires the dealer to obtain proof of insurance. The court then proceeded to reject Holder's argument that his course of prior dealing with Booth (by having sold him vehicles in the past, most recently within a year of the subject sale) satisfies the "proof" requirement by way of his knowledge that Booth was insured with KFB in the recent past, noting that the statute requires verification beyond mere assumption or prior knowledge. Justices Lambert, Roach and Winterheimer joined Johnstone in the majority.

Justice Graves issued the dissenting opinion during which he discusses the legislative intent behind KRS 186A.220, which is to prevent uninsured vehicles on the roadways. He felt that the majority too narrowly reviewed the proof of insurance requirement, and questioned what effect a discussion about insurance coverage at the time of sale (that the majority repeatedly noted Holder had failed to do) would have on the ultimate question of ownership at the time of the accident. He felt that almost any form of proof carries an assumption, the exception being proof obtained directly from the buyer's insurance representative. He emphasizes the difficulty dealers would face if required to obtain this form of absolute proof, especially on weekends, and felt that the statute did not require it. Graves points out that even if there was a technical deficiency at the time of sale, Holder had nevertheless cured it by obtaining verbal proof of insurance from Booth's agent on 4/17/00 - 3 days before the accident. In this regard, he declares that the harm the statute seeks to prevent - uninsured motorists - did not exist in this particular case since KFB had admitted coverage existed on all relevant dates at issue. He concludes by conceding that a prior course of dealing is certainly not a preferable means to obtain proof of insurance, but nevertheless felt that there was evidence sufficient in favor of Holder to at least survive a MSJ. Justices Cooper and Scott joined in the dissent.

Commentary: The majority's decision appears to place a burden of strict compliance on the dealer to obtain proof of insurance pursuant to KRS 186A.220, presumably on the basis that the dealer is in the best position to prevent the harm of uninsured vehicles hitting the roadways. However, the majority doesn't go far enough by offering some guidance on what actions constitute verification of "proof" of insurance. Is verbal assurance from the buyer enough? What about obtaining a copy of the most current insurance card? Of course, as Graves notes this carries with it an assumption that the policy has not lapsed or been canceled since the date the card was printed. The majority flatly rejected Holder's argument that knowledge of coverage by Booth less than a year prior was satisfactory, so would an insurance card printed up to 6 months before the sale nevertheless be okay? Or was the majority's ruling simply a way of providing as much insurance coverage as possible to a claimant who apparently sustained significant damages and would have otherwise been limited to Booth's policy limits (though never identified, it's safe to assume that they were a fraction of the dealer's liability limits). Certainly, Holder's failure to even hint at the topic of insurance coverage during the transaction with Booth gave the majority an opportunity to issue its ruling without having to adjudge what action(s) a dealer must take in order to satisfy the proof of insurance requirement.

The court's minority instead focuses on the big picture by weighing the benefits of requiring strict compliance against the costs placed on the dealer in doing so. Their opinion is that the latter outweighs the former, and suggests that the logistics of obtaining actual proof of insurance at the time of sale would adversely impact commerce in light of the volume of sales that occur outside the regular business hours of insurance companies and agencies. The dissenting opinion seems to suggest that the ultimate determination on liability of the dealer is not the sufficiency of proof obtained at the time of sale, but instead is whether the buyer did in fact have valid insurance coverage at the time of loss. If the dealer has a reasonable basis for assuming coverage exists at the time of sale, and the assumption turns out to be correct (as in the present case), then the court's minority would seemingly relieve the dealer of liability since the vehicle is not uninsured and the situation contemplated by the statute is therefore avoided. However, this approach ignores the fact that the statute speaks to who is deemed the legal "owner" of the vehicle and not whether the vehicle is insured at the time of loss.

While this decision does not resolve all potential issues that may arise when a dealer transfers possession of a vehicle to a buyer without the accompanying title, it certainly suggests that the dealer must make some affirmative inquiry into the buyer's insurance status before the buyer drives the vehicle off the lot. Needless to say, it would be wise for the dealer to have some documentation in his file supporting the existence of insurance such as a copy of the buyer's current insurance card or a letter from his insurer or agent or maybe a written ledger entry confirming verbal proof received from the insurer or agent. One thing that is clear -- obtaining proof after the date of sale but before the date of loss will not be held sufficient in light of the majority's decision.

This was a medical negligence case in which the plaintiff Schmidt offered to settle the claim within policy limits but the insured physician (Dr. Tabler) withheld his consent and the matter went to a jury in which the plaintiff obtained a verdict in excess of the policy limits of $1 million. This appeal followed.

Like many professional liability insurance policies, Tabler's policy with KMIC contained a "consent to settle" clause providing that: "The Company shall not compromise any claim hereunder without the consent of the named Insured."

KMIC maintained it did not enter into negotiations with Schmidt because Dr. Tabler did not consent to a settlement of Schmidt's claims against him. After judgment was entered pursuant to the verdict, Dr. Tabler retained personal counsel who negotiated a settlement offer from Schmidt in the amount of 1 .2 million dollars, or $200,000.00 more than KMIC's policy limits, and demanded that KMIC pay that amount to settle the judgment.

Dr. Tabler testified on direct examination as a witness for Schmidt, inter alia, that he "did not recall" being warned by his attorneys of his potential exposure to liability in excess of his policy limits and that he "did not understand" that he could be personally, as well as corporately, liable for an excess judgment. He also denied withholding his consent to a settlement of Schmidt's claim . However, when confronted on cross-examination with sworn statements he had previously made during a discovery deposition, he admitted having reviewed the "settlement brochure" prepared by Schmidt's attorney claiming over $900,000 .00 in medical bills, demanding five million dollars in settlement, and advising that he (Tabler) would be personally liable for any excess judgment over his policy limits.

The attorneys who had represented Tabler in the malpractice action also testified that they had advised Tabler of the risks of going to trial but that he was convinced that he had done nothing wrong and that he would be exonerated by the jury.

There was ample evidence to support the jury's finding that, after being "fully informed" of the risks, Dr. Tabler did not consent to a compromise settlement prior to the return of the excess liability verdict. The Court of Appeals erred in usurping the fact-finding authority of the jury on this issue .

An insurer acts in "bad faith" with respect to a potential excess judgment against its insured only if it is afforded the opportunity to settle within the policy limits . Davis v . Home Indem . Co . , 659 S.W.2d 185, 189 (Ky. 1983)

Although KMIC's policy covered costs and fees incurred during an appeal, it only covered the cost of an appeal bond to the extent of its policy limits and only its pro rata share of interest payable on the judgment. Thus, the policy required Tabler to supersede the excess portion of the judgment and to pay any interest thereon .

Here, the plaintiff was willing to settle for the policy limits, but the insured exercised his right under the policy to withhold consent to any such settlement, thus denying the insured the opportunity to settle within the policy limits.

This case arises from medical complications ensuing from breast lift surgery. The Appellant, Sharon Jo Ann Harrison filed a medical negligence claim against Dr. George Valentini who performed the lift surgery and administered follow-up care. The trial court dismissed the action as time-barred and the Court of Appeals affirmed with SCOKY granting discretionary review to consider whether the continuing treatment Appellant received from Appellee tolled the applicable statute of limitations, rendering her claim timely.

SCOKY applied the continuing treatment doctrine and reversed and remanded the case to the trial court for further proceedings.

NEIGHBORS V. RIVER CITY INTERIORS
WORKERS COMPENSATION – VOCATIONAL REHABILITATION
2005-SC-000681-WC.pdf
PUBLISHED
AFFIRMING (OPINION OF COURT)
DATE: 3/23/2006

The Court affirmed the ALJ’s findings and Order that the claimant was capable of engaging in vocational rehabilitation and requiring that he attend, after he had been found by a different ALJ to be totally disabled, and was receiving Social Sceurity Disability for total disability. The claimant questioned the jurisdiction of the ALJ, since the statute allowing reopening does not address post-award refusals to undergo vocational rehabilitation. This case opens a new avenue for insurers to reduce payment of a total disability award by 50% if the claimant refuses to participate in the retraining process.

In a 6-1 opinion, SC affirmed Barnes' conviction for Murder at his retrial. Although indicted in Russell County, Barnes was granted a change of venue to Wayne County for his first trial. He was convicted of Murder and filed a direct appeal from that conviction. The SC reversed and remanded for a new trial. Barnes was convicted of Murder at the second trial which was also held in Wayne County. The primary issue on this appeal is whether the trial judge improperly denied Barnes' request for a re-transfer of venue back to Russell County. SC held that KRS 452.210 governed this issue. According to that statute, once venue has been changed, it remains in the transferee county until a complete determination of the case. (Justice Scott dissents without opinion.)

In a 6-1 opinion, SC reversed Wardia's convictions for First-Degree Rape and related offenses and ordered a new trial. The sole issue on appeal was whether the trial court's use of a white board to block the child-victim's view of the defendant while she testified was reversible error. The majority said that it was because the trial judge utilized a shielding method that was not authorized by law. Furthermore, the trial court failed to make the necessary finding of compelling need under KRS 421.350 (the statute permitting a child-victim to testify via closed circuit television).

COOPER, J., WOULD REVERSE AND REMAND FOR THE SAME REASONS STATED IN HIS DISSENTING OPINION IN JACKSON V. COMMONWEALTH, 113 S.W.3d 128 (KY. 2003) AND JOHNSTONE, J., WHO DISSENTS WITHOUT OPINION.

SC affirmed Defendant's convictions and 44 year sentence for kidnapping, receiving stolen property valued over $300, second degree escape, second degree wanton endangerment, third degree criminal mischief and second degree persistent felony offender. Defendant was properly determined competent to stand trial. When an examination of a defendant's competency is performed, the trial judge is required to conduct a hearing to determine if the defendant is competent to stand trial. KRS 504.100(3). SC previously determined that when a hearing is not held, the standard of review is whether a reasonable judge "should have experienced doubt with respect to competency to stand trial". Mills v. Commonwealth, 996 S.W.2d 473 (Ky. 1999).

Note: SC affirmed the convictions despite the TC's failure to hold a competency hearing, as required by KRS 504.100(3), and failure to obtain a written waiver of jury trial, as required by RCr 9.26.

TC properly prohibited defense counsel from eliciting testimony that victim was on conditional discharge from an unrelated misdemeanor conviction. Defense counsel offered absolutely no evidence during the avowal to support a claim that victim's testimony was motivated by or related in any manner to her discharge status.

The claimant’s motion to re-open was denied on the grounds that he filed it more than three years after the award was rendered, and that he failed to state one of the reasons for re-opening that is stated in the re-opening statute as being allowed after the four-year limit. The Court in this case said the statue is unambiguous. However, compare the NEIGHBORS case rendered concurrently where re-opening was allowed by the employer to enforce a rehabilitation Order even where no grounds for such a reopening is stated in the statute.

The Court affirmed the ALJ’s finding that the injuries incurred at work were a temporary exacerbation of a pre-existing problem and did not rise to the level of an injury as defined in the statute, which requires a harmful change in the human organism.

The Court affirmed the ALJ’s finding that the claimant had failed to list his previous back injury and settlement on his employment application and was therefore barred from claiming a subsequent back injury at work by KRS 342.165.