AUGUST 10, 2007 KENTUCKY COURT OF APPEALS DECISIONS (2006:38)
PUBLISHED (COA).
UPTON, AN UNDERWRITE AT LLOYDS OF LONDON V. GINNWhen Ginn went to pick up the tobacco the old switcheroo had occurred. Good tobacco had been switched with bad. Ginn started removing the good tobacco left but had to stop after a few days to attend a preset trade show. Upon Ginn’s return he found the warehouse locked tight. Lloyds said he repudiated the contract so they sold the remaining tobacco for .05 per pound. Ginn yelled foul and Lloyds filed the action to attempt to recover the .65 per pound difference.
The trial court said no dice to Lloyds, finding the anticipatory repudiation of Ginn was not unequivocal as required. Also the alleged anticipatory repudiation did not substantially impair the value of the contract to Lloyds as it only involved 2% of the total.
The CA upheld the lower Court finding the lower Court’s findings of fact was not clearly erroneous.
Digested by Paul Schurman
Digested by Cherry Henault
BROWN
V. COMMONWEALTH
CRIMINAL: CRIMES (THEFT AND PECUNIARY LOSS OF LABOR)
2006-CA-000545
PUBLISHED: AFFIRMING
PANEL: TAYLOR PRESIDING; DIXON AND MOORE CONCUR
COUNTY: FAYETTE
DATE RENDERED: 8/10/2007
CA affirmed Defendan't conviction for Criminal Mischief in the First Degree, a violation of KRS 512.020. Here, Brown was caught breaking into a vehicle by cutting a hole into its convertible top. Proof at trial revealed the cost of the convertible top to be less than $1,000; however the Commonwealth secured a conviction by demonstrating the labor cost would exceed the threshhold $1000 requirement. KRS 512.020 clearly requires proof of damage to property in the amount of at least $1,000.00 in order to sustain a conviction upon first-degree criminal mischief. KRS 512.020 specifically utilizes the term “pecuniary loss.” Pecuniary loss is generally defined as “[a] loss of money or of something having monetary value.” Black's Law Dictionary 1152 (7th ed. 1999). CA held that the cost of labor to install the convertible top is “something having monetary value.” Accordingly, the cost of labor represents a proper element of pecuniary loss under KRS 512.020.
Because the General Assembly directed that registration is mandatory in cases in which the victim is a minor, neither the Commonwealth nor the trial court had authority to relieve Carpenter of the requirement. Finally, CA ruled that because Carpenter entered a valid plea, the judgment entered on the plea must be considered final and thus the trial judge lost jurisdiction to rule upon his motions ten (10) days after entry of that judgment. CR 59.05.
Note: This decision adds sex offender registration to the list of collateral matters that evidently need not be discussed with a defendant prior to a plea. See Commonwealth v. Fuartado, 170 S.W.3d 384 (Ky. 2005) - designating deportation consequences as a collateral matter.
Digested by Scott C. Byrd
CODISPOTI V. PRESTON HIGHWAY MOTORS, INC.
This appeal dealt with an exclusion to coverage for injury to an employee of the "insured." The circuit court entered summary judgment holding that an employee exclusion in the
liability policy precluded coverage to Joseph M. Codispoti.
Eric Jameson was driving a vehicle with the permission of the owner
Codispot who also was the owner and president of Preston Highway
Motors. Jameson was an independent contractor and, therefore, not an employee of Preston Highway
Motors, who was hired to drive a Preston Highway Motors car to
Indianopolis for an auction. Jameson was driving, and Codispoti was
a passenger, when Jameson fell asleep, and wrecked the car injuring
himself and his passenger Codispoti.
The vehicle was insured under a policy with First Financial Insurance naming Preston Highway Motors as the named insured
who did that pursuant to the terms of the policy, Jameson was a permissive user of the vehicle and, therefore, an insured. However,
the policy had an exclusion precluding coverage to indemnify injuries to
an employee of the owner.
This insurance does not apply to any of the following:
EMPLOYEE INDEMNIFICATION AND EMPLOYER'S LIABILITY
“Bodily injury” to:
a. An “employee” of the “insured” arising out of and in the course of:
(1) Employment by the “insured”; or
(2) Performing the duties related to the conduct of the “insured's” business.
Codispoti argued that the exclusion did not apply because he was not an employee of the insured Jamison. The Court of Appeals found that it did not matter, because Condispoti was an employee of Preston Motors, who was also an insured. Therefore, the exclusion applied.
COA also held the exclusion was not void against public policy rejecting
Codispoti's argument that it eliminated insurance coverage for Jameson. The Court of Appeal found this argument lacking as well. It noted that the same exclusion was previously found not to violate public policy in the case of Brown v. Indiana Insurance Co., 184 S.W.3d 528 (Ky. 2005).
Although the COA recognized the factual distinction between Brown and the present
case because unlike in Brown where the accident victim and the tort-feasor were
both employees of the named insured, Jameson was not an employee of the
named insured. This made no difference to the outcome, as they affirmed the summary judgment.
By Michael Stevens
ESTATE OF JEAN C. "FOX" DEMOISEY V. RIVER DOWNS INVESTMENT CO.The DeMoisey Estate appealed circuit court order affirming a judgment and order of the Campbell District Court. The Estate contended the District Court improperly concluded the Estate failed to demonstrate a good reason for prosecuting an appeal, and that the Executor therefore was not entitled to recoup costs and attorney fees associated with the appeal. That appeal arose from an action instituted by River Downs Investment Company (“River Downs”) to recover payment for a gambling debt. COA held the appeal at issue was taken for good cause, and reversed the order from which the Estate appeals
Jean C. “Fox” DeMoisey died on December 27, 1998. Approximately two weeks prior to his death, he signed a promissory note in favor of River Downs in the amount of $34,510.80 to cover gambling losses incurred by decedent DeMoisey’s use of a telephone betting account. J. Fox DeMoisey, an attorney and son of Jean, was appointed Executor. River Downs sent a written claim to the Estate seeking recovery under the note. The Estate took no action on the claim other than to request further information.
J. Fox DeMoisey sent a letter to River Downs disallowing the claim as void pursuant to KRS 372.010 which declares any claim for gambling debts void as against public policy. District court rejected disallowing the claim finding the Executor presented no evidence to justify or explain the Estate’s failure to file a timely notice of disallowance for a period of over three years. The Estate unsuccessfully appealed the ruling which was eventually affirmed by the COA in a separate appeal which held that the gambling debt - which was not recoverable by operation of KRS 372.010 -became a valid and enforceable debt when the Estate failed to disallow it within 60 days as required under KRS 396.055(1).
Sometime thereafter, the Executor filed a motion in District Court seeking payment of costs and attorney fees incurred prosecuting the appeal. River Downs filed exceptions to the motion, after which a hearing on the matter was conducted. River Downs argued that the payment of attorney fees was not justified because no benefit inured to the Estate from the Executor’s appeal. The district court concluded there was no reasonable basis for prosecuting an appeal and incurring costs and legal fees, relying on White v. White, 883 S.W.2d 502 (Ky. App. 1994), in determining that the Executor did not - in the language of White - pursue the appellate process “with a good reason.”
White established a very low threshold for distinguishing between legitimate estate actions meriting entitlement to costs and attorney fees, and illegitimate actions not meriting the same. In order to justify the action - and entitle the Executor to costs and fees - an estate need not even show that it benefited from the action. However, where no benefit is shown, costs and fees are not recoverable “unless there appears some good reason” for prosecuting the action.
The Executor arguably had a fiduciary duty to defend against a void claim even if that defense was not timely, and the COA added the issue of whether a void claim could be transformed into an enforceable one by inaction on the part of an Executor was novel and of first impression. Accordingly, w the appeal process below satisfied White, and that the District Court erred in failing to so rule.
By Michael Stevens
Masterson appeals a directed verdict granted to Gloria
George. Masterson and George enter into a 2 year lease of George's
farm with an option to purchase. Lease expired in 1992 but Masterson
continued to holdover. Masterson claims he exercised the option to
purchase the property in 1994 by oral notice to George's two sons (once in
June and another time in December). In 1995 George's son advised
Masterson that they were going to auction the farm and he was welcome to
bid on the farm. Masterson did not pay rent for 1995 (due in January
1996). In April 1996 George' son expressly refused to honor
Masterson's previous requests to purchase the farm. Masterson sued.
Issue is whether option was viable in 1994 or 1995 and whether Masterson
effectively exercised the option.
Trial court erred by ruling that the option was not viable due to: (1) the
option to purchase was severable from the other terms of the lease and was
not extended during the holdover terms and (2) Masterson materially
breached the lease by failing to name Gloria as "loss payee" on
a liability insurance policy. The lease gave Masterson the right to
purchase the farm "at any time during the continuance of this
Lease." The Court of Appeals said that language can only
be interpreted as granting the option not only at any time during the
original term of the lease but also at any time during the
continuance of the lease. As for not naming George as the loss
payee, George waived default (not receiving notice of the insurance
policy) by accepting rent payments.
Whether the notice by Masterson to George's sons was sufficient for
exercising the option is a question of fact for the jury to determine.
DIGESTED BY PAUL C. O'BRYAN
Both sides appealed TC's affirming part of the KBTA's (KY Board of Tax Appeals) denial of tax exempt status to a portion of property owned by the Church and remanding the matter to the KBTA for additional factual findings. The Church was organized as a non-stock non-profit corporation and had purchased two 5-acre lots that each had a residential home on it in Jessamine Co. with plans to build a new, larger church covering both tracts. The Church leased both homes to non-member individuals to help pay the mortgage, but had carved out a portion of one lot for outdoor church gatherings and a portion of the other lot for a meditation area for use by its members. The Church sought a tax exemption under Section 170 of the KY Constitution, which was denied by the Jessamine Co Bd of Assessment Appeals. The KBTA later upheld the non-exempt status finding. On appeal, the TC held that the portions of both lots used for church functions was tax exempt while the remaining portions with the leased homes was not.
The COA began by noting that it may not substitute its own judgment for that of the KBTA on any question of fact. The COA analyzed the 1990 amendment to Section 170 of the Constitution, and determined that it broadens the class of properties that may beheld by a religious institution and not be subject to an ad valorem tax. The COA ruled that the KBTA and TC's narrow interpretation of the amended Section thwarted the intent behind the amendment, and attempting to construct different degrees of occupancy would create a "Gordian knot." Due to the lack of evidence that the Church intended to use the property for investment or to construct anything other than a church, the COA concluded that the entirety of both lots was exempt from taxation.
By Chad Kessinger
GREEN
V. OWENSBORO MEDICAL HEALTH SYSTEM, INC.
TORTS: MEDICAL NEGLIGENCE (EXPERT TESTIMONY)
2005-CA-001422
PUBLISHED: AFFIRMING
PANEL: NICKELL PRESIDING; ABRAMSON, PAISLEY CONCUR
COUNTY: DAVIESS
DATE RENDERED: 8/10/2007
CA affirms entry of SJ for defendants in this medical negligence case.
Appellant fractured her finger and underwent surgery. All went well with her hand, but upon awaking appellant found her four front teeth loose, misaligned & bloody. She sued the surgery practice, the facility and the anesthesiologist. By interrogatory, the facility asked the name of any expert witness and whether appellant had obtained an expert opinion as to the applicable standard of care. With no response, it filed a motion to compel; an order compelling followed. She responded, but with no expert's name. She was again directed to disclose by a date certain. She eventually named her regular treating dentist as her expert, but his testimony was to be limited to pre- and post-operative condition and his opinion that the condition was from trauma and not disease.
Defendants eventually sought SJ for failure to name an expert on the applicable standards of care. The TC denied, giving appellant 90 more days to produce an expert. No expert was produced and SJ was entered against appellant. She appealled, arguing abuse of discretion in that a jury could infer negligence on these facts.
CA holds that whether
expert testimony is necessary is in the TC's discretion and, as the
CA does not believe the average layperson has sufficient medical knowledge
about anesthesia procedures, no abuse of discretion is found.
Digested by John Hamlett
CARMICAL
V. BULLOCK
TORTS: DOGS, STATUTORY LIABILITY, AND COMPARATIVE NEGLIGENCE
2006-CA-001595
PUBLISHED: AFFIRMING
PANEL: WINE PRESIDING; COMBS AND NICKELL CONCUR
COUNTY: MADISON
DATE RENDERED: 8/10/2007
Appellant challenges TC's jury instructions in that he felt the TC should only have included a strict liability instruction consistent with KRS 257.275(1) (now KRS 258.235(4)) on his personal injury claim stemming from a dog attack on Appellee's property. Appellant argued that this statute and Palmore's model instructions in dog bite cases call only for a strict liability instruction. The COA disagreed, noting Kentucky courts have previously held this statute does not impose strict liability on a dog owner. The COA determined that an owner's liability should be subject to comparative negligence, which it found consistent with the law of other states. The COA ultimately found the TC's instruction to the jury to be consistent with Kentucky legal precedent on dog bite cases.
By Chad Kessinger
COLEMAN
V. BEE LINE COURIER SERVICE INC.
TORTS: SETTLEMENTS (INDEMNITY AND PIP)
2006-CA-000994
PUBLISHED: AFFIRMING
PANEL: WINE PRESIDING; COMBS AND ACREE CONCUR
COUNTY: JEFFERSON
DATE RENDERED: 8/10/2007
The COA held that a release and indemnification agreement settling a personal injury claim from a car accident against a self-insured employer and its employee which included the plaintiff indemnifying the defendant-employer for any medical expenses it paid was valid and enforceable in spite of the purpose of the Kentucky Motor Vehicle Reparations Act.
In this car accident, Coleman was hit and injured by Huff, an employee of Bee Line and while in the course of his employment by Bee Line. Coleman’s vehicle
suffered property damage which was settled between Coleman and Bee Line without the aid of counsel.
Bee-Line and Coleman settled the injury claim for $6,500. Coleman had received PIP benefits from Nationwide his auto insurance company for $5,737 who later submitted it's subrogation claim directly to the self-insured Bee-Line who then requested Coleman to indemnify it pursuant to the agreement. When Coleman refused, Bee Line negotiated a settlement in the amount of $4,737 (after deducting the "intercompany" offset), which it paid to Nationwide. Bee Line sought indemnification from Coleman, relying on the language set out above in the Release signed by Coleman. Coleman refused and Bee Line filed suit for indemnity. Coleman counterclaimed alleging violation of the Fair Claims Settlement Practice Act, infliction of emotional distress and tortious bad faith.
Issues were raised on discovery and the taking of evidence prior to the grant of summary judgment by the trial judge whoexplained that because an AOC-280 form had been filed and because nearly five months had passed since that notice was filed, she believed discovery for those issues had been completed. Further, she explained the filing of an AOC-280 form triggered an inquiry from the Administrative Office of the Courts (“AOC”) as to why there had not been a decision after ninety days.
Bee Line argues that the Release signed by Coleman clearly provides that she must indemnify Bee Line against any third party, including the reparations obligor for PIP benefits. Coleman defended against the suit, claiming it was never the intention of the parties that she should be responsible for any reimbursement claims for PIP benefits made by her insurance carrier, Nationwide.
The COA's analysis turned on the interpretation of the language in the Release - “The undersigned agrees to hold the released parties harmless and indemnify them from any claims asserted by any third parties or lien holders, including but not limited to, all medical providers and any other insurance carriers against the proceeds of this settlement.”
A reparations obligor has no claim against the adverse driver but a subrogation claim against the liability insurer or, in this case, the self-insurer Bee Line. Nationwide, as a reparation obligor, has a separate right of recovery for PIP amounts expended on behalf of Coleman and may intervene in Coleman’s tort action against the tortfeasor, Bee Line, in order to assert a direct claim against the tortfeasor’s insurer, which is again, Bee Line. It is well established that a policy of insurance cannot abrogate a mandatory provision of the Motor Vehicle Reparations Act. State Farm Mutual Automobile Insurance Co. v. Mattox, 862 S.W.2d 325 (Ky. 1993).
The release/indemnification agreement signed by Coleman does not compromise Nationwide’s right to assert a basic reparation benefit subrogation claim against the tortfeasor or its insurer. Rather, it shifts the responsibility for paying the claim from Bee Line to Coleman. The court found while Coleman had no statutory obligation to reimburse Nationwide for its PIP payments, she did have a contractual obligation to reimburse Bee Line for the amounts it was forced to expend to settle Nationwide’s claim.
Contrary to Coleman’s argument, nothing in the Release would suggest indemnification is limited to health care providers, Medicare or Medicaid. The Release was the contract, whereas the faxed letters were the negotiations between the parties. It was incumbent upon Coleman and her counsel to reject the Release if it did not accurately portray the terms of their agreement. She was free to refuse to sign the Release and the parties could have proceeded with the lawsuit.
Bee Line agreed to pay Coleman $6,500 and Coleman agreed to indemnify and hold harmless Bee Line against any third party claims. Those terms in the Release are clear and unambiguous. Under the peculiar facts of this case, COA concluded summary judgment in favor of Bee Line should have been granted. Because the trial court properly granted Bee Line’s motion for summary judgment, it is not necessary to address Coleman’s motion for summary judgment or her motion to dismiss the counterclaims. The order denying Coleman’s motion to reconsider as entered by the Jefferson Circuit Court are affirmed.
By Michael Stevens
The Administrative Law Judge ruled that the employee's wages included profit sharing, because these were part of "money payments for services rendered". Reversing, the Court of Appeals relied on a Minnesota case (also against Ford) which held that because profit sharing does not reflect earning power, it is not included as part of the average wage of the employee. This makes sense in the context of the triple and double multipliers, since a higher wage post-injury should reflect a lesser occupational disability, not increased company profits.
Digested by Peter
Naake
In 2002, the Morrises sought a zoning amendment for their entire property to allow for four lots per acre (“RB” zoning) (“2002 Amendment”). The Franklin County Planning Commission recommended denial of the application, and the Fiscal Court denied it in part because of plans to widen the highway in front of the property and the lack of sewer availability.
The Morrises sought a second zoning amendment in 2003 (“2003 Amendment”) asking to re-zone only a portion of its property to RB. The Planning Commission held a public hearing in which there was testimony that the widening of the highway was completed, the property was an example of infill because the area around it was already developed RB, there was a shortage of single-family lots with sewers in the county and sewers had been put into service in the area. After the hearing, the Planning Commission again recommended denial. However, the Fiscal Court approved the proposed 2003 Amendment to RB.
Neighboring property owners appealed. The circuit court reversed the zoning change approval. Although the circuit court rejected the argument that the 2003 Amendment was barred by res judicata or collateral estoppel due to the denial of the 2002 Amendment, it held that the Fiscal Court’s findings when approving the 2003 Amendment were not supported by substantial evidence because there was no evidence that the amendment agreed with the Comprehensive Plan, that there were changes in the area not anticipated by the Comprehensive Plan or that the existing zoning was no longer appropriate.
The Morrises and the Fiscal Court appealed. The court of appeals agreed with the circuit court that the 2003 Amendment was not barred by collateral estoppel or res judicata based on the denial of the 2002 Amendment. The court ultimately reversed the circuit court, however, finding that there was substantial evidence supporting the Fiscal Court’s approval of the 2003 Amendment. Specifically, the court found that the circuit court improperly considered the reasons for denial of the 2002 Amendment in determining whether the findings supporting the 2003 Amendment were supported by substantial evidence because the earlier findings were not binding on the Fiscal Court. The court stated that while there was evidence against allowing the zoning amendment, when viewed as a whole, the evidence supported the Fiscal Court’s decision.
Digested by Sam Hinkle
NOT PUBLISHED (COA)
SCHENKEL
& SCHULTZ, INC. V. MIDWEST CONSTRUCTION CO.
BUSINESS LAW: SETTLEMENT AGREEMENT AS CONTRACT AND "FOUR CORNERS OF
THE EMAIL"
2006-CA-000149
NOT PUBLISHED: 99
DATE RENDERED: 8/10/2007
MEFFORD
V. SWINNEY
CIVIL: STATUTE OF LIMITATIONS, FRAUD
TORTS: FIDUCIARY DUTY ISSUES IN ESTATE
2006-CA-001392
NOT PUBLISHED: 95
DATE RENDERED: 8/10/2007
SMITH
V. FERGUSON
CRIMINAL: PRISON DISCIPLINARY PROCEEDING
2006-CA-001204
NOT PUBLISHED: 98
DATE RENDERED: 8/10/2007
WASHINGTON
V. COM.
CRIMINAL: 11.42
2006-CA-002190
NOT PUBLISHED: 81
DATE RENDERED: 8/10/2007
KIRBY
V. COM.
CRIMINAL: PAROLE, VIOLENT OFFENDER
2005-CA-002485
NOT PUBLISHED: 170
DATE RENDERED: 8/10/2007
BLYTHE
V. COM.
CRIMINAL: EVIDENCE (URINE TEST ADMISSIBILITY)
2006-CA-000023
NOT PUBLISHED: 87
DATE RENDERED: 8/10/2007
TUMEY
V. TUMEY
FAMILY LAW: PROPERTY DIVISION; CONTRACT FOR DEED; SS BENEFITS
2005-CA-001766
NOT PUBLISHED: 101
DATE RENDERED: 8/10/2007
C.R.S.
V. COM.
FAMILY LAW: JUVENILE COMMITMENT
2006-CA-001989
NOT PUBLISHED: 94
DATE RENDERED: 8/10/2007
P.W.
V. COM.
FAMILY LAW: TERMINATION OF PARENTAL RIGHTS
2006-CA-002516
NOT PUBLISHED: 86
DATE RENDERED: 8/10/2007
MOORE
V. GROSS
INSURANCE: BRB, SOL, AND CLAIMS "ACTION" INCLUDES MAKING CLAIM
OR REQUEST
2006-CA-002039
NOT PUBLISHED: 81
DATE RENDERED: 8/10/2007
MCDONALD
V. PARROTT
PROPERTY: BOUNDARY LINE DISPUTE AND AGREED USE OF SURVEYOR
2006-CA-001382
NOT PUBLISHED: 80
DATE RENDERED: 8/10/2007
T.J.
MAXX V. BLAGG
WORKERS COMP: UNIVERSITY EVALUATORS
2006-CA-002640
NOT PUBLISHED: 95
DATE RENDERED: 8/10/2007
RINKERS
MATERIALS CORP. V. BRACHER
WORKERS COMP: DESIGNATED EVALUATORS, ALJ FACT FINDER
2007-CA-000435
NOT PUBLISHED: 109
DATE RENDERED: 8/10/2007
Thanks to Scott Byrd, John E. Hamlet, Cherry Henault, Sam Hinkle, Chad Kessinger, Hays Lawson, J. Russell Lloyd, Michelle Eisenmenger Mapes , Peter Naake, Paul O'Bryan, Bryan Pierce, Paul Schurman, Michael Stevens and James Worthington for their efforts in digesting Kentucky's appellate decisions.