March 7, 2008 -  KENTUCKY COURT OF APPEALS DECISIONS (2008:12)

PUBLISHED (COA).

KENTUCKY SCHOOL BOARD ASSOCIATION V. JEWELL
INSURANCE:  PIP, WORKERS COMPENSATION AND SUBROGATION
2006-CA-001995
PUBLISHED: AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
PANEL: HENRY PRESIDING; COMBS, ACREE CONCUR
COUNTY: WHITLEY
DATE RENDERED: 3/7/2008

This case has an unsual procedural history since the first decision was not published, then following a request for reconsideration by the COA, the request was granted and a revised opinion published!  A motion for discretion review was filed on 4/7/2008 with the Supreme Court.

This case involved a claimant injured in the scope of employment who settled her disputed workers compensation claim for $25,000 and was assigned the subrogation rights in exchange for her future medicals.  She then settled for the $25,000 policy limits of the liability carrier and pursued a claim for underinsured motorist benefits (UIM).  A verdict was received in excess of the liability limits, but a post-verdict dispute arose on the applicability of the offsets for workers compensation and "payable" PIP as it applied to the UIM benefits.

Jewell had received $17,734.55 in workers compensation benefits, and her health insurer had also paid some of her medical bills as there was a dispute over a pre-existing condition such that $8,307.45 of her workers compensation settlement went to pay her health insurer for medical bills (which had not been paid by PIP).  Workers comp carrier assigned Jewell its third party subrogation rights.

With regard to her personal injury claim, she settled with tortfeasor for policy limits of $25,000.  PIP had paid $333.45 in benefits for lost wages not covered by workers compensation and then proceeded directly against KSBA for underinsured motorist benefits.

The jury awarded a total of $101,102.77 which included $70,558.77 for medical expenses, $5,544.00 for lost wages, and $25,000 for pain and suffering.  The trial court applied a $25,000 offset from the liability settlement with the tortfeasor and the $333.45 paid by PIP.

The UIM carrier sought an additional offset for the $26,826.55 in past medical bills and wages and the remainder of the "payable" PIP of $19,666.55 (the policy provided for $20,000 in basic PIP rather than the standard and usual $10,000).  The UIM carrier's position was that failure to award an offset would result in a double recovery per Cinn. Ins. Co. v. Samples.

The COA agreed with the UIM carrier and held a payment made in performance of a contractual obligation [by a UIM carrier ] is not a payment of “damages.”  Therefore, the rights which Jewell gained in her settlement agreement do not include subrogation rights against the KSBA (UIM), since the workers ’ compensation carrier had no subrogation rights against the UIM carrier. A workers ’ compensation carrier cannot assign a subrogation right that it itself does not possess.

COA also rejected the argument that the claimant was entitled to an offset per AIK v. Minton such that Jewell's attorneys' fees and expenses of $30,307.72 plus legal expenses of $4,781.73 should be deducted from the offset claimed.  The COA concluded the last sentence in KRS 342.700(1) was a limit on the subrogation right and recovery from the responsible third party - Minton did not apply here.

With regard to the PIP offset for the full $20,000 that was "payable", the COA held that due to the presence of the word “payable ” in the statute, Kentucky courts have concluded that the full amount of BRB payable may be offset against a claimant ’s damages, whether or not a claimant actually received the BRB.

The COA then affirmed the $25,000 deduction from the liability limits, and upon remand the lower court shall deduct from the jury verdict workers compensation benefits of $26,042 for past medical expenses and $784.55 for lost wages, and $20,000 for payable basic reparation benefits.

Comments:  This decision has holes in it.  First, the workers compensation settlement included payment of medical bills paid by health insurance rather with those amounts billed versus paid were not reflected in this decision (not to mention the value of that subrogation payment may have been compromised as part of the settlement of the workers compensation claim).  Second, the workers compensation subrogation amount was not reduced to reflect Minton as it applied to the underlying $25,000 liability settlement and any pro rata division of that recovery as it applied to the claimant and the workers compensation subrogor (even though this right of subrogation was assigned it still needed to be reflected in that portion of the recovery against the tortfeasor).  Third, no mention was made in the decision regarding the MRVA provision that workers compensation is primary and thus PIP would not be "payble" at all per statute.  Fourth, is PIP still "payable" even after the statute of limitations for a claim has expired?  Fifth, the "payable" portion of PIP and the applicable case law refers to "basic reparation benefits" and not just reparation benefits such that applying the $20,000 of "basic" reparation benefits in the insurance policy is questionable. 

This case has unanswered questions and needs to be reviewed by the Supreme Court to answer these questions.

Although all are in agreement that the law provides for no duplicate payments, there is an obvious disagreement and potential hardship in calculating the amount of that payment in light of subrogation, assignment, disputed claims, and PIP that will never  be payable per SOL and WC. It is one thing to assert that a claimant should not be paid twice; but it is an entirely another matter to take money away from the claimant and allow the contractual UIM carrier to reap the benefit of a phantom PIP payment and no reduction of the subrogation claim's value per Minton.  "Payable" within the context of workers compensation, statute of limitations, and the actual circumstances needs to be cleared up.

Digested by Michael Stevens

CHARLES D. WILLIAMS AS ADMINISTRATOR FOR THE ESTATE OF LESLIE DUNAGAN, ET AL. V. PRIMARY CARE ASSOCIATES OF SOUTHERN KENTUCKY, PLLC, ET AL.
 TORTS:  MEDICAL NEGLIGENCE
CIVIL PROCEDURE: POST-VERDICT PROCEEDINGS - ABILITY TO ORDER MISTRIAL AFTER JURY RENDERS VERDICT
 2006-CA-002610
PUBLISHED: REVERSING AND REMANDING WITH DIRECTIONS
PANEL: TAYLOR PRESIDING; THOMPSON, BUCKINGHAM CONCUR
COUNTY: BARREN
DATE RENDERED: 3/28/2008

The estate and the decedent's parents appeal a judgment entered in favor of Appellees following a second jury trial on their medical malpractice claim after the first trial resulted in a mistrial being ordered by the TC. Appellants' claims stem from treatment the 14 year-old decedent received from Appellees after being released from UofL Hospital subsequent to being accidentally shot in the neck with a BB gun by her younger brother. The day after her release, the decedent began to experience shortness of breath and was taken by her mother to Appellees' office for examination. Appellee Branstetter was a licensed nurse at the medical office who saw decedent and focused on her neck injury as being the cause of the breathing problems. The girl was released home and the following day she was taken to the ER with even more serious problems, and was transferred again to UofL where she was deemed brain dead upon arrival. It was later determined that the cause of death was an abdominal stress ulcer that was not diagnosed during treatment with Appellees. Suit was filed and the case proceeded to a first trial where the jury found the nurse to be 100% liable and awarded the requested funeral expenses and medical expenses, but nothing for future earnings impairment. Both parties objected to the jury decision, with Appellees arguing that the jury should be sent back into deliberations to reconsider the impairment issue again. The TC did just that, and after 25 minutes the jury came back with a new impairment award of $800,000. Appellees then moved for a mistrial, and the TC granted it. Tried a second time nine months later, this time a defense verdict was returned and judgment entered accordingly. The estate appealed.

On appeal, Appellants raised 3 arguments: 1) TC abused its discretion in granting the mistrial after the jury had already returned its final verdict; 2) TC erred by failing to restrict the second trial to the issue of damages only since liability had already been properly assessed against the Appellees in the first trial; and 3) TC committed various procedural and evidentiary errors during the course of the second trial. The COA focused its entire analysis on whether the TC had authority to grant the mistrial, and cited law from other jurisdictions that a mistrial (which is equivalent to no trial) is inappropriate to grant after the jury has already returned its verdict. The COA then looks to Kentucky statutes and civil court rules dealing with procedural aspects of rendering a verdict in the state and the post-trial motions and remedies available to parties after the jury's verdict. At the end, the COA concluded that declaring a mistrial after a final, valid verdict has been rendered was an abuse of the TC's discretion and therefore reversible error. The correct procedure is for the TC to enter judgment on the verdict and then allow either party to challenge the sufficiency of the verdict through a JNOV motion or motion for new trial.

The COA nevertheless went on to reject the 2 bases cited by the TC for granting the mistrial (injection of liability insurance reference by one of Appellants' witnesses and short time jury deliberated again on the impairment claim), first holding that the witness' reference to having offered opinions in other cases for his own "malpractice company" did not violate KRE 411 and then finding that the mere 25-minute deliberation time by the jury was not a proper basis for a mistrial and that doing so amounts to an abuse of discretion on its face. The COA went even further by noting that neither of these bases reasonably supports a post-judgment motion for JNOV or new trial either. In conclusion, the COA reversed the TC's judgment for the Appellees and directed the TC to render judgment on the first, valid jury verdict. The COA also held that should the TC determine that a new trial is warranted upon motion thereafter for any of the grounds provided for in CR 59.01, the new trial shall be limited to damages as pertains solely to the future impairment claim.

By Chad Kessinger, Schiller Osbourn Barnes & Maloney 

HOPPE V. TALLENT
FAMILY LAW:   Child Visitation, Allegations of Child Sexual Abuse
 2007-CA-000104
PUBLISHED: AFFIRMING
PANEL: NICKELL PRESIDING; CLAYTON, GRAVES CONCUR
COUNTY: CLINTON
DATE RENDERED: 3/7/2008

Father appealed the TC’s denial of his motion for immediate reinstatement of visitation with his daughter, K.H. 
  
During the parties’ divorce settlement negotiations in 1997, the mother alleged that the father sexually abused K.H. The record is silent as to the nature of the allegations and whether the allegations were substantiated. The separation agreement granted joint custody to the parties, with the mother being appointed primary residential custodian. The father then had visitation with K.H. every other weekend and two hours on every other Wednesday until 2004. 
  
Without the father’s knowledge, the mother had K.H. see therapists, the Sensings, in 1998. The Sensings noted that K.H. may have been traumatized by a male. They did not observe any obvious signs of sexual abuse, but could not rule out the possibility. Their recommendation was for K.H. to continue visitation with her father, but suggested that a female relative be present and that the visits increase as K.H. grew more comfortable with her father. 
  
In 2003 the mother alleged that K.H. became anxious before visits with her father. Her pediatrician found no physical explanation for the anxiety. In 2004, Sally Sensing met with K.H. again. K.H., eight years old at this time, told the therapist that her father made her uncomfortable and she became physically ill before each visit. K.H. also alleged that her father embarrassed her, slept in bed with her, and took pictures of her naked in the shower (court noted that child was standing in the shower behind the curtain, modeling a shower cap, with a wide smile on her face), washed her inappropriately during baths, would drink and drive with her in the car, and left her in the car alone for 25 minutes while he shopped for a television. Sensing recommended that the visitation continue, but with professional supervision until the causes of K.H.’s anxiety could be fully assessed. Sensing did not report any abuse to authorities. 
 
That same month, the mother motioned for the court to suspend or alter the father’s visitation. The father objected, and the mother stopped the visitation on her own. As a result, the father asked that the mother he held in contempt of court. 
The DRC held a hearing in February 2004. After hearing testimony from the Sensings, Dr. Fane, a clinical psychologist who evaluated the father, both parties, maternal and paternal grandmothers, K.H.’s teacher, and the father’s ex-wife, the DRC recommended that visitation be suspended until the mother, father, and K.H. could be evaluated by one professional. 
 
The evaluation by Feinberg & Associates revealed assets and deficits in the parenting of both parties. No allegations of sexual abuse were revealed, and Feinberg recommended that the visitation resume. As a result the TC ordered both parents and K.H. to begin counseling with Ruth Sutton, another therapist. When K.H. learned that she was to see Sutton to facilitate visitation with her father she became upset and claimed that her father had sexually abused her. Sutton reported the allegations of abuse to authorities. 
K.H. told the CPS worker, Guffy, of the incidents of sexual abuse. The mother confirmed to Guffy that K.H. had told her of the incidents. The maternal grandparents also confirmed that K.H. had told them of incidents of abuse by her father. Since the father was living in Tennessee and that is where the abuse allegedly took place, Guffy filed a report with the police in TN. 
 
In December of 2004, K.H. underwent a medical exam, however during the exam neither K.H. or her mother alleged that any inappropriate physical contact had occurred. The results of the exam revealed no abnormalities, but could not rule out the possibility of abuse. 
 
Sutton continued to see K.H. until January 2006. The father had not heard from Sutton by December 2004, so he moved the court to reinstate visitation. The court set a hearing for January 2005, and planned on interviewing the child. In January 2005, the TN authorities wrote the TC a letter informing the judge of their open investigation and stated that if the father was granted access to the child, the authorities would take the child into state custody. The TC cancelled the interview of the child as to not become a witness in the TN criminal investigation. The record is silent as to whether criminal charges were ever filed or pursued against the father in KY or TN. 
In December 2006, a hearing was held at which the father testified and denied the abuse allegations. Sutton also testified. She stated that she believed K.H. and adamantly opposed any contact between K.H. and her father. The TC concluded that it was not in K.H.’s best interests to see her father, since it would endanger her physical, mental, and emotional health. 
 
COA affirmed. TC’s findings were supported by substantial evidence and did not abuse its discretion. However, COA noted that six mental health professionals reviewed the case, and only one of them, Sutton, testified at the hearing. Sutton, who stumbled on cross-examination regarding her own qualifications, was the only one of the six that thought visitation should be stopped. COA also noted that its opinion does not prohibit the father from pursuing future visitation with his daughter. 

Graves, Senior Judge, Concurring Opinion: Judge Graves would have preferred if the TC had interviewed the child. 

Digested by Sarah Jost Nielsen, Diana L. Skaggs + Associates

KENTUCKY EMPLOYERS MUTUAL INSURANCE V. J & R MINING, INC.
WORKERS COMP:  Coverage of owner
2007-CA-001901
PUBLISHED: AFFIRMING
PANEL: DIXON PRESIDING; CLAYTON, GRAVES CONCUR
COUNTY:  WORKERS COMP BOARD
DATE RENDERED: 3/7/2008

Earl Reed, an owner with his wife of J& R Mining, Inc., was killed while working for his company. The insurer, KEMI, contested coverage on the basis that he was an owner and had not elected to be covered by the policy. The Court held that, as an officer of the corporation, he was an employee of the corporation, requiring rejection of coverage filed in Frankfort on a particular form. Since this was not done, and the signature on an exclusion form provided by the insurer was questioned, the Court held that the decedent was covered by workers’ compensation. 

Peter Naake, editor

 

NOT PUBLISHED (COA)

JORDAN V. MURRAY
REAL ESTATE:  Drainage and subservient estates and unreasonable changes to flow
2007-CA-000431
NOT PUBLISHED: 96
DATE RENDERED: 3/7/2008

OWENS V. OHIO CASUALTY GROUP
CIVIL PROCEDURE:  Proper party of insurance company; Rule 11 sanctions for failure to discover appropriate name
2007-CA-000616
NOT PUBLISHED: 104
DATE RENDERED: 3/7/2008

HANEY V. MONSKEY
TORTS:  Qualified immunity and ministerial capacity
2007-CA-000487
NOT PUBLISHED: 86
DATE RENDERED: 3/7/2008

TRAYLOR V. POTTER
CIVIL: Judge required to make findings of fact and conclusions of law in bench trial
2006-CA-001220
NOT PUBLISHED: 82
DATE RENDERED: 3/7/2008

GIBSON V. LEECO, INC.
Workers compensation and "fellow servant" rule precludes common law negligence action against coworker
2006-CA-001640
NOT PUBLISHED: 107
DATE RENDERED: 3/7/2008

MANN V WAGNER
CIVIL PROCEDURE:  Ten day rule for notice before hearing for summary judgment
2006-CA-002329
NOT PUBLISHED: 111
DATE RENDERED: 3/7/2008

HUBBARD V. WEINEL
PROBATE:  Renunciation by surviving spouse and statutory share
2006-CA-001866
NOT PUBLISHED: 95
DATE RENDERED: 3/7/2008

MATHEWS V. COM
2006-CA-000367
NOT PUBLISHED: 105
DATE RENDERED: 3/7/2008

WIMBERLY V. COM
2006-CA-001071
NOT PUBLISHED: 93
DATE RENDERED: 3/7/2008

VELEZ-MARTINEZ V. COM
2006-CA-001190
NOT PUBLISHED: 68
DATE RENDERED: 3/7/2008

CAGLE V. COM
2006-CA-001823
NOT PUBLISHED: 90
DATE RENDERED: 3/7/2008

DEVERS V COM
2006-CA-002049
NOT PUBLISHED: 84
DATE RENDERED: 3/7/2008

FERNANDEZ V COM
2006-CA-002447
NOT PUBLISHED: 118
DATE RENDERED: 3/7/2008

PHON V. COM
2006-CA-002456
NOT PUBLISHED: 95
DATE RENDERED: 3/7/2008

KISER V COM
2006-CA-002549
NOT PUBLISHED: 119
DATE RENDERED: 3/7/2008

PENTECOST V COM
2007-CA-000024
NOT PUBLISHED: 94
DATE RENDERED: 3/7/2008

LOUISVILLE AND JEFFERSON COUNTY METRO GOVERNMENT V. LOUISVILLE METRO POLICE MERIT BOARD
2007-CA-000105
NOT PUBLISHED: 124
DATE RENDERED: 3/7/2008

PEDEN V. NANCE
2007-CA-000115
NOT PUBLISHED: 101
DATE RENDERED: 3/7/2008

VIRES V COM
2007-CA-000164
NOT PUBLISHED: 154
DATE RENDERED: 3/7/2008

BENTLEY V. PARSONS
ELECTIONS
2007-CA-000189
NOT PUBLISHED: 122
DATE RENDERED: 3/7/2008

FINEMAN V. MCCULLOUGH
BUSINESS:  CONTRACTS, CONSIDERATION, NOTES
2007-CA-000224
NOT PUBLISHED: 119
DATE RENDERED: 3/7/2008

TOLLIVER V. TOLLIVER
FAMILY LAW
2007-CA-000275
NOT PUBLISHED: 87
DATE RENDERED: 3/7/2008

AMERICAN TAX FUNDING LLC V. SAWYERS
REAL ESTATE TAXES AND LIENS, PRIVATE PURCHASERS
2007-CA-000300
NOT PUBLISHED: 94
DATE RENDERED: 3/7/2008

JONES V. WITT
2007-CA-000404
NOT PUBLISHED: 132
DATE RENDERED: 3/7/2008

BOWLING V. COM
2007-CA-000531
NOT PUBLISHED: 91
DATE RENDERED: 3/7/2008

SCHRECKER V. SCHRECKER
FAMILY LAW
2007-CA-000668
NOT PUBLISHED: 100
DATE RENDERED: 3/7/2008

GLASSCOCK V. COM
2007-CA-000694
NOT PUBLISHED: 102
DATE RENDERED: 3/7/2008

R.L.O. V. COM
2007-CA-000756
NOT PUBLISHED: 98
DATE RENDERED: 3/7/2008

BOLING V. BROCK
FAMILY LAW
2007-CA-000990
NOT PUBLISHED: 79
DATE RENDERED: 3/7/2008

BERRY V. COM
2007-CA-001094
NOT PUBLISHED: 132
DATE RENDERED: 3/7/2008

J.E.S. V. COM
2007-CA-001494
NOT PUBLISHED: 121
DATE RENDERED: 3/7/2008

FIELDS V. COM
2007-CA-001642
NOT PUBLISHED: 58
DATE RENDERED: 3/7/2008

CHRYSALIS HOUSE, INC. V. TACKETT
WORKERS COMP
2007-CA-002316
NOT PUBLISHED: 127
DATE RENDERED: 3/7/2008

 

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