Kentucky Court Report - SCOKY & COAKY

TORTS - Punitive damages, impeachment by employment of witness, pain and sufferering prior to death, voir dire, juror signing verdict: Fuel Transport, Inc. v. Gibson (COA 9/25/2009)

Fuel Transport, Inc. v. Gibson
2008-CA-000969 9/25/09 2009 WL 3047578 Rehearing pending

Opinion by Judge Clayton; Judge Thompson and Senior Judge Lambert concurred. The Court affirmed in part and reversed in part a judgment of the circuit court entered subsequent to a jury verdict in favor of an estate in a wrongful death case awarding compensatory and punitive damages.

The Court first held that the trial court did not abuse its discretion in denying a motion for a new trial based on a claim of juror misconduct. During voir dire, appellants failed to ask a proper question to elicit a response they complained was prejudicially omitted by the juror. Further, the juror did not sign the verdict form awarding compensatory damages. The Court next held that, although appellant failed to exercise reasonable care in failing to fix the coal truck that caused the accident, the failure did not rise to the level of wanton or reckless disregard for others so as to prove the gross negligence necessary for an award of punitive damages. Therefore, the trial court erred in overruling appellant’s motion for a directed verdict on the issues of punitive damages. The Court next held that the trial court properly admitted an affidavit regarding the ownership of the coal truck and the employment of the driver, as it affected the credibility of a key witness. The Court next held that appellants waived the right to challenge the award for pain and suffering when they failed to object to the $2 million limit on possible recovery. Even so, the award was supported by evidence that the deceased had intervals of consciousness until her death. The court then held that appellants’ failure to object to jury instruction until immediately prior to the reading of the instructions to the jury, and failure to request an instruction limitation for “conscious” pain and suffering, waived the issue. The Court finally held that the trial court properly denied appellants’ requests for change of venue.

TORTS - TP Negligence claim and workers comp injury, experts, impaired earning capacity, discovery sanctions: Boland-Maloney Lumber Company, Inc. v. Burnett (COA 9/11/2009)

Boland-Maloney Lumber Company, Inc. v. Burnett
2008-CA-000059 9/11/09 2009 WL 2901206 DR pending

Opinion by Judge Wine; Judges Acree and Stumbo concurred. The Court affirmed on direct appeal and reversed on cross-appeal a judgment of the circuit court entered subsequent to a jury verdict in favor of the injured person in a negligence action involving an injury occurring on a staircase.

The Court first held that the trial court did not abuse its discretion in allowing the matter to proceed to the jury absent expert testimony on the defendant’s duty. The uniformity of stair risers on a stairway is an abundantly apparent standard, even among laypersons, so that anyone could interpret the exceptional foreseeability of risk. The Court then held that the trial court did not err in refusing to allow any apportionment of fault to a subcontractor. The right to apportionment did not extend to the subcontractor that had been determined not to be liable as a matter of law. The Court then held that the trial court had the inherent authority to enforce its orders and therefore, did not err in refusing to grant a motion to allow expert testimony when the defendant failed to disclose the experts after an order was entered that no additional discovery would be allowed. The Court then held that the trial court did not abuse its discretion in allowing testimony from an economic expert concerning the injured person’s earning capacity. Although the testimony was not based on actual earnings at the time of injury, nothing precluded testimony on the impairment to earn money or the use of a “proxy” to do so, where current earnings were not indicative of earning power. The Court then held that the trial court did not err in allowing testimony in violation of an order that the plaintiff’s witnesses could not testify that the stairs violated the Kentucky Building Code. The defendant waived the issue when it failed to object to the testimony at trial, defendant’s counsel brought up the reference to the Kentucky Building Code, and the testimony was not in violation of the order. The Court then held that the defendant’s failure to specifically object to the final written instructions precluded review but even so, although the present case was not a premises liability case, the use of the term “unreasonably dangerous” was often found instructed in cases other than products liability when dealing with an ordinary care standard so that the trial court did not abuse its discretion in including the instruction. The Court finally held that the trial court erred in excluding evidence related to plaintiff’s claim for future prescription medication expenses. Although there was no expert testimony as to the amount of medication required or the likely cost of the medication over the remainder of the plaintiff’s lifetime, the plaintiff entered the yearly cost of the prescription drugs by avowal and the doctors testified that the plaintiff suffered from a seizure disorder which would likely require him to take medication for the remainder of his life. The Court reversed and remanded for a determination on the sole issue of future prescription medication expenses.

TORTS - FELA, SOL, judicial admissions: Zapp v. CSX Transportation, Inc. (COA 9/25/2009)

Zapp v. CSX Transportation, Inc.
2008-CA-001362 9/25/09 2009 WL 3047630 Rehearing pending

Opinion by Judge Taylor; Chief Judge Combs and Judge Nickell concurred. The Court reversed and remanded an order of the circuit court granting a motion for directed verdict for an employer on an employee’s claim under the Federal Employers’ Liability Act (FELA).

The circuit court found that the claim was barred by the statute of limitations. The Court held that the circuit court erred by deeming the employee’s testimony a judicial admission and by usurping the prerogative of the jury to decide a disputed issue of fact - when the statue of limitations was triggered. While the employee testified that his hand symptoms worsened while working in 1999, the circuit court erroneously inferred that the employee knew or should have known that the injury was caused by work duties in 1999.

GOVERNMENT IMMUNITY - Lexington Airport Authority coverered by gov't immunity for Comair crash negligence: Comair, Inc.; and Comair Services, Inc. v. Lexington-Fayette urban County Airport Corporation et. Al (SC 10/1/2009)

Comair, Inc.; and Comair Services, Inc. v. Lexington-Fayette urban County Airport Corporation et. Al
2007-SC-000602-TG October 1, 2009
Opinion by Justice Noble. All sitting; all concur.

The estates of persons killed in a commercial airplane crash sued Comair, the flight operator. Comair then filed a third-party complaint against the Lexington-Fayette Urban County Government Airport Board, the LFUCG Airport Corporation and members of the board in their official capacities alleging negligence in operation of the airport where the accident occurred. The circuit court granted the third-party defendants motion to dismiss, holding they were entitled to immunity. Comair appealed and the Supreme Court transferred the case to its docket from the Court of Appeals.

The Court affirmed, holding that the airport board and airport corporation were both agencies of the LFUCG, exercising a function integral to state government by providing essential transportation infrastructure—and thus immune from suit. In reaching this decision, the Court moved away from the two-pronged test for sovereign immunity set forth in Berns (1: direction and control by central state government; 2: supported by funds from the state treasury).

The Court concluded the Berns test was overly simple and limiting and that it did not lend itself to analyzing municipal entities. Instead, the Court held a preferable approach is a case-by-case analysis of a) the origins of the organization seeking immunity (i.e. state, county, municipal) to determine the level of immunity enjoyed by the “parent” entity; and b) whether the organization exercised a function integral to state government. The Court rejected Comair’s argument that the airport board was engaged in a purely proprietary function—distinguishing providing transportation services from providing transportation infrastructure (terminals, runways, etc.). The Court concluded that the latter was a “quintessentially governmental function.”

TORTS / DAMAGE - Spousal Loss of Consortium claim recognized i Ky: Tina Martin, Administratrix of the Estate of Billie Carol Shreve, Deceased; and Donald Ray Shreve, Individually v. Ohio County Hospital Corporation (SC 10/1/2009)

Tina Martin, Administratrix of the Estate of Billie Carol Shreve, Deceased; and Donald Ray Shreve, Individually v. Ohio County Hospital Corporation
2008-SC-000211 October 1, 2009
Opinion by Justice Noble. All sitting; all concur.

Billie Carol Shreve died after suffering injuries in a car accident. Her estate and surviving spouse brought suit against the hospital under three causes of action: medical negligence, inadequate policies and procedures and violations of the Emergency Medical Treatment & Active Labor Act (EMTALA). The jury returned a verdict in favor of the plaintiffs, which included $250,000 in damages for Mr. Shreve’s loss of consortium for the period of time from the accident until Mrs. Shreve’s death (approximately 5 and a half hours). The Court of Appeals reversed, holding that the hospital was entitled to a directed verdict on the EMTALA claim and that Mrs. Shreve had not lived long enough after the accident to allow for loss of consortium damages since such damages terminated at her death.

The Supreme Court first addressed the loss of consortium issue, noting that at common law, damages terminated at the death of the spouse since the loss would then be covered by a wrongful death suit. However, the General Assembly enacted a loss of consortium claim by statute (KRS 411.145) which creates a cause of action for the spouse, not the estate. The Court noted that the statute is silent as to when the loss terminates. The Court determined that the focus of KRS 411.145 is compensatory in nature. Thus, the Court reasoned—full compensation could not be gained if damages are required to terminate at death. Further, the Court held that to put a value on loss of consortium while a spouse is incapacitated but to then say the loss is worthless after death defies common sense. The Court also pointed out that terminating loss of consortium damages at death provides a “perverse incentive” for tortfeasors to kill their victims instead of leaving them disabled. Lastly, the Court noted that the vast majority of states have statutory or case law providing that loss of consortium damages do not terminate at death. For these reasons, the Court reinstated the jury award and held that it would not impose a limitation on damages where the statute was silent on the matter.

The plaintiffs had also prevailed at trial on their claim that the hospital’s failure to follow EMTALA—the federal act designed to prevent hospitals from “dumping” patients who lack insurance or cannot pay—resulted in delayed treatment which caused Mrs. Shreve’s death. The Court upheld the Court of Appeals’ ruling that the hospital was entitled to a directed verdict on the EMTALA claim—agreeing that all statutory requirements were met. However, the Court held that the trial court’s refusal to grant a directed verdict on the EMTALA claim was harmless since the jury found liability for wrongful death on three theories of causation. Lastly, the Court provided appropriate jury instructions for use in EMTALA claims. These instructions do not include a general negligence instruction, since negligence is not a proper element of an EMTALA claim.

SOVEREIGN IMMUNITY / JURAL RIGHTS: Caneyville Volunteer Fire Department, et al v. Green’s Motorcycle Salvage, Inc., et al (SC 6/25/2009)

Caneyville Volunteer Fire Department, et al v. Green’s Motorcycle Salvage, Inc., et al
2007-SC-000517-DG June 25, 2009
Opinion by Justice Scott; all sitting.

The Greens sued the Caneyville Volunteer Fire Department (CVFD) and it chief in tort, alleging negligence in failing to timely extinguish a fire, causing damage to their property. They also argued that KRS 75.070 and 95.830(2), which purport to provide firefighters and fire departments with immunity from civil liability are unconstitutional. The Circuit Court dismissed the complaint. The Court of Appeals reversed, holding the statutes unconstitutional for violating the jural rights doctrine. The Court of Appeals ruled that by enacting the statutes, the legislature impermissibly extended sovereign immunity. The majority opinion analyzed the roots of the jural rights doctrine and the historic relationship between civil governance and firefighting. Applying the test from Autry, the Court concluded that the CVFD was an agent of the Commonwealth, engaged in the Commonwealth’s work and thus entitled to sovereign immunity. The majority also concluded that the fire chief was afforded qualified official immunity from liability under Autry, since his acts were discretionary in nature, not ministerial.

Justice Venters concurred, contending reevaluation of the jural rights doctrine and sovereign immunity was unnecessary since the original complaint failed to state a claim for which relief could be granted since the fire department owed no duty to the Greens to save their property. Justice Abramson concurred in result only, writing that the city of Caneyville was not a proper party to the case since the fire department was a county-authorized taxing district immune from suit under KRS 75.070. Chief Justice Minton (joined by Justice Schroder and Justice Cunningham) concurred in result only, arguing that the jural rights doctrine is a legal fiction without basis in Kentucky law or history. This minority agreed that the fire chief enjoyed immunity for actions performed within the scope of his employment, regardless of whether the action were mistrial or discretionary—rejecting these distinctions as a “judicial amendment” to the immunity statute. Justice Noble concurred in result only.

INSURANCE - UIM, "Coots" Notice of Tender requirements per KRS 304.39-320: James Malone v. Kentucky Farm Bureau Mutual Insurance Company (SC 6/25/2009)

James Malone v. Kentucky Farm Bureau Mutual Insurance Company
2007-SC-000468-DG June 25, 2009
Opinion by Justice Abramson; all sitting.

After sustaining injuries in a car accident, Malone sued the other driver and Malone’s underinsured motorist carrier (KFB). The tortfeasor’s insurer offered to settle for the policy limits and Malone’s counsel sent a certified letter to KFB indicating Malone was “considering whether to accept” the offer and demanding that, consistent with KRS 304.39-320 and Coots, that KFB either consent to the settlement or preserve its subrogation rights by advancing a check for the amount equivalent to the tortfeasor’s policy limits. KFB responded to the letter, advising Malone’s counsel to notify KFB when his client had made a final decision on the settlement offer from the tortfeasor’s insurer. Malone subsequently accepted the settlement offer and executed a release. KFB then filed a motion for summary judgment which the trial court granted on the grounds that Malone’s UIM claim was extinguished for lack of proper notice to KFB of the settlement. The Court of Appeals affirmed.

The Supreme Court affirmed, holding that KRS 304.39-320 requires notice to the UIM carrier when the injured party “agrees to settle.” Since Malone’s letter merely stated the offer was being considered, there was no agreement in place and notice to KFB was insufficient. The Court rejected Malone’s argument that he had substantially complied with the intent of the statute, noting that the central underpinning of the statute was the existence of a binding agreement to settle between the injured party, the under-insured motorist and the under-insured motorist’s liability carrier. Justice Cunningham (joined by Justice Schroder and Justice Scott) dissented, asserting that the letter satisfied the notice requirements and that the majority was, in effect, adopting a “magic phrase” component. The dissent contended that the majority was focusing solely on the “considering whether to accept” phrase while ignoring the plain meaning of the overall letter. The minority discounted KFB’s response to Malone’s letter saying objective analysis trumped KFB’s subjective interpretation.

TORTS / WORKERS COMPENSATION -- Exclusive remedy, coworkers, contractors and temporary labor: Labor Ready, Inc. and Sylvann C. Hudson III v. Wanda Sue Johnston (SC 6/25/2009)

Labor Ready, Inc. and Sylvann C. Hudson III v. Wanda Sue Johnston
2007-SC-000419-DG June 25, 2009
Opinion of the Court; Justice Abramson not sitting.

Mid-America Auto Auction routinely supplemented its permanent workforce during auctions by ordering temporary employees from Labor Ready, a temporary labor service. During one such auction, Johnston, a permanent employee of Mid-America, was struck by a vehicle operated by Hudson, a temporary employee. Johnston settled her claim for workers’ compensation benefits with Mid-America and then filed suit in tort against Labor Ready and Hudson.

The defendants moved for summary judgment arguing that Hudson was Johnston’s coworker at the time of the accident—thus her sole remedy was workers’ compensation. The trial court granted summary judgment, reasoning that allowing a permanent employee to receive workers’ compensation benefits and to sue a subcontractor in tort would unconstitutionally grant the permanent employee greater rights than a similarly situated temporary employee even though they would both be performing the exact same work. The Court of Appeals reversed.

The Supreme Court affirmed the Court of Appeals and remanded the case back to the trial court, holding that a contractor’s permanent employee may maintain a tort action against a temporary labor service and its employee for an injury that occurred while working for the contractor. The Court concluded that the exclusive remedy provision of KRS 342.690(1) did not legislatively 12 overrule the holding in Dillman that a subcontractor’s employee was not immune from a tort claim by the principal contractor’s employee. The Court also rejected Labor Ready’s argument that Hudson was a loaned employee, since KRS 342.615(4) states that temporary help service workers are deemed to be employees of the temporary agency. Therefore, Johnston and Hudson were not coworkers.

SETTLEMENTS & RELEASES - Hold harmless, indemnity, and applicability to PIP claims: Myanh Coleman v. Bee Line Courier Service, Inc. (SC 5/21/2009)

Myanh Coleman v. Bee Line Courier Service, Inc.
2007-SC-000628-DG May 21, 2009

Opinion of the Court. Justice Abramson not sitting.

Coleman suffered injuries in an accident involving a vehicle owned by Bee Line. She received $5,737 in basic reparation benefits (BRB) from her insurer, Nationwide, before settling with Bee Line for $6,500. As part of the settlement with Bee Line, Coleman signed a release in which he agreed to indemnify Bee Line for all claims “against the proceeds of the settlement.” Nationwide then sought reimbursement of its BRB payment from Bee Line in arbitration proceedings. After agreeing to pay Nationwide $4,737, Bee Line demanded indemnity from Coleman. When she refused, Bee Line filed suit. The trial court awarded summary judgment to Bee Line, holding she was contractually obligated to reimburse Bee Line for the payment. The Court of Appeals affirmed.

The Supreme Court reversed, holding that the language of the agreement limited indemnity to “claims against the proceeds of the settlement” of personal injury tort claims and did not include BRB benefits. The Court declined to address the issue of whether a sufficiently specific agreement to indemnify the tortfeasor for BRB recoupment claims would contravene the purposes of Kentucky’s Motor Vehicle Reparations Act.

Justice Noble (joined by Justice Venters) concurred in result only, contending that the Court should have addressed the “next question” regarding the propriety of tortfeasors extracting BRB recoupment agreements when settling claims. The minority asserted that the legislative intent and public policy behind the MVRA prohibit such agreements.

TORTS; EVIDENCE - Rape shield rule in claim against psychiatric hospital for rape by orderly: Ten Broeck Dupont, Inc. (d/b/a Ten Broeck Hospital) v. Artemecia Brooks (SC 5/21/2009)

Ten Broeck Dupont, Inc. (d/b/a Ten Broeck Hospital) v. Artemecia Brooks
2006-SC-000484-DG May 21, 2009

Opinion by Justice Scott. Justice Abramson not sitting.

Patient sued a psychiatric hospital claiming she was raped by an orderly during her in-patient stay. The jury returned a judgment in the patient’s favor for $2,091,000.

The Supreme Court affirmed in part, reversed in part and remanded for a new trial. The Court held that the trial court erred when it excluded the patient’s medical records as well as her relevant sexual history under KRE 412 (Kentucky’s Rape Shield Law). The Court ruled that the excluded evidence should have been allowed since it was highly probative of the issues of consent and patient’s injuries. The Court determined that the danger of harm to the patient from admitting the evidence did not outweigh the hospital’s need for the probative value of the evidence. 9 The Court also held that the trial court committed reversible error by failing to include a definition of “rape” in its jury instructions. In so doing, the Court reasoned, the trial court did not require the jury to determine whether the sexual conduct was non-consensual— effectively denying the hospital a defense to the patient’s claims.

Justice Schroder (joined by the Chief Justice) concurred in result only, contending that the patient’s sexual history was not relevant to the issue of her damages.