Kentucky Tort Report

Settlements and Releases - Singleton v. Bravo Development Inc. COA 9/21/2007

SINGLETON V. BRAVO DEVELOPMENT INC.
SETTLEMENTS AND RELEASES: 
2006-CA-002163
PUBLISHED: VACATING AND REMANDING
PANEL: ROSENBLUM PRESIDING; MOORE AND STUMBO CONCUR
CAMPBELL COUNTY
DATE RENDERED: 09/21/2007

[CONDENSED SUMMARY: CA vacates and remands dismissal of this class action suit for a restaurant's unlawful practice of "tipping out."  CA holds that the settlement and release, on its face, pertained only to damages under KRS 337.065, not 337.385. Also, the doctrines of exhaustion of administrative remedies and election of remedies do not apply to this case.]

CA vacates and remands dismissal of this class action suit for a restaurant's unlawful practice of "tipping out."

In August 2003, appellant began working as a server at Bravo Development Inc., d/b/a Brio Tuscan Grille in Newport, Kentucky. Servers were required to remit back to the restaurant 3% of their sales. This is called "tipping out" and is unlawful pursuant to KRS 337.065. Appellant complained; management refused to correct the practice. Appellant filed a DOL complaint; DOL investigated and confirmed the unlawful practice. Bravo made an offer of settlement for back wages; appellant rejected it and filed this class action. A reaudit confirmed that Bravo's offer of settlement was too low as significantly more had been withheld from the servers in violation of KRS 337.065. Revised offers were made; appellant accepted. Bravo then sought dismissal of the class action for failure to exhaust administrative remedies; dismissal was granted. The complaint was again prosecuted, seeking liquidated damages and attorney fees under KRS 337.385. This complaint was dismissed on the grounds that appellant had settled his claim and he had failed to exhaust administrative remedies.

CA holds that the settlement and release, on its face, pertained only to damages under KRS 337.065, not 337.385. Also, the doctrines of exhaustion of administrative remedies and election of remedies do not apply to this case.

Digested by John E. Hamlet 

U.S. Sixth Cir. Ct. of Appeals denies state court jurisdiction over structured FTCA settlement per sovereign immunity

Sixth Circuit U.S. Court of Appeals  has held the doctrine of federal sovereign immunity deprives a state court of jurisdiction to approve a transfer of structured-settlement payment rights where the U.S. nominally owns, but has no beneficial interest in, the annuity funding the payments.

TransAmerica v. USA, et al.
Western District of Kentucky at Louisville

COOK, Circuit Judge. Settlement Capital Corporation (“Settlement Capital”) appeals a district court’s order granting summary judgment in favor of the United States on the basis of federal sovereign immunity. We affirm.

This case turns on whether the doctrine of federal sovereign immunity deprives a state court of jurisdiction to approve a transfer of structured-settlement payment rights where the United States nominally owns—but has no beneficial interest in—the annuity funding these payments. If federal sovereign immunity applies, summary judgment should be granted in favor of the government. Cf. Akers v. Alvey, 338 F.3d 491, 497 (6th Cir. 2003). 

Release reserving claims for excess trumped by agreed order dismissing with prejudice "any and all claims"

FORD V. RATLIFF
CIVIL - INSURANCE (Settlement, release, assignment)
2004-CA-000022 PUBLISHED 
AFFIRMING
VANMETER
DATE:  1/13/2006

CA affirms TC dismissal of direct action against insurance company, citing release of tortfeasor.

In this auto collision case, plaintiff settled with tortfeasor, signing a settlement agreement and release (in exchange for policy limits under a Kentucky Farm Bureau policy) that attempted to leave open the option to sue general liability insurer Scottsdale Insurance. An agreed order dismissing "any and all" claims against the tortfeasors, with prejudice, was entered. After, plaintiff amended complaint to include general liability carrier. Carrier moved to dismiss, arguing that, under Kentucky law, plaintiff must file against tortfeasor, not directly against his carrier. Plaintiff claimed he had an executed assignment of rights, but was unable to produce it. Plaintiff moved the court to require plaintiff to sign a new one, which it declined, citing the language of the agreement. Plaintiff cannot proceed against the insurer directly; dismissal affirmed.

COA decision on releasing gov't employee releases gov't in Board of Claims

COM. V. MORRIS
BOARD OF CLAIMS - Jurisdiction (settlement and release of employee)
2005-CA-000370
PUBLISHED   
REVERSING
BUCKINGHAM
DATE:  1/13/2006

A release of the tortfeasor (cabinet employees) for personal injuries constitutes a release of the government in a board of claims action.  The cabinet  was relieved of any liability in connection with the claims due to the claimants having executed releases to its employee, Lancaster. Citing Copeland v. Humana of Kentucky, Inc., 769 S.W.2d 67 (Ky.App. 1989).  The claimants’ settlements with Lancaster inured to the benefit of the employer, the Labor Cabinet, notwithstanding attempts by the claimants in their releases to reserve the right to file claims against the Labor Cabinet.