Kentucky Court of Appeals
Limitations - Professional Liability
Hughes v. Demoisey, ___ S.W.3d ___, 2014 WL 2632504 (Ky.App. June 13, 2014), motion for discretionary review filed September 18, 2014 (2014-SC-560-D).

While the facts of this case are complicated, the facts material to the holding are pretty straightforward. Demoisey's former clients alleged that his negligence caused them to settle the case for an amount other than its value. The Court held that the cause of action accrued on the date that the settlement was agreed to. More importantly, the Court determined that the key date was when the oral agreement to settle for a specific amount even though other terms were to be decided later.

Kentucky Court of Appeals Unpublished
Professional Liability - Child Abuse Reports - Immunity
White v. Norton Healthcare, Inc., 2014 WL 2619973 (Ky.App. June 13, 2014)

Plaintiff brought her daughter to the emergency room reporting that the daughter's behavior was out of control. During the triage by a psychiatric nurse, the daughter reported that her mother hit her with a belt and pushed her scratching her arm. The nurse observed a scratch. When asked, the plaintiff confirmed that she had used a belt to discipline her daughter, reporting that she only responds to physical force. The mother also reported that her daughter may have been sexually abused by the son of a friend and may have had a history of mental illness. The nurse completed a form and contacted Child Protective Services (CPS), but was advised that the on call agent was unavailable and would contact the hospital later. The Emergency Room physician was given a similar history and he noted linear abrasions on the daughter's back, arm and thigh. They concurred in deciding the best course of action would be to admit the daughter to the psychiatric unit for observation.

The following morning the mother tried to remove her daughter from the hospital was not allowed to do so. CPS had still not responded to the notification, so the daughter was put on a 72 hour psychiatric hold. The mother was escorted from the hospital. During a two hour examination a psychiatrist elicited from the daughter that her parents hit her with the buckle less part of a belt up to three times a week. She filed another report with the CPS that evening. The next day a CPS worker interviewed the daughter and released her to her mother, who then removed the daughter from the hospital against medical advice. She then filed suit against all involved.

The trial Court granted summary judgment on the claims based on the immunity provided by KRS 620.050(1). The mother argued tha the immunity did not apply because her daughter was no in imminent danger and placing the 72 hour hold was not authorized by KRS 620.030. The Court held that the facts revealed no indication of bad faith. Bad faith, the Court observed, required proof that the reporter did not subjectively believe he or she was discharging the duties set out by the statute. The Court does not address, however, the rather serious contention that a 72 hour hold is not covered by the statute and thus immunity does not apply. The mother failed to make out a negligence case in any event, so the Court may have considered the issue moot, but the opinion leaves the scope of the immunity confused.

Kentucky Court of Appeals
Insurance - UIM - Owned but Not Scheduled Exclusion
Tryon v. Encompass Indemnity Company, ___ S.W.3d ___, 2014 WL 2536984 (Ky.App. June 6, 2014), motion for discretionary review filed July 3, 2014 (2014-SC-000357-D)

The plaintiff had three vehicle each insured under a different policy. The motorcycle which was being operated at the time of the accident was insured by Nationwide. He also had a Lexus insured by Encompass and an antique vehicle insured by Philadelphia. Each policy afforded underinsured motorist coverage. While Nationwide provided UIM benefits, Encompass and Philadelphia denied coverage, citing an exclusion applying to owned vehicles not listed as covered automobiles. The trial Court agreed with Encompass and Philadelphia, relying on Motorists Mutual Ins. Co. v. Hartley, 2011 WL 474944 (Ky.App. 2011). This panel reversed, finding the exclusion to be violative of public policy.

This panel decided that the case was controlled by two earlier Supreme Court cases, Chaffin v. Kentucky Farm Bureau Ins. Companies, 789 S.W.2d 754 (Ky. 1990) and Allstate Ins. Co. v. Dicke, 862 S.W.2d 327 (Ky. 1993). The Chaffin opinion related to the stacking of uninsured motorist coverage and is thus distinguishable. In the Dickie case, the Chaffin holding was extended to uninsured motorist coverage by a divided Court. In Dickie, the Court reviewed a single policy which provided UIM coverage for two vehicles each with a separate premium. This case might present the Supreme Court an opportunity to clean up this sloppy line of cases, although it is not clear that the Court has any interest beyond the result.

Kentucky Court of Appeals
Immunity - Zoo
Rivera v. Lankford, 2014 WL 2536914 (Ky.App. June 6, 2014)

This opinion deals with multiple claims arising out of single incident at the Louisville Zoo. The Zoo runs several trains, and in this instance the Green train was alleged to have been operated incorrectly which in turn caused it to derail and overturn. Most of twenty nine passengers sustained some type of injury, many of whom settled before this appeal. This panel sees immunity as much a much narrower doctrine than set out in Yanero v. Davis, 65 S.W.3d 510 (Ky. 2001) and it progeny. Perhaps the recent decision of Marson v. Thomason, ___ S.W.3d ___, 2014 WL 1499498 (Ky. 2014) is the canary singing a new immunity song.

Sovereign Immunity - Louisville

The trial Court dismissed the Louisville Jefferson County Metro Government based on sovereign immunity. As a merged city-county government, it takes on the immunity previously afforded to Jefferson County. The plaintiffs argued that the operation of a Zoo was not a governmental function, which would make a difference if the issue were governmental immunity. What makes this noteworthy is that this panel strongly expressed a disagreement with this distinction between sovereign and governmental immunity, and argued that the governmental/proprietary should be applied to sovereign immunity as well. While the Court of Appeals has no power to change this, one has to wonder if the judges on this panel are privy to the sense of the Supreme Court on this issue.

Qualified Immunity - Delegation of Authority

While the opinion is not clear, its analysis reflects a claim against a number of employees in their individual capacities. In this context, the threshold issue is whether the act(s) in question were discretionary or ministerial in nature. The Court's analysis began with the statutory and regulatory regime governing the operation of amusement rides. See KRS 247.232-.236 and 302 KAR 16:010-140.

The Court first addressed the director of the Zoo, Walczak. He testified that he delegated responsibility for the operation and maintenance of the trains to his assistant director, Zoeller. The Claim to immunity was based on the holding of Autry v. Western Kentucky University, 219 S.W.3d 713 (Ky. 2007). In that case, a student was killed in a dormitory, and the Court held that the university as well as an entity created to hold title and fund the property were both acting in a discretionary fashion with respect to the maintenance of the dormitories. The holding entity then had a management agreement with the university. The Supreme Court held that the delegation of the management functions to the university was discretionary. This panel distinguished Autry, arguing that while an official may delegate authority it cannot delegate responsibility. This is an entirely illusory distinction, and it is clear that the panel is advocating a much narrower view of immunity than enunciated by Yanero v. Davis, 65 S.W.3d 510 (Ky. 2001). The Court, much like the Marson Court, essentially emphasized a shift to a duty analysis, seeing immunity as a simple and mechanic issue.

Qualified Immunity - Negligent Supervision

The Court held that the duty of supervisors to supervise their employees was a ministerial duty because they were required to in a manner that complied with their statutory duty to properly maintain, repair and operate the amusement ride. Again, this panel applied the immunity narrowly, holding in effect that the duty to assure compliance with a statutory duty is ministerial.

Qualified Immunity - Maintenance

As noted above Walczak delegated responsibility over the trains to Zoeller, and as an authorized agent of the Zoo the statutory and regulatory mandates applied to him. Since these duties are mandatory and specific, there is no discretionary and accordingly no immunity. The same applied to others to whom the statutory responsibilities applied.

Qualified Immunity - Operation of the Train

The statutes and regulations required that the trains be operated in accordance with the Chance Manual. The Chance manual gave very specific instructions as to the operation, and the operator testified that the manual she was provided contained no such instructions. That fact notwithstanding, the operator's statutory duties were determined to be ministerial. With respect to the allegation that the train was operated at an unsafe speed, however, the Court found the conduct to be discretionary. Neither the statute, regulations nor Chance Manual gave any guidance as to what constituted an unsafe speed, leaving the issue to the operator's discretion.

Kentucky Court of Appeals - Unpublished
Limitations - Professional Liability - Real Estate
Housing Plus, Inc. v. Estate of Paul Donaldson Ross, Sr., 2014 WL 2536864 (Ky.App. June 6, 2014)

The decedent was an attorney that performed real estate work for Housing Plus. At issue were alleged errors made in connection with the preparation of title opinions. The Complaint alleged professional negligence and fraud. A number of claims were dismissed because documentation supporting same was produced late in violation of court orders relating to discovery. The Court, however, considered the claims that the title opinions omitted delinquent tax liens.

Suit was filed on August 29, 2008. The transactions in question occurred in 2006. Housing Plus had direct notice of the tax liens in March of 2007. Housing Plus argued that there was no occurrence until they settled the tax liens, which occurred after suit was filed, relying on Alagia, Day, Trautwein & Smith v. Broadbent, 882 S.W.2d 121 (Ky. 1994). In Alegia, the Court considered an alleged tax liability and litigation was pending to determine if there was to be any liability. In this case, there were no ongoing negotiations or questions about liability for the taxes. The fact that they were not paid until later did not stop the fact of some damage from being reasonably certain. The determination of a specific dollar amount of damage is not necessary to a finding of occurrence. In this case, the Court held that the occurrence was when Housing Plus acquired ownership of property that had taxes due on them.

Housing Plus received notice of the tax liens in March of 2007 and questioned Ross' work in June of 2007, and the trial Court held this sufficient to show notice under the discovery rule. The Court of Appeals agreed, holding that discovery of the liens was sufficient to begin the running of the limitations period.

Sixth Circuit Court of Appeals - Unpublished
Insurance - CGL - Liquor Liability Exclusion
KSPED LLC v. Virginia Surety Co., Inc., 2014 WL 2459743 (6th Cir. June 2, 2014)

Bivens was killed in a single vehicle automobile accident while a passenger in a vehicle operated by Marsh. Both Bivens and Marsh had attended an event at Kentucky Speedway, and Marsh had been served alcohol by a food concessionaire at the event. A wrongful death suit was brought against Kentucky Speedway and DJ's Food Service Management Group, the entity that sold the alcohol to Marsh. These claims were joined with a prior claim asserted against OS Speedway, an entity that subcontracted with DJ's to provide concessions. The liability insures for OS and DJ's settled. Kentucky Speedway paid $10,000.00 and incurred defense costs. This suit was filed to recover from its liability insurer under a CGL policy. That policy excluded liability arising out of the sale of alcoholic beverages if the insured is "in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages."

The Court undertook an extensive analysis of the concession agreements, and concluded that Kentucky Speedway was in the business of selling alcohol. Even though it did not sell the alcohol, it retained substantial control of the sale. Kentucky Speedway retained the right to approve management personnel to be used, and could reject employees. Kentucky Speedway had the right to stop an impaired person from purchasing more alcohol. Patrons were given rules which stated that persons had to be 21 to purchase alcohol and Kentucky Speedway could refuse service. Kentucky Speedway had the right to decide if alcohol would be served at an event, and approve prices charged. Further, the concessionaires were required to obtain liquor liability insurance and cause the Kentucky Speedway to be an additional insured. Finally, Kentucky Speedway received 30-35% of revenues from the sale of alcohol. The Court distinguished Auto-Owners Ins. Co. v. Veterans of Foreign Wars Post 5906, 276 SW 3d 298 (Ky.App. 2009), which held that a VFW hall was really just a place for members to store their alcohol while their actual business was bingo and other charitable activities.