Justia Insurance Law Opinion Summaries

A five-year-old child tragically died after being struck by a vehicle driven by an Alltrade employee at an apartment complex owned by Whispering Brook Acquisitions LLC. Alltrade had a commercial general liability policy with Motorists Mutual Insurance Company, while Whispering Brook had a similar policy with First Specialty Insurance Corporation. Both policies contained "other insurance" provisions, which led to a dispute over which insurer was primarily responsible for covering the incident.The Jefferson Circuit Court determined that Alltrade and its employees were insured under First Specialty’s policy. The court found that the "other insurance" provisions in both policies were mutually repugnant excess clauses, meaning neither could claim to be secondary to the other. Consequently, the court ruled that both insurers shared primary liability and must contribute equally to defend and indemnify the insureds. Motorists' argument that First Specialty should be primarily liable due to an indemnification provision in the Service Agreement between Alltrade and Whispering Brook was rejected. First Specialty appealed, and the Court of Appeals reversed the trial court, holding that First Specialty’s provision was a nonstandard escape clause, making Motorists primarily liable.The Supreme Court of Kentucky reviewed the case and reversed the Court of Appeals' decision. The court held that both "other insurance" provisions were mutually repugnant excess clauses, requiring Motorists and First Specialty to share primary liability equally. The court also overruled the earlier decision in Empire Fire & Marine Insurance Co. v. Haddix, which the Court of Appeals had relied upon. Additionally, the court found that Motorists had waived its indemnification argument by not filing a cross-appeal and requesting the Court of Appeals to affirm the trial court's summary judgment. The case was remanded to the Jefferson Circuit Court for further proceedings. View "MOTORISTS MUTUAL INSURANCE COMPANY V. FIRST SPECIALTY INSURANCE CORP." on Justia Law

The case involves a dispute over whether an insurance policy issued by State Auto Property and Casualty Company to Greenville Cumberland Presbyterian Church covered the collapse of the Church’s roof. The Church's roof, part of a one-story sanctuary building, was around 120 years old. In September 2019, during a roof replacement project, a significant section of the roof dropped overnight. An engineer, Harold Gaston, found that the roof trusses had decayed due to long-term water infiltration, causing the roof to collapse. The Church filed a claim with State Auto, which was denied on the basis that the damage did not constitute a collapse under the policy.The Muhlenberg Circuit Court granted summary judgment in favor of State Auto, ruling that there was no collapse as defined by Kentucky precedent in Niagara Fire Ins. Co. v. Curtsinger and Thiele v. Kentucky Growers Ins. Co. The court held that the roof's condition did not meet the "rubble on the ground" standard for collapse.The Kentucky Court of Appeals reversed, finding that the roof had indeed collapsed under the Curtsinger definition, which does not require the building to fall to the ground. The court also found the policy ambiguous and ruled in favor of the Church.The Supreme Court of Kentucky affirmed the Court of Appeals, holding that the policy provided coverage for the actual collapse of any part of the building, including the roof. The court found that the roof had indeed collapsed due to hidden decay and insect damage, and that the Church had taken reasonable steps to mitigate further damage. The court vacated the circuit court’s summary judgment in favor of State Auto and remanded for entry of summary judgment in favor of the Church on its breach of contract claim, and for further proceedings on the Church’s extra-contractual claims. View "STATE AUTO PROPERTY & CASUALTY COMPANY V. GREENVILLE CUMBERLAND PRESBYTERIAN CHURCH" on Justia Law

Donna Miller Bruenger, the ex-wife of the late Coleman Miller, filed a petition for declaratory judgment against Courtenay Ann Miller, Coleman’s daughter, seeking entitlement to Coleman’s Federal Employee’s Group Life Insurance (FEGLI) benefits. Coleman had failed to designate a beneficiary for his FEGLI benefits before his death, and MetLife distributed the benefits to Courtenay. Bruenger argued that Coleman’s legal obligation under a Qualified Domestic Relations Order (QDRO) to assign her the benefits should prevail.The Jefferson Circuit Court ruled against Bruenger, concluding that federal law precluded her claim because Coleman’s employer did not receive the QDRO before his death. Bruenger’s subsequent appeal was dismissed by the Court of Appeals as untimely, and the court also imposed sanctions for filing a frivolous appeal. Bruenger then sought relief under CR 60.02, which the trial court granted, allowing her to refile the appeal. The Court of Appeals dismissed the refiled appeal as frivolous and awarded attorney’s fees to Courtenay.The Supreme Court of Kentucky reviewed the case and determined that the Court of Appeals had jurisdiction to consider the merits of the CR 60.02 relief. The Supreme Court held that RAP 11(B) authorizes the award of attorney’s fees as a sanction for frivolous appeals but found that the imposition of sanctions in this case violated due process because Bruenger was not given notice or an opportunity to be heard. The Supreme Court affirmed the dismissal of the appeal for lack of jurisdiction but reversed the sanctions imposed by the Court of Appeals. View "BRUENGER V. MILLER" on Justia Law

The case revolves around a car accident that occurred on November 4, 2015, involving Donna Powers and Fendol Carruthers, Jr. Carruthers was charged and pleaded guilty to operating a motor vehicle under the influence of alcohol or drugs. Powers claimed to have sustained serious, permanent injuries from the crash. Carruthers was insured by State Farm Mutual Automobile Insurance Company (State Farm) with a policy limit of $50,000. Powers began receiving Personal Injury Protection (PIP) benefits from her own insurance carrier, Kentucky Farm Bureau (KFB). The Kentucky Motor Vehicle Reparations Act (MVRA) imposes a two-year statute of limitations for tort actions arising from motor vehicle accidents. Powers received her last PIP payment on August 4, 2016, meaning any tort claim she wished to assert arising from her accident with Carruthers must have been filed by August 4, 2018.Powers filed a complaint in McCracken Circuit Court on April 3, 2018, asserting a negligence claim against Carruthers and an underinsured motorist (UIM) claim against KFB. However, Carruthers had died two years earlier in March 2016, unbeknownst to Powers or her attorneys. The case remained stagnant for the next year, with Powers failing to take any action to rectify the portion of her complaint that was a nullity against Carruthers. It wasn't until August 2019 that Powers successfully moved the district court to appoint the Public Administrator to act as Administrator of Carruthers’s Estate.The Supreme Court of Kentucky affirmed the decisions of the lower courts, which had dismissed Powers’s negligence claim against Carruthers, denied Powers’s motions for substitution and revival, denied Powers’s motion for leave to amend her complaint to raise a new claim, and granted summary judgment in favor of KFB. The court held that Powers’s claim against Carruthers was null, and her attempted claim against the Estate was untimely. Furthermore, Powers’s inability to recover from Carruthers or the Estate foreclosed her underinsured motorist claim against KFB. View "Powers v. Kentucky Farm Bureau Mutual Insurance Co." on Justia Law

In this case heard before the Supreme Court of Kentucky, the primary issue was whether the Breathitt Circuit Court correctly dismissed Teresa Spicer's lawsuit against James Combs for intentional infliction of emotional distress (IIED). Spicer's suit arose from damages linked to Combs' actions, following a fatal ATV accident which resulted in the death of Tiara Combs, James Combs’ wife and Spicer's daughter. Prior to the lawsuit, Combs and Spicer, as co-administrators of Tiara's estate, had signed a release settlement with Progressive Casualty Insurance Company, effectively absolving both Combs and Progressive of any further liability relating to the accident.After learning that Combs was intoxicated at the time of the accident, a fact he allegedly hid from her, Spicer sought to sue Combs personally for IIED. Combs moved to dismiss Spicer's complaint on the grounds that the previous release signed by Spicer barred her claim, and that her complaint did not meet the standard for an IIED claim. The circuit court dismissed the action, holding that the release was intentionally broad and included all potential claims, including IIED.On appeal, the Court of Appeals reversed the dismissal, ruling that the release did not prevent Spicer from asserting a personal cause of action against Combs. The Supreme Court of Kentucky affirmed the Court of Appeals' decision. The court ruled that the language of the release only covered claims possessed by the estate and not Spicer's individual claims. Furthermore, the Court held that Spicer's complaint was sufficient to proceed under a motion to dismiss for failure to state a claim, leaving it to the circuit court to resolve whether Spicer can sufficiently establish her claim at a later time. View "COMBS V. SPICER" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the decision of the circuit court concluding that the notice-prejudice rule adopted in Jones v. Bituminous Casualty Corp., 821 S.W.2d 798 (Ky. 1991), applied in the underlying case, holding that there was no error.At issue was whether the claims-made-and-reported management liability policy issued by Allied World Specialty Insurance Company to Kentucky State University (KSU) provided coverage when KSU did not comply with the policy's notice provisions. The circuit court granted summary judgment for KSU after applying the notice-prejudice rule. The court of appeals reversed, determining that the notice-prejudice rule did not apply. The Supreme Court affirmed, holding (1) the policy's notice provisions were clear and unambiguous and that Allied World was entitled to deny coverage to KSU because KSU did not comply with the notice requirements; and (2) generally, the notice-prejudice rule shall not apply to a claims-made-and-reported policy that contains unambiguous notice requirements as condition precedent to coverage. View "Ky. State University v. Darwin Nat'l Assurance Co." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the opinion of the Workers' Compensation Board affirming the administrative law judge's (ALJ) conclusion that medical providers did not have to submit their medical billing statements until after a determination of liability, holding that the statute is unambiguous.At issue was whether P&P Construction, Inc. and, by extension, the company's insurer, Kentucky Employers Mutual Insurance (KEMI), was responsible for payment of medical billings statements submitted outside of the forty-five-day period set forth in Ky. Rev. Stat. 342.020(4). The ALJ and Board determined that medical providers do not have to submit their billings until after a determination of liability. The court of appeals reversed, holding that medical providers are required to submit their billings within forty-five days of service, regardless of whether a determination of liability has been made, and therefore, employers and their insurance carriers are not responsible for payment of billings submitted after the forty-five day period. The Supreme Court, holding that under the unambiguous language of the statute, medical service providers must submit their billings within forty-five days of treatment, and such requirement applies both pre- and post-award. View "Farley v. P&P Construction, Inc." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals denying State Farm Mutual Automobile Insurance Company's petition for a writ of prohibition to prevent Judge Brian Edwards of the Jefferson Circuit Court from enforcing certain discovery orders, holding that State Farm was not entitled to the writ.Betty Irvin was involved in an automobile collision with Deborah Combs, who was insured by State Farm. Irvin brought suit, alleging a negligence claim against Combs and a third-party statutory bad faith claim under Kentucky's Unfair Claims Settlement Practices Act, Ky. Rev. Stat. 304.12-230, against State Farm. The trial court bifurcated the bad faith claim against State Farm from the other claims. Later, State Farm filed this petition seeking to prevent Judge Edwards from enforcing his discovery orders on the grounds that Irvin's bad faith claim against it was not yet ripe. The court of appeals denied the writ petition. The Supreme Court affirmed, holding that the court of appeals did not err. View "State Farm Mutual Automobile Insurance Co. v. Honorable Edwards" on Justia Law

The Supreme Court reversed the opinion of the court of appeals that because an insurance company's coverage under its policy had never been finally adjudicated, a third-party claimant's bad faith claim was premature, holding that the court of appeals erred.Relying on Pryor v. Colony Insurance Co., 414 S.W.3d 424 (Ky. App. 2013), the court of appeals held that the circuit court improperly allowed Plaintiffs to pursue their bad faith claims because coverage had not been established when they filed their third-party bad faith complaint. The Supreme Court reversed, holding (1) Pryor should not be construed as requiring a final judicial determination of coverage prior to filing a third-party tort claim against an insurer, and instead, this Court continues to apply the requirements of Wittmer v. Jones; and (2) the court of appeals erred concluding that the circuit court improperly permitted Plaintiffs to pursue their bad faith claims in violation of Pryor because coverage had not been established when they filed their third-party bad faith complaint. View "Estate of Bramble v. Greenwich Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court to utilize Ky. R. Civ. P. 37.02(3) to assess attorney's fees against a non-party after the non-party failed to obey an order to comply with a subpoena duces tecum, holding that the plain language of CR 34.07(3) applies only to parties to an action.Plaintiffs brought two actions related to an automobile collision against their insurer, Allstate Property & Casualty Insurance Company, among others. Allstate disputed the charges assessed by Dr. David Megronigle for his chiropractic treatment to Plaintiffs, alleging that they were not properly compensable. Plaintiffs later filed a notice of voluntary dismissal as to Megronigle. Thereafter, Allstate filed a motion for attorney's fees under CR 37.02(3). The court granted the motion and ordered Megronigle to pay Allstate the amount of $816. The court of appeals affirmed. The Supreme Court reversed, holding (1) the plain language of CR 37.07(3) applies only to parties to an action; and (2) Megronigle was not a party to the underlying action because he was involved solely by virtue of the subpoenas served upon him by Allstate. View "Megronigle v. Allstate Property & Casualty Insurance Co." on Justia Law