Articles Posted in Kentucky Supreme Court

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In order for there to be a “collapse” under a homeowner's insurance policy, there must have been a “falling down or collapsing of a part of a building,” Wanda Thiele, the daughter of Hiram Campbell, moved into Campbell’s residence following his death. After she discovered terminate infestation, Thiele contacted Kentucky Growers Insurance Company, which had issued a homeowner’s insurance policy to Campbell, to make a claim under the policy provision covering collapse. Insurer denied Thiele’s claim because no collapse had occurred. Thiele then filed a declaration of rights claim. The trial court issued a judgment in Thiele’s favor. The court of appeals reversed. The Supreme Court affirmed, holding that, under the definition set forth in Niagara Fire Insurance Co. v. Curtsinger, 361 S.W.2d, 762 (Ky. Ct. App. 1962), in order for there to be a “collapse,” there must have been a “falling down or collapsing of a part of a building,” which did not happen in this case. View "Thiele v. Kentucky Growers Insurance Co." on Justia Law

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Kara Sidebottom was injured during the course of her employment. Sidebottom filed a workers’ compensation claim in connection with the work-related injury. In determining Sidebottom’s weekly compensation benefit, the administrative law judge (ALJ) applied Ky. Rev. Stat. 342.140(1)(d). The ALJ determined that Sidebottom was a variable wage employee working on a “wage plus tips” arrangement at the time of her injury. The Uninsured Employers’ Fund appealed, arguing that, at the time of her injury, Sidebottom was a salaried, or fixed wage, employee whose average weekly wage should have been determined in accordance with Ky. Rev. Stat. 342.140(1)(a). The Workers’ Compensation Board disagreed and affirmed the ALJ’s decision. The court of appeals affirmed. The Supreme Court affirmed, holding that the ALJ, and hence the Board, applied the correct statute to the facts in determining Sidebottom’s average weekly wage. Remanded. View "Commonwealth, Uninsured Employers’ Fund v. Sidebottom" on Justia Law

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Richard Tryon was injured by an underinsured motorist while driving his motorcycle. At the time of the accident, Tryon owed two automobiles insured with Encompass Indemnity Co. and Philadelphia Indemnity Insurance Co. (together, the Companies). Both policies included Underinsured Motorist Insurance (UIM) coverage provisions. The Companies denied UIM coverage for Tryon on the basis of their respective insurance policies, which had owned-but-not-scheduled-for-coverage exclusions. Tryon filed suit against the Companies. The trial court granted summary judgment for Encompass and Philadelphia, ruling that the language in the policies issued by the Companies clearly excluded coverage of Tryon’s motorcycle. The court of appeals reversed, concluding that the unpublished Court of Appeals opinion in Motorists Mutual Insurance Co. v. Hartley and the Supreme Court’s holding in Chaffin v. Kentucky Farm Bureau Insurance Cos. mandated coverage. The Supreme Court affirmed in part and reversed in part, holding (1) owned-but-not-scheduled provisions for UIM coverage are enforceable so long as they expressly and plainly apprise insureds of the exclusion; and (2) the Philadelphia policy failed to plainly exclude coverage under the circumstances, but the terms of the Encompass policy plainly excluded coverage. View "Philadelphia Indemnity Insurance Co. v. Tryon" on Justia Law

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Samantha Hollaway was involved in an accident with Harry Sykes, who was insured by Direct General Insurance Company of Mississippi. Hollaway sought compensation from Direct General for both bodily and property damage. Direct General settled Hollaway’s property damage claim, but there was a breakdown of settlement negotiations with respect to Hollaway’s bodily injury claim. Hollaway filed suit, asserting a third-party bad faith claim against Direct General under the Kentucky Unfair Claims Settlement Practices Act. The trial court granted summary judgment in favor of Direct General, finding that liability and causation were legitimately disputed, and therefore, Direct General could not have acted in bad faith as a matter of law. The Court of Appeals affirmed. The Supreme Court affirmed, holding that Hollaway failed to make a colorable third-party bad-faith claim and, therefore, summary judgment in favor of Direct General was appropriate. View "Hollaway v. Direct Gen. Ins. Co. of Miss., Inc." on Justia Law

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At issue in this case was the apportionment of damages between two insurance companies who provided underinsured motorist (UM) coverave to a passenger injured in an automobile accident in Bowling Green. The Circuit Court ordered the companies to share the damages pro rata in proportion to their respective policy limits. Countryway Insurance appealed that decision to the Court of Appeals, contending that the damages should not have been divided at all, but should have been apportioned entirely to United Financial, the insurer of the accident vehicle. To Countryway's dismay, the Court of Appeals panel decided that that argument was "half right:" the Court agreed that the damages should not have been divided, but in its view Countryway, the insurer of the injured passenger, bore full responsibility for the passenger's UM claim. The Supreme Court concluded the Court of Appeals erred in its analysis of the controlling case-law applicable to this matter, reversed and remanded to the Circuit Court for entry of an appropriate order in favor of Countryway. View "Countryway Ins. Co. v. United Financial Casualty Ins. Co." on Justia Law

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Craig Smith, who suffered injuries in a motor vehicle accident, submitted an underinsured motorist coverage (UIM) claim to his insurer, Allstate Insurance Company. Allstate denied the claim because Smith’s policy did not provide for UIM coverage. Smith sued Allstate for breach of contract and a declaration of rights as to UIM coverage. The trial court granted summary judgment for Allstate because Smith had not paid a premium for UIM or requested UIM coverage. The court of appeals reversed, finding that Allstate had a duty under the Kentucky Motor Vehicle Reparations Act (MVRA) to advise Smith of possible UIM coverage. The Supreme Court reversed the decision of the court of appeals and reinstated the trial court’s judgment, holding that Allstate had no affirmative duty under the MVRA to notify or counsel Smith on the availability of UIM coverage. View "Allstate Ins. Co. v. Smith" on Justia Law

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Plaintiff was injured in an automobile accident. Plaintiff filed a negligence suit against the adverse driver. Plaintiff settled the claim for the adverse driver’s automobile-liability-insurance policy limits. Before dismissing the suit, however, Plaintiff asserted a claim against his own automobile liability insurer, State Farm, for underinsured motorist benefits (UIM). Plaintiff’s insurance policy contained a limitation provision that gave Plaintiff two years from the date of the accident or date of the last basic reparation benefit payment within which to make a UIM claim. Plaintiff filed his UIM three years after the date of the accident. The trial court granted summary judgment in favor of State Farm, concluding that the explicit terms of Plaintiff’s policy rendered his UIM claim untimely. The court of appeals reversed, holding that State Farm’s time limitation on UIM claims was unreasonable and therefore void. The Supreme Court reversed, holding that the State Farm policy provision was not unreasonable. View "State Farm Mut. Auto. Ins. Co. v. Riggs" on Justia Law

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Brent Horn, who was not an employee of B&B Contracting, LLC and did not receive compensation for his work, volunteered to drive one of the company’s trucks on a day that B&B was short-staffed. While Horn was driving a B&B truck, Bradley Stafford, a B&B employee, fell from Horn’s truck and was killed. The administratrix of Stafford’s estate brought a wrongful death action against Horn. Horn responded that the liability policy issued by Tower Insurance Company of New York insuring B&B’s trucks covered the claim against him. Tower then filed an intervening complaint seeking a declaration of rights regarding its obligation to defend and indemnify Horn. The circuit court denied coverage to Horn, concluding (1) Horn was a permissive user of B&B’s truck and thus was an insured under Tower’s policy; but (2) an employee exclusion in the policy precluded coverage for Stafford’s death because Stafford was an employee of B&B. The court of appeals reversed, finding that the policy’s severability clause rendered the employee exclusion ineffective as to Horn, who was not Stafford’s employer. The Supreme Court affirmed, holding that the injured employee policy exclusion did not bar coverage of Horn, a permissive user. View "Tower Ins. Co. of New York v. Horn" on Justia Law

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Appellant was severely injured in an automobile collision in Kentucky while driving a truck for Miller Pipeline Corporation. Appellant received workers’ compensation benefits and settled with the tortfeasor and then sought to recover the remainder of his damages from underinsured motorist (UIM) coverage in Miller’s policy with Zurich American Insurance Company. Zurich denied coverage because Miller had allegedly rejected UIM coverage in Kentucky. The trial court ultimately granted summary judgment in favor of Zurich, concluding that the inclusion of UIM coverage in the policy was a mutual mistake by Miller and Zurich. The court of appeals affirmed. The Supreme Court reversed, holding that the doctrine of mutual mistake was erroneously applied by the courts below. Remanded for an order granting Appellant’s motion for partial summary judgment on the issue of UIM coverage. View "Nichols v. Zurich Am. Ins. Co." on Justia Law

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Appellant was injured while working for Employer, which had an insurance policy issued by Zurich American Insurance Company. The policy included an underinsured motorist (UIM) endorsement. After settling with the tortfeasor, Appellant sought damages from the UIM coverage in the Zurich policy. After Zurich refused Appellant’s claim, Appellant sued Zurich. Ultimately, the trial court granted summary judgment in favor of Zurich on the grounds that the UIM coverage included in the policy was the result of a mutual mistake in the making of the insurance contract. The Supreme Court reversed and remanded for entry of an order granting Appellant’s motion for partial summary judgment on the issue of UIM coverage, holding that reformation of the insurance contract on the grounds of mutual mistake was improper because (1) the facts did not establish that at the time the insurance contract was formed, the minds of the contracting parties met with the common intent to execute a policy that excluded UIM coverage; and (2) Zurich did not assert the mistake or deny the existence of UIM coverage until after Appellant had released the tortfeasor. View "Nichols v. Zurich Am. Ins. Co." on Justia Law