Articles Posted in Kentucky Supreme Court

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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

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Angela Frye filed a workers' compensation claim against her employer alleging that in 2008 she suffered a work-related injury. The administrative law judge (ALJ) awarded Frye benefits related to the injury. In 2009, after the final hearing in the 2008 claim but before the ALJ took that claim under submission or rendered an opinion, Frye allegedly suffered a second work-related injury. In 2010, Frye filed a claim related to the 2009 accident. The ALJ dismissed the 2010 claim, concluding that Frye was required by Ky. Rev. Stat. 342.270(1) to file her claim for benefits related to the 2009 accident and join it to her pending 2008 claim, which she failed to do. The Workers' Compensation Board reversed, concluding that a claim is no longer pending for section 342,270(1) purposes after the date of the final hearing. The court of appeals affirmed. The Supreme Court affirmed, holding that in this case and under these facts, Frye's first injury claim was not pending between the date of the hearing and the date the ALJ rendered his opinion regarding that claim. Remanded. View "Saint Joseph Hosp. v. Frye" on Justia Law

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The underlying class action here was brought against Southern Financial Life Insurance Company, which sold credit life and disability insurance through lending institutions, by purchasers of Southern Financial's credit life and disability policies. During the discovery phase, the trial court entered an order compelling Southern Financial to produce certain loan information and documents regarding the putative class members and the insurance sold to them. Southern Financial did not comply with the order, arguing that the loan information was not in its "possession, custody or control" within the meaning of Ky. R. Civ. P. 34.01, but rather, the information was in the possession of the individual lenders. After applying principles of general agency law, the trial court overruled the objection. Southern Financial subsequently sought a writ of prohibition to prevent the trial court's enforcement of the discovery order. The court of appeals declined to issue a writ. The Supreme Court affirmed, holding that Southern Financial was legally in control of the information it was compelled to disclose in the trial court's order, and therefore, the trial court committed no error. View "S. Fin. Life Ins. Co. v. Pike Circuit Court" on Justia Law

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Plaintiff was a Pennsylvania resident who was injured in Kentucky. Plaintiff's daughter, with whom Plaintiff resided, was driving the vehicle involved in the accident. Plaintiff brought suit against her insurance carrier, State Farm Mutual Automobile Insurance Company, for underinsured motorist (UIM) coverage under a policy issued in Pennsylvania and covering a vehicle that Plaintiff registered and used exclusively in Pennsylvania. The trial court and court of appeals concluded that Pennsylvania law governed the dispute between Plaintiff and State Farm, but the two courts reached different results. The trial court concluded that Plaintiff was not entitled to UIM coverage because her policy disallowed coverage when she was injured in an underinsured vehicle owned or regularly used by a "resident relative." The court of appeals found Kentucky public policy would prohibit enforcement of the policy provision and concluded Plaintiff was entitled to UIM coverage despite the plain language of her policy. The Supreme Court reversed, holding (1) Pennsylvania law applied to this dispute; and (2) there was no prohibition on the type of UIM exclusion at issue in this case. View "State Farm Mut. Ins. Co. v. Hodgkiss-Warrick" on Justia Law

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Jason Morris worked for Owensboro Grain, a refinery located on the Ohio River. Morris suffered a work-related injury while performing deckhand duties, including loading items onto a barge. Morris received benefits from Owensboro Grain's Longshore and Harbor Workers' Compensation Act (LHWCA) insurance policy. Later, Morris filed a claim for Kentucky workers' compensation benefits. Owensboro Grain denied the claim on the grounds that the injury was not covered under the Kentucky Workers' Compensation Act. An ALJ dismissed Morris's claim, finding that Morris's injury fell under the LHWCA, and therefore, Kentucky had no subject matter jurisdiction over his claim. The Workers' Compensation Board and court of appeals affirmed. The Supreme Court affirmed, holding (1) because Morris was covered under the LHWCA, he was exempt from Kentucky's workers' compensation law unless Owensboro Grain provided him voluntary coverage; and (2) there was insufficient evidence to prove that Owensboro Grain provided voluntary workers' compensation coverage to Morris. View "Morris v. Owensboro Grain Co., LLC" on Justia Law