Justia Insurance Law Opinion Summaries

The Supreme Court reversed the decision of the Court of Appeals affirming the judgment of the trial court ruling in favor of Peters Farms, LLC, which sued Ikerd Mining, LLC and Ikerd’s insurer, American Mining Insurance Company (AMIC), holding that Ikerd’s unauthorized removal of coal from Peters’ property was not an accident and therefore not covered under the insurance policy.The trial court concluded that Ikerd’s removal of coal from Peters’ property were “accidents,” which meant each “mistake” was an “occurrence” that unintentionally caused “property damage” as defined by Ikerd’s commercial general liability (CGL) policy. Therefore, the court concluded that the mineral removal was covered under the CGL policy. The Supreme Court disagreed, holding that the intentional removal and conversion of coal is not an “accident” constituting an “occurrence,” regardless of whether the trespass was willful or innocent. View "American Mining Insurance Co. v. Peters Farms, LLC" on Justia Law

The Court of Appeals correctly applied the principles of Cincinnati Insurance Co. v. Motorist Mutual Insurance Co., 306 S.W.3d 69 (Ky. 2010), to hold that a contractor’s faulty workmanship on the basement and foundation of an existing structure, which resulted in extensive damage to the entire building, was not an accident triggering coverage as an occurrence under the contractor’s commercial general liability (CGL) insurance policy.The policy provided that the insurer (Insurer) would pay for property damage if it resulted from an “occurrence.” The trial court ruled that Plaintiff could recover from Insurer under the policy for the damage to the structure above the basement level because the damage was an unexpected and unintended consequence of the contractor’s faulty work on the basement. The court of appeals reversed, ruling that none of the structural damage qualified as an accident triggering coverage as an occurrence under Insurer’s CGL policy. The Supreme Court affirmed, holding that the trial court failed to focus on the proper elements from Cincinnati. View "Martin/Elias Properties, LLC v. Acuity, a Mutual Insurance Co." on Justia Law

The Supreme Court affirmed the circuit court’s order rejecting the Board of Trustees of the Kentucky Schools Boards Insurance Trust’s (KSBIT) claim of governmental immunity and thus denying its motion for summary judgment. In this complaint filed by the Deputy Rehabilitator of the Kentucky School Boards Trust Workers’ Compensation Self-Insurance Fund and of the Kentucky School Boards Insurance Trust Property and Liability Self Insurance Fund against the KSBIT Board for, inter alia, negligence, the KSBIT Board asserted a defense of governmental immunity and moved for summary judgment. The circuit court determined that the KSBIT Board was not entitled to governmental immunity because its “parent” entity was not an agency of state government that enjoyed governmental immunity and because it did not perform a function that was integral to state government. The Supreme Court affirmed, holding (1) because the KSBIT Board is not the offspring of local public school boards, it does not have the governmental immunity accorded to those governmental bodies; and (2) the KSBIT Board does not serve a function integral to state government. View "Board of Trustees of Kentucky School Boards Insurance Trust v. Pope" on Justia Law

Roniesha Adams, her son, and her son’s father, Barry Adams (Barry), were passengers in Milton Mitchell’s car when the car was rear ended. Mitchell and his three passengers asserted claims against State Farm, seeking personal injury protection and uninsured motorist benefits. Because they allegedly gave inconsistent statements to State Farm regarding “substantive issues,” State Farm advised Mitchell, Adams, and Barry that they were required to submit to questioning under oath. Adams and Barry refused to submit to questioning under oath, and State Farm refused to pay additional benefits. Adams and Barry filed suit, and State Farm filed a counterclaim seeking a declaratory judgment that it did not have to provide coverage because Adams and Barry failed to cooperate with its investigation. The circuit court granted summary judgment for State Farm. Adams appealed. The court of appeals reversed, ruling that State Farm was required to obtain a court order before it could require Adams to submit to questioning under oath. The Supreme Court reversed, holding that the circuit court correctly found that Adams was required to submit to questioning under oath regarding issues as a condition precedent to coverage. View "State Farm Mutual Automobile Insurance Co. v. Adams" on Justia Law

KESA, the Kentucky Workers’ Compensation Fund, on behalf of its insureds, filed five separate medical fee disputes against the Injured Workers’ Pharmacy (IWP) and the insureds’ employees and former employees, all of whom had their prescriptions filled by IWP. The chief administrative law judge (CALJ) found (1) a pharmacy/pharmacist is a medical provider, which entitles an injured worker to choose where to have his or her prescriptions filled; (2) the pharmacy fee schedule is based on the amount a pharmacist pays a wholesaler for medication, and IWP is entitled to interest on any underpayment by KESA; and (3) because KESA brought its medical fee disputes without reasonable ground and without reasonable medical or factual foundation, KESA was required to pay the cost of the proceedings. The Workers’ Compensation Board reversed the award of costs but otherwise affirmed. The court of appeals affirmed. The Supreme Court affirmed in part, vacated in part, and remanded, holding (1) the court of appeals did not err regarding the assessment of interest and sanctions or in concluding that a pharmacy is a medical provider; but (2) the remainder of the court of appeals opinion is vacated and remanded because the CALJ did not make a determination regarding the actual average wholesale price paid by IWP. View "Steel Creations by and through KESA, the Kentucky Workers’ Compensation Fund v. Injured Workers’ Pharmacy" on Justia Law

When Plaintiff learned that a family occupying a residence nearby to a vacant property owned by Plaintiff was pursuing environmental claims against him, he notified his liability carrier, the Indiana Insurance Company. Indiana Insurance provided a defense and eventually settled the claims. Plaintiff later sued Indiana Insurance for bad faith arising from a breach of his insurance contract. The jury awarded Plaintiff $925,000 in emotional distress damages and $2,500,000 in punitive damages. The court of appeals affirmed. On appeal, Indiana Insurance argued that, having provided a defense and indemnification, Plaintiff had no viable bad faith claim. The Supreme Court affirmed, holding (1) Plaintiff presented sufficient evidence to support the jury’s determination that Indiana Insurance breached its contract with Plaintiff and that Indiana Insurance’s acts or omissions violated the Unfair Claims Settlement Practices Act; (2) the trial court did not err in denying Indiana Insurance’s motion for directed verdict or judgment notwithstanding the verdict on Plaintiff’s Kentucky Consumer Protection Act claim; (3) expert testimony is unnecessary to substantiate damages for emotional distress in a bad faith case; and (4) Indiana Insurance’s two remaining allegations of error were not properly before the court for review. View "Indiana Insurance Co. v. Demetre" on Justia Law

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

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

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

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