The Supreme Court published Neurodiagnostics, Inc. v. Kentucky Farm Bureau, which discussed whether a medical provider could assert a direct action against an insurance company to recover basic reparations benefits through an assignment by the insured.  The case arose out of two lawsuits filed by Neurodiagnostic’s, Inc. against Farm Bureau and State Farm Insurance Company, arising out of medical services performed on insureds for injuries resulting from two auto accidents.

The Supreme Court concluded:

Upon review, we conclude that the MVRA no longer affords a direct right of action by assignment to medical providers against reparation obligors. Instead, the control rests with the insured to direct payment of his or her benefits among the different elements of loss.

The Court noted the affect of the repeal of the assignment statute:

With this change in the law, the legislature recognized that it is a more efficient, economical, and equitable system to keep the provider out of the reparations process and afford the insured the control of how his or her benefits are paid because there is only a certain amount of money available for payment. If each and every medical provider obtained an assignment-as a matter of course-of any right to benefits under the MVRA, the insured’s benefits could be exhausted after an accident, leaving the insured no ability to decide at a later date that he or she would be better served by directing reparation benefits to cover some other element of loss, such as economic loss.

The MVRA no longer allows an insured to assign his or her claim for basic reparation benefits.  Instead, the insured directs those benefits, in any manner or means allowed by the MVRA, including directing payment of lost wages or other economic loss.

Editor’s Note:  Why is it so important for the PIP carrier to pay these bills as opposed to health insurance or the insured?  The answer is simple.  Under PIP, Neurodiagnostics, Inc., receives compensation for 100% of its bill versus the reduced rate usually paid by a health insurer or worse the amount paid by the insured out of the settlement proceeds.  How important has the race to the PIP payout become.  Important enough that medical providers will apparently try to sue the insurance companies directly to recover their bills.

The Supreme Court published Jones v. Cross, which dealt with whether or not the Sheriff’s Office was entitled to official immunity for the acts of its deputies, and if so, whether KRS 70.040 waives it.  Sheriff’s deputy injured two state troopers while attempting to catch an evading suspect.  The liability of the deputy was not an issue.  The liability of the Sheriff’s Office for the actions of his deputies was.

After reviewing the common law the Court declared the Sheriff’s Office immune from suit under the doctrine of absolute official immunity.  The true question was whether KRS 70.040 wiaved this immunity.  The Court found it had.  It noted:

A literal or plain reading of the statute clearly imposes liability on the sheriff in his official capacity for acts committed by his deputies . In construing a statute, words must be given their literal, usual, and ordinary meaning unless they have acquired a technical meaning .

The Supreme Court affirmed the appellate court’s opinion, overruling the trial court, which had found KRS 70.040 did not waive immunity.

The Court of Appeals has posted its minutes for April 25th, here.  There was only one published decision dealing with torts and insurance law.  The Court rendered an opinion in the case of Graham v. Rogers, which involved the question of when a vehicle transfers between individual buyers and sellers for purposes of ownership and, therefore, responsibility for insurance coverage.

Louden sold a vehicle to Angel Rogers and delivered the title.  Rogers did not file the documents with the Clerk’s office and was later involved in an accident with Graham.  Graham argued Louden was the owner, for among other things, failing to  notify the clerk pursuant to KRS 186A.215(4) that the vehicle had not been registered within 15 days.

The Court noted the section states; “If it comes to the attention”, of the transferor. The Court noted that the legislature did not say it was incumbent upon the seller to verify that the buyer had submitted the necessary documents within fifteen days of the sale.  The legislature has not chosen to “establish an affirmative duty on the seller to insure the buyer compliance with KRS 186A.215(3) (sic).” The Court believed it was Rogers responsibility to transfer the title and not Louden’s to insure she had done so.

Editor’s Note:  Good case that finally clears up some confusion over the duties on the part of individual sellers and buyers in the titling of motor vehicles.  Now if the legislature can get it down to ONE step necessary to transfer ownership, we have it made.

Chief Justice Lambert announced his retirement this morning. He will continue to serve through the Senior Judge’s Program. For his own words on his retirement, go to the Kentucky Court of Justice. The Courier Journal also reported on his retirement, here. While there was very little on which Justice Lambert and I agreed, I do agree with his philosophy when it comes to serving in positions of government. His own words on being a Supreme Court Judge; “I believe it’s a mistake to remain for too long in a high-level position in government”.

I certainly agree with the Chief Justice on that philosophy.

The Supreme Court has posted its minutes for April 24th, here. Check back for digests of important cases dealing with tort and insurance law.

The Court of Appeals recently published Pennington v. Greenup Co. Board of Ed., which again dealt with when a state employee is entitled to qualified official immunity. At the time relevant to the action, Andrew was a special education student at Greenup County High School. While on a school outing, Andrew fell and broke his ankle. Andrew’s parents sued the Greenup County Board of Education and Andrew’s teacher, Tracey Kelley.

The issue presented on this appeal is whether or not the circuit court erred when it found that Tracey Kelley’s actions in supervising Andrew were discretionary rather than ministerial in nature, resulting in the legal conclusion that Ms. Kelley is entitled to the protection of qualified official immunity.

After reviewing the record and relevant case law on the issue, the Court concluded:

[W]e are unable to conclude that the circuit court erred as a matter of law by granting summary judgment in favor of Ms. Kelley. The record establishes that she had to exercise personal judgment and deliberation numerous times during this incident, including deciding how to best implement Andrew’s IEP, whether to take him on the outing, how and by whom he should be supervised, whether to permit him to skate, whether to lock his skates, and so on. For purposes of “discretionary versus ministerial” analysis, it is our opinion that Ms. Kelley’s decisions required as much personal deliberation and judgment as that exercised by the employees in Sloas and Lamb, and we are unable to rationally distinguish the relevant factual bases of those recent cases from that of the present case.

Editor’s Note:

Hasn’t the court of appeals just described many people who are sued? Aren’t many performing acts involving discretion? Why should Ms. Kelley be immune from her conduct any more than Jane Doe, who just doesn’t happen to be a teacher. While I agree that Ms. Kelley shouldn’t be held liable based on the facts, I continue to believe that the doctrine of sovereign immunity insulates government actors from exercising the same care the rest of the population is required to exercise. This doctrine does nothing but remove any incentive for the Commonwealth to use ordinary care in its day to day operations. It is outdated and unfair and should be abolished.

The Court of Appeals has posted its minutes for April 18th, here.  Check back for digests of recent published cases.

The Courier Journal has posted an article on the passing of Judge Montano, here.  She was 46, not 45 as I stated in my earlier post.  I am sure the Judge would have forgiven me for that mistake.  It appears she died from complications from pneumonia.  She worked for more than a decade as a judge at several different courts.   As I have mentioned, she will be missed.

I was just told that Judge Kathleen Voor Montano passed away this morning after battling an unsuspected illness.  She was 45 and is survived by her husband and four teenage children.  I had the pleasure of trying a case in front of Judge Montano with several fine Louisville attorneys.  I always found her to be extremely smart, thoughtful, and well tempered.  In short, the perfect judge.  She was a graduate of the University of Louisville Law School and to my understanding was well liked and respected by her peers.  My condolences to her family and to the local legal community at the loss of such a fine person, who we were fortunate to have as a judge.

I will pass on information and links to articles as they become available.

The Supreme Court recently published Humana v. Blose, which dealt with the limited issue of whether a claimant can waive his right to a statutory action by signing a release of claims.  The Court of Appeals held that the “remedy for a breach of a release and waiver of a statutory right is “an original action or counterclaim for recovery of damages incurred as a result of the breach,” rather than the dismissal of the statutory action.”

Blose was employed by Humana and terminated allegedly as an overall reduction in workforce.  In exchange for 12 weeks severance pay and continuation of benefits, Blose signed a release, agreeing to settle any claim she might have arising out of her termination.  This included any statutory rights she may have resulting from her disability.  Several years later, she filed suit against Humana, alleging among other claims, disability discrimination.  Humana filed for a dismissal or in the alternative a summary judgment based on Blose’s execution of the release.  The claim was dismissed.

The Court of Appeals held that Blose could not waive a statutory right of action, and that the appropriate remedy to Humana was a suit for breach of contract.  (The breach being Blose’s filing of a lawsuit despite her agreement). The Court of Appeals also held that further discovery was warranted on the factual issues surrounding the execution of the release by Blose.  (This part of the order was not appealed).

The Supreme Court noted that releases and compromise agreements were contracts, governed by contract law.  As such, they could be impeached if procured by fraud, bad faith, or false representations.  Relief from such an agreement could also be granted if the agreement was procured under duress.

The SC noted:

Even before American General , we had held, “a release is a discharge of a claim or obligation and surrender of a claimant’s right to prosecute a cause of action .” Thus, a “‘release’ extinguishes a claim or cause of action.” … Thus, a release without duress, fraud, or bad faith, is effective to waive a plaintiff’s right to bring a claim, whether statutory or otherwise.

Therefore, Humana could assert the release as a defense to Blose’s claim, and not simply counterclaim for breach of the release. The SC reversed so much of the Court of Appeals’ opinion that required the trial court to consider the breach of the release as a counterclaim, as opposed to dismissing the case outright.