Justia Contracts Opinion Summaries

Articles Posted in Kentucky Supreme Court
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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

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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

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The Supreme Court affirmed the judgment of the trial court granting Defendant's motion to dismiss the underlying complaint filed by Port of Louisville for defamation and professional malfeasance, holding that Port of Louisville had no legally recognized relationship with R. Wayne Stratton, CPA and Jones, Nale & Mattingly PLC (collectively, Stratton), and therefore, Stratton did not owe the Port of Louisville any duty.Louisville and Jefferson County Riverport Authority filed a lawsuit seeking to terminate Port of Louisville's lease based on allegations that Port of Louisville breached the parties' lease The action was stayed while the claims were referred to an arbitrator, who found that Port of Louisville had not breached the lease. Based on what occurred during the arbitration the Port of Louisville brought a complaint against Stratton for defamation and professional malfeasance. The trial court granted Stratton's motion to dismiss, and the court of appeals affirmed. The Supreme Court affirmed, holding that Port of Louisville had no legally recognized relationship with Stratton that would cause Stratton to owe it a duty. View "New Albany Main Street Properties, LLC v. R. Wayne Stratton, CPA" on Justia Law

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The Supreme Court affirmed the opinion of the court of appeals reversing the order of the circuit court granting summary judgment in favor of Phoenix American Administrators, LLC and Phoenix American Warranty Company, Inc. in this case stemming from a contract dispute in which Plaintiff sought to recover damages from Phoenix, holding that summary judgment was prematurely granted.Phoenix was the administrator of a guaranteed asset protection waiver addendum entered into by Plaintiff during the course of his purchase of and the financing of a motor vehicle. Plaintiff sued Phoenix for breach of contract, and the trial court granted summary judgment in favor of Phoenix. The court of appeals reversed, concluding that a factual dispute existed precluding summary judgment. The Supreme Court affirmed, holding that the court of appeals did not err. View "Phoenix American Administrators, LLC v. Lee" on Justia Law

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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

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In this putative class action where Students sought a refund of money from the University of Kentucky after the University switched all on-campus classes to an online format for the remainder of the spring 2020 semester, the Supreme Court affirmed the judgment of the court of appeals affirming the trial court's ruling that governmental immunity was waived and that a breach of contract claim may proceed for adjudication on the merits, holding that the Student Financial Obligation and accompanying documents were a written contract under Ky. Rev. Stat. 45A.245(1) such that governmental immunity was waived and the underlying breach of contract claims may proceed. View "University of Ky. v. Regard" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals affirming the order of the circuit court failing to rule on Plaintiffs' contract claim, holding that the court of appeals correctly found that Plaintiffs waived their breach of contract claim.Plaintiffs, who leased property owned by Defendants, brought this action alleging wrongful eviction, breach of contract, and defamation. The trial court granted summary judgment to Defendants on the wrongful eviction claim and then dismissed Plaintiffs' defamation claims. The court of appeals affirmed and ruled that Plaintiffs waived their breach of contract claim. The Supreme Court affirmed, holding that the court of appeals correctly held that Plaintiffs waived their contract claim. View "Wieland v. Freeman" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court granting a directed verdict on a bad faith claim, holding that Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1993), established the applicable legal standard for both common law and statutory bad-faith claims.Cincinnati Insurance Company (CIC) brought a declaratory judgment action disputing coverage under a commercial general liability policy insuring K-2 Catering, LLC for claims Haley Belt made stemming from an accident that occurred during an event hosted by K-2's member-managers at their residence. Ultimately, judgment was entered declaring coverage under the policy. While the action was pending, Belt brought a separate action against K-2 and CIC, alleging bad faith and negligence in the settlement of her claims under K-2's policy. The negligence claims were settled and, after a jury trial, the jury returned a verdict against CIC. The court of appeals reversed, concluding that the trial court erred when it failed to grant CIC a directed verdict on the bad faith claims. The Supreme Court affirmed, holding that the trial court erred when it failed to apply the Wittmer standard and grant a directed verdict for CIC. View "Belt v. Cincinnati Insurance Co." on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing in part the trial court's grant of summary judgment in favor of the City of Barbourville on all of Plaintiff's claims holding that the reasoning of the trial court was sound.Plaintiff sustained burns on the bottom of her feet after visiting a water park owned by the City, requiring eventual amputation of a portion of her foot. Plaintiff sued the City, bringing claims under theories of premises liability, strict liability, and breach of contract. The trial court granted summary judgment in favor of the City on all claims. The court of appeals reversed the summary judgment on the premises liability claim and otherwise affirmed. The Supreme Court reversed in part, holding that the trial court correctly granted summary judgment in favor of the City on Plaintiff's strict liability, breach of contract, and premises liability claims. View "City of Barbourville v. Hoskins" on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court dismissing Constance Mouanda's complaint against Jani-King International (Jani-King) and Cardinal Franchising, Inc. (Cardinal) alleging fraud, breach of contract, and unconscionability, holding that the trial court erred in granting Cardinal's and Jani-King's motion to dismiss.Mouanda formed The Matsoumou's LLC, for which Cardinal provided the necessary legal documents. The LLC entered into a franchise agreement with Cardinal and began operating as a unit franchisee. Mouanda later brought suit alleging fraud, breach of contract, and unconscionability and seeking damages for Cardinal and Jani-King's failure to comply with Kentucky's wage and hour laws. Cardinal and Jani-King moved to dismiss based on Mouanda's failure to bring the lawsuit on behalf of the LLC. The court of appeals affirmed. The Supreme Court reversed, holding that the franchise agreement contained nothing that would preclude a wage and hour claim by Mouanda individually and that the fraud claim was not dependent on the LLC being a party to the action. The Court remanded the case to allow the parties to develop the record so the trial court can determine whether Mouanda has a valid wage and hour claim and/or fraud claim. View "Mouanda v. Jani-King International" on Justia Law