Justia Contracts Opinion Summaries

The case involves disputes over horse consignment contracts between Ramsey and Hickstead Farms and Dapple Stud, LLC. Ramsey and Hickstead entered into agreements with Dapple Stud to sell their horses at auction, with Dapple Stud acting as the consigning agent. The sales proceeds were deposited into Dapple Sales' checking account, managed by Mike Akers, who allegedly misappropriated the funds, resulting in Ramsey and Hickstead not receiving their due proceeds.The Fayette Circuit Court granted summary judgment in favor of Dapple Stud and Dapple Sales, dismissing Ramsey and Hickstead's breach of contract claims. The court also required Ramsey and Hickstead to pay restitution to Dapple Stud for amounts previously paid. Additionally, the court denied Ramsey and Hickstead's motions to file third-party complaints against Akers and Dapple Sales, citing the statute of limitations.The Supreme Court of Kentucky reviewed the case and found that Ramsey and Hickstead had valid consignment contracts with Dapple Stud, which were breached when the sales proceeds were not remitted. The court held that Akers, as the manager of Dapple Stud, had the authority to bind the company in these transactions. The court reversed the summary judgment in favor of Dapple Stud and Dapple Sales and the restitution orders, remanding the case for further proceedings to determine the amounts owed to Ramsey and Hickstead, including interest.However, the court affirmed the lower court's decision to bar the third-party complaints against Akers and Dapple Sales due to the statute of limitations. The court also upheld the dismissal of the conversion and theft claims against Dapple Sales. The case was remanded to the Fayette Circuit Court for further proceedings consistent with the Supreme Court's opinion. View "RAMSEY V. DAPPLE STUD, LLC" on Justia Law

In January 2016, Kenneth McPeek Racing Stable, Inc. (McPeek) entered into an oral agreement with Nancy Polk, owner of Normandy Farm, LLC (Normandy), to train a horse named Daddy’s Lil’ Darling. McPeek was to receive monthly training fees, room and board fees, and 12% of the horse’s winnings. After Polk’s death in August 2018, her heirs decided to sell the horse, which fetched $3,500,000 at auction. McPeek claimed an additional 5% commission on the sale, asserting it was part of his oral agreement with Polk, although this term was not documented in writing.The Fayette Circuit Court granted summary judgment in favor of Normandy, citing KRS 230.357(11), which requires a signed writing for any compensation related to the sale of a horse. The court found that McPeek’s claim for a 5% commission was barred by this statute, as there was no written agreement. The court also dismissed McPeek’s quantum meruit claim, stating that he had already been compensated for his training services and that exceptional circumstances justifying equitable relief were not present.The Kentucky Court of Appeals reversed the trial court’s decision, holding that KRS 230.357(11) only applied to buyers, sellers, and their agents in horse transactions. The court reasoned that McPeek’s commission was for training services, not for the sale of the horse, and thus the statute did not apply.The Supreme Court of Kentucky reversed the Court of Appeals, reinstating the trial court’s summary judgment. The Supreme Court held that KRS 230.357(11) applies broadly to any form of compensation connected with the sale of a horse, including McPeek’s claimed commission. The court emphasized that the statute’s plain language requires a signed writing for such compensation to be enforceable, and McPeek’s lack of a written agreement barred his claims. View "NORMANDY FARM, LLC V. KENNETH MCPEEK RACING STABLE, INC." on Justia Law

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

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

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

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

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

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

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

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