Justia Contracts Opinion Summaries

The issue in this case was created by a 2016 amendment of the look-back period in Ky. Rev. Stat. 189A.010, Kentucky’s principal driving under the influence of alcohol (DUI) statute. The amendment increased the look-back period from five years to ten years. In separate prosecutions, Defendants were charged with DUI, fourth offense, for offenses that occurred after the newly-amended version of section 189A.010 became effective. Both defendants had prior convictions for DUI offenses beyond the five-year look-back period of the former law but within the ten-year look-back period of the current law. The circuit court concluded that the convictions exceeding the former five-year look-back period could not be used to elevate the current DUI charges to DUI, fourth offense because doing so would violate contractual rights established in Defendants’ plea agreements. The Supreme Court reversed, holding that the trial court erred by excluding Defendants’ 2009 and 2011 offenses from use as enhancing prior DUI convictions because (1) plea agreement contract principles do not bar application of the new rules; and (2) the alternative grounds relied upon by Defendants for affirming the trial court’s decision were unavailing. View "Commonwealth v. Jackson" 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

Keeneland Association, Inc. entered into a contract with Appalachian Racing, LLC to preserve its interest in purchasing Appalachian Racing’s ownership of the racing track Thunder Ridge. Floyd County held bonds that were to be paid upon Keeneland’s purchase of Thunder Ridge. While the contract was pending, Keeneland applied for a license with the Kentucky Horse Racing Commission on behalf of Cumberland Run, LLC to operate another racing track. The Commission issued a public notice that it would review and consider the application. Appalachian Racing, joined by Floyd County, sued the Commission on a theory of aiding and abetting fraud and tortious interference with a prospective advantage. The circuit court issued a restraining order prohibiting the Commission from considering or taking any action on the license application. The Commission then sought a writ of prohibition to prevent the circuit court from enforcing its restraining order. The court of appeals granted the Commission’s request determining that the circuit court violated Kentucky’s separation of powers doctrine in issuing the order. The Supreme Court affirmed, holding that there was nothing in the present suit that authorized the circuit court to prevent the Commission from considering Keeneland’s application. View "Appalachian Racing, LLC v. Commonwealth" on Justia Law

Developer intended to develop real property into single-family residential lots and secured financing through Bank. Insurer provided a surety bond to the Planning and Zoning Commission. Insurer executed three Bond Agreements as surety for Developer. Developer later defaulted in its loan. In lieu of foreclosure, Developer deed the property to Bank’s property management company. Bank transferred the property to another internal holding company. The Commission subsequently complied with Bank’s request for the Commission to call Developer’s bonds and place the proceeds in escrow for the purpose of reimbursing Bank for completion of the necessary infrastructure projects required by Developer’s approved plat. Developer filed a declaratory judgment action alleging that the bonds were not callable and that payment on the bonds would result in Bank receiving an unjust enrichment. The trial court granted summary judgment for Defendants. The Supreme Court affirmed, holding (1) Developer was liable under the bond; and (2) Developer’s claims of error during discovery were unavailing. View "Furlong Development Co. v. Georgetown-Scott County Planning & Zoning Commission" on Justia Law

Kentucky Oaks Mall Co. (the Mall) Owend a commercial real estate development in Paducah. SM Newco Paducah, LLC (Newco) owned a building located within that development that had been vacant and deteriorating for more than a decade. The Mall filed suit to compel the enforcement of Newco’s obligation to keep the building in good condition. When the Mall learned that Newco was considering the possibility of demolishing the building, it filed in the pending litigation a motion for a temporary injunction to stop the demolition. Eventually, counsel for the Mall tendered a proposed order designated as a temporary injunction, and the circuit court entered the temporary injunction over Newco’s objection. Newco filed a motion for interlocutory relief pursuant to Ky. R. Civ. P. 65.07. The court of appeals denied the motion. Newco then moved for interlocutory relief in the Supreme Court under Ky. R. Civ. P. 65.09. The Supreme Court denied Newco’s motion, holding that Newco failed to show the “extraordinary cause” required by Rule 65.09 for obtaining such relief. View "SM Newco Paducah, LLC v. Kentucky Oaks Mall Co." 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

Kentucky Shakespeare Festival, Inc. (KSF) and Brantley Dunaway entered into an employment agreement. Two years later, KSF terminated Dunaway’s employment. When KSF informed Dunaway that he was not entitled to a bonus for the 2013 fiscal year, Dunaway filed an action for breach of contract. Nearly one year later, KSF filed a motion for partial summary judgment and declaratory relief, arguing that KSF’s determination that Dunaway was not entitled to a bonus was a binding “arbitration award” issued by an independent accounting firm. The circuit court denied relief, concluding that the employment agreement did not contain an agreement to forgo litigation and arbitrate any bonus dispute. The court of appeals affirmed. The Supreme Court affirmed, holding that no arbitration agreement existed between KSF and Dunaway, and because no arbitration proceeding occurred, there was no arbitration award to be confirmed. View "Kentucky Shakespeare Festival, Inc. v. Dunaway" on Justia Law

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

Linda Davis and Matthew Davis executed a property settlement agreement prior to their divorce providing that Matthew maintain his life insurance policy and keep Linda as the beneficiary. The decree of dissolution entered by the circuit court failed to incorporate the agreement. The omission went unnoticed until after Matthew died. Prior to his death, Matthew changed the beneficiary on his life insurance policy to Karen Davis, his then-wife. Linda, upon learning of Matthew’s death, filed a proof of claim against his estate, alleging breach of the agreement. Karen, as executrix of Matthew’s estate, denied the claim. Karen then filed this action seeking the policy proceeds. Linda intervened as a third party plaintiff. The circuit court ruled against Linda. The court of appeals affirmed, holding that Ky. Rev. Stat. 403.180(4) essentially voided the agreement. The Supreme Court reversed, holding that a settlement agreement involving property division that was not incorporated or referenced in the final decree of dissolution may be enforced through an independent contract action. View "Davis v. Davis" on Justia Law