Recent Firm Highlights & News
On February 6, 2017, the insurance defense practice group, led by Don Pisacano, obtained a summary judgment for its client, Kentucky Growers Insurance Company, in Ortiz v. Kentucky Growers Insurance Company, Muhlenberg Circuit Court Action 15-CI-00364. The plaintiffs sought to recover under their homeowners’ policy for a fire loss. However, they misrepresented their ownership interest in the insurance application, as well as the existence of a previous foreclosure and previous cancellation from another insurer, all of which rendered the policy void ab initio. Read the court’s order dismissing KY Growers and order as to other defendants.
FARRIS V. COLUMBIA, 2015-CA-448, KY Court of Appeals, February 3, 2017. The Court of appeals agreed Columbia, the former principal and football coach in Clark County, that Farris’s, the former superintendent’s, appeal was interlocutory and subject to dismissal. Read the court’s Opinion.
BUSCH V. WELLS FARGO HOME MORTGAGE, 16-CV-210-JMH, USDC at Lexington, JANUARY 9, 2017. Busch and his wife filed their lawsuit in the Fayette Circuit Court which was removed by the Defendant to federal court. Thereafter, the Defendant moved to dismissed the case. The court held that the Busches did state a cause of action under the Fair Credit Reporting Act, 15 USC 1681, which provides for recovery of certain damages and attorneys’ fees. Read the court’s Opinion.
ROBERT WEBB V. DAN CUMMINS CHEVROLET-BUICK, INC. 2015-CA-938, Bourbon Circuit Court 15-CI-61, DECEMBER 2016. MGM successfully defended an area car dealer. Webb sued the dealer over his trade in of a vehicle that was more than 10 years old when he traded it in, and he had originally purchased it used. Webb sued the car dealer alleging fraudulent misrepresentation based on statements during the negotiations of the trade in as to whether the vehicle had a “salvage” title. He also sued under the Kentucky Consumer Protection Act (“CPA”). Upon an immediate motion to dismiss the case, the trial court dismissed Webb’s claims ruling that Webb could not show both “that the defendant made a false statement and did so knowingly or recklessly.” The Court of Appeals affirmed. Opinion, p. 6. “On the contrary, all evidence in the record indicates that the [car dealer’s] representation was truthful.” Id. The Court of Appeals further held that any purported “reliance” could not have been “reasonable” because the CarFax report presented to Webb during the negotiations, a “public service” concerning Webb’s own vehicle, revealed the salvage title brand. “While there may be no duty to investigate public records, one entering into a contract must exercise ordinary care for his protection.” Id. at p. 8. Moreover, the car dealer’s statement as to the value of the trade-in was an opinion and was therefore not actionable as fraud. Id. at 8-9. Finally, the Court of Appeals held that there were no unfair, false, misleading or deceptive acts in the negotiations between the parties and therefore the claim under the CPA was properly dismissed. Id. at p. 9. See Opinion here.
DECEMBER 2016: Don Pisacano successfully tried a Landlord Tenant Case in Bourbon County Circuit Court and obtained a defense verdict for the farm owner/landlord in a premises liability personal injury claim arising from a trip and fall on an alleged defective cattle guard. Plaintiff was seeking damages for a fractured ankle and subsequent infection (osteomyelitis) that occurred when he fell into/on an open and obvious cattle guard. The jury found for the landowner and the Plaintiff was awarded nothing. See a copy of the Jury Verdict.
NOVEMBER 2016: On behalf of Kentucky Growers Insurance, Don Pisacano obtained summary judgment against a national mortgage company’s claim for proceeds arising from a foreclosure action and subsequent fire loss. Papastefanou v. Kentucky Growers, et al., Warren Circuit Court, 13-CI-1440 (November 23, 2016).
FEDERAL UPDATE: FEDERAL WAGE-AND-HOUR RULES CHANGES ON HOLD –
December 2016: On December 1, 2016, the DOL appealed the nationwide injunction. The Fifth Circuit Court of Appeals issued an order on December 8, 2016, expediting the review of the nationwide injunction that prohibited the implementation of the DOL’s new regulations on overtime. It appears that briefing will be completed in January 2017 and the matter will be set for arguments promptly thereafter.
November 22, 2016: A Texas District Judge granted an injunction that prohibited the implementation of the DOL’s new regulations expanding overtime saying it improperly created a de-facto salary test under the Fair Labor Standards Act.
October 28, 2016: Twenty-one states, as well as numerous business groups, have sued the United States Department of Labor (“DOL”) in order to challenge new regulations that will broaden that the number of workers potentially eligible for overtime pay under the federal Fair Labor Standards Act (“FLSA”). The new regulations, effective beginning December 1, 2016, provide that full-time workers making a yearly salary of less than $47,476 cannot satisfy the “salary” portion of the test that governs whether an employee may be treated as “exempt” from overtime requirements. This means that an employee whose duties qualify as administrative or executive and who would otherwise qualify as exempt may nevertheless be entitled to overtime pay if they make more than $47,476 in a year. The lawsuits allege that the change exceeds the rule-making authority granted to the DOL. The states that have brought suit additionally argue that the DOL has violated the Tenth Amendment by interfering with the manner in which state government employees are paid. The plaintiffs have asked the Court for an injunction, which would prevent the new rule from going into effect until after the lawsuits are resolved. More information about the rule at issue in the lawsuits may be found at: https://www.dol.gov/featured/overtime
Background: August 2016: An important change in the federal wage-and-hour rules becomes effective on December 1, 2016. The new rule recently promulgated by the Department of Labor will increase the salary level from $455 per week ($23,660 annually) to $913 per week (or $47,476 annually). Additional changes were made to the salary rules applicable to the “highly compensated employee” exemption, and the rule provides for automatic updates to the salary and compensation levels every three years. No changes have been made to the “duties test.” Read more.
HERALD LEADER OPEN RECORDS REQUEST TO UNIVERSITY OF KENTUCKY, DECEMBER 2016: The New York Times published an article on December 2, 2016, addressing the pending litigation involving the Kentucky Kernal Open Records request. See the article.
HERALD LEADER ATTORNEY GENERAL’S OPINION AUGUST 2016: In the newest round of efforts to shed light on the activities of UK, the Attorney General issued an August 31, 2016 (16-ORD-193), opinion addressing the refusal of UK to provide documents in response to a Herald Leader Open Records request for matters involving the Hazard cardiology practice acquired by UK and the expenses and fees paid by UK or KMSF to their lawyer and law firm Sheppard Mullin since 2013. The AG determined that UK’s refusal to provide records for in camera inspection by the AG to consider UK’s asserted exemptions violated the Open Records Act.
VEITCH v. PUBLIC PROTECTION CABINET, AUGUST 2016 UPDATE: The Franklin Circuit Court has again ruled in favor of John Veitch in his claims against the Kentucky Horse Racing Commission related to penalties imposed on him as Chief State Steward for his actions at the LIFE AT TEN race. In its August 23, 2016, Opinion and Order, the Court reverses and remands the most recent effort by KHRC to impose a 9 month suspension penalty because the penalty has not been justified by KHRC.
HERALD LEADER ATTORNEY GENERAL’S OPINION JULY 2016: We are pleased to have had the opportunity to assist the Herald-Leader in its commitment to the transparency in government that is protected by both the Open Meetings and Open Records Acts. The information presented at the Trustees’ dinner meeting directly concerned the University’s management of funds, and so is exactly the type of information that our legislature recognizes that the citizens of the Commonwealth must receive in order to hold their public entities accountable. Although we have not yet received a response to our request to the Attorney General for the documents presented during the meeting, we are optimistic that they will soon be provided to the Herald-Leader. We also believe that, because the University chose to have an open meeting, Kentucky’s Open Meetings Act requires that minutes be prepared for the meeting, and those minutes must now be provided. The Attorney General’s Opinion reflects his agreement. Read the article here. UK reports as of August 9, 2016, in the Lexington Herald Leader that it intends to appeal the AG’s decision.
NURSING HOME CLAIMS: October 28, 2016: The federal agency overseeing Medicare and Medicaid services has issued a rule barring any nursing home that receives federal funding from requiring residents to enter pre-dispute arbitration agreements. Such agreements have long been used by nursing homes to force patients and their families to pursue claims such as elder abuse and wrongful death through the private system of arbitration rather than in court. Although nursing homes and patients may still enter arbitration agreements on a voluntary basis at the time a dispute arises, those agreements must be clearly explained to residents. This major change in policy is viewed as an important step in protecting the rights of nursing home patients. More information about the new rule is available at:
NURSING HOME WRONGFUL DEATH FILING JULY 2016: Miller, Griffin & Marks, PSC filed an action in the Madison Circuit Court in July 2016 alleging the wrongful death of Donald Shelton. Named in the suit as defendant IS Madison Health and Rehabilitation Center in Richmond, Kentucky. Read more.
RECENT LITIGATION MATTER: Litigation with a flooding neighbor: Our litigators address a variety of issues through trial and appeal. In a case of an uphill neighbor focusing and directing ‘unnatural’ water flow on the downhill neighbor, a jury awarded $50,000 in compensatory damages and $75,000 in punitive damages. See Vescio v. Darnell, (Fayette Circuit Court, 99-CI-2531, The verdict was affirmed by the Kentucky Court of Appeals in Case 2013-CA-189, rendered January 29, 2016. The appellate court further ordered the case remanded to the trial court with directions to enjoin the uphill neighbor by requiring that all the holes in their brick wall be “plugged” to prevent further intentional flooding of the downhill neighbor.
RECENT FAMILY LAW MATTER: Our Family Law Group is active through all levels of litigation. In what appears to be a case of first impression in Kentucky, in December 2015 they successfully reversed the lower courts’ rulings related to a conflict between an IRA beneficiary form that was not changed as required by the terms of divorce and the Divorce Decree. Sadler v. Van Buskirk, 2013-SC-809-DG, Kentucky Supreme Court, December 17, 2015.