Articles Posted in Contracts

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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

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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

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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

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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

Posted in: Contracts

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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

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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

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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

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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

Posted in: Contracts, Family Law

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Plaintiffs, Keith Randall Sparkman and In-Depth Sanitary Service, Inc., filed a complaint against Defendants, CONSOL Energy Inc. and CONSOL of Kentucky, Inc. for breach of contract and tortious interference with contract. The contracts at issue in this dispute were entered into by In-Depth Sanitary Service Group, which was not named in the complaint. The jury found in favor of “Keith Randall Sparkman d/b/a In-Depth Service Group." Defendants appealed, and Plaintiffs cross-appealed. The Court of Appeals disposed of the matter sua sponte based on a perceived lack of jurisdiction, concluding that the wrong parties had filed suit, and the trial court’s judgment awarded damages to a “non-party.” The Supreme Court reversed, holding (1) the judgment of the trial court identified the correct party because the parties mutually consented to the amendment of the complaint to reflect Keith Randall Sparkman d/b/a In-Depth Sanitary Service Group; and (2) the naming of the parties in the notice of cross-appeal was sufficient to transfer jurisdiction to the court of appeals. View "Sparkman v. Consol Energy of Kentucky, Inc." on Justia Law

Posted in: Contracts, Injury Law

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Keith Randall Sparkman filed a complaint against CONSOL Energy, Inc. (CONSOL) and CONSOL of Kentucky, Inc. (CKI), as well as certain individuals, for breach of contract and tortious interference with contract. The jury found in favor of Sparkman and awarded damages. CONSOL/CKI appealed, and Sparkman cross-appealed. The court of appeals disposed of the matter sua sponte based on a perceived lack of jurisdiction. Because the contracts at issue in this dispute were entered into by In-Depth Sanitary Service Group (Group), a sole proprietorship not named in the complaint, and because the judgment was in favor of Group, a “non-party,” the court of appeals reversed and remanded the cause to the circuit court for further proceedings and any “appropriate corrective action.” The Supreme Court reversed, holding (1) the trial court’s judgment identified the correct party because the parties mutually consented to the amendment of the complaint to reflect Keith Randall Sparkman d/b/a In-Depth Sanitary Service Group; and (2) the naming of the parties in the notice of cross-appeal was sufficient to transfer jurisdiction to the court of appeals. View "Sparkman v. Consol Energy, Inc." on Justia Law