Justia Kentucky Supreme Court Opinion Summaries

The Supreme Court remanded this matter to the circuit court with directions to reinstate a default judgment granted to Bingham Greenebaum Doll, LLP and J. Richard Kiefer (collectively, Bingham) against Meredith Lawrence on its counterclaim to enforce a promissory note made by Lawrence in partial payment of attorney’s fees owed by Lawrence to Bingham, holding that the trial court erred in setting aside the default judgment and that the Court of Appeals erred in affirming that order.Specifically, the Court held that because Bingham’s counterclaim was a compulsory counterclaim to Lawrence’s action against Bingham for professional negligence and because the complaint called into question the validity of the promissory note at issue, Bingham’s counterclaim was justiciable even though it was filed three an a half months prior to the promissory note’s due date. View "Bingham Greenebaum Doll, LLP v. Lawrence" on Justia Law

In this fraud and professional negligence case the Supreme Court reversed the decision of the Court of Appeals that a $80 million punitive damage award was unreasonable and reinstated the trial court’s award, otherwise affirming the appellate court’s judgment, holding that the $80 million award was not grossly excessive and was constitutionally acceptable.Plaintiffs participated in a tax shelter marketed by Defendant, their accounting firm. After the IRS disallowed the tax shelter, Plaintiffs settled with the IRS, paying a total of $20 million for back taxes, interest and penalties and amounts paid to Defendant for fees. Plaintiffs then commenced this action to recoup the $20 million. The trial court found Defendant liable for fraud and gross professional negligence and awarded $20 million in compensatory damages and $80 million in punitive damages. The Court of Appeals affirmed the judgment on liability and compensatory damages but reduced the punitive damage award to equal the compensatory damage award. The Supreme Court (1) affirmed the Court of Appeals’ decision that Defendant was liable for fraudulent conduct and the compensatory damage award; but (2) reversed the remittitur and reinstated the trial court’s punitive damage award, holding that the facts supported an $80 million punitive damage assessment and that an award of that magnitude was constitutionally acceptable. View "Yung v. Grant Thornton, LLP" on Justia Law

The Supreme Court adopted the Exoneration Rule, the majority rule across the nation providing that a criminal defense attorney may not be sued for legal malpractice in a case resulting in the conviction of his or her client unless the client has been exonerated by direct appeal or upon post-conviction relief, and affirmed the trial court’s dismissal of Plaintiffs’ legal malpractice claim against Defendants.The trial court dismissed Plaintiffs’ legal malpractice action against Plaintiff’s defense attorneys. The Court of Appeals affirmed, holding that a criminal defendant who has been convicted at trial and whose conviction has not been overturned on appeal or through other post-conviction proceedings may not bring a legal malpractice action against his defense attorneys for alleged negligence occurring during the representation. The Court of Appeals’ opinion was based on the Exoneration Rule, which the court had previously applied. The Supreme Court granted discretionary review to consider the merits of the rule, adopted the rule, and affirmed, holding that because Plaintiff failed to allege that he had been exonerated of his convictions through post-conviction proceedings, the trial court did not err in dismissing his legal malpractice action without prejudice. View "Lawrence v. Bingham, Greenebaum, Doll, LLP" on Justia Law

The Supreme Court affirmed the holdings of the circuit court and court of appeals determining that public defenders, as employees of the Department of Public Advocacy (DPA), a statutorily-created agency of the Commonwealth, are entitled to assert the defense of qualified immunity within the proper context.After he was discharged from custody, Plaintiff filed a malpractice action against his former attorney, alleging that as a result of Defendants negligent advice regarding parole eligibility, Plaintiff had served longer in prison than he expected when entering his guilty plea. The circuit court granted Defendant’s motion to dismiss, finding that Defendant was entitled to qualified official immunity from suit as an employee of the DPA. The Supreme Court affirmed, holding (1) public defenders performing discretionary tasks in good faith and within the scope of their employment are entitled to assert qualified immunity to any negligence claim; and (2) Defendant was entitled to the defense of qualified immunity under the circumstances of this case. View "Jacobi v. Holbert" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing the judgment of the trial court in this action arising from a construction dispute.Two subcontractors - the steel fabricator and the steel erector and installer - on a condominium project brought suit against the project owner, developer, and general contractor after the subcontractors proceeded with extra work outside the scope of the original bid documents but were never paid for either that work or the retainage amount owed under the steel fabricator’s contract with the general contractor. The circuit court entered judgment in favor of Plaintiff for the cost of the extra work and unpaid retainage. The general contractor prevailed on its indemnification cross-claim against the other two defendants and on the negligence cross-claim asserted against it by the other two defendants. The court of appeals reversed. The Supreme Court held that the court of appeals (1) erred by reversing the trial court’s judgment against the owner for unjust enrichment; (2) properly reversed the trial court’s judgment against the general contractor for breach of contract; and (3) properly found that the trial court should have instructed the jury on the owner and developer’s breach of contract claim but erred in finding the negligence instruction deficient. View "Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC" on Justia Law

Appellant, a Kentucky-licensed land surveyor, testified as a trial expert on behalf of defendants in a quiet-title action in circuit court. The trial court eventually ruled in favor of the plaintiffs. Alleging that Appellant gave misleading and inaccurate trial testimony during the trial, the Kentucky State Board of Licensure for Professional Engineers and Land Surveyors initiated disciplinary proceedings against Appellant. The Board ultimately suspended Plaintiff’s surveyor’s license, concluding that Plaintiff’s expert witness performance violated professional standards. Appellant sought judicial review. The Supreme Court held (1) a number of the statutes and regulations enforced by the Board against Appellant were impermissibly vague as applied to him; and (2) the Board’s decision to discipline Appellant was supported by substantial evidence. Remanded to the Board for reconsideration of Appellant’s sanction. View "Curd v. Ky. State Bd. of Licensure for Prof’l Eng’rs & Land Surveyors" on Justia Law

Following the death of their father in an accident in which the van he was driving struck a retaining wall, Appellees retained a law firm and attorneys (collectively, Appellants) to pursue a wrongful death action against the company charged with maintaining the van. The circuit court dismissed the suit after the defendant successfully excluded two of the plaintiffs' expert witnesses. Two years later, Appellees filed a professional negligence action against Appellants. The trial court granted Appellants' motion for summary judgment, finding that Appellees were not in privity with Appellants and thus lacked standing to sue for professional negligence. The court of appeals reversed, concluding (1) there was a material factual issue in dispute as to whether Appellees were represented by Appellants or were led to believe they were being represented by them, and (2) even if there was no privity, the children were owed professional duties because they were the intended beneficiaries of the underlying wrongful death action. The Supreme Court affirmed, holding (1) there were issues of material fact regarding the attorney-client relationship; and (2) the attorneys owed duties to the children, who were real parties in interest to the wrongful death action. View "Pete v. Anderson" on Justia Law

Plaintiffs brought a lawsuit against the company that marketed the anti-obesity drug combination known as Fen-Phen. Plaintiffs claims were transferred from Kentucky to a similar action pending in Alabama, where Plaintiffs were represented by Attorneys. After Plaintiffs' claims were settled, Plaintiffs brought this action against Attorneys, claiming that Attorneys wrongfully withheld from each Plaintiff a substantial portion of the settlement award. The circuit court dismissed the action, concluding that Plaintiffs' complaint was untimely filed under the applicable statute of limitations. The court of appeals affirmed. The Supreme Court affirmed, holding (1) Plaintiffs were not prejudiced by the court of appeals' affirmation of a summary judgment dismissing the claims of all fifty Plaintiffs where the motion before the trial court related to only one particular plaintiff; (2) the court of appeals erred in applying the Alabama statute of limitations rather than Kentucky's, but Appellants' suit was untimely under the applicable Kentucky statutes; (3) Plaintiffs' claims of misrepresentation were subject to the one-year limitation period for professional service malpractice rather than the general five-year limitation period; and (4) the application of the statutes of limitations was not an issue to be resolved by a jury. View "Abel v. Austin" on Justia Law

This case arose after the settlement of Guard v. American Home Products, Inc., which was brought by Kentucky residents who had taken the diet drug known as Fen-Phen. Each Appellant was a plaintiff in the Guard case and was represented under a contingent fee contract by Appellees, a team of four attorneys. Appellants filed a complaint alleging that Appellees breached their fiduciary duties by wrongfully retaining or improperly disbursing a portion of the Guard case settlement money that should have gone to Appellants. The trial court granted partial summary judgment to Appellants, finding three of the attorneys breached their fiduciary duty. The court of appeals reversed and remanded the case against the three attorneys for further proceedings. The Supreme Court reversed the court of appeals' opinion regarding the issue of the three attorneys' breach of fiduciary duty and reinstated the partial summary judgment entered against them, holding, primarily, (1) the facts established a breach of fiduciary duty that entitled Appellants to summary judgment on the three attorneys' liability as a matter of law; and (2) the court of appeals did not err by declining to review the trial court's denial of summary judgment against the fourth attorney, as the order was not appealable. View "Abbott v. Chelsea " on Justia Law

While Brenda Osborne was at home alone, an airplane pilot crashed his airplane into Osborne's home. Osborne subsequently hired Attorney to assist her recovering her losses from the pilot, but when the lawsuit was finally filed, the federal court dismissed the action as barred by limitations. Osborne filed this action against Attorney asserting breach of contract, legal malpractice, and fraud and deceit. A jury found in favor of Osborne, resulting in a judgment against Attorney in excess of $5 million. The court of appeals affirmed the judgment in part but vacated a large portion of the damage award. The Supreme Court reversed, holding (1) the trial court properly tried this case using the suit-within-a-suit method but erred when it failed to instruct the jury on Pilot's negligence, thus resulting in Osborne's failure to establish that Attorney's malpractice proximately caused her loss; (2) emotional-distress plaintiffs must first satisfy the elements of a general negligence claim; and (3) punitive damages are not recoverable against an attorney in a legal malpractice case. View "Osborne v. Keeney" on Justia Law