RENDERED: DECEMBER 15, 2022

TO BE PUBLISHED

Supreme Court of Kentucky

2019-SC-0426-DG

2020-SC-0310-DG

HALEY BELT APPELLANT/CROSS-APPELLEE

ON REVIEW FROM THE COURT OF APPEALS

V. NO. 2017-CA-0155

BULLITT CIRCUIT COURT 

NOS. 11-CI-01465 & 12-CI-00795

CINCINNATI INSURANCE COMPANY APPELLEE/CROSS-APPELLANT

OPINION OF THE COURT BY CHIEF JUSTICE MINTON

AFFIRMING

Cincinnati Insurance Company (“CIC”) brought a declaratory judgment 

action disputing coverage under a commercial general liability policy insuring 

K-2 Catering, LLC (“K-2”) for claims made by Haley Belt arising out of a utility 

terrain vehicle (UTV) accident that occurred during a social event hosted by 

K-2’s member-managers at their home. This declaratory judgment action

culminated in a judgment declaring coverage under the CIC policy for Belt’s 

claims made against K-2. CIC did not appeal from this judgment and paid Belt 

the policy limits available under the K-2 policy.

While CIC’s declaratory judgment action was pending, Belt brought a

separate action against K-2 and CIC, alleging K-2’s negligence and CIC’s bad 

faith in the settlement of her claims under K-2’s policy. The trial court severed 
2

Belt’s bad faith claims from her negligence claims. Belt settled her negligence 

claims, and her bad-faith claims against CIC ended in a jury trial. The jury

found that CIC handled Belt’s claim in bad faith and returned a verdict against 

CIC resulting in a judgment against CIC for $4,583,472.39 in compensatory 

and punitive damages. 

CIC appealed the judgment, and the Court of Appeals reversed, finding 

that the trial court erred by failing to grant CIC a directed verdict on Belt’s badfaith claims. 

We granted Belt’s motion for discretionary review and CIC’s cross-motion

for discretionary review to clarify the legal standard for analyzing a motion for 

directed verdict on a bad faith claim. We affirm the result reached by the Court 

of Appeals. We hold 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. Accordingly, the trial court erred when it failed to apply that 

standard and grant a directed verdict for CIC.

I. FACTUAL AND PROCEDURAL HISTORY

Chuck and Melissa Kersnick were the member-managers of K-2 Catering, 

LLC. On August 5, 2011, the Kersnicks purchased a UTV. The next day, the 

Kersnicks hosted an event at their home during which they allowed Zachary, 

their teenage son, to give rides to guests on the UTV. While giving a ride to 

Haley Belt and several other individuals, Zachary crashed the UTV. As a result 

of the accident, Belt sustained permanent and disfiguring injuries. 
3

On August 16, 2011, the Kersnicks filed claims resulting from the 

August 6 accident with CIC, K-2’s commercial general liability insurer, and 

Employers Mutual Casualty (EMC), the Kersnicks’ homeowners’ insurer. CIC 

began investigating the accident and collecting statements from the Kersnicks 

to determine whether coverage under the policy existed for the August 6 

accident. On October 12, 2011, CIC sent a reservation of rights letter to the 

Kersnicks regarding the coverage issues. The letter outlined the relevant policy 

terms and explained that unsettled issues provided a basis for disputing 

coverage of the claim. The letter encouraged the Kersnicks to provide any 

additional relevant information to CIC to aid in the investigation of the claim 

and coverage determination.

December 1, 2011, CIC filed a declaratory judgment action against K-2, 

the Kersnicks, Belt, and EMC to determine whether coverage existed under the 

policy. EMC filed an Answer, Counterclaim, and Cross-Claim alleging that the 

August 6 accident was outside the coverage of the Kersnicks’ homeowners’ 

insurance policy.

On July 12, 2012, Belt filed a complaint against K-2 and Chuck, Melissa, 

and Zachary Kersnick, alleging negligence and negligent entrustment and 

seeking compensatory and punitive damages. At that time, CIC sent a 

supplemental reservation of rights letter to the Kersnicks, informing them that 
4

it would provide them a defense to Belt’s suit, reserving its right to dispute 

coverage later.

1

On September 26, 2012, the trial court consolidated Belt’s separate 

action with CIC’s pending declaratory judgment action. On April 23, 2013, Belt 

filed a First Amended Complaint, adding claims against CIC and EMC for 

common law bad faith and statutory bad faith under the Kentucky Unfair 

Claims Settlement Practices Act (KUCSPA) and the Kentucky Consumer 

Protection Act (KCPA). Belt sought compensatory damages, punitive damages, 

and attorney’s fees and costs. In September 2013, the trial court granted CIC’s 

motion to bifurcate the coverage and bad-faith claims.

On January 22–25, 2014, the trial court held a bench trial in the 

coverage action. On February 28, 2014, the trial court ruled, finding coverage 

under both CIC’s and EMC’s policies. Neither CIC nor EMC appealed the trial 

court’s decision, and both companies paid policy limits to Belt following the 

trial court’s ruling.

In April 2014, Belt settled with K-2, Chuck and Melissa Kersnick, and 

Zachary Kersnick. As a part of the consideration offered in the settlement, K-2 

and the Kersnicks assigned their potential bad-faith claims, KUCSPA claims, 

and KCPA claims against CIC and EMC to Belt. On May 6, 2015, the trial 

1 CIC anticipated that EMC would provide coverage counsel to Zachary 

Kersnick, but when EMC refused to do so, CIC hired separate counsel to represent 

Zachary.
5

court entered an agreed order of partial dismissal, releasing EMC from the 

litigation. 

Belt’s bad-faith claims against CIC were tried before a jury. Before the 

case was submitted to the jury, CIC moved for a directed verdict on the 

grounds that Belt had failed to provide evidence from which a reasonable jury 

could conclude that CIC acted in bad faith. The trial court denied CIC’s 

motion. 

The trial court instructed the jury on the elements provided in the 

KUCSPA. The trial court also instructed the jury that “Belt must also show 

that Cincinnati Insurance Company either knew there was no reasonable basis 

for denying the claim or acted with reckless disregard for whether such a basis 

existed.”

The jury returned a verdict in Belt’s favor, awarding her $1,000,000 for 

emotional pain and mental anguish, $43,472.39 in litigation costs, $3,500,000 

in punitive damages, and $40,000 to Chuck and Melissa Kersnick for 

emotional pain and anguish. The trial court entered judgment accordingly.

On appeal, the Court of Appeals held that the trial court erred as a 

matter of law by failing to grant CIC a directed verdict. The Court of Appeals 

held that coverage, the first element of the Wittmer test, was not established 

until after the trial court’s judgment in the declaratory judgment action, and 

CIC promptly paid policy limits to Belt in accordance with the judgment, so CIC 

was entitled to a directed verdict on the matter of coverage. The Court of 
6

Appeals vacated the jury’s verdict and remanded the case for dismissal. This 

appeal now follows.

II. STANDARD OF REVIEW

When a trial court is faced with a motion for directed verdict, it “must 

draw all fair and reasonable inferences from the evidence in favor of the party 

opposing the motion.”2 Viewed through that lens, the trial court should grant a 

directed verdict only when “there is a complete absence of proof on a material 

issue or if no disputed issues of fact exist upon which reasonable minds could 

differ.”3 On appellate review, we will reverse the trial court’s ruling only if we 

find that the jury could not have “reasonably reached its verdict on the basis of 

the evidence before it.”4

III. ANALYSIS

The issue of whether CIC was entitled to a directed verdict is inextricably 

linked with another issue CIC brings in its cross-motion—the proper jury 

instructions for common law and statutory bad faith claims. In reviewing a 

trial court’s ruling on a motion for directed verdict, we consider whether it 

would be clearly unreasonable for the jury to find for the non-moving party, in 

light of the totality of the evidence.5 In order to determine the reasonableness

2 Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 285 (Ky. 2014) (quoting Bierman v. 

Klapheke, 967 S.W.2d 16, 18 (Ky. 1998)).

3 Id.

4 Ellison v. R & B Contracting, Inc., 32 S.W.3d 66, 75 (Ky. 2000).

5 Commonwealth v. Benham, 816 S.W.2d 186, 187 (Ky. 1991).
7

of the jury’s potential finding, we look to the elements of the claim brought.6 

We note that “the directed-verdict question is not controlled by the law as 

framed in the jury instructions,” but by the statutes and case law creating the 

cause of action.

7 So we must first identify the proper elements of common law 

and statutory bad faith claims before deciding whether CIC was entitled to a 

directed verdict as a matter of law.

A. The elements of a common law or statutory bad faith claim are 

those defined in Wittmer.

Kentucky courts have recognized the inclusion of an implied covenant of 

good faith and fair dealing in all insurance contracts.8 This covenant requires 

the insurer to, among other things, protect the insured from “the risk of having 

a judgment rendered against him greatly in excess of the policy.”9 Both named 

insureds (first parties) and liability plaintiffs (third parties) may bring common 

law bad-faith claims against insurers for acting in bad faith in the settlement of 

claims under a policy.10

6 Acosta v. Commonwealth, 391 S.W.3d 809, 816 (Ky. 2013) (internal citation 

omitted), overruled on other grounds by Ray v. Commonwealth, 611 S.W.3d 250 (Ky. 

2020).

7 Id.; cf. Harper v. Univ. of Louisville, 559 S.W.3d 796, 810 (Ky. 2018) (holding 

that a motion for directed verdict could not be supported by a violation of the FWA 

that was not described in the jury instructions because the propriety of the court’s 

jury instructions was not challenged).

8 Manchester Ins. & Indem. Co. v. Grundy, 531 S.W.2d 493, 498 (Ky. 1975) 

(“[W]hile the specific language will not be found in the contract it is there by operation 

of law.”) (quoting Terrell v. Western Cas. & Surety Co., 427 S.W.2d 825, 827 (Ky. 

1968)); see also Germania Ins. Co. of New York v. Rudwig, 80 Ky. 223, 235 (Ky. 1882); 

Continental Ins. Co. v. Vallandingham & Gentry, 76 S.W. 22, 24 (Ky. 1903).

9 Manchester, 531 S.W.2d at 498.

10 Curry v. Fireman’s Fund Ins. Co., 784 S.W.2d 176, 177-78 (Ky. 1989) 

(recognizing an insured’s recovery against his own insurer for bad faith); Manchester, 
8

In 1950, Kentucky enacted Kentucky Revised Statute (KRS) 304.12-230 

et seq., the Kentucky Unfair Claims and Settlement Practices Act (KUCSPA).

11

The act prohibits unfair claims settlement practices to protect the public from 

unfair trade practices and fraud.12 When applied in conjunction with KRS 

446.070, the KUCSPA creates a statutory cause of action under which both 

first and third parties may bring claims against an insurer.13

Similarly, in 1972, Kentucky enacted KRS 367.170, the Kentucky 

Consumer Protection Act (KCPA). This act makes unlawful “[u]nfair, false, 

misleading, or deceptive acts or practices in the conduct of any trade or 

commerce[.]” Additionally, KRS 367.220 authorizes a statutory cause of action 

for violations of the KCPA.14 This Court has found the KCPA applicable to 

insurance contracts and prohibitive of bad faith on the part of an insurer in 

performing its duties under the contract.15

531 S.W.2d at 498 (holding that, under the principle of privity of contract, an insured 

may assign his bad faith claim against his insurer to the liability plaintiff in exchange 

for a release of the insured from liability in excess of policy limits).

11 When first adopted, the KUCSPA was codified at KRS 304.915 et seq.

12 State Farm Mut. Auto. Ins. v. Reeder, 763 S.W.2d 116, 118 (Ky. 1988).

13 Id.

14 “Any person who purchases or leases goods or services primarily for personal, 

family or household purposes and thereby suffers any ascertainable loss of money or 

property, real or personal, as a result of the use or employment by another person of a

method, act or practice declared unlawful by KRS 367.170, may bring an action under 

the Rules of Civil Procedure in the Circuit Court in which the seller or lessor resides or 

has his principal place of business or is doing business, or in the Circuit Court in 

which the purchaser or lessee of goods or services resides, or where the transaction in 

question occurred, to recover actual damages.”

15 Stevens v. Motorist Mut. Ins. Co., 759 S.W.2d 819, 820 (Ky. 1988) (holding 

that the purchase of an insurance policy is the purchase of a “service” as defined by 

the KCPA).
9

Ordinarily, a third party cannot maintain a claim against an insurer 

under the KCPA because the statutory language of KRS 367.220 limits 

standing under the Act to those persons who purchased the good or service in 

question—in this case, the insurance policy.

16 But a bad-faith claim under the 

KCPA is a statutory tort that arises out of a contractual relationship and, as 

such, is assignable.17 So, as in Belt’s case, the insured may assign a claim 

arising under the KCPA to a liability plaintiff.

The gravamen of the KUCSPA and the KCPA (as it applies to insurance 

contracts) is that an insurer is required to deal with the insured or third-party

claimant in good faith.18 Although the KUCSPA provides a list of improper 

practices, the offenses listed are merely “technical violations.”19 Such 

“technical violations” are contractual claims that cannot form the basis of a 

private cause of action for tortious misconduct rising to the level of bad faith.20 

Instead, a showing of intentional misconduct or reckless disregard of the rights 

of an insured is a prerequisite to the submission of a KUCSPA or KCPA claim 

and a jury instruction on punitive damages.21

In Wittmer v. Jones, this Court clarified the appropriate elements of both 

statutory and common law first- and third-party bad-faith claims:

16 Motorists Mut. Ins. Co. v. Glass, 996 S.W.2d 437, 451 (Ky. 1997).

17 Associated Ins. Service, Inc. v. Garcia, 307 S.W.3d 58, 62 (Ky. 2010).

18 Indiana Ins. Co. v. Demetre, 527 S.W.3d 12, 26 (Ky. 2017); Stevens, 759 

S.W.2d at 821-22.

19 Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1993).

20 Id.

21 Id.
10

[A]n insured must prove three elements in order to prevail against 

an insurance company for alleged refusal in bad faith to pay the 

insured's claim: (1) the insurer must be obligated to pay the claim 

under the terms of the policy; (2) the insurer must lack a 

reasonable basis in law or fact for denying the claim; and (3) it 

must be shown that the insurer either knew there was no 

reasonable basis for denying the claim or acted with reckless 

disregard for whether such a basis existed.

22

So in considering CIC’s motion for a directed verdict on Belt’s bad-faith 

claims, the trial court was required to determine, considering the evidence 

provided in a light most favorable to Belt, whether a reasonable juror could 

conclude that CIC was obligated to pay the claim under the terms of K-2’s 

policy; that CIC lacked a reasonable basis in law or fact for denying K-2’s 

claim; and that CIC knew there was no reasonable basis for denying the claim

or acted with reckless disregard for whether such a basis existed. If the trial 

court found that, under the evidence presented, a reasonable juror could find 

all three Wittmer elements to be satisfied, the trial court should have denied 

CIC’s motion for directed verdict. But if Belt failed to produce sufficient 

evidence to persuade a reasonable juror on any one of the three elements, the 

trial court was required to grant a directed verdict in CIC’s favor.

22 Id. (quoting Federal Kemper Ins. Co. v. Hornback, 711 S.W.2d 844, 846-47 

(Ky. 1986) (Leibson, J., dissenting) overruled by Curry v. Fireman’s Fund Ins. Co., 784 

S.W.2d 176 (Ky. 1989) (overruling Federal Kemper’s majority opinion and adopting 

Justice Leibson’s dissent)).
11

B. The trial court erred in denying CIC’s motion for a directed verdict.

With the appropriate elements of a bad-faith claim identified, we now 

consider the evidence admitted at the bad-faith trial and analyze whether it 

satisfied the standard of proof outlined in Wittmer.

1. Coverage existed under K-2’s commercial general liability policy 

with CIC.

CIC filed an action against EMC, the Kersnicks, and K-2 on December 1, 

2011, to determine whether coverage existed under CIC and EMC’s policies for 

the August 6, 2011 UTV accident. This action culminated with a bench trial, 

at which the trial court concluded that coverage existed under both CIC’s 

commercial liability policy and EMC’s homeowners’ insurance policy for the 

August 6 UTV accident. 

At the bad-faith trial, the court admitted into evidence Plaintiff’s Exhibit 

#47, the trial court’s coverage ruling that concluded that the UTV accident was 

covered under K-2’s policy with CIC.

23 This ruling provided conclusive 

evidence to the jury that coverage existed under the policy in question in the 

bad faith action. So the first element of the Wittmer test was satisfied.24

23 One of the cross claims asserted by CIC deals with the propriety of the trial 

court’s admission of the trial court’s coverage opinion into evidence. As we resolve the 

case on other grounds, we need not reach this question today and make no ruling on 

the propriety of the admission.

24 The Court of Appeals overturned the jury’s verdict on the grounds that Belt 

failed to satisfy the first element of the Wittmer test. But the Court of Appeals 

conflated elements one and two of the Wittmer test, failing to distinguish the actual 

finding that coverage existed from the reasonable basis under which CIC filed the 

declaratory judgment action. As such, although we affirm the decision of the Court of 

Appeals, we do so on different grounds, ultimately finding element one of the Wittmer 

test satisfied and elements two and three unsatisfied.
12

2. CIC had a reasonable basis in law and fact for disputing the 

policy’s coverage of Belt’s claims.

On August 16, 2011, the Kersnicks provided notice to CIC of a claim 

under K-2’s commercial general liability policy. A copy of the Notice of Claim 

form was admitted into evidence at the bad-faith trial as Plaintiff’s Exhibit #1. 

There, the Kersnicks informed CIC that the UTV involved in the incident was 

purchased for business use and that Zachary Kersnick was driving the UTV at 

the time of the accident.

In email correspondence dated September 7, 2011, CIC Field Claims 

Manager Chad Dowdy communicated with Paul Braden, CIC Home Office 

Supervisor, that concerns existed about ownership of the UTV because the UTV 

was purchased by the Kersnicks individually. As a result, CIC was concerned 

that coverage for the claim might not exist under the terms of the policy. These 

email communications were admitted into evidence at the bad-faith trial as 

Plaintiff’s Exhibit #2. Outside of the ownership of the UTV, the emails 

expressed concern that the accident occurred outside the course and scope of 

K-2’s business and thus may not be covered by the policy. Lastly, the emails 

questioned the nature of the event held by the Kersnicks and whether it was a 

part of K-2’s business.

In email correspondence dated September 8, 2011, CIC Field Adjustor 

Jessica Hawkins communicated with Melissa Kersnick to obtain more 

information about the claim. These emails were admitted into evidence at the 

bad-faith trial as Plaintiff’s Exhibit #9. Melissa stated that the event was not 

K-2 business in the sense that they were not preparing and selling funnel 
13

cakes. Melissa stated that she discussed scheduling some shifts for K-2 with 

guests at the event. Melissa stated that the food at the event was prepared by 

a person who sometimes works for K-2, and that the tent, grill, and tables used 

at the event belong to K-2. Melissa stated that her husband intended to pay 

some of the boys at the event for helping to set up the event, but payment 

never occurred because of the accident. Melissa recounted to Hawkins that, at 

the event, Melissa told an attendee: “I guess today is K-2’s company picnic.”

On September 15, 2011, Melissa and Chuck Kersnick were formally 

interviewed by Jessica Hawkins to collect more information regarding their 

claim. A transcript of this interview was admitted into evidence at the badfaith trial as Plaintiff’s Exhibit #7. At that interview, they stated that they 

intended the UTV to be owned by K-2, although the vehicle was titled and 

financed in their names individually. They also stated that they authorized 

Zachary to give rides to his friends on the UTV, but they told him to stay in the 

yard. At this interview, Melissa and Chuck described the August 6 event as a 

social event—a birthday party for Melissa. They stated that guests brought 

food to share potluck-style and that Chuck provided some food for guests as 

well. Lastly, they stated that several of K-2’s employees were at the event and 

assisted with grilling, but that they were not paid for their work.

In email correspondence between Mike Risley, CIC’s outside coverage 

counsel, and Jessica Hawkins, concern was expressed that Zachary was not an 

insured under CIC’s policy. This email communication was admitted into 

evidence at the bad-faith trial as Plaintiff’s Exhibit #10. Risley stated that even 
14

if Zachary was found to be covered under the policy, because he exceeded the 

authorized scope of use of the UTV, his use of the UTV likely exceeded the 

scope of the policy’s coverage. They concluded that the ownership of the UTV 

itself was a question of the purchaser’s intent. The original purchase 

documents for the UTV did not contain any mention of K-2, but Melissa 

admitted to altering the documents herself to list K-2 as a co-owner after the 

August 6 accident occurred. Risley and Hawkins felt that this discrepancy 

created a question of material fact as to the intended ownership of the UTV at 

the time of the accident. The conversation concluded with factual and legal 

uncertainty regarding coverage of the accident under K-2’s policy.

Finally, on October 7, 2011, Risley provided a coverage opinion letter to 

CIC. This letter was admitted into evidence at the bad-faith trial as Plaintiff’s 

Exhibit #12. In this letter, Risley stated that K-2 was the named insured and 

therefore was an insured under the policy. He stated that neither the policy’s 

auto exclusion nor its mobile-equipment exclusion would likely apply to 

exclude the UTV accident from coverage under the policy. But he stated that 

Zachary was likely not an insured under the policy, regardless of whether he 

could be considered an employee of K-2.25 He stated that Chuck and Melissa 

Kersnick were insureds under the policy only if the claims against them related 

25 In the letter, Risley distinguished CIC’s policy from an ordinary automobile 

liability policy. According to Risley, in an ordinary automobile liability policy, the 

definition of an “insured” under the policy generally includes anyone operating the 

vehicle with the insured’s permission. In the case of K-2’s commercial liability policy, 

an insured is only defined as an employee acting within the scope of K-2’s business. 

Risley concluded that because Zachary was acting outside the scope of K-2’s business 

in driving the UTV, he is not an insured under the CIC policy. 
15

to the conduct of K-2’s business. He concluded that the ownership of the UTV 

was a factual issue that was important in the determination of coverage, 

because, if the UTV was owned by K-2, then Chuck and Melissa’s allowing 

someone to use the UTV could constitute the conduct of K-2’s business. 

Lastly, Risley identified a novel legal question of coverage presented by an LLC 

member’s authorization of use of company-owned property for non-company 

business. Overall, Risley recommended CIC file a declaratory judgment action 

to resolve the coverage issues described in his letter. 

These exhibits provided ample evidence that CIC had a reasonable basis 

in fact for disputing coverage of Belt’s claims. The ownership of the UTV, the 

purpose of the August 6 event, Zachary’s role at the event, and the role played 

by K-2 at that event were all unsettled factual questions that, coupled with the 

recommendation of outside counsel, justified CIC’s declaratory judgment action 

seeking a decision on coverage.

Additionally, CIC provided substantial evidence that it had a reasonable 

basis in law for disputing coverage of Belt’s claims. The novel legal question 

presented by the delegation of authority by LLC members to use potentially 

business-owned property for a non-business purpose presented an unsettled 

question of law which justified CIC’s pursuit of a declaratory judgment 

regarding coverage.26

26 Travelers Indem. Co. v. Armstrong, 565 S.W.3d 550, 568 (Ky. 2018) (quoting 

Empire Fire & Marine Ins. Co. v. Simpsonville Wrecker Serv., Inc., 880 S.W.2d 886, 890 

(Ky. App. 1994)) (“If a genuine dispute does exist as to the status of the law governing 
16

In the face of the factual evidence admitted at trial, we do not believe that 

a reasonable juror could conclude that CIC lacked a basis in law or fact for 

challenging the policy’s coverage of Belt’s claim.27 Thus, we find that Belt 

failed to satisfy the second element of Wittmer.

Belt argues that the action finding that coverage existed under K-2’s

policy provides an evidentiary basis for a reasonable juror to conclude that 

coverage was not fairly debatable. She asserts that CIC’s failure to appeal the 

coverage action ruling and its willingness to pay Belt policy limits constituted 

an admission of the unreasonable nature of CIC’s challenge to coverage. As 

this Court has stated before, such an inference is preposterous.28 “[A]n insurer 

is entitled to challenge a claim and litigate it if the claim is debatable on the 

law or facts.”29 We decline to hold that the ultimate finding that coverage 

exists is dispositive evidence that the coverage action was brought in bad faith. 

Additionally, a party’s litigation strategy to decline to appeal a coverage 

decision and pay policy limits in accordance with that coverage decision does 

not constitute evidence of bad faith in bringing the coverage action. 

the coverage question, the insured's claim is fairly debatable and the tort claim for bad 

faith based upon the insurer's refusal to pay the claim may not be maintained.”).

27 Mosley v. Arch Specialty Ins. Co., 626 S.W.3d 579, 586 (Ky. 2021) (“[W]hen an 

insured's liability is unclear, bad-faith claims fail as a matter of law because the 

insurer has a reasonable basis for challenging the claim.”).

28 Glass, 996 S.W.2d at 454. 

29 Id. 
17

3. Belt failed to provide evidence that CIC acted with reckless 

disregard for whether a reasonable basis existed for denial of 

Belt’s claim.

A claimant bringing a bad-faith claim must provide evidence of 

“intentional misconduct or reckless disregard of the rights of an insured or 

claimant to warrant submitting the right to award punitive damages to the 

jury.”30 Kentucky courts have found such intentional misconduct or reckless 

disregard in cases in where affirmative evidence showed that an insurer 

blatantly misrepresented policy provisions to the insured,31 used the claimant’s 

financial struggles to leverage its bargaining position,32 focused its 

investigation on evading paying the claim,33 or refused to settle a claim until 

the claimant released the insurer from liability arising from its misconduct.34 

At trial, Belt failed to offer evidence of any intentional misconduct. First, 

Belt relied on simple conjecture to argue that CIC’s historic losses in the period 

preceding Belt’s claim motivated CIC to deny coverage to avoid further losses. 

But without affirmative evidence of a causal connection between such losses 

and the investigation, negotiation, and settlement of Belt’s claim, a finding of 

intentional misconduct or reckless disregard cannot be sustained.

Second, in her brief, Belt provides as evidence of CIC’s “reckless 

disregard” a statement made by CIC Vice President Dennis Stetz that, “no one 

30 Wittmer, 864 S.W.2d at 890. 

31 Farmland Mut. Ins. Co. v. Johnson, 36 S.W.3d 368, 377 (Ky. 2000). 

32 Hamilton Mut. Ins. Co. v. Buttery, 220 S.W.3d 287, 293 (Ky. App. 2007).

33 Id. 

34 Id. 
18

would jump off a bridge for $1 million.”35 But Belt provided no evidence that 

Stetz’s comment was, in any way, associated with her claim. Additionally, 

Stetz’s statement was made in a deposition on June 13, 2016, more than four

years after CIC filed the declaratory judgment action for determination of 

coverage under K-2’s policy. A possibly inflammatory statement made by an 

otherwise unrelated employee of an insurer cannot, alone, prove intentional 

misconduct or reckless disregard in the administration of an individual’s claim.

Lastly, Belt conflates the seriousness of the financial, physical, and 

psychological effects of her injuries with intentional misconduct by CIC, who 

she claims recklessly and intentionally delayed settling her claim for two-anda-half years. This argument fails for two reasons.

First, “mere delay in settlement does not rise to bad-faith conduct.”36 So

a plaintiff must provide “proof or evidence supporting a reasonable inference 

that the purpose of the delay was to extort a more favorable settlement or to 

deceive the insured [or claimant] with respect to the applicable coverage.”37 

Belt provided no evidence of improper motive in CIC’s delay in payment of 

settlement. Nor did Belt provide evidence that CIC acted to deceive K-2 as to 

the coverage provided in the policy. Instead, communications admitted into 

evidence provide numerous examples of CIC employees clearly communicating 

35 We note that Belt’s brief alleges Stetz said, “[N]o one would jump off a bridge 

for $1 million.” But the video record to which Belt cites is the testimony of Britta Moss 

making reference to Stetz’s deposition testimony. There, Moss alleges that Stetz said, 

“No one at Cincinnati would jump off a bridge over a million dollars.”

36 Mosley, 626 S.W.3d at 588-89.

37 Glass, 996 S.W.2d at 452-53.
19

to K-2 and its counsel the unsettled questions that required resolution in a 

declaratory judgment action. Overall, an insurer’s duty to effectuate a 

settlement under a policy does not begin until coverage is reasonably clear.38 

As such, CIC’s duty to settle with Belt did not arise until the trial court’s 

coverage ruling issued, at which point CIC paid Belt its policy’s limits.

Second, CIC was acting within its rights as an insurer in filing a 

declaratory judgment action to determine whether coverage existed under the 

policy.39 Although seeking a declaratory judgment on coverage does not 

preclude a bad-faith claim, when it is coupled with genuine questions of law 

and fact that make coverage fairly debatable, the delay in settlement caused by 

a declaratory judgment action does not expose the insurer to liability for bad 

faith.40

The dissent cites as evidence of CIC’s “reckless disregard” the trial 

testimonies of Britta Moss and Paul Braden as well as CIC’s “institutional 

failure to investigate, inform, or reasonably settle with parties to this claim—

given the magnitude of the injury and the number of CIC representatives who 

failed to comport with industry standards over the course of several years[.]” 

We find this evidence insufficient for several reasons.

38 Davidson v. Am. Freightways, Inc., 25 S.W.3d 94, 100 (Ky. 2000) (“The 

gravamen of the UCSPA is that an insurance company is required to deal in good faith 

with a claimant, whether an insured or a third-party, with respect to a claim which 

the insurance company is contractually obligated to pay.”).

39 Guaranty Nat. Ins. Co. v. George, 953 S.W.2d 946, 949 (Ky. 1997).

40 Id.
20

First, Moss testifying that CIC’s actions were outrageous does not simply 

make them so. Although CIC may not have investigated and handled Belt’s 

claim in the way that Moss and Belt would have preferred, that does not make 

CIC’s conduct unreasonable, let alone outrageous. As described in CIC’s 

claims file, Plaintiff’s Exhibit #2, upon receiving notice of K-2’s claim under the 

policy, CIC investigated the claim and interviewed the claimants. CIC 

consulted with outside coverage counsel to resolve questions regarding the 

policy’s coverage. Five months after initial notification of the claim, when 

coverage questions remained unsettled, CIC promptly filed a declaratory 

judgment action to determine coverage. And when Belt filed suit against K-2 

and the Kersnicks, CIC provided a defense to K-2, the Kersnicks, and their son 

under a reservation of rights. Nothing about CIC’s behavior was unusual, let 

alone reckless or outrageous. In fact, this is the exact course of conduct we 

expect an insurer to take. Despite Moss’s opinion otherwise, we do not find 

that a reasonable jury applying this Court’s precedent could conclude that CIC 

acted outrageously.

Further, calling an action outrageous does not simply make it so. To 

hold otherwise would be to grant any expert witness in a bad faith action the 

ability to define the scope of bad faith under our law. We decline to do so 

today.

Second, the dissent cites Braden’s trial testimony as evidence of reckless 

disregard for whether a reasonable basis for denying Belt’s claim existed. At 

trial, Braden testified that, following the verdict in the coverage action, he felt 
21

indifferent to the court’s decision. The dissent argues that this testimony is 

evidence from which the jury could conclude that CIC did not intend to abide 

by the trial court’s ruling in the coverage action. We do not find this testimony 

to provide reasonable grounds for such an inference. A single employee’s 

emotional response to a coverage decision does not impute bad faith to the 

insurer, particularly when that employee did not take, nor is he alleged to have 

taken, any action based on that emotion. Although Braden may have been 

displeased by the verdict on the coverage action, CIC did not appeal the trial 

court’s finding of coverage, and it paid policy limits to Belt. Thus, CIC in no 

way failed to abide by the trial court’s ruling, and Braden’s mere statement 

about his indifference does not provide a sufficient basis from which a 

reasonable jury could conclude that CIC acted with reckless disregard for 

whether a reasonable basis for denial of Belt’s claim existed.

The remaining evidence the dissent cites as supporting a finding of 

“reckless disregard” amounts to alleged violations of the KUCSPA. However, as 

previously stated, such “technical violations” are contractual claims that 

cannot form the basis of a private cause of action for tortious misconduct rising 

to the level of bad faith.41 CIC did not fail to investigate, communicate, or 

negotiate settlement with Belt, it just did not do so in the ways that Belt would 

41 Wittmer, 864 S.W.2d at 890.
22

have liked. Mere alleged deficiencies in undertaking the obligations set out in 

the KUCSPA cannot, alone, form the basis of a bad faith claim.42

Belt simply provides no evidence on which a reasonable jury could 

conclude that CIC acted with reckless disregard for whether a reasonable basis 

for denial of Belt’s claim existed. Thus, Belt did not satisfy the third element of 

the Wittmer test.

IV. CONCLUSION

Because Belt provided insufficient evidence for a reasonable jury to find 

two of the three Wittmer elements to be satisfied, the trial court should have 

granted CIC’s motion for a directed verdict on all Belt’s bad-faith claims, 

statutory and common law. And considering our holding, we need not address 

the remaining arguments raised by CIC’s cross-appeal. We affirm the Court of 

Appeals’ holding, albeit on different grounds, and remand this matter to the 

trial court for dismissal of Belt’s claims.

All sitting. Hughes, Lambert, and VanMeter, JJ., concur. Keller, J., 

dissents by separate opinion in which Conley and Nickell, JJ., join.

KELLER, J., DISSENTING: I respectfully dissent from the Majority’s 

opinion. As elaborated below, Haley Belt put forth evidence sufficient to prove

that Cincinnati Insurance Company (CIC) possessed all the information 

necessary to make a coverage determination in the first two months of having 

the claim file, that CIC failed to reasonably investigate the claim, that CIC had 

42 See Hollaway v. Direct Gen. Ins. Co. of Mississippi, Inc., 497 S.W.3d 733, 739 

(Ky. 2016).
23

no justification for its one settlement offer amount, that CIC filed a declaratory 

judgment action to force a lower settlement, and that CIC repeatedly 

misrepresented material information to the claimants. If Belt’s evidence is 

taken as true and all reasonable inferences are drawn in Belt’s favor—as is 

required under our standard of review—it is clear that the trial court did not 

err in denying CIC’s motion for a directed verdict.

I. ANALYSIS

Both sides argue vehemently over how Belt’s case aligns with this Court’s 

precedent regarding bad faith. Before detailing the testimony as elicited in this 

case, I will first review this Court’s relevant precedent subsequent to Wittmer.

Wittmer v. Jones, 864 S.W.2d 885 (Ky. 1993). In Hollaway v. Direct General

Insurance Co. of Mississippi, Inc., 497 S.W.3d 733 (Ky. 2016), Hollaway alleged 

bad faith based on an insurer’s alleged failure to reasonably negotiate a 

settlement or investigate a claim. Id. at 735. However, the facts underlying 

the claim, including whether Hollaway’s damages actually stemmed from the 

accident or a prior injury, were in dispute. Id. at 735–36. Because of this, when 

the insurer moved for summary judgment, the trial court granted its motion. 

Id. at 736. The trial court found “that a legitimate dispute existed regarding 

who had been liable for the accident and what injuries to Hollaway were 

caused by the accident.” Id. at 735–36. On de novo review of the summary 

judgment award, this Court affirmed. Id. at 740.

This Court similarly affirmed summary judgment granted in favor of an 

insurer in a bad faith claim in Mosley v. Arch Specialty Insurance Co., 626 
24

S.W.3d 579, 582 (Ky. 2021). There, Mosley alleged bad faith despite a 

legitimate dispute regarding liability precluding settlement. Id. at 587. This 

Court found no error, since “when an insured’s liability is unclear, bad-faith 

claims fail as a matter of law because the insurer has a reasonable basis for 

challenging the claim.” Id. at 586.

In Indiana Insurance Co. v. Demetre, 527 S.W.3d 12 (Ky. 2017), unlike in 

the cases above, this Court affirmed the trial court’s denial of an insurer’s

directed verdict motion regarding bad faith. Id. at 15. Demetre sought coverage 

from his insurer, Indiana Insurance Company, for environmental claims 

brought against him by a family occupying a residence nearby a vacant lot 

Demetre owned which had previously operated as a gas station. Id. at 14–15. In 

finding in favor of Demetre, we noted that “viewing the evidence in the light 

most favorable to Demetre,” Indiana Insurance engaged in “a sustained effort . . 

. to deny coverage long after it could and should have determined that it was 

legally obligated under its contract with Demetre.” Id. at 30. We further stated 

that “the evidence readily support[ed] Demetre’s contention that Indiana 

Insurance was far more interested in denying coverage than defending 

[Demetre] against [the] claims.” Id. We noted that the resolution of the claim 

did not proceed without delay despite the coverage question being 

straightforward. Id. 

Further, we held that “[t]here was no ‘genuine dispute’ that Demetre had 

contracted with Indiana Insurance to insure the . . . property and that the . . . 

claims arose from alleged contamination caused by that property.” Id. at 31. 
25

We noted that Indiana Insurance was never “able to demonstrate that Demetre 

had concealed information about possible contamination . . . from his insurer,” 

which was “the premise for the insurer’s refusal to acknowledge coverage and 

[was] a position it eventually abandoned.” Id. Finally, we explained that “there 

was clearly insufficient factual support” for the “first-impression legal theories” 

advanced but eventually abandoned and that the next theory Indiana 

Insurance advanced “was without any factual justification whatsoever,” as 

acknowledged by an employee at trial. Id. at 32. Accordingly, we held that “a 

reasonable jury could conclude that Indiana Insurance’s assertion and 

prolonged continuation of an ultimately meritless coverage dispute reflected 

bad faith and caused its insured to endure significant emotional and financial 

strain.” Id. at 30.

As can be seen, there are significant factual distinctions between the 

three cases. In addition to the factual distinctions between Demetre and the 

first two cases above, there is also an important procedural distinction. Mosley 

and Hollaway both came to this Court on appeals from summary judgments 

awarded in favor of insurers. Our standard of review for such issues is below.

On appeal from summary judgment granted below, we determine 

whether “the pleadings, depositions, answers to interrogatories, 

stipulations, and admissions on file, together with affidavits, if any, 

show that there is no genuine issue as to any material fact and 

that the moving party is entitled to a judgment as a matter of law.” 

All factual ambiguities are viewed in a light most favorable to the 

nonmoving party. And we review all legal conclusions de novo; the 

lower courts’ opinions are entitled to no deference.
26

Hollaway, 497 S.W.3d at 736 (internal citations omitted). By contrast, Demetre, 

like the case at bar, was before this Court on the denial of an insurer’s motion 

for directed verdict. The standard of review for a denial of a directed verdict sets

a high bar. In such a review, this Court is prohibited from determining the 

“credibility or the weight which should be given to the evidence” presented at 

trial. Lewis v. Bledsoe Surface Mining Co., 798 S.W.2d 459, 461 (Ky. 1990) 

(citing Kentucky & Indiana Terminal R. Co. v. Cantrell, 298 Ky. 743, 184 S.W.2d 

111 (1944); Cochran v. Downing, 247 S.W.2d 228 (Ky. 1952)). In fact, “[a]ll 

evidence which favors the prevailing party”—in this case, Belt—“must be taken 

as true.” Id. More than just taking the evidence as true, though, “[t]he 

prevailing party is entitled to all reasonable inferences which may be drawn 

from the evidence.” Id.

After drawing reasonable inferences and taking Belt’s evidence as true, 

we then “must determine whether the verdict rendered is palpably or flagrantly 

against the evidence so as to indicate that it was reached as a result of passion 

or prejudice.” Id. at 461–62 (internal quotation marks omitted) (quoting NCAA 

v. Hornung, 754 S.W.2d 855, 860 (Ky. 1988)). Only where the jury’s result is 

“palpably or flagrantly against the evidence” may we reverse the trial court’s 

decision to deny a motion for a directed verdict. Id. (internal quotation marks 

omitted). By adopting such a deferential standard, we maintain the sanctity of 

an awarded jury verdict, rather than take a decision out of the hands of a jury 

who has already deliberated and decided a case.
27

Here, Belt alleged bad faith against CIC. To prove a bad faith claim

against CIC, Belt needed to satisfy the three Wittmer factors. Wittmer, 864 

S.W.2d at 890. To satisfy those factors, Belt needed to show that CIC was 

obligated to pay the claim under the terms of the policy, that CIC lacked “a 

reasonable basis in law or fact for denying” her claim, and that CIC “either 

knew there was no reasonable basis for denying the claim or acted with 

reckless disregard for whether such a basis existed.” Id. (citation omitted).

Under our standard of review, this Court must determine if Belt put on 

sufficient evidence supporting each of the three factors in order to survive a 

motion for directed verdict. See Demetre, 527 S.W.3d at 25.

We agree with the majority that Belt established the first of the three 

Wittmer factors. Our analysis thus focuses on the second two. As we elaborate 

below, there is considerable overlap in evidence for the second and third 

elements on this bad faith claim.

A. Element Two

Under the second element of the Wittmer test, Belt needed to show that 

CIC lacked a reasonable basis in law or fact for denying her claim. Wittmer, 864 

at 890. This Court need not determine whether that element was actually 

proven. Instead, it is our duty to determine if Belt entered sufficient evidence to 

support that conclusion. Put a different way, the question is not whether 

evidence supported a conclusion that CIC had a reasonable basis to deny her 

claim. If a jury could have concluded or inferred from any of the evidence 
28

proffered by Belt that CIC lacked a reasonable basis in law or fact for denying 

her claim, then the directed verdict denial should be affirmed. Id.

Belt’s case for CIC lacking a reasonable basis in law or fact for denying 

the claim relies on exhibits and testimony from various individuals, including

employees of CIC itself. One such piece of evidence is the opinion letter

regarding coverage written by Mike Risley, an attorney at Stites & Harbison. 

Risley was contacted by CIC to review the claim at issue and provide a legal 

opinion regarding coverage. In his letter, Risley opined that none of the policy 

exclusions applied to Belt’s claim. He further advised that K-2 was an insured 

covered for any claims that could be brought against it. He advised that Zach 

Kersnick was not an insured under the policy. Finally, he advised that whether 

Mr. and Mrs. Kersnick were insureds under the policy turned on two questions: 

(1) whether the vehicle was owned by K-2 at the time of the accident; and (2) if 

the vehicle was owned by K-2, whether their entrustment of the vehicle to Zach 

constitutes conducting the business of K-2. While neither of these questions 

could be answered with absolute certainty, Risley wrote that it was likely that a 

factfinder would conclude that K-2 owned the vehicle, a fact that is noticeably 

absent from the Majority’s opinion. Also absent from the Majority’s opinion is 

the fact that Risley recommended taking an Examination Under Oath (EUO) 

and merely suggested considering filing a declaratory judgment action after the 

EUO was completed.

Belt used the claim file from CIC on her claim to show that after receiving 

Risley’s opinion letter, CIC conducted no further investigation. Anything related 
29

to the claim, including investigations and communications, is included in the 

claim file. According to the file, CIC did nothing to attempt to ascertain the 

answers to the questions Risley posed aside from filing a declaratory judgment 

action to determine coverage. Against the advice of Risley, CIC failed to take 

any EUOs prior to filing the coverage action. 

Further, after receipt of Risley’s opinion letter and throughout the 

pendency of the coverage action, contrary to the letter, CIC continued to tell the 

Kersnicks that two of the policy exclusions may apply to defeat coverage for 

their claim. They did this despite not only Risley’s opinion, but also notes in 

the claim file indicating CIC’s belief that the exclusions likely did not apply.

In addition to Risley’s opinion letter and the claim file, the jury also saw 

the trial court’s Findings of Facts and Conclusions of Law on coverage from the 

coverage action. In that order, Judge Burress found that “the entirety of the 

testimony presented is contrary to [CIC]’s allegation” that the Ranger was a 

personal vehicle and not a business vehicle. The court found that the Polaris 

Ranger was owned by K-2. Judge Burress further found that the party “had 

both a business and personal component.” He also found “that Chuck and 

Melissa Kursnick [sic] were acting within their capacity as managers of K-2 at 

the time of the injury to Haley Belt.” Judge Burress stated, “Providing a ride to 

[Belt] and the others in the vehicle at that time was clearly entertainment 

pursuant to the business purpose of the party.” (Emphasis added). Finally, 

Judge Burress found that “at the time of the occurrence Zachary Kersnick was 

operating the Polaris Ranger for a business purpose within the scope of his 
30

volunteer activities for K-2.” Of note, Judge Burress stated that it was 

“undisputed” that Zach was engaged in volunteer activities on the night of the 

wreck. While this judgment was admitted into evidence over CIC’s objection,43

because the jury received no admonition regarding the limitations of its use, we 

must assume they considered the whole of the exhibit. Importantly, all of the 

facts upon which Judge Burress based his order were already known to CIC 

within mere weeks of the claim being filed.

Belt also introduced the testimony of Paul Braden at trial. Braden 

oversaw the entire claim file regarding coverage and settlement offers with Belt. 

During her examination, Belt’s attorney walked Braden through each of CIC’s 

“questions” that allegedly made a coverage determination impossible and 

compared them to the trial court’s findings. In doing so, Belt attempted to show 

that in the Fall of 2011, prior to filing the declaratory judgment action, CIC had 

all the information the trial court used to make its decision, and should have 

come to similar conclusions regarding coverage. Braden testified that he had 

no reason not to believe Risley’s opinion that K-2 Catering owned the Polaris.

Braden’s testimony indicated that Risley had told CIC in October of 2011 that, 

most likely, CIC would need to cover Belt’s injuries. 

43 CIC challenges the entry of this evidence on appeal. At trial, CIC objected to 

the trial court’s judgment being entered as an exhibit. Although the judge agreed to 

give an admonition that the opinion only be used to evaluate experts, no admonition 

was ultimately provided, and CIC failed to alert the court. Accordingly, the jury 

received the whole of the judgment. While I do not reach this issue in my dissent, I 

acknowledge that even in the absence of the coverage opinion, Belt still satisfies our 

standard for a directed verdict on a bad faith claim against an insurer.
31

Belt’s attorney continued to underscore CIC’s failure to investigate

despite allegedly having lingering questions, saying, “If you look at the claim 

file, in the first three weeks, the Kersnicks told Cincinnati Insurance that the 

[Polaris] was bought for K-2 Catering, that it was at the Kentucky Fair for 

business, that it was bought to make it easier to transport supplies for events . 

. . but Cincinnati Insurance failed to . . . confirm any information it needed to 

confirm?” Braden responded that although CIC could have attempted to obtain

the information it needed, it did not.

Belt also used Braden’s testimony to establish that despite not 

investigating further, CIC already had all the information necessary to make a 

coverage determination in favor of the Kersnicks and Belt. She compared the 

internal opinions of CIC to the ultimate determination of coverage by the trial 

court in the coverage action. Alluding to the trial court’s coverage opinion, 

Belt’s attorney asked, “So the same thing that you knew in 2011, the judge 

found two and a half years later. Is that correct?” Braden responded, “That is 

correct.”

CIC claimed that ownership of the Polaris was an issue for resolution at 

the coverage trial. However, Braden was not surprised by the trial court’s 

determination that the Polaris was owned by K-2 Catering, as he had reached 

this same conclusion shortly after the claim was filed. Braden testified, “[T]he

court agreed, as I did, that [the Polaris] did belong to K-2 Catering.” Yet, when 

Braden was pushed on the matter, he continued to allege that CIC “didn’t know 

with certainty either way.”
32

Braden also testified that despite lingering questions, CIC failed to 

conduct any investigation into the financing of the Polaris, failed to speak with 

anyone at the party other than the Kersnicks themselves, failed to follow up on 

the Kersnicks’ assertion that they used other company equipment at the party, 

and failed to seek out any additional information that would be relevant to 

coverage. CIC failing to act was a theme throughout Belt’s case and was central 

to her claim of bad faith. 

Finally, Braden testified that CIC knew that K-2’s equipment was being 

used at the party and that several employees worked at the event. CIC failed to 

follow up with any of these employees, however, about the nature of the event.

Belt’s injury would not be covered if the event was unrelated to K-2 Catering’s 

business. In spite of the importance of this question, CIC failed to follow up on 

an email from Mrs. Kersnick sent the day after her recorded interview with CIC.

The majority chose to completely disregard this evidence. The email clarified 

several facts relevant to coverage. These facts were favorable to coverage. 

Although no one testified that they did not believe Mrs. Kersnick, CIC 

maintained that coverage was unclear. Instead of investigating, CIC filed the 

coverage action.

In addition to the above, the trial court also heard several other

individuals testify to facts supporting a conclusion that CIC lacked a

reasonable basis in law or fact for denying the claim. These testimonies further 

buttressed the evidence noted above. Together, they draw a picture of an 

insurer that had all the information that the trial court had, that failed to 
33

investigate further in spite of a duty (and an apparent internal need) to do so, 

and that despite internal opinions to the contrary, led insureds to believe they 

may not be covered due to irrelevant exclusions.

Jessica Hawkins, the on-the-ground adjuster for the claims file, testified 

that on the first day she received the file, CIC already had information that the 

Polaris was purchased for business use and that Zach was at fault. Wes 

Grushon, the CIC employee in charge of Zach’s defense file, and Elizabeth 

Schirm, the CIC employee who oversaw Mr. and Mrs. Kersnick’s and K-2’s 

defense file, similarly testified that CIC was aware that Zach would likely be 

found liable. The trial court heard further testimony from Schirm, Hawkins, 

and Grushon that even without medical records, they knew Belt’s injuries were

severe. Hawkins specifically stated that within two weeks of the accident (after 

learning of the degloving), she knew that Belt’s injuries would total in the six 

figures. This fact was bolstered by testimony from John Martin, the attorney 

hired by CIC to defend Mr. and Mrs. Kersnick and K-2. Martin stated that he 

knew there could be an excess verdict44 based on Belt’s injuries and notified 

CIC of that numerous times. 

Despite the testimony regarding the extent of Belt’s injuries, no one from 

CIC could explain why only one offer of merely $250,000 was made. Even CIC’s 

own expert, Bill Woolums, testified that CIC should have had a reasonable 

explanation for any offer that it made, and that there was no explanation at all 

44 An excess verdict is one which exceeds the liability limits of the insurance 

company.
34

for the $250,000 offer. Schirm testified that she requested authority to make a 

higher offer, but this request was denied by upper management.

Britta Moss, Belt’s expert, similarly testified that there must be a 

reasonable basis or explanation for any settlement offer made regarding a 

claim. Since there was no evaluation of the value of the claim and no 

explanation of how they arrived at the $250,000 offer, CIC failed to comply with 

industry standards, according to Moss. Moss outlined several other ways in 

which CIC failed to comport with industry standards, including unjustly 

delaying payment, focusing on a theory of coverage and seeking only to support 

that theory (called “prejudgment”), failing to clearly and truthfully

communicate, failing to objectively evaluate the claim, failing to use proper 

standards to deny the claim, failing to complete a reasonable investigation, 

misrepresenting facts and policy provisions, failing to attempt to settle when 

liability under the policy was reasonably clear, and failing to provide a basis for 

coverage decisions. Moss also testified that the filing of a coverage action does 

not suspend these duties; they persist through the life of the claim. So, 

according to Moss, the coverage action did not save CIC from potential bad 

faith.

Moss’s, Hawkins’s, and Braden’s testimonies indicated that by 

September 8, 2011, CIC had all the factual information it would ever have 

regarding coverage. With only that information, Risley was able to draw the 

conclusions for his letter, and in the coverage action, a judge was able to draw 

a conclusion in favor of coverage (echoing Braden’s testimony described above). 
35

Nevertheless, CIC failed to investigate Risley’s outstanding questions or 

negotiate above its initial, baseless offer. Moss testified that an insurer has a 

duty to conduct a full investigation before denying a claim. She further stated 

that a reasonable investigation requires making an effort to gather all the facts 

that are relevant to a coverage determination, continuing to ask questions, 

following up with individuals named as relevant parties to a determination, and 

seeking additional information where facts seem contradictory or confusing.

Moss stated that in the insurance field, it is common—and necessary—to 

further investigate claims in order to make a determination. She stated that 

CIC did not act appropriately after receiving the follow-up email from Mrs. 

Kersnick because the email provided multiple additional avenues CIC could 

have explored, but it failed to do so.

Because, according to Moss, the issue of whether there was coverage for 

K-2 and the Kersnicks was not fairly debatable, and since CIC should have 

known that, CIC should have attempted to settle for the policy limits. Instead, 

Moss testified, CIC had made a prejudgment about the claim and was therefore 

looking for ways to refuse to pay the claim, initiating a coverage action in an 

attempt to save money or extort a lower settlement. In doing so, Moss stated 

that CIC effectively denied Belt’s claim without a full investigation. A jury could 

easily infer from the above testimony, taken together, that CIC lacked a 

reasonable basis in law or fact for denying the claim.

Moss was particularly concerned with CIC’s continued insistence that 

exclusions may apply to defeat coverage. CIC sent letters to the Kersnicks for 
36

years citing exclusions even when it both believed and was told none would 

apply. This testimony was supported by the testimony of Braden as well as 

Risley’s opinion letter. CIC’s expert, Woolums, specifically testified that he 

believed including the mobile exclusion in the Reservation of Rights letter was a 

mistake. He even stated that he “won’t disagree” with calling it a 

misrepresentation. Terry Feeney, CIC’s headquarters field claims supervisor,

acknowledged that an adjuster should not say that an exclusion may defeat 

coverage when they know it doesn’t apply. Feeney further testified, in 

accordance with Moss’s testimony, that doing otherwise could give rise to a bad 

faith claim. This fact is bolstered by CIC’s internal Bad Faith Training 

PowerPoint, entered as an exhibit, which states that giving misleading 

information such as this can be the basis of a bad faith claim and should be 

avoided. Each of the CIC employees who worked Belt’s claim had taken this 

training multiple times. Moss testified that it was outrageous to repeatedly cite 

exclusions that do not apply.

In summary, the jury heard the following evidence. CIC did not rely on 

advice of counsel in this case. Braden decided not to conduct the EUO and to 

file a declaratory judgment action instead. CIC stopped investigating completely 

after less than a month despite lingering questions and misinformed relevant 

parties regarding policy exclusions. CIC deliberately told the Kersnicks the 

opposite of what its own counsel stated in an effort to delay or effectively deny 

coverage, despite factual and legal bases supporting coverage. No attorney 

testified that Risley’s opinion letter was inaccurate or that his opinions were 
37

questionable. No one testified as to why a low offer was made. There was no 

apparent justification for the offer at all. No one investigated any alleged 

controversies relating to coverage. Experts for both sides implied that CIC acted 

unreasonably. Belt’s expert testified that CIC subverted many industry norms 

and duties. Belt entered exhibits from CIC showing that its employees should 

have known that what they were doing was in bad faith, by their own training 

materials. Finally, the jury saw Risley’s opinion letter and the judgment in the 

coverage action, both of which landed approximately in the same place: CIC 

needed to cover Belt’s injuries. The judgment itself made CIC’s arguments 

against coverage seem lacking in evidentiary grounding. 

With all this evidence and reasonable inferences drawn from it, a juror 

certainly could have been convinced of CIC’s lack of a basis in fact or law for 

denying coverage. According to testimony, either CIC knew everything it needed 

to determine coverage and did not settle the claim anyway, or it had lingering 

questions related to coverage that it could have resolved, but did nothing to 

investigate. In either case, CIC had a legal duty and flouted it. As in Demetre, 

the evidence taken in a light most favorable to Belt shows “a sustained effort . . 

. to deny coverage long after it could and should have determined that it was 

legally obligated.” Demetre, 527 S.W.3d at 30. It further shows, as did the 

evidence in Demetre, that “[the insurer] was far more interested in denying 

coverage than defending . . . against [the] claims.” Id. Accordingly, I would have 

affirmed the trial court on this element of bad faith.

B. Element Three
38

To reiterate, the third Wittmer factor requires that an insurer “either 

knew there was no reasonable basis for denying the claim or acted with 

reckless disregard for whether such a basis existed.” Wittmer, 864 S.W.2d at

890. Proof of the third element “requires evidence that the insurer’s conduct 

was outrageous, or because of . . . reckless indifference to the rights of others.” 

Hollaway, 497 S.W.3d at 738 (citation omitted). In looking for reckless 

indifference or outrageousness, we “no longer consider” an “evil motive” on the 

part of the insurer. Id. at 738 n. 11.

Taken together, I believe the weight of the evidence outlined above is 

sufficient to show outrageous conduct and a reckless indifference to Belt’s and 

the Kersnicks’ rights under the CIC policy. Such an institutional failure to 

investigate, inform, or reasonably settle with parties to this claim—given the 

magnitude of the injury and the number of CIC representatives who failed to 

comport with industry standards over the course of several years—should be 

sufficient in and of itself to provide sufficient evidence of outrageous or reckless 

conduct to survive our directed verdict standard. 

However, Belt introduced several explicit pieces of testimony indicating 

outrageousness and reckless indifference to the rights of others. Following the 

court’s coverage opinion, Braden stated that he was “indifferent” about the 

decision—a jury could infer from this that CIC did not initially want to abide by 

the ruling specifically delineating the rights of policyholders in this case. 

Moss’s testimony is even more compelling. Moss stated that it was 

outrageous for CIC to repeatedly cite exclusions that did not apply and 
39

indifferent for CIC to limit the reserve on Belt’s claim given the severity of her 

injuries and the near inevitability of coverage. 

Some may reasonably argue that events underlying this claim were not

as severe as those in Demetre. However, Demetre is not the floor for bad faith 

claims. Neither does the evidence described in this dissent amount to mere 

technical violations of the Kentucky Unfair Claims Settlement Practices Act, as 

alleged by the Majority. In fact, the evidence viewed in the light most favorable 

to Belt could lead a reasonable juror to believe that CIC blatantly 

misrepresented policy provisions to the Kersnicks, as was deemed sufficient to 

satisfy Wittmer’s third factor in Farmland Mutual Insurance Co. v. Johnson, 36 

S.W.3d 368, 377 (Ky. 2000). A reasonable juror also could find that CIC 

focused its investigation on evading paying Belt’s claims, as occurred 

in Hamilton Mutual Insurance Co. of Cincinnati v. Buttery, 220 S.W.3d 287, 293 

(Ky. App. 2007). Finally, a reasonable juror could find that the purpose of CIC’s 

delay “was to extort a more favorable settlement or to deceive the insured with 

respect to the applicable coverage,” as the Court in Motorists Mutual Insurance 

Co. v. Glass said was required for bad faith. 996 S.W.2d 437, 453 (Ky. 1997), 

abrogated on other grounds by Hollaway, 497 S.W.3d 733. Given Moss’s 

testimony, Braden’s statements, and the gravity of CIC’s alleged failures 

presented to the jury, I would hold that Belt satisfied the third prong of the 

Wittmer analysis for the purposes of surviving a motion for directed verdict.
40

II. CONCLUSION

In this case, we are not called to make credibility determinations for 

witnesses. We are not called to determine what we, as a Court, would have 

found given the totality of the evidence. Instead, we are called to determine if 

Belt had enough evidence to survive a motion for directed verdict. To do so, 

Belt needed only to put on enough evidence for each of the Wittmer factors to 

be potentially found by a jury without “passion or prejudice,” so as to be 

“palpably or flagrantly against the evidence.” Lewis, 798 S.W.2d at 461–62. “A 

directed verdict is proper only when there is a complete absence of pleading or 

proof on a material issue in the action, or there is no disputed issue of fact 

upon which reasonable men could differ.” Harper v. Univ. of Louisville, 559 

S.W.3d 796, 801 (Ky. 2018) (internal quotations and citations omitted). This 

Court is constrained in its analysis to its standard of review.

In the case at bar, a jury, having been convinced after seven days of trial, 

awarded Haley Belt $1,083,472.39 in compensatory damages and $3,500,000 

in punitive damages. The Majority today would take away that jury’s award. 

Because I believe that Belt presented sufficient evidence to overcome a motion 

for directed verdict, I respectfully dissent from the Majority’s opinion.

Conley and Nickell, JJ., join.
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COUNSEL FOR APPELLANT/CROSS-APPELLEE:

Jennifer A. Moore

Emily A. DeVuono

Moore Law Group, PLLC

Don Battcher

Batcher Law Office, PSC

COUNSEL FOR APPELLEE/CROSS-APPELLANT:

Pamela A. Chestnut

Robert A. Jenkins

Kinkead and Stilz, PLLC

COUNSEL FOR AMICUS CURIAE, INSURANCE INSTITUTE OF KENTUCKY:

Susan L. Maines

COUNSEL FOR AMICUS CURIAE, KENTUCKY DEFENSE COUNSEL, INC.:

Patricia Colleen Le Meur

William Baxter Oberson, Jr.

COUNSEL FOR AMICUS CURIAE, UNITED POLICYHOLDERS:

Philip Gray Fairbanks

Bartley Kemble Hagerman

Mendel Austin Mehr