RENDERED: DECEMBER 2, 2022; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2021-CA-0976-MR

KENTUCKY FARM BUREAU 

MUTUAL INSURANCE COMPANY APPELLANT 

v. 

APPEAL FROM BOYD CIRCUIT COURT

HONORABLE GEORGE W. DAVIS, III, JUDGE

ACTION NO. 15-CI-00328

WILLIAM N. WALTERS AND RYAN 

BREWER APPELLEES 

OPINION

REVERSING AND

REMANDING

**   **  **

BEFORE: COMBS, MCNEILL, AND K. THOMPSON, JUDGES.

COMBS, JUDGE: This is a declaratory judgment action between an insurance 

company and its insured. Kentucky Farm Bureau Mutual Insurance Company 

(Kentucky Farm Bureau) appeals from an order of the Boyd Circuit Court. The 

circuit court concluded that the terms of a commercial general liability (CGL)

policy issued to William Walters required Kentucky Farm Bureau to defend a civil 
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action against him and to pay damages caused by a landslide (or landslip) on 

property that Walters had graded and prepared as a building lot. After our review, 

we reverse and remand. 

This appeal marks the parties’ third appearance before this Court. 

Once again, we set forth the relevant facts and procedural history of the dispute

expanding upon our earlier recitations as time and subsequent events have made 

necessary. 

Walters operates an excavation business. In September 2000, he 

purchased property in Catlettsburg. He built a road through the property and sold 

the standing timber. According to Walters, he undertook various erosion control 

measures while the timber was being harvested. Once the timber was removed, 

Walters graded the property and otherwise prepared it for development. He 

subdivided the acreage into 40 residential lots and named it Mountain View 

Estates. 

During the development process, Walters was cited for his failure to 

prevent erosion which was washing away large amounts of sediment. 

Furthermore, an inspection report prepared by Kentucky’s Environmental and 

Public Protection Cabinet indicated specifically that “several acres of slopes show 

severe erosion because they have not been stabilized.” 
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Ryan Brewer became interested in building a home in Mountain View 

Estates in August 2014. He and his parents met with Walters and Walters’s realtor 

at the development in September 2014. In his deposition, Brewer explained that he 

saw an excavator at the property and it was obvious that Lot 52 and Lot 54 had 

been recently excavated; he asked Walters if there was any reason to be concerned 

about building on either of the lots. According to Brewer, Walters explained that a 

portion of Lot 54 had slipped down the hill and that he (Walters) had undertaken 

steps to restabilize the ground. Lot 52 had been partially excavated to “tie 

everything back in.” (At his deposition, Walters remembered that he had also 

excavated in order to repair a sewer-line leak on Lot 50, which he did not consider 

an attempt to restabilize the ground following a landslip.) 

 Approximately one week later, because he felt that Lot 52 had a better 

view, Brewer contracted to purchase it. Brewer decided to forego his right to have 

the property inspected “because as the developer of the lot, I thought [Walters] 

would have been the professional to talk to. He was the one to know everything 

about it.” While no soil stabilization test had ever been conducted, Brewer stated 

that his conversations with the realtor and Walters persuaded him that the property 

was suitable for building. The transaction closed on November 13, 2014. 
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 After he purchased the property, Brewer decided upon a house plan 

that he found online, and he visited Lot 52 with his builder, Millard Chaffins. 

Chaffins began construction of the home in February 2015. 

Walters was hired by Chaffins to dig the footings according to 

dimensions supplied by Chaffins. Walters excavated the footings to bedrock, 

completing his work. Construction was then interrupted by severe winter weather. 

Then, in March 2015, the land slipped about three feet beyond the edge of the 

footing. The slip was nearest the slope at the rear of the property. In his 

deposition, Brewer stated that it was his understanding that the slip began at Lot 54 

and migrated to his Lot 52. 

In April 2015, Brewer’s attorney corresponded with Walters advising 

him of the slip at Lot 52. Counsel alleged that Walters had represented to Brewer 

that the property was suitable for home construction and claimed that excavation 

work performed by Walters led to the landslip. Brewer hired soil engineers with 

Alternative Building Concepts to study the problem. The company suggested that 

piers be constructed to stabilize the foundation of the house. Another geotechnical 

engineering firm was hired in May 2015 to study the foundation. That firm 

concluded that the foundation had not been impacted by the slip and that the 

structure was at a low risk of being adversely affected in the future. 
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On April 28, 2015, Brewer filed his complaint against Walters in 

Boyd Circuit Court. It included eleven causes of action alleging variously that 

Walters was: negligent and grossly negligent in his excavation and development 

of Lot 52; that he was negligent and grossly negligent in failing to disclose 

conditions that he knew or reasonably should have known made Lot 52 unsuitable 

for construction; and that he was negligent per se with respect to the excavations 

undertaken at Mountain View Estates. The complaint also alleged fraud, negligent 

misrepresentation, unjust enrichment, breach of contract, and finally, breach of the 

covenant of good faith and fair dealing. 

At the time the claim was made, Walters (doing business as William 

Walters Heavy Equipment) had two insurance policies with Kentucky Farm 

Bureau -- a farm-owner policy and the CGL policy. The policies provide that 

Kentucky Farm Bureau will pay sums that the insured becomes legally obligated to 

pay as damages because of property damage but only where the property damage is 

caused by an “occurrence.” “Occurrence” is defined by the policies as “an 

accident.” 

After Walters notified Kentucky Farm Bureau of Brewer’s claim, 

Kentucky Farm Bureau sent Walters correspondence informing him that it was 

reserving its right to deny coverage because of the delay in reporting the loss and 

because the claims might not be covered by the policy. Nevertheless, Kentucky 
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Farm Bureau employed counsel to represent Walters in the civil action against him. 

Walters answered and denied the allegations made by Brewer. 

In May 2015, Walters filed a third-party complaint against Chaffins, 

the home builder. Walters alleged that the slip at Lot 52 had occurred as a result of 

the delay in construction once the footings had been excavated. Additionally, he 

alleged that Chaffins’s decision to place a footing beyond the slope of the lot 

contributed to the slip. As an alternative, Walters alleged that the combined 

negligence of Brewer, Chaffins, and him (Walters) caused the “accident” and the 

damages claimed by Brewer. Construction of the house was completed in latesummer of 2015. 

Discovery and pre-trial litigation continued. Throughout the 

litigation, Walters continued to be represented by counsel employed on his behalf 

by Kentucky Farm Bureau.

At his deposition in June 2016, Walters explained that a small slip had 

appeared at Lot 52 three or four months before Brewer purchased it. Walters 

repaired it and “had it fixed perfect, and grass coming up.” He denied talking with 

Brewer about any slip before Brewer purchased the lot because, as he stated, 

“[n]obody asked me.” He believed that his realtor was aware of the slip at Lot 52 

and felt sure that the excavation and attempt to re-stabilize the land was obvious to 

everyone who viewed the property. According to Walters, “there was nothing 
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wrong with [Lot 52] . . . there wasn’t no cracks, there wasn’t nothing. There 

wasn’t a crack in that hill until they stuck the footer over the hill and it filled full of 

water.” 

 Additionally, Walters felt that the dwelling’s footprint was too large 

for Lot 52, but “[he] wasn’t hired to build that house.” He alleged that Chaffins 

was in a rush to get the footing excavated and the foundation prepared so that he 

[Chaffins] could take a draw from Brewer’s loan. He attributed the slip to 

Chaffins’s decisions -- “If Mr. Chaffins hadn’t dug the footer and walked off and 

left it, [Lot 52] would have been fine. You can’t dig a nine-foot footer 50 foot 

long, fill it full of nine feet of water, come freezing rain, it lay up there for six 

weeks, and not expect the hill below it not to slip.” 

On August 4, 2017, Kentucky Farm Bureau filed an intervening 

petition for declaratory judgment concerning the coverage offered by its policies.

Walters filed an answer to the petition, requesting the court to declare that the 

terms of the policy afforded him coverage for the claims asserted against him by 

Brewer. Kentucky Farm Bureau filed a motion for summary judgment. By its 

order entered April 20, 2018, the circuit court declared that Kentucky Farm Bureau 

was estopped to deny coverage under its policies because of its delay in pursuing 

the issue. The first appeal to this Court followed.
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By our opinion rendered February 21, 2020, in Kentucky Farm 

Bureau Mutual Insurance Company v. Brewer, 596 S.W.3d 620 (Ky. App. 2020), 

the order of the Boyd Circuit Court was reversed. We concluded that the mere 

passage of time between Kentucky Farm Bureau’s correspondence to Walters 

reserving its rights and the declaratory judgment proceedings was insufficient to 

preclude it from contesting coverage. Id. We held that the court erred by failing to 

consider whether Kentucky Farm Bureau ever misrepresented to Walters that it 

was no longer defending under a reservation of rights and whether Walters was

prejudiced by Kentucky Farm Bureau’s failure to assert its no-coverage position 

earlier. Id. Consequently, we remanded for these factual findings. We expressly 

declined to decide whether the Kentucky Farm Bureau policies afford coverage for 

Brewer’s claims. 

On remand, Kentucky Farm Bureau argued: 1) that it was not 

estopped from pursuing the coverage issue because it had never misrepresented its 

position concerning its reservation of rights; and 2) that Walters had not been 

prejudiced by the timing of its decision to dispute coverage. Moreover, it 

contended that neither policy issued to Walters provided coverage for the claims 

asserted against him by Brewer. 

In its order entered January 12, 2021, the circuit court concluded that 

liability attributable to Walters’s alleged acts of intentional conduct and grossly 
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negligent conduct “would not be covered under the [CGL] Policy[.]” However, it 

concluded that “alleged acts of negligent conduct, . . . if found [to be] true by the 

trier of fact, would constitute an ‘occurrence’” under Kentucky Farm Bureau’s 

CGL policy and that Walters would, in that event, be entitled to liability coverage. 

The circuit court’s order did not reference the estoppel issue addressed by our 

opinion reversing and remanding. Nor did it specifically reference the terms of the 

farm owner policy issued to Walters by Kentucky Farm Bureau. 

 Kentucky Farm Bureau filed its notice of appeal. Walters did not 

cross-appeal the circuit court’s judgment with respect to coverage of the damages 

allegedly caused either by his acts of intentional conduct or grossly negligent 

conduct. 

By our order entered on June 17, 2021, we dismissed the second 

appeal. While the circuit court had designated its order as final and appealable, the 

order did not recite that “there is no just cause for delay.” On that basis, a motion 

panel of the Court concluded that we lacked jurisdiction to consider the appeal. 

CR1 54.02. On August 6, 2021, the circuit court revised its order to indicate that it 

had made the omitted determination and that there was, in fact, no just cause for 

delay. This third appeal followed. Again, Walters did not cross-appeal. 

1 Kentucky Rules of Civil Procedure. 
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On appeal, Kentucky Farm Bureau argues that no cause of action 

asserted by Brewer against Walters could trigger the liability coverage afforded by 

its policies. We agree that the circuit court erred by concluding that Walters could 

be entitled to coverage under the terms of the CGL policy. 

A party seeking a declaratory judgment may move (with or without 

supporting affidavits) for a summary judgment in his favor. Foreman v. Auto Club

Property-Casualty Insurance Company, 617 S.W.3d 345 (Ky. 2021). Upon our 

review, we determine whether the record supports the trial court’s conclusion 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.” CR 56.03. Because the interpretation of 

insurance contracts is a matter of law, our review is de novo. Foreman, supra. 

Where provisions of an insurance contract are unambiguous and reasonable, they 

are enforced as written. Id. 

By their terms, Walters’s policies cover his liability for property 

damage caused only by an accident. Kentucky Farm Bureau argues that the 

allegations upon which Brewer relies -- referring to Walters’s negligence and other 

wrongful conduct in preparing Lot 52 for sale -- were not an accidental cause of 

the alleged property damage. The Supreme Court of Kentucky has analyzed 

identical policy language under similar facts. It has held, as a matter of law, that 

coverage is not triggered under these CGL policy provisions where an insured had 
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control over the disputed event -- even if he did not intend to cause the resulting 

damage. The disputed event in this case is Walters’s preparation of the ground at 

Mountain View Estates. 

In Bituminous Casualty Corporation v. Kenway Contracting, Inc., 240 

S.W.3d 633 (Ky. 2007), an employee of a construction company was sent to 

demolish a carport. He misunderstood the scope of the project and, instead, he tore 

down much of an adjoining structure. The Kentucky Supreme Court held that even 

though the employee intentionally undertook demolition, the construction company 

never intended to destroy anything but the carport. This event was characterized as 

an accident that triggered coverage under the terms of the policy. 

In Cincinnati Insurance Company v. Motorists Mutual Insurance

Company, 306 S.W.3d 69 (Ky. 2010), the Court considered whether faulty 

construction undertaken at a home constituted an accident covered by the builder’s 

CGL policy. The Court refined its analysis. It noted that the term “accident” had 

not acquired a technical meaning in the law and had to be interpreted according to 

its ordinary meaning. Id. at 74. “Inherent in the plain meaning of ‘accident’ is the 

doctrine of fortuity.” Id. Examining the facts as alleged by the plaintiff, the Court 

concluded that the disputed construction -- even where it ultimately proved faulty -

- had been undertaken in accordance with the builder’s plan and intention and 

“[did] not involve the fortuity required to constitute an accident.” Id. at 80 
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(citation omitted). The builder had intended to undertake the construction just as 

he saw fit and the resulting property damage was not the result of chance or 

fortuity. The builder retained full control over the operation with no intervening 

accidental occurrence. 

In Martin/Elias Properties, LLC v. Acuity, 544 S.W.3d 639 (Ky. 

2018), the Supreme Court of Kentucky again applied the concept of fortuity. 

Where a subcontractor undertaking renovations in a basement rendered the entire 

house unstable, the Court observed that the subcontractor had exercised control of 

his work even though it ultimately proved faulty. The Court concluded that the 

property damage was not caused by an accident but rather was an unintended 

consequence of the subcontractor’s poor workmanship. Coverage for an accident 

is available to protect the insured only where the insured did not intend the event or 

result to occur, and the result was a chance event beyond anyone’s control. Under 

these circumstances, the Court held that the subcontractor’s liability coverage had 

not been triggered. 

In the case before us, Walters’s allegedly improper preparation of the 

building site was not an “accident” because Walters was in control of the grading 

and other preparation of the development. That he might have undertaken his 

work negligently -- with natural and foreseeable consequences -- does not 

transform the landslip into an accident. The undisputed evidence indicates that 
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Walters was aware of the soil conditions at Mountain View Estates. He had been 

cited for his failure to prevent erosion from washing away large amounts of 

sediment; he had also been made aware by environmental officials that the slopes 

had become severely eroded because he failed to take necessary steps to stabilize 

them. By his own admission, Walters had become aware of the instability of Lot 

52 before he sold it to Brewer and had tried again to prevent it from slipping. 

 In light of these undisputed facts, Walters could not deny that damage 

to the property resulting from his grading and soil preparation -- if undertaken 

negligently -- was reasonably to be anticipated. Landslips under these conditions 

are not unusual or unexpected. Therefore, under these specific circumstances, the 

landslip, if it were caused by Walters’s negligent workmanship, cannot be 

characterized as an accident. Consequently, the coverage provisions of the policy 

were not triggered. 

Based upon the forgoing, the judgment of the Boyd Circuit Court is 

reversed and remanded for entry of an order consistent with this Opinion. 

THOMPSON, K., JUDGE, CONCURS.

MCNEILL, JUDGE, CONCURS IN RESULT ONLY AND FILES 

SEPARATE OPINION.

MCNEILL, JUDGE, CONCURRING IN RESULT ONLY: In consideration of the 

majority’s well-written Opinion, I must respectfully concur in result only. There 

are two core claims at issue here. First, there is the tort claim arising from 
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Walters’s alleged errors in excavating Brewer’s property. Second, there is a 

contract claim concerning denial of insurance coverage brought by Kentucky Farm 

Bureau. 

The only reasoning advanced by the circuit court in denying Kentucky 

Farm Bureau’s motion for summary judgment is that “Plaintiff has nonetheless 

alleged acts of negligent conduct, which if found true by the trier of fact, would 

constitute an ‘occurrence’ under sad [sic] policy.” It therefore appears that the 

court erroneously conflated the two claims. The CGL policy covers accidents, not 

negligence. 

“Generally, the interpretation of a contract, including determining 

whether a contract is ambiguous, is a question of law for the courts and is subject 

to de novo review.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 

385 (Ky. App. 2002). See also Martin/Elias Properties, LLC v. Acuity, 544 

S.W.3d 639, 641-42 (Ky. 2018) (“Interpretation of a contract is ordinarily a 

question of law for a court’s determination.”); Lewis v. Monumental Life Ins. Co., 

No. 2006-CA-000914-MR, 2007 WL 1207153, at *2 (Ky. App. Apr. 20, 2007)

(“The construction and interpretation of an insurance policy is a question of law for 

the Court.”); and Foster v. Kentucky Hous. Corp., 850 F. Supp. 558, 560-61 (E.D. 

Ky. 1994) (“Since there are no relevant factual disputes, the interpretation and 

construction of the insurance policy is a matter of law for the court.”). 
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Whether there was an “occurrence” under the policy is most 

appropriately a matter of law to be decided in the first instance by the circuit court. 

Therefore, I respectfully concur in result only because I believe the circuit court 

erred by conflating the two claims, and by concluding that the trier of fact must 

determine whether there was an “occurrence” under the CGL policy. I would 

reverse the circuit court and remand for the court to enter an order on the 

occurrence issue as a matter of law. Upon remand, if the court determines that 

there are genuine issues or material of fact that negate a judgment as a matter of 

law, then there is of course nothing prohibiting the court from so holding. In any 

event, I believe the circuit court should have the opportunity to revisit this issue 

with the guidance provided herein. 

BRIEFS FOR APPELLANT:

John J. Ellis

Morehead, Kentucky

BRIEF FOR APPELLEE WILLIAM 

WALTERS:

Robert T. Renfroe

Greenup, Kentucky