Court Opinion

ID: 4198599
Source: CourtListenerOpinion
Date Created: 2017-08-24 14:07:17.090659+00
Date Added: 2024-06-11T14:39:45.131642
License: Public Domain

RENDERED: AUGUST 24, 2017
To BE PUBLISHED

_ ,%npreme Tuur'f of Benfnckg

2015-SC-000 107-DG
INDIANA INSURANCE COMPANY APPELLANT

. ON REVIEW FROM COURT OF APPEALS
-V. CASE NO. 2013-CA~000338-MR
CAMPBELL CIRCUIT COURT NO. OQ~CI-O 1 175

JAMES DEMETRE ` APPELLEE

OPINION OF THE COURT BY JUSTICE HUGHES
AFFIRMING `

Appellee J ames Demetre Sued his insurer, the Indiana lnsurance
Company ‘(hereafter “Indiana Insurance”], for bad faith arising from breach of
his insurance contract, violation of the Kentucky Unfair Claims Settlement
Practices Act, and violation of the Kentucky Consumer Protection Act. These
claims stemmed from a vacant property owned by Demetr`e that had operated
decades earlier as a gas station. When Demet;re received notice that a family
occupying a nearby residence was pursuing environmental claims against him
for alleged migration of petroleum and other substances, he notified his liability
carrier, Indiana Insurance, vvhich provided a defense and eventually settled the
family’s claims. Indiana Insurance maintains that, having provided a defense

and indemnification, Demetre has no viable bad faith claim but the trial court

and the jury viewed the evidence of what occurred in the more than three years
from notice of the family’s claims to settlement of their lawsuit in an altogether
different light. Afte`r an eight-day trial, the jury awarded Demetre $925,000 in
emotional distress damages and $2,500,000 in punitive damages The trial
court denied post~trial motions and Indiana Insurance appealed to the Court of
Appeals, which rejected Indiana Insurance’s allegations of error and affirmed
the trial court’s judgment in its enti-rety.

On discretionary review, Indiana Insurance makes the following
allegations of error:. 1] the trial court erred in not granting its motions for
directed verdict and judgment notwithstanding the verdict; 2)_ there was
insufficient evidence of Demetre’s emotional distress to sustain the jury’s
award of damages; and 3) the trial court erred by barring two of Indiana
Insurance’s witnesses from testifying at trial and by erroneously instructing the
jury. The second issue requires us to consider whether expert testimony is '
necessary to support an emotional distress damage award in a bad faith
insurance claim, a potential application (or more accurately extension] of our
relatively recent decision in .Osbome v. Keeney, 399 S.W.3d 1 (Ky. 2012‘). After
careful consideration of the record and laW, we affirm the Court of Appeals and
thus affirm the trial court’s judgment upon jury verdict.

FACTUAL AND PROCEDUMCKGROUND

In 2006, Demetre contracted with Indiana Insurance to provide coverage

for his condominium residence and automobile. At the same time, Demetre

obtained an excess liability or “unibrel'la” policy to provide him with additional

2

coverage. These bundled policies provided Demetre with approximately
$2,500,000 in liability coverage Demetre expanded his coverage in 2008 by
adding liability coverage for two parcels of real estate, one in Kenton 'County
and the other in Campbell County. Indiana Insurance’s coverage of the
Campbell County property was the genesis of the case at bar.

Until 1962, the Campbell County property was the site of an active
Texaco gas station. The station remained dormant until the 19903, when
efforts were made to remove the station and its fixtures from the ,property. In
1998, the station’s underground gasoline storage tanks were rem'Qved and, the
next year, the station’s building was torn down and all remaining materials
were hauled away. As such, when Demetre acquired the Campbell County
property from his in-laws in'2000, the property had been reduced to an empty
lot. Despite the removal of the gas station and tanks, the Commonwealth of
Kentuclcy’s Department for Environmental Protection continued monitoring cf
the property for some time,

ln April 2008, Demetre contacted Indiana Insurance to obtain coverage
for the Campbell County property. Demetre informed Gwendolyn Rich, an
Indiana Insurance agent,`that the lot had previously been the site of a gas
station. When later deposed, Rich confirmed that she had informed Indiana
_lnsurance’s underwriting department of the lot’s prior use as a gas station.
Indiana Insurance agreed to insure the Campbell County property and added it
to Demetre’S liability coverage in April. At this time`, a major misstep occurred

internally at Indiana Insurance because although the property was insured it

was apparently underwritten as though it was residential property.1 Shortly
thereafter, on June 29, 2008, renewed Demetre’s insurance policy for another
year.

On September 4, 2008, Demetre received a letter from an attorney
representing Mahannare Harris, her partner Dorian Cosby, and Harris’s five
minor children (collectively, the “Harris family”]. The Harris family had moved
into a house on a lot adjoining the Campbell County property in 2004. In the '
letter, Paul Dickman, the lawyer for the Harris family, alleged that members of
h the family had suffered injuries due to gasoline emissions from the Campbell
County property including “significant medical damages” and a loss in the fair
market value of their residence. Demetre immediately notified his agent of the
letter and, on September _1 l, 2008, the agent notified Indiana Insurance of the
Harris family’s claim`s. .

Indiana Insurance initially assigned Demetre’s case to adjuster Allen
Geisinger. On September 1'_7, 2008, Geisinger sent an “alert” to Indiana
Insurance’s Special Claims Unit, which handled environmental claims and
toxic torts. .Eighty-eight minutes later, Geisinger received a response from
David Cowles of the Special Claims Unit, instructing him to work with adjuster
Paula Matheny and stating that “[i]t appears their (sic) may not be coverage

under the Insured’s condo policy for'this matter.”

 

1 There is no suggestion that Demetre misrepresented the Campbell County
property as a personal_residence. See pp. 13-14 inji'a.

4

On October 30, 2008, Geisinger sent Demetre a letter by certified mail
informing him that Indiana Insurance had questions as to whether the Harris
family’s claims were covered by his insurance policy and would “handle this
matter under a reservation of rights.” This letter was sent approximately two
weeks after Geisinger acknowledged in an email to a co-worker that he was
unsure whether there would be coverage for the Harris family’s claims, while at
the same time admitting “I don’t know what claims are being made against the
insured by the attorney.”

Subsequently, Geisinger directed Indiana Insurance’s Field Investigation
Unit to interview Demetre and to conduct an investigation of the Campbell
County property, This investigation included obtaining from Shield
Environmental Associates-_the contractor monitoring groundwater underneath
.the Campbell County property for the Commonwealth--all environmental
records, information, data, and testing documents related to the
Commonwealth’s monitoring of the property. Thcse efforts were directed to
determining whether lJemetre knew of the Harris family’s claims before the
Campbell County property was added to Demetre’s insurance policy.

` While Geisinger thoroughly investigated Demetre, his investigation of the
Harris family’s claims was practically non-existent When asked what he had
done to assist Demetre, Geisinger explained that he “undertook this
investigation,` responded to Mr. Dickman’s letters, hired or assigned a F`ield
Investigation Unit to do sitework.” Geisinger acknowledged that while he had

spoken to Dickman early in the case, the attorney lmew very little about his

5

clients or their alleged injuries. When asked about following up on the Harris
family’s claims, Geisinger explained that he was waiting for the Harris family’s
attorney to respond to him. There was no effort to interview the Harris family
members, request medical records, seek medical exams, inspect or sample the
soil near the Harris residence or otherwise determine the validity and nature of
the claims being asserted against Demetre.

Despite this inaction, Geisinger wrote a letter to Demetre on Mar-ch 23,
2009 (more than six months after indiana Insurance had received notice of the
Harris family’s claims), where he stated “[p]lease recall that we are investigating
the claims being made by Ms. 'Harris and her family. Their attorney has not
provided us with any information regarding those claims.” Geisinger then
proceeded to ask questions about the status of the storage tanks from the
' Campbell County property. In closing his letter, Geisinger reminded Demetre
that “[Indiana lnsurance] continues to handle this matter under a reservation
of rights.”2 1

On March 27-, 2009, Demetre’s case was reassigned from Geisinger to
Karen Shields Glardon.3 Despite the change_in personnel, Indiana Insurance
was consistent in its lack of progress in assessing the Harris family’s claims.

When questioned during the subsequent litigation, Glardon admitted to doing

 

2 On March 23, 2009, shortly before he was to leave the case, Geisinger
acknowledged in an email “I have not determined a coverage position [as to the Harris
claims]. I will need to obtain a coverage opinion from Claims Legal.” When
questioned, Geisinger testified that he never requested or obtained a coverage opinion.

3 In this same month, the Harris family demanded alternative living
arrangements to be paid for by indiana Insurance. The insurer declined.

6

` nothing to protect Demetre’s interests during her handling of the case file. She
did not seek information about the Harris family or their claims nor did she
recall ever speaking with Demetre or Dickman.4

Despite Glardon's inaction, two significant developments occurred during
her handling of the case. On June 29, 2009, Indiana Insurance renewed
Demetre’s insurance policy for another year. The second and more critical
development came to pass on August 14, 2009, when the Harris family filed

n suit alleging trespass, nuisance and negligence claims against Demetre, and-a

` third-party bad faith claim against Indiana Insurance. After consulting with

the Special Claims Unit, Glardon engaged Tim Schenkel to represent Demetre

and Don Lane _to represent Indiana Insurance.5 Although Glardon engaged

Schenkel to represent Demetre, she¢ad_mitted that she never spoke to him

during her management of the case.

On September 25, 2009, Demetre’s case was_reas'signed yet again to
James Magi. Magi had significant experience handling toxic tort claims, to
such an extent that he was considered the “go-to-guy” in the Special Claims
Unit for this type of work. This reputation was likely in part derived from his
success in closing 7 2% of his assigned insurance claims without paying any

money to claimants. F‘urther, on those cases where payment was made, 31%

 

4 Glardon did acknowledge sending an email inquiring about the existence of a
coverage opinion. '

5 In August 2009, Demetre hired his own personal counsel to protect his
interests given Indiana Insurance’s seemingly adversarial position.

7

of them took an average of ten years to process (f_rom the date a claim was
made until the claim was closed and payment made). Magi was assigned _
Demetre’s coverage claim and was also designated by Indiana Insurance to
simultaneously handle the Harris family’s liability claims.

Bruce }i`rederick, the unit leader of the Special Claims Unit and Magi’s
supervisor, explained that in Magi’s role as insurance adjuster, he controlled
and directed the activities of the attorneys involved in the c`ase-Lane who
represented Indiana Insurance and Schenkel who represented Demetre. As
such Lane and Schenkel had to request permission from Magi to take
necessary actions in representing their clients. To further demonstrate this,
Magi testified that it was correct that, “[s]teps taken- in litigation, whether to file
a motion for summary judgment, whether to file a motion to bifurcate
something, or take any other significant step in the conduct of litigation,” had
to be suggested by counsel to him, discussed with him, and approved by him,
prior to the lawyer being permitted to take action.

ln October 2009, Schenkel and Magi discussed hiring an expert to
~ “determine the status”_ of the Campbell County property with the state
environmental agency. With Magi’s permission, Schenkel asked his associate
Jason Morgan to find an expert to check the state regulatory records. On .
October 21, 2009, Morgan informed Schenkel that he had spoken to Bill
Johnson, an environmental engineer in Louisville, who informed Morgan that -
the Campbell County property was “in~Site Investigation NOT Corrective

Action.” In a memorandum to Schenkel, Morgan explained that “it seems to

8

me that if the site is in Site Investigation and not Corr_ective Action, it is
unlikely that the [Harris family]’s claims are legitimate.” _

On November 4, 2009, Magi noted in an internal data management
system that he “[s]poke to D./ C,' he is in the process of retaining an expert from
Louisville. He will send me the CV and rates.” Given the context of the diary
and the date of the entry, it would appear that this message was referring to
Schenkel, in his role as defense counsel, and Johnson, as the expert from
Louisville. Additionally, in copies pf email messages between Schenk_e_l and
Magi that were admitted as evidence in trial, Schenkel reiterates that Magi
should “bc assured that I will keep you informed of all future developments in ` `
this matter.” Yet, in his trial testimony Magi denied having any knowledge of
Morgan’s memorandum about the questionable nature of the Harris family’s
claims.

Magi seemingly focused his full attention on attempting to~deny coverage.
On December 1 l, 2009, Magi sent a second Reservation of Rights letter to
Demetre, in which he noted that defense counsel had been provided to Demetre l
and “Indiana [Insurance] shall continue such defense until a determination is
made that no coverage exists for the [u]nderlying [c]laim. . . .”
Thus fifteen months after Demetre notified Indiana Insurance of the Harris
family’s claims, there was still no determination as to coverage.

Shortly after Magi sent'this letter to Demetre, Indiana Insurance
internally separated the Harris family’s claims file, the bad faith file, and the

coverage file. William Ambrose was assigned to handle the Harris family’s

9

claims, while Magi retained control over the'coverage and bad faith files.
Despite the split in management of the files, Schenkel continued to update
‘Magi about any developments he learned of in the handling of the Harris
family’S claims, ` fl v

On January 22, 2010, Indiana Insurance answered the Harris family’s
amended complaint and filed a declaratory judgment .cross-claim, under
Kentucky Revised Statutes (KRS) 418.045, against its insured, ljemetre.
Indiana Insurance claimed that while Demetre contacted Indiana Insurance’s
agent to insure the Campbell County property, “the parties have been unable tol
identify an actual endorsement that was appended t'o the [p]olicy adding
coverage,for the [p]roperty to it.” Second, Indiana Insurance alleged that ‘[a]t
the time that Demetre sought to insure the [p]roperty, he was aware that
investigations concerning possible contamination of the [p]roperty had been
ongoing for_several years and failed to inform the [a] gent or Indiana [Insurance]
of contamination on the [p]roperty before seeking to insure it.”

On May 4, 2010,_Demetre filed an answer to Indiana Insurance’s cross-
claim and raised his -own cross-claims alleging bad faith breach of contract,
unfair Claims settlement practices and violations of`. the Kentucky Consumer
Protection Act. Demetre asserted that Indiana Insurance had wrongly asserted
a reservation of rights, and he requested a declaration of his rights and duties
under the liability policy.

On September 23,. 2010, Indiana Insurance filed a motion for a

declaratory judgment seeking a summary ruling that it -had no duty to defend

10

or indemnify Demetre for the Harris family’s claims under any insurance
policies issued to Demetre by Indiana Insurance. Indiana Insurance argued
that “H]udgment is appropriate because the Harris claim results from a loss in
progress under the relevant insurance coverage, and therefore, this ‘loss’
cannot be covered as a matter of law.” The loss-in-‘progress doctrine relieves
the insurer of a coverage obligation where the insured was aware of an ongoing
progressive loss at the time the policy became effective. While the loss-in-
progress doctrine has never been recognized by this Court or the Kentucky
Court of Appeals, Indiana Insurance relied on a decision from the United States
District Court for the Western District of Kentucky. See Pz'zza Magia Int’l, LLC
v. As`surance Co. ofAmen`ca, 447 F. Supp. 2d 766, 776 (W.D. Ky. 2006). That
Court opined that the Kentucky Supreme Court would adopt the loss- -in-
progress doctrine. 6

On December 8; 2010., the trial court, after reviewing Indiana Insurance

and Demetre’s detailed pleadings, denied Indiana Insurance’s motion for a

\

 

6 In support of the declaratory judgment motion, Indiana Insurance included an
affidavit from Debora.h`Chikar, a senior underwriter with the Liberty Mutual Group, of
which Indiana Insurance is a member company. She claimed that the insurer added
the Campbell County property to Demetre’s policy believing it w_as another residence
occupied by the insured; that it was unaware that it was a “contaminated former
gasoline station;” and that had it known the true status of the property it would never
have insured it. This affidavit `also provides some insight as to why Demetre’s _
insurance policy was repeatedly renewed during this litigation. Chikar claimed that in
September 2008, Indiana Insurance sought to discontinue its coverage, However, she
claimed that Indiana Insurance could not cancel the coverage midterm for the 2008-
2009 policy period. Second, she alleged that Dawn Dunham, a former employee of
Liberty Mutual, had intended to send Demetre a notice cancelling the policy before its
2009-2010 renewal, but through clerical oversight failed to do so. Third, Chikar
admitted that when it was time to renew the policy for 2010-2011, that she“ was
unable to timely complete [her own] due diligence” and as such renewed the policy for
another year.

il

,`

declaratory judgment lThe trial court determined that a declaratory judgment
would not be appropriate as “Indiana [Insurance] is essentially asking the [trial
court]- to adopt factual defenses in order to grant judgment in their favor.”
After noting that there was no controversy regarding whether the policy would
cover the type of third-party loss that was the subject of the underlying Harris
litigation or that Indiana Insurance had a duty to defend, the trial court
\explained:

Indiana [Insurance] is asking this Court toid. at 461 (eiting Kentucky a indiana ret-miner R.- ca a cantrell 184 s.w.2d
111 [Ky. ~1944); Cochran v. Downing, 247 S.W.2d 228 (Ky. _1952]]. Additionally,
the nonmoving party “is entitled to all reasonable inferences which may be
drawn frorri the evidence.” Lew_r`s, 798 S.W.2d at 461. The decision of the trial
court will stand unless it is determined that “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 (quoting NCAA v. Horrtung, 754
S.W.2d 855, 860 (Ky. 1988)}. Further, “the considerations governing a proper
decision on a motion for judgment notwithstanding the verdict are exactly the
samel as those . . . on a motion for a directed verdict.” 'Cassl'nelli v. Begley, 433
S.W.2d 651-52 (Ky. 1968).

Before._turning to Indiana Insurance’s specific arguments in support of a
directed verdict or judgment notwithstanding the verdict, it is necessary to
revisit briefly Kentucky law regarding bad faith. As this Court recognized in
Davidson v. American Ii‘reightways, Inc., 25 S.W.3d 94 (Ky. 2000), bad faith
claims against an insurer canbe premised on- common law as developed in
cases such as Manchester Ins. & Indem. Co. v. Grundy, 531 S.W.2d 493;(Ky.
`1975) (bad faith claim premised On insurer’s refusal to settle a third-party
liability claim, resulting in a verdict in excess of policy limits) and Curry v.

Fireman’s Fund_Ins. -Co., 784 S.W.2d 176 (Ky. 1989] (bad faith claim for failure

24

to settle claim made by insured under his own policy). Common law bad faith
claims flow from the insurer’s breach of the covenant of good faith and fair
dealing. d

A bad faith claim can also be based on either or both of two Kentucky
statutes: the Kentucky Consumer Protection Act, `KRS 367.170, and the
LlCSPA, KRS 304.12-230. See Davidson, 25 S.W.3d at 96-100. The Consumer
Protection Act prohibits “unfair, false, misleading, or deceptive acts or practices
in the conduct of any trade or business” and grants a right of recovery to
persons who have purchased or leased goods or services for personal, family or
household purposes and in conjunction therewith have been injured by a 7
prohibited act or practice. KRS 367.170; KRS 367.220. See,- e.g., Stevens v.
kMotorists Mut. Ins. Co., 759 S.W.2d 819 (Ky. 1988) (_l_lomeowner’s policy was
purchase of “service” and homeowner had Consumer Protection Act claim
where insurer intentionally misrepresented experts’ report and arbitrarily
refused to negotiate blasting damage claim).

The UCSPA prohibits a number of different “acts or omissions” including,
but not limited to, misrepresenting pertinent facts or policy provisions relating
to coverage; failing to promptly acknowledge and respond to claims; failing to
adopt and implement standards for prompt investigation of claims; refusing to
pay claims without first conducting a reasonable investigation; failing to affirm
- or deny coverage within a reasonable period of time; and not attempting in`
good faith to reach a prompt, fair and equitable settlement of claims on Which

liability is reasonably¢clear. KRS 304.12-230. “The gravamen of the UCSPA is

25

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.” Davidson, 25 S.W.3d at
100. Although the UCSPA does not include a private right of action provision,
KRS 446.070 allows a person injured by a violation of any Kentucky statute to
recover damages from the offender. Thus, “KRS 446.0’70 and KRS 304.12-230
read together create a statutory bad faith cause of action.” State Farm limit
date ina ce. a Reeder, 763 s.W.2d'll6, 118 (Ky. 1988).

As the Davidson court noted, Justice Leibson, writing for a unanimous
eeui-t in Wittmer a Jonee, 864 s.w.2d 886 (lstatute. 25 S.W.3d at 100. The three required elements

B.I`CI

(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
Id. quoting Wittmer, 864 S.W.2d at 890.

Indiana Insurance argues, rather half-heartedly, that the Wittmer
elements do not actually apply to this case because Demetre is neither a first-

party claimant seeking to recover personally on his own policy nor a third-party

claimant seeking recovery from a tortfeasor’s liability policy. While this is true,

26

we reject the insurer’s proposition that Demetre is not a claimant at all. The
essence of liability insurance is that the insured is indemnified in the event of a
third-party claim and, if necessary, has counsel to represent his or her interest
in litigation. A liability insured who seeks these benefits owed under a policy of
insurance is most assuredly making his or her own claim. As this Court noted
in Knotts v. Zurich Ins. Co., 197 S.W.3d 512, 516 (Ky. 2006), “‘claim’ is subject
to multiple, subtly different definitions . . . But at its most basic, the word
means an assertion of a right, with the contours and specific nature of the
right depending on context.”16 When Demetre notified Indiana Insurance of the
Harris family’s claims in September 2008, he himself made a “claim" for the
benefits he had purchased under the liability policy.17 With this overview of
bad faith claims in mind, we turn to Indiana Insurance’s argument that it was

entitled to judgment as a matter of law.

 

16 Knotts also quotes the following Black’s Law Dictionary of the word “claim:”

l. The aggregate of operative facts giving rise to a right
enforceable by a court ._Also termed claim
for relief. 2. The assertion of an existing right; any right to
payment or to an equitable remedy, even if contingent or
provisional . 3. A demand for money, property, or.a legal
remedy to which one asserts a right; esp., the part of a
complaint in a civil action specifying what relief the plaintiff
asks for.... 4. An interest or remedy recognized at law; the
means by which a person can obtain a plivilege,
possession, or enjoyment of a right or thing; CAUSE OF
ACTION (l] .”).

17 The jury instructions in this case appropriately defined “clairn” as “The
assertion of a right or a demand for something that is believed to be rightfully due
under an insurance policy.”

27

A. Demetre’s UCSPA and Breach of Contract Claims.

Indiana Insurance repeatedly emphasizes that it provided Demetre with
- defense counsel and indemnified him by settling the Harris family’s claims,
Given that these two primary obligations under the liability insurance policy
were met, Indiana Insurance perceives that Demetre’s bad faith claim is solely
(and improperly) premised on the fact that Indiana Insurance raised a coverage
issue and filed a declaratory judgment claim, actions it was legally entitled to
take. As the trial court found, Indiana lnsurance’s_view of the scope of
common law and statutory bad faith is too narrow. Further, the insurer
overlooks (or fails to acknowledge] that Demetre’s bad faith allegations were
about more than the fact that the insurer sought a judicial determination
regarding coverage, Nevertheless, we begin our review With Guaranty Nat’l Ins.
Co. v. George, 953 S.W.2d 946 (Ky. 1997), the case Indiana Insurance
principally relies on to argue that it was entitled as a matter of law to question
coverage and seek a judicial determination, and thus the trial court was
obligated to grant its motion for directed verdict

In George, the George family contracted with'Guaranty National to

provide commercial insurance coverage for a truck used for mail service but
the wrong vehicle was mistakenly listed on the policy. Id. at 947. -After the
mail truck was involved in a fatal accident, the Georges were sued for wrongful
death. Ici. Guaranty National provided them with counsel, but reserved the
right to deny coverage, should the facts indicate the insurance policy did not

cover the vehicle involved in the accident Id. Ilr response, the Georges'filed an

‘28

action alleging bad faith on the part of Guaranty National. Id'. Ultimately the
circuit court concluded that there had been a mutual mistake, and ordered
equitable reformation of the insurance contract, resulting in the insurer
settling the wrongful death case. Id. at 948. In granting Guaranty National .
summary judgment on the Georges’ bad faith claims, the circuit court
concluded that the “legal questions`of reformation and agency raised by
Guaranty National in filing the declaration of rights action were ‘fairly
debatable.’” Id. '(quoting Empire Fire & Marine v. Sirnpsonville Wrecker, 880
S.W.2d 886 (Ky. App. 1994)). Additionally, the circuit court opined that “[i]t
should not be left to a jury to determine whether the legal principles involved
are ‘fairly debatable.’” Id. n

Although the Court of Appeals held that the Georges were entitled to
pursue a bad faith action, this Court, citing the Wittmer elements, concluded
otherwise, siding with the trial court. ld. In George, the Supreme Court held
that an insurer is expressly “entitled to challenge a claim and litigate it if the
claim is debatable on the law or the facts.” Id. at 949. This Court found that
the insurer’s conduct did not rise to the level necessary to sustain a bad faith
action in large part because “Guaranty National provided a defense for the
Georges and the claim proceeded without delay.” Id.

Significantly, the George Court expressly rejected the position Indiana
Insurance now advocates, ie.,' that defending the insured under a reservation
of rights and seeking declaratory judgment on coverage precludes a bad faith

claim.

29

Some may argue that the insurer, by notifying its insured that it is
defending under a reservation of rights and filing a declaratory
action, is automatically absolved of bad faith. We do not-so hold.
Clearly, one can envision factualsituations where an insurer could
abuse its legal prerogative in requesting a court to determine
coverage issues. Those may well be addressed through a motion
under [Kentucky Rule of Civil Procedure (CR)] 11 or, in certain
circumstances, an action for bad faith.

Id.` (emphasis supplied).

Indiana Insurance insists that, as in George, the trial court should have
concluded that their conduct did not meet the “bad faith threshold,” and points
to several similarities between George and the case at bar. Inparticular, both
cases involve: 1) a suit against`an insured; 2) an insurer defending under a
reservation of rights; 3) the assertion of a bad faith claim; 4) a judgment that
coverage exists; and 5] the insurer settling the underlying claim within the
policy’s limits. Despite these similarities, George is readily distinguishable
from this case.

ln George, the circuit court found that there had been “a mutual
mistake” that required equitable reformation of the insurance contract. The
mutual mistake was due to Guaranty l\lational’s erroneously listing the wrong
vehicle irl preparing the policy and the Georges not subsequently identifying
` this prominent error in the policy. The case at bar was manifestly not about a
“mutual mistake” in the underlying insurance contract but rather a coverage
dispute premised on the insured allegedly having misled the insurer at the time
the policy was purchased and the insurer’s expectation that Kentucky courts

would recognize the loss-in~progress doctrine.

30

It was uncontested that when Demetre sought coverage for the Campbell
County property in april 2008 he informed Indiana Insurance’s agents that the
property had previously been the site of a gas station. Accepting the potential
risk inherent in insuring such da property, Indiana received Demetre’s premium
payments and provided coverage,lS ln September 2008, when Demetre
informed Indiana Insurance about the Harris family’s claims, Indiana
Insurance conducted an eighty-eight-minute review of the policy and
determined that there was a potential coverage issue. Later, in October 2008,
Indiana Insurance informed Demetre that they were proceeding with his claim
under a reservation of rights. Indiana Insurance then began a detailed
investigation of Demetre’s property directed to determining what Demetre knew
about the property’s status when he purchased insurance in April 2008.
Almost a year after Demetre had notified Indiana Insurance of the Harris
family’s claims, the family sued Demetre and Indiana Insurance.' Shortly n
thereafter, in October 2009, the defense counsel assigned to Demetre by
Indiana Insurance consulted an environmental engineer and determined that it
was unlikely that the Harris family’s claims were legitimate However, the
environmental engineer was not hired and nothing was done to advance

Demetre’s defense.

 

13 As noted, there was apparently an internal error in classifying and
underwriting the Campbell County property but that error on the part of Indiana
Insurance was not chargeable to Demetre.

31`

ln January 2010, sixteen months after first being notified of the Harris
family’s claims, Indiana Insurance filed a declaratory action against Demetre,
claiming that it was unable to identify “an actual endorsement that was
appended to the policy adding coverageto it.” Indiana Insurance advanced this
argument despite having renewed the policy o`n June 29, 2009. The insurer
also alleged that when Demetre insured the property, h`e “was- aware that
investigations concerning possible contamination of the [p]roperty had been
ongoing for several years and failed to inform the [a]gent or Indiana [Insurance]
of contamination on the [p]roperty before seeking to insure it.” Far from the
mutual mistake at issue in George, Indiana Insurance alleged that its insured
had deliberately misled the company.

The only foundation for this serious allegation against its insured'
consisted of two letters to Mrs. Harris that Demetre had never seen and a
March 2007 letter that.Demetre had received from the Departrnent for
Environmental Protection. The latter identified likely contamination on the
Campbell County property and “possibly- off-site to the East and West,” but
indicated that further investigation should be conducted. Notably,'after
obtaining this letter to Demetre, Indiana Insurance never asked him for
clarification about his understanding of this correspondence. In any event by
the fall 'of 2009, Indiana Insurance no longer needed to rely on speculation
about contamination of the Harris property and Demetre’s knowledge of it
because the insurer had performed its own investigation of the Campbell

County property. Based on this information and defense counsel’s

32

consultation with an environmental engineer, Indiana Insurance was aware
that the Harris family’s claims were likely “not legitimate.”

Despite this knowledge, Indiana Insurance pursued a declaratory action
against Demetre for a full year, finally abandoning in January 201 1 its legal
justifications for denying coverage, Even then-, the insurer continued to rely on
the “time-on-loss” doctrine to limit its liability. llltimately, this last theory was
shown to be meritless, with _Magi testifying at trial that there was no evidence
to support the time-on¢loss defense--.it was essentially speculation and
conjecture

Manifestly, this case was not about a “mutl,lal mistake” as in George, but
rather, viewing the evidence in the light most favorable to Demetre, a sustained v
effort on the part of Indiana Insurance to deny coverage long after it could and
should have determined that it was legally obligated under its contract with
Demetre. Sirnilarly, there was a significant difference in how Guaranty
National and Indiana Insurance defended the claims asserted against their
respective insureds. In lG\eorge, the Court noted that the insurer “provided a
defense for the Georges and'the claim proceeded without delay.” 953 S.W.2d at
949. Indiana Insurance took a decidedly different approach.

In October 2008, Geisinger, the first adjuster assigned to Demetre’s case,
authorized a thorough investigation of Demetre’s property, but did not inquire
into the validity or nature of the Harris family’s claims. Glardon, the second
adjuster assigned to Demetre’s case, did even less. The Harris suit was filed in

August 2009 and Indiana Insurance engaged Schenkel to defend Demetre but

33

by January 2011, Demetre sought to discharge Schenkel noting, quite
accurately,_ the lack of measurable progress in defense of the tort action over a
seventeen-month period. Later, with newly appointed counsel, an investigation
into the Harris family’s claims began in earnest In September 201 1,
Mahannare Harris was finally deposed and within weeks medical records were
obtained and an inspection of the house was performed. By December 20 1 1,
Demetre’s second appointed counsel concluded that the Harris family’s claims
were nothing more than a “nuisance value case.” Despite this conclusion,
Indiana Insurance settled the case with the Harris family for $165,000 in
January 2012, three years and four months after first being apprised of the
claim and over two years after the family’s lawsuit was filed. Based on these
facts it cannot be said that the resolution of the claim “proceeded without
delay” as in George. Further, the evidence readily supports Demetre’s
contention that Indiana Insurance was far more interested in denying coverage
than defending its insured against the Harris family’s claims.

Finally, unlike in George where the coverage question'was “fairly
debatable,” here the coverage question was straight forward; the Campbell
County property was insured by Indiana Insurance and there was no credible
evidence that Demetre was aware of the Harris family’s claims and misled the
company, a position the insurer finally abandoned in January 2012. Notably,
the George Court expressly recognized that While the actions of Guaranty
National in that case did not rise to the threshold of bad faith, an insurer could

“abuse its legal prerogative in requesting a court to determine coverage issues.”

34

953 S.W.2d at 949. Here, 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. Nothing in George supports Indiana
Insurance’s position that it was entitled on these facts to a directed verdict as a
matter of law.
Indiana Insurance also relies on Philadelphia Indem. Ins. Co. v. Youth
Alive, Inc., 732 F.3d 645 (6th Cir. 2013), asserting that the United States Court
of Appeals for the Sixth Circuit, applying Kentucky law, has recognized that an
insurer can raise coverage disputes without opening itself up to a bad faith
claim. In that case, an employee of Youth Alive, a nonprofit corporation that
provided services to at-risk youth, asked a sixteen-year~old to transport four
children back to their homes from a Youth Alive event. Id. Unbeknownst to
the employee, the sixteen-year-old did not have a driver’s license and the car he
was driving was stolen. Id. at 648. In a police pursuit following a traffic stop,
the young driver crashed the vehicle, killing all four children. When the
children’s estates brought suit, Philadelphia Indemnity provided a defense to
Youth Alive but filed a declaratory judgment seeking a determination that
Youth Alive’s insurance policies did not provide coverage for the claims because
the sixteen-year-old driver was a “volunteer worker” or a “club member,”

bringing into play a specific policy exclusion. Id.19

 

19 Youth Alive’s excess liability policy did not provide coverage for any liability
arising out of the use of an automobile but the organization’s commercial general
liability policy did provide such coverage unless the automobile was owned or operated

35

Youth Alive filed a bad faith counterclaim against Philadelphia Indemnity
contending that the insurer’s coverage positions had no reasonable basis in law
or fact and that the insurer violated the common law duty of good faith and the

'UCSPA. Id. Ultimately, Philadelphia Indemnity settled the estates’ wrongful
death claims against Youth Alive, and the district court dismissed Youth Alive’s
bad faith claims based on its determination that Philadelphia lndemnity’s .
coverage position was reasonable and had not been taken in bad faith. Id. at
649. The Sixth Circuit affirmed the dismissal, explaining that Youth Alive had
failed to demonstrate that Philadelphia Indemnity lacked a reasonable basis in
law for Contesting coverage under both policies. Id. at 65 1.

Indiana Insurance misconstrues the holding and reasoning of
Philadelphia Indemnity by suggesting that it stands for the proposition that an
insurer can raise coverage disputes without opening itself to a bad faith claim.
On the Contrary, Philadelphia Indemnity indicates that Whether bad faith
liability exists is predicated o'n the reasonableness of the insurer’s
conduct_namely was there-a “genuine dispute” as to the pertinent facts o'r laW.

l Id. at 650 (citing Empire Fire, 880 S.W.2d at 889-90). In particular, “a bad
faith claim is precluded as a matter of law as long as there is room for
reasonable disagreement as to the proper outcome of a contested legal issue,”
but where the insurer’s coverage obligation is not fairly debatable seeking to

avoid coverage through a declaratory judgment Claim can expose the insurer to

 

by the insured, 732 F.3d at 648. “Insured” was defined in the policy to include a
“volunteer worker” or “club member.” Id.

36

' a bad faith claim. Id. In Philadelphia Indemnity, the coverage dispute focused
on the application of specific policy language to the facts and the courts
ultimately determined that the insurer’s “position regarding the'policy language
was reasonable,” i.e., its position that the sixteen-year-old driver was a .
“volunteer worker” and hence an “insured” whose operation of the vehicle was
excluded from coverage was reasonable Id.

Unlike Philadelphia Indemnity, the coverage issue here was not about
specific policy language and. whether the Harris family’s claims were covered.
There was no “genuine dispute” that Demetre had contracted with indiana
Insurance to insure the Campbell County property and that the Harris family’s
claims arose from alleged contamination caused by that property Nor was
Indiana Insurance ever able to demonstrate that Demetre had concealed
information about possible contamination of his or the Harris family’s property
from his insurer, the premise for the insurer’s refusal to acknowledge coverage
and a position it eventually abandoned. Indiana Insurance maintains that it
Should not be penalized for raising legal issues of first-impression (e.g., the
known loss rule or the loss-in-progress doctrine) and we agree, but we also
agree with the trial court that it is necessary that there be sufficient factual
support to establish the appropriateness of applying that first-impression legal
theory. Here, there was clearly insufficient factual support even if Kentucky
courts were to adopt the known loss/loss-in-progress rule. Moreover, even

after Indiana Insurance abandoned these first-impression legal theories, it

`37

raised the time~on-loss theory; a theory that Magi acknowledged at trial was
without any factual justification .whatsoever.' n
George and Philadelphia Indemnity simply do not support Indiana
Insurance’s position that it was entitled to judgment as a matter of law because
the filing of a declaratory judgment claim precludes a finding of bad faith.
Similarly Indiana Insurance was not entitled to a directed verdict on Demetre’s
bad faith claim simply because it ultimately met its contractual obligations by
providing an attorney for Demetre and indemnifying him on the Harris family’s
l claims.20 ln the context of a first-party bad faith claim, this Court has stated
that our inquiry focuses on “whether_' there is sufficient evidence from which
reasonable jurors could.conclude that in the investigation, evaluation, and
processing of the claim, the insurer acted unreasonably and either knew or was
conscious of the fact that its conduct was unreasonable.” Farmland Mut. Ins.
Co. v. Johnson, 36 S.W.3d 368, 376 [Ky. 2000) (quoting Zilisch v. State Farm, ' _
995 P.2d 276, 280 (Ariz. 2000]]. We See no reason for a different Standard

where the insured is seeking a defense and indemnification pursuant to a

 

20 Indiana Insurance maintains that there was no breach of contract.
Specifically, Indiana Insurance claims that “[Demetre] did not cite to any provision of
the insurance policy Indiana Insurance supposedly breached.” Indiana Insurance
states that “the trial court correctly recognized that Indiana Insurance had not
breached the contract of insurance.” In support of this proposition, Indiana Insurance
quotes a portion of a sentence from the trial court’s April 26, 201 1 order denying
Demetre’s motion for declaratory relief. However, this statement is misleading based
on the trial court’s later statement on this matter, “I have never found and I made it
very, very clear, that I never intended to find that Indiana Insurance did not breach its
contract with, of insurance, with James Demetre.” Referencing his April ,26, 201 1
order, the trial court explained that, “what l did, I found that I was not willing at that
time, with what was before the court at that'time, to summarily find that Indiana
[Insurance] had done so.” Ultimately, the trial court submitted the claim of breach of
contract to the jury, which unanimously found for Demetre on that claim.

38

liability policy. The jury was entitled to hear, and did hear, about the handling
of Demetre’s claim from notification of his insurer in September 2008 through
settlement with the Harris family in January 2012. Viewing all evidence in the
~ light most favorable to Demetre and granting him “all reasonable inferences
which may be drawn from the evidence,*’ Lewis,, 798 S.W.2d at 461, it is clear
that the trial court properly denied Indiana Insurance’s motion for directed
verdict.

In answering specific individual interrogatories in the jury instructions,
the jury unanimously found that Indiana Insurance violated the UCSPA by,
among other things, lacking a reasonable basis to delay the coverage
determination; misrepresenting pertinent facts or policy provisions; failing to
acknowledge and act reasonably promptly upon communications relating to
Demetre’s claim; failing to adopt and implement reasonable standards for the
prompt investigation of claims such as Demetre’s; and not attempting in good
faith to effectuate prompt, fair and equitable settlement of the claim after
liability had become reasonably clear. The jury also unanimously found that
Indiana Insurance, in its dealings with Demetre, engaged in unfair, false,
misleading or deceptive acts or practices as prohibited by the Kentucky
Consumer Protection Act. Finally, the jury unanimously found that Indiana
Insurance breached its contract with Demetre with breach defined to_include
failing or refusing to perform essential contract terms; violating the fiduciary

duties owed to a policy holder; or violating the covenant of good faith and fair

39

dealing. The evidence supporting most, if not all, of these conclusions is
readily discernible from a review of the record. . j

Based on this same evidence, we cannot say that the verdict was
“palpably or flagrantly” against the evidence so as to “indicate that it was
reached as a result of passion or prejudice.” Lewis, 798 S.W.2d at 461-62. By_
the time Indiana Insurance decided to accept coverage and settle the Harris
family’s claims, Demetre had been forced to expend substantial amounts of
money defending himself. More significantly though, Demetre endured years of
stress and worry about what would happen to him and his family due to
Indiana Insurance’s handling of the Harris family’s claims and its litigation of
the coverage issue. The reason “[a]n insured purchases insurance in the first
1 place [is] so as not to suffer such anxiety, fear, stress, and uncertainty The
fact that an insurer finally pays in full does not erase the distress caused by
the bad faith conduct.” Goodson v. Amen'can Standard Ins. Co. of Wisconsin,
89 P.3d 409, 417 (colo. 2004).

In sum, Demetre presented sufficient evidence to support the jury’s
determination that Indiana Insurance breached its contract with Demetre by
violating the implied covenant of good faith and fair dealing. There was also

sufficient evidence supporting Demetre’s claims that Indiana Insurance’s acts

or omissions in this matter violated the UCSPA.QL.22 The trial court did not err
in denying a directed verdict on either of those bad faith claims.

B. Demetre’s Kentucky Consumer Protection Act Claim

Indiana Insurance also 'contends that the trial.court erred by not

granting its motions for directed verdict and judgment notwithstanding the
verdict on the Kentucky Consumer Protection Act claim. Specifically, Indiana
Insurance argues that Demetre’s emotional distress damages and attorney fees
cannot satisfy the Act’s requirement of an “ascertainable loss of money or
'property.” See KRS 367.220[1) (granting right of recovery to person who

“suffers any ascertainable loss of money or property” in conjunction with

 

21 Indiana Insurance makes a barebones argument that the UCSPA Was never
intended to apply in this.situ_ation. According to Indiana Insurance, the UCSPA “is
designed to alford protections to persons asserting a claim for benents under the
policy, and Mr. Demetre never asserted a claim for beneEts under the policy. Instead,
Mr. Demetre was an insured against whom a claim had been asserted.” We strongly
disagree with this construction, which would render the UCSPA inapplicable to an
insured seeking benefits purchased pursuant to a liability insurance policy. As we
have explained, Demetre made a “claim” on his policy when he alerted his insurer to
the Harris family’s claims and his own need for a defense and indemnification If
Indiana Insurance failed to meet its UCSPA obligations, Demetre was permitted to

bring suit for relief.

22 Indiana Insurance also contends that Demetre’s dissatisfaction with his first
defense counsel, Schenkel, was a basis for his bad faith claim. Indiana Insurance
argues that this was error and'that the case was permitted “to go to the jury based on
rhetoric instead of evidence.” However, Demetre was very clear during the trial that
his allegations of bad faith were not based on any alleged misconduct by Schenkel,
but rather Indiana Insurance’s conduct in handling the claim. Further, irl-denying
Indiana Insurance’s motion for a judgment notwithstanding the verdict, the trial court
explained “[t]his is about the insurance company conduct, not about its lawyers
. . . . It’s about adjuster and internal, you krrow, how an insurance company handles
its claim, not how its lawyers handled its claims, because the adjusters make most of
the calls orr what, you know, what they can spend and who they can hire.” Contrary
to Indiana Insurance’s argument, the adequacy of Schenkel’s representation was not
at issue at trial, rather it,was Indiana Insurance’s conduct that was offered to prove
bad faith. ` '

41

unfair, false, misleading or deceptive business acts or practices). We need not
reach the question of whether damages for emotional distress could constitute
an “ascertainable loss of money or property” under the Act, given that
Demetre’s attorney fees incurred in his dispute with Indiana Insurance over the
coverage issue were sufficient to'submit the Consumer Protection Act claim to
the jury.23
n Indiana Insurance relies on two cases, Yates v. Bankers Life, 720 F.

supp. 2d 809 (w.D. Ky. 2o10) and`Hozmes v. countrywiae Fin. corp., No. 5:03-
CV-00205-R, 2012 WL 2873892 (W.D. Ky. 2012), to argue that attorney- fees
cannot satisfy the Act’s requirement of an “ascertainable loss of money or
property.” ln Holmesj several former customers of the Countrywide Financial
Corporation filed suit due to the illegal disclosure of their personal financial
information, 2012 WL 2873892 at *2. The plaintiffs contended that attorney
fees amassed during their litigation against Countrywide constituted an
“ascertainable loss” under the New Jersey _Consumer Fraud Act, Id,'. at *14.
The district court rejected this theory, which had been expressly repudiated by
the New Jersey Supreme Court in Weinberg v. Spn`nt Corp., 801 A.2d 281 (N.J.

2002), as “nonsensical” and insupportable under both the New Jersey and

 

23 A review of closing arguments reveals that the almost $400,000 in attorney
fees testified to by Demetre was what his counsel pointed to in addressing
Interrogatory No. l 1 of the jury instructions: “Do you believe from the evidence that
Mr. Demetre suffered an ascertainable loss of money or property as a` result of Indiana
Insurance Company’s conduct?” Interrogatory No. 10 had asked whether Indiana
Insurance “in dealing with its policy holder, Mr. James Demetre, engaged in unfair,
false, misleading, or deceptive acts or practices?” The jury found unanimously for
Demetre on the liability interrogatory and nine jurors found in his favor on
Interrogatory No. 1 1 regarding-an ascertainable loss.

42

Kentucky consumer protection statutes. Id. Yates also involved a plaintiff
relying on attorney fees that would prospectively accrue during the prosecution
of the Consumer Protection Act claim as evidence of an “ascertainable loss.”
Logically, attorney fees that have not yet accrued but that are anticipated
during the pursuit of a Consumer Protection Act claim cannot constitute an
ascertainable loss giving rise to the claim. That, however, is not the issue here.

In the case at bar, Demetre was compelled to hire counsel and incurred
almost $400,000 in attorney fees seeking to protect himself and defending the
declaratory judgment cross-claim brought by Indiana Insurance on the
coverage issue. As such, Demetre suffered an ascertainable economic loss in
the form of attorney fees separate and apart from any attorney fees incurred in
pursuing the Consumer Protection Act claims he brought against Indiana
Insurance. Courts in sister states have recognized that such out-of-pocket
attorney fees can constitute a loss supporting a statutory consumer protection
act/ unfair trade practices claim. See, e.g., columbia Chiroprac_tic Grp., Inc. v.
Trust Ins. Co., 712 N.E.2d 93, 96 (Mass. 1999] (chiropractic group committed
unfair or deceptive acts or practices in attempting to collect medical bills from
insurance company; company’s litigation expenses in defense of collection suit,
including attorney fees, were a loss of money recoverable under unfair trade
practices_statute]; Nationwide Mut. Ins. Co. v. Holmes, 842 S.W.2d 335, 342
(Tex. Ct, App. 1992] (attorney fees that Holmes incurred “to induce Nationwide'
to indemnify him” in initial motor vehicle accident litigation recoverable as

damages in deceptive trade practices act claim]. As Demetre’s personal

43

attorney fees were sufficient evidence of an “ascertainable loss of money” under
the Consumer Protection Act, the trial court did not~err in denying Indiana
Insurance’s motion for directed verdict or judgment notwithstanding the verdict
on that claim;24

II. Expert Testimony' rs Unnecessary to Substantiate D`amages for
Emotional Distress in a Bad Faith Case.

Relying on this Court’s opinion in Osbome, Indiana Insurance argues
that Demetre was required to present expert medical or scientific proof to
support his claim for emotional distress damages l`~`urther, because Demetre
relied solely on his own testimony to establish his emotional distress, Indiana
Insurance alleges that this evidence was insufficient to sustain an award of
emotional distress damages Demetre counters that-Osbome’s heightened
proof requirement-expert testimony regarding severe emotional
distress_applies only to claims of negligent infliction of emotional distress.

In Osbome, the plaintiff was sitting in her home when an airplane
crashed through the roof causing considerable damage to the home and its
contents. 399 S.W.3d at 6. Fortunately, Osborne was not struck and she
suffered no physical injury Id. She tried to bring an action against the pilot of
the plane, but her counsel, Keeney, failed to file suit in a timely manner. Id. at

7. Osborne later sued Keeney for breach of contract, legal malpractice, and

 

. 24 We reject Indiana Insurance’s suggestion that the attorney fees cannot be an
ascertainable loss under the Act because the jury was not asked to award them as
damages. Further, to the extent Indiana Insurance suggests it was entitled to
judgment because there was no evidence of the acts or practices prohibited by the
Consumer Protection Act, we reject that argument as well.

44

fraud and deceit, and obtained a jury verdict in her favor on all claims. Id.
However, the Court of Appeals reversed several portions of the jury’s verdict,
including the damages for pain and suffering because she experienced no
physical impact in the plane crash. Id. at 8. Specifically, the case~within-the
case~Osbome’s original action against the pilot_was based, at least in part,
on negligent infliction of emotional distress and our law then required a
physical impact to support such a`claim_

At the time Osborne was decided, Kentucky was one of only six courts
nationwide that adhered to the impact rule. Id. at 14, n.39. Principally, the
impact rule held that “an action will not lie for fright, shock[,] or mental
anguish which is unaccompanied by physical contact or injury.” Id. (quoting
Deutsch v. Shein, 597 S.W.2d 141, 145-46 (Ky. 1980]). While the impact rule
was longstanding, having been adopted by Kentucky in 1903, the Osbome
Court determined that the rule had become “difficult in its application and
ha[d] been repeatedly stretched and diluted.” Id. at 15. Accordingly, the Court
concluded that the impact rule should be abandoned in favor of an analysis
based on general_negligence principles Id. at 17, Further, relying on the
Tennessee Supreme Court’s decision in Camper v. Minor, 915 S.W.2d 437
(Tenn. 1996), the Osbome Cour_t'resolved that recovery in those cases should
be limited to those instances where there was a “severe” or “serious” emotional
- injury. Id. In conformity with Camper, the Osborne Court directed that “a
plaintiff claiming emotional distress damages must present expert medical or

scientific proof to support the claimed injury or impairment.” Id. at 17-18.

45

After Osborne was decided, it was unclear whether Osbome’s heightened
requirement of expert testimony to establish emotional damages was restricted
to claims of intentional or negligent infliction of emotional distress, or if expert
testimony is always necessary to establish emotional distress damages25
While this Court has not directly addressed this issue, a number of federal
courts,l sitting in diversity suits, have issued conflicting interpretations of .
Osborne-125 As this is an issue of state law, we are not bound by these
decisions, but we often consider federal decisions to be persuasive authority.
See Embs v. Pepsi-Cola`Bottling Co. of Lexington, Kentucky, 528 S.W.2d 703,
705 (Ky. 1975). 7

ln Sergent v. ICG Knott County, LLC, No. CIV. l2-118-ART, 2013 WL

6451210, at *6 (E.D. Ky. 2013), a division of the United States District Court,

 

25 Four years earlier in Childers Oz`l Co. Inc. v.'Adkr'ns, 256 S.W.3d 19 (Ky. 2008),
an age-discrimination action, this Court had unanimously affirmed an emotional
distress damage award premised only on the plaintiffs testimony. The Court
distinguished between the to__rt action for intentional infliction of emotional distress
and a statutory compensatory damage award that included damages for emotional
distress lt did not address the issue of expert testimony.

26 Demetre argues'that in Banker v. Univ. of 'Louisville Athletic Ass’nj Inc., 466
S.W.3d 456 (Ky. 2015), this Court implicitly limited Osbome’s expert proof
requirement to negligent infliction of emotional distress cases Banker alleged that
she had been discharged for engaging in conduct protected by the Kentucky Civil
Rights Act. Id. at 458. At trial, Banker and her mother provided testimony in support
of her claim of emotional distress, and the jury ultimately awarded Banker $300,000
in emotional distress damages Id. On appeal, the University of Louisville Athletic
Association (ULAA) argued that while this lay testimony may have supported an award
of some damages, it Was insufiicient to support the jury’s award. Id. As such, ULAA
disputed only the amount of the award, not that Banker had failed to provide expert
evidence to sustain any emotional distress damages This Court concluded that the
trial court did not abuse its discretion in refusing to alter the jury’s award. Id. at 464.
Plainly, the Banker Court did not address Osborne as the necessity of expert testimony
to support Banker’s emotional damages was not raised. Accordingly, we do not find
Banker to be controlling in the resolution of the case at bar.

46

Eastern District of Kentucky, concluded that “plaintiffs seeking damages for
emotional distress must adduce expert testimony in support of their claims.”
Noting that the Osborne Court “gave no indication that the expert-testimony
requirement is limited to impact-free 'cases,” that district court found that the
reasoning employed by the 0sbome Court supports a general rule requiring
proof by medical experts to recover emotional distress damages in a negligence
action. Id. at *7.27

However, this interpretation of Osborne was rejected by a judge of the
United States District Court, Western District of Kentucky, in MacGlashan v.
ABs Lincs KY, rnc., 84 F. supp. ad 595 (w.o. 20‘15). rn MacGlashan, the
plaintiff was working as a nurse manager when she was notified that a patient
with a sulfa allergy had been treated with a sulfa-based antibiotic.~ Id. at 598.
After the patient was transported to a different hospital for medical treatment,
MacGlashan was ordered to investigate the incident Id.' AS part of her
investigation, MacGlashan visited the patient and obtained the patient’s
medical records Id. Afterwards, MacGlashan was fired by the hospital. Id.
'Clairr_ring that she was fired based on a false allegation that she violated the
Health Insurance Portability and Accountability Act of 1996 (HIPPA),
MacGlashan filed suit in federal court alleging retaliation, wrongful discharge,

and defamation. Id..

 

27 ln a separate unpublished opinion, Adkins v. Shelter Mut. Inc. Co, No. 5:12-
173-KKC, 2015 WL 4548728 (E.D. Ky. 2015], a different division of the United States
District Court, Eastern District of Kentucky, citing Sergent, concluded that Osborne
applied to all negligence actions and dismissed Adkins’ claims as her own testimony
was insufficient evidence of emotional distress

47

On a motionfor summary judgment, the hospital argued, citing Osbome,
that MacGlashan’s claim for emotional distress damages should be denied due
to her failure to present expert testimony. ` Id. at 604~05. The district court
acknowledged Sergent, but disagreed with the.analysis in that case, specifically
the conclusion that the Osborne court “gave no indication that the expert- 1
testimony requirement is limited.” Id. F_urther, the district court explained
d that l“[t]his [Sergent’s] interpretation is questionable because the Osborne court
was clearly talking in the context of an NIlilED [negligent infliction of emotional
distress] claim.” Id. The district court noted thatlother federal courts had also
. rejected Sergent’s interpretation of Osbome. See Minter v. Liberty Mut. Fire Ins.,
Co., No. 3:11-CV-00249-S, 2014 WL 4914739 at ’i5, n.-l (W.D. Ky. 2014)
(responding to a bad faith claim', “Liberty Mutual incorrectly asserts that, _in
order to recover emotional distress damages, Minter must meet the strict-
standard of proof that is required for a Negligent or Intentional infliction of
Emotional Distress claim (‘NIED_’ and ‘IIED’]”); Smith v. Walle Corp., No. CIV.
-5:13-219-DCR, 2014 WL 5780959 at *4 (E.D. Ky. 2014) (district court was not
persuaded that “expert evidence is necessary to substantiate a claim [of
damages for emotional distress] for discrimination or retaliation under the

KCRA).”-28 Based on the foregoing, the MacGlashan court concluded_that

 

` 237 In Minter, a different division of the United States Distiict Court, Western

' District of Kentucky, went onto explain that Osbome’s expert requirement made

sense in negligent or intentional infliction of emotional distress cases, “as the elements

_ .of such a claim specifically require ‘severe or serious emotional injury.”" 2014 WL
5780959 at *4 (citing Osborne, 399 S.W.3d at 17). However, in the case before the

district court1

48

“Osbome’s requirement for expert testimony is limited to NIED and intentional
infliction of emotional distress claims.” Id.29

Although Indiana Insurance urges the Court to extend the requirement of _
expert testimony to support recovery of emotional distress damages to a bad
faith claim, it cites no authority for the _view other than Se'rgent and a handful
of other negligence cases from the Eastern District of Kentucky that have
followed Sergent. Specifically, Indiana Insurancedoes not cite a single case
from any other jurisdiction in the country imposing such a requirement in a
bad faith case, and we have found noine. l

Notably, in Esrare ofAmoS v. vanderbilt Univ., 62 s.W.sd 133 (Tenn.

2001), the Tennessee Supreme Court declined to extend Camper‘s (the case

 

bad-faith conduct in settling a claim is alleged to have caused the
Plaintiff emotional harm. 'This is not a claim sounding in negligence,
NIED, or IIED. Liberty Mutual cites no authority applying Osborne in the
context of bad faith. Nor could it, because plaintiffs claiming statutory

' violations have recovered for humiliation, embarrassment, or nervous
shock, and the courts allowing those recoveries did not require evidence
of serious or severe emotional'injury.

Id. (citations omitted). Indiana Insurance argues that Minter closely resembles
the case at bar, and that we should take note that Minter’s claims of emotional
damages, based solely on her testimony, were insufficient to survive summary '
judgment Id. at *5. However, Minter is distinguishable While Demetre’s
testimony was the sole basis for his recovery for emotional damages, he testified
at length `and was very specific about the impact of Indiana Insurance’s bad
faith on his mental health and wellbeing. There was apparently no such
testimony-in the Minter case.

29 Indiana Insurance also cites the Court to an earlier unpublished
memorandum opinion and order by the author of MacGlashan issued in Powell v.
Tosh, No. 5:09-CV-00_121-TBR, 2013 WL 1878934 (W.D. Ky. 2013]. In Powell, the
district court denied the plaintiffs’ motion to reconsider its grant of summary
judgment on their negligence claims, due to the failure to provide expert proof of
emotional distress. Id. at *4~5. However, the Powell case has little persuasive value,
as it is clear that the district court reconsidered its interpretation of Osborne as
expressed in its more recent and published MacGlashan decision.

49

` relied on by this Court in Osbome) heightened standard of proof for the
recovery of emotional damages in negligent infliction of emotional distress
claims to all claims for emotional damages In that case, Amos underwent jaw
surgery at_ Vanderbilt University Medic`al Center and received a blood
transfusion, including a unit of blood that had been contaminated with human
immunodeficiency virus (HIW. Id. At the time (1984), Vanderbilt' did _not test
blood for HIV and did not have a policy mandating patient notification when a
blood transfusion had occurred. Id. In 1991, Amos gave birth to a daughter
who died shortly after birth from HIV. Subsequent testing led to Amos’s
discovery of her own HIV infection. Id.

Amos filed suit against Vanderbilt and recovered at trial on her claims for
wrongful birth, negligence, and negligent infliction of emotional distress Id. _
The Tennessee Court of Appeals reversed the estate’s award for emotional
injuries, however, “[b]ecause the Amoses failed to present expert or scientific
testimony of serious or severe emotional injury, as required under this Court’s
decision in Camper.’f Id. at 136.

On appeal, the Tennessee Supreme Court reversed, declining to extend '-
Camper"’s requirements of expert medical or scientific proof and serious or
severe injury to all negligence cases where emotional damages are sought. Id.
_ at 134. Specifically, the Court noted that “[t]he special proof requirements in
Camper area unique safeguard to ensure the reliability of ‘stand-alone’
negligent infliction of emotional distress claims.” Id. at 136-37 (citing Camper,

915 s.w._2d at 440; Mizzer v. Wiubanks, 8 s.W.sd 607, 614 (Tenn. 1`999)).

50

Whi_le the nature of “stand-alone” emotional injuries creates a risk of
fraudulent claims, that risk is reduced “however,'in a case in which a claim for
emotional injury damages is one of multiple claims for damages.-” Id. (citations
_ omitted). “When emotional damages are a ‘parasitic’ consequence of negligent
conduct that results in multiple types _of damages', there is no need to impose
special pleading or proof requirements that apply to ‘stand~alone’ emotional
distress claims .” Id. (citations omitted). As the Amos Court reasoned

[i]mposing the more stringent Camper proof-requirements upon all

negligence claims resulting in emotional injury would severely limit

the number of otherwise compensable claims Such a result would

be contrary to the intent of our opinion in Camper_-to provide a

more adequate, flexible rule allowing compensation for valid

“st-and alone” emotional injury claims

Id. at 137 (citing Camper, 915 S.W.2d at 446).

indiana Insurance argues that rllmos is distinguishable from the case at
bar as Demetre only sought recovery for emotional damages,- unlike the Amos
plaintiffs who requested “damages for emotional injuries stemming from those
causes of action as well as . . . other damages.” lt is true_that the only
compensatory damages that the_jury was asked to award in this case were
damages for "‘emotional pain and suffering, stress, Worry, anxiety, or mental
z anguish,” but it is further true that Demetre testified to an out-of-pocket loss in
the form of the almost $'400,000 in attorney fees that he incurred litigating '

with Indiana Insurance to obtain coverage. Demetre sought to recover these

damages along with his other attorney fees, through a fee award from the

51

judge. Thus, this case is not one where the only injury identified by the
plaintiff is emotional distress ‘

Nor is this case a negligence case like Amos. It is a bad faith case and
Kentucky has long recognized that “damages for anxiety and mental anguish
are recoverable in an action for statutory bad faith” provided there is “clear and
satisfactory” evidence from which “the jury could infer that anxiety or mental
anguish in fact occurred.” Moton'sts Mut. Ins. Co., 996 S.W.2d at 454.

Moreover, we share the concern expressed by the Amos Court that the
imposition _of the stringent proof requirements adopted by this Court in
Osborne for all claims for emotional damages would dramatically limit the
otherwise compensable claims that arise in bad faith cases as well as a variety
of other actions Such a result would no_t be conducive to the interests of
justice. Accordingly, we hold that Osbome’s requirement of expert medical or
scientific proof is limited to claims of intentional or negligent infliction of
emotional distress

Our conclusion i_s due inpart to the recognition that claims for emotional
damages grounded in breach of contract or violation of statute, such as those
alleged by Demetre in the case at bar, are less likely to be fraudulent than
those advanced under a free-standing claim of intentional or negligent infliction
of emotional distress To evaluate whether emotional damages are appropriate
in those cases that do not allege the free-standing torts of intentional or
negligent infliction of emotional distress, we have historically relied on our trial

courts and the jury system to evaluate the evidence and determine the merits

52

of the alleged claims See C_urry, 784 S.W.2d at 178 (“Throughout the history
of Anglo-American law, the most important decisions societies have made have
been entrusted to duly empaneled and properly instructed juries Decisions as
to human life, liberty and'public' and private property have been routinely
made by jurors and extraordinary confidence has been placed in this decision-
making process.”); doodson, 89 P.3d at 417 (“[T]he jury system itself serves as
a safeguard; we routinely entrust the jury with the important task of weighing
the credibility of evidence and determining whether, in light of the evidence,
plaintiffs have satisfied their burden of proof.”]. We see no compelling reason
to depart from this View. n

With this standard established we turn to the facts in the case at bar to
determine whether there was “clear and satisfactory” proof to support
Demetre’s recovery of` emotional damages See Moton'sts Mut. Ins. Co., 996
S.W.2d at 454 (citations omitted). Indiana Insurance claims that any stress
Demetre suffered was due solely to his being sued by Harris: “[i]t is not
surprising that Mr. Demetre may have been experiencing stress, since a claim
had been made against him and he had been sued by Ms. Harris, Those are
certainly stress-inducing events.” This causal explanation offered by Indiana
Insurance for Demetre’s stress is Self-serving as it purposefully omits any
recognition that Demetre endured stress due to Indiana Insurance’s lackluster
handling of the Harris family’s claims and subsequent legal action against
Demetre. The jury heard extensive evidence about the totality of the

circumstances surrounding the Harris family’s claims and Demetre’s

53

interactions with his insurer, and it was a factual issue for the jury as to
whether Demetre suffered any emotional distress and, if he did, whether
Indiana Insurance bore any responsibility on that score. -

Contrary to Indiana Insurance’s assertions Demetre presented sufficient
evidence to establish his emotional distress during the four years prior to trial,
describing the experience in_ some detail as a “total disaster,” and a
“nightmare.” Additionally, Demetre testified to daily stress wondering what
would happen to his family due to his potentially uninsured million-dollar
exposure in the Harris litigation, a case which would deplete his financial
resources and likely force him to declare bankruptcy. Further, Demetre
explained that the stress impacted all aspects of his life-, from his marital life to
his business relations and resulted in a perpetual loss of sleep. Lastly,
Demetre testified to seeking spiritual comfort from his priest to weather the
stress caused by Indiana Insurance’s conduct Based on this evidence, we
conclude there was sufficient clear and satisfactory proof presented to sustain

the jury’s award of emotional distress damages.30 .

 

30 Indiana Insurance suggests this Court should revisit the genesis of the tort of
bad faith in Kentucky and adopt the requirements of. “severe” emotional distress and
“substantial damages aside and apart from the emotional distress” articulated in
Anderson v. Cont’f Ins. Co., 271 N.W.2d 368, 378 (Wis. 1978). This argument was not
raised in the motion for discretionary review but, in any event, we are not inclined to
change the Motorists Mut In.s. Co. standard When Anderson Was rendered, Kentucky .
was grappling with whether there should be a tort action against an insurance
company for breach of an implied covenant of good faith and fair dealing. In fact, the
Court expressly rejected the tort of bad faith in Federal Kemper Ins. Co. v. Homback,
71 l S.W.2d 844, 845 (Ky. 1986) overruled by Curry v. Fireman’s Fund|Ins. Co., 784 _
S.W.2d 176 (Ky. 1989)), but in his dissent Justice Leibson advocated adopting the
Wisconsin Supreme Court’s three~part Anderson test for a bad faith claim. 71 1
S.W.2d at 846-47 {citingAnderson, 271 N.W.2d at 371.] Eventually, the Curry Court
(and later Wittmer v. Jones) adopted Anderson’s three-part test, but we have never

54

III. Indiana Insurance’s Two Remaining Allegations of Error Are Not
Properly Before This Court For Review.

ln one of its final claims of error, Indiana-Insurance contends that even if
this Court concludes that a directed verdict o_r judgment notwithstanding the
verdict was not appropriate, that a new trial is nonetheless warranted due to:
1.) the trial court’s exclusion of the testimony of Tim Schenkel and Don Lane;
and 2) the trial court’s jury instructions Prior to trial, Demetre-asked the trial
court to bar Indiana Insurance from deposing or calling Lane and Schenkel as
witnesses at trial due to the insurer’s violation of the deadlines in the parties’
agreed scheduling order. The agreed scheduling order mandated that the
parties list all potential witnesses in their written discovery responses by March
30, 2012, er depose them by the April so, 2012 discovery cut-err The trial

court was unsympathetic to Indiana Insurance’s belated request to name

 

embraced Anderson’s requirement that the plaintiff must “prove substantial damages
aside and apart from the emotional distress,” nor have we barred recovery for
emotional distress damages that were not severe. See Motorists Mut., 996 S.W.2d at
454 (damages for anxiety and mental anguish are recoverable in an action for .
statutory bad faith, if clear and satisfactory evidence supports inference that anxiety
or mental anguish occurred]. In not requiring“ severe” emotional distress, Kentucky is
certainly not alone. See, e. g., Farr v. Transamen'ca Occidental sze Ins. Co. of
Cal;fomia, 699 P.2d 376, 382 (Ariz.Ct.App.1984] (emotional distress damages could
be awarded in a bad faith case, “even though the defendant did not intentionally cause
the distress and even though the distress was not severe.”]; Jacobsen v. Allstate In,s.
Co., 215 P.3d 649 (Mont. 2009) (plaintiff was not required to demonstrate serious or
severe emotional distress to recover emotional distress damages arising out of a b_ad
faith claim). Nor are we alone in not requiring proof of economic or physical loss
caused by the insurer’s bad faith. See, e.g., Goodson, 89 P.3d at 412 (“We hold that,
in a tort claim against an insurer for breach of the duty of good faith and fair dealing,
the plaintiff may recover damages for emotional distress without proving substantial
property or economic loss.”]; Miller v. Hartford Life Ins. Co, 268 P.3d 418, 432 {Haw.
2011] (“If a first-party maurer commits bad faith, an insured need not prove that the
insured suffered economic or physical loss caused by the bad faith in order to recover
emotional distress damages caused by the bad faith.”) (emphasis in original).

55

Schenkel and Lane as witnesses noting that “[w]here, as here, the parties,
represented by seasoned counsel, have negotiated and set specific deadlines
and‘ memorialized them in an Agreed Scheduling Order, the [trial court] will not
. vacate them, absent unusually compelling circumstances.” The court ruled
that neither Lane nor Schenkel could testify

On appeal the Court of Appeals observed that Schenkel and Lane were
classic rebuttal witnesses and that Demetre had sufficient time lto depose both
witnesses after the trial date was moved from June 2012 to September 2012
due to courthouse construction. Although the Court of Appeals concluded that
the trial court abused its discretion in barring Schenkel and Lane’s testimony,
the Court of Appeals deemed that error harmless The Court of Appeals was
frustrated by Indiana Insurance’s failure to “cite to the record where the avowal
testimony can be found or offer the content of that testimony” and to argue
“how the exclusion was prejudicial or demonstrate that the outcome of the trial
would have_been different.” Accordingly, the Court of Appeal`s determined that
Indiana Insurance failed to provide a basis for that court to conclude the trial
court’s error constituted reversible error,

Now before this Court, Indiana Insurance again contends that it was
reversible error for the trial court to exclude Lane and Schenkel’s testimony.
However, Indiana Insurance failed to properly raise this issue before this Court,
having neglected in its motion for discretionary review to ask the Court to
address the exclusion of this testimony. Without any mention of this issue in

the motion for discretionary review, it is not properly before the Court. See

55

Ellison v. R & B Contracting, Ir_l_c., 32 S.W.3d 66, 71 (Ky. 2000) (“The Ellisons'
Motion for Discretionary Review focused solely on the directed verdict issue
and made no mention of the punitive damage and injunctive relief issues they
raised before the Court of Appeals. Although those issues were briefed before
us and addressed at oral argument, we find that neither the punitive damages
nor the injunctive relief issue is properly before this Court. CR 7 6.20(3)(d)).”
Accordingly, we decline review.

Additionally, Indiana Insurance alleges that the trial court’s jury
instructions were erroneous because the jury was permitted to award punitive
damages -if it concluded Indiana Insurance breached its contract with Demetre.
The Court of Appeals rejected this argument ercplaining that “[t]he trial court
instructed the jury that it could only award punitive damages if it found that
Indiana Insurance violated the Unfair Claims Settlement Practices Act or the
Consumer Protection Act. No punitive damages were authorized under the
‘breach of contract’ instruction and, therefore, Indiana Insurance’s claimed
v error is without merit.” This jury instruction claim, like the exclusion of
testimony from Lane and Schenkel, was not raised in Indiana Insurance’s

motion for discretionary review and therefore we decline to examine it.31

 

31 Although we decline to review this issue on the merits, we concur with the
Court of Appeals’ reading of the jury instructions, i.e., the instructions did not allow
the jury to award punitive damages for breach of contract. See Jury Instruction No.
10.

i

57

CONCLUSION .

For the reasons explained herein, we affirm the_Court of Appeals and
thereby affirm the judgment entered by the trial court following the jury’s
' verdict.

All sitting. Minton, C.J.; Cunningham, Keller, Venters, _and Wright, JJ.,
concur. VanMeter, J., dissents by separate opinion.

VANMETER, J., DISSENTING: l respectfully dissent. In Guaranty Nat’l
Ins. Co. v. George, 953 S.W.2d 946, 949 (Ky. 1997), this court recognized that
an insurer may permissibly advise its insured that it is defending under a
reservation of rights and file a declaration of rights action when coverage under
the policy is unclear. In my view, the circumstances surrounding the
_ property’s prior use, and the timing of Demetre’s obtaining coverage and the
Harrises’ claim gave rise to a reasonable belief that Demetre may have been
aware of the potential claim, which belief the insurer was entitled to
investigate The fact that the insurer ultimately changed course and dropped
this argument does not mean its initial belief was unreasonable My concern
with the majority opinion is that, in the future, insurance companies having
reservations about questionable claims will be placed between the proverbial
“rock and a hard place” notwithstanding decisions in cases such as Hollaway
v. Direct Gen. Ins. Co. of Mississippi, Inc., 497 S.W.3d'733, 739 (Ky. 20'16)
(stating “KUCSPA only requires insurers to negotiate reasonably with respect to _
claims; it does not require them to acquiesce to a third party's demands[]”].

Additionally, rny view is that Demetre’s proof of emotional damages-was

58

insufficient Litigation is stressful, and this case will be cited for the
proposition that litigation stress is compensable

As to Demetre’s claim for violation of Kentucky Consumer Protection Act,
KRS 367.220, I question whether Demetre satisfied the requirement that he`_
“suffered any ascertainable loss of money or property, real or personal” as
required by the statute since his instructed damages were limited to “emotional
pain and suffering, stress, worry, anxiety or mental anguish.”_

Finally, with respect to the common law breach of contract claim, our
longstanding case law recognizes the “universal rule that damages for mental
anguish is not recoverable for the violation of a contract unaccompanied with
physical injury.” Clark v. Life & Cas. Ins. Co., 245 Ky. 579, 582, 53 S.W.2d
958, 970 (1932). While the proof in the case demonstrates that Demetre
expended almost $400,000 for attorney’s fees in defending the coverage issu_e,
the jury instructions only articulated a damage claim for Demetre’s “emotional
pain and suffering,' stress, worry, anxiety or mental anguish.” Based on a
failure of proof for the requisite damages, the trial court erred in failing to
direct a verdict in favor of Indiana on this count. Further, KRS 41`1.184(4),

prohibits an award of punitive damages for breach of contract.

59

COUNSEL FOR APPELLANT:

Donald Lee Miller, II
Kr`istin M. Lomond
Quintairos, Prieto,\ Wood 85 Boyer, P.A.

Michael D. Risley
Bethany A. Breetz
Stites & Harbison, PLLC

COUNSEL FOR APPELLEE:

Kevin Crosby Burke
Burke Neal PLLC

Robert Edward_ Sanders
Justir_l Aaron Sanders
The Sanders Law Firm

- Jeffrey Sanders

Jeffrey M. Sanders PLLC

COUNSEL FOR AMICUS CU_RIAE,

THE INSURANCE lNSTITUTE OF KENTUCKY:

Ronal'd L. Green
Green, Chesnut 85 Hughes, PLLC'

COUNSEL FOR AMICUS CURIAE, _
KENTUCKY JUSTICE ASSOCI_l¢\TION:

I-Ians George Poppe, Jr.

Warner Thomas Wheat
The Poppe Law Firm

60