While proponents of the bill (backed heavily by business groups, hospitals, and the Kentucky Chamber of Commerce) argue that it will “modernize” Kentucky’s legal liability system and contain insurance costs, organizations like the Kentucky Justice Association warn that the legislation will create additional procedural requirements shifting the burden away from wrongdoers and onto injured victims and taxpayers. Here is a closer look at what SB 195 proposes and how it could severely impact your rights if you are injured in the Commonwealth.

Eliminating Accountability Through Changes to Comparative Fault 

Kentucky has long followed a pure comparative fault system. Under that framework, fault is apportioned precisely. A plaintiff who is 10% at fault recovers 90% of their damages. A plaintiff who is 70% at fault still recovers 30%. The guiding principle is straightforward: each party pays for the harm they caused.

That structure reflects a policy choice. Kentucky law recognizes that accidents are often messy. Multiple actors can contribute to an event. Under pure comparative fault, the focus remains on proportional responsibility rather than all-or-nothing outcomes.

SB 195 would replace that approach with a modified comparative fault bar. If a plaintiff is found 50% or more at fault, recovery would be eliminated entirely. This would fundamentally alter the structure of liability in Kentucky. In close cases that threshold creates a cliff effect. A single percentage point can mean the difference between substantial recovery remedying negligence found by a jury and no recovery at all. Kentucky’s current system promotes personal responsibility by ensuring you fix exactly what you break. 

Across the river in Indiana, under IC 34-51-2-6, if an injured individual is more than 50% at fault, they are unable to recover any damages whatsoever. If SB 195 were to be enacted, it would actually be slightly stricter than Indiana’s system in that under a 50% bar, even where a defendant is equally responsible for causing the harm, the plaintiff would recover nothing. And, interestingly, in such a case of equal fault where both drivers are suing one another, neither party owes the other anything and the liability insurers do not have to pay any judgment for either. 

The Kentucky Justice Association has illustrated the danger of the shift from pure comparative to modified comparative with this example: imagine a drunk driver runs a red light and crashes into your spouse, causing a totally disabling, lifelong injury. If your spouse happened to be traveling 60 mph in a 55-mph zone, a jury might split the fault 50/50. Under SB 195, the wrongdoer who chose to drive drunk and run a red light could avoid financial responsibility despite being equally responsible for the collision. This undermines accountability.

The “Empty Chair” Defense: Scapegoating Non-Parties 

Kentucky already allows juries to apportion fault among multiple parties under KRS 411.182 and Hilen v. Hays. In a negligence case, a jury may assign percentages of fault to the plaintiff, the defendant, and even certain properly identified non-parties. Each defendant then pays only the percentage of damages corresponding to their share of fault. This system reflects Kentucky’s shift away from joint and several liability and toward proportional responsibility.

However, Kentucky’s current framework requires that non-party fault be properly raised and supported by evidence. It operates within established comparative fault principles and existing case law.

SB 195 appears to broaden that structure in important ways.

Under the proposed bill, defendants could potentially ask juries to assign fault to third parties who cannot be sued or held financially responsible — including immune government entities, bankrupt companies, or other legally protected actors. While this may reduce a defendant’s percentage of fault on paper, the injured person may have no practical way to recover the portion attributed to that third party.

The practical result is significant. If a jury assigns 40% fault to a defendant and 60% to an immune entity, the defendant pays only 40%, and the plaintiff absorbs the remaining loss. In effect, liability is reduced without a corresponding source of compensation.

Supporters argue this promotes fairness by ensuring defendants pay only for their share. Critics respond that expanding third-party apportionment shifts financial risk from negligent actors to injured individuals.

Regardless of perspective, SB 195 represents a meaningful change to Kentucky’s existing comparative fault system that could materially affect how fault is allocated and how much compensation injured Kentuckians are ultimately able to recover.

“Healthcare Premium Theft” and Protecting Insurance Profits 

If you pay your hard-earned money for health insurance premiums, you expect those benefits to protect you. Under SB 195, defendants and their liability insurers would be the ones reaping the benefits of your foresight. Unfortunately, Indiana already allows this under the case of Stanley v. Walker, which allows the introduction of the billed amounts and paid amounts, allowing the jury to determine the reasonable value of services. SB 195 appears to limit recoverable medical expenses to amounts actually paid or owed, rather than the full value of the services rendered, intentionally ignoring the premiums and out-of-pocket costs the plaintiff has already paid themselves. Furthermore, it prevents juries from knowing the actual charges billed by doctors and hospitals. Even Indiana courts allow the introduction of billed charges, allowing the jury to exercise discretion. The Kentucky Justice Association refers to this as “Healthcare Premium Theft,” noting that previous attempts to pass similar measures were struck down by courts as unconstitutional.

The bill also makes it significantly harder for injured plaintiffs to pursue “bad faith” claims against insurance companies that unreasonably delay or deny legitimate payouts. All of this comes at a time when national statistics indicate that property and casualty insurance companies made staggering profits in 2024. According to an industry analysis by Verisk and the American Property Casualty Insurance Association, the U.S. property and casualty insurance industry generated roughly $170 billion in net income nationwide in 2024, making 2024 one of the highest profit levels ever recorded.

“Gotcha” Red Tape Designed to Dismiss Cases 

Perhaps one of the most concerning parts of SB 195 is the creation of complex, detailed new procedures for initiating and pursuing lawsuits. The bill mandates written notifications to defendants, full explanations of damages, signed authorizations for paperwork, and strict, unforgiving deadlines. According to Maresa Fawns, chief executive of the Kentucky Justice Association, this is nothing more than “gotcha red tape”. The underlying goal is not to seek the truth or promote fairness, but to trap plaintiffs in technicalities. If an injured person misses a notice deadline or fails to check a specific box, their entire case could be dismissed before a jury ever hears a single piece of evidence. This represents a significant procedural departure from existing Kentucky practice, as Kentucky already requires a lawsuit in non-MVA cases to be filed in one year and requires loss of consortium claims to be filed in one year. There can be little rational reason for such a provision other than simply hoping wrongdoers can avoid responsibility by running out the clock.

The Myth of the Litigation Crisis in Kentucky 

Supporters of the bill, including lobbyists for hospitals and corporate businesses, argue that the legislation is necessary because Kentucky allegedly ranks 40th nationally for its legal liability climate. However, this ranking is based entirely on subjective surveys of corporate in-house lawyers. These are the very individuals whose primary job is to avoid paying for corporate liability.

The actual numbers tell a very different story about the state of litigation in Kentucky. According to recent statistics cited by the Kentucky Justice Association, despite there being 139,663 traffic collisions in 2024, only 2% of those crashes resulted in a circuit court case filing. Similarly, out of approximately 12 million healthcare encounters annually, a mere 0.002% result in a medical negligence lawsuit.

Proponents also claim that every Kentucky family pays $2,800 a year in a “tort tax,” but this figure misleadingly lumps in insurance company profits, CEO compensation, advertising, and payouts for unrelated property issues like weather damage. Ironically, proponents’ own data reveals that this $2,800 figure makes Kentucky the third lowest among surrounding states for these costs, sitting well below neighbors like Illinois ($4,200) and Missouri ($3,400). The Kentucky Justice Association notes that the push for this bill is so corporately driven that its supporters are utilizing a 501(c)(4) dark-money fund to solicit anonymous contributions to push the legislation through the General Assembly. As critics point out, if this bill were genuinely good for Kentucky families, it wouldn’t require secret money to sell it.

Ultimately, the Kentucky Constitution clearly guarantees its citizens access to the courts when they are harmed and expressly prohibits the legislature from limiting the amount recovered for injuries or death. SB 195 attempts to circumvent these constitutional protections to the detriment of ordinary citizens.

SB 195’s Procedural Roadblocks: Destined to be Ruled Unconstitutional?

While proponents of SB 195 claim it merely updates the legal system, many of its provisions appear destined for a constitutional challenge, much like previous “tort reform” efforts in the Commonwealth. As we noted eight years ago in our blog, in 2018, the Kentucky Supreme Court delivered a landmark ruling in Commonwealth v. Claycomb, striking down a state law that mandated medical review panels for malpractice claims. The reasoning in that decision provides a clear blueprint for why the procedural hurdles in SB 195 may also be deemed unconstitutional.

Kentucky’s founders explicitly protected citizens’ rights to the civil justice system. 

Article I, Section 14 of the Kentucky Constitution guarantees that “All courts shall be open,” and that every person who suffers an injury shall have a remedy by due course of law, with justice administered “without sale, denial or delay”. In Claycomb, the Kentucky Supreme Court emphasized that the right to access the courts for a remedy is “possibly the most important” right guaranteed by the state’s Bill of Rights. The Court found that forcing injured individuals through a mandatory medical review panel process before filing a lawsuit was an unconstitutional “mandatory process” that created an unlawful delay in accessing the courts.

SB 195 attempts to implement similar roadblocks under the guise of detailed new procedures for initiating lawsuits. The bill mandates written notifications to defendants, full explanations of damages, signed authorizations, and strict, unforgiving deadlines. If an injured person misses a tight deadline or fails to check a specific box, their entire case could be dismissed on a technicality. Just as the medical review panels forced a mandatory delay on claimants, SB 195’s “gotcha red tape” creates technical trapdoors that delay justice and threaten to deny it altogether.

Furthermore, the Kentucky Supreme Court noted in Claycomb that the constitutional guarantee of open courts restricts both the judiciary and the legislative branch. Section 28 of the Kentucky Bill of Rights explicitly states that these constitutional rights “shall forever remain inviolate” and that any laws contrary to the Constitution are void. According to this precedent, the legislature may not enact laws that conflict with constitutional guarantees of open courts.

If SB 195 passes, its intricate procedural requirements and “gotcha” dismissals will likely face immediate legal scrutiny. Under the strong precedent set by the Kentucky Supreme Court, citizens should be assured that legislation placing arbitrary roadblocks in the way of an individual wanting to seek redress in court “without delay” should continue to be found unconstitutional. Reasonable people can debate how to balance business costs and civil accountability. But when proposed reforms alter long-standing constitutional protections, careful scrutiny is warranted. You may read SB 195 here.

Barsumian Armiger Injury Lawyers is Here to Help 

At Barsumian Armiger Injury Lawyers, Todd Barsumian is licensed to practice in Kentucky and proudly serves clients throughout Indiana and Kentucky, including Henderson, Owensboro, and Madisonville. He understands the tactics used by insurance companies to deny liability and minimize payouts and remains committed to fighting for the maximum compensation our clients deserve, regardless of legislative hurdles.

The Court held that the Dram Shop Act did not eliminate the common-law liability of dram shops, but rather modified it by imposing two additional requirements: (1) the person furnishing the alcohol must have actual knowledge of the injury-causing person’s visible intoxication; and (2) the intoxication must be a proximate cause of the injury. The Court found that the plaintiff’s negligence claim satisfied these requirements and alleged facts capable of supporting relief.

The Court clarified the history and scope of dram-shop regulation in Indiana, which dates back to the late nineteenth century. The Court explained that Indiana’s dram shops have faced criminal liability for various conduct since then, and civil liability under principles of common-law negligence since the 1960s. The Court also noted that the Dram Shop Act, enacted in 1986, was not applicable in two previous cases that recognized the existence of independent common-law liability, Picadilly, Inc. v. Colvin and Gariup Construction Co. v. Foster.

The Court rejected the argument that the Dram Shop Act abrogated the common law in either express terms or by “unmistakable implication.” The Court observed that the statute did not mention common-law rights, nor did it establish elements of an independent statutory cause of action or criminalize conduct. The Court also found that the statute was not designed to replace the common law or so comprehensive that it and the common law could not coexist. Rather, the statute presumed the existence of common-law liability, subject to the statute’s requirements.

The Court also addressed the interplay between the plaintiff’s two negligence claims: one based on a violation of the criminal statute that prohibits serving alcohol to an intoxicated person, and one based on a failure to exercise reasonable care in furnishing alcohol. The Court acknowledged that the two claims were similar and that the plaintiff could not recover twice for the same wrong. However, the Court reasoned that dismissing the second claim at this stage would make no difference, because the defendant’s liability depended on the same factual scenario: an act of common-law negligence that included the Dram Shop Act’s requirements. The Court also noted that the plaintiff’s allegations in the second claim could be relevant to comparative fault or alternative theories of recovery.

The Court affirmed the trial court’s denial of the motion to dismiss and allowed the plaintiff’s negligence claim to proceed. The Court also provided guidance for future cases involving dram-shop liability in Indiana. The Court emphasized the importance of the common law as a source of rights and remedies, and the need for clear legislative intent to abrogate it. The Court’s also clarified the relationship between the Dram Shop Act and the common law, and the requirements for establishing liability under both. You can read the Court’s decision here.

Z.D. received medical care at Community Health Network’s emergency department in 2018. A hospital employee called Z.D. to discuss her health matters but could not reach her. The employee then prepared a letter containing Z.D.’s diagnosis and treatment, but placed it in an envelope addressed to Jonae Kendrick, a teenager who knew Z.D.’s daughter. Kendrick opened the letter, posted it on Facebook, and tried to tag Z.D. Z.D.’s daughter saw the post and notified her mother. Kendrick declined Z.D.’s daughter’s request to remove the post. However, Kendrick later relented and removed the post in response to Z.D.’s request that she remove the post and return the letter in exchange for $100. Z.D. sued the hospital for invasion of privacy and negligence, seeking damages for emotional distress and other losses.

The trial court granted summary judgment to the hospital on all of Z.D.’s claims. The court found that the hospital was not the proximate cause of Z.D.’s damages, that Z.D. could not recover emotional-distress damages in her negligence claim due to the modified impact rule, and that Z.D. did not bring a claim for public disclosure of private facts.

The Court of Appeals affirmed in part and reversed in part. We previously wrote a blog about this decision you can read here. It affirmed the trial court’s grant of summary judgment on Z.D.’s claim for negligent training, supervision, and retention of employees, but reversed on her other claims.

Significantly, in reversing the trial court, the Court of Appeals adopted the elements of the public-disclosure tort found in the Restatement (Second) of Torts § 652D. This tort consists of four elements: 1) the information disclosed was private; 2) the information was “communicated in a way that either reaches or is sure to reach the public in general or a large enough number of persons such that the matter is sure to become public knowledge”; 3) the information would be highly offensive to a reasonable person; and 4) the information was not of legitimate public concern. Ultimately, it held that Z.D. adequately pled a public-disclosure claim that the hospital did not negate the publicity element of that claim, and that issues of fact remained as to whether Z.D. could recover pecuniary damages and whether the hospital was the proximate cause of those damages in her negligence claim.

The Supreme Court affirmed in part and reversed in part. First, it agreed with the Court of Appeals that Z.D. properly raised a public-disclosure claim and that the hospital did not negate the publicity element. It clarified that the public-disclosure tort does not require a showing of intent, that recovery for emotional distress is available in such a claim, and that disclosure to one person can satisfy the publicity element depending on the facts and circumstances. The Court explained that not requiring any intent is consistent with the public-disclosure tort’s dual purpose. The tort helps deter public disclosures by incentivizing protective measures through negative reinforcement. In other words, lackadaisical privacy practices may yield a civil remedy for the individual whose information was shared publicly. And, regardless of the intent of the disclosing party, the impact to an individual whose private information is shared publicly will be no different. The level of harm to that individual is tied to the nature of the facts disclosed and the extent of the disclosure.

The Supreme Court also agreed with the Court of Appeals that Z.D.’s negligence claim remained for pecuniary damages (claimed loss of income and rental expenses) but declined to exempt negligence-based medical privacy breaches from the modified impact rule’s physical-impact requirement for the recovery of emotional distress damages. The Court believed the public-disclosure tort better addresses the harm by “incorporat[ing] certain, necessary restraints, particularly the highly offensive and publicity elements, to provide relief to those who suffer invasion of privacy without exposing individuals and entities to inordinate liability each time someone’s privacy is compromised.”

This case confirms that Indiana recognizes a tort for invasion of privacy by public disclosure of private facts, and that plaintiffs can recover emotional-distress damages without proving intent or physical impact if they satisfy the four elements of the tort. It also reaffirms that negligence claims for emotional-distress damages are subject to the modified impact rule, which requires a direct physical impact from the negligence. It further highlights the importance of protecting private health information from unauthorized disclosures, and the potential liability for healthcare providers who fail to do so. You can read the Court’s decision here.

Faye and James Hunter (the Hunters) sued J & M for the property damage to their home and for the personal injury of negligent infliction of emotional distress to Faye. J & M thereafter filed a motion for partial summary judgment in the trial court arguing that Faye could not recover emotional distress damages under Indiana law. The trial court held a hearing and, agreeing with J & M, entered partial summary judgment in favor of J & M on Faye’s negligent infliction of emotional distress claim.

Over the years Indiana law has changed with regards to the recovery of damages for negligent infliction of emotional distress. Currently, Indiana law allows for the recovery of such damages under four circumstances. First, under the impact rule, a plaintiff can recover emotional distress damages if he or she suffers a direct physical impact resulting in physical injury with emotional trauma resulting from the injury. Second, under the modified-impact rule, a plaintiff can recover when, without any physical injury, he or she sustains a direct physical impact and the defendant’s negligence caused an injury or death to a third party, so long as the emotional trauma is serious enough to affect a reasonable person and resulted from the plaintiff’s direct involvement. Third, under the bystander rule, a plaintiff can recover when, without any direct impact, he or she witnesses a relative’s severe injury or death or viewed the immediate aftermath of the incident. Fourth, a parent or guardian of a sexually abused child can recover for negligent infliction of emotional distress when the wrongdoer has a duty of care to the parent or guardian, there is irrefutable certainty of the act’s commission, the act is one that rarely, if ever, is witnessed by parents or guardians, and the abuse severely impacts the emotional health of the parent or guardian.

In this case, the Hunters argued there existed a genuine issue of material fact as to whether Faye sustained a direct physical impact under Indiana’s modified-impact rule, thereby precluding partial summary judgment on Faye’s negligent infliction of emotional distress claim. The Hunters pointed to designated evidence that Faye was shaken awake in her bed by the fireworks shell mortar. However, the Indiana Court of Appeals concluded that Faye did not sustain a direct physical impact under the modified-impact rule, reasoning that her “bed merely shook and she was awakened from her sound sleep.” In so holding, the Court referenced one of its prior decisions finding no direct physical impact in the case of a woman awakened from her sleep due to a fire which she had to flee. The Court also noted two of its prior decisions where the loss suffered was purely economic. Ultimately, the Court of Appeals found no error in the trial court’s entry of partial summary judgment in favor of J & M and affirmed the trial court’s judgment.

You can read the full opinion here.

After Storey loaded Penny’s vehicle, Penny got onto the flatbed of the tow truck. While Penny said Storey asked her to get on the flatbed to restrain her puppy so that Storey could put her vehicle in park, Storey said he did not ask Penny to get onto the flatbed, did not know Penny was on the flatbed, and believed Penny being on the flatbed was in violation of industry standards. After Penny restrained her puppy on the flatbed, she pivoted to walk towards the back of the flatbed and fell several feet to the ground, suffering injuries. While Penny didn’t know exactly why she fell, she noted it was a tight space to traverse without the ability to have her feet side by side.

In personal injury negligence claims in Indiana, claimants must prove (1) the defendant owed the claimant a duty, (2) the defendant breached that duty, and (3) compensable injuries proximately caused by the defendant’s breach of duty. Storey and his company moved for summary judgment arguing that there existed no genuine issue of material fact as to proximate cause, which is generally a question of fact for the jury, because Penny did not know what caused her to fall. The trial court held a hearing and three months later issued an order granting summary judgment for the defendants.

At the hearing, the trial court stated, among other things: “I wouldn’t be suing in this situation, but I’m not a litigious person,” Chappeys’ lawsuit was not a “valuable use of limited judicial resources,” “I know what happened without even hearing from anybody what happened,” “[Penny] probably was showing [Storey] how to do the stuff,” “just because people file suits and a lot of them get resolved… doesn’t mean that the Plaintiffs should be doing what they are doing,” “[this case is] not really important, because we have a person who doesn’t know how they were injured… [c]laiming [it’s] somebody else’s fault,” and “I’m a little bit offended… we’ve got someone that doesn’t say how they got injured, but they want to sue somebody.”

The trial court stated in its order, among other things: “[t]he civil litigation system in Indiana is broken,” “[t]he… solution is to simply banish certain legal fictions (insurance companies) from the Courts,” “the other solution is… allocating costs regularly and aggressively for the prevailing party,” “[i]t simply cannot stand that we allow a system to exist where anybody can sue anyone at any time…,” “case law strongly and severely discourages summary judgment, ostensibly because, ‘people are entitled to their day in Court,’” “[n]o rational person, on their own accord, would have pursued this claim,” “[w]ill Plaintiffs (insurance company) appeal this finding and the Court’s award of costs or will it tacitly collude…?” and “our civil litigation process has been and remains a farce overrun by legal fictions.”

In its decision, the Court of Appeals first found that summary judgment for defendants was improper because there was a genuine issue of material fact as to the proximate cause of Penny’s fall. While recognizing there are cases in which summary judgment was properly granted when the claimants did not know why they fell (e.g., a plaintiff not knowing why she fell off a step inside a store, a claimant not knowing what caused him to fall in a parking lot, and a claimant not knowing why she fell in stepping from a curb), the Court found the facts in this case did not lead to only one single inference. The Court noted that, while one inference is Penny fell because she wasn’t being careful, another reasonable inference is she fell because she was placed in an unreasonable position of peril in navigating a tight space elevated from the ground at the request of Storey.

The Court of Appeals also found the Chappeys were denied due process by the trial court, and as such, were entitled to a new judge on remand of the case. Under the law, an impartial judge is an essential element of due process, and a trial judge violates due process when the judge combines the role of judge and advocate. Judges must be impartial and refrain from making unnecessary comments and remarks. While the law presumes judges are unbiased, a party can overcome that presumption by showing a judge has a personal prejudice for or against a party. A party must show the judge’s conduct was impartial and prejudiced that party’s case. Here, the Court of Appeals concluded the judge failed to preside over the case as a neutral, impartial decision maker and in doing so effectively, and unconstitutionally, torpedoed the Chappeys’ case.

You can read the full opinion here.

Z.D. filed a lawsuit against Community for the “distribut[ion] [of her] extremely sensitive and private health information to unauthorized person(s) and the general public.” After the letter was posted to Facebook with Z.D.’s diagnosis, Z.D.’s fiancé broke up with her and “kicked her out of his house,” resulting in Z.D. having to rent her own apartment, Z.D.’s co-workers and supervisor at her warehouse job found out about Z.D.’s diagnosis, ultimately resulting in Z.D. leaving that job, Z.D. lost several hairdressing clients whose children attended high school with her daughter, and Z.D. suffered from depression and underwent counseling. In her lawsuit, Z.D. sought damages for loss of privacy, lost income, rent expenses, and emotional and mental distress.

Community filed a motion for summary judgment arguing Kendrick’s posting of the letter on Facebook was an unforeseeable criminal act that broke the chain of causation, Z.D. could not recover emotional distress damages under a negligence theory, and any claim for public disclosure of private facts fails because such is not recognized in Indiana (this was pre-McKenzie). The trial court granted summary judgment in favor of Community. The Court found the modified impact rule and the bystander rule barred Z.D.’s claim for emotional distress damages under a negligence theory, Z.D. could not recover damages for loss of privacy because she had not specifically pled an invasion of privacy claim, and Community’s actions were not the proximate cause of her damages.

On appeal, the Court of Appeals first addressed Z.D.’s public-disclosure-of-private-facts claim. In public-disclosure-of-private-facts claims under McKenzie and the Restatement (Second) of Torts § 652D, which McKenzie adopted, claimants must show (1) the information disclosed was private in nature (the information was both factually true and privately held), (2) the disclosure was made to the public (the information was communicated in a way that either reaches or is sure to reach the public in general or a large enough number of persons such that it is sure to become public knowledge), (3) the disclosure was one that would be highly offensive to a reasonable person (the disclosure offends society’s accepted communal norms and social mores), and (4) the information disclosed was not of legitimate public concern (a lack of newsworthiness such that a reasonable member of the public would say that he had no concern with the information disclosed). Contrary to Community’s assertion and the trial court’s findings, the Court first found that Z.D.’s complaint appropriately pled a public-disclosure-of-private-facts claim under Indiana’s notice pleading, which requires only pleading the operative facts of a claim so as to place a defendant on notice as to the evidence to be presented at trial. The Court also found a genuine issue of material fact as to the publicity requirement, even though Community’s disclosure was only to one person, with the Court noting the focus of publicity is on the end result of a disclosure, not merely the initial act. The Court also noted there is no requirement the disclosure be intentional, and in any case, in this case, the letter with Z.D.’s diagnosis was intentionally addressed and sent to Kendrick. As such, the Court reversed and remanded the case for further proceedings on Z.D.’s invasion of privacy claim, noting she could seek damages for, among other things, her mental distress.

As to Z.D.’s negligence theory, the Court found that under Indiana’s current framework for the recovery of emotional distress damages, Z.D. could not recover such damages, as she did not satisfy either the modified-impact rule or the bystander rule because she did not sustain a physical impact or perceive a physical injury to a loved one. However, the Court found Z.D. could recover her pecuniary damages, that is, lost income and rent expenses, under a negligence theory. While the trial court found Community could not be held liable for Kendrick’s “intentional, criminal action,” the Court of Appeals noted Kendrick was the intended recipient of the letter, there was no showing as to what laws, if any, Kendrick broke, and the facts were not such that only one inference or conclusion could be drawn as to proximate cause and intervening cause, with the Court noting an intervening act does not break the causal chain when such act could reasonably have been foreseen. Accordingly, the Court reversed and remanded the case for further proceedings on Z.D.’s negligence claim for pecuniary damages.

You can read the full opinion here. The Supreme Court has since vacated the Court of Appeals opinion, although it summarily affirmed certain portions of it. You can read the Supreme Court’s full opinion here.

In Kearschner, Donald Kearschner (Kearschner) injured his shoulder in a car crash while working for Wal-Mart. The at-fault driver had a liability insurance policy with a $50,000 limit. Kearschner had his own insurance coverage with American Family Mutual Insurance Company (AFI), with $100,000 in liability coverage and $100,000 in UIM coverage. Kearschner sued the at-fault driver and AFI. Kearschner settled with the at-fault driver for the at-fault driver’s liability limit of $50,000 and sought an additional $50,000 in UIM coverage from AFI. AFI moved for summary judgment arguing that Kearschner was not entitled to any UIM coverage because, in addition to the $50,000 he received from the at-fault driver, he had also received a net amount of $62,084.52 in worker’s compensation payments, and his UIM policy stated that his UIM limit would be reduced by any payment from an at-fault driver and by any payment made under any worker’s compensation law. The trial court granted AFI’s motion and Kearschner appealed.

Similar to its decision in Craighead, the Indiana Court of Appeals held that the provision of Kearschner’s AFI policy providing a setoff for the $62,084.52 in worker’s compensation payments violated Indiana’s uninsured/UIM statute, specifically Indiana Code § 27-7-5-2 (“the UIM Statute”). The Court noted that the purpose of UIM coverage is to provide an insured with a recovery the insured would have received had the at-fault party carried adequate liability insurance, with the UIM Statute providing a minimum level of compensation. The UIM Statute provides that, absent a written rejection, UIM coverage (1) must be provided “in limits at least equal to the limits of liability specified in the bodily injury liability provisions of an insured’s policy,” and (2) may not be provided in an amount less than $50,000. Ind. Code § 27-7-5-2(a).

In reaching its holding, the Court found the Indiana Supreme Court’s decision in Justice v. Am. Family Mut. Ins. Co. to be instructive. The Court in Justice invalidated an identical policy provision that would have prevented an insured who had been paid $25,000 from an at-fault driver from receiving the statutory minimum of $50,000 in UIM coverage the insured had purchased. Here, AFI argued unsuccessfully that, despite the opinion in Justice, the setoff here did not violate the UIM Statute, as Kearschner had already received the $50,000 minimum set forth in the UIM Statute. AFI’s position was that the UIM Statute allows setoffs from UIM limits for worker’s compensation payments, even if they reduce UIM coverages to zero, so long as an insured receives, either from the at-fault party and/or the UIM carrier, at least the minimum $50,000 set forth in the UIM Statute. However, the Court of Appeals disagreed, noting the UIM Statute sets forth two minimum coverage amounts: the first (applicable here) is the coverage amount equal to an insured’s liability coverage limit (here, $100,000), and the second is the $50,000 minimum, which applies when an insured rejects in writing UIM coverage equal to the insured’s liability coverage. Rejecting AFI’s argument, the Court found AFI’s policy reducing Kearschner’s UIM coverage to zero violated the UIM Statute and reversed and remanded the case for further proceedings.

You can read the full opinion here.

Erie claimed Craighead’s $100,000 UIM coverage should be set off by both the $50,000 liability payment and the $10,000 in MPC payments, thereby making the available UIM coverage $40,000. While recognizing Erie was entitled to a setoff for the $50,000 liability payment, Craighead claimed she was entitled to the remaining $50,000 in UIM coverage with no setoff for the $10,000 MPC payments. After Erie refused to pay the undisputed $40,000 in UIM coverage absent agreement by Craighead to release her claim for the additional $10,000 in coverage, Craighead filed a lawsuit against Erie for both breach of contract and bad faith. After Craighead filed suit, Erie reversed its previous position and paid Craighead the undisputed $40,000 in UIM coverage.

Both parties moved for summary judgment in the trial court. Erie argued it acted in accordance with Indiana law and not in bad faith in enforcing the MPC setoff policy provision. Craighead argued the MPC setoff policy provision violated Indiana law and there was a genuine issue of material fact as to whether Erie acted in bad faith. The trial court denied Erie’s motion for summary judgment but granted Craighead’s motion for partial summary judgment, finding a setoff from Craighead’s UIM coverage for the $10,000 MPC payments was not permissible. Erie appealed.

Under Indiana law, Indiana Code § 27-7-5-2(a) states that automobile insurers must provide uninsured motorist (UM) and UIM coverages unless an insured rejects such coverages in writing, and any UIM coverage cannot be less than $50,000. The UM/UIM law is a “mandatory coverage, full-recovery, remedial statute,” which is legally considered part of every automobile insurance policy. Indiana Code § 27-7-5-5(c) of the UM/UIM law deals with “limitations on coverage,” and provides that the maximum amount payable for bodily injury under UIM coverage is the lesser of (1) the difference between the “amount paid in damages” by the liable party and the per person UIM limit, or (2) the difference between the total amount of damages and the amount paid by the liable party.

On appeal, Erie argued that the UM/UIM law only prevented a setoff from the minimum $50,000 required for UIM coverage, whereas Craighead argued it is the amount of UIM coverage purchased, i.e., the limit, that cannot be set off, not the statutory minimum. Agreeing with Craighead, the Indiana Court of Appeals noted that Indiana Code § 27-7-5-5(c) provides the starting point for calculating the maximum amount payable under UIM coverage as the per person UIM limit, not the statutory minimum, and that the $50,000 amount in Indiana Code § 27-7-5-2(a) is only the statutory minimum of UIM coverage that must be provided and nothing more. The Court further found, while distinguishing prior cases, that MPC payments do not qualify as an “amount paid in damages” under Indiana Code § 27-7-5-5(c), as they are no-fault payments independent of any wrongdoing. Accordingly, the Court found that Erie’s policy provision allowing the UIM coverage to be set off by MPC payments violated Indiana Code § 27-7-5-5(c).

As to Craighead’s bad faith claim, Erie argued it reasonably relied on the MPC setoff provision in its policy and did not exert an unfair advantage over Craighead by initially refusing to provide the undisputed $40,000 in UIM coverage. Under Indiana law, insurers have a duty to deal with their insureds in good faith, which includes refraining from causing an unfounded delay, making an unfounded refusal to pay policy proceeds, exercising an unfair advantage to pressure an insured into settlement, and deceiving an insured. A good faith dispute as to the value of a claim and even poor judgement and negligence do not rise to the level of bad faith; rather, there must be a showing of conscious wrongdoing. Based upon the facts in the case, the Court found at least one genuine issue of material fact, namely, whether Erie acted in bad faith by refusing to pay the undisputed $40,000 in UIM coverage for around a year while conditioning payment on Craighead releasing her claim as to the disputed $10,000 in UIM coverage.

You can read the full opinion here.

Wiley sued various parties for his personal injuries, including ESG. Under Indiana law, to recover in a negligence case, a plaintiff must show (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the defendant’s breach proximately caused the plaintiff’s injuries. Generally, the existence of a duty is a question of law for courts to decide.

ESG filed a motion for summary judgment arguing it was entitled to judgment as a matter of law as it did not owe Wiley a duty of care and Wiley incurred the risk of his injuries. While the contract between ESG and Live Nation stated that ESG would “exert reasonable… efforts to protect all persons who enter [the venue] from… personal injury from any causes whatsoever,” ESG argued that language only applied to risks of which a concertgoer would not be aware or warned against and such did not mean ESG had to protect concertgoers from their own negligent acts. There were signs posted throughout the venue, and an audio message repeatedly played, that crowd surfing was prohibited and those who crowd surfed did so at their own risk and were subject to expulsion.

Wiley argued that while concertgoers may have understood the risks of crowd surfing, ESG knew that concertgoers would fail to protect themselves against that risk, which required ESG to exercise reasonable precautions for the safety of concertgoers engaging in crowd surfing. In fact, ESG had an operating procedure for crowd surfing in which ESG personnel would assist crowd surfers, and ESG had recommended to Live Nation that two additional ESG personnel be stationed at the racks for the concert. After hearing, the trial court denied ESG’s motion “on the issue of duty,” but nonetheless granted summary judgment for ESG finding Wiley incurred the risk of his injuries.

On appeal, the Court of Appeals first found ESG’s duty of reasonable care to provide concert security at the venue did not include protecting concertgoers from the prohibited conduct of crowd surfing. Based upon prior precedent, including the Indiana Supreme Court’s decision in Cavanaugh’s Sports Bar & Eatery, Ltd. v. Porterfield, the Court noted that foreseeability as an element of duty in cases involving dangerous activities on premises involves a threshold evaluation of (1) the broad type of plaintiff and (2) the broad type of harm (i.e., the general class of persons of which the plaintiff was a part and whether the harm suffered was of a kind normally to be expected). Here, in the Court’s view, a concert attendee getting dropped or thrown to the ground from above the heads of other concertgoers is not normally to be expected.

However, Wiley also argued that ESG assumed a duty of care by its conduct. Wiley argued ESG knew concertgoers at this concert would crowd surf despite warnings not to, and because of that, had recommended additional personnel be stationed at the racks; ESG had an operating procedure to handle crowd surfers; and ESG had assisted crowd surfers the night of the concert. Indiana law recognizes that parties can assume a duty of care by undertaking to perform an act with affirmative conduct. On this issue—the assumption of a duty of care—the Court of Appeals found there was a genuine issue of material fact, and therefore ESG was not entitled to summary judgment.

As to Wiley having incurred or assumed the risk of his injuries, the Court noted that, in accordance with Indiana’s Comparative Fault Act, incurred or assumed risk only negates duty in cases of express consent. Here, the Court found there was no evidence Wiley expressly (as opposed to impliedly) consented to take his chances as to sustaining injury from crowd surfing. The Court of Appeals accordingly reversed the trial court’s grant of summary judgment in favor of ESG and remanded the case for a determination of whether and to what extent ESG assumed a duty of care, and if so, determinations as to beach of that duty, causation, and comparative fault.

You can read the full opinion here.

On remand after the first appeal the trial court ordered American Family to pay Parkview the full amount of Parkview’s hospital lien, $95,541.88, and Parkview’s attorney’s fees. After American Family filed a motion to correct error, the trial court ordered that Parkview was not entitled to its attorney’s fees; however, the trial court ordered that Parkview was entitled to the full amount of its hospital lien despite American Family’s request that its liability be limited to $50,000.00, which was the Ohio plaintiffs’ underinsured policy limits. Parkview appealed raising three issues: (1) whether Parkview I required the trial court to enter judgment for Parkview on its original request for damages and attorney’s fees; (2) whether American Family forfeited its challenges to Parkview’s damages by raising those challenges under Indiana Trial Rule 59 on remand; and (3) whether Parkview was entitled to its attorney’s fees under the Hospital Lien Act. American Family cross-appealed raising just one issue, whether it was required to pay Parkview the full amount of Parkview’s lien, $95,541.88, or the $50,000.00 limit of its underinsured policy with its insured.

In Parkview II the Indiana Court of Appeals ultimately concluded that the amount of Parkview’s damages and whether it was entitled to attorney’s fees was not decided in Parkview I, American Family did not forfeit its right to challenge the trial court’s award of damages and attorney’s fees under Indiana Trial Rule 59, Parkview was not entitled to attorney’s fees under Indiana’s Hospital Lien Act, and American Family’s responsibility for damages was limited to $50,000.00.

First, Parkview argued on appeal when the Court in Parkview I found Parkview was “entitled to judgment as a matter of law” on its motion for summary judgment that meant Parkview was entitled to all the relief it requested in its motion for summary judgment. However, the Court noted Parkview’s motion for summary judgment raised two issues, one, whether Parkview had a valid lien, and two, the amount of Parkview’s damages. Reviewing its decision in Parkview I, the Court in Parkview II found that Parkview I only addressed the first issue. While Parkview argued alternatively that the doctrines of res judicata and law of the case applied, the Court disagreed. The Court also noted that the trial court had not made any findings as to damages, and therefore the Court could not have, in the first instance, made those findings on appeal in Parkview I.

Second, the Court disagreed with Parkview’s claim that American Family had forfeited its right to challenge the trial court’s award of damages and Parkview’s entitlement to attorney’s fees by raising those issues under Indiana Trial Rule 59 on remand. Indiana Trial Rule 59(A) provides two mandatory circumstances in which a motion to correct error is a prerequisite for appeal: (1) newly discovered material evidence, and (2) a claim that a jury verdict is excessive or inadequate. However, as noted by the Court, while providing mandatory situations in which a motion to correct error must be filed, Indiana Trial Rule 59 does not foreclose parties from raising other issues by way of a motion to correct error. Therefore, the trial court did not err in allowing American Family to raise its challenges to the trial court’s order by way of a motion to correct error.

Third, the Court found Parkview was not entitled to an award of attorney’s fees. The Court noted that Indiana follows the “American Rule” as to attorney’s fees under which parties are responsible for their own attorney’s fees absent a contrary agreement between the parties, a statute, or another rule providing for the payment of attorney’s fees by another party. The Court noted that Parkview had not really argued, and there was no evidence that, American Family had pursued any claim or defense that was frivolous, unreasonable, or groundless, or that American Family had otherwise litigated in bad faith, so as to support an award of attorney’s fees under Indiana Code § 34-52-1-1. The Court also found that Indiana’s Hospital Lien Act does not provide for attorney’s fees, and therefore, the trial court did not err in denying Parkview’s claim for attorney’s fees.

Lastly, on American Family’s cross appeal, the Court found that American Family’s responsibility to Parkview was limited to its underinsured exposure of $50,000.00. The Court determined that the Hospital Lien Act’s provision that “[t]he release or settlement of a claim with a patient by a person claimed to be liable for the damages incurred by the patient… without obtaining a release of the lien… entitles the lienholder to damages for the reasonable cost of the hospital care,” Ind. Code § 32-33-4-6(b), did not apply to American Family as the underinsured carrier. Rather, that provision only applies to a third-party tortfeasor or the tortfeasor’s insurance carrier. Since American Family insured the patient, and not “a person claimed to be liable for the damages incurred by the patient,” American Family’s exposure was limited to its insured’s policy limits. The Court reasoned that American Family’s failure to comply with the Act did not place Parkview in a better position than it would have been in had American Family complied with the Act.

Accordingly, the Court affirmed the trial court as to the trial court’s consideration of damages and attorney’s fees and its denial of Parkview’s request for attorney’s fees, reversed the trial court as to American Family’s responsibility for damages under the Act, and remanded the case with instructions for the trial court to award Parkview $50,000.00 plus prejudgment interest.

You can read the full opinion here.

The Parents sued the school claiming the School failed to exercise reasonable care and supervision for DeShawn’s safety. The School filed a motion for summary judgment in court arguing it was entitled to immunity as a governmental entity under the Indiana Tort Claims Act (ITCA), which provides “[a] governmental entity… is not liable if a loss results from… [t]he adoption and enforcement of or a failure to adopt or enforce… in the case of a public school… a policy.” Ind. Code § 34-13-3-3(a)(8)(B). After a hearing, the trial court granted the School’s motion for summary judgment finding the School was immune from liability under the ITCA.

The Parents appealed and on appeal argued the School was not entitled to immunity under Indiana Code § 34-13-3-3(a)(8)(B) because what happened to their son did not result from the School’s failure to properly enforce a school policy. While the Court of Appeals noted some question as to the meaning of “policy” under the ITCA, the Court ultimately concluded the Parents’ claim did not arise from the School’s failure to “enforce” its dismissal procedures, and therefore the School was not entitled to the “enforcement” immunity under the ITCA. The Court reviewed prior precedent defining enforcement under the ITCA as “compelling or attempting to compel the obedience of another to laws, rules or regulations, and the sanctioning or attempt to sanction a violation thereof,” such as a school deciding to suspend, expel, or impose discipline on students. Here, the Court ruled public schools are not entitled to immunity when they are sued concerning their own compliance, or failure to comply, with laws, regulations, or their own policies, and since the Parents were alleging the School itself failed to comply with its own dismissal procedures, as opposed to the School failing to compel DeShawn’s obedience to its dismissal procedures, the trial court erred in granting summary judgment under Indiana Code § 34-13-3-3(a)(8)(B) of the ITCA.

The School also argued in the alternative that it was entitled to immunity under Indiana Code § 34-13-3-3(a)(10) of the ITCA, which provides “[a] governmental entity… is not liable if a loss results from… [t]he act or omission of anyone other than the governmental entity or the governmental entity’s employee.” The School claimed the teacher who removed DeShawn from the bus line and directed him to walk home was a substitute teacher and independent contractor, not a school employee. However, the Court found conflicting evidence as to who exactly was ultimately responsible for the mishap, and because the facts were in dispute, the Court found the School was also not entitled to immunity under Indiana Code § 34-13-3-3(a)(10) of the ITCA.

The Indiana Court of Appeals reversed the trial court’s grant of summary judgment in favor of the School and remanded the case back to the trial court for further proceedings.

You can read the full opinion here.

Bradley filed a lawsuit against Ceres which included a claim for his emotional distress. Typically, to recover emotional distress damages in Indiana, under Indiana’s Modified Impact Rule, a claimant must suffer a direct impact by another’s negligence and by virtue of that involvement suffer an emotional trauma serious in nature and of a kind and extent normally expected to occur in a reasonable person. However, Indiana has also adopted the Bystander Rule, which is an exception to the Modified Impact Rule, that allows emotional distress damages when a claimant establishes a direct involvement with the incident. To recover emotional distress damages under Indiana’s Bystander Rule, courts consider as a matter of law three factors: (1) the severity of the victim’s injury (serious injury or death to a victim), (2) the relationship of the plaintiff to the victim (a close familial relationship with the victim), and (3) the circumstances surrounding the claimant’s discovery of the victim’s injury (direct observation of the incident or its immediate “gruesome aftermath,” rather than learning of the incident by indirect means). To satisfy the third factor, (A) the bystander claimant must come on the scene at or immediately following the incident, (B) the claimant must not have been informed of the incident before coming on the scene, and (C) the scene and victim must be in essentially the same condition as immediately following the incident.

Here, about three hours after the explosion, Bradley was driving home from work when he came upon a roadblock, around three-quarters of a mile from his home. He could see flames coming from his home. He asked the lady at the roadblock, who was a local volunteer firefighter’s wife, whether his wife made it out of the house, but she did not know, she had no radio, and she had not been provided any information as to what was occurring. Bradley drove to his home and saw “big and steady” flames. Bradley saw his son Eric on a gurney with a blanket on and visible burn injuries to his face. Eric told Bradley he did not know where Kathy was, and although firefighters continued to search for her, the flames got bigger every time they dug, so they had to wait. The firefighters eventually found Kathy and made Bradley leave the scene so they could remove her.

Ceres filed a motion for partial summary judgment in the trial court arguing Bradley could not recover emotional distress damages as to either Eric or Kathy. After a hearing, the trial court granted Ceres’ motion as to Eric but denied Ceres’ motion as to Kathy. Bradley appealed the decision and Ceres cross appealed. Ultimately, the Indiana Court of Appeals agreed with Bradley and affirmed the trial court’s denial of Ceres’ motion as to Kathy and reversed the grant of partial summary judgment for Ceres as to Bradley’s claim for emotional distress damages as to Eric.

The only issue on appeal was the third factor relating to the circumstances surrounding Bradley’s discovery of Eric and Kathy’s injuries. First, the Indiana Court of Appeals concluded the explosion and fire were not separate injury-producing events and that the injury-producing event in this case was ongoing when Bradley arrived on the scene. Although Bradley arrived hours after the explosion itself, when Bradley arrived the flames were “big and steady” and got bigger every time the firefighters dug. Eric was still on the scene and Kathy had not yet been located. Second, the Court concluded Bradley was not informed of the incident by indirect means before coming on the scene. Bradley was coming home from work when he came on the scene, he could see the fire from the roadblock, and he received no specific details from the lady at the roadblock. Third, the Court concluded the scene, Eric, and Kathy were in essentially the same condition as immediately following the incident. As to Eric, the Court noted Eric had not been removed from the scene and Eric’s injuries (though not all of them) were visible to Bradley. In the Court’s view, it was not necessary for Bradley to have been able to view all of Eric’s injuries. As to Kathy, the Court noted that Bradley reasonably believed Kathy was still in the home when he arrived on the scene, and Bradley did not have to view Kathy’s body in order to recover emotional distress damages as to her. The Court reasoned that the “sudden sensory observation” required to show direct involvement does not prevent recovery for bystanders who do not actually view the body in cases involving fires. The Court limited its holding to serious injuries or death resulting from fires.

Having concluded Bradley satisfied all the requirements regarding his discovery of Eric’s injury and Kathy’s death, the Indiana Court of Appeals affirmed the trial court as to its denial of Ceres’ motion for partial summary judgment as to Kathy, reversed as to the trial court’s grant of partial summary judgment on Ceres’ motion as to Eric, and remanded the case back to the trial court.

You can read the full opinion here.

Indiana’s traditional impact rule requires a plaintiff prove (1) an impact on the plaintiff, (2) which causes physical injury to the plaintiff, and (3) which physical injury, in turn, causes the emotional distress. The modified impact rule requires a plaintiff prove a direct impact, and because of that direct involvement an emotional trauma serious enough to affect a reasonable person, without regard to whether the emotional distress arises out of or accompanies any physical injury to the plaintiff. Indiana’s bystander rule requires a plaintiff prove (1) serious injury or death to a victim, (2) a close familial relationship with the victim, and (3) direct observation of the incident or its immediate “gruesome aftermath,” rather than learning of the incident by indirect means.

The trial court granted the School Defendants’ motion for summary judgment, and on appeal the Indiana Court of Appeals affirmed, finding Ruch’s claim for emotional distress did not fall within any of the appliable rules. The Indiana Supreme Court, however, granted transfer and adopted a new rule: when a caretaker assumes responsibility for a child, and when that caretaker owes a duty of care to the child’s parent or guardian, a claim against the caretaker for the negligent infliction of emotional distress may proceed when the parent or guardian later discovers, with irrefutable certainty, that the caretaker sexually abused that child and when that abuse severely impacted the parent or guardian’s emotional health. To satisfy the rule, a plaintiff must show (1) that the tortfeasor had a duty of care to the parent or guardian; (2) that there is irrefutable certainty of the act’s commission; (3) that the tortious act is one rarely, if ever, witnessed by the parent or guardian; and (4) that the abuse severely impacted the parent or guardian’s emotional health. Irrefutable certainty under the Court’s new rule requires an admission to the abuse by the caretaker to a person of authority, a finding of abuse by a judge, or the caretaker’s conviction for the abuse.

In adopting its new rule, the Indiana Supreme Court first discussed the evolution of Indiana’s common-law rules governing emotional distress claims and the policy reasons behind them and why the circumstances of this case supported a limited expansion with a narrow rule and why such a rule does not implicate public-policy concerns. The Court then held Ruch’s claim satisfied the Court’s new rule. The Court found the School Defendants owed a duty of care to Ruch as K.G.’s parent, the school assistant Smith confessed to the sexual abuse and later plead guilty to child molesting, the sexual abuse of K.G. was hidden from Ruch, and Ruch’s discovery of the abuse severely impacted her mental health. The Court also found Ruch adequately plead her claim for economic damages and the School Defendants did not establish an absence of a genuine issue of material fact as to her economic damages claim. Accordingly, the Indiana Supreme Court reversed and remanded the case back to the trial court for further proceedings consistent with its opinion.

You can read the full opinion here.

At the time of the appeal in this case, Angell was the sole remaining defendant. To succeed in their claim against Angell, the Poppes were required to prove (1) Angell owed them a duty of care, (2) Angell breached that duty, and (3) Angell’s breach proximately caused their injuries. Whether a duty exists is a question of law for the court to decide, and absent a duty, there can be no breach and therefore no liability. Angell moved for summary judgment in court arguing that it owed the Poppes no duty and therefore was entitled to judgment as a matter of law. After a hearing, the trial court entered summary judgment in favor of Angell, and the Poppes appealed.

To decide whether Angell owed the Poppes a duty, the Indiana Court of Appeals was first required to decide whether to apply the landowner liability analytical framework in Burrell v. Meads (based upon Restatement (Second) of Torts Section 343) that applies when injuries result from a condition on land, or the analytical framework in Goodwin v. Yeakle’s Sports Bar & Grill, Inc. that applies when injuries result from the criminal acts of a third person. The Burrell analysis provides that a landowner is responsible for injuries to invitees resulting from a condition on land but only if the landowner knew, or should have known, of the condition and that it involved an unreasonable danger of harm, if the landowner should have expected its invitees would not realize the danger or protect themselves against it, and if the landowner failed to exercise reasonable care to protect its invitees. The Goodwin foreseeability analysis of duty in the case of criminal acts of third parties causing injuries focuses on the “broad type of plaintiff and harm involved, without regard to the facts of the actual occurrence,” and turns on “whether there is some probability or likelihood of harm that is serious enough to induce a reasonable person to take precautions to avoid it.”

Here, the Court of Appeals agreed with Angell that the Goodwin analysis applied because the Poppes were injured, not as a result of a condition on land, but as a result of the criminal acts of a third party, the intoxicated truck driver. Applying the Goodwin analysis, the Court found the broad type of plaintiff was a grocery store patron and the broad type of harm was “a random intoxicated driver losing control of his vehicle and striking a patron,” and Angell could not have known or reasonably foreseen the Poppes would be struck by an intoxicated driver in the store parking lot. The Court held Angell had no duty to protect the Poppes from the random criminal acts of an intoxicated driver, and therefore, affirmed the judgment of the trial court in favor of Angell dismissing the Poppes’ personal injury claims against it.

You can read the full opinion here.

Indiana law allows for the recovery of damages for mental distress or emotional trauma under the traditional impact rule, the modified impact rule, and the bystander rule. Under the traditional impact rule, a plaintiff can recover if the plaintiff can prove (1) an impact on the plaintiff, (2) which causes physical injury to the plaintiff, and (3) which physical injury, in turn, causes the emotional distress. Under the modified impact rule, a plaintiff can recover if the plaintiff suffers a direct impact by another’s negligence, and by reason of that direct involvement suffers an emotional trauma which is serious in nature and of a kind and extent normally expected to occur in a reasonable person, without regard to whether the emotional distress arises out of or accompanies any physical injury to the plaintiff. Under the bystander rule, a plaintiff can recover if he or she actually witnessed or came on the scene soon after the death or severe injury of a loved one, with a relationship to the plaintiff analogous to a spouse, parent, child, grandparent, grandchild or sibling, caused by a defendant’s wrongful conduct, even if he or she was not directly impacted.

In this case, Ruch conceded she could not recover emotional distress damages under the traditional impact rule, the modified impact rule, or the bystander rule, as she was not touched by Smith and did not witness the sexual abuse. However, Ruch argued that Indiana should adopt another rule providing for recovery in cases in which the wrongful conduct would never be witnessed, such as sexual abuse, which occurs in secret. Ruch argued Indiana should allow for recovery when “(1) the genuineness of a claim is beyond question, (2) the facts present a unique and rare occurrence, and (3) the tort would never happen with a witness present.” Unfortunately, the Indiana Court of Appeals rejected Ruch’s invitation to expand the parameters of recoveries for emotional distress damages. The Court also held the Article I, Section 12 of the Indiana Constitution did not require recognition of such claims if not otherwise recognized by law.

The Indiana Court of Appeals did find, however, that the trial court erred in awarding summary judgment to the School Defendants on all of Ruch’s individual claims, as Ruch claimed that, in addition to emotional damages, she “incurred expenses for the placement of [K.G.] in a chronic care facility.” Under Indiana law, an injury to a minor child creates two causes of action, one for the injured minor for personal injuries and one for a parent for loss of services. While the School Defendants argued on appeal that Ruch failed to plead a derivative claim for economic damages, the Court found Ruch’s allegation was sufficient to plead a claim for economic damages. The Court noted the trial court granted summary judgment on all Ruch’s claims even though the School Defendants had not even moved for summary judgment on Ruch’s economic damages claims.

The Indiana Court of Appeals affirmed in part, reversed in part, and remanded the case back to the trial court for further proceedings. You can read the full opinion here.

The plaintiff in Catt was injured when his vehicle slid and crashed into a ditch in Knox County caused by a washed-out culvert following a rainstorm the night before. The culvert had washed out many times prior to Catt’s car accident and had been repaired. The plaintiff alleged Knox County had negligently inspected, designed or maintained the roadway. However, the Indiana Supreme Court held Knox County, despite any negligence, was immune from liability under section 34-13-3-3(3) of the Indiana Tort Claims Act, which provides “[a] governmental entity… is not liable if a loss results from… [t]he temporary condition of a public thoroughfare… that results from weather.” Ind. Code § 34-13-3-3(3). The Court framed the question as whether the washed-out culvert was due to weather and whether Knox County had the opportunity to repair the washed-out culvert and failed to do so (i.e., whether it was temporary versus permanent), regardless of any prior negligent inspection, design or maintenance or the frequency with which the culvert may have washed out on prior occasions. Since the washed-out culvert was caused by weather, Knox County had not received notice that it had washed out on this occasion prior to the collision, and Knox County was busy repairing other washed-out culverts and had previously repaired this one, the Court found the washed-out culvert was caused by weather and was a temporary condition.

In subsequent cases based on Catt, the Indiana Supreme Court has further explained that governmental immunity for temporary conditions resulting from weather applies during the “window of reasonable response” to the road condition. That window lasts until the condition stabilizes. That is, if the condition continues to worsen or is still evolving, the condition has not stabilized and is therefore deemed temporary, and the government is immune.

The Indiana Court of Appeals reviewed Catt in the recent case of Ladra v. State, 2021 WL 325849 (Ind. Ct. App. Jan. 27, 2021). In this case, Tracy Ladra (“Ladra”) filed a lawsuit against the State of Indiana and the State of Indiana Department of Transportation (collectively “INDOT”) after she sustained injuries when her car hydroplaned as a result of flooding on I-94 in Portage, Indiana. The flooding occurred due to a clogged drainage system that caused consistent flooding in the area with an officer stating he had previously contacted the state highway maintenance crew between 10-15 times to unclog the drains. Ladra alleged INDOT was negligent for failing to provide warnings and failing to have proper drainage and properly maintain the drains. The INDOT filed a motion for summary judgment, which the trial court granted, finding INDOT was immune.

On appeal Ladra argued that INDOT was not entitled to immunity because her collision was caused as a result of the clogged drainage system and not the flooded roadway, or at least that the flooded roadway was not the sole cause of the accident. The Indiana Court of Appeals disagreed finding the flooded roadway was the direct result of the clogged drainage system and there was no evidence that the clogged drainage system was not the result of rain and collecting debris during the rain.

Ladra also argued that the clogging of the drainage system was not a temporary condition, but rather the permanent condition of the clogged drainage system that caused flooding whenever it rained. The Court of Appeals, however, discussing and relying on Catt, noted that factors such as poor inspection, design or maintenance or the frequency of prior events were irrelevant to the question of whether a condition was temporary or permanent. And because there was no evidence the weather had stabilized or the INDOT had an opportunity to respond, having no notice of the flooding before the accident, the Court found the facts in Ladra fell within the scope of Catt and the flooded roadway was a temporary condition providing the INDOT with immunity.

In so holding, the Court of Appeals stated that Catt had created circular reasoning whereby unaddressed defects in roadways that only cause issues during weather events are irrelevant to whether the issues arising therefrom are deemed temporary or permanent. In other words, under Catt, governments are entitled to immunity even for negligently failing to address a known defect in a roadway so long as the defect only materializes during a weather event. The Court in Ladra stated that Catt removed its ability to consider INDOT’s knowledge of the frequency of prior events in determining whether the condition was temporary or whether the accident was actually the result of the weather or the failure to address a condition prior to the weather event. According to the Court of Appeals, Catt “not only allows for the State to be negligent, it encourages it” and “gives the State no incentive to attempt to implement remedial or preventative measures…”

A few days after deciding Ladra, the Indiana Court of Appeals issued a decision in a similar case, Staat v. Indiana Dep’t of Transp., 2021 WL 325670 (Ind. Ct. App. Jan. 28, 2021). In this case, Chad Staat and Julie Statt (collectively “Staats”) filed a lawsuit against the INDOT arising from injuries Chad sustained when his vehicle hydroplaned on accumulated, pooling, or puddled water on I-74, left the roadway, and collided with a tree. As in Ladra, the trial court granted the INDOT’s motion for summary judgment based upon immunity for a temporary condition resulting from weather. However, unlike Ladra, the Court of Appeals in Staat found that the INDOT had not designated evidence showing that the collision resulted from a temporary condition.

The INDOT argued the accumulated water on I-74 was due to an ongoing rainfall, which had gotten worse immediately prior to the collision and which had created a condition that had not stabilized. Although it had been raining the night before the collision and was raining at the time of the collision, the Staats argued that despite ongoing rain, the INDOT had not shown the accumulated, pooled, or puddled condition of I-74 had not in fact stabilized, noting when puddles fill up, they cannot continue to fill up and eventually stabilize and then dissipate. The Court agreed with the Staats, finding a reasonable inference that any accumulated, pooled, or puddled water had reached its maximum capacity, and the INDOT had failed to show whether the roadway condition had stabilized one way or the other. Thus, the Court found a genuine issue of material fact as to whether the condition was temporary so as to entitle the INDOT to immunity. The Court also found the INDOT had not negated breach of its duty as a matter of law due to it having received no notice of the accumulated, pooled, or puddled water, as the question is not just whether the INDOT knew of the water, but also whether the INDOT should have known of the water.

In so holding, the Court of Appeals in Staat also voiced its concern with the analytical framework set forth in Catt. The Court noted its agreement with Ladra that Catt allows and encourages negligence taking away any incentive for remedial or preventative measures to address dangerous conditions that only manifest during weather events. Fortunately, while the Court in Staat was bound by the precedent in Catt, it was able to reach a more reasoned result than in Ladra.

You can read the opinion in Ladra here.

You can read the opinion in Staat here.

Harold Merritt alleged that Dr. Anthony Smith, an employee of KentuckyOne Health, was responsible for medical negligence in the deaths of his wife, Kimberly, and infant son. During her pregnancy, Kimberly developed placenta previa, a condition wherein the baby’s placenta partially or totally covers the mother’s cervix, which can cause severe bleeding during pregnancy and delivery. Although the high-risk obstetrician to whom Dr. Smith referred Kimberly recommended a caesarian section no later than at thirty-seven weeks gestation, Dr. Smith examined her at thirty-seven weeks and scheduled an appointment one week later. Shortly thereafter Kimberly was found unresponsive at home and died shortly after being transported to the hospital by EMS. The couple’s child was delivered by post-mortem caesarian section, but only survived a few hours, suffering seizures during that time.

In his medical malpractice complaint, Merritt named Catholic Health, an entity that sponsors KentuckyOne Health and its affiliates, and First Initiatives, a foreign, wholly-owned subsidiary of Catholic, which provided self-insurance coverage to Catholic, its affiliates and employees including KentuckyOne Health and Dr. Smith. First Initiatives provided coverage and Catholic paid assessments to First Initiatives, although Catholic’s affiliates did not pay for the coverage. Merrit included a claim that First Initiatives violated the UCSPA, KRS 304.12-230, by engaging in bad faith settlement negotiations.

Shortly after filing his lawsuit, Merritt filed a motion for declaratory judgment asking the court to find First Initiatives is subject to the UCSPA and civil liability for violations of the statute. Merritt alleged that First Initiatives engaged in bad faith by offering a consolidated settlement, rather than negotiating the two claims separately, attempting to leverage the undisputed claims of the couple’s deceased child to settle the disputed claims of Kimberly, failing to timely respond to settlement demands, and failing to provide any basis for denying various settlement demands.

First Initiatives claimed it was not subject to the UCSPA, arguing its captive insurance agreement with Catholic did not include risk shifting or risk distribution like ordinary insurance and that First Initiatives is not in the business of insurance. Ultimately, the trial court denied Merritt’s motion, determining that the UCSPA does not apply to a self-insured person or entity and that First Initiatives was a captive insurer because it only exists to insure Catholic and is located in the Cayman Islands and subject to the captive insurance laws of the Cayman Islands government. The court considered persuasive affidavit evidence that First Initiative’s financial statements were consolidated with Catholic’s and, therefore, First Initiatives was unable to shift risk due to the economic link between the two entities.

Merritt requested the trial court reconsider and, in doing so, conceded First Initiative’s status as a foreign captive insurer. However; Merritt claimed an exception in the UCSPA applied wherein any foreign captive insurer transacting business in Kentucky before July 14, 2000, must petition the insurance commissioner for the subtitle to apply. Ultimately, the trial court denied Merritt’s motion and granted First Initiatives and Catholic summary judgment.

Merritt later settled the negligence claims against the medical defendants, making the claims against First Initiatives and Catholic ripe for appeal. The Court of Appeals affirmed the trial court.

The Kentucky Supreme Court concluded it was undisputed that First Initiatives was a foreign captive insurer. Although the Court found the UCSPA is to be “liberally construed” to serve its purpose of protecting the public from unfair trade practices and fraud, the statute specifically and unequivocally exempts captive insurers. As for Merritt’s argument that First Initiatives was transacting business in Kentucky before July 14, 2000, the Court found that both the trial court and Court of Appeals correctly determined it was not. The Court noted that “Self-insurers are not in the business of entering into contracts of insurance but rather have a self-insurance agreement with covered entities.” Significantly, Catholic “retains the entire financial stake in the self-insured, professional liability claims paid to claimants…any liability for the deaths…remained with Catholic.” As such, the Court found First Initiatives was not transacting business in Kentucky and had no obligation to petition for exemption from the UCSPA. The Court’s opinion can be found here.

Spinnenweber was driving a minivan on I-94 in Indiana when he was rear-ended by a truck driven by Laducer. Spinnenweber refused medical care at the scene and only five days later sought care at an urgent care center for pain in his neck and possible ringing in the ears, which is also commonly known as tinnitus. Three months later Spinnenweber reported to his doctor that he was suffering tinnitus and short-term memory loss. Spinnenweber ultimately treated with seventeen medical providers.

Spinnenweber sued Laducer and Laducer’s employer. At trial, Spinnenweber did not seek damages for anything but physical injuries, waiving any request for medical expenses or lost wages or psychiatric, mental, or emotional injuries. The Defendants conceded responsibility for causing the crash.

None of Spinnenweber’s seventeen providers testified at trial. Instead, Spinnenweber and his friends and family testified and he called the Defendant’s medical expert, Dr. Peter Carney, by his recorded deposition testimony.

As for Spinnenweber’s injuries, Dr. Carney testified he had suffered whiplash but did not relate the tinnitus to the crash. Further, while Dr. Carney noted it was “possible” Spinnenweber had suffered a mild concussion, he testified he was certain it was not serious and that any objective testing suggesting a brain injury could not be tied to any particular injury or occurrence.

In his closing arguments, Spinnenweber’s counsel argued that “[t]he purpose of tort law, or negligence law, is to deter bad conduct so it doesn’t repeat.” The jury entered a verdict in Spinnenweber’s favor in the amount of $1,000,000.

The Defendants requested the court reduce the verdict (remittitur) or grant them a new trial, arguing the verdict was unsupported by the evidence and grossly excessive. The trial court granted the motion and gave Spinnenweber the option of accepting a judgment reducing the verdict to $250,000 or a new trial. Spinnenweber, through his counsel, declined to accept the reduced verdict. Then Spinnenweber’s counsel advised the court he would be withdrawing and Spinnenweber would be proceeding pro se.

The court set the matter for a jury trial, but the parties waived the jury trial demand. At the one-day bench trial, Spinnenweber “presented no evidence and requested an award of $0 in damages, which he described as a ‘verdict of silence.’” The Defendants moved for judgment in their favor, which the Court granted. Spinnenweber, represented by counsel, appealed the district court’s award granting Defendants’ motion for remittitur or a new trial.

First, in reviewing the trial court’s granting of the Defendants’ motion, the Seventh Circuit found that there was no evidence to “show that the crash could have caused Spinnenweber’s other alleged injuries such as internal brain trauma and tinnitus. Those were subjective injuries because Spinnenweber perceived them, but they were not directly observable by his doctors.” Because the cause of unobservable injuries presented a “complicated medical question,” it would have been conjecture or speculation for the jury to conclude Spinnenweber suffered those injuries on account of the car crash. Consequently, the Seventh Circuit found that the trial court was correct to conclude the only two injuries at issue had been “whiplash and a mild concussion.”

Second, the Court addressed the issue of whether there was sufficient evidence to support a verdict for $1,000,000 in damages. The Seventh Circuit noted that although juries are given “wide latitude” to award damages, this does not equate to “unlimited discretion.” Noting that Spinnenweber had not sought any medical expenses, lost wages, or damages for emotional harm, the Seventh Circuit concluded that the jury must have nonetheless awarded damages for all of Spinnenweber’s injuries, rather than his whiplash and a mild concussion. It suggested that this may have been tied to his counsel’s argument that the purpose of tort law was to deter bad conduct, so it does not repeat. Consequently, the Court found the trial court’s offer to Spinnenweber of the choice of a reduced verdict or a new trial was not an abuse of discretion.

Even then, the Court noted, Spinnenweber did not have to seek $0 in his second trial. But, by doing so, he “was hoisted with his own petard” by seeking a $0 “verdict of silence.” The Court’s opinion can be read here.

In Hogan v. Magnolia Health Sys. 41, Mary Hogan (“Hogan”), and subsequently her Estate, sought damages for a personal injury that occurred when an employee of Magnolia Health Systems 41, LLC (“Magnolia”), which owned and/or operated Crown Pointe of Carmel, an assisted living facility, caused a buffet table to fall on Hogan’s walker causing Hogan to fall and hit her head. Hogan sued Magnolia, and, not knowing the name of the employee, “John Doe.” After later learning of the employee’s name, Hogan moved to amend her complaint to name the employee. However, because the amendment occurred more than two years after the incident, the employee filed a motion to dismiss based upon the statute of limitations, which the trial court granted. Magnolia then filed a motion for summary judgment arguing it could not be held vicariously liable for the employee’s actions under respondeat superior because Hogan’s claim against the employee was barred. After a hearing, the trial court granted Magnolia’s motion, and Hogan appealed.

The legal theory of respondeat superior imposes liability on employers for the wrongful conduct of employees committed within the course and scope of employment. To be within the course and scope of employment, the act must have been incidental to authorized conduct or in furtherance of the employer’s business to an appreciable extent. Thus, although an employer may not have committed any wrongful or negligent act itself, when an employee commits a negligent act in the course and scope of employment, the employer can be held liable for the employee’s negligence. However, no liability applies under respondeat superior if the employee was not negligent.

Here, Magnolia did not argue its employee was not negligent or that its employee was not acting within the course and scope of employment when the injury occurred. Rather, Magnolia argued that because the claim was barred against its employee, no claim could be pursued against it based upon the employee’s conduct. Magnolia cited Indiana cases supporting the proposition that when an employee cannot be held liable, no action based solely upon respondeat superior can be maintained against the employer. However, while it is true that if an employee is not negligent and therefore not liable, an employer cannot therefore be found liable, Indiana jurisprudence does not support the proposition that an employee has to be named as a defendant and judgment entered against the employee in order to hold the employer liable. Rather, the employee’s liability is imputed to the employer arising out of the employment relationship. Thus, plaintiffs have the option to sue the employee, employer, or both arising out of the wrongful and injurious conduct committed by an employee while in the course and scope of employment with an employer.

The employee’s dismissal from this case did not bar Hogan’s claim against Magnolia. While Hogan’s claim against Magnolia’s employee was barred by the statute of limitations, she sued Magnolia within the statute of limitations and could, therefore, move forward with her claim against Magnolia to hold it liable for its employee’s negligent conduct in causing Hogan to fall and suffer personal injuries. The Court therefore found a material issue of fact existed as to whether the employee was negligent, and Magnolia was not entitled to judgment as a matter of law. The Court reversed the trial court’s judgment and remanded the case for further proceedings.

This is a helpful case for plaintiffs, many of whom would otherwise be forced to deal with the often times very difficult and time-sensitive task of identifying and suing all individual employees who may bear some fault for causing injuries. It is also a helpful case for individual employees, who in some cases will be able to avoid being sued since their employer can be pursued alone. However, as our previous blog noted, the issue of employment and agency can be a tricky one to pin down.

You can read the full opinion here.