Lauren Savage Individually v. Allstate Insurance Company
2017 CA 000615
Ky. Ct. App.Jan 14, 2021Background
- Co-part Auto Auctions sold and stored salvage vehicles for insurers (Allstate, Hartford); Allstate and Hartford executed salvage title transfers to buyer AUF via Co-part.
- Ventura Barraza/Autos Usados Felix (AUF) bought a 2003 Toyota and 2004 Jeep; Oscar Ramos (agent for AUF) retrieved both vehicles, affixed Arizona 3‑day restricted permits, and towed the Jeep behind the Toyota on I‑65 in Louisville.
- Ramos lost control while changing lanes; James Savage (motorcyclist) was killed after being struck; Estate sued insurers, Co-part (and executives/employees), Chapa (which procured Ramos’s permits), AUF, and Ramos.
- Service on Ramos (a Mexican citizen) was quashed because plaintiff failed to follow the Hague Service Convention; Ramos never properly before the court.
- Trial court granted summary judgment to Allstate and Hartford on ownership/insurance duties; many statutory claims against Co-part were dismissed; jury found only Chapa (via Ramos) negligent and awarded damages; Estate appealed.
- Court of Appeals: affirmed most rulings for insurers and some dismissals, but reversed as to certain statutory claims and several evidentiary rulings against the Estate, and remanded for a new trial against Co-part on negligence, negligent entrustment, and remaining statutory claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of service on Ramos | Service via KY Sec. of State under KRS 188.020 was sufficient | Hague Convention controls service on Mexican nationals; must use Mexico’s Central Authority | Service quashed; Hague Convention applied; later service at Chapa address also quashed |
| Allstate's ownership of Toyota / insurance duty | Allstate retained ownership and duty because MD transfer defective | Allstate properly assigned Certificate of Salvage under MD law and delivered title/vehicle to buyer | Allstate’s obligation ended on delivery of certificate and vehicle; summary judgment for Allstate affirmed |
| Hartford's ownership of Jeep / insurance duty | Hartford remained owner and liable | Co‑part acted under limited power of attorney; Hartford did not control Co‑part’s sale/delivery; title transferred to AUF | Hartford not liable; Co‑part was independent contractor for sale; summary judgment for Hartford affirmed |
| Insurer liability for Co‑part negligence | Insurers liable because Co‑part acted as agent, so negligence imputed | Co‑part was independent contractor for sale/delivery; insurers lacked control | Insurers not liable; negligence/negligent entrustment claims against Co‑part properly submitted to jury |
| Statutory dealer duties (KRS 186A.100; KRS 189.224) | Co‑part violated duties (temp tag, permitting illegal operation of salvage vehicle); AUF was a purchaser "for use"; a towed salvage vehicle was being "operated" | Statutes inapplicable to salvage transfers or towed vehicle; titles transferred before delivery so verification statutes don't apply | Trial court erred dismissing some statutory claims; AUF can be a purchaser "for use"; Jeep as towed unit can be "operated"; reversed and remanded for jury consideration |
| Withdrawal of admission that Ramos "drove out" Toyota | Late withdrawal deprived Estate of discovery and prejudiced case | Withdrawal corrected an erroneous admission | Withdrawal permitted was an abuse of discretion; prejudice requires remand for new trial and limited discovery on that issue |
| Evidentiary rulings: expert exclusions, MVC materials, SSD benefits | Exclusion of certain experts, MVC dealer handbook, and SSD benefits prejudiced Estate’s proving statutory/causation and economic loss claims | Rulings reasonable for relevance, disclosure inadequacy, or undue prejudice | Some exclusions were abuse of discretion (e.g., Burrows expert testimony; MVC materials should be presented through experts); SSD benefits remain inadmissible under controlling precedent for "power to earn," but residual earning capacity may be shown |
| Punitive damages directed verdict | Jury award appropriate given conduct | No evidence of gross negligence, malice, or wanton disregard to support punitive damages | Directed verdict for Co‑part on punitive damages was proper; no gross negligence shown |
Key Cases Cited
- Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988) (Hague Convention preempts inconsistent state methods of service abroad)
- Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476 (Ky. 1991) (summary judgment standard in Kentucky)
- Potts v. Draper, 864 S.W.2d 896 (Ky. 1993) (certificate‑of‑title controls vehicle ownership for insurance purposes)
- Auto Acceptance Corp. v. T.I.G. Ins. Co., 89 S.W.3d 398 (Ky. 2002) (KRS 186A.220(5) exception when dealer delivers title documents)
- Travelers Indem. Co. v. Armstrong, 565 S.W.3d 550 (Ky. 2018) (interpretation of "purchaser for use" under dealer/insurance statutes)
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (trial court gatekeeping for expert testimony)
- Nazar v. Branham, 291 S.W.3d 599 (Ky. 2009) (distinguishing agent liability from independent contractor)
- Phelps v. Louisville Water Co., 103 S.W.3d 46 (Ky. 2003) (standard for punitive damages: oppression, fraud, malice, or gross negligence)