720 S.W.3d 900
Ky. Ct. App.2025Background
- Loriane and Michael Powell, Tennessee residents, were injured in a June 2022 Kentucky motorcycle accident; Michael was the driver and Loriane the passenger.
- Loriane orally agreed with Geico to accept the policy limits ($25,000), signed a written release, and initially authorized payment to Air Evac (a medical provider claiming a lien); Geico ultimately paid limits twice and later paid UM limits.
- Loriane sued Michael and Geico alleging breach of the settlement (for initial payment to Air Evac), uninsured-motorist (UM) coverage, and bad-faith claims; bad-faith claims were bifurcated.
- The circuit court dismissed claims against Michael as settled (relying on a recorded call), then later amended the order to add finality language; Geico obtained summary judgment on bad-faith claims.
- Loriane timely appealed the Geico summary-judgment order but filed an amended notice for Michael’s June 5 order five days late; the trial court granted an enlargement based on counsel’s claimed excusable neglect.
- The Court of Appeals found no excusable neglect, vacated the enlargement as to Michael (dismissing that appeal), and affirmed summary judgment for Geico on the bad-faith claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether recorded phone call may be considered to show settlement and release of claims against Michael | Powell: parol evidence (recorded call) conflicts with written release and should not be considered | Michael/Geico: recorded call shows Loriane agreed to settlement and authorized payment to Air Evac | Appeal as to Michael dismissed for lack of jurisdiction (late notice); court did not address merits due to vacatur of enlargement. |
| Whether trial court abused discretion in granting enlargement for late notice of appeal (excusable neglect) | Powell: counsel had network problems and attended CLE, constituting excusable neglect | Michael/Geico: counsel’s reasons insufficient under RAP and case law; no excusable neglect shown | No excusable neglect; enlargement vacated; appeal of June 5 order dismissed. |
| Whether Geico acted in bad faith handling bodily-injury claim given household-exclusion in Tennessee policy | Powell: Kentucky MVRA/public policy requires minimum liability coverage for accidents in Kentucky despite policy exclusion | Geico: Tennessee law/favorable choice-of-law and policy household-exclusion preclude coverage for spouse on motorcycle | Affirmed for Geico: Tennessee law applies; motorcycles exempt from KRS 304.39-100(2) obligations; no coverage, so no bad-faith liability. |
| Whether Geico acted in bad faith handling UM claim | Powell: insurer failed to timely and fairly pay UM claim | Geico: UM payment conditioned on clear and convincing proof of third-party involvement; Geico paid UM limits promptly after affidavit/witness evidence | Affirmed for Geico: no evidence of reckless disregard; Geico paid UM limits promptly after evidence; summary judgment appropriate. |
Key Cases Cited
- Hodgkiss-Warrick v. State Farm Mut. Auto. Ins. Co., 413 S.W.3d 875 (Ky. 2013) (choice-of-law applied other state’s law to out-of-state policy; limited Kentucky public-policy override)
- AK Steel Corp. v. Carico, 122 S.W.3d 585 (Ky. 2003) (misunderstanding of filing date is not excusable neglect)
- Cabinet for Health & Fam. Servs. v. D.W., 680 S.W.3d 856 (Ky. 2023) (timely notice of appeal is jurisdictional; no substantial compliance exception)
- Cabinet for Health & Fam. Servs. v. H.C., 581 S.W.3d 580 (Ky. 2020) (misreading an entry date is not excusable neglect; trial court lacks discretion to extend absent excusable neglect)
- Wittmer v. Jones, 864 S.W.2d 885 (Ky. 1993) (elements for bad-faith insurance claim: obligation to pay, lack of reasonable basis to deny, and insurer’s knowledge or reckless disregard)
- Preferred Risk Mut. Ins. Co. v. Oliver, 551 S.W.2d 574 (Ky. 1977) (recognition of distinctive risk profile for motorcyclists and reasonableness of exclusions)