Baumler sued Warner, alleging personal injuries sustained in an automobile accident. Warner’s counsel obtained some of Baumler’s medical records and identified what he believed to be a pattern of behavior suggesting that Baumler fabricated or exaggerated his complaints in order to obtain narcotics for non-medical reasons. Accordingly, Warner moved the Jefferson Circuit Court for an order requiring the Cabinet for Health and Family Services’ records custodian to release Baumler’s KASPER (Kentucky All-Schedule Prescription Electronic Reporting) records. Circuit Judge McKay Chauvin found that Warner had shown good cause and granted the order, provided that the records were used only for litigation and claim evaluation purposes.

The Cabinet moved the trial court to vacate the order, arguing that KRS 218A.202(6) prohibited such disclosure. KRS 218A.202(6) reads in pertinent part:

The Cabinet for Health and Family Services shall only disclose data to persons and entities authorized to receive that data under this section. Disclosure to any other person or entity, including disclosure in the context of a civil action where the disclosure is sought either for the purpose of discovery or for evidence, is prohibited unless specifically authorized by this section.

The trial court found that the Cabinet’s obligation and authority to release KASPER records under KRS 218A.202(6) was in conflict with the court’s obligation and authority to permit discovery under CR 26.02(1). Relying on O’Bryan v. Hedgespeth, 892 S.W.2d 571 (Ky. 1995), the court determined that a statute that encroaches on the judicial branch’s responsibility to control matters of discovery violates the separation of powers and denied the Cabinet’s motion.

The Cabinet petitioned the Court of Appeals for writs of prohibition and mandamus, contending that the issue is not one relating to discovery. Rather, the Cabinet argued, the issue is whether the trial court proceeded erroneously against a mandate of the General Assembly. Warner argued that the trial court did not err in ordering the production of the KASPER records because KRS 218A.202(6) encroaches on the exclusive power of the judicial branch to promulgate rules controlling the scope of discovery. The Court of Appeals saw “no materially significant distinction with regard to the issue at hand between KRS 411.188, which was held to be unconstitutional in O’Bryan, supra, and the amended language in KRS 218A.202(6) that is at issue in this case because we are of the opinion that they both amount to rules of practice and procedure that infringe on the exclusive discretion and authority of the Judicial Branch to control the functioning of its own proceedings.”

Alternatively, the intervening petitioner, Kentucky Attorney General Jack Conway, contended that there was no conflict between CR 26.02(1) and KRS 218A.202(6) because the CR 26.02(1) excludes any privileged matter from the scope of discovery and, therefore, the trial court erred in failing to exclude from discovery a confidential KASPER record as the Rule obligates it to do. The Court of Appeals disagreed, noting:

[W]ith regard to information or documents, Black’s Law Dictionary defines “confidential” as “meant to be kept secret” while it defines “privileged” as “[n]ot subject to the usual rules or liabilities; esp., not subject to disclosure during the course of a lawsuit.” BLACK’S LAW DICTIONARY (8th ed. 2004). Clearly, the two adjectives are not one and the same. Unlike information or document that is “confidential,” information that is “privileged” is not discoverable, unless discovery is allowed under a listed exception…On the basis of a plain reading of KRS 218A.202(6), the Court is unable to discern any intent by the General Assembly to elevate the confidential KASPER records to a privileged status.

Ultimately, Court of Appeals denied the Cabinet’s petition, but determined that the trial court must amend its order to add an additional procedural step. The amended order must direct the Cabinet’s records custodian to deliver the KASPER records to the trial court under seal for in camera inspection to determine what portion of the records are relevant to the subject matter of the litigation. Only after this procedural step, may the records be released to Warner’s counsel.

This case involved a dispute between sisters Diana Smith and Denica McCurdy over the proceeds of a settlement reached in an action premised on the maltreatment of their deceased mother, Thelma Nanney, in a nursing home. McCurdy was the sole beneficiary under Nanney’s Last Will and Testament. Preliminarily, the Court of Appeals observed that under Kentucky law, all settlement proceeds derived from a survival action pass through the estate, but proceeds from a wrongful death action are distributed according to the provisions of KRS 411.130. In sum, Smith would be entitled to recover proceeds from a wrongful death action, but not a survival action.

Smith argued that wrongful death and survival claims were joined, as permitted by KRS 411.133, in the action brought by McCurdy against the nursing home. The resulting settlement did not specify what amount, if any, was paid to settle the wrongful death claim. As KRS 411.133 does not provide for distribution of proceeds for joinder of wrongful death and survival claims, Smith contended that the distribution method provided in KRS 411.130 controlled. Consequently, Smith argued, she was entitled to a portion of the settlement proceeds.

McCurdy argued that the settlement proceeds were not intended as payment for the wrongful death claim, noting that since Nanney was 82 years-old at the time of her death and unable to earn income, the facts did not support a claim for wrongful death. The Kentucky Court of Appeals agreed, observing that “damages flow naturally from the wrongful death of a person unless there is evidence from which the jury could reasonably believe that the decedent possessed no power to earn money.” Citing Turfway Park Racing Ass’n v. Griffin, 834 S.W.2d 667, 671 (Ky. 1992). Consequently, Smith was not entitled to any part of the settlement proceeds.

The Court of Appeals next briefly addressed Smith’s contention that, where a settlement is reached in an action joining a survival claim with a nonviable wrongful death claim, settlement proceeds should be distributed according to KRS 411.130 (governing wrongful death claims) since KRS 411.133 (permitting such joinders) lacks a distribution provision. The court rejected this theory, noting that “KRS 411.133 only omits the prior obligation to elect remedies and now allows wrongful death claims and survival actions to be jointly pled. Obviously, this cannot eliminate the inherent necessity for the elements of either causes of action to be met for a recovery.” Thus, “there is no merit to an argument regarding how proceeds for a non-existent recovery should be distributed.” In other words, mere joinder of the nonviable wrongful death claim with a survival claim does not entitle statutory beneficiaries under KRS 411.130 to proceeds obtained from the survival claim.

Introduced in House February 26, 2008

AN ACT relating to civil actions.

Be it enacted by the General Assembly of the Commonwealth of Kentucky:

SECTION 1. A NEW SECTION OF KRS CHAPTER 411 IS CREATED TO READ AS FOLLOWS:

(1) In civil actions in which comparative fault is or becomes an issue, a defendant or third-party defendant in the suit may allege in an appropriate pleading that a person not a party to the suit caused or contributed to the injury or damage for which the plaintiff seeks recovery. If a defendant or a third-party defendant alleges in an appropriate pleading that a person not sued by the plaintiff caused or contributed to the injury or damage for which the plaintiff seeks recovery, and if the plaintiff’s cause or causes of action against such person would be barred by any applicable statute of limitations but for the operation of this section, the plaintiff may either:

(a) Amend the complaint to add that person as a defendant pursuant to Rule 15 of the Kentucky Rules of Civil Procedure and cause process to be issued for that person; or

(b) Institute a separate action against that person by filing a separate complaint. If the plaintiff elects to proceed under this subsection by filing a separate action, the complaint so filed shall not be considered an “original complaint initiating the suit” or “an amended complaint” for purposes of this paragraph.

(2) A cause of action brought pursuant to subsection (1) of this section shall not be barred by any statute of limitations.

(3) This section shall not:

(a) Shorten or lengthen the applicable statute of limitations for any cause of action, other than as provided in subsection (1) of this section; or

(b) Limit the right of any defendant to allege in an answer or amended answer that a person not a party to the suit caused or contributed to the injury for which the plaintiff seeks recovery.

(4) For purposes of this section, “person” means any individual or legal entity.

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For associates at firms that base the size of year-end bonuses and annual pay raises largely on the amount of billable hours each attorney logs, lukewarm business this year could translate into an equally tepid payoff in comparison with the last few years.

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