Cincinnati Insurance Co. Wins Kentucky Appeal, Directed Verdict

The Kentucky Supreme Court reversed a $4.6 million jury verdict and held that Cincinnati Insurance Co. should have been granted a directed verdict before the case reached the jury. K-2 Catering held an employee party at the owners’ home, at which the owners’ son gave guests rides on a newly purchased ATV. The vehicle crashed, causing disfiguring injuries to a guest. The owners filed claims with their business liability carrier, and the injured party sued the tortfeasor. The owners settled with the injured party and assigned their bad faith claim to the third party, who litigated the claim and prevailed at jury trial. The Kentucky Supreme Court ultimately held that coverage was obligated under the policy, but the insurer had a reasonable basis to deny the claim and had not acted with reckless disregard, and remanded the case to the trial court for dismissal on directed verdict.

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