Journal-Times (Grayson, KY)

March 6, 2013

KLC loses dismissal motion in flood lawsuit

By Leeann Akers - Editor
Journal-Times

March 6, 2013 — Attorneys representing all of the parties in a lawsuit stemming from the 2010 floods in Olive Hill appeared in Carter Circuit Court Monday for motion hour.

Motions to dismiss several defendants and to hold discovery had been filed, as well as responses, within the last two months.

Kentucky League of Cities, Inc., and Kentucky League of Cities Insurance Services, Inc., and Kentucky League of Cities Insurance Agency, Inc., had filed a motion Jan. 16 to be dismissed as defendants in the case.

Legal counsel for the group claimed that Kentucky League of Cities Insurance Service Association was the only party named in the original suit that could be considered a proper party to the action.

According to the motion, KLC, Inc. has no claims handling responsibilities and therefore no obligation to pay any claims in the case.

Attorneys Mike Fox and Reid Glass, representing the flooded property owners, filed a motion requesting that the defendant motion be denied.

To back up their argument, the plaintiffs produced a contract, allegedly between KLC, Inc. and Collins & Company, Inc., a third-party insurer.

According to the contract, KLC, Inc. “shall at all times provide funds adequate for the payment of claims.”

The contract also states that Collins is employed in a capacity as an agent of KLC and that “KLC shall retain ultimate control and responsibility...and the final authority over decisions and policies regarding claims administration.”

Christina Vessels and Barry Miller, attorneys for the defendants, claimed that they did not think the contract was important nor did they know where it had come from.

“That contract bolstered their (Fox and Glass) assertion,” Circuit Judge Rebecca Phillips said in denying the motion to dismiss those defendants.

Phillips stated that discovery would also be necessary.

“There needs to be some verification of the inner workings and relationships of all of these different entities,” the judge added.

She overruled the defendants’ motion to hold discovery in part, because of a single claim that was paid, while all others were denied.

Olive Hill business owner Donnie Lykins filed a claim for flood damage and received $159,800 while all of the other claims were denied, according to the complaint.

“There was some claim of liability by the city when the Lykins claim was paid,” Phillips said. “Maybe some of the facts made by that claim are relevant to the other claims.”

According to the original complaint filed in April 2012, the property owners claimed the City of Olive Hill failed to properly maintain its sewage and/or storm water drainage systems which was a major factor in causing the floods of May 2, 2010, and July 21, 2010.

They also said the city excavated dirt, rock and sediment from in and around the Tygart’s Creek channel in 2003 which altered the flow of water and added to the downtown flooding.

Leeann Akers can be reached at lakers@journal-times.com or by phone at 474-5101.