Mitchell v. Transamerica Ins. Co.

• Decision Date: 20 May 1977
• Citation: 551 S.W.2d 586
• Parties: Tandy W. MITCHELL and Beulah V. Mitchell, Appellants, v. TRANSAMERICA INSURANCE COMPANY, Appellee. James CARR, Appellant, v. Tandy W. MITCHELL and Beulah V. Mitchell, Appellees.
• Court: Kentucky Court of Appeals

Page 586

551 S.W.2d 586

Tandy W. MITCHELL and Beulah V. Mitchell, Appellants, v. TRANSAMERICA INSURANCE COMPANY, Appellee.

James CARR, Appellant, v. Tandy W. MITCHELL and Beulah V. Mitchell, Appellees.

Court of Appeals of Kentucky.

May 20, 1977.

Richard M. Trautwein, Barnett & Alagia, Louisville, for Transamerica ins. co.

Victor W. Ewen, Ewen, Mackenzie & Peden, P. S. C., Louisville, for James M. Carr.

F. Thomas Conway, Robinson, Tackett, DeMoss & Conway, P. S. C., Louisville, for Tandy W. and Beulah Mitchell.

Before HOWARD, LESTER and WILHOIT, JJ.

HOWARD, Judge.

This is a case that involves claims by Tandy W. Mitchell and his wife, Beulah Mitchell, hereinafter called "Mitchells", made against their former attorney James Carr, hereinafter called "Carr". Also involved are Mitchells' claims against Carr's malpractice carrier Transamerica Insurance Company, hereinafter called "Transamerica".

The Mitchells were severely injured as a result of an accident occurring just north of Shepherdsville, Kentucky in Bullitt County. A tractor-trailer rig pulled out in front of the Mitchells while making a U-turn on Interstate 65. The Mitchells employed James Carr, an attorney, to represent them against the driver and owners of the rig. Carr let the one year Kentucky Statute of Limitations expire without filing suit but he kept this fact from his clients for several more months. In the meantime, he contacted Transamerica and advised its representatives of the potential loss. Carr attempted to settle this matter with Transamerica for $20,000.00 which was a figure that the Mitchells had once discussed with Carr. One of Transamerica's employees called the Mitchells and assured them that their claim was being processed but he did not reveal to them that he was calling on behalf of the Mitchells' liability carrier. Finally, Carr advised the Mitchells of his neglect and they promptly hired another attorney who thereupon brought an action in the Federal District Court of Southern Indiana. Indiana has a two year statute and the defendants in that case were subject to process there.

Prior to trial, a lump sum settlement was reached for the Mitchells in the amount of $60,000.00. In the meantime, suit was brought in Jefferson County, Kentucky by the Mitchells against Carr and Transamerica among others. The case was tried on the following issues:

1. A claim against Carr for negligence in permitting the statute to run in Kentucky. Coupled with this was a claim for unethical and fraudulent conduct, all of which allegedly damaged the Mitchells as to their claims.

2. A claim against Carr and Transamerica that Carr wrongfully divulged the contents of the Mitchell file to Transamerica with intent to defraud the Mitchells, all of which represented an invasion of the economic rights of the plaintiffs and a disturbance of the attorney-client relationship.

On the other hand, the defense contended that 1) No pecuniary damage resulted to the Mitchells, 2) Mitchells' remedy was not lost by any act or failure to act on the part of Carr as the Mitchells successfully maintained their case in Indiana, 3) The Mitchells incurred no pecuniary loss by reason of Carr having furnished his file to Transamerica, and 4) Carr's violation, if any, of ethical duties to the Mitchells, while a possible basis for disciplinary proceedings against him, was not a basis for a cause of action to be submitted to a jury for compensatory and punitive damages.

The...