The Difference between $50,000 in Coverage and $20 Million Results in Multiple Appeals

The Law of the Case Prevents a Second Appeal of the Same Facts

Available policy limits and assets are always important to litigants and their attorneys. Regardless of the facts of an incident and the applicable law, the potential availability of $20 million in policy limits and wrongful death of a young person draws plaintiffs’ lawyers like honey draws flies.

In Charles Armstrong, Administrator of The Estate of Craig Armstrong v. The Estate of Jonathan Elmore and Terrez Dewalt D/B/A Dewalt Auto Sales, NO. 2019-CA-001084-MR, Commonwealth of Kentucky Court of Appeals (May 15, 2020) Craig Armstrong was riding as a passenger in a 1996 Chevrolet Cavalier owned and driven by Jonathan Elmore. Elmore, who was delivering newspapers at the time, pulled into the path of another vehicle at an intersection and was hit by the oncoming vehicle. Both Armstrong and Elmore were fatally injured, and it is not disputed that Elmore was at fault and the driver of the oncoming vehicle was blameless.


The history of the title of the Elmore vehicle was important. On November 30, 2013, nearly five months before the accident, Martin Cadillac, a licensed motor vehicle dealer, traded for the 1996 Chevrolet Cavalier that Elmore would later drive. On December 6, 2013, Martin Cadillac sold the vehicle for $600 to Terrez DeWalt, d/b/a DeWalt Auto Sales, through an auction conducted by Auction Broadcasting Company (ABC), and DeWalt took possession of it. On January 19, 2014, DeWalt sold the vehicle to Elmore for cash. As required by statute DeWalt required Elmore to provide written proof of insurance before allowing Elmore to take possession. Elmore obtained a policy with Nationwide that had $50,000 per person/$100,000 per incident policy limits, and he took possession of the vehicle on January 24, 2014. This policy was in force on the date of the accident.

When Martin Cadillac sold the car to DeWalt, it never transferred the title to DeWalt. On the date of the accident, Martin Cadillac was still the certificate title owner. Martin Cadillac had two insurance policies with Travelers Insurance Company, a general liability policy with a $1,000,000 limit and an umbrella policy with a $20,000,000 limit.

After Armstrong filed wrongful death claims in the Warren Circuit Court, the main issues quickly became who was the statutory owner of the Elmore vehicle and whose insurance was potentially responsible for damages resulting from the accident. At the trial court level Armstrong contended that Martin Cadillac had not complied with the statute which requires a dealer assigning a vehicle to a “purchaser for use” to require proof of insurance before transferring the vehicle. Armstrong argued that because Martin Cadillac had not required proof of insurance by DeWalt before transferring possession, Martin Cadillac was still the owner.

In addressing cross-motions for summary judgment by Martin Cadillac and Travelers, the circuit court rejected Armstrong’s argument that Martin Cadillac was the vehicle’s owner despite the fact it held legal title. The circuit court held that Elmore was the owner of the vehicle for all purposes as he was a “purchaser for use.”

The Kentucky Supreme Court accepted discretionary review and in Travelers Indemnity Company v. Armstrong, 565 S.W.3d 550 (Ky. 2018) held that “[t]he circuit court correctly found that Martin was not the owner of the vehicle and we reinstate its order granting summary judgment on all claims against Martin and Travelers.”

The Court framed the issue before the circuit court as who was the statutory “owner” of the vehicle at the time of the collision, and thus, which insurance company was primarily responsible for liability coverage. In reversing the Court of Appeals, the Supreme Court reaffirmed its decision in Gainsco Companies v. Gentry, 191 S.W.3d 633 (Ky. 2006), where it held that liability coverage by a dealer’s policy was primary where the dealer failed to obtain proof of insurance before transferring a truck to a consumer buyer.

Armstrong amended the complaint to assert a claim against DeWalt who had not been a party to the litigation. The circuit court granted the motion, and Armstrong, while acknowledging that DeWalt had met the requirement of the statute by requiring Elmore to demonstrate proof of insurance, asserted a claim against DeWalt for damages based on alleged noncompliance with the promptness requirements of the statute.

DeWalt filed a motion to dismiss, which the circuit court granted. It noted that the Supreme Court had determined Elmore was the statutory “owner” of the vehicle, even though title was still in Martin’s name. The circuit court explained that because the Supreme Court had held that Martin Cadillac was not the owner and was not responsible for insurance coverage, it had indicated the circuit court’s determination that Elmore was the statutory owner was correct.


The essence of the competing arguments made by DeWalt and Armstrong is that DeWalt contends the circuit court, based on the holding by the Supreme Court in Travelers, correctly held that Elmore was the owner of the vehicle at the time of the accident.

The Supreme Court held that Martin was not the owner of the vehicle and was not responsible for insurance coverage of the vehicle, thus indicating the correctness of the  ruling that Elmore was the statutory owner.

Here, Armstrong initially litigated a claim against Martin Cadillac concerning whether it was the statutory owner of the vehicle. Armstrong lost that battle in Travelers, and he now pursues a claim against a different defendant (DeWalt) on a different basis.


In addition to the doctrine of collateral estoppel, the circuit court also granted DeWalt’s motion to dismiss on the grounds of the law-of-the-case doctrine. The court reasoned that the Kentucky Supreme Court determined Elmore was the statutory owner of the vehicle by reinstating this Court’s decision that was originally appealed.

Under the law-of-the-case doctrine, an appellate court, on a subsequent appeal, is bound by a prior decision on a former appeal in the same court. The rule means that issues decided in earlier appeals should not be revisited in subsequent ones.  Where multiple appeals occur in the course of litigation, another law-of-the-case rule provides that issues decided in earlier appeals should not be revisited in subsequent ones.

An extension of the core law-of-the-case doctrine is the rule that precludes an appellate court from reviewing not just prior appellate rulings, but decisions of the trial court which could have been but were not challenged in a prior appeal. The law-of-the-case doctrine is applicable in this case. The Supreme Court clearly stated in Travelers that “Elmore was the statutory ‘owner’ of the vehicle, even though title was still in Martin’s name.” That it believed Elmore to be the statutory owner of the vehicle was not essential to the Court’s determination; it was essential to the Court’s ruling to determine only that Martin Cadillac was not the owner. Nevertheless, the Court made that determination, and the Court of Appeals is are bound by it.

The circuit court’s order dismissing DeWalt as a party on the ground that Armstrong is barred from re-litigating the ownership of the vehicle based on the clear language of the Supreme Court in Travelers.


I understand that the heirs would have preferred to dip into Martin’s $21 million in liability insurance rather than the dead driver’s $50,000 in coverage, thus the two appeals. They probably should have given up after the loss in the Supreme Court but tried again. Hopefully, since the Court of Appeal has followed the Supreme Court’s decision the appeals will stop and people in Kentucky will learn the reason for buying high limit UM/UIM coverages.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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