Legal Memorandum: Pleading Standards for a Colorable Claim in KY

Issue: What is the applicable standard for expressing a colorable claim under Kentucky Law?

Area of Law: Litigation & Procedure
Keywords: Colorable claim; Statutory immunity; Middleman statute
Jurisdiction: Kentucky
Cited Cases: 263 S.W. 15
Cited Statutes: Ky. Stat. § 411.340; Restatement (Second) Torts § 12 (1965)
Date: 07/01/2010

Under Kentucky state pleading standards, a complaint adequately states a claim, and it is not subject to dismissal, as long as it appears the plaintiff is “entitled to relief under any set of facts which could be proved in support of his claim.”  Pari-Mutuel Clerks’ Union v. Ky. Jockey Club, 551 S.W.2d 801, 803 (Ky. 1977); Keith v. Laurel County Fiscal Court, 254 S.W.3d 842, 845 (Ky. Ct. App. 2008). 

A defendant is not entitled to statutory immunity under the Middleman statute, Ky. Stat. § 411.340.  As a preliminary matter, it is appropriate to note the meaning of the relevant phrase of the Middleman Statute, “knew or should have known.”  Id.  Generally, the word “knew” requires that the actor have actual knowledge of a fact at the relevant time, but the phrase “should have known” encompasses something less than actual knowledge and is sometimes referred to as “constructive knowledge.”  See In re County Treasurer, 707 N.E.2d 60, 64-65 (Ill. App. Ct.  1998).  “‘Constructive knowledge’ (or usually, ‘constructive notice’) is a legal concept by which notice of some fact is imputed to one who, by his knowledge of other facts, should have expected the fact in question to be true, or at least conducted further inquiry.”  Bennett v. Nicholas, 250 S.W.3d 673, 677 (Ky. Ct. App. 2007) (italicized emphasis in original, bold emphasis added).  The upshot is that “[i]f a person has knowledge of such facts as would lead a fair and prudent man, using ordinary care and thoughtfulness, […]

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