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Koch v. Owners Ins. Co.

United States District Court, W.D. Kentucky

January 28, 2014

TAMMY KOCH, PLAINTIFF
v.
OWNERS INSURANCE COMPANY, DEFENDANT

Order Filed: April 18, 2014

For Tammy Koch, Plaintiff, Counter Defendant: John E. Spainhour, Givhan & Spainhour, PSC, Shepherdsville, KY.

For Owners Insurance Company, Defendant, Counter Claimant: Catherine M. Sewell, LEAD ATTORNEY, Peter J. Sewell, Sewell, O'Brien & Neal, PLLC, Louisville, KY.

OPINION

Page 532

MEMORANDUM OPINION

Charles R. Simpson III, Senior United States District Judge.

This matter is before the Court on a motion for summary judgment filed by Defendant Owners Insurance Company (" Defendant" ) against Plaintiff Tammy Koch (" Plaintiff" ) (DN 26). For the reasons set forth below, the Court will grant the motion for summary judgment.

BACKGROUND

The following facts are undisputed. On March 14, 2011, Plaintiff's home was partially destroyed by a fire. At the time, Plaintiff was covered by a homeowners insurance policy issued by Defendant, on the basis of which she sought to obtain compensation for property damage sustained during the fire. As part of its investigation of the fire, Defendant requested that Plaintiff submit to an " Examination Under Oath" regarding events preceding the fire. Based on Plaintiff's responses, Defendant concluded that Plaintiff had made several material misrepresentations in her application for insurance coverage. Accordingly, Defendant rescinded Plaintiff's policy and refused payment thereunder.

On March 14, 2011, Plaintiff filed the present action in Bullitt County Circuit Court, seeking payment pursuant to her insurance policy as well as damages pursuant to Kentucky's Unfair Claims Settlement Practices Act (" KUCSPA" ). On March 21, 2012, Defendant removed the action to this Court on the basis of diversity jurisdiction. On March 29, 2013, Defendant

Page 533

filed the present motion for summary judgment. Having considered the parties' briefs and being otherwise sufficiently advised, the Court will now address the motion for summary judgment.

STANDARD

i. Summary Judgment

Before granting a motion for summary judgment, the Court must find that there is no genuine issue of material fact such that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The party moving for summary judgment bears the initial burden of establishing the nonexistence of any issue of material fact, Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), a burden which may only be satisfied by " citing to particular parts of materials in the record..." or " showing that the materials cited do not establish the absence or presence of a genuine dispute." Fed.R.Civ.P. 56(c)(1). If the moving party satisfies this burden, the burden of production shifts to the non-moving party, who must then identify evidence demonstrating the existence of a genuine issue of material fact. See Celotex, 477 U.S. at 322.

Although the Court must view the evidence in a light most favorable to the non-moving party, see Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007), the non-moving party " must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Accordingly, " [t]he mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the non-moving party fails to satisfy its burden of counterproduction, the court must grant the motion for summary judgment.

ii. Misrepresentations in Insurance Policies

Ky. Rev. Stat. § 304.14-110 provides that misrepresentations made in an insurance policy application " shall not prevent a recovery under the policy or contract unless either: (1) fraudulent; or (2) material either to the acceptance of the risk, or to the hazard assumed by the insurer; or (3) the insurer in good faith would [ ] not have issued the policy or contract...." Thus, " [w]hen an insured misrepresents material facts on the application, the insurer is justified in denying coverage and rescinding the policy." Hornback v. Bankers Life Insurance Co., 176 S.W.3d 699, 705 (Ky. Ct. App. 2005). " [A] false answer is material if the insurer, acting reasonably and naturally in accordance with the usual practice of ... insurance companies under similar circumstances, would not have accepted the application if the substantial truth had been stated therein." Cook v. Life Investors Ins. Co. of Am., 126 Fed.Appx. 722, 724 (6th Cir. 2005) (quoting Mills v. Reserve Life Insurance Co., 335 S.W.2d ...


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