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Philadelphia Indemnity Insurance Co. v. 3D Resorts-Bluegrass, LLC

United States District Court, W.D. Kentucky, Louisville Division

January 31, 2014



THOMAS B. RUSSEL, Senior District Judge.

This matter comes before the Court upon the Motion for Summary Judgment of Frost Insurance Agency, Inc. ("Frost"). (Docket No. 80.) Defendant 3D Resorts-Bluegrass, L.L.C. ("3D Resorts") has responded. (Docket No. 84.) Frost has replied (Docket No. 86), and 3D Resorts has filed a Sur-Reply (Docket No. 89-1). This matter is now ripe for adjudication.

The Court, having reviewed the parties' submissions and being otherwise sufficiently advised, now GRANTS Frost's Motion for Summary Judgment for the reasons that follow.


This action arises from a February 6, 2010 fire that destroyed a two-hundred year-old general store on the Green Farm Resort property owned by 3D Resorts, a Kentucky limited liability company.

At the time of Green Farm Resort's purchase on December 26, 2008, 3D Resorts retained Frost to obtain an insurance policy. In 2009, 3D Resorts corresponded with Frost regarding renewal insurance for the property for the period from December 19, 2009 and December 19, 2010. Plaintiff Philadelphia Indemnity Insurance Company ("Philadelphia") provided a proposal for this renewal policy. The parties do not dispute that the schedule of buildings for the relevant insurance policy fails to list the general store.

Because 3D Resorts filed suit against Frost on April 26, 2013;, at issue is whether 3D Resorts' claims against Frost for its alleged negligent failure to procure insurance are time-barred. This determination hinges on whether Kentucky's borrowing statute, Ky. Rev. Stat. 413.420, requires the Court to apply the Texas two-year limitations period. Frost argues that 3D Resorts' cause of action accrued only upon Philadelphia's denial of the claim at issue, and that such denial occurred in Texas. 3D Resorts responds that its claim against Frost arose with the fire that destroyed the property in Kentucky; therefore, it reasons, the borrowing statute is inapplicable. The Court will consider the parties' arguments below.


Summary judgment is appropriate where the pleadings, the discovery and disclosure materials on file, and any affidavits show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587 (1986).

"[N]ot every issue of fact or conflicting inference presents a genuine issue of material fact." Street v. J.C. Bradford & Co. , 886 F.2d 1472, 1477 (6th Cir. 1989). The test is whether the party bearing the burden of proof has presented a jury question as to each element in the case. Hartsel v. Keys , 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a mere scintilla of evidence in support of his position; rather, he must present evidence on which the trier of fact could reasonably find for him. See id. (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252 (1986)). Mere speculation will not suffice to defeat a motion for summary judgment: "[T]he mere existence of a colorable factual dispute will not defeat a properly supported motion for summary judgment. A genuine dispute between the parties on an issue of material fact must exist to render summary judgment inappropriate." Monette v. Elec. Data Sys. Corp. , 90 F.3d 1173, 1177 (6th Cir. 1996) (abrogated on other grounds by Lewis v. Humboldt Acquisition Corp. , 681 F.3d 312 (6th Cir. 2012)).


In an effort to avert forum shopping, Kentucky law requires courts to at times "borrow" a foreign jurisdiction's statute of limitations. Courts apply the "borrowing" principle when a cause of action arose in a foreign jurisdiction with a shorter limitations period than Kentucky's own. See Combs , 354 F.3d at 578. Ky. Rev. Stat. 413.320 provides, in pertinent part:

When a cause of action has arisen in another state or country, and by the laws of this state or country where the cause of action accrued the time for the commencement of an action thereon is limited to a shorter period of time than the period of limitation prescribed by the laws of this state for a like cause of action, then said action shall be barred in this state at the expiration of said shorter period.

Kentucky applies a three-step analysis to determine whether the borrowing statute requires that another state's limitations period be utilized. First, the Court determines whether the cause of action accrued in another state. If so, the Court then determines whether that state's statute of limitations for the cause of action at issue is shorter than Kentucky's. Finally, if the accrual state's statute of limitations is shorter than Kentucky's, the Court applies the statute of limitations of the accrual state. If the accrual state's statute of ...

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