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Cline v. Allstate Insurance Co.

United States District Court, E.D. Kentucky, Southern Division, London

December 15, 2014

ALLEN D. CLINE, and MARSHA E. CLINE, Plaintiffs,


DANNY C. REEVER, District Judge.

The Court considers the parties' cross-motions for summary judgment. Plaintiffs contend that summary judgment in their favor is appropriate because no rational trier of fact can find for the defendant on whether Plaintiffs committed civil arson or fraud, whether Defendant is entitled to punitive damages, and whether defendant is liable under the applicable insurance policy at issue. D.E. 58 at 5-6. Defendant contends that it is entitled to summary judgment as to Plaintiffs' claims of bad faith, claimed violations of the Kentucky Unfair Claims Settlement Practices Act ("UCSPA"), request for punitive damages, and what it characterizes as the undisputed incendiary nature of the fire. D.E. 41.

Having fully considered the record and applicable law, the Court denies Plaintiffs' motion, and grants Defendant's motion.


Plaintiffs filed this action following the destruction of their house and all personal property therein by fire on or about January 13, 2013. D.E. 1-1 at 1. It is undisputed that, at the time of the fire, Plaintiffs' home and personal property contained therein were insured pursuant to a policy issued by Defendant. The fire completely destroyed the home. Defendant concedes that Plaintiffs presented a "Sworn Statement in Proof of Loss" form. Defendant elected to deny Plaintiff's claim, and communicated that denial by letter dated May 22, 2013. See D.E. 41-3 at 9. Defendant relied upon the policy's exclusion for "intentional or criminal acts of or at the direction of any insured person" and an exclusion for concealment or misrepresentation of material fact or circumstance by any insured. Id. at 9-10. Defendant's claims handler, Marion Richard Read, Jr., indicates, by sworn affidavit, that

the claim was denied based upon Allstate's contention that the evidence developed during its investigation demonstrated that a sudden and accidental direct physical loss by fire at the loss location did not occur, and that the investigative evidence demonstrated that all three elements of the civil arson defense existed, which included an incendiary or set fire, motive on the part of an insured, and an opportunity to have set the fire or direct another to set the fire. Furthermore, it was Allstate's contention as a result of its investigative findings that an insured person, Mr. Cline, misrepresented and concealed material facts and circumstances regarding the subject loss and the details surrounding the cause of the fire, and the parties responsible for setting the fire, also supporting Allstate's decision to deny the payment of the claim.

D.E. 41-3 at 2.

In September 2013, Plaintiffs filed a Complaint against Defendant in Wayne Circuit Court. D.E. 1-1 at 1. Plaintiffs claim breach of contract by Defendant's failure to pay under the policy and that Defendant acted in bad faith and in violation of the UCSPA, entitling them to punitive damages. Id. at 2. Defendant has asserted several defenses and counterclaims for civil arson, fraud, and punitive damages. D.E. 4. The case was timely removed to this Court.

The parties debate certain facts and circumstances concerning the fire. Defendant claims that its investigation reveals that Plaintiffs were motivated to rid themselves of their home so they could move away for various reasons. Defendant's theory is that Plaintiff Jeff Cline asked his son-in-law, Jeff Harp, to set fire to the home, and that he did so while Plaintiffs were away in Indiana. Defendant contends that opportunity to set the fire is established by the fact that Plaintiffs' home alarm system was activated before they left their home and all doors and windows were secured, but the alarm monitoring company received no alert or alarm, which Defendant construes as meaning that whomever set the fire (which Defendant claims was intentional), did so with some input from Plaintiffs to avoid triggering the alarm. Of course, Plaintiffs dispute Defendant's theory as to motive and opportunity. As revealed below, resolution of these factual issues is not necessary to the Court's decision herein.


Summary judgment is appropriate when "the movant shows 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); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Chao v. Hall Holding Co., 285 F.3d 415, 424 (6th Cir. 2002). A dispute over a material fact is not "genuine" unless a reasonable jury could return a verdict for the nonmoving party. That is, the determination must be "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The party moving for summary judgment bears the burden of showing that no genuine issue of material fact exists. CenTra, Inc. v. Estrin, 538 F.3d 402, 412 (6th Cir. 2008).

However, once the moving party has met its burden of production, its opponent must "do more than simply show that there is some metaphysical doubt as to the material facts." Sigler v. Am. Honda Motor Co., 532 F.3d 469, 483 (6th Cir. 2008) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). Instead, the nonmoving party must present "significant probative evidence [of a genuine dispute]... to defeat the motion for summary judgment." Chao, 285 F.3d at 424. The nonmoving party cannot simply rely upon the assertions in its pleadings. It must come forward with probative evidence, such as sworn affidavits, to support its claims. Celotex, 477 U.S. at 324. In deciding whether to grant summary judgment, the Court views all the facts and inferences drawn from the evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587.

When reviewing cross-motions for summary judgment, the Court must evaluate each motion on its own merits and view all facts and inferences in the light most favorable to the nonmoving party. See Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991). In Taft Broadcasting, the Sixth Circuit pointed out that, on cross-motions for summary judgment, "the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose ...

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