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Wright v. Grange Mutual Casualty Co.

United States District Court, Western District of Kentucky, Louisville

March 23, 2015

JAMES MICHAEL WRIGHT, PLAINTIFF
v.
GRANGE MUTUAL CASUALTY COMPANY DEFENDANT

MEMORANDUM OPINION

CHARLES R. SIMPSON III, SENIOR JUDGE UNITED STATES DISTRICT COURT

This matter is before the Court on the motion of Defendant Grange Mutual Casualty Co. (“Grange”) for summary judgment (DN 26). For the following reasons, the Court will grant Grange’s motion. Plaintiff James Michael Wright’s Complaint (DN 1-4) will be dismissed with prejudice.

I. BACKGROUND

Plaintiff owned and operated U.S. Tobacco Outlet in Brandenburg, Kentucky. (Compl., DN 1-4, ¶ 1.) U.S. Tobacco Outlet was a smoke shop that sold tobacco products and accessories, along with other consumer goods. (Compl., DN 1-4, ¶ 7.) Plaintiff maintained property insurance for his business under a Commercial Package Policy issued by Grange. (Certified Policy, DN 26-5.)

On July 2, 2011, a fire engulfed U.S. Tobacco Outlet, destroying the building and its contents. (Compl., DN 1-4, ¶ 9.) After the fire, Grange began investigating the cause and extent of Plaintiff’s loss. Grange suspected that Plaintiff intentionally burned his business to recover under the insurance policy.

While pursuing the insurance claim, Plaintiff repeatedly modified the amount of his loss. On September 6, 2011, Plaintiff asserted a total loss of $509, 175.32 in his initial sworn statement in proof of loss (DN 26-18). Plaintiff then signed a second sworn statement in proof of loss (DN 26-30) on April 25, 2012, reducing the total loss to only $232, 238.00. Finally, on March 23, 2013, Plaintiff raised the total loss to $414, 623.16 in a third sworn statement in proof of loss (DN 26-47). Plaintiff, through counsel, also provided an itemized list to substantiate this last figure. (Settlement Demand, DN 26-48.)

As part of its investigation, Grange reviewed Plaintiff’s financial records and other relevant documentation. Plaintiff also submitted to an extensive examination under oath. During the examination, Grange questioned Plaintiff on the value of his property loss and his potential involvement in setting the fire.

On July 1, 2013, Plaintiff filed this lawsuit in Meade County Circuit Court. (Compl., DN 1-4.) First, Plaintiff alleges that Grange breached the insurance contract by refusing to pay his claim. (Compl., DN 1-4, Ct. I.) Second, Plaintiff alleges that Grange’s refusal to pay his claim constituted bad faith under the common law, the Kentucky Consumer Protection Act (“KCPA”), KRS 367.170, and the Kentucky Unfair Claims Settlement Practices Act (“KUCSPA”), KRS 304.12-230. (Compl., DN 1-4, Cts. II–IV.)

On July 25, 2013, Grange removed the case to this Court, basing subject matter jurisdiction solely on diversity of citizenship. (Notice of Removal, DN 1.) On August 8, 2013, Grange formally denied Plaintiff’s insurance claim based on the policy’s provisions regarding “concealment, misrepresentation, or fraud” and “intentional acts.” (Denial of Claims, DN 26-57.) Grange now calls upon this Court to grant summary judgment in its favor on all of Plaintiff’s claims.

II. STANDARD

The Court shall grant summary judgment if “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). The party seeking summary judgment bears the initial burden of explaining the basis of its motion and demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). That burden may be satisfied only by “citing to particular parts of materials in the record” or “showing that the materials cited do not establish the . . . presence of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). Should the movant meet its burden, the nonmoving party may not simply rest on its prior pleadings; it must produce further evidence showing a genuine issue for trial. Celotex, 477 U.S. at 324.

When considering a motion for summary judgment, the Court must view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). Even so, the nonmoving 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). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “The mere existence of a scintilla of evidence in support of the [nonmoving party’s] position will be insufficient . . . .” Id. at 252.

III. DISCUSSION

A. Breach of Contract


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