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Wolz v. Auto Club Property-Casualty Insurance Co.

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

March 31, 2017



          Thomas B. Russell, Senior Judge.

         This matter is before the Court upon Defendant Auto Club Property-Casualty Insurance Co.'s motion for summary judgment. [DN 14.] Plaintiff Joseph Wolz has responded, [DN 15], and Auto Club has replied, [DN 16]. Fully briefed, Auto Club's motion is ripe for adjudication. For the following reasons, that motion [DN 14] is GRANTED.

         I. Facts and Procedural History

         The relevant facts are undisputed. Plaintiff Joseph Wolz was riding a motorcycle on Highway 44 in Bullitt County, Kentucky, when Danny Catlett, also on a motorcycle, pulled out in front of him. [DN 1-2 at 2.] To avoid colliding with Catlett, Wolz laid his motorcycle down, causing him significant injury. [Id.] Allstate, Catlett's insurer, offered Wolz its policy limits of $50, 000.00. [Id.]

         Wolz's motorcycle was insured by Progressive, but his policy did not provide underinsured motorist (UIM) benefits. [DN 14-3 at 1-2.] Wolz did, however, own five other vehicles, each insured by Auto Club. See [DN 14-4.] The policy provides $100, 000.00 UIM coverage per vehicle, for a total stacked UIM coverage of $500, 000.00. [Id. at 4-8.] Wolz notified Auto Club of Allstate's offer of policy limits and informed Auto Club that he would be making a UIM claim against his Auto Club policy. [DN 1-2 at 2.] Auto Club denied UIM coverage under the owned-but-not-insured (also known as the “owned-but-not-scheduled”) exclusion, discussed below.

         Wolz filed suit against Auto Club in state court, seeking to recover UIM benefits as well as for Auto Club's alleged bad faith in denying his claim. See [id.] Auto Club removed the suit to this Court. [DN 1.] The Court stayed proceedings pending the outcome of a Kentucky Supreme Court case that appeared to be directly on point, Philadelphia Indemnity Insurance Co. v. Tryon, 502 S.W.3d 585 (Ky. 2016). [DN 8.] After that court handed down its decision, Auto Club moved for summary judgment. [DN 14.] Wolz responded, [DN 15], and Auto Club replied, [DN 16].

         II. Standard of Review

         Summary judgment is appropriate when the record, viewed in the light most favorable to the nonmoving party, reveals “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). A genuine dispute of material fact exists where “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The Court “may not make credibility determinations nor weigh the evidence when determining whether an issue of fact remains for trial.” Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014) (citing Logan v. Denny's, Inc., 259 F.3d 558, 566 (6th Cir. 2001); Ahlers v. Schebil, 188 F.3d 365, 369 (6th Cir. 1999)). “The ultimate question is ‘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.'” Back v. Nestlé USA, Inc., 694 F.3d 571, 575 (6th Cir. 2012) (quoting Anderson, 477 U.S. at 251-52).

         As the party moving for summary judgment, Auto Club must shoulder the burden of showing the absence of a genuine dispute of material fact as to at least one essential element of each of Wolz's claims. Fed.R.Civ.P. 56(c); see Laster, 746 F.3d at 726 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Assuming Auto Club satisfies its burden of production, Wolz “must-by deposition, answers to interrogatories, affidavits, and admissions on file-show specific facts that reveal a genuine issue for trial.” Laster, 746 F.3d at 726 (citing Celotex Corp., 477 U.S. at 324).

         III. Discussion

         A. Underinsured Motorist Coverage

         Kentucky's Motor Vehicle Reparations Act (MVRA) supplies the Commonwealth with “a comprehensive motor-vehicle insurance system.” Philadelphia Indemnity Ins. Co. v. Tryon, 502 S.W.3d 585, 588 (Ky. 2016) (citing KRS 304.39-010). Among other things, the MVRA requires “drivers to purchase a baseline level of motor-vehicle liability insurance, ” and “addresses other forms of coverage incidental to the mandatory liability coverage.” Id. (citing KRS 304.39-110).

         Pertinent to this case is a type of coverage called underinsured motorist coverage. The MVRA defines an underinsured motorist as “a party with motor vehicle liability insurance coverage in an amount less than a judgment recovered against that party for damages on account of injury due to a motor vehicle accident.” KRS 304.39-320(1). “Insurers are required to make UIM coverage ‘available upon request to its insureds, ' but ‘subject to the terms and conditions of such coverage not inconsistent with this section.'” Tryon, 502 S.W.3d at 588 (quoting KRS 304.39-320(2)) (emphasis removed). In other words, by the terms of KRS 304.39-320(2), “UIM coverage [is] optional, supplemental insurance.” Id.

         In contrast, insurers may not exclude a similar but distinct category of coverage, uninsured motorist (UM) benefits. The applicable statute ...

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