United States District Court, E.D. Kentucky, Northern Division, Covington
MEMORANDUM OPINION & ORDER
L. Banning United States District Judge.
Family Dollar, Inc. (“Family Dollar”) moves to
dismiss Plaintiff Katherine Jones's Complaint, arguing
that she has failed to state claims upon which relief can be
granted. (Doc. # 6). Specifically, Family Dollar contends
that Plaintiff's tort claim is barred by the statute of
limitations and that Kentucky law does not support
Plaintiff's bad-faith claim. The Motion to Dismiss is
fully briefed (Docs. # 8 and 9) and ripe for review. The
Court has jurisdiction over this matter pursuant to 28 U.S.C.
FACTUAL AND PROCEDURAL BACKGROUND
15, 2015, Plaintiff slipped and fell at Family Dollar in
Florence, Kentucky. (Doc # 1-1 at 2). Plaintiff alleges that
her fall was caused by Family Dollar's failure to clean
up or caution customers about the wet floor. Id.
Plaintiff claims that on the day of the fall, a Family Dollar
employee took her information and that the manager on duty
filed a claim regarding the incident with Sedgwick, who
Plaintiff alleges insures Family Dollar. Id. at 3.
Since June 15, 2015, Plaintiff claims that she has made
diligent efforts to follow up on the claim, including
multiple attempts to reach Sedgwick by phone, mail, and
email. Id. Plaintiff alleges that her matter was
passed to at least three different claims agents, that her
messages went unreturned, and that her requests for
supervisor contact information were disregarded. Id.
Plaintiff claims that she injured both her wrist and back
during the fall, and that she incurred and is still incurring
medical bills due to complications from her injuries.
March 2, 2017, Plaintiff filed the instant action in Boone
County Circuit Court, asserting claims for premises liability
and bad faith against Family Dollar and Sedgwick
(collectively “Defendants”). (Doc. # 1-1 at 2-3).
Specifically, Plaintiff claims that Family Dollar had a duty
to exercise reasonable care to protect Plaintiff when she was
on Family Dollar's premises, and that Family Dollar
breached that duty. Id. at 4. Plaintiff's
bad-faith claim arises out of the Unfair Claims Settlement
Practices Act (“UCSPA”). Ky. Rev. Stat. Ann.
§ 304.12-230. Plaintiff claims that both Family Dollar
and Sedgwick had an obligation “to investigate and
resolve Plaintiff's claim in a timely and thorough
manner” and that “Defendants have failed to meet
this obligation through delay, obfuscation, and failure to
communicate with the Plaintiff in a timely manner regarding
her claim.” (Doc. 1-1 at 4).
March 24, 2017, Sedgwick, with the consent of Family Dollar,
removed this action to federal court pursuant to 28 U.S.C.
§ 1441(a). (Doc. # 1). On March 25, 2017, Family Dollar
moved to dismiss Plaintiff's Complaint. (Doc. # 6).
Family Dollar claims that Plaintiff has failed to state a
claim upon which relief can be granted for two reasons: (1)
the statute of limitations bars Plaintiff's
premises-liability claim, and (2) Kentucky law prohibits
bad-faith claims under the UCSPA against an entity, like
Family Dollar, who is not engaging in the business of
entering into contracts of insurance. (Doc. # 6-1 at 4-6).
Standard of Review
survive a Rule 12(b)(6) Motion to Dismiss, “a complaint
must contain sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly v. Bell Atl. Corp., 550 U.S. 544, 570
(2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. “[A]
formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 55. While
the court must accept all allegations contained in the
complaint as true, the court need not accept “as true
unwarranted factual inferences, or legal conclusions
unsupported by well-pleaded facts.” Terry v. Tyson
Farms, Inc., 604 F.3d 272, 276 (6th Cir. 2010).
Choice of Law
considering the issues raised in Family Dollar's Motion
to Dismiss, the Court must determine which State's law
governs. As a federal court sitting in diversity, this Court
must apply the choice-of-law rules of the forum state.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941). Therefore, Kentucky choice-of-law rules
govern. Kentucky courts strongly favor Kentucky law and apply
“Kentucky substantive law whenever
possible.” Harris Corp. v. Comair, Inc.,
712 F.2d 1069, 1071 (6th Cir. 1983). The first step in the
choice-of-law analysis is to identify the substantive area of
law from which the instant claim arises. See Petro v.
Jones, No. 6:11-CV-00151-GFVT, 2013 WL 756756, at *7
(E.D. Ky. Feb. 27, 2013) (citing Miller Truck Lines, LLC
v. Cent. Refrigerated Serv., Inc., 781 F.Supp.2d 488,
491 (W.D. Ky. 2011)). If the claim sounds in tort, the Court
applies the significant contact test, which requires a court
to apply Kentucky law “if there are significant
contacts-not necessarily the most significant contacts-with
Kentucky.” Foster v. Leggett, 484 S.W.2d 827,
829 (Ky. 1972); see also Saleba v. Schrand, 300
S.W.3d 177, 181 (Ky. 2009).
the parties do not address the choice-of-law issue in their
briefs, they apparently all believe that Kentucky law
applies, and the Court agrees. In tort actions, “the
occurrence of an accident in Kentucky is, by itself,
sufficient” to meet the significant contact test and
justify the application of Kentucky law. Harris, 712
F.2d at 1071. Here, the significant contact test is
satisfied. Plaintiff's accident, which gave rise to the
instant action, occurred in Florence, Kentucky, and the
Complaint states that all events mentioned occurred in
Kentucky. (Doc # 1-1 at 2). Accordingly, the strong
preference for applying Kentucky law and the existence of
significant contacts with Kentucky, dictate that Kentucky law
governs this dispute.