United States District Court, E.D. Kentucky, Northern Division, Ashland
MEMORANDUM OPINION AND ORDER
R. WILHOLT UNITED STATES DISTRICT JUDGE.
matter is before the Court upon Owners Insurance
Company39;s and Frontier Housing, Inc.39;s cross motions
for summary judgment [Docket Nos. 22 and 24]. The motion has
been fully briefed by the parties [Docket Nos. 24-1, 25, 26,
27 and 28] and for the reasons stated herein, the Court finds
that Owners Insurance Company is entitled to summary judgment
and does not owe Frontier Housing Inc. a duty to defend or
indemnify as to the claims asserted against Frontier Housing
Inc. by Stephen Burton and Pamela Burton.
case arises from a construction contract between Defendants
Frontier Housing, Inc. ("Frontier") and Stephen and
Pamela Burton ("The Burtons") for the construction
of their home in West Liberty, Kentucky. The original
contract set the price of constriction around $200, 000.
However, a result of alleged change orders and upgrades, the
legitimacy of which are hotly contested by the Burtons, the
ultimate price of the construction was upwards of $400, 000.
According to Frontier, the Burtons owe it $250, 000.
According to the Burtons, they owe Frontier about $17, 000.
matter resulted in litigation. On December 10, 2014, Frontier
filed a mechanics lien against the Burton39;s property.
Subsequently, Frontier filed its breach of contract action in
the Morgan Circuit Court against Stephen Burton and Pamela
Burton, styled Frontier Housing Inc., v. Stephen Burton
and Pamela Burton, Commonwealth of Kentucky, Morgan
Circuit Court, Civil Action No. 15-CI-0062.
response to the Complaint filed against them, the Burtons
asserted a counterclaim against Frontier, alleging breach of
contract, negligent misrepresentation, negligent infliction
of emotional distress, fraud, forgery, intentional
misrepresentation, intentionally filing Mechanics and
Materialman39;s Lien based on false information, the
intentional infliction of emotional distress, intentional
violations of the Kentucky Consumer Protection Act KRS
§§ 367.110, et. seq., the tortuous breach of
contract and abuse of process and slander of title.
Insurance Company ("Owners") issued a commercial
policy of general liability insurance Policy No. 52454382,
("Policy") to Frontier, which was in effect from
October 2014 to October 2015. [Docket No. 24-3].
10, 2015, counsel for Frontier, John Ellis, sent a letter to
Plaintiff giving notice of the Burtons39; claim against
Frontier presented in Counterclaim.
August 18, 2015, Owners advised Frontier that it intended to
provide a defense under a reservation of rights but also
advised that some or all of the allegations contained in the
Counterclaim may not be covered under the policy.
Specifically, Owners asserted that the alleged
misrepresentations by Frontier, as well as other intentional
acts, are not covered under the policy it issued to Frontier.
to that policy, Owners filed this declaratory judgment
action, seeking a judicial determination as to whether it
owes a duty of defense or indemnity to Frontier for the
Owners and Frontier seek summary judgment.
a defense or coverage is owed under an insurance policy is a
question of law. The basic principles governing the
interpretation of an insurance policy as well established.
Clear an unambiguous terms must be construed according to the
"plain and ordinary" meaning. Ambiguities are to be
construed in favor of the insured, yet there is no
requirement that every doubt be resolved against the insurer.
Further, a court may not enlarge or restrict coverage under
the guise of contract construction; exceptions and exclusions
should be construed to make insurance ...