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National Union Fire Insurance Company of Pittsburgh v. Bowling Green Recycling LLC

United States District Court, W.D. Kentucky, Bowling Green Division

December 19, 2017

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA PLAINTIFF
v.
BOWLING GREEN RECYCLING LLC, et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          Greg N. Stivers, Judge

         This matter is before the Court on Plaintiff's Motion for Partial Summary Judgment (DN 52)[1], and Defendants' Motion for Summary Judgment (DN 53). For the reasons outlined below, Plaintiff's Motion for Partial Summary Judgment on its claim of conversion is GRANTED IN PART and DENIED IN PART, and Defendants' Motion for Summary Judgment is DENIED.

         I. STATEMENT OF FACTS AND CLAIMS

          Belden, insured by Plaintiff National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union” or “Plaintiff”), is a corporation that designs, manufactures, and markets signal transmission solutions for broadcast, enterprise, and industrial applications. (Am. Compl. ¶ 13). At its Tompkinsville and Monticello, Kentucky, plants during the relevant time period, Belden received processed copper and fabricated it into cable. (Am. Compl. ¶ 14; Pl.'s Mem. Supp. Mot. Summ. J. 3, DN 52-1 [hereinafter Pl.'s Mem.]).

         Beginning as early as December 2004 and continuing through 2014, Jimmy Pruitt (“Pruitt”), a Belden manufacturing manager, stole 254 reels of copper from Belden and resold them to three of the defendant entities[2] as “scrap.” (Am. Compl. ¶¶ 15-17, 19; Pl.'s Mem. 3-5).[3]By the time Belden discovered the scheme, Pruitt had stolen $1, 935, 272.15 worth of copper, and one or more Defendants had resold the copper for a profit. (Am. Compl. ¶ 18, 20; Pl.'s Mem. 5). As Belden's insurer, National Union reimbursed the loss and was assigned Belden's claims. (Am. Compl. ¶ 21; Pl.'s Mem. 5).

         National Union then filed this subrogation action against Defendants. Defendants concede that they purchased the stolen copper from Pruitt and that they knew the copper originated from Belden, but maintain that they did not know Pruitt had stolen the copper. (Defs.' Mem. 1-2; Pl.'s Mem. 4-5).[4]

         II. JURISDICTION

         The Court has subject matter jurisdiction under 28 U.S.C. § 1332(a) because there is diversity of citizenship between the parties and the amount in controversy exceeds $75, 000, exclusive of interest and costs.

         III. STANDARD OF REVIEW

         In ruling on a motion for summary judgment, the Court must determine whether there is any genuine issue of material fact that would preclude entry of judgment for the moving party as a matter of law. See Fed. R. Civ. P. 56(a). The moving party bears the initial burden of stating the basis for the motion and identifying evidence in the record that demonstrates an absence of a genuine dispute of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the moving party satisfies its burden, the non-moving party must then produce specific evidence proving the existence of a genuine dispute of fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         While the Court must view the evidence in the light most favorable to the non-moving party, the non-moving party must do more than show the existence of some “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citation omitted). Rather, the non-moving party must present specific facts proving that a genuine factual dispute exists by “citing to particular parts of the materials in the record” or by “showing that the materials cited do not establish the absence . . . of a genuine dispute . . . .” Fed.R.Civ.P. 56(c)(1). “The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient” to overcome summary judgment. Anderson, 477 U.S. at 252.

         IV. DISCUSSION

         A. Plaintiff's Motion for Partial Summary Judgment

         Plaintiff argues that Defendants are liable for conversion under Kentucky law, regardless of whether Defendants knew the copper was stolen. (Pl.'s Mem. 2-3). Conversion is an intentional tort, defined as “the wrongful exercise of dominion and control over the property of another.” Jones v. Marquis Terminal, Inc., 454 S.W.3d 849, 853 (Ky. App. 2014) (citations omitted). In Kentucky, a claim of conversion requires proof of seven elements:

(1) the plaintiff had legal title to the converted property; (2) the plaintiff had possession of the property or the right to possess it at the time of the conversion; (3) the defendant exercised dominion over the property in a manner which denied the plaintiff's rights to use and enjoy the property and which was to the defendant's own use and beneficial enjoyment; (4) the defendant intended to interfere with the plaintiff's possession; (5) the plaintiff made some demand for the property's return which the defendant refused; (6) the defendant's act was the legal cause of the plaintiff's loss of the property; and (7) the plaintiff suffered damage by the loss of the property.

Meade v. Richardson Fuel, Inc., 166 S.W.3d 55, 58 (Ky. App. 2005) (quoting Ky. Ass'n ofCounties All Lines Fund Tr. v. McClendon, 157 S.W.3d 626, 632 n.12 (Ky. 2005)). Defendants dispute whether Plaintiff has met its burden of proof only as to the fourth and sixth elements. (Defs.' Resp. Pl.'s ...


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