Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Willowbrook Investments, LLC v. Maryland Casualty Co.

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

June 27, 2018

WILLOWBROOK INVESTMENTS, LLC, Plaintiff,
v.
MARYLAND CASUALTY COMPANY, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          David J. Hale, Judge United States District Court.

         In April 2012, a fire destroyed several units in an apartment building owned by Plaintiff Willowbrook Investments, LLC. (Docket No. 1-1) At the time of the fire, Willowbrook held an apartment owner's insurance policy issued by Defendants Maryland Casualty Company, Zurich American Insurance Company, and Farmers Insurance. (Id.) Willowbrook brought this action against Defendants seeking to recover under the policy for the costs it incurred rebuilding the damaged apartments. (Id.) Defendants have filed a motion for judgment on the pleadings, arguing that Willowbrook's contract claim is untimely because it was not brought within two years of the date of the physical loss as required by the policy. (D.N. 14; D.N. 14-1) Willowbrook responds that the two-year contractual limitation is unenforceable because it contravenes public policy and violates Ky. Rev. Stat. § 304.14-370. (D.N. 15) For the reasons explained below, Defendants' motion will be granted in part and denied in part.

         I. BACKGROUND

         The following facts are set out in the complaint and accepted as true for purposes of the present motion. See Hill v. Blue Cross & Blue Shield of Mich., 409 F.3d 710, 716 (6th Cir. 2005).

         In December 2011, Defendants[1] issued to Willowbrook an apartment owner's insurance policy. (D.N. 1-1, PageID # 9-10) Under the policy, Defendants agreed to indemnify Willowbrook for losses it sustained on its property as a result of fire. (Id., PageID # 10) In April 2012, while the policy was in effect, a fire destroyed nine units in the apartment building. (Id.) Willowbrook notified Defendants of the loss, and Defendants paid Willowbrook “for the depreciated cost of the damage” to the building. (Id.) However, Willowbrook was unable to rebuild the apartments until December 2016 due to “delays caused by governmental agencies in granting the necessary building permits.” (Id.) After the rebuild was complete, Willowbrook requested payment for additional costs it incurred rebuilding the apartments. (Id.) Defendants denied the request. (Id.)

         Willowbrook filed this action against Defendants in state court, alleging that Defendants breached the insurance policy and refused to pay in bad faith. (Id., PageID # 11) Defendants removed the action to this Court. (D.N. 1) They have filed a motion for judgment on the pleadings, arguing that Willowbrook's contract claim is untimely and that the bad-faith claim must be dismissed as derivative of the contract claim. (D.N. 14-1) Willowbrook contends that the two-year contractual limitation in the policy is unenforceable because it was impossible under the circumstances to file suit within two years of the fire. (D.N. 15)

         II. STANDARD

         A motion for judgment on the pleadings pursuant to Rule 12(c) is subject to the same standard as a motion to dismiss for failure to state a claim under Rule 12(b)(6). CoMa Ins. Agency, Inc. v. Safeco Ins. Co., 526 Fed.Appx. 465, 467 (6th Cir. 2013) (citing Wee Care Child Ctr., Inc. v. Lumpkin, 680 F.3d 841, 846 (6th Cir. 2012)). Thus, to survive a motion for judgment on the pleadings, “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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To meet this standard, a plaintiff must “plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A complaint whose “well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct” does not satisfy the Federal Rules' pleading requirements and will not withstand a motion for judgment on the pleadings. Id. at 679; see also CoMa Ins. Agency, 526 Fed.Appx. at 467. As is the case with a motion to dismiss, for purposes of a motion for judgment on the pleadings, the Court is required to “accept all the [plaintiff's] factual allegations as true and construe the complaint in the light most favorable to the [plaintiff].” Hill, 409 F.3d at 716.

         III. ANALYSIS

         Willowbrook asserts claims against Defendants for breach of contract and bad faith pursuant to Kentucky's Unfair Claims Settlement Practices Act. (D.N. 1)

         A. Breach of Contract

         The policy provided: “No one may bring a legal action against us under this insurance unless . . . [t]here has been full compliance with all of the terms of this insurance; and . . . [t]he action is brought within 2 years after the date on which the direct physical loss or damage occurred.” (D.N. 14-2, PageID # 228; see also D.N. 1-1, PageID # 71)[2] The fire destroyed Willowbrook's apartments on April 11, 2012, but Willowbrook did not file this suit until July 24, 2017. (D.N. 1-1, PageID # 6-7, 10) Defendants argue that Willowbrook cannot prevail on a contract claim because it failed to file suit within two years of the fire as required by the policy. (D.N. 14-1, PageID # 220-22)

         In the event of loss, the policy gave Defendants the option to pay the value of the damaged property, pay the cost of replacing the damaged property, take the property at an appraised value, or rebuild the property. (D.N. 1-1, PageID # 71) In this case, Defendants opted to pay the cost of replacing the apartments. (D.N. 16, PageID # 248; D.N. 15, PageID # 232) But under the policy, Defendants would not pay the replacement cost “[u]ntil the lost or damaged property [was] actually repaired or replaced.” (D.N. 1-1, PageID # 72) The complaint alleges that “[d]ue to delays caused by governmental agencies in granting the necessary building permits, ” Willowbrook did not complete the rebuild until December 22, 2016. (Id., PageID # 10) Because it was not entitled to payment until December 2016, more than two years after the fire, Willowbrook argues that it was “impossible under the given circumstances” to file suit within two years in accordance with the two-year contractual limitation. (D.N. 15, PageID # 233) Willowbrook maintains that if it had filed suit within two years of the fire, the suit “would have been dismissed as premature” because Willowbrook did not yet have the legal right to demand payment under the policy. (Id., PageID # 235)

         Under Kentucky law, “the terms of an insurance contract must control unless [they] contraven[e] public policy or a statute.” York v. Ky. Farm Bureau Mut. Ins. Co., 156 S.W.3d 291, 294 (Ky. 2005) (alterations in original) (quoting Meyers v. Ky. Med. Ins. Co., 982 S.W.2d 203, 209 (Ky. Ct. App. 1997)). Willowbrook argues that the two-year contractual limitation in the policy ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.