United States District Court, E.D. Kentucky, Southern Division, London
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE UNITED STATES DISTRICT COURT.
matter is before the Court pursuant to two Motions for
Summary Judgment, one filed by Plaintiff GuideOne Elite
Insurance Company (DE 39) and the other filed by Defendant
Landmark Sprinkler, Inc. (DE 53). For the following reasons,
Plaintiff's motion is GRANTED IN PART
and DENIED IN PART, and Defendant's
motion is DENIED.
2013, Landmark Sprinkler, Inc. (“Landmark”)
performed an annual inspection of the dry sprinkler system at
Laurel Heights Home for the Elderly (“Laurel
January 8, 2014, water discharged from a ruptured sprinkler
head that was connected to the dry sprinkler system, causing
water damage to the Laurel Heights facility. Laurel
Heights' insurer, GuideOne, alleges that it paid
restoration costs of $607, 442.29 according to the terms and
provisions of Laurel Heights's insurance policy. (DE 39-1
at 2). In this subrogation action, GuideOne seeks to recover
the restoration costs from Landmark on grounds of negligence,
negligent misrepresentations, and breach of contract. (DE 1).
The Court considers the parties' arguments regarding
summary judgment below.
judgment is proper “if the movant shows 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). The moving party bears the initial burden and must
identify “those portions of the pleadings...which it
believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986) (internal citation omitted).
the movant meets the initial burden, the opposing party
“must set forth specific facts showing that there is a
genuine issue for trial.” Fed.R.Civ.P. 56(e). In the
Court's consideration of the motion, “the evidence
should be viewed in the light most favorable to the
non-moving party.” Ahlers v. Schebil, 188 F.3d
365, 369 (6th Cir. 1999) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505 (1986)).
parties have invoked the diversity jurisdiction of the Court,
meaning the substantive law of the Court's forum state,
Kentucky, will apply. See State Auto Property and Cas.
Ins. Co. v. Hargis, 785 F.3d 189, 195 (6th
Plaintiff GuideOne's Motion for Partial Summary Judgment
GuideOne seeks partial summary judgment on damages, arguing
that Landmark has failed to rebut its expert witness
regarding the reasonable cost of restoring the Laurel Heights
facility. (DE 39-1). In addition, GuideOne seeks dismissal of
several affirmative defenses originally pled in
Landmark's answer. Id. The motion is granted in
part and denied in part.
Kentucky Supreme Court has upheld two distinct types of
damages in injury-to-property cases: (1) diminution in fair
market value of the property when the injury is permanent;
and (2) reasonable restoration costs when the injury is
temporary. Ellison v. R&B Contracting, Inc., 32
S.W.3d 66, 69 (Ky 2000). Kentucky courts generally determine
whether an injury is permanent or temporary by comparing the
two potential damage figures. See Worldwide Equipment
Enterprises, Inc. v. Broan-Nuton LLC,191 F.Supp.3d 684,
687-88 (E.D. Ky. 2016). But when there is no evidence of fair
market value, the correct measure of damages is reference to
the reasonable restoration costs. See Arch Ins. Co. v.
Broan NuTone, LLC,509 Fed.Appx. 453, 461
(6th Cir. 2012); see also WorldWide Equipment
Enterprises, Inc., 191 F.Supp.3d at 690-91 (“[I]f
the defendants choose not to present any evidence of
diminution in value, then the presumption is that the
diminution in value is equal to the replacement
costs”). Finally, the Kentucky Supreme ...