United States District Court, E.D. Kentucky, Southern Division, Pikeville
MEMORANDUM OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE
matter is before the Court on Plaintiff AIG's Property
Casualty Insurance Company's motion for summary judgment.
(DE 27). For the following reasons, the motion shall be
dispute arises out of an insurance contract between Plaintiff
AIG and Defendant P & P Construction, Inc. (DE 1 at 2).
On November 1, 2015, AIG issued P & P a workers'
compensation and employers' liability insurance policy,
which was effective from November 1, 2015, to November 1,
2016. Id. The policy specifically provides that all
“premium for this policy will be determined by our
manuals of rules, rates, rating plans and
classifications.” (Id.; see also DE 1-1 at
13). The policy goes on to provide that
[t]he premium shown on the Information Page, schedules, and
endorsements is an estimate. The final premium will be
determined after this policy ends by using the actual, not
the estimated, premium basis and the proper
classifications and rates that lawfully apply to the business
and work covered by this policy. If the final premium is
more than the premium you paid to us, you must pay us the
(DE 1-1 at 13 (emphasis added)). At the beginning of the
policy period, AIG calculated the estimated premium to be
$164, 704, id. at 5, which was eventually reduced to
$141, 378, (DE 1 at 3-4), which P & P paid, id.
at 4. Following the expiration of the policy, in accord with
the terms of the policy, the final premium was determined to
be $433, 600, of which P & P had already paid $141, 378.
(DE 1 at 4; DE 1-1 at 13; DE 1-3). As such, on April 4, 2017,
AIG sent P & P a bill for the remaining amount due of
$292, 222. (DE 1-3). P & P never paid the amount due,
despite AIG's multiple attempts to work with and collect
from P & P. (DE 1 at 5; DE 1-4).
& P failed to pay the liquidated amount due under the
policy, AIG filed this suit for breach of contract and, in
the alternative, unjust enrichment. (DE 1). AIG seeks only to
recover the $292, 222 due under the policy, subject to pre
and post-judgment interest and costs. Id. at 7.
STANDARD OF REVIEW
moving party is entitled to summary judgment pursuant to
Federal Rule of Civil Procedure 56 “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). In order to defeat a summary judgment
motion, “[t]he nonmoving party must provide more than a
scintilla of evidence, ” or, in other words,
“sufficient evidence to permit a reasonable jury to
find in that party's favor.” Van Gorder v.
Grand Trunk W. R.R., Inc., 509 F.3d 265, 268 (6th Cir.
2007) (citing Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 252 (1986)). Summary judgment must be entered if,
“after adequate opportunity for discovery, ” a
party “fails to make a showing sufficient to establish
the existence of an element essential to that party's
case, and on which that party will bear the burden of proof
at trial.” Tolton v. American Biodyne, Inc.,
48 F.3d 937, 940 (6th Cir. 1995) (quoting Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986) (internal quotation
Procedural Posture of the Case
proceeding to the merits of this action, because it is
disputed, the Court must clarify the procedural posture of
this case. Prior to the initiation of this action on August
25, 2017, the owner of P & P, Robert Pugh, filed another
action in the Letcher County Circuit Court. Robert Pugh
v. AIG Property Casualty Company, 17-ci-00226 (filed
July 28, 2017). That action was removed from the Letcher
County Circuit Court to this Court on September 6, 2017.
Robert Pugh v. AIG Property Casualty Company,
7:17-cv-143, (DE 1). Here, P & P argues that this breach
of contract and unjust enrichment case involves claims that
are properly characterized as compulsory counterclaims in
Pugh, which would require the dismissal of this
action in its entirety. (DE 28).
general matter, a compulsory counterclaim is one that at the
time of service the defendant has against the plaintiff,
which arises out of the same “transaction or occurrence
that is the subject matter of the opposing party's
claim.” Fed.R.Civ.P. 13(a)(1). To arise out of the same
transaction or occurrence, it must be the case that
“the issues of law and fact raised by the claims are
largely the same [or] substantially the same evidence would
support or refute both claims.” Sanders v. First
Nat'l Bank & Trust Co. in Great Bend, 936 F.2d
273, 277 (6th Cir. 1991). Here, while the parties are the
same in both this case and Pugh, the cases involve
separate legal bases and factual issues. Pugh is a
negligence action where Pugh alleges that AIG negligently
failed to renew the insurance policy between P & P
Construction and AIG. Pugh, 7:17-cv-143, (DE 1-1 at
8); see also AIG Property Casualty Company v. P & P
Construction, Inc., 7:17-cv-140, (DE 28 at 1 (P & P
construction characterizes the Pugh matter as one
filed in “negligence”)). This case is a breach of
contract and unjust enrichment matter pertaining to P &
P's failure to pay the amount due under the original
insurance policy between P & P and AIG. (DE 1). The legal
and factual questions in these cases raise clear and distinct
issues. As such, it cannot be said that this breach of
contract claim is a compulsory counterclaim to the negligence
claim in Pugh. Sanders, 936 F.2d at 277.
Accordingly, this case proceeds on the merits.
Breach of Contract ...