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AIG Property Casualty Co. v. P & P Construction, Inc.

United States District Court, E.D. Kentucky, Southern Division, Pikeville

January 2, 2019

P & P CONSTRUCTION, INC., Defendant.



         This 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 GRANTED.


         This 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 balance.

(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).

         After P & 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.


         A 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 marks omitted)).

         III. ANALYSIS

         A. Procedural Posture of the Case

         Before 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).

         As a 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.

         B. Breach of Contract ...

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