United States District Court, E.D. Kentucky, Central Division, Lexington
DARREL L. MYERS, et al., Plaintiffs,
AGRILOGIC INSURANCE SERVICES, LLC, et al. Defendants.
MEMORANDUM OPINION & ORDER
M. HOOD, SENIOR U.S. DISTRICT JUDGE.
response to the Court's Order of July 5, 2017, Defendants
have filed a status report [DE 17] indicating that they wish
to renew the issue raised in their Motion to Dismiss [DE 4]
that the Court has not yet substantively addressed.
Plaintiffs have responded [DE 20], stating that they have no
objection to litigating those issues at this time.
aver that they suffered loss of their tobacco and corn crops
on July 25, 2012, due to wind and hail damage. Defendant
AgriLogic Insurance Services, LLC (“Agrilogic”),
denied the claim on May 9, 2013. The case at bar was filed on
May 7, 2014, in the Nicholas Circuit Court and removed to
this Court on June 10, 2014. The Court has already determined
and the Court of Appeals has affirmed the decision that
Plaintiffs' breach of contract claim against Agrilogic is
barred by application of the one year statute of limitations
set forth in Section 16 of the Policy at bar in this case
(“If you do enter suit against us, you must do so
within 12 months of the occurrence causing loss or
damage.”) [DE 10, 11, 13]. The Court of Appeals has
reversed and remanded the Court's decision to dismiss
Plaintiff's claim for bad faith under the Kentucky Unfair
Claims Settlement Practices Act (“UCSPA”) on the
grounds that the Court prematurely determined that the claim
should be dismissed for failure to state a claim without
renewed Motion to Dismiss [DE 4, 17], Defendants argue,
first, that the one-year statute of limitations set forth in
Section 16 of the Policy also bars Plaintiffs' claim for
bad faith in violation of the UCSPA. They next argue that any
claim for bad faith in violation of the UCSPA is barred
because the statute of limitations has run on Plaintiffs'
breach of contract claim against Agrilogic Insurance
Services, LLC, as determined by this Court, such that they
cannot demonstrate that the insurer is obligated to pay their
claim. See Wittmer v. Jones, 864 S.W.2d 885, 890
(Ky. 1993) (explaining that an obligation to pay a claim is
an element of a cause of action under the UCSPA).
courts of this district have, however, uniformly held that a
bad faith cause of action in which the allegation is that the
insurance company wrongfully denied an insured's claim
cannot accrue until the denial of the claim under Kentucky
law and that, when applied to a bad faith claim, a one year
contractual limitation provision in an insurance policy like
the one in this case - which runs from the occurrence of a
loss as opposed to the denial of coverage - is inconsistent
with KRS § 304.14-370. See Price v. AgriLogic Ins.
Servs., LLC, 37 F.Supp.3d 885, 897 (E.D. Ky. 2014);
Howard v. Allstate Ins. Co., No. CIV.A.
5:14-173-DCR, 2014 WL 5780967, at *5 (E.D. Ky. Nov. 5, 2014);
Barjuca v. State Farm Fire & Cas. Co., No.
5:11-CV-380-JMH-REW, 2013 WL 6631999, at *9-10 (E.D. Ky. Dec.
17, 2013); Memorandum Opinion & Order, Tennant v.
Allstate, 6:04-cv-000054-KKC, DE 28 (E.D.Ky. Oct. 4,
2005). Thus, these courts have declined to enforce similar if
not identical contractual limitations to that in this case
with respect to bad faith claims. Id. Applying this
logic, the Court will deny Defendant's motion to dismiss
the UCSPA claim simply because the breach of contract claim
was untimely under the contractually defined limitations
courts in this district have also determined that, under
Kentucky law, a bad faith claim against an insurer under the
UCSPA does not fail as a matter of law simply because any
claim for breach of contract against the insurer is barred by
the applicable running of the statute of limitations. See
Price, 37 F.Supp.3d at 897-98; Barjuca, 2013 WL
6631999 at *9- 10; Tennant v. Allstate Ins. Co., No.
04-cv-54-, 2006 WL 319046, at *7-8 (E.D. Ky. Feb. 10, 2006);
see also Elliott v. Liberty Mut. Fire Ins. Co., No.
CIV. 09-178-GFVT, 2010 WL 3294417, at *2-3 (E.D. Ky. Aug. 19,
2010) (same in context of third-party bad faith claim against
tortfeasor's insurance carrier where breach of contract
claim was barred by statute of limitations). Again, applying
the logic announced by these courts in highly similar if not
identical situations, the Court will deny Defendant's
motion to dismiss the UCSPA claim on this ground, as well.
IT IS ORDERED:
that Defendant's renewed Motion to Dismiss [DE 4, 17] is
Fed.R.Civ.P. 16 and 26, IT IS FURTHER
That, within twenty-one (21) days from the date of service of
this Order, the parties, by counsel, shall meet, either in
person or by telephone, to discuss the nature and basis of
their claims and defenses and the possibilities for a prompt
settlement or resolution of the case, to make or arrange for
the disclosures required by Fed.R.Civ.P. 26(a)(1), as amended
December 1, 2010, and to develop a proposed discovery plan.
See Fed. R. Civ. P. 26(f), as amended December 1,
that within ten (10) days after the meeting the parties shall
file a joint status report containing:
(a) the discovery plan;
(b) in formulating their plan, the parties should consider
the concerns described in Fed.R.Civ.P. 26(b)(1), as amended
December 1, 2015, as well as the Court's belief that