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Massachusetts Bay Insurance Co. v. Preferred Safety, LLC

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

October 8, 2019

MASSACHUSETTS BAY INSURANCE COMPANY, Plaintiff/Counter-Defendant
v.
PREFERRED SAFETY, LLC, Defendant/Counter-Plaintiff PREFERRED SAFETY, LLC, Third Party Plaintiff,
v.
WHITE & ASSOCIATES INSURANCE AGENCY INC., WHITE & ASSOCIATES INSURANCE WIMBERLY AGENCY, LLC, and JOHN DYER, Third Party Defendants MASSACHUSETTS BAY INSURANCE COMPANY, Plaintiff/Counter-Defendant/Cross-Plaintiff,
v.
WHITE & ASSOCIATES INSURANCE AGENCY, INC., WHITE & ASSOCIATES INSURANCE WIMBERLEY AGENCY, LLC and JON DYER, Third Party Defendants/Cross-Defendant.

          MEMORANDUM OPINION AND ORDER

          Thomas B. Russell, Senior Judge United States District Court

         This matter comes before the Court upon a Motion to Strike filed by Plaintiff/Counter-Defendant Massachusetts Bay Insurance Company (“MBIC”). [DN 27.] Defendant/Counter-Plaintiff, Preferred Safety, (“Preferred”) has responded [DN 30.] MBIC has filed its reply. [DN 33.] As such, this matter is ripe for adjudication and, for the following reasons, IT IS HEREBY ORDERED MBIC's Motion to Strike, [DN 27], is GRANTED.

         I. BACKGROUND

         MBIC is an insurance company located in Kentucky. [Counterclaim ¶ 3.] It issued a Businessowners Policy, No. OD5-D416536-00 (“2017 BOP Policy”), to Preferred for the period of November 13, 2017 to November 13, 2018. [Complaint ¶ 31.] As of September 12, 2018, the policy was amended to include a Commercial Umbrella Policy for the period of September 12, 2018 to November 13, 2018. [Counterclaim ¶30.] MBIC subsequently issued Businessowners Policy No. OD5-D416536-01 to Preferred for the period of November 13, 2018 to November 13, 2019 (“2018 BOP Policy”). [Id.] MBIC filed this action seeking declaration that it owes no duty to defend or indemnify Preferred for the suit against it. [DN 1.]

         Preferred filed a Counterclaim against MBIC alleging: negligence, negligent misrepresentation, fraudulent misrepresentation and inducement, equitable estoppel and promissory estoppel.

         Preferred states that White and Associates Insurance Agency, Inc., White & Associates Insurance Wimberly Agency, LLC, and Jon Dyer (collectively, “White Agency Defendants”) were MBIC agents at all times relevant to the allegations. [Counterclaim ¶ 8-9.] Preferred also asserts that the White Agency Defendants had authority to solicit applications for insurance, receive applications, answer questions, and sell policies. [Id. at ¶11-12.]

         Preferred alleges that, “while White Agency Defendants were acting within the authority as MBIC's agents”, they told Preferred that the policies would cover bodily injury claims arising from Preferred's safety consulting work. [Counterclaim ¶ 23.] Preferred claims the White Agency Defendants made these statements with knowledge that Preferred's work exposed it to bodily injury claims, and knowledge that there was an open claim against Preferred. [Id. at ¶¶ 20-21.] Preferred seeks to recover against MBIC on a theory of vicarious liability. [Id. at ¶¶ 43, 53, 63, 71, 82.] Preferred sought relief in the form of punitive damages, and attorney's fees and costs. Id. at 32.]

         MBIC filed this motion seeking to strike the prayer for punitive damages and attorney's fees. Preferred has withdrawn its prayer for attorney fees so the Court will only address its request for punitive damages. [DN 30 at 2.]

         II. LEGAL STANDARD

         Rule 12(f) allows a court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). A court may strike portions of the pleading acting on its own initiative or “on a motion made by a party . . . before responding to the pleading.” Id. Courts are given considerable discretion in deciding whether to strike portions of pleadings under 12(f). See id.; see also Delta Consulting Group, Inc. v. R. Randle Constr., Inc., 554 F.3d 1133, 1141 (7th Cir. 2009); Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 665 (7th Cir. 1992). However, “the action of striking a pleading should be used sparingly by the courts.” Anderson v. United States, 39 Fed.Appx. 132, 135 (6th Cir. 2002) (quoting Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir. 1953)). It is only to be used “when required for the purposes of justice and the pleading to be stricken has no possible relation to the controversy.” Id. “The function of the motion is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with them early in the case.” Operating Eng'rs Local 324 Health Care Plan v. G&W Constr. Co., 783 F.3d 1045, 1050 (6th Cir. 2015) (citing Kennedy v. City of Cleveland, 797 F.2d 297, 305 (6th Cir. 1986). “A motion to strike may be used to strike any part of the prayer for relief when the damages sought are not recoverable as a matter of law.” Nat'l Inst. For Strategic Tech. Acquisition & Commercialization v. Nissan of N. Am., 2012 U.S. Dist. LEXIS 117941 * 12 (E.D. Mich. Aug. 21, 2012).

         III. DISCUSSION

         MBIC asserts Preferred has not pled any facts to support an award of punitive damages. In support, MBIC has citied case law and a statute that requires proof the employer/principal either authorized, ratified, or should have anticipated the conduct in question before punitive damages are assessed. KRS 411.184(3); Saint Joseph Healthcare, Inc. v. Thomas, 487 S.W.3d 864, 873 (Ky. 2016). In response, Preferred argues it has met the notice requirements imposed by Federal Rule of Civil Procedure 8. Preferred further asserts that the repeated statement in the Counterclaim- “all of the foregoing occurred while MBIC agents White Agency Defendants were acting within the authority as MBIC's agent(s) and/or affiliates”-puts MBIC “on notice” of the claims against it. The Court will first discuss the pleading requirements of Rule 8.

         A. F.R.C.P 8

         F.R.C.P ...


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