United States District Court, W.D. Kentucky, Louisville
MEMORANDUM OPINION & ORDER
B. Russell, Senior Judge
matter is before the Court upon a motion (DN 44) by the
Defendant, State Farm Mutual Automobile Insurance Company
(“State Farm”), for reconsideration regarding
this Court's Memorandum Opinion & Order (DN 43)
granting Plaintiff's motion to remand and denying Bob
Dotson Insurance Agency's (the “Agency”)
motion to dismiss as moot. Plaintiff, Lance Wright, has
responded (DN 47) and State Farm has filed its reply (DN 48).
Fully briefed, this matter is ripe for review and for the
following reasons, State Farm's motion for
reconsideration is GRANTED.
action arises from an automobile accident in which Plaintiff
suffered a fractured pelvis and several other injuries. (DN
1-2 at 4). Plaintiff filed his Complaint against
State Farm and the Bob Dotson Insurance Agency, Inc. (the
“Agency”) in Jefferson Circuit Court, alleging
violations of the Kentucky Consumer Protection Act, the
Kentucky Unfair Claims and Settlement Practices Act, common
law bad faith, breach of contract, fraudulent
misrepresentation, and civil conspiracy. Plaintiff claims
that “State Farm and the Bob Dotson Insurance Agency,
and in furtherance of a civil conspiracy, withheld
information from Mr. Wright and his counsel that he was
actually insured under multiple insurance policies affording
him tens, if not hundreds, of thousands of dollars in
coverage.” (DN 10 at 2-3).
November 21, 2018, State Farm removed this action under
diversity jurisdiction. Because the Plaintiff and the Agency
are both citizens of Kentucky, there is no diversity on the
face of the Complaint. But State Farm argues that “the
Kentucky citizenship of Agent Dotson should be ignored under
fraudulent joinder because Wright failed to assert a
colorable claim against Agent Dotson.” (DN 13 at 4). On
September 25, 2019, this Court granted Plaintiff's motion
to remand. The Court found that Plaintiff had stated a
colorable bad faith claim against the Agency. Now before the
Court is Defendant's timely filed motion for
reconsideration. Upon careful consideration of the
parties' submissions and being otherwise sufficiently
advised, State Farm's motion for reconsideration is
the Federal Rules of Civil Procedure do not provide expressly
for "motions for reconsideration," courts generally
construe such motions as motions to alter or amend a judgment
under Rule 59(e). E.g., Moody v. Pepsi-Cola Metro.
Bottling Co., 915 F.2d 201, 206 (6th Cir. 1990);
Taylor v. Colo. State Univ., 2013 U.S. Dist. LEXIS
52872, 2013 WL 1563233, at *8-9 (W.D. Ky. Apr. 12, 2013). The
Sixth Circuit has consistently held that a Rule 59 motion
should not be used either to reargue a case on the merits or
to reargue issues already presented, see Whitehead v.
Bowen, 301 Fed.Appx. 484, 489 (6th Cir. 2008) (citing
Sault Ste. Marie Tribe of Chippewa Indians v.
Engler, 146 F.3d 367, 374 (6th Cir. 1998)), or otherwise
to "merely restyle or rehash the initial issues,"
White v. Hitachi, Ltd., 2008 U.S. Dist. LEXIS 25240,
2008 WL 782565, at *1 (E.D. Tenn. Mar. 20, 2008) (internal
quotation marks and citation omitted). "It is not the
function of a motion to reconsider arguments already
considered and rejected by the court." Id.
(citation omitted). As another district court in this Circuit
put it, "Where a party views the law in a light contrary
to that of this Court, its proper recourse is not by way of a
motion for reconsideration but appeal to the Sixth
Circuit." Hitachi Med. Sys. Am., Inc. v.
Branch, 2010 U.S. Dist. LEXIS 73664, 2010 WL 2836788, at
*1 (N.D. Ohio July 20, 2010) (internal quotation marks and
citations omitted). Accordingly, the Sixth Circuit instructs
that a motion for reconsideration should only be granted on
four grounds: "Under Rule 59, a court may alter or amend
a judgment based on: '(1) a clear error of law; (2) newly
discovered evidence; (3) an intervening change in controlling
law; or (4) a need to prevent manifest injustice.'"
Leisure Caviar, LLC v. U.S. Fish & Wildlife
Serv., 616 F.3d 612, 615 (6th Cir. 2010) (quoting
Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th
Cir. 2005)). Furthermore, because there is an interest in the
finality of a decision, this Court and other district courts
have held that "[s]uch motions are extraordinary and
sparingly granted." Marshall v. Johnson, 2007
U.S. Dist. LEXIS 29881, 2007 WL 1175046, at *2 (W.D. Ky. Apr.
19, 2007) (citing Plaskon Elec. Materials, Inc. v.
Allied-Signal, Inc., 904 F.Supp. 644, 669 (N.D. Ohio
1995)); accord Rottmund v. Cont'l Assurance Co.,
813 F.Supp. 1104, 1107 (E.D. Pa. 1992).
correct a clear error of law and to prevent manifest
injustice, the Court must grant State Farm's motion to
reconsider. In its Opinion granting remand, the Court stated
that Davidson v. American Freightways, Inc., 25
S.W.3d 94 (Ky.2004) is the most persuasive authority on this
matter and that “Davidson sends conflicting signals and
creates ambiguity on the issue of which ‘persons'
can be sued for bad faith under the UCSPA.” (DN 43 at
10). Davidson is controlling on this matter but the
interpretation expressed in the Court's Opinion is
incorrect and contrary to the interpretation previously
espoused by this Court, uniformly adopted by courts in the
Western District of Kentucky, and affirmed by the Sixth
circuit Court of Appeals. For this reason, the Court grants
State Farm's motion to reconsider.
Daugherty v. Am. Express Co., this Court explained:
Plaintiff's response to Defendants' motion argues
privity of contract is not the sole basis by which Defendants
may be held liable, and that Defendants were engaged in the
business of insurance for purposes of his bad faith claims.
In support of his claim, Plaintiff cites to two cases:
Davidson, 25 S.W.3d at 95, and Western Leasing, Inc. v.
Acordia of Ky., Inc., No. 2008-CA-002237-MR, 2010 Ky.
App. LEXIS 81, 2010 WL 1814959, at *9 (Ky. Ct. App. May 7,
The portion to which Plaintiff cites in Davidson states:
“We conclude that both the statute and the common law
tort apply only to persons or entities engaged in the
business of insurance . . . .” 25 S.W.3d at 95.
Plaintiff argues that Defendants were engaged in the business
of insurance, and can therefore be held liable. However,
Plaintiff's narrow interpretation of Davidson is
incomplete. The Kentucky Supreme Court stated that “the
UCSPA was clearly intended to regulate the conduct of
insurance companies.” Id. at 96. Plaintiff
ignores the Kentucky Supreme Court's statement that there
must be a contractual obligation. Id. at 100
(“The gravamen of the UCSPA is that an insurance
company is required to deal in good faith with a claimant,
whether an insured or a third party, with respect to a claim
which the insurance company is contractually obligated to
pay.” (emphasis in original)).
In Western Leasing, the Kentucky Court of Appeals considered
a case in which the trial court had determined that insurance
brokers were not “engaged in the business of
insurance” as that term is applied in the UCSPA. 202
Ky. App. LEXIS 81, 2010 WL 1814959 at *9. The Kentucky Court
of Appeals held that an insurance broker is an agent of the
insured, and insureds are not subject to the UCSPA.
Id. Plaintiff argues that this case supports his
argument that Defendants may be held liable because they were
engaged in the business of insurance, and were not insureds.
The Kentucky Court of Appeals in Western Leasing also noted,
however, that “[l]anguage in Davidson, while dicta,
further suggests that only persons ‘entering into
contracts of insurance' may be considered to be engaged
in the ‘business of insurance.'” Id.
(citing Davidson, 25 S.W.3d at 98; Accord Ky. Nat. Ins.
Co. v. Shaffer, 155 S.W.3d 738, 742 (Ky. Ct. App. 2004
(“[W]e find compelling the Court's unequivocally
firm holding [in Davidson] that, in the absence of a
contractual obligation to pay, there can be no action for bad
faith.”) Accordingly, the Court finds that Western
Leasing does not support Plaintiff's claim.
The Sixth Circuit has also acknowledged that privity is
necessary for liability under Kentucky common law bad faith
claims. See Torres v. Am. Employers Ins. Co., 151
Fed.Appx. 402, 410 (6th Cir. 2005) (“A proper synthesis
of these cases produces an undeniable understanding that
Kentucky common law bad faith arises in the insurance context