The Ohio Casualty Insurance Company v. Cox et al
Filing
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MEMORANDUM OPINION & ORDER: IT IS ORDERED that the third-party dfts' 10 MOTION to Dismiss is DENIED without prejudice; IT IS FURTHER ORDERED that pla's 14 MOTION for telephonic sched conference is DENIED without prejudice as premature; third-party dfts shall file answers to third party complaint w/in 20 days of entry of this order. Signed by Judge Jennifer B Coffman on 4/18/2012.(GLD)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
CIVIL ACTION NO. 11-334-JBC
THE OHIO CASUALTY INSURANCE CO.,
V.
PLAINTIFF,
MEMORANDUM OPINION & ORDER
BARBARA COX, et al.,
DEFENDANTS.
**********
Pending before the court is the third-party defendants’ motion to dismiss the
third-party complaint, R.10, and the plaintiff’s motion to schedule telephonic
scheduling conference, R.14. For the reasons stated below, both motions will be
denied.
I. Background
This action arises out of an indemnity agreement, which was allegedly
signed by the defendant Barbara Cox and her late husband David Cox, in which
they both agreed to indemnify the plaintiff, the Ohio Casualty Insurance Company,
against any loss or claim arising out of bonds that were executed on behalf of
David Cox. After receiving notice of approximately $925,954.090 in claims on the
bonds, Ohio Casualty sued Barbara Cox, both individually and as administratrix of
the estate of David Cox, claiming that Ohio Casualty was entitled to
indemnification for those claims.
Cox filed a third-party complaint against Jerry Catlett, David Henry, and
Western Surety Company, alleging that she did not sign the Ohio Casualty
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indemnity agreement; rather, she claims, the signature appearing on the document
as her signature is a forgery. Cox alleges that Catlett and Henry, as witness and
public notary to the signatures on the indemnity agreement respectively, failed to
exercise their duties under Kentucky law. Cox also claims that Western Surety
Company is liable on a bond it posted for Henry as surety that Henry would
faithfully perform his duties as a public notary. Specifically, Cox brings negligence
claims against Catlett and Henry; a claim under KRS 423.010, et seq. against
Henry; and an action to enforce a bond against Western Surety Company. The
third-party defendants now move to dismiss the third-party complaint under Fed. R.
Civ. P. 12(b)(6) for failure to state a claim.
II. Analysis
The third-party defendants’ Fed. R. Civ. P. 12 (b)(6) motion is dually based:
First, they argue that Cox has no plausible claim because Ohio Casualty has not yet
obtained a judgment against her, so her injuries are speculative. Second, the thirdparty defendants allege that Cox cannot establish proximate causation between
their conduct and Cox’s injuries, as required for a negligence claim under Kentucky
law. The court will not dismiss Cox’s claims for relief, however, because they are
“plausible on [their] face.” Ashcroft v. Iqbal, 556 U.S. 662, 884 (2009) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Neither of the third-party defendants’ arguments demonstrates that the thirdparty complaint fails the Twombly plausibility standard. First, Cox’s damages are
not speculative merely because liability has not been determined in the underlying
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action. The third-party defendants have not shown that a ruling in favor of the
plaintiff in the underlying action is a predicate for recovery of damages under all of
the claims in the third-party complaint. Cox seeks damages including pain and
suffering, punitive damages, recovery under the surety bond, statutory damages,
and court costs. The third-party defendants have offered no law to show that the
relief sought could not plausibly be recovered under each of Cox’s claims, including
negligence, violations of KRS 423.010, et seq., and action to enforce bond.
Second, Cox’s complaint does not fail for lack of a showing of causation. In
Kentucky, liability for a negligence claim requires a showing of proximate
causation, see Nunan v. Bennett, 184 Ky. 591, 593-94 (Ky. 1919), but “[t]he
question of proximate cause is a factual one, not a legal one, depending upon
whether the evidence shows that the results of the misconduct are reasonably
foreseeable.” Watts by and Through Watts v. K, S & H, 957 S.W. 2d 233, 239
(Ky. 1997). At this early stage of litigation, it is premature for the court to make a
factual determination that no proximate causation exists between any damages and
the acts of the third-party defendants. Additionally, no legal analysis has been
offered to show why lack of causation in the negligence context would render the
other two causes of action implausible.
The court notes that the third party defendants have raised a common-sense
argument as to why the third-party complaint should be dismissed. The third-party
defendants state that the third-party claims are baseless regardless of whether Cox
is found liable in the underlying action: if Cox signed the agreement, she has no
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claims against the third-party defendants because her signature was found to be
valid, and if Cox did not sign the agreement, then the indemnity agreement is not
enforceable against Cox and thus Cox has no claim for relief against the third-party
defendants. This argument does not address the elements of recovery of all of the
claims brought in the third-party complaint and therefore fails to show that each of
Cox’s claims for relief is implausible.
Accordingly,
IT IS ORDERED that the third-party defendants’ motion to dismiss, R.10, is
DENIED without prejudice.
IT IS FURTHER ORDERED that the plaintiff’s motion to schedule telephonic
scheduling conference, R.14, is DENIED without prejudice as premature, because
after all issues are joined by the filing of answers, the court will direct the parties
to propose a joint written discovery schedule, in which they may seek such a
conference if they cannot agree upon a proposed schedule.
IT IS FURTHER ORDERED that the third-party defendants shall file their
answers to the third-party complaint within 21 days from the date of entry of this
order.
Signed on April 18, 2012
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