Adkins v. Shelter General Insurance Company

Filing 195

OPINION & ORDER: DENYING dft's 152 MOTION to Strike 129 Third Amended Complaint. Signed by Judge Karen K. Caldwell on 3/16/15.(KJR)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISIION
AT LEXINGTON
KAYLA ADKINS,

CIVIL ACTION NO. 5:12-173-KKC

Plaintiff,
V.

OPINION AND ORDER

SHELTER MUTUAL INS. CO.,
Defendant.

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This matter is before the Court on the motion (DE 152) by the Defendant Shelter
Mutual Insurance Company to strike the third amended complaint filed by the plaintiff
Kayla Adkins.
In October 2008, Adkins was in an automobile accident. She was 17 years old at the
time. The accident was caused by Anthony Mason, who was insured by defendant Shelter.
Because Adkins was a minor, Shelter approached her mother about resolving the
claim. Shelter paid Adkins’ mother $500. In return, Adkins’ mother signed an
“Indemnifying Release,” by which she agreed to hold Shelter and Mason harmless for any
claim resulting from Kayla’s injury and to reimburse Shelter and Mason if any litigation
should arise from Kayla’s injuries. The release purported to “fully settle[] and discharge[]
all claims” against Shelter and Mason. (DE 82-4, Release.) No party sought court approval
of the settlement. Adkins alleges that Shelter did not conduct a reasonable investigation to
determine if $500 was a fair or reasonable settlement amount.
In 2009 – after Adkins reached 18 years of age – Adkins retained counsel and filed
suit against Mason. Adkins alleges that Shelter refused to negotiate this claim and instead

alleged that the release signed by her mother barred the action. The parties eventually
settled Adkins’ 2009 claim for $12,000.
In 2012, Adkins filed this action against Shelter. In her second amended complaint,
Adkins asserted two claims: a claim under Kentucky’s Unfair Claims Settlement Practices
Act (“UCSPA”), KRS § 304.12-230 and a common law bad faith claim. (DE 1-7, Second
Amended Complaint.) Among other things, Adkins asserted that Shelter wrongly attempted
to resolve her claim for $500; failed to obtain court approval of the settlement; and used the
$500 settlement as the basis for its refusal to negotiate the 2009 lawsuit she filed as an
adult.
After discovery in this action and prior to the deadline for motions to amend
pleadings, Adkins moved to amend her complaint to assert nine additional claims against
Shelter. She sought to add claims for violation of the Kentucky Consumer Protection Act,
KRS § 367.110, et seq.; fraud in the inducement; fraud; negligence/gross negligence;
negligent

misrepresentation;

negligent

training

and

supervision;

intentional

misrepresentation; intentional infliction of emotional distress; and violation of the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq.
Shelter objected to the motion to amend, arguing that it was unduly delayed and
prejudicial and that most of the claims were futile. The Court found no undue delay or
prejudice. As to futility, however, the Court found that Adkins’ assertion of common law
bad faith and intentional infliction of emotion distress claims and her claims for violations
of the KCPA and RICO were futile. Accordingly, the Court granted Adkins’ motion to
amend with respect to her fraud in the inducement, fraud, negligence/gross negligence,
negligent

misrepresentation,

negligent

training

and

supervision,

and

intentional

misrepresentation claims but denied the motion to add the four claims that the Court had

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determined were futile. The Court ordered Adkins to file a third amended complaint “in
conformity” with the opinion.
Adkins filed a revised third amended complaint (DE 129). Shelter points out that
the revised complaint contains 12 paragraphs that the tendered amended complaint did not
contain. Shelter argues that certain of these new paragraphs assert that this Court made
several “holdings” in its ruling on the motion to amend that the Court did not make.
The sole remedy that Shelter seeks is an order striking the amended complaint in its
entirety. “According to the case law of this circuit, the ‘action of striking a pleading should
be used sparingly by the courts.’” Anderson v. United States, 39 F. App’x 132, 135 (6th Cir.
2002) (quoting Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th
Cir. 1953)). “It should be ‘resorted to only when required for the purpose of justice’ and
when ‘the pleading to be stricken has no possible relation to the controversy.” Id.
The Court agrees that including assertions about this Court’s prior “holdings” in the
factual background of the third amended complaint is an unusual practice. Furthermore,
when denying a portion of Adkins’ motion to amend and ordering the filing of a new
complaint “in conformity” with the order, the Court did not envision that the new complaint
would contain additional factual allegations except those necessitated by the deletion of the
futile counts.
Nevertheless, the Court does not find the drastic remedy of striking the complaint is
warranted. To the extent that Adkins’ assertions regarding this Court’s holdings are
incorrect, Shelter has a remedy under the civil rules. It can simply deny them in its answer.
Further, the parties’ representations regarding this Court’s holdings will have no
significance in this proceeding. The Court is aware of its prior holdings. Thus, no party will
gain any advantage by misrepresenting them.

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For these reasons, the Court hereby ORDERS that Shelter’s motion to strike (DE
152) the third amended complaint is DENIED.
Dated March 16, 2015.

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