Prout v. PRG Real Estate Management, Inc. et al

Filing 27

MEMORANDUM OPINION & ORDER: Motions for S/J of Defendant PRG Real Estate Management 16 and Defendant ESIS Inc 17 are GRANTED. Signed by Judge Joseph M. Hood on 10/09/2014.(lc)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
MARY L. PROUT,

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)
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Plaintiff,
v.
PRG REAL ESTATE
MANAGEMENT, INC. and
ESIS, INC.,
Defendants.

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Action No. 5:13-cv-384-JMH-REW

MEMORANDUM OPINION AND ORDER

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**

This matter is before the Court upon motions for summary
judgment by Defendants PRG Real Estate Management, Inc. [DE 16]
and ESIS, Inc. [DE 17].

Plaintiff filed a consolidated response

to the motions, [DE 21], and the Defendants have filed replies,
[DE 22, 26].

The Court has considered the parties’ arguments

and, for the following reasons, will grant Defendants’ motions
for summary judgment.
I.

BACKGROUND
During

the

relevant

time

period,

Plaintiff

resided

at

Saddlebrook Apartments in Lexington, Kentucky, which was owned
and

operated

(“PRG”).

by

Defendant

PRG

Real

Estate

Management,

Inc.

On July 2, 2012, Plaintiff sustained injuries when she

fell on a sidewalk located at the apartments.

Plaintiff claims

that the sidewalk was unsafe and in a state of disrepair.

After

reporting the incident to PRG, Plaintiff was put into contact
with a representative of ESIS, Inc. (“ESIS”), the third-party
administrator for PRG’s self-insurance plan.

Plaintiff reports

that ESIS repeatedly assured her that they wanted to resolve the
matter without litigation and began paying medical bills as they
were submitted.
of

limitations

On August 13, 2013, after the one-year statute
had

settlement demand.

run,

ESIS

asked

Plaintiff

to

submit

a

She promptly made a demand for $400,000,

which was denied on September 24, 2013.
On October 18, 2013, Plaintiff filed suit in Fayette County
Circuit Court, alleging that PRG was negligent for failing to
maintain its sidewalks and that ESIS violated Kentucky’s Unfair
Claims Settlement Practices Act (“UCSPA”) and engaged in bad
faith through its handling of her claim.1

Defendants removed the

case to this Court on November 11, 2013.
II.

STANDARD OF REVIEW
Summary

judgment

is

appropriate

where

“the

pleadings,

discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c).

“The mere existence of a scintilla of

1

Plaintiff also asserted bad faith claims against PRG but acknowledged in her
response to PRG’s motion for summary judgment that she had no such viable
claims and did not oppose PRG’s motion for summary judgment with respect to
the bad faith claims against it.

2

evidence

in

support

of

the

plaintiff’s

position

will

be

insufficient; there must be evidence on which the jury could
reasonably find for the plaintiff.”

Anderson v. Liberty Lobby,

Inc.,

The

moving

parts

of

477

initial

U.S.

burden

242,
to

252

(1986).

identify

those

establish the absence of a material issue.

party

the

has

record

the
that

Chao v. Hall Holding

Co., Inc., 285 F.3d 415, 424 (6th Cir. 2002).

Once the moving

party has made this showing, the non-moving party is required to
go beyond the pleadings and come forward with specific facts to
demonstrate that there is a genuine issue of fact.
Celotex

Corp.

v.

Catrett,

477

U.S.

317,

324

Id. (citing

(1986)).

In

considering a motion for summary judgment, however, the Court
will draw all reasonable inferences in favor of the non-moving
party.

Liberty Lobby, 477 U.S. at 255.

III. DISCUSSION
A.

ESIS’S Motion For Summary Judgment

In her complaint, Plaintiff averred that ESIS was PRG’s
insurer.
merely

Both ESIS and PRG contend, however, that ESIS was
a

insurance

third-party
program.

claims
In

administrator

support

of

its

for

motion

PRG’s
for

selfsummary

judgment, ESIS filed in the record a “risk management services
agreement,”

dated

Defendants.

The

September
document

11,

outlines
3

2011,
the

and
terms

signed
of

by

both

Defendants’

agreement, making clear that claim payments were the obligation
of

PRG,

not

authenticity

ESIS.
of

the

Plaintiff
contract

has

or

to

failed

to

identify

dispute
any

the

evidence

indicating that ESIS was actually an insurer.2
Kentucky’s Unfair Claims Settlement Practices Act (“UCSPA”)
and

the

tort

of

bad

faith

“apply

only

to

those

persons

or

entities who are ‘engaged . . . in the business of entering into
contracts of insurance.’”

Davidson v. Am. Freightways, Inc., 25

S.W.3d 94, 102 (Ky. 2000) (citing K.R.S. § 304.1-040).

Further,

under Kentucky law, a bad faith claim requires a contractual
obligation to pay a claim under an insurance policy.

Ky. Nat’l

Ins. Co. v. Shaffer, 155 S.W.3d 738, 742 (Ky. Ct. App. 2004);
see also Lisk v. Larocque, 3:07-cv-718-S, 2008 WL 2116466, at *2
(W.D. Ky. May 19, 2008) (finding that Davidson barred bad faith
claim against claims adjuster with no contractual obligation to
pay

claims).

Defendants’

risk

management

services

agreement

demonstrates that ESIS, as PRG’s claims administrator, had no
contractual

obligation

to

make

payment

to

Plaintiff.

2

Generally, when a party fails to object to evidentiary materials submitted
by the opposing party in support of summary judgment, such objections are
deemed waived. Lauderdale v. Wells Fargo Home Mortg., 552 F. App’x 566, 572
(6th Cir. 2014) (citing Wiley v. United States, 20 F.3d 222, 225-26 (6th Cir.
1994)).
Because Plaintiff fails to dispute ESIS’s characterization as a
third-party claims administrator, the Court considers this fact undisputed
for the purposes of these motions.
See Fed. R. Civ. P. 56(e)(2); see also
Plaintiff’s response in opposition to summary judgment, DE 21 at Page ID #
138 (describing ESIS as PRG’s “risk management service”).

4

Additionally, even if the Court viewed the issue in light of
ESIS’s agency relationship with PRG, any bad faith claim is
barred

because

contracts

for

PRG

is

not

insurance.

in

the

See

business

Davidson,

of

25

entering

S.W.3d

into

at

102.

Because there is no genuine question as to whether a contractual
obligation to pay existed, ESIS is entitled to summary judgment.
B.

PRG’S MOTION FOR SUMMARY JUDGMENT
Under

Kentucky

law,

the

statute

negligence claim is one year.
Urban

Cnty.

Gov’t,

331

of

limitations

for

a

Phillips v. Lexington-Fayette

S.W.3d

629,

(citing K.R.S. § 413.140(1)(a)).

634

(Ky.

Ct.

App.

2010)

Here, Plaintiff’s negligence

claim accrued the day she fell and sustained injuries, July 2,
2012.

See Lane v. Richards, 256 S.W.3d 581, 583 (Ky. Ct. App.

2008)

(cause

of

action

accrues

when

claimant

knows,

reasonably should know, that injury has occurred).

or

Plaintiff

suggests, however, that the statute of limitations with respect
to her negligence claim against PRG should be tolled based on
ESIS’s conduct in handling her claim.
Assuming,
Plaintiff
fail.
where

is

but

not

imputed

deciding,

to

PRG,

ESIS’s

Plaintiff’s

conduct

claims

toward

against

PRG

Tolling the statute of limitations is appropriate only
the

plaintiff

defendant
by

his

has

“induced

false

inaction

representations
5

that

on
or

the

part

of

fraudulent

concealment.”

Miller v. Thacker, 481 S.W.2d 19, 22 (Ky. 1972).

The fraudulent action “must be of a character to prevent inquiry
or elude an investigation or otherwise mislead the party having
[a]

cause

of

action,

and

such

party

is

exercise reasonable care and diligence.”

under

the

duty

to

Id. (quoting Burke v.

Blair, 349 S.W.2d 836, 838 (Ky. 1961)) (alteration added).
Plaintiff
following

contends

statements

ESIS

her:

to

that

representatives

“that

they

were

the

made

the

insurance

company for PRG;” that the matter “could be worked out between
[Plaintiff and ESIS] without needing to involve attorneys;” and
“because

of

Medicare

subrogation

and

because

[Plaintiff]

was

still treating, they were unable to discuss settlement of the
personal injury claim.”

Kentucky courts have long held that

plaintiffs

not

generally

representations
claim.

of

do
an

have

adversary

a

when

right

to

pursuing

rely
an

on

the

insurance

See Pospisil v. Miller, 343 S.W.2d 392, 394 (Ky. 1961)

(plaintiff not entitled to rely on representations of insurance
adjuster).

Rather, the court noted, the plaintiff “should have

consulted an attorney, or someone whose interest was not adverse
to

his

omitted).

in

regard
Further,

to
a

the

subject-matter.”

plaintiff

applicable statute of limitations.

6

is

presumed

Id.
to

(citation
know

the

See id.; see also Cuppy v.

Gen. Accident Fire & Life Assurance Corp., 378 S.W.2d 629, 631
(Ky. 1964).
In arguing that the circumstances at hand warrant tolling
the

statute

of

limitations,

Plaintiff

Thacker, 481 S.W.2d 19 (Ky. 1972).
Supreme

Court

stated

that

the

relies

upon

Miller

v.

In Thacker, the Kentucky

relevant

inquiry

was

whether,

considering all of the facts and circumstances, the plaintiff
was

justified

insurance

in

relying

adjuster.

upon

Miller,

the

481

representations

S.W.2d

at

an

Miller

23.

of

is

distinguishable from the instant case in many respects, however.
Miller

involved

a

Mississippi

Kentucky,

implicating

different

statutes

misrepresentations

resident

differing
prescribing

that

the

who

the

plaintiff

injured

of

statutes

was

limitation,

age
was

a

of
minor,

in

majority,
and

the

specific promise that the plaintiff’s plastic surgery would be
covered without respect to timing.

Id. at 20-23.

Plaintiff has

failed to identify any factors to persuade the Court that a
Kentucky court would toll the statute of limitations in the
instant matter.

While the Court takes Plaintiff’s assertions as

true, “mere negotiations looking toward an amicable settlement
do not afford a basis for estoppel to plead the statute of
limitations.”

Id. (citing Cuppy, 378 S.W.2d at 631).

Tolling

the statute of limitations requires “fraudulent action” of such
7

character that it prevents inquiry or eludes investigation or is
otherwise

misleading—plaintiffs

reasonable care and diligence.
S.W.2d

836,

limitations

838
has

(Ky.

have

as

duty

to

exercise

Id. (citing Burke v. Blair, 349

1961)).

expired

a

Accordingly,

to

Plaintiff’s

the

statute

negligence

of

claim

against PRG and summary judgment is appropriate.
C.

EVIDENTIARY ISSUES

Plaintiff requests additional time to conduct discovery,
arguing that ESIS possesses information that impacts the tolling
of the statute of limitations in this matter.
that

pursuant

to

the

scheduling

order,

the

The Court notes
period

for

fact

discovery in this case does not conclude until December 31,
2014.

[See DE 14.]

Before ruling on a motion for summary

judgment, the Court is obliged to provide the parties adequate
time

for

discovery,

which

is

determined

in

light

of

the

circumstances of the case. Plott v. Gen. Motors Corp., 71 F.3d
1190, 1195 (6th Cir. 1995) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 250 n.5 (1986)).

In deciding whether to

defer ruling and grant additional time, one factor the Court
must consider is whether the desired information could change
the outcome of the motion for summary judgment.
1196-97.

See id. at

Since the viability of Plaintiff’s claim against PRG

depends on representations ESIS allegedly made to Plaintiff, the
8

Court is unpersuaded that further discovery would uncover any
information
motions.

that

could

change

the

outcome

of

Defendants’

If ESIS made additional representations upon which

Plaintiff wished to base her claims, she at least could have
made

reference

to

before the Court.

them

in

her

affidavit,

which

is

properly

Ultimately, Plaintiff has not identified any

specific basis for additional discovery and has not established
that the additional facts sought are essential to justify her
opposition,

as

required

by

Federal

Rule

of

Civil

Procedure

56(d).
Defendants object to the Court’s consideration of two of
Plaintiff’s exhibits on the basis that the documents have not
been authenticated.

An affidavit used to support or oppose a

motion for summary judgment must be sworn to by the affiant
before an “officer authorized to administer oaths.”

Worthy v.

Mich. Bell. Tel. Co., 472 F. App’x 342, 343 (6th Cir. 2012)
(quoting Peters v. Lincoln Elec. Co., 285 F.3d 456, 475 (6th
Cir. 2002)).

Declarations may also be used to support or oppose

motions

summary

for

judgment,

but

they

must

be

made

under

penalty of perjury, certified as true and correct, signed, and
dated.
(6th

Id. (citing Pollock v. Pollock, 154 F.3d 601, 612 n.20

Cir.

1998)).

The

Rule

56(d)

affidavit

of

Plaintiff’s

counsel has not been notarized or even signed by Counsel, thus,
9

it

is

not

properly

before

the

Court.

Even

if

the

Court

considered Counsel’s affidavit, however, it does not meet the
requirements of Federal Rule of Civil Procedure 56(d) for the
reasons stated above.
Defendants also contend that the Court should not consider
a

printed

email

exchange

between

Plaintiff

and

ESIS

representative Vincent Caruso because the document has not been
authenticated.

Circumstantial evidence including the context of

the exchange and email addresses that appear in the document
support Plaintiff’s assertion that it is an email exchange that
occurred between Plaintiff and Vincent Caruso, a representative
of ESIS.

Additional support for the document’s authenticity is

found

Plaintiff’s

in

conversations

with

affidavit,

Caruso.

in

which

Ideally,

she

discusses

Plaintiff

would

her
have

provided more direct evidence to demonstrate that the email was
authentic.
Cir. 2013).

See Devbrow v. Gallegos, 735 F.3d 584, 586-87 (7th
The Court notes, however, that at this early stage

of discovery, there is no indication that Plaintiff has had an
opportunity

to

depose

Caruso

or

anyone

else

from

ESIS.

Regardless, Caruso’s purported statement in the email—“we would
like to get this taken care of sooner than later and I will work
with you to see that we can get it done as soon as possible,”—
does not change the Court’s analysis with respect to the statute
10

of limitations.
that

Even considered with the other representations

Plaintiff

alleges,

these

statements

constitute

“negotiations looking toward an amicable settlement” and do not
warrant tolling the statute of limitations.

See Miller, 481

S.W.2d at 22.
IV.

CONCLUSION
For the foregoing reasons, the motions for summary judgment

of

Defendant

PRG,

[DE

16],

and

Defendant

GRANTED.
This the 9th day of October, 2014.

11

ESIS

[DE

17],

are