Salyers et al v. State Farm Fire and Casualty Co.
Filing
7
MEMORANDUM OPINION & ORDER: GRANTING dft's 5 MOTION for Summary Judgment. Signed by Judge Joseph M. Hood on 7/22/14.(KJR)cc: COR,pla (US Mail), Modified text on 7/22/2014 (KJR).
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
MICHAEL AND CATHY SALYERS,
Plaintiffs,
v.
STATE FARM FIRE AND CASUALTY
CO.,
Defendant.
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Civil Case No. 14-cv-143-JMH
MEMORANDUM OPINION AND ORDER
***
This matter is before the Court upon Defendant State Farm
Fire
and
Casualty
Judgment [DE 5].
Co.’s
(“State
Farm”)
Motion
for
Summary
The time for a response has expired, see LR
7.1(c), and Plaintiffs have filed no objections.
Accordingly,
the Court considers the facts asserted in the Motion for Summary
Judgment and Memorandum in Support to be undisputed.
Further,
this Court will grant summary judgment in favor of Defendant as
the motion and supporting materials, including the undisputed
material facts, show that Defendant is entitled to relief.
I.
A fire occurred at Plaintiffs Michael and Cathy Salyers’
home at 109 Combs Street, Jackson, Breathitt County, Kentucky,
on or about October 30, 2011.
Following the fire, Plaintiffs
made a claim with State Farm under a fire loss insurance policy
issued to them, number 17-BJ-F525-4, which provided coverage for
the
loss,
including
coverage
for
the
dwelling
(Coverage
A),
coverage for the personal property of the Plaintiffs (Coverage
B), and coverage for living expenses of the Plaintiffs for a
period of time during which the Plaintiffs arranged alternative
housing
or
replaced
the
insured
premises.
(Coverage
C).
Plaintiffs' claims for benefits under Coverage A and Coverage B
were paid to the Plaintiffs and are not in dispute.
The only
dispute arises out of State Farm’s payment of benefits under
Coverage C.
Coverage C of the policy provides as follows:
1. Additional Living Expense. When a Loss
insured causes the residence premises to
become uninhabitable, we will cover the
necessary increase in cost your incur to
maintain your standard of living for up to
24 months. Our payment is limited to
incurred costs for the shortest of: (a) the
time required to repair or replace the
premises; (b) the time required for your
household to settle elsewhere; or (c) 24
months. This coverage is not reduced by the
expiration of this policy.
Following
the
presentation
of
the
Plaintiffs'
claim
for
these living expenses under Coverage C, State Farm began making
payments
and
determined
reconstruction
of
the
that
a
Plaintiffs'
reasonable
premises
period
would
be
for
the
through
January 6, 2013. The Plaintiffs were notified by letter from
State
Farm,
dated
July
30,
2012,
that
the
living
expenses
payable under Coverage C would therefore expire on January 6,
2
2013,
leaving
thereafter.
them
responsible
$41,306.71
in
for
benefits
any
were
expenses
paid
to
incurred
Plaintiffs
under Coverage C for living expenses through January 6, 2013.
No payments for living expenses after January 6, 2013 were made.
On February 6, 2014, the Plaintiffs filed the subject suit
alleging that the State Farm policy required payments to be made
for the full twenty-four (24) months following the loss and
should not have been terminated on January 6, 2013.
In its
Motion for Summary Judgment, Defendant argues that Plaintiffs’
claims
are
barred
under
the
policy’s
contractual
limitations
clause which provides that, with respect to suits against the
insurer,
“no
compliance
action
with
the
shall
be
policy
brought
unless
provisions.
The
there
action
has
been
must
be
started within one year after the date of loss or damage.”
For the reasons which follow, the Court agrees and shall
grant summary judgment in favor of Defendant.
II.
This
Court
“shall
grant
summary
judgment
if
the
movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). On motions for summary judgment, courts
resolve all reasonable inferences in favor of the non-moving
party and focus their inquiry on the pivotal issue of “whether
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the
evidence
presents
a
sufficient
disagreement
to
require
submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.”
Anderson v. Liberty
Lobby, Inc. 477 U.S. 242, 251-52 (1986); Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
When the
“record taken as a whole could not lead a rational trier of fact
to find for the non-moving party, there is no genuine issue for
trial”
and
summary
judgment
is
appropriate.
Matsushita
Elec.
Indus. Co., 475 U.S. at 587 (quotation marks and citation in
original omitted).
III.
The question before this Court is whether, as a matter of
law, the contractual limitations clause contained in the subject
insurance policy is enforceable and whether it bars Plaintiffs’
claims in this matter.
the
applicable
law,
On the undisputed facts and in light of
the
Court
concludes
that
the
one
year
limitations clause is enforceable and that Plaintiff’s claim is
barred by the application of the limitations clause and the
passage of time as set forth below.
Substantive Kentucky law applies in this diversity case.
Hanover Ins. Co. v. Am. Eng’g Co., 33 F.3d 727, 730 (6th Cir.
1994) (citing Miller's Bottled Gas, Inc. v. Borg–Warner Corp.,
955 F.2d 1043, 1049 (6th Cir. 1992); Nat Harrison Assoc., Inc.
v. Louisville Gas & Elec. Co., 512 F.2d 511, 513 (6th Cir.
4
1975)).
Under Kentucky law, the “the construction of insurance
contract provisions comprise questions of law for the court,
unless disputed facts are involved.”
Id. (citing Perry's Adm'x
v. Inter–Southern Life Ins. Co., 71 S.W.2d 431, 433 (Ky. 1934)).
Further, the terms and conditions of a contract of insurance
control
the
contractual
relationship
between
the
insurer
and
insured, absent contravention of public policy or statute. See
Meyers v. Kentucky Med. Ins. Co., 982 S.W.2d 203, 209-10 (Ky.
Ct. App. 1997) (quoting Cheek v. Commonwealth Life Ins. Co., 126
S.W.3d 1084, 1089 (1939)).
In this instance, no one disputes that the parties entered
into a contract containing a one-year limitation on actions,
measured from the time of loss.
Further, on the facts before
it, the Court concludes that the one-year limitation term in the
contract is enforceable.
insurance
companies
in
See, e.g., KRS 304.14-370 (permitting
Kentucky
to
include
coverage
terms
setting a limitations period of no less than one (1) year);
Smith v. Allstate Ins. Co., 403 F.3d 401, 404 (6th Cir. 2005)
(citing Edmondson v. Penn. Nat’l Mut. Cas. Ins. Co., 781 S.W.2d
753, 756 (Ky. 1989); Webb v. Ky. Farm Bureau Ins. Co., 577
S.W.2d
17,
18–19
(Ky.
Ct.
App.
1978))
(“Contract
provisions
limiting the time within which an insured may sue are generally
valid under Kentucky law.”).
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Next the Court considers the impact of the application of
the one-year limitations period in light of the undisputed facts
(1) that the subject claim arises from a fire at the Plaintiffs'
home on October 30, 2011, (2) that State Farm terminated living
expenses payments under the coverage as of January 6, 2013, and
(3) that Plaintiffs’ suit was commenced in Breathitt Circuit
Court no earlier than February 6, 2014.
This matter was filed
out of time if the Court calculates the limitations period from
the date of the fire, which is the only loss averred in this
action.
Further, even if Plaintiffs could persuade the Court
that their cause of action accrued at some later date, including
the date that living expenses were terminated, for example, the
matter would be time barred under the contractual limitation.
More than two years passed after the damage caused by the fire
and more than one year passed after payments for additional
living expenses under Coverage C were terminated before this
suit was commenced.
As the contract’s own terms bar the suit before the Court,
the Court will dismiss Plaintiffs’ claims and enter judgment in
favor of Defendant.
Accordingly,
IT
IS
ORDERED
Summary Judgment [DE 5] is GRANTED.
6
that
Defendant’s
Motion
for
This the 22nd day of July, 2014.
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