Myers et al v. Agrilogic Insurance Services, LLC et al

Filing 22

MEMORANDUM OPINION & ORDER: (1) Defendant's renewed Motion to Dismiss DE 4 , 17 is DENIED. (2) Within 21 days parties shall meet to discuss the possibilities for a prompt settlement or resolution ot the case, to arrange for disclosures, and to develope a proposed discovery plan. (3) Within 10 days after the meeting the parties shall file a joint status report. Signed by Judge Joseph M. Hood on 1/17/2019.(JJ)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON

DARREL L. MYERS, et al.,

)
)
Plaintiffs,
)
)
v.
)
)
AGRILOGIC INSURANCE SERVICES, )
LLC, et al.
)
)
Defendants.
)
)
)

Civil Case No.
14-cv-227-JMH

MEMORANDUM OPINION & ORDER

***
In

response

to

the

Court’s

Order

of

July

5,

2017,

Defendants have filed a status report [DE 17] indicating that
they wish to renew the issue raised in their Motion to Dismiss
[DE

4]

that

the

Court

has

not

yet

substantively

addressed.

Plaintiffs have responded [DE 20], stating that they have no
objection to litigating those issues at this time.
Plaintiffs aver that they suffered loss of their tobacco
and corn crops on July 25, 2012, due to wind and hail damage.
Defendant

AgriLogic

Insurance

Services,

LLC

(“Agrilogic”),

denied the claim on May 9, 2013. The case at bar was filed on
May 7, 2014, in the Nicholas Circuit Court and removed to this
Court on June 10, 2014.

The Court has already determined and

the Court of Appeals has affirmed the decision that Plaintiffs’
breach

of

contract

claim

against

Agrilogic

is

barred

by

application of the one year statute of limitations set forth in
Section 16 of the Policy at bar in this case (“If you do enter
suit

against

us,

you

must

do

so

within

12

months

occurrence causing loss or damage.”) [DE 10, 11, 13].

of

the

The Court

of Appeals has reversed and remanded the Court’s decision to
dismiss

Plaintiff’s

claim

for

bad

faith

under

the

Kentucky

Unfair Claims Settlement Practices Act (“UCSPA”) on the grounds
that the Court prematurely determined that the claim should be
dismissed for failure to state a claim without discovery.
In its renewed Motion to Dismiss [DE 4, 17], Defendants
argue, first, that the one-year statute of limitations set forth
in Section 16 of the Policy also bars Plaintiffs’ claim for bad
faith in violation of the UCSPA.

They next argue that any claim

for bad faith in violation of the UCSPA is barred because the
statute of limitations has run on Plaintiffs’ breach of contract
claim against Agrilogic Insurance Services, LLC, as determined
by

this

Court,

such

that

they

cannot

insurer is obligated to pay their claim.

demonstrate

that

the

See Wittmer v. Jones,

864 S.W.2d 885, 890 (Ky. 1993) (explaining that an obligation to
pay a claim is an element of a cause of action under the UCSPA).
The courts of this district have, however, uniformly held
that a bad faith cause of action in which the allegation is that
the

insurance

company

wrongfully

denied

an

insured’s

claim

cannot accrue until the denial of the claim under Kentucky law
2

and

that,

when

applied

to

a

bad

faith

claim,

a

one

year

contractual limitation provision in an insurance policy like the
one in this case – which runs from the occurrence of a loss as
opposed to the denial of coverage – is inconsistent with KRS §
304.14-370.

See Price v. AgriLogic Ins. Servs., LLC, 37 F.

Supp. 3d 885, 897 (E.D. Ky. 2014); Howard v. Allstate Ins. Co.,
No. CIV.A. 5:14-173-DCR, 2014 WL 5780967, at *5 (E.D. Ky. Nov.
5, 2014); Barjuca v. State Farm Fire & Cas. Co., No. 5:11-CV380-JMH-REW, 2013 WL 6631999, at *9–10 (E.D. Ky. Dec. 17, 2013);
Memorandum Opinion & Order, Tennant v. Allstate, 6:04-cv-000054KKC, DE 28 (E.D.Ky. Oct. 4, 2005).
declined

to

limitations
claims.

enforce
to

Id.

that

similar
in

this

Applying

if
case

this

Thus, these courts have
not

identical

with

respect

logic,

the

to

Court

contractual
bad
will

faith
deny

Defendant’s motion to dismiss the UCSPA claim simply because the
breach of contract claim was untimely under the contractually
defined limitations period.
The

courts

in

this

district

have

also

determined

that,

under Kentucky law, a bad faith claim against an insurer under
the UCSPA does not fail as a matter of law simply because any
claim for breach of contract against the insurer is barred by
the

applicable

running

of

the

statute

of

limitations.

See

Price, 37 F. Supp. 3d at 897–98; Barjuca, 2013 WL 6631999 at *9–
10; Tennant v. Allstate Ins. Co., No. 04–cv–54–, 2006 WL 319046,
3

at *7-8 (E.D. Ky. Feb. 10, 2006); see also Elliott v. Liberty
Mut. Fire Ins. Co., No. CIV. 09-178-GFVT, 2010 WL 3294417, at
*2–3 (E.D. Ky. Aug. 19, 2010) (same in context of third-party
bad

faith

claim

against

tortfeasor’s

insurance

carrier

where

breach of contract claim was barred by statute of limitations).
Again, applying the logic announced by these courts in highly
similar

if

not

identical

situations,

the

Court

will

deny

Defendant’s motion to dismiss the UCSPA claim on this ground, as
well.
Accordingly, IT IS ORDERED:
(1) that Defendant’s renewed Motion to Dismiss [DE 4, 17]
is DENIED.
Pursuant Fed. R. Civ. P. 16 and 26, IT IS FURTHER ORDERED:
(2)
service

That, within twenty-one (21) days from the date of
of

this

Order,

the

parties,

by

counsel,

shall

meet,

either in person or by telephone, to discuss the nature and
basis of their claims and defenses and the possibilities for a
prompt settlement or resolution of the case, to make or arrange
for the disclosures required by Fed. R. Civ. P. 26(a)(1), as
amended December 1, 2010, and to develop a proposed discovery
plan.

See Fed. R. Civ. P. 26(f), as amended December 1, 2015.

(3)

that

within

ten

(10)

days

after

the

parties shall file a joint status report containing:
(a)

the discovery plan;
4

meeting

the

(b)

in

formulating

their

plan,

the

parties

should

consider the concerns described in Fed. R. Civ. P. 26(b)(1), as
amended December 1, 2015, as well as the Court’s belief that
discovery should last between three and five months.
(c)

the parties' estimate of the time necessary to

file pretrial motions;
(d)

the parties' estimate as to the probable length

(e)

the dates mutually convenient for trial;

(f)

the parties' decision as to whether the action

of trial;

may be referred to a United States magistrate judge for trial
pursuant to 28 U.S.C. § 636(c); and
(g)
resolution

of

the
the

parties’
case

may

determination

as

be

mediation

aided

by

to

whether
or

the

other

special procedures as authorized by statute or local rule.
Each party is directed to advise the Court at the time of
the submission of the joint report of all parent corporations,
subsidiaries, affiliates, members and/or partners with which it
is associated.
If Plaintiffs do not wish to pursue this claim further,
they should advise the Court by filing a request to voluntarily
dismiss the matter.
This the 17th day of January, 2019.

5

6