Martin & Bayley, Inc. et al v. O'Bryan, Brown & Toner et al

Filing 172

MEMORANDUM OPINION AND ORDER Signed by Judge Justin R. Walker on 1/31/2020 granting 158 Motion for Summary Judgment: The Court DISMISSES WITH PREJUDICE the indemnity, contribution, and apportionment claims filed by USI Insurance Services Nati onal, Inc.; Old National Insurance; and Roland Lehnus (together, Insurance Defendants) against the O'Bryan Brown & Toner Defendants. The Court also DISMISSES WITH PREJUDICE the O'Bryan Brown & Toner Defendants' indemnity, contributi on, and apportionment claims against the Insurance Defendants. Under Rule 56(f), the Court provides notice that it may enter judgment in the Defendants' favor on the unjust enrichment claim filed by Martin & Bayley, Inc. and Acuity (together, "Plaintiffs"). Plaintiffs' deadline for responding to this notice or withdrawing that claim is 2/21/2020. Replies, if any, are due 3/6/2020. The Court ORDERS the parties to participate in a settlement conference in spring 2020 with Magistrate Judge H. Brent Brennenstuhl. cc: Counsel(JM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
MARTIN & BAYLEY, INC., et al.

PLAINTIFFS

v.

CIVIL ACTION NO. 3:15-CV-225-JRW-HBB

O’BRYAN BROWN & TONER PLLC, et al.

DEFENDANTS

ORDER
The Court GRANTS the summary judgment motion (DN 158) filed by O’Bryan Brown &
Toner PLLC and Michael P. Reilly (together, “O’Bryan Brown & Toner Defendants”). The Court
DISMISSES WITH PREJUDICE the indemnity, contribution, and apportionment claims filed
by USI Insurance Services National, Inc.; Old National Insurance; and Roland Lehnus (together,
“Insurance Defendants”) against the O’Bryan Brown & Toner Defendants. The Court also
DISMISSES WITH PREJUDICE the O’Bryan Brown & Toner Defendants’ indemnity,
contribution, and apportionment claims against the Insurance Defendants.
Additionally, under Rule 56(f), the Court provides notice that it may enter judgment in the
Defendants’ favor on the unjust enrichment claim filed by Martin & Bayley, Inc. and Acuity
(together, “Plaintiffs”). Plaintiffs’ deadline for responding to this notice or withdrawing that claim
is February 21, 2020. Replies, if any, are due March 6, 2020.
The Court ORDERS the parties to participate in a settlement conference in spring 2020
with Magistrate Judge H. Brent Brennenstuhl. No later than February 14, 2020, counsel shall
jointly

email

Judge

Brennenstuhl’s

case

manager,

Kelley

[e-mail], to schedule the settlement conference.

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Lovell,

at

MEMORANDUM OPINION
Morgan Bryan Perry slipped and fell at a convenience store owned by Martin & Bayley.
He won a $2.6 million default judgment. Plaintiffs filed this lawsuit after settling with Perry for
$1.8 million.
Plaintiffs blame their former lawyers, the O’Bryan Brown & Toner Defendants, and their
former insurance broker, the Insurance Defendants, for the default judgment and settlement. The
O’Bryan Brown & Toner Defendants and the Insurance Defendants (together, “Defendants”) point
the finger back at Plaintiffs and at each other. Included in all this finger-pointing are the
Defendants’ indemnity, contribution, and apportionment claims against each other.
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Under Kentucky law, a tortfeasor may seek indemnity from another tortfeasor “where both
parties have been in fault, but not in the same fault, towards the party injured, and the fault of the
party from whom indemnity is claimed was the primary and efficient cause of the injury.” Degener
v. Hall Contracting Corp., 27 S.W.3d 775, 780 (Ky. 2000). In other words, a party who bears less
fault (the passive wrongdoer) may seek indemnity from the party who bears more fault (the active
wrongdoer) for the plaintiff’s alleged harm. The Court determines whether indemnity is proper
by comparing the plaintiff’s allegations against the alleged wrongdoers. Id. at 781; see also,
Memorial Sports Complex, LLC v. McCormick, 499 S.W.3d 700, 703 (Ky. Ct. App. 2016).
Plaintiffs bring negligence and breach of contract and fiduciary duty claims against the
Defendants. DN 28. Although Plaintiffs bring separate counts against the O’Bryan Brown &
Toner Defendants and the Insurance Defendants, their factual allegations come down to this: the
Defendants each knew about Perry’s slip and fall lawsuit, and they each did nothing to protect
Plaintiffs from the $2.6 million default judgment. See DN 28 at #143 (“FACTS COMMON TO

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ALL COUNTS”) (emphasis in original). Specifically, the Defendants received the state-court
complaint and summons before Perry moved for default judgment, but neither acted to protect
Martin & Bayley from a potential default. Id. ¶¶ 28-31. Neither checked the state-court docket.
Id. ¶¶ 32-36. Additionally, the O’Bryan Brown & Toner Defendants did not contest Perry’s default
judgment proceedings. Id.
Plaintiffs’ allegations are passive wrongdoing allegations: you knew about it, you did
nothing, and your inaction caused me harm. Therefore, the Insurance Defendants cannot seek
indemnity from the O’Bryan Brown & Toner Defendants because Plaintiffs accuse the O’Bryan
Brown & Toner Defendants of passive, not active, wrongdoing. Brown Hotel Co. v. Pittsburgh
Fuel Co., 224 S.W.2d 164, 167 (1949) (“the party who was the active wrongdoer or primarily
negligent can be compelled to make good to the other any loss he sustained”) (emphasis added).
Although the Insurance Defendants have not sought summary judgment on the O’Bryan
Brown & Toner Defendants’ indemnity claim, under Rule 56(f), summary judgment is proper on
that claim, too. The O’Bryan Brown & Toner Defendants were on notice of this possibility because
the Insurance Defendants referred to those claims on page 1 of their brief. See DN 167 at #1108.
The O’Bryan Brown & Toner Defendants had an opportunity to defend their indemnity claim in
their reply, but they didn’t. See DN 170. More than that, the O’Bryan Brown & Toner Defendants
argued that both groups of Defendants’ alleged passive negligence precludes the Insurance
Defendants’ indemnity claim against O’Bryan Brown & Toner. By the same token, it also
precludes O’Bryan Brown & Toner’s own indemnity claim against the Insurance Defendants. Cf.
CAROLE KING, Bitter with the Sweet, on RHYMES & REASONS (A&M Studios, 1972).
Likewise, none of the Defendants’ contribution and apportionment claims against each
other survive. The O’Bryan Brown & Toner Defendants moved for summary judgment on the

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Insurance Defendants’ contribution and apportionment claims, arguing that Kentucky law does
not recognize either claim. DN 158 at #861. The Insurance Defendants did not respond to these
arguments. See DN 167. Accordingly, the O’Bryan Brown & Toner Defendants are entitled to
summary judgment on the Insurance Defendants’ contribution and apportionment claims. In the
same vein, because the O’Bryan Brown & Toner Defendants argued that Kentucky does not
recognize the contribution and apportionment claims, summary judgment in the Insurance
Defendants’ favor is appropriate on those claims by the O’Bryan Brown & Toner Defendants
against the Insurance Defendants.
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Finally, under Rule 56(f), the Court provides notice to Plaintiffs that it may enter summary
judgment to the Defendants on the unjust enrichment claim. See DN 28 ¶¶ 82-86. Frankly, the
Court is skeptical of that claim because Plaintiffs paid the $1.8 million settlement to Perry, not the
Defendants. The Court will give Plaintiffs the opportunity to respond to this Rule 56(f) notice or
withdraw that claim before entering summary judgment on it.
cc: Counsel

1/31/2020

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