Court: District Court, E.D. Kentucky; October 9, 2014; Federal District Court
Motions for summary judgment were filed by Defendants PRG Real Estate Management, Inc. and ESIS, Inc., with the Plaintiff responding and the Defendants replying. The Court granted the Defendants' motions for summary judgment based on the following key points:
1. **Background**: The Plaintiff, residing at Saddlebrook Apartments owned by PRG, fell on a sidewalk on July 2, 2012, claiming it was unsafe. After reporting the incident, she dealt with ESIS, the third-party administrator for PRG’s self-insurance. ESIS initially assured her of a resolution without litigation and covered her medical expenses. However, after the statute of limitations expired, ESIS requested a settlement demand, which the Plaintiff made for $400,000, later denied. The Plaintiff filed suit against PRG for negligence and against ESIS for violating Kentucky’s Unfair Claims Settlement Practices Act (UCSPA) and bad faith.
2. **Standard of Review**: Summary judgment is appropriate when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. The burden is on the moving party to prove the absence of a material issue, while the non-moving party must provide specific facts to demonstrate a genuine issue.
3. **Discussion**: ESIS argued that it was not an insurer but a claims administrator for PRG’s self-insurance, supported by a risk management services agreement that clarified PRG's obligation to make claim payments. The Plaintiff did not dispute the authenticity of this agreement or provide evidence to support her claim that ESIS was an insurer. Consequently, the UCSPA and bad faith claims do not apply to ESIS, as these laws are relevant only to entities engaged in the insurance business.
The Court's decision was thus influenced by the lack of evidence supporting the Plaintiff's claims against ESIS and the clear terms of the agreement between the Defendants.
Under Kentucky law, a bad faith claim requires a contractual obligation to pay a claim under an insurance policy. In the case of Ky. Nat’l Ins. Co. v. Shaffer, the court determined that bad faith claims against claims adjusters lacking such contractual obligations are barred. ESIS, as PRG's claims administrator, had no obligation to pay the Plaintiff, thereby entitling ESIS to summary judgment. Additionally, even considering ESIS's agency relationship with PRG, the claim is still barred since PRG does not engage in insurance contracts.
For negligence claims in Kentucky, the statute of limitations is one year from the date of injury, which in this case occurred on July 2, 2012. The Plaintiff suggested that the limitations period should be tolled due to ESIS's conduct. Tolling applies only when a defendant induces inaction through false representations or fraudulent concealment. The Plaintiff claimed ESIS misrepresented their role and the settlement process, but Kentucky courts have established that a claimant cannot rely on an adversary's statements regarding insurance claims. Plaintiffs are expected to consult independent legal counsel and are presumed to know the statute of limitations. The Plaintiff's reliance on Miller v. Thacker is misplaced as that case involved significantly different circumstances, including differing laws and specific misrepresentations regarding age and treatment coverage.
The Court finds that the Plaintiff has not provided sufficient grounds to toll the statute of limitations for her negligence claim against PRG. While the Court accepts the Plaintiff's assertions as true, the act of negotiating for settlement does not constitute a basis for estoppel regarding the statute of limitations. Tolling requires evidence of fraudulent actions that hinder investigation, and the Plaintiff must demonstrate reasonable care and diligence, as established in prior case law. Consequently, the statute of limitations has expired, making summary judgment appropriate.
The Plaintiff has requested additional time for discovery, claiming ESIS possesses relevant information. However, the Court emphasizes that the discovery period ends on December 31, 2014, and must ensure parties have adequate time for discovery before ruling on motions for summary judgment. The Court is not convinced that further discovery would yield information that could alter the outcome of the motions, given that Plaintiff has not provided specific reasons or established the necessity of additional facts as per Federal Rule of Civil Procedure 56(d).
The Defendants argue against the consideration of two of the Plaintiff's exhibits due to lack of authentication. An affidavit must be sworn before a qualified officer, and declarations must comply with specific stipulations. The Plaintiff's Counsel's Rule 56(d) affidavit was neither notarized nor signed, rendering it invalid. Even if considered, it fails to meet the requirements of Rule 56(d). Additionally, the Defendants challenge the authenticity of an email exchange between the Plaintiff and an ESIS representative, although circumstantial evidence and the Plaintiff's affidavit lend support to its authenticity.
Plaintiff's evidence regarding the authenticity of an email was insufficient, as more direct proof was needed. At this early discovery stage, Plaintiff has not deposed Caruso or anyone from ESIS. The email's statement indicating a desire to resolve matters quickly does not affect the statute of limitations; such statements are viewed as negotiations toward settlement and do not justify tolling. Consequently, the Court granted summary judgment motions for Defendants PRG and ESIS. Plaintiff conceded that there were no viable bad faith claims against PRG and did not contest PRG's summary judgment motion on those grounds. Additionally, failure to object to the opposing party's evidentiary materials typically results in waiver of those objections. As Plaintiff did not dispute ESIS's role as a third-party claims administrator, this fact is accepted as undisputed for the motions.
