Opinion
Civil Action No. 3:00-CV-323-S
March 28, 2002
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the following motions: 1) Defendant Constitution States Service Company's Motion for Summary Judgment; 2) Defendant Travelers Property Casualty Corporation's Motion for Summary Judgment; 3) Plaintiff's Motion for Leave File a Surreply; 4) Plaintiff's Motion to Reconsider; and 5) Plaintiff's Motion for Partial Summary Judgment. For the following reasons: 1) Defendant Constitution States Service Company's Motion for Summary Judgment will be GRANTED; 2) Defendant Travelers Property Casualty Corporation's Motion for Summary Judgment will be GRANTED; 3) Plaintiff's Motion for Leave File a Surreply will be GRANTED; 4) Plaintiff's Motion to Reconsider will be DENIED; 5) Plaintiff's Motion for Partial Summary Judgment will be DENIED.
BACKGROUND
The facts relevant to these motions are set out in our earlier opinion, dated March 28, 2002.
DISCUSSION
Defendant Constitution States Service Company's Motion for Summary Judgment
Defendant Constitution State Service Company ("CSSC") moves for summary judgment on plaintiff's Kentucky Unfair Claims Settlement Practices Act ("UCSPA"), common law bad faith, outrage, and conspiracy claims. In order to support a motion for summary judgment, a moving party must prove the absence of a genuine issue of any material fact and that the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding a summary judgment motion, a court's role is not to weigh the evidence or determine its truth, but to determine if a genuine question of fact exists. Id. at 249. In making these determinations, the court is to view all facts and inferences in a light most favorable to the nonmoving party. White v. Turfway Park Racing Ass'n, Inc., 909 F.2d 941 (6th Cir. 1990).
First, CSSC argues it cannot be held liable for bad faith under the UCSPA or common law because it did not stop plaintiff's workers' compensation payments until after his termination. We agree.
[W]hether premised upon common law theory or a statutory violation. . . . the three required elements of a cause of action for bad faith are as follows: "(1) the insurer must be obligated to pay the claim under the terms of the policy; (2) the insurer must lack a reasonable basis in law or facts for denying the claim; and (3) it must be shown that the insurer either knew there was no reasonable basis for denying the claim or acted with reckless disregard for whether such a basis existed."Davidson v. American Freightways, Inc., 25 S.W.3d 94, 100 (Ky. 2000) (quoting Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1993) (emphasis in original). CSSC had no obligation to continue plaintiff's workers' compensation payments once he was terminated. It consequently cannot be held liable for either statutory or common law bad faith because it did not deny a claim it was contractually obligated to pay.
Plaintiff argues CSSC may not rely on his termination to escape bad faith liability because it was engineered by CSSC in concert with Lear. Plaintiff, however, presents no evidence of such a concerted action. CSSC's motion for summary judgment regarding these claims will therefore be granted.
Second, CSSC argues its conduct was not "outrageous" under Kentucky law. We agree. "To prevail on [an outrage] claim, Plaintiff must prove: (1) that the conduct was intentional; (2) that the conduct caused severe emotional distress; and (3) that the conduct was outrageous." Cheatham v. Paisano Communications, Inc., 891 F. Supp. 381, 387 (W.D.Ky. 1995) (citing Craft v. Rice, 671 S.W.2d 247 (Ky. 1984)). Conduct is "outrageous" if "it offends against generally accepted standards of decency and morality." Craft, 671 S.W.2d at 249. CSSC has presented evidence that its actions were based on a reasonable concern over the lawfulness of plaintiff's workers' compensation claim and on plaintiff's subsequent termination. Such actions therefore cannot be viewed as "a deviation from all reasonable bounds of decency and . . . utterly intolerable in a civilized community." Id. at 250; see also Lynch v. McFarland, 893 F. Supp. 707, 708 (W.D.Ky. 1995) (finding no outrage when defendant's conduct "was not the kind of indecent and immoral behavior that would engender the ire, rather than the mere disapproval, of a civilized community. . . ."). CSSC will therefore be granted summary judgment on plaintiff's outrage claim.
Finally, CSSC asserts there is no basis for plaintiff's conspiracy claim. Again, we agree. In order to establish a conspiracy, plaintiff must show "an unlawful/corrupt combination or agreement between [CSSC] and the [co-defendants] to do by some concerted action an unlawful act." Montgomery v. Milam, 910 S.W.2d 237, 239 (Ky. 1995) (citing McDonald v. Goodman, 239 S.W.2d 97 (Ky. 1951)). As noted above, there is no evidence of such an agreement. Summary judgment will therefore also be granted on plaintiff's conspiracy claim.
Defendant Travelers Property Casualty Corporation's Motion for Summary Judgment
Defendant Travelers Property Casualty Corporation ("Travelers") argues it is entitled to summary judgment on plaintiff's claims against it because it is CSSC's holding company and thus a separate entity that cannot be held liable for workers' compensation claims administered by CSSC. Plaintiff, on the other hand, argues there is evidence that Travelers was responsible for his workers' compensation claim.
Plaintiff appears to base his theory of liability against Travelers on a claim representative's letter identifying Travelers as the third party administrator for Lear Seating Corporation's ("Lear") workers' compensation claims. (Pltf. Resp. Lear Mot. Summ. J. Exh. 17). However, the letter is written on CSSC letterhead and a CSSC claims handler testified that she attributes its reference to Travelers to human error as CSSC is the third party administrator for Lear. (Grinstead Dep. at 24). Additionally, Lear's human resources manager testified that he dealt solely with CSSC and never with Travelers. (McClaughlin Dep. at 18). Thus, the evidence eradicates any genuine issue of material fact regarding Travelers's responsibility for handling plaintiff's workers' compensation claim.
Further, it is undisputed that Travelers is CSSC's holding company and thus a separate corporate entity. "Before a Kentucky court will disregard the corporate entity, it must also determine that the artificial personality serves to shield individuals from legal responsibility for fraudulent or criminal acts, or that the form of organization is subversive of public policy." Poyner v. Lear Siegler, Inc., 542 F.2d 955, 958 (6th Cir. 1976) (citing Big Four Mills v. Commercial Credit Co., 211 S.W.2d 831, 834 (Ky. 1948)); see also Boggs v. Blue Diamond Coal Co., 590 F.2d 655, 661 (6th Cir. 1979) ("Kentucky recognizes customary principles of corporation law which hold that separate corporate identities should not be disregarded.") (citing Square D. Co. v. Kentucky Bd. of Tax Appeals, 415 S.W.2d 594, 601 (Ky. 1957)). There is no evidence that Travelers has committed any fraudulent or criminal acts or that observing its status as a separate entity is contrary to public policy. Travelers motion for summary judgment will therefore be granted.
Plaintiff's Motion for Leave File a Surreply
As defendants CSSC and Travelers have not objected to plaintiff's Motion for Leave to File a Surreply to their respective Motions for Summary Judgment, plaintiff's motion will be granted.
Plaintiff's Motion to Reconsider
Plaintiff requests that we reconsider our August 23, 2001 denial of his Motion to Amend the Complaint to join DJ Associates as a defendant. "[A] motion which asks a court to vacate and reconsider, or even to reverse its prior holding, may properly be treated under Rule 59(e) as a motion to alter or amend a judgment." Smith v. Hudson, 600 F.2d 60 (6th Cir. 1979); see also McDowell v. Dynamics Corp. or America, 931 F.2d 380, 382 (6th Cir. 1991) ("Although motions to reconsider are not specifically called for in the Federal Rules of Civil Procedure, this Court has considered such motions before, holding that they are properly treated as motions to alter or amend a judgment under Rule 59(e)").
A motion to alter or amend a judgment under Rule 59(e) "is granted only in limited circumstances, and . . . is within the informed discretion of the district court." Shivers v. Grubbs, 747 F. Supp. 434, 436 (S.D.Ohio 1990) (citing United States Labor Party v. Oremus, 619 F.2d 683, 692 (7th Cir. 1980)). "Motions made under [Rule 59(e)] are not intended to be utilized to relitigate old matters nor to allow a party to present his case under a new theory; these motions are designed to correct manifest errors of fact or law or as vehicles to present newly discovered evidence." Milwee v. Peachtree Cypress Investment Co., 510 F. Supp. 284, 289-90 (E.D.Tenn. 1978); see also Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998). Here, plaintiff has failed to establish any legal or factual error or to present any new evidence. His Motion to Reconsider will therefore be denied.
Plaintiff further requests oral argument on the matter. Because we are able to pass judgment on plaintiff's motion based on the parties' memoranda, plaintiff's request will also be denied.
Plaintiff's Motion for Partial Summary Judgment
Plaintiff requests summary judgment on Lear's liability for the acts of its agents. Plaintiff asserts that Lear has judicially admitted such liability. We disagree. While Lear has admitted it is liable for the conduct of DJ Associates, a party we refused to join in our order dated August 23, 2001, it has specifically denied its co-defendants are its agents. Further, in our order dated March 28, 2002, we found there is a genuine issue of material fact regarding whether an agency relationship between Lear and its co-defendants exists. Plaintiff's motion will therefore be denied.
CONCLUSION
For the reasons stated above: 1) Defendant Constitution States Service Company's Motion for Summary Judgment will be GRANTED; 2) Defendant Travelers Property Casualty Corporation's Motion for Summary Judgment will be GRANTED; 3) Plaintiff's Motion for Leave File a Surreply will be GRANTED; 4) Plaintiff's Motion to Reconsider and his corresponding request for oral argument will be DENIED; 5) Plaintiff's Motion for Partial Summary Judgment will be DENIED.
ORDER
For the reasons set forth in the memorandum opinion entered this date and the Court being otherwise sufficiently advised, IT IS HEREBY ORDERED AND ADJUDGED that: 1) Defendant Constitution States Service Company's Motion for Summary Judgment is GRANTED; 2) Defendant Travelers Property Casualty Corporation's Motion for Summary Judgment is GRANTED; 3) Plaintiff's Motion for Leave File a Surreply is GRANTED; 4) Plaintiff's Motion to Reconsider and his corresponding request for oral argument are DENIED; 5) Plaintiff's Motion for Partial Summary Judgment is DENIED.