CLARA YVONNE WITHERSPOON v. GRANGE MUTUAL CASUALTY COMPANY
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RENDERED: MARCH 9, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-002618-MR
CLARA YVONNE WITHERSPOON
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE KEN F. CONLIFFE, JUDGE
ACTION NO. 96-CI-005894
v.
GRANGE MUTUAL CASUALTY
COMPANY
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUDGEL, CHIEF JUDGE; BARBER, AND SCHRODER, JUDGES.
BARBER, JUDGE: Appellant, Clara Witherspoon, (“Witherspoon”)
seeks review of an order of the Jefferson Circuit Court granting
summary judgment in favor of the Appellee, Grange Mutual Casualty
Company, (“Grange”).
Witherspoon alleged that Grange acted in
bad faith and violated the Unfair Claims Settlement Practices
Act.
The sole issue on appeal is whether the trial court erred
in determining that Ohio law applied to Witherspoon’s claim.
Finding no error, we affirm.
On December 12, 1992, Witherspoon and her husband,
Charles, were in Norfolk, Virginia, visiting their son, John C.
Witherspoon, who was in the Navy.
En route to a hockey game, the
three were in a motor vehicle accident.
John was driving his
parents’ car at the time, because he was more familiar with the
area; Clara was riding in the back seat.
Gerald Rice, the driver
of the other car, was a resident of Ironton, Ohio.
Grange was
Rice’s insurer and handled the claim out of its Portsmouth, Ohio
office.
Kentucky Farm Bureau was the Witherspoons’ insurer.
The
Witherspoons’ policy provided for underinsured motorist coverage.
On November 18, 1994, Clara Witherspoon filed a suit in
Lawrence County, Ohio, where Rice resided.
Farm Bureau were named as defendants.
attorney to defend Rice.
Rice and Kentucky
Grange hired an Ohio
On December 29, 1994, Grange, through
the Ohio attorney, filed a Third-Party complaint against John C.
Witherspoon, seeking contribution under Ohio law “against the
other driver.”
On January 17, 1995, Kentucky Farm Bureau also
filed a Third-Party Complaint against John C. Witherspoon.
case was set for trial on April 23, 1996.
The
At a pretrial
conference on April 15, 1996, Grange agreed to pay its policy
limits of $50,000 on behalf of Rice.
The Ohio action
subsequently proceeded to trial and a verdict was obtained
against Kentucky Farm Bureau.
On October 9, 1996, Clara Witherspoon filed the within
action in Jefferson Circuit Court against Grange and Kentucky
Farm Bureau, alleging conspiracy; fraudulent, malicious,
deceitful and intentional acts; insurance fraud under KRS 304.47020(1)(c); violation of the Unfair Settlement Claims Practices
Act, KRS 304.230; outrage and bad faith.
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In particular,
Witherspoon complained of the filing of the third-party
complaints against John C. Witherspoon by Grange and Kentucky
Farm Bureau; that Grange failed to offer policy limits until
April 15, 1996 and that Kentucky Farm Bureau had attempted and
conspired to deprive her of coverage under the respective
policies.
On April 27, 1999, the trial court entered summary
judgment in favor of Grange, holding that Ohio law should apply
to Witherspoon’s bad faith claims against Grange; further, that
under Ohio law, Pasipani v. Morton, 572 N.E.2d 234 (Ohio App.,
1990), a third party has no cause of bad faith against the
tortfeasor’s insurance company:
Under Kentucky’s choice of law rules, the
Court should apply the law of the state which
has significant contact with the issue
presented before the Court. Foster v.
Leggett, Ky., 484 S.W.2d 827, 829 (1972);
Arnett v. Thompson, Ky., 433 S.W.2d 109, 113
(1968); Wessling v. Paris, Ky., 417 S.W.2d
259, 260-61 (1967).
In the instant case, the Plaintiff alleges
that Grange committed bad faith by allowing
its insured to file a third-party complaint.
Grange is an Ohio corporation. Grange’s
insured is a resident of Ohio. The ThirdParty Complaint was filed in an Ohio action.
The sole contact with the Commonwealth of
Kentucky is that it is the place of residence
of the Plaintiff. The fact that Grange
conducts business in Kentucky does not arise
to significant contacts on the issue brought
before this court. Accordingly, Ohio has
significant contact with the Plaintiff’s bad
faith claims, and this Court will apply Ohio
law to those claims.
In Ohio, a third party has no cause of action
for bad faith against the tortfeasor’s
insurance company. Pasipani v. Morton, 572
NE 234, 235 (Ohio App. 1990). “A insurance
company has a duty to act in good faith in
settling claims and a breach of that duty
will give rise to a cause of action by the
insured. However, that duty runs only from
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the insurer to the insured, not to third
parties.”
The remaining claim against Kentucky Farm Bureau was subsequently
settled.
30, 1999.
An agreed order of dismissal was entered on September
This appeal followed.
We review summary judgments de novo.
Ky. App., 12 S.W.3d 698, 700 (2000).
Blevins v. Moran,
The Kentucky choice of law
rule applicable to torts is that “if there are significant
contacts — not necessarily the most significant contacts — with
Kentucky, the Kentucky law should be applied.
Foster v. Leggett,
484 S.W.2d 827 (1972); Bonnlander v. Leader National Insurance
Co., Ky. App. 949 S.W.2d 618 (1996).
The issue in Foster was whether recovery was barred by
Ohio’s guest statute.
There, the appellee was domiciled in Ohio,
but worked in Russell, Kentucky.
The night before the accident,
appellee had stayed in a room he kept at the Russell, Kentucky
YMCA.
The next morning, Appellee picked up appellant’s decedent
at her home in Kentucky.
The couple had planned to spend the day
in Columbus, Ohio, and returned to Kentucky that same night.
accident occurred in Ohio, en route to Columbus.
The
The high court
held that recovery was not barred by Ohio’s guest statute, and
that Kentucky law should apply, because contacts with Kentucky
“were numerous and significant.”
Id. at 829.
Witherspoon attempts to persuade us that significant
Kentucky contacts exist in this case, because Witherspoon is a
resident of Kentucky.
Witherspoon contends that her journey
began and ended in Kentucky, as did the tragic journey in Foster.
-4-
Although the Witherspoons were in Virginia visiting their son
when the accident occurred en route to a hockey game, it is not
apparent that they had traveled from, or intended to return to,
Kentucky on the day of the accident.
Witherspoon attempts to bolster the significance of the
Kentucky connection, by noting that her (former) husband and son
(two principal lay witnesses) are residents of Kentucky; that she
received medical treatment in Kentucky; that depositions
concerning liability for the accident were taken in Kentucky; and
that payments for damages and for deposition expenses, as well as
letters, were sent by Grange “across the Kentucky state line.”
Witherspoons’ residence is not at issue.
It is not surprising
that Witherspoon has family, doctors and a mailing address in
Kentucky because she lives here.
Those factors do not enhance or
increase the contact with Kentucky in this case.
Witherspoon emphasizes that Grange writes insurance and
transacts business in Kentucky.
This case does not involve a
Grange policy issued in Kentucky.
This case involves allegations
of bad faith arising out of a lawsuit filed in Ohio, against an
Ohio insured, defended by an Ohio attorney, over an accident
which occurred in Virginia.
Nor does the fact that circuit court
has personal jurisdiction over the parties require application of
Kentucky law.
Although a “State may . . . assume jurisdiction
over the claims of plaintiffs whose principal contacts are with
other States, it may not use this assumption of jurisdiction as
an added weight in the scale when considering the permissible
constitutional limits on choice of substantive law.”
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Phillips
Petroleum Co. v. Shutts, 472 US 797, 821, 105 S.Ct. 2965, 86
L.Ed.2d 628, (1985).
We agree with the trial court that “[t]he fact that
Grange conducts business in Kentucky does not arise to
significant contacts on the issue brought before this Court.
Accordingly, Ohio has significant contact with the Plaintiff’s
bad faith claims, and this Court will apply Ohio law to those
claims.” (emphasis added.)
The order of the trial court granting
summary judgment for Grange Mutual Casualty Company is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Bixler W. Howland
Steven D. Yater
Louisville, Kentucky
John K. Whittle
Schiller, Osbourn & Barnes
Louisville, Kentucky
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