Opinion
Civil Action No. 99-154.
February 18, 2000.
MEMORANDUM OPINION AND ORDER
This matter is before the court upon the cross-motions by the defendant and the plaintiff for summary judgment (Nos. 19 and 23), the plaintiff's motion for an order to videotape a deposition for use at trial (No. 30), the plaintiff's motion to amend her complaint (No. 31), and the plaintiff's motion for summary judgment on her breach of contract claim against the defendant for its refusal to defend (No. 32). For the reasons stated below, the court will grant the defendant's motion for summary judgment and deny all remaining motions.
SUMMARY OF FACTS
The plaintiff, Sandra Lenning, is employed by PNC Bank as a Vice President in its private client group. She describes her position as a PNC lender. Ed Gatterdam, her fiancé, has worked as a general contractor for residential homes. His business ended with his personal bankruptcy in 1990. In 1996, Lenning and Gatterdam agreed to build six homes, using the profits from the sale of each home to finance construction of the next home. The couple hoped that their plan would generate enough money to permit them to retire to Florida. According to their plans, the plaintiff would obtain a construction loan to finance the building of each house. Gatterdam would then serve as construction manager and receive a fee paid by the plaintiff.
The first house on which the plaintiff and Gatterdam collaborated was built at 5708 Timber Ridge, Prospect, Kentucky. The plaintiff claims that when she purchased the lot in June 1996, she intended to build a home for use as her personal residence. In a recorded statement provided by the plaintiff to her insurance agent, however, the plaintiff stated that "the idea was for us to build a house and then try to sell it."
Regardless of the plaintiff's original plan for the lot, she entered into a contract just after beginning construction to sell the unbuilt home to Dennis Tapp. When Gatterdam began clearing the lot and pouring the house's concrete foundation, he erected a sign stating, "E G Associates — will build to suit." The sign also included Gatterdam's home telephone number, which was assigned to the apartment he shared with Lenning. Shortly after Gatterdam poured the concrete for the home's foundation, Tapp contacted the plaintiff and Gatterdam by telephone and expressed his interest in the unbuilt house. Tapp met with the plaintiff and Gatterdam on a Saturday morning to review the house's plans and to suggest changes. On August 14, 1996, Lenning, Gatterdam, and Tapp signed a document titled "Tri-Party Construction Contract," under which Tapp agreed to purchase the completed home from the plaintiff for $196,000.00.
The sign was apparently used in Gatterdam's construction business prior to his bankruptcy.
Although Tapp was the home buyer, the plaintiff obtained the construction loan necessary to finance the building of the house. The plaintiff personally paid subcontractors and obtained all necessary building licenses and permits. Gatterdam and Lenning jointly sent a letter to one subcontractor expressing their displeasure with the installation of the home's "DRYVIT" outer covering. The plaintiff and Gatterdam jointly signed all change orders, which were entitled "S. Lenning/E. Gatterdam, Bldr." The term "Seller" appeared beneath the plaintiff's signature on the change orders. The plaintiff did not move into or spend a night at the Tapp house. The parties closed on the contract on January 30, 1997.
After purchasing the lot at 5708 Timber Lane, but before entering the contract with Tapp, the plaintiff obtained a homeowner's policy written by the Commercial Union Insurance Company ("CUIC") through an independent agent, the Langan Company ("Langan"). The policy named only Lenning, not Gatterdam, as an insured. Tom Barrett, the agent responsible for the plaintiff's policy, testified that he believed Lenning intended to use the home as her personal residence. Neither the plaintiff nor Gatterdam informed Barrett or any other Langan agent that they had entered into a tri-party contract with Tapp or that the house had been sold prior to its completion. Because the homeowner's policy included a builder's risk endorsement which would expire upon the completion of construction, Langan agents periodically contacted the plaintiff or Gatterdam to ascertain the building's progress. An activity log for the plaintiff's account indicates that on January 15, 1997, five months after the signing of the tri-party contract and two weeks prior to closing, Lenning informed a Langan agent that she would close on the home within a few weeks and would advise the company when she moved into the home. On January 30, 1997, the plaintiff conveyed the property to Tapp by a general warranty deed.
On February 9, 1998, Tapp sued the plaintiff and Gatterdam in Jefferson Circuit Court, Case No. 98-CI-753. Tapp's complaint claims that the home was built with poor workmanship and that he was forced to finish construction at his own expense. Prior to filing the lawsuit, Tapp posted outside his interior design store and new home large signs stating, "Ed Gatterdam and Sandy Lenning Builders? They never finish a job." The plaintiff later filed a counterclaim against Tapp for defamation.
The CUIC policy purchased by the plaintiff provides:
If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will:
1. Pay up to our legal limit of liability for the damages for which the "insured" is legally liable. Damages include prejudgment interest awarded against the "insured"; and
2. Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when the amount we pay for damages resulting from the "occurrence" equals our limit of liability.
An "occurrence" is defined as:
. . . an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in:
a. "Bodily injury"; or
b. "Property damage."
Property damage is defined as "physical injury to, destruction of, or loss of use of tangible property."
An exclusionary provision in the policy states that coverage for personal liability of the insured does not apply to "bodily injury" or "property damage":
Which is expected or intended by the "insured";
Arising out of or in connection with a "business" engaged in by an "insured." This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the "business."
The policy defines "business" as a "trade, profession or occupation."
The policy also states that coverage for personal liability of the insured does not apply to property damage to property which is owned by the insured.
The plaintiff submitted a copy of Tapp's complaint and the parties' tri-party contract to Langan for forwarding to CUIC. Although he forwarded the documents, Barrett advised the plaintiff that the policy did not appear to cover her claim. On February 25, 1998, a CUIC supervisor, Ken Schartz, sent a handwritten note to senior claims representative Karen Lasch. The note informed Lasch of the Tapp lawsuit and alerted her to a "possible exclusion for business operation unless this is occasional operation/occupation." Lasch attempted to telephone Lenning that day, but reached only Gatterdam. The following morning, Lasch again telephoned the plaintiff and obtained her permission to record their conversation. During the conversation, Lenning volunteered the fact that she and Gatterdam had originally intended to build a house and then sell it.
The conversation included the following exchange:
Q: . . . And Sandra, what . . . you work for PNC?
A: Correct.
Q. And what do you do there?
A. I'm vice-president in the private bank.
Q. Okay. And then do you also have a side business or . . . It's got you . . . you as a seller. Did you own some property out in this Timber Ridge development?
A. Yes, I had bought a lot . . .
Q. Okay.
A. . . . and then Ed Gatterdam just happens to be my fiancé and a builder . . .
Q. Okay.
A. . . . so I said to him I will be the financial person on this if you will build the home.
Q. Okay. So the lot was built . . . I mean was the lot purchased by you primarily . . .
A. Yes. Yes.
Q. . . . as a . . . as an investment?
A. Exactly.
Q. Okay. Now, how did you . . . how did . . . how did Dennis Tapp come into the picture? How did he find out about it?
A. He was living in an apartment complex in the same area as The Landings. The property is in a subdivision called The Landings. He was living in an apartment building in that area. He had to drive by every day our lot and we had started . . . we had cleared the lot and had the found . . . not the foundation but the slab poured. We had been working there maybe two, three weeks. The idea was for us to build a house and then try to sell it . . .
The plaintiff later acknowledged that the transcript of her recorded statement to Lasch represented "probably exactly what I said."
On March 2, 1998, the defendant informed the plaintiff that it reserved all rights and defenses under the policy, including its right to pursue a judicial determination that no coverage existed under the policy. On March 26, 1998, Lenning's attorney mailed to Lasch several documents relating to Tapp's lawsuit. The attorney requested that CUIC inform him whether it intended to defend Lenning in the Tapp litigation.
These documents included the following: Gatterdam's answer and counterclaim, Lenning's amended counterclaim, notice of Tapp's deposition, Lenning's request for production of documents, Gatterdam's first set of interrogatories, and Gatterdam's first request for production of documents.
On April 17, 1998, Lasch sent a letter to the plaintiff explaining that the defendant would deny coverage for the Tapp lawsuit for two reasons. First, the defendant characterized Tapp's claims as based upon breach of contract, breach of express and implied warranties, and slander of title. None of these claims qualified as an "occurrence," as defined in the policy. Second, the defendant stated that even if Tapp's complaint stated a negligence claim for property damage, the policy excluded coverage due to the business risk exclusion. Lasch's letter stated that the defendant reserved its right to rely upon other facts and grounds for denial which might subsequently be discovered.
The plaintiff and Gatterdam are now building a fourth home. The second home was constructed on a lot purchased by the plaintiff around the time she purchased the 5708 Timber Ridge lot. The plaintiff states that her profit on the three completed homes totals between $121,000.00 and $128,000.00. The plaintiff and Gatterdam currently live in an apartment, and they still plan on building a total of six homes.
LEGAL ANALYSIS CROSS-MOTIONS FOR SUMMARY JUDGMENT AND, PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON BREACH OF CONTRACT THE, PLAINTIFF'S LIABILITY IN THE TAPP LITIGATION IS NOT COVERED BY THE CUIC POLICY Tapp's Complaint Does Not Allege an "Occurrence" under the PolicyThe terms of the policy purchased by the plaintiff require CUIC to defend or indemnify an insured only when a lawsuit brought against the insured is based on "bodily injury" or "property damage" caused by an "occurrence." The policy defines an "occurrence" as an accident resulting in bodily injury or property damage. Tapp's complaint against Lenning states: "This is a claim for negligence, breach of contract, fraud and slander of title in the construction for the plaintiff by the Defendants."
Courts do not interpret the term "occurrence," as used by the insurance industry, so broadly as to include liability based on breach of contract, even if underlying claims are based on tortious conduct. Pace Constr. Co. v. United States Fidelity Guaranty Insurance Co., 934 F.2d 177, 179 (8th Cir. 1991). In Pursell Constr. Inc. v. Hawkeye-Security Ins. Co., 596 N.W.2d 67 (Iowa 1999), the court interpreted the term "occurrence" in a comprehensive general liability ("CGL") policy purchased by a building contractor. The contractor sought coverage for negligence and contract claims brought against him by a developer. Id. at 68. Like the CUIC policy, the CGL policy at issue in Pursell defined "occurrence" as "an accident, including conditions or repeated exposure to substantially the same general harmful conditions." Id. at 70. The claim brought against the contractor was characterized as "essentially one for defective workmanship." Id. The court framed the issue as "whether this alleged defective workmanship constitutes an occurrence within the meaning of the policy. . . ." Id. The court joined the "majority of courts that have considered this issue [which] have concluded that a CGL policy does not provide coverage for claims against an insured for the repair of defective workmanship that damaged only the resulting work product." Id. The fact that this case concerns a different type of insurance policy does not make Pursell inapplicable because, as noted below, a CGL policy provides far broader coverage than a homeowner's policy. If "occurrence" does not include a defective workmanship claim in a CGL policy, then the term cannot be given broader meaning in a homeowner's policy. To the extent that Tapp's complaint alleges a defective workmanship claim, therefore, he does not allege an "occurrence" which triggers the policy's coverage.
Even if Tapp's negligence claim is independent from his breach of contract claim, the complaint does not allege an "occurrence" because it does not charge bodily injury or property damage. The policy defines property damage as only such damage which results in physical injury to, destruction, or the loss of the use of tangible property. Tapp's complaint merely alleges that he was forced to complete construction himself. He does not even state that Lenning and Gatterdam's defective workmanship resulted in the loss of use of the home. Tapp claims a purely economic loss, which does not qualify as "property damage" or "bodily injury" triggering policy coverage. Allstate Ins. Co. v. Morgan, 806 F. Supp. 1460 (N.D.Cal. 1992) (because a claim of negligent misrepresentation does not constitute property damage, no "occurrence" under a homeowner's policy triggers coverage); Allstate Ins. Co. v. Hansten, 765 F. Supp. 614, 616-17 (N.D.Cal. 1991) (no coverage under a homeowner's policy even for negligent construction and negligent infliction of emotional distress claims because the claims are based on the insured's contractual liability under a real estate agreement); Yegge v. Integrity Mutual Ins. Co., 534 N.W.2d 100 (Iowa 1995) (because purely economic claims against the insured fail to qualify as property damage under a general business liability policy, the insured is not entitled to liability coverage).
The plaintiff relies on James Graham Brown Foundation, Inc. v. St. Paul Fire Marine Ins. Co., 814 S.W.2d 273 (Ky. 1991), which held that only damages expected or intended from the standpoint of the insured are excluded from the term "occurrence." Arguing that because she neither expected nor intended Tapp's claims of poor workmanship, Lenning contends that Tapp's complaint alleges an "occurrence" arising out of property damage. The Brown court, however, defined the term "occurrence" in the context of a CGL policy. The court emphasized that a CGL policy is designed for businesses and governmental entities. Indeed, "the very name of the policy suggests the expectation of a comprehensive general liability policy is to provide broad comprehensive coverage." Id. at 278. To uphold the comprehensive purpose of CGL policies, the court interpreted "occurrence" to provide "the broadest coverage available." Here, the plaintiff purchased a narrowly written, specific-purpose homeowner's policy.
The plaintiff correctly cites the interpretive canon which requires courts to construe exclusions narrowly, with all doubts resolved in the insured's favor. However, this rule applies only where the language of an insurance contract is ambiguous or self-contradictory. "Otherwise, the contract is to be read according to its plain meaning, its true character and purpose, and the intent of the policies." Peoples Bank Trust Co. v. Aetna Cas. Surety Co., 113 F.3d 629, 636 (6th Cir. 1997); St. Paul Fire Mutual Ins. Co. v. Powell-Walton-Milward, Inc., 20 F.3d 690, 693 (6th Cir. 1994);. Foster v. Kentucky Housing Corp., 850 F. Supp. 558, 561 (E.D.Ky. 1994). The contract at issue is neither ambiguous nor self-contradictory, so the court need not resort to this rule of construction.
The Plaintiff Is Not Entitled to Coverage under the Business Exclusion
Even if Tapp's complaint constituted an "occurrence" under the CUIC policy, coverage is excluded for damages arising out of or in connection with an insured's business. This exclusion applies not only because Tapp brought his action against Lenning as a builder, but also because the record demonstrates that Lenning held herself out as a builder.
Tapp's complaint states that "the Defendants, Sandra K. Lenning and Ed Gatterdam are residents of the Commonwealth of Kentucky and are builders." Each claim brought by Tapp is based upon "the construction of a home for the plaintiff by the Defendants." The plaintiff denies that Tapp considered her a builder, emphasizing state court pleadings in which he acknowledges that Lenning's occupation is as a PNC lender. Tapp made this statement, however, in response to the plaintiff's counterclaim for defamation. In an attempt to defeat Lenning's motion for summary judgment against him, Tapp refuted the defamation claim by arguing that because Lenning's profession was that of banker rather than a builder, he could not have damaged her professional reputation.
A determination of whether an insurance company owes its insured a defense must be made at the start of litigation. Brown, 814 S.W.2d at 279. From the start of the litigation, Tapp's complaint alerted the defendant to the fact that he sued Lenning as a builder. Tapp's response to Lenning's summary judgment motion was filed in February 1999, one year after the complaint was filed. Furthermore, Tapp's complaint rather than his response to a summary judgment motion controls whether or not he sued Lenning as a builder.
Although the plaintiff now insists that she originally intended to occupy the house, this recent assertion cannot outweigh the extraordinary amount of evidence to the contrary. The tri-party contract was entered after the "slab" foundation was poured, but before any other construction began. Concededly, the term "seller" appeared beneath her signature line on change order forms. This designation does not, however, supersede the logo appearing at the top of the form which designates Lenning and Gatterdam as builders. When Lasch telephoned Lenning to inquire about the Tapp claim, Lasch asked an open-ended question regarding Tapp's interest in the house. Lenning provided a lengthy response which included the statement that the "idea was for us to build a house and then try to sell it." She characterized herself as the "money man."
Without providing an example, the plaintiff attempts to characterize her recorded conversation with Lasch as coercive. However, Lasch's questions appear straightforward and non-confrontational. Lenning responded to many of Lasch's questions by providing far more information than was requested. The court sees no support for Lenning's claim of coercion.
In Eyler v. Nationwide Mutual Fire Ins. Co., 824 S.W.2d 855 (Ky. 1992), Kentucky's Supreme Court adopted a test for determining whether a business-pursuit exclusion barred coverage under a homeowner's policy. The court held:
To constitute a business pursuit, there must be two elements: first, continuity, and secondly, the profit motive; as to the first, there must be a customary engagement or a stated occupation; and as to the latter, there must be shown to be such activity as a means of livelihood, a gainful employment, means of earning a living procuring subsistence or profit, commercial transactions or engagements.Id. at 859 ( quoting Krings v. Safeco Ins. Co., 628 P.2d 1071, 1074 (1981)).
In Eyler, the court held the business-pursuit exclusion inapplicable because the insured was not actively involved in the venture. The insured assisted a farmer in selling used tires to the Chinese government. The insured borrowed $75,000 and became a partner in the anticipated sale. Because the insured's assets were insufficient collateral for the loan, the farm conveyed the tire-storage property to the insured, who then obtained the loan by encumbering the property and his personal dwelling. A worker was injured during clean-up of the property. Applying the two-prong business-pursuit test, the court noted that the insured was merely an investor in the tire venture. Id. at 859. He had not participated in acquiring the tires or in negotiating the sale to the Chinese government. Here, however, the Eyler test supports the applicability of the business-pursuit exclusion.
The continuity prong of Eyler is clearly met in this case. Although the plaintiff insists that her subsequent home-building activity is irrelevant to this action, the Eyler test requires an examination of "whether [her] involvement in the activity was continuous." Id. at 859 ( quoting Randolph v. Ackerson, 310 N.W.2d 865, 866 (1981). The plaintiff and Gatterdam are currently building their fourth home in three years. Lenning admitted that they always intended to build six houses, sell them, and use the profit to move to Florida. The profit motive required by Eyler is also undisputably present in this case. Lenning has conceded that she intended to profit from the homes which she financed and Gatterdam constructed. Unlike the insured in Eyler, the plaintiff participated in the acquisition of the property she now characterizes as a mere investment. A banker by trade, Lenning obtained financing for an essential construction loan for the house. She signed change order forms and a letter of complaint to a subcontractor. She negotiated the sale to Tapp. In contrast with the Eyler insured, Lenning actively participated in the home-building plan she forged with Gatterdam.
The plaintiff contends that if her activities characterize her as a builder in this case, then a mere investor in a large automobile company must be deemed an automobile builder. However, an investor in such a company would probably not personally sign orders affecting the automobiles' specifications, nor would she obtain a loan or personal insurance policy to support the company's activities. Such an investor would not negotiate the sale of the automobiles to dealers or consumers.
The plaintiff states that her only occupation is as a PNC banker. Certainly, Lenning correctly identifies her primary job. A "business pursuit," however, need not serve as an insured's sole occupation. Williams v. State Farm Fire Cas. Co., 509 N.W.2d 294, 298 (Wis.App. 1993). Part-time business activities are also excluded under the business-pursuit exclusion. Id. This premise is especially applicable where a majority of the plaintiff's involvement in the building project was as a financier, which is her primary occupation.
The Policy Excludes Coverage for Property Damage to Property Owned by the Insured
The plaintiff concedes that she was the owner of the Tapp house during the entire construction period. Any poor workmanship, therefore, occurred while the plaintiff owned the house. The CUIC policy states that coverage for an insured's personal liability does not extend to damage to property owned by the insured.
THE, DEFENDANT DID NOT BREACH ITS CONTRACTUAL DUTY TO DEFEND THE, PLAINTIFF
The plaintiff claims that the defendant's refusal to defend her against Tapp was a breach of the insurance contract. In an action based on breach of contract, a plaintiff must show the existence and the breach of a contractually imposed duty. Strong v. Louisville Nashville R. Co., 43 S.W.2d 11, 13 (Ky. 1931). Insurance contracts include an obligation to defend, which is broader than the company's duty to indemnify. Brown, 814 S.W.2d at 280. Even if an insurance company denies coverage based on the mistaken belief that it is justified in doing so, then the company has breached its contract with the insured. Eskridge v. Educator Executive Insurers, Inc., 677 S.W.2d 887, 889 (Ky. 1984).
Kentucky law imposes upon an insurer the obligation to defend only if there is an allegation "which potentially, possibly, or might come within the coverage of the policy." Brown, 814 S.W.2d at 279. As explained above, a facial examination of Tapp's complaint of breach of contract and negligent construction demonstrated to CUIC that the Tapp litigation did not fall within the coverage of Lenning's policy. Coverage was abrogated by both the business-pursuit exclusion and the policy's definition of "occurrence." Moreover, the policy excluded coverage for personal liability due to property damage which occurs while the insured owns the property.
THE DEFENDANT DID NOT VIOLATE ITS DUTY OF GOOD FAITH
To establish a claim of bad faith, an insured must demonstrate the following: (1) the insurer was obligated to pay under the policy, (2) the insurer lacked a reasonable basis for denying the claim, and (3) the insurer either knew there was no reasonable basis to deny the claim or acted with reckless disregard for whether such a basis existed. Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1989). As explained above, the defendant was not obligated to pay under the policy. No genuine issue of material fact, therefore, supports the plaintiff's bad-faith claim.
THE, DEFENDANT RESPONDED PROMPTLY TO AND REASONABLY INVESTIGATED THE, PLAINTIFF'S INSURANCE CLAIM
The plaintiff contends that the defendant failed to respond promptly to and reasonably investigate her insurance claim, in violation of two Kentucky statutes. The Unfair Claims Settlement Practices Act, K.R.S. § 304.12-230, makes insurers liable for the following: (1) failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies or (2) failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies. K.R.S. § 304.12-230(2)-(3). The Consumer Protection Act makes it unlawful to employ "[u]nfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce." K.R.S. § 367.170(1). Both claims are unsupported by the record.
The plaintiff's Langan agent sent a notice of Tapp's claim to the defendant on February 25, 1998. Upon receiving the notice, Lasch unsuccessfully attempted to contact the plaintiff. Instead, she spoke with Gatterdam. The following day, Lasch telephoned the plaintiff and, with her permission, took a recorded statement. The defendant's communication with the plaintiff one day after receiving notice of Tapp's complaint cannot be characterized as a failure to investigate the claim promptly.
Lenning also claims that because the defendant has not adopted a written manual instructing its agents on claim investigation, the defendant's investigation was unreasonable. Lasch characterized her training as based on 20 years' experience. She testified:
There are no specifics. We have, when you first start this business, somebody might hand you a typed list of questions you can ask in an injury case, that sort of thing, but basically you are asking questions that you felt are germane to the issue and there's no set guidelines other than name, address, tell them you're recording, try to mention the date and time . . . I just ask whatever question comes to mind.
Lenning fails to identify any specific deficiency in the procedure actually used by the defendant, nor does she identify the procedure which the defendant should have used. She merely states that because Lasch did not follow a written manual, the defendant's investigation was unreasonable. Kentucky's Unfair Claims Settlement Practices Act does not require the defendant to adopt a written manual. The plaintiff claims that the information provided to the defendant should have created at least a doubt regarding the applicability of the business-pursuit exclusion. On the contrary, Tapp's complaint alerted Lasch's supervisor to the possibility that Lasch was engaged in a business pursuit. The plaintiff's statements to Lasch merely confirmed the exclusion's applicability. Concededly, where the determination of coverage depends on the credibility of witnesses and the weight of evidence, an insurance company must provide the insured with a defense, at least under a reservation of rights. Ogden v. Employers Fire Insurance Co., 503 S.W.2d 727, 729 (Ky.App. 1973). Coverage of the plaintiff's claim did not, however, depend upon the credibility of witnesses. The plaintiff's own statements to Lasch conclusively barred her claim under the business-pursuit exclusion. For the same reasons, the defendant's denial of the plaintiff's claim cannot be deemed unfair under Kentucky's Consumer Practices Act.
LENNING'S MOTION TO AMEND
The plaintiff moves to amend her complaint to include a claim of severe emotional distress, contending that the defendant's pleadings maliciously commented upon her character. A plaintiff may be granted leave to file an amended complaint where justice so requires. Fisher v. Roberts, 125 F.3d 974, 978 (6th Cir. 1997). An amendment may not be permitted, however, if the complaint as amended could not withstand a motion to dismiss. Sinay v. Lamson Sessions Co., 948 F.2d 1037, 1041 (6th Cir. 1991). Here, the plaintiff's amendment would be futile.
"Kentucky courts have long recognized that statements in judicial proceedings, if relevant to the issues involved, are absolutely privileged, even though it may be claimed that they are false and alleged with malice." General Electric Co. v. Sargent Lundy, 916 F.2d 1119, 1126 (6th Cir. 1990). The defendant noted that the plaintiff had failed to report her profits from the homes' construction on her tax forms. This statement was relevant to determining whether the plaintiff engaged in the construction venture with an intent to profit. The defendant also charged that Lenning misrepresented facts to her insurance agent. Made in response to the plaintiff's Consumer Protection Act claim, this statement was not irrelevant. The plaintiff's motion to amend her complaint must, therefore, be denied.
ORDER
For the reasons stated above, IT IS ORDERED that the defendant's motion for summary judgment is GRANTED;
IT IS FURTHER ORDERED that the plaintiffs' motions for summary judgment are DENIED;
IT IS FURTHER ORDERED that the plaintiff's motion to amend her complaint is DENIED;
IT IS FURTHER ORDERED that the plaintiff's motion to videotape her deposition is DENIED.
This the 18th day of February, 2000.