NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION File Na me: 12a0548n.06 No. 11-5346 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT J OHN DA UGHERTY, Plaintiff-Appellant,

v. AMERI CAN EXPRESS COMPANY; HEAL THEXTRAS, I

NC., Def endants-A

ppellees. ) ) ) ) ) ) ) ) ) ) ) ON APPEALFROM THE UNI TED STATES DI STRI CT COURT FOR THE WESTERN DI STRI CT OF KE NTUCKY

BEF ORE: BOG GS and GRI FF I N, Circuit J udg es; BA RZI L AY, Judge. * P ER CURIAM J ohn Daug herty appea ls a district-court o r d e r d is mi s s in g h is c la im s a g a in s t A me r ic a n Ex press Company and He althEx tras, I nc. (c ollectively , “the de fenda nts”). We af

firm. Daug herty , an Am er i can Ex press car dholder, was solicited by mail to purcha se the “Ac cidental Disability Plan from Americ an Ex press,” a plan marke ted b y Am eric an Ex press and Hea lthEx tras that included $1

. 5 mi ll io n lu mp-sum disability insurance cover ag e provided by Fe dera l I nsuranc e Company (“F eder al”) and additional benef its underw ritten by other insurers. Daug herty enrolled in the plan in 2001, beg an pay ing mon t h l y p remiums, and subsequently filed a claim throu gh Am er i ca n Ex press, seeking benef its arising from a disabling injury that he suffe red on

The Honora

ble J udith M. Ba

rzilay , Senior J udg e for the United States Court of I nterna tional * Trade , sitti ng by

desig nation.No. 11-5346

Daugherty v . American E xpress Co., et al. Fe bruar y 23, 2003. On November 29, 2004, Fe dera l informed Daug herty that his claim was denied beca use his injury

did not constitut e a “ perma nent total disability ” as de fined by the plan. On Dec ember 27, 2007, Daug herty filed a complaint in state court ag ainst the defe ndants and other entities, including Fe dera l, asser ting that they brea ched the insurance contra ct by deny ing his claim. The action was remove d to f eder al court, and Daug herty amende d his complaint to inc lude the following cause s of action: brea ch of contra ct, brea ch of duty o f go o d fa i t h , violation of Kentucky ’s Unfa ir Claims Settlement Practice s Act, and misrepre sentation. After the district court bifurca ted Daug herty ’s brea ch-of -contrac t cl ai m from his other claims, the defe ndants moved for summary judgme nt on that claim, asser ting that 1) they wer e not parties to the i nsuranc e contract, and 2) even if they could be held liable under the insurance contra ct, Daug herty ’s claim was barr ed by the three -y ear

statute of limitations contained in the plan desc ription. The district court g rante d the motion for summary judgme n t , rea soning that Daug herty ’s brea ch-of -contra ct claim lay ag ainst the insurer, Fe dera l, and that the defe ndants could not be held liable for any brea ch of the insurance contra ct beca use they wer e not parties to the contra ct. The district court subsequently g rante d the defe ndants’ motion to dismiss Daug hterty ’s rema ining claims ag ainst them, concluding that his misrepre sentation claim was time-barr ed and that his statutory and common-law bad-f

aith claims fail ed beca

use there was no privity of contra ct. Daug herty timely appea ls. Upon de novo revie w, see Gen. Conference Corp. of Seve nth-Day Adve ntists v. McG ill , 617 F.3d 402, 407 (6th Cir. 2010), cer t

. d en ied , 131 S. Ct. 2097 (2011), we conclude that the district court did not err . Reg arding the contra ct claim, Daug herty arg ues that the Plan Summary provided by Americ an Ex press was “a binding contra ct on its fac e,” that he upheld his end of the barg ain by -2-No. 11-5346

Daugherty v . American E xpress Co., et al. pay ing the monthly premium, and that Americ an Ex press and Hea lthEx tras failed to uphold their end of t h e b ar gain by wrong fully deny ing his claim. Daug herty rea sons that Americ an Ex press and Hea lthEx tras we re in sole control of the pl an and wer e not relieve d of t heir c ontrac tual obliga tion to him simply beca

use they used Fe dera l as a “vendor .” This arg ument cannot be sustained in light of t he plain terms of the P lan S ummary and the Bene fit Plan Descr iption, both of which state t hat the re levant portion of the disa bility plan is underwr itten by

Fe dera l. Specifica lly , the “Certific ate of I nsuranc e” included in the “B enef it Plan Desc ription” states:

“ W e will pay the applicable Be nefit Amount if an Acc ide n t r esults in a L oss not otherwise excluded.” “We” ref ers to “the Company provid i n g t h i s insurance ,” and “Company ” is define d as “F eder al I nsuranc e Company .” There fore , the contra ct unambig uously provides that only “F eder al I nsuranc e Company ” will pay insurance benef its in the event of an Acc ident. Daug herty ’s relianc e on the Plan Summary far es no better, as the Summary nowher e indicates that the defe ndants underta ke to insure Daug herty

. I ndeed, it e x pressly states that the “ter ms a nd conditions de scribed in the Be nefit Plan Desc ription and Master Policies” g overn insurance cover ag e. The Master Policy contains p r o visions and def initions identical to those in the B enef it Pl an De scription. Under Kentucky law, an insurance policy is a contra ct “betwe en an insurer and an insured.” Estate of R iddle ex rel. Riddle v. S. Farm B ureau Life Ins. Co. , 421 F.3d 400, 404 (6th Cir. 2005) ;

see Buck Run Baptist Church, Inc. v. Cumber l a n d S u r . Ins. Co., Inc. , 983 S.W .2d 501, 504 (Ky

. 1998) (“A n insurance policy is a contra ct of indemnity wher eby the insurer ag ree s to indemnify the insured for any loss resulting from a specific event.” ). The plan documents make clea r that Fe dera l is the insurer and, as such, is the party subject to liability under the insurance contra ct. See Lenning v. C ommerc ial Union Ins. Co. , 260 F.3d 574, 581 ( 6th Cir. 2001) (“Unde r Ke ntucky law, in order -3-No. 11-5346

Daugherty v . American E xpress Co., et al. to rec over in any action based on brea ch of a contract, a plaintiff must show the exis tence and the brea ch o f a co ntrac tually imposed duty .”); Sudamax Industria e Comercio de Cigarros, Ltda v. Buttes & Ashes, Inc. , 516 F. Supp. 2d 841, 845 (W.D. Ky

. 2007) (“A contra ct is only binding upon the parties to a contract.” ). Ac cording ly , the district court properly g rante d summary judgme nt to the def endants on Da

ug herty ’s bre ach- of-c ontrac t c laim. And, bec ause D aug herty ’s common-law

an d s tatutory bad-f

aith claims rest on his arg ument that the defe ndants wer e in brea ch of the insurance contra ct, those claims wer e proper ly dismiss ed as well. See Davidson v. Am. Freightways, Inc. , 25 S.W .3d 94, 100 (Ky . 2000) (“A bsent a contra ctual oblig ation, there simply is no bad faith

cause of ac tion, either at c ommon law or by statute.”). The dist rict court denied Daug herty ’s fi n al claim – that the defendants mi srepr esente d the terms of the disability plan in their solicitation and promotional materia ls – as b ar red by the applicable five-y ear statute of limit ations. See Ky

. Rev. Stat. § 413.120(2), (12). The district court deter mined that Daug herty ’s cause of action acc rued when he rec eived the plan documents setting forth the ter

ms of coverag e. Daug herty arg ues t hat hi s misrepre sentation claim ac crue d no ear lier than Novembe r 29, 2004, the da te that Fe dera l denied his insuranc e cla im. Under Kentucky law, the statute of limit ations for a fra ud or misrepre sentation claim beg ins to run “fr om the time the fra ud could have been disc overe d throug h ordinary diligenc e.” Johnson

v. S mi t h , No. 98-5593, 1999 WL 551383, at *1 (6th Cir. J uly 19, 1999); see Ky

. Rev. Stat. § 413.130(3); McLain v. Dana Corp. , 16 S.W .3d 320, 326 (Ky

. Ct. App. 1999). The district c ourt proper ly deter

mined that the limit ations period b ega n to run when Daug herty rec eived the plan documents, at which time he could have discovere d a ny a lle g ed misrepre sentations in the solicitation and promotional materia ls. See Allen v. Lawyers Mut. Ins. Co. of Ky. , 216 S.W .3d 657, 662 (Ky

. Ct. -4-No. 11-5346

Daugherty v . American E xpress Co., et al. Ap p . 2007) (conc luding that the plaintiff’s fra udulent-misrepre sentation claims acc rued when he

rec eived his in s u ra n ce cer tificate, rathe r than when his rede mption reque st was denied) ; see also Johnson , 1999 WL 551383, at *1 (noting that the plaintiffs could have discovere d the alleg ed fra ud simply by rea ding the underly ing ag ree ments). The case on which Daug herty relies, Doe v. Golden & W alters, PLLC , 173 S.W

. 3 d 2 60, 270-71 (Ky

. Ct. App. 2005), is distinguishable beca use it involves the acc rual of a malprac tice claim arising from litigation, which is g overne d by an entirely differ ent s tatute of limit ation s t h an a fraudulent-misre prese ntation claim. See Johnson , 1999 WL 551383, at *2-3 (distinguishing between m al p ractice claims and fra ud claims for purposes of the

s t at u t e o f l imitations ); see also Raisor v. Burkett , No. 2007-CA-001508-MR, 2008 WL 2219887 , at *4 (Ky

. Ct. App. May 30, 2008) (“The rules develope d by our courts reg arding the acc rual of leg al malprac tice actions are specific to that tort alone, and we decline to extend them to misrepre sentation actions.”)

. For these re asons, we a ffirm the district c ourt’s judg ment.

-5-