Court Opinion

ID: 8436176
Source: CourtListenerOpinion
Date Created: 2022-11-04 14:04:06.135922+00
Date Added: 2024-06-11T16:48:42.961788
License: Public Domain

RENDERED: OCTOBER 28, 2022; 10:00 A.M.
                        NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2021-CA-1242-MR

TERESA BATES                                                       APPELLANT

                   APPEAL FROM KNOTT CIRCUIT COURT
v.                 HONORABLE KIM C. CHILDERS, JUDGE
                         ACTION NO. 21-CI-00088

TODD DAUPER; AXEL
SMALLWOOD; AND STATE FARM
MUTUAL AUTOMOBILE
INSURANCE COMPANY                                                   APPELLEES

                                    OPINION
                                   AFFIRMING

                                  ** ** ** ** **

BEFORE: GOODWINE, MAZE, AND K. THOMPSON, JUDGES.

GOODWINE, JUDGE: Teresa Bates (“Bates”) appeals the October 12, 2021 order

of the Knott Circuit Court dismissing Todd Dauper (“Dauper”), a claims specialist

for State Farm Mutual Automobile Insurance Company (“State Farm”), as a party

for lack of personal jurisdiction. We affirm.
               Bates and her husband, Carl, are both residents of Texas. They were

involved in a motor vehicle collision involving another vehicle driven by Axel

Smallwood (“Smallwood”) in Knott County, Kentucky on September 17, 2019.

The Bateses presented a claim for bodily injury to Smallwood’s liability insurance

carrier, Grange Insurance Company (“Grange”). After settling their claim with

Grange, the Bateses filed a claim for underinsured motorist (“UIM”) benefits with

their automobile insurance carrier, State Farm. The State Farm policy originated in

the Bateses’ home state of Texas, where their vehicle is garaged and registered.

Dauper, a Texas claims specialist, was assigned to the UIM claim.

               On April 26, 2021, the Bateses filed suit against Smallwood, State

Farm, and Dauper. They alleged, in relevant part, Dauper acted in bad faith in

violation of the Kentucky Unfair Claims Settlement Practice Act (“UCSPA”) by

failing to settle their UIM claim. State Farm then paid out $100,000, the full

amount allowed by the UIM limits of the Bateses’ policy.1 Dauper, a resident of

Texas, moved for dismissal, arguing Kentucky courts did not have personal

1
  Bates maintains she is entitled to “stack” the UIM benefits of the other vehicles listed on the
insurance policy. State Farm argues Texas has jurisdiction over Bates’ claims and stacking is
prohibited under that state’s law. Bates’ claims against Smallwood and State Farm remain
pending before the trial court.

                                                -2-
jurisdiction over him. Finding it lacked personal jurisdiction over him, the trial

court dismissed Dauper as a party. This appeal followed.2

                The existence of personal jurisdiction is a question of law which we

review de novo, giving no deference to the trial court’s decision. H.E.B., LLC v.

Jackson Walker, L.L.P., 587 S.W.3d 333, 338 (Ky. App. 2019) (citing Appalachian

Reg’l Healthcare, Inc. v. Coleman, 239 S.W.3d 49, 53-54 (Ky. 2007)).

                On appeal, Bates argues the trial court erred in dismissing Dauper as a

party based on lack of personal jurisdiction.3

                The trial court does not have personal jurisdiction over Dauper, a

nonresident of Kentucky. Personal jurisdiction refers to a “court’s authority to

determine a claim affecting a specific person[.]” Nordike v. Nordike, 231 S.W.3d

733, 737 (Ky. 2007) (citation omitted). The purpose of KRS4 454.210, the

Commonwealth’s long-arm statute, “is to permit Kentucky courts to exercise

personal jurisdiction over nonresident defendants while complying with federal

constitutional due process.” Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d

51, 54 (Ky. 2011) (citation omitted).

2
 Only Teresa, not Carl, appealed from the October 12, 2021 order of the trial court dismissing
Dauper as a party.
3
 Bates also argues the trial court inappropriately relied on Tennessee Farmers Mutual Insurance
Company v. Harris, 833 S.W.2d 850 (Ky. App. 1992), in dismissing Dauper. The record does
not indicate the court relied on Harris. In fact, the order dismissing Dauper cites no case law.
4
    Kentucky Revised Statutes.

                                              -3-
               Determination of long-arm jurisdiction over a nonresident defendant

requires a two-step analysis. H.E.B., 587 S.W.3d at 338 (citation omitted). First, a

court must determine whether the matter arises from activities of the defendant

which fit into one of the categories enumerated in KRS 454.210. Id. For a claim

to “arise from the activities” of a defendant, there must be “a reasonable and direct

nexus between the wrongful acts alleged in the complaint and the statutory

predicate for long-arm jurisdiction.” Beach, 336 S.W.3d at 59. If the statute does

not apply, the court does not have personal jurisdiction over the defendant and the

claims against him must be dismissed. If the statute applies, the court must

perform the second step of analysis, which requires a determination of whether

exercising personal jurisdiction would offend the defendant’s federal due process

rights. H.E.B., 587 S.W.3d at 338 (citation omitted). If not, the court has personal

jurisdiction over the nonresident defendant. Id.

               Bates argues Kentucky courts have long-arm jurisdiction over Dauper

under KRS 454.210(2)(a)3., which confers personal jurisdiction where a person

has “[c]aus[ed] tortious injury by an act or omission in this Commonwealth[.]”5

To support this claim, she alleges Dauper ignored her demands, failed to make any

5
  On appeal, Bates also claims KRS 454.210(2)(a)1. applies. However, she did not raise this
argument before the trial court. It is well settled that a party is prohibited from raising an issue
for the first time on appeal. Sunrise Children’s Services, Inc. v. Kentucky Unemployment
Insurance Commission, 515 S.W.3d 186, 192 (Ky. App. 2016) (citation omitted). On this basis,
we will not consider the merits of this argument.

                                                -4-
offers of settlement, and forced her to litigate her UIM claim, causing her injury

under the UCSPA. Appellant’s brief at 6.

             Dauper is a resident of Texas and conducts his work as a claims

specialist for State Farm from Texas. He was assigned to Bates’ UIM claim

because the insurance policy originated in Texas, the Bateses are residents of

Texas, and the vehicle they were operating at the time of the collision is garaged

and registered in Texas. None of the conduct Bates claims Dauper engaged in

occurred in Kentucky. If Dauper ignored communications from Bates’ counsel in

violation of the UCSPA, he did so in Texas. Because the alleged activities did not

occur in Kentucky, KRS 454.210(2)(a)3. does not apply, and the trial court does

not have personal jurisdiction over Dauper. On this basis, we need not consider

the parties’ arguments regarding federal due process.

             Based on the foregoing, the order of the Knott Circuit Court is

affirmed.

             MAZE, JUDGE, CONCURS.

             THOMPSON, K., JUDGE, CONCURS IN RESULT ONLY.

BRIEFS FOR APPELLANT:                      BRIEF FOR APPELLEE TODD
                                           DAUPER:
Timothy C. Bates
Hindman, Kentucky                          Darrin W. Banks
                                           Paintsville, Kentucky

                                         -5-