                        NOT RECOMMENDED FOR PUBLICATION
                                File Name: 13a0254n.06

                                           No. 12-5734

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                                                                       FILED
                                                                                    Mar 11, 2013
NORTH AMERICAN SPECIALTY INSURANCE                      )                    DEBORAH S. HUNT, Clerk
COMPANY                                                 )
                                                        )
       Plaintiff-Appellee.                              )
v.                                                      )   ON APPEAL FROM THE UNITED
                                                        )   STATES DISTRICT COURT FOR
                                                        )   THE EASTERN DISTRICT OF
JOHN PAUL PUCEK, DAVID FOGG, BRETT                      )   KENTUCKY
SETZER, and ROBERT L. EDWARDS                           )
                                                        )
       Defendant-Appellant,                             )
                                                        )



Before: KEITH, MARTIN, and COLE, Circuit Judges.

       BOYCE F. MARTIN, Circuit Judge. This case involves a dispute over an equine mortality

insurance policy. John Paul Pucek, David Fogg, Brett Setzer, and Robert L. Edwards, the former

owners of a horse named Off Duty, appeal a district court order granting summary judgment to North

American Specialty Insurance, Co. For the reasons set forth below, we AFFIRM the district court’s

judgment.


                                       I. BACKGROUND


       On October 19th, 2008, Off Duty, a five-year-old thoroughbred, fractured both of his

sesamoid bones in his left front limb while training at Churchill Downs. A track trainer examined

Off Duty and found he had a collapsed fetlock joint and thus had destroyed his suspensory apparatus.
No. 12-5734
North Am. Specialty Insur. Co. v. Pucek

Such an injury is incurable and there are two options in response to it: (1) euthanize the horse, or (2)

perform a surgical procedure called fetlock arthrodesis. The trainer at Churchill Downs told the

Owners the horse could be euthanized at the track, but the Owners instead took Off Duty to another

veterinarian for a second opinion. At approximately 10 a.m. on the day of the injury the Owners’

insurance agent alerted Kirk Horse Insurance, LLC, the Managing Underwriter for North American

Specialty, of Off Duty’s injury.


        The Owners took Off Duty to Rood & Riddle Veterinarian Hospital in Lexington, Kentucky,

where Lawrence Bramlage, D.V.M., examined Off Duty on October 19. That afternoon Dr.

Bramlage told Ron Kirk and Ryan Quinn of Kirk Horse Insurance about Off Duty’s condition. Dr.

Bramlage told Kirk and Quinn that, while a horse’s suspensory apparatus cannot be reconstructed,

he believed Off Duty was a good candidate for fetlock arthrodesis and that there was a fifty-percent

chance that Off Duty could be saved as a breeding stallion. Fetlock arthrodesis is a procedure where

the horse’s joint is fused, allowing the horse to stand on its leg. Without surgery, the horse will

likely die from a condition called “laminitis,” caused by the horse placing too much weight on the

leg opposite the injured limb. Laminitis is extremely painful and horses with laminitis are

euthanized. Dr. Bramlage had helped pioneer the fetlock arthrodesis surgery, which is considered

a salvage surgery as, in the Appellant’s words, “the horse can be kept alive and his economic value

salvaged.”


        While Dr. Bramlage believed Off Duty was a good candidate for the fetlock surgery, he

refused to provide an official opinion to North American Specialty on the case because the Owners

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North Am. Specialty Insur. Co. v. Pucek

had hired him to inspect Off Duty. Furthermore, the Owners had told Dr. Bramlage they wanted to

euthanize the horse and did not want to proceed with the surgery. On October 20th, Dr. Bramlage

sent a letter to one of the Owners, John Pucek, with a copy to Quinn, saying that Off Duty’s fetlock

injury was grounds for humane destruction under American Association of Equine Practitioners

guidelines. The letter also stated that the fetlock surgery “is a long and complicated surgical

procedure and the [American Association of Equine Practitioners] Insurance Committee has held

that it is beyond what should be required of the insured, unless all parties agree to proceed with the

attempt to save the horse.” Bramlage’s letter says that North American Specialty requested he

consider surgery, but he would not agree unless the Owners were also in agreement. Bramlage

recommended North American Specialty seek another veterinary opinion, and he referred Quinn and

Kirk to Dr. Michael Spirito or Dr. Robert Hunt for second opinions.


       Quinn contacted Dr. Spirito on October 21st. Dr. Spirito ultimately recused himself from the

proceedings because he was friends with Kirk and also with David Fogg, one of the Owners, who

had contacted Spirito asking that he provide an opinion in support of euthanasia. However, Dr.

Spirito did provide the Owners with an unofficial opinion, saying the injury was incurable and met

the American Association of Equine Practitioners guidelines for euthanasia. Spirito also agreed that

the fetlock arthrodesis surgery, if successful, would save Off Duty’s life.


       After Dr. Spirito’s recusal, Kirk called the second veterinarian Dr. Bramlage recommended,

Dr. Hunt, on October 22nd. Also on October 22, Kirk received a letter from the Owners’ counsel

stating that they had decided to euthanize Off Duty within twenty-four hours. Because Dr. Hunt was

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North Am. Specialty Insur. Co. v. Pucek

not available that evening, Dr. Hunt’s partner, Dr. Richard Holder, personally examined Off Duty

at the Rood & Riddle facility on Hunt’s behalf and provided Dr. Hunt with a summary of Off Duty’s

condition. Dr. Holder described Off Duty as being calm, with normal heart and breathing rates. Dr.

Holder said Off Duty was eating well, did not appear stressed, and was “passing manure normally.”


        The next day, October 23, the Owners’ counsel contacted Kirk at 1:30 p.m. saying it was

their intention to euthanize Off Duty. Pucek had visited Off Duty and felt the horse was suffering

and had video-taped Off Duty in his stall. At 2:35 p.m., the Owners received Dr. Hunt’s opinion

which stated that while Off Duty’s injury was life-threatening if not addressed, he believed Off Duty

was a good candidate for fetlock arthrodesis surgery. Dr. Hunt recommended the fetlock surgery;

however, he agreed that if there were any complications from the surgery he would recommend

humane destruction. Given Pucek’s opinion of Off Duty’s condition, Dr. Hunt asked another of his

partners, Dr. Smith, to examine Off Duty at 2:50 p.m. on October 23, to make sure Off Duty’s

condition had not changed from the day before. Dr. Smith found Off Duty’s heart and breathing

rates to be within normal range. This is consistent with Rood & Riddle’s medical records as well,

which record Off Duty as “[a]mbulating well around the stall” on October 23.


        Later on the afternoon of October 23, North American Specialty offered to pay for the fetlock

surgery and post-operative care of Off Duty until he had recovered, without diminishing the policy’s

coverage. The Owners rejected the offer and euthanized Off Duty the next morning on October 24,

2008.




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North Am. Specialty Insur. Co. v. Pucek

          On November 6, 2008 the Owners submitted a payment claim under their insurance policy.

North American Specialty denied the claim on November 24, 2008. North American Specialty

brought a declaratory judgment action and following discovery, moved for summary judgment. The

district court entered summary judgment against the Owners on June 15, 2012 and the Owners now

appeal.


                                            II. ANALYSIS


          A.     Standard of review


          We review a grant of summary judgment de novo. State Fram Fire & Cas. Co. v. Zurich Ins.

Co., 111 F.3d 42, 44 (6th Cir. 1997). The Court must consider the evidence in the light most

favorable to the nonmoving party to determine whether a genuine issue of material fact exists. A

grant of summary judgment is proper if “the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ.

P. 56(a). A genuine dispute of material fact exists if the evidence shows “that a reasonable jury

could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249

(1986).


          B.     Interpretation of the Equine Mortality Policy

          This case is a dispute over the terms of an insurance policy. This is a diversity case and we

apply the choice of law provisions of the forum state, Kentucky. Pedicini v. Life Ins. Co. of


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North Am. Specialty Insur. Co. v. Pucek

Alabama, 682 F.3d 522, 526 (6th Cir. 2012), reh’g denied (July 11, 2012). In Kentucky, the legal

effect of an insurance policy is a matter of law for the court. State Farm Mut. Auto. Ins. Co. v.

Slusher, 325 S.W.3d 318, 322 (Ky. 2010) (citing Morganfield Nat’l Bank v. Damien Elder & Sons,

836 S.W.2d 893, 895 (Ky. 1992)). “[A]mbiguous language must be liberally construed so as to

resolve all doubts in favor of the insured,” and where language is not ambiguous the court should

apply the ordinary meaning of the insurer’s words is to be followed. Bituminous Cas. Corp. v.

Kenway Contracting, Inc., 240 S.W.3d 633, 638 (Ky. 2007); Slusher, 325 S.W.3d at 322.

        The parties spend much of their briefs arguing about whether the Owners violated Section

IV.1.u. of the policy, which outlines the Owners’ obligations if the horse is injured, sick, or diseased.

The relevant section requires the Owners to:

        (1) Give immediate notice to [North American Specialty’s] Managing Underwriter as shown
            on the Declarations Page;
        (2) Employ at your [the owners’] expense a veterinarian to treat the horse;
        (3) Secure proper care, and, if necessary, allow the horse to be removed at [North American
            Specialty’s] direction for treatment at [the owners’] expense.

Failure or refusal to follow these steps gives North American Specialty the right to deny coverage.

The Owners argue that fetlock arthrodesis surgery is beyond what “proper care” requires, while

North American Specialty argues that euthanasia does not constitute treatment under the policy. The

district court found it unnecessary to delve into the ambiguities of the language, holding that the

Owners had violated an exclusion in the mortality policy. We agree.




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North Am. Specialty Insur. Co. v. Pucek

       North American Specialty’s policy provides an exclusion from coverage if the Owners

intentionally destroy the horse. Section II.2.b. However an exception to the exclusion allows

coverage for humane destruction of a horse. Id. The policy defines humane destruction as,

       the intentional slaughter of a horse:
       a. when the horse suffers an injury or is afflicted with an excessively painful disease and
           a veterinarian appointed by [North American Specialty’s] Managing Underwriter certifies
           in writing that the horse is incurable and in constant pain, or presents a hazard to itself
           or its handlers; or
       b. when the horse suffers an injury and [the owners’] appointed veterinarian certifies in
           writing that the horse is incurable and in extreme pain, and that immediate destruction
           is imperative for these reasons without waiting for the appointment of a veterinarian by
           [North American Specialty’s] Managing Underwriter.

Section V.2.a and b. The Owners euthanizing of Off Duty does not meet the humane destruction

standards.


       For the humane destruction exception to the exclusion to apply under either clause a or b, a

veterinarian must have provided two things: (1) a certified written opinion; and (2) an opinion

determining that the horse was “incurable and in constant pain.” The only certified written opinion

we have here is from Dr. Hunt, and it does not meet the second requirement. Dr. Hunt’s partners did

not find Off Duty to be in constant pain and Dr. Hunt’s opinion determined that Off Duty was

“reasonably comfortable” with normal “vital parameters.”


       The Owners’ challenge Dr. Hunt’s opinion because he did not personally examine Off Duty

and they further argue that Pucek recorded a video of Off Duty on October 23, 2008 showing that

the horse was in extreme pain. The Owners’ arguments are not persuasive. While Dr. Hunt did not

personally examine Off Duty, he had two qualified veterinarians check the horse for signs of distress.


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North Am. Specialty Insur. Co. v. Pucek

Furthermore, while not certified opinions capable of meeting the policy requirements for humane

destruction, neither Dr. Bramlage, nor the medical records from Rood & Riddle Veterinarian

Hospital, describe the horse as being in extreme pain. Finally, the Owners’ video is ultimately not

relevant to the policy guidelines, which required a veterinarian to certify in writing that the horse was

incurable and in extreme pain.


        Regardless of whether the American Association of Equine Practitioners guidelines allow

for euthanasia, the parties had agreed to the language of the contract. The Owners do not meet the

exception to the Intentional Destruction exclusion. The Owners euthanized Off Duty, despite North

American Specialty’s offer to take over treatment of the horse and in violation of their Equine

Mortality Policy.


                                          III. CONCLUSION

        For all of the reasons set forth above, we AFFIRM the judgment of the district court.




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