American Zurich Insurance Company v. Catalyst Resources, LLC and Covol Fuels No. 3, LLC

CourtDistrict Court, E.D. Kentucky
DecidedMarch 9, 2026
Docket6:24-cv-00131
StatusUnknown

This text of American Zurich Insurance Company v. Catalyst Resources, LLC and Covol Fuels No. 3, LLC (American Zurich Insurance Company v. Catalyst Resources, LLC and Covol Fuels No. 3, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Zurich Insurance Company v. Catalyst Resources, LLC and Covol Fuels No. 3, LLC, (E.D. Ky. 2026).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY SOUTHERN DIVISION (at London)

AMERICAN ZURICH INSURANCE ) COMPANY, ) ) Civil Action No. 6:24-CV-131-CHB Plaintiff, ) ) v. ) MEMORANDUM OPINION AND ) ORDER CATALYST RESOURCES, LLC, and ) COVOL FUELS NO. 3, LLC, ) ) Defendants. )

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This matter is before the Court on American Zurich Insurance Company’s Motion for Summary Judgment, [R. 24-1]. Catalyst Resources, LLC and Covol Fuels No. 3, LLC responded, [R. 26], and American Zurich replied, [R. 28]. The matter has been fully briefed and is ripe for review. For the reasons that follow, the Court will grant American Zurich’s Motion for Summary Judgment. I. BACKGROUND This suit arises from an insurance contract between American Zurich Insurance Company (hereinafter, “Plaintiff”) and Catalyst Resources, LLC and Covol Fuels No. 3, LLC (hereinafter, collectively, “Defendants”). Plaintiff is an insurer. [R. 27-1, p. 10 (Policy)]. Defendants are in the coal business, and Covol Fuels No. 3, LLC is the sole member of Catalyst Resources, LLC. Id. at 10, 13, 41; [R. 1, ⁋⁋ 2–3]. Pursuant to the insurance contract between Plaintiff and Defendants (hereinafter, “the Policy,” [R. 27-1]), Plaintiff agreed to provide workers’ compensation and employers liability insurance to Defendants for a one-year period between December 31, 2022, and December 31, 2023 (hereinafter, the “policy period”). [R. 27, ⁋ 5 (Salgado Dec.); R. 27-1, p. 10 (Policy)].1 The Policy established Defendants’ premiums in two stages. At first, based on Defendants’ own estimations as to their payroll and the type of work they expected to perform during the policy period, the Policy set an initial premium, called the “total estimated annual premium.” [R. 27-1, pp. 10–11, 18 (Policy)]. But the Policy further specified that the total estimated annual premium

was just that—“an estimate”—and noted the final premium would be determined after the Policy terminated based on the work Defendants actually performed during the policy period. Id. at 18. In order to determine the final premium, Plaintiff reserved the right under the Policy to conduct an audit. Id. And, if the final premium calculated was greater than the total estimated annual premium, Plaintiff reserved the right to collect the balance owed by Defendants. Id. Defendants canceled the Policy on June 1, 2023. [R. 27, ⁋ 5 (Salgado Dec.)]. Afterwards, Plaintiff conducted an audit and determined that Defendants owed additional premiums. Id. at ⁋ 10; [R. 27-2, p. 2 (Audit Adjustments)]. Plaintiff alleges Defendants have since refused to pay those premiums. [R. 24-1, pp. 9–10; R. 27, ⁋⁋ 14–17, 26 (Salgado Dec.)]. Additionally, the policy

requires Defendants to pay a deductible for submitted claims. [R. 27-1, p. 37 (Policy)]. Plaintiff further alleges that although it paid a claim during the policy period and thereafter issued invoices

1 Confusingly, Plaintiff originally filed the Salgado Declaration at [R. 24-3] alongside Plaintiff’s Motion for Summary Judgment at [R. 24-1], but Plaintiff failed to attach the exhibits referenced in the Salgado Declaration. Then, after apparently realizing this error—but only after Defendants had filed their Response brief—Plaintiff re-filed the Salgado Declaration along with its exhibits at [R. 27; R. 27-1–R. 27-12]. See [R. 28-1, ⁋ 9].

In the Kadian Declaration at [R. 28-1], Plaintiff explains that Defendants were not prejudiced by Plaintiff’s failure to attach their exhibits until after Defendants filed their Response because “Defendants were provided with complete copies of these exact same exhibits on November 11, 2024, as part of [Plaintiff’s] Request for Admissions.” [R. 28-1, ⁋ 9]. The Court agrees that in light of Plaintiff’s prior disclosure of these documents, Defendants were not prejudiced by Plaintiff’s failure to attach them to its Motion for Summary Judgment. And, in any event, Defendants have filed no motion to strike the late-attached exhibits or indicated their objection to the documents through their Response. The Court is satisfied and will consider these exhibits in its analysis. for the deductible owed, Defendants have not paid those invoices. [R. 24-1, pp. 10–11; R. 27, ⁋⁋ 16–25 (Salgado Dec.)]. As a result, Plaintiff sued, alleging Defendants breached the Policy terms in two ways: by failing to pay additional premiums and failing to pay the deductible owed. [R. 1, ⁋⁋ 31–39]. Plaintiff also brings claims for account stated, anticipatory repudiation, and unjust enrichment. Id.

at ⁋⁋ 40–64. Plaintiff now seeks summary judgment based on Defendants’ alleged failure to pay the additional premiums and deductible obligations under the Policy, arguing Defendants owe them $128,917.80 on the Policy premiums (including interest accrued through August 25, 2025) and $29,317.05 on the unpaid deductible (including interest accrued through August 25, 2025). [R. 27, ⁋⁋ 14–16, 21, 24–25 (Salgado Dec.)]. Defendants responded, generally contesting the accuracy of Plaintiff’s audit and accounting practices based on alleged previous accounting mistakes by Plaintiff. [R. 26, pp. 2–3; R. 26-1, ⁋⁋ 7–12 (Gilmore Dec.)]. Plaintiff replied, providing support for the accuracy of its audit and accounting procedures and arguing that Defendants’ unsupported assertions as to Plaintiff’s “potential mistakes” are insufficient to avoid summary

judgment. [R. 28, pp. 6–10]. The matter is therefore ripe for review. II. LEGAL STANDARD Under Federal Rule of Civil Procedure 56, a court may grant summary judgment if it first finds that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).2 “A genuine dispute of material fact exists ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’” Winkler

2 Plaintiff’s Motion for Summary Judgement and Reply mistakenly cite to Kentucky law when discussing the summary judgment standard. See [R. 24-1, pp. 7–8; R. 28, p. 6]. This is incorrect. Instead, the federal summary judgment standard applies. See Fed. R. Civ. P. 56. v. Madison County, 893 F.3d 877, 890 (6th Cir. 2018) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The moving party bears the initial burden “of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the

absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also Anderson, 477 U.S. at 256. That burden may be satisfied by demonstrating that there is an absence of evidence to support an essential element of the non-moving party’s case for which he or she bears the burden of proof. Celotex Corp., 477 U.S. at 323. Once the moving party satisfies this burden, the non-moving party thereafter must produce “specific facts, supported by the evidence in the record, upon which a reasonable jury could find there to be a genuine fact issue for trial.” Bill Call Ford, Inc. v. Ford Motor Co., 48 F.3d 201, 205 (6th Cir.

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Bluebook (online)
American Zurich Insurance Company v. Catalyst Resources, LLC and Covol Fuels No. 3, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-zurich-insurance-company-v-catalyst-resources-llc-and-covol-kyed-2026.