MICHAEL WHITEHEAD AS ADMINISTRATOR OF THE ESTATE OF CHRISTA JENNIFER WHITEHEAD APPELLANT v. MEMBERSELECT INSURANCE COMPANY APPELLEE (2026)

OPINION AFFIRMING

This is an appeal from an Order granting a motion to dismiss in favor of MemberSelect Insurance Company (“MemberSelect”) due to lack of personal jurisdiction against the out-of-state insurer in Kentucky. For reasons outlined below, we affirm.

FACTUAL BACKGROUND

Victor Whitehead and Christa Whitehead (“The Whiteheads”), a married couple and Michigan residents, both died in a car accident that occurred in Scott County, Kentucky on January 23, 2023. Victor was driving with Christa as a passenger, and there were no other vehicles involved. The Whiteheads and their vehicles were insured by MemberSelect, a Michigan insurance company. MemberSelect is not registered to do business in Kentucky, does not issue policies in Kentucky, and does not transact any other business in Kentucky.

In January 2024, the Estate of Christa Whitehead (“Christa's Estate”) filed a lawsuit in Scott Circuit Court claiming that Victor had negligently operated the vehicle, thereby causing the accident. Christa's Estate further filed suit for common law and statutory bad faith claims against MemberSelect. For its bad faith claim, Christa's Estate asserted that the policy provided liability limits of $250,000, but MemberSelect had delayed settlement of the negligence/wrongful death claim by offering only $50,000, thus requiring Christa's Estate to file a lawsuit for the full limits.

MemberSelect filed a motion to dismiss all claims pursuant to Kentucky Rule of Civil Procedure (“CR”) 12.02 for lack of personal jurisdiction. MemberSelect argued that as a non-resident party, it could not be sued under either Kentucky's long-arm statute, Kentucky Revised Statute (“KRS”) 454.210, or the due process provisions of the United States Constitution. MemberSelect also argued that there was no merit to the bad faith claim. It asserted that it had made an offer to Christa's Estate, relying upon a valid “step-down” clause or household exclusion of the policy, and that Michigan law required payment of only the minimum liability limits, which MemberSelect claimed was $50,000.¹

Christa's Estate countered that an offer consistent with the Michigan policy's household exclusion was invalid under Kentucky law, which has long found such provisions to be unenforceable and in violation of public policy. Lewis v. W. Am. Ins. Co., 927 S.W.2d 829 (Ky. 1996). However, the validity of the household exclusion in this instance and any applicability to the claim in this case was never addressed below. It is not before this Court due to subsequent events.

In August 2024, the parties advised the circuit court that all claims of Christa's Estate against Victor's Estate had been settled and dismissed. The record reveals that MemberSelect ultimately paid $250,000, rather than the $50,000 initially offered, leaving only the bad faith allegations of Christa's Estate against MemberSelect. Additional briefing continued as to MemberSelect's motion to dismiss, with Christa's Estate asserting that Kentucky courts had jurisdiction over MemberSelect because it had “caused tortious injury by an act or omission in this Commonwealth” by seeking to enforce the household exclusion, which is not recognized in Kentucky.

MemberSelect continued to argue the circuit court could not exercise personal jurisdiction for the alleged bad faith claims arising from claim decisions made in its corporate offices in Michigan, when the only connection to Kentucky was that the accident occurred in this state. MemberSelect also argued that a delay in paying the limits, with a dispute over the amount owed, would not constitute bad faith under either state's laws. Christa's Estate then asserted that MemberSelect had waived its objections to personal jurisdiction by entering a general appearance and by making these other arguments as to its good faith practices, choice of law, and remedies available.

On August 6, 2025, the circuit court granted MemberSelect's motion to dismiss, analyzing Kentucky's long-arm statute, KRS 454.210, as follows:

Under Kentucky law, a plaintiff must first establish that the exercise of personal jurisdiction over a non-resident defendant is proper under Kentucky's long-arm statute, KRS 454.210. Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky. 2011). Under this analysis, the Court must first determine whether one of the nine listed instances of conduct set forth in KRS 454.210(2)(a) applies to permit the exercise of personal jurisdiction over a non-resident. Id. at 55; KRS 454.210(a). If the plaintiff satisfies the first step, the “plaintiff must also show that his claim is one that arises [from] the conduct or activities described in the subsection.” Id.; KRS 454.210. Further, any claim “based upon contacts, conduct[,] and activities which may not be fairly said to meet one of these explicit categories must be held to be outside the reach of the statute, regardless of whether federal due process might otherwise allow the assertion of in personam jurisdiction.” Id. at 56.

One of the nine instances of conduct set forth in KRS 454.210(2)(a) that permits the exercise of personal jurisdiction over a non-resident is “[c]ausing tortious injury by an act or omission in this Commonwealth.” KRS 454.210(2)(c). In determining whether a claim should be considered “arising from acts” enumerated in this section, the wrongful conduct “must originate from the actions or activities that form the applicable statutory predicate for assertion of long-arm jurisdiction.” Caesars Riverboat, 336 S.W.3d at 58-59. The Court should consider whether there is a “reasonable and direct nexus between the wrongful acts alleged in the complaint” and the applicable subsection. Id. at 59. This determination depends on a “common sense analysis” of the facts. Id.

The second step to determine whether the Court can exercise personal jurisdiction over a non-resident defendant is to ascertain whether exercising jurisdiction would comport with constitutional due process concerns. Id. at 57. The Court must answer three questions to determine whether constitutional due process permits jurisdiction over the non-resident defendant: (1) does the defendant have “minimum contacts with this Commonwealth such that maintenance of a suit would not offend traditional notions of fair play and substantial justice[?]”; (2) did the defendant “purposefully avail itself by conducting activities within this Commonwealth, thus invoking the benefits and protections of our laws[?]”; and (3) did the defendant have a connection with this Commonwealth such that it should reasonably anticipate [being] haled into court here?” Nat'l Grange Mut. Ins. Co. v. White, 83 S.W.3d 530, 534 (Ky. 2002). It is also stated that “the unilateral activity of someone other than the defendant cannot satisfy the requirement of contact with the forum state.” Id.

This appeal followed.

STANDARD OF REVIEW

The parties agree that the proper standard of review on appeal is de novo. Appalachian Reg'l Healthcare, Inc. v. Coleman, 239 S.W.3d 49, 53-54 (Ky. 2007). “When a lawsuit is filed in Kentucky against a non-resident defendant, the plaintiff carries the burden of establishing jurisdiction over the defendant.” Hinners v. Robey, 336 S.W.3d 891, 895 (Ky. 2011) (citation omitted).

ANALYSIS

The circuit court properly set forth the two-step process required under the version of the long-arm statute in effect at the time of this action to determine whether our courts can exercise personal jurisdiction over a non-resident defendant. See Caesars Riverboat Casino, 336 S.W.3d at 57.² As recently reiterated by our Supreme Court, a trial court must consider two questions when deciding the propriety of exercising personal jurisdiction over an out-of-state defendant under the version of Kentucky's long-arm statute in effect at the time pertinent to this appeal:

First, review must proceed under [the long-arm statute] to determine if the cause of action arises from conduct or activity of the defendant that fits into one of the statute's enumerated categories. If not, then in personam jurisdiction may not be exercised.

Braun v. Bearman Indus., LLC, ___ S.W.3d ___, 2025 WL 2998495, at *3 (Ky. Oct. 23, 2025) (quoting Caesars Riverboat Casino, 336 S.W.3d at 57).

In the case before us and as the circuit court noted, both parties cited precedent in support of their arguments regarding personal jurisdiction. Both parties agreed that the relevant statutory provision in this case was whether MemberSelect caused “tortious injury by an act or omission in this Commonwealth[.]” KRS 454.210(2)(a)3. (2019). However, the issue before the circuit court and on appeal has not been fully addressed in our prior decisions. We believe the question here is more limited. Can an out-of-state insurer be brought into Kentucky for “causing tortious injury by an act or omission in this Commonwealth” based solely on alleged bad faith handling of a claim involving only out-of-state insureds?

Christa's Estate relies primarily upon Auto Owners Insurance Co. v. Consumers Insurance USA, Inc., 323 S.W.3d 781 (Ky. App. 2010). In Auto Owners, an accident occurred in Kentucky, due to the negligence of a Tennessee resident, and caused injuries to a Kentucky resident. Id. at 782. Auto Owners insured the injured Kentucky resident and paid basic reparation benefits to its insured. Id. Auto Owners then filed suit against the Tennessee resident and against her insurer, Consumers, to recover those benefits. Id. Auto Owners also alleged bad faith claims against Consumers for its failure to reimburse the payment. Id. Consumers did not transact business within Kentucky and argued that it did not subject itself to the jurisdiction of Kentucky courts.

In that case, this Court stated that Consumers had availed itself of the privilege of acting in Kentucky by writing an automobile policy that had no geographical boundaries or limitations upon its drivers. Id. at 784. It further noted that the automobile accident arose from Consumers’ insured's activity within the Commonwealth, which caused injury to a Kentucky resident. Id. Finally, it found that the accident caused by the insured of a non-resident insurer was a sufficiently substantial connection to Kentucky to make the exercise of jurisdiction reasonable. Id.

Christa's Estate maintains that Auto Owners held that any insurer issuing a policy that does not contain geographical limitation voluntarily assumes an interstate obligation and “purposefully avails” itself to out-of-state jurisdiction. However, we do not read that case so broadly.

The Auto Owners Court found it significant that the injured party in that action, a Kentucky resident, was a stranger to the contract between Consumers and its insured. The Court held that an injured Kentucky resident should not be “circumscribed by the contractual relationship of others” to preclude her from using the courts of her state of residence. Id. The opinion also discusses the fact that Consumers utilized the services of an independent adjusting service to assess the damage done to the two vehicles, used an independent medical damage assessor to assess injuries sustained by the Kentucky resident, and hired Kentucky counsel to defend the personal injury suit that arose because of the collision. In the case at hand, the only remaining claim is that of the injured party, a Michigan resident, making a bad faith claim against her own insurer, a Michigan corporation, who issued its claim handling decision out of its home office in Michigan.

In contrast, MemberSelect points to the decision in Tennessee Farmers Mutual Insurance Company v. Harris, 833 S.W.2d 850 (Ky. App. 1992), a case involving Tennessee residents who were injured because of a motor vehicle accident in Kentucky and who sought to recover uninsured/underinsured motorist benefits under a policy issued by Farmers Mutual in Tennessee. Therein, the lower court found that the insurer engaged in some claim handling investigations in Kentucky and found personal jurisdiction did exist. Id. at 851. However, on appeal, this Court reversed, holding that such activities were not sufficient to satisfy the long-arm statute and the mere fact that the accident occurred in Kentucky was not sufficient to give rise to personal jurisdiction over the non-resident insurer. Id. We reiterated in Harris “that the minimum contacts test necessary to confer jurisdiction on Kentucky courts pursuant to KRS 454.210(2)(a)(1) is not satisfied by the mere fact that the accident occurred in Kentucky.” Id.

In finding jurisdiction, the Auto Owners Court in 2010, distinguished Harris, stating that the plaintiffs therein were first party insureds suing their own insurance carrier. “As such it was not unreasonable to require the plaintiff to sue in the courts of the defendant's domicile.” Auto Owners, 323 S.W.3d at 784. Of course, that is the exact scenario we are presented with here. We find Harris to be more analogous to the situation before us. We further note that both cases predated Caesars Riverboat Casino, which sets forth the two-step process as undertaken by the circuit court in this case. Both Caesars Riverboat Casino and Braun require that the wrongful conduct “must originate from the actions or activities that form the applicable statutory predicate for assertion of long-arm jurisdiction.” Caesars Riverboat Casino, 336 S.W.3d at 59; Braun, 2025 WL 2998495, at *4. Christa's Estate bore the burden of showing that an assertion of personal jurisdiction over this out-of-state defendant was proper. Hinners, 336 S.W.3d at 895 (citation omitted).

KRS 454.210(2)(a)3. (2019) provides that personal jurisdiction may be exercised over a non-resident defendant who has caused tortious injury in this Commonwealth, but only as to a claim that arises from such conduct or activity. Caesars Riverboat Casino, 336 S.W.3d at 58-59. In Caesars Riverboat Casino, our Supreme Court further held that the phrase “arising from” in the long-arm statute should be interpreted to mean that the “cause of action must have originated from, or came into being, as a result of” the defendant's activities that fit into the categories listed in KRS 454.210. Id. at 58. The Supreme Court emphasized that the non-resident defendant's conduct must have arisen from or have a direct nexus to the wrongful acts alleged in the complaint. Id. at 55.³ Here, the only conduct alleged in the complaint against MemberSelect was: 1) that it had delayed or refused to offer more than $50,000 based upon a provision in its Michigan policy; and 2) that the provision was invalid under Kentucky law. Christa's Estate skipped a few steps by arguing choice of law and bad faith arguments without first establishing personal jurisdiction. Adopting this position, when virtually all auto policies cover insureds in any of the 50 states, would subject any out-of-state insurer that does not transact business in Kentucky to personal jurisdiction for bad faith claims merely because an accident occurs in Kentucky. We believe that approach is contrary to our personal jurisdiction precedent and long-arm statute.

Further, such an approach is inconsistent with the majority of other states that have considered this issue. One recent case out of Alabama involving a Kentucky insurer illustrates the difficulty with this approach. In Ex Parte Kentucky Farm Bureau Mutual Insurance Company, 428 So.3d 21 (Ala. 2025), a Kentucky resident brought an action in Alabama against her Kentucky automobile insurer to recover uninsured motorist benefits. The accident occurred in Alabama and was caused by an Alabama resident. Kentucky Farm Bureau argued that the Alabama courts lacked personal jurisdiction as it had issued the policy in Kentucky, did not conduct business in Alabama, and had not availed itself of the jurisdiction of the Alabama courts. Id. at 23. The Kentucky resident argued, as Christa's Estate does here, that she purchased insurance to cover her in all 50 states, and given this nationwide coverage, Kentucky Farm Bureau should anticipate being haled into any court in the country. Id. at 29. The Alabama Supreme Court disagreed and noted an important “distinction between providing its insured with liability coverage throughout the United States, should the insured be sued as the alleged tortfeasor in an automobile collision, and defending itself against a contract claim by its insured.” Id.⁴ The Alabama Supreme Court issued a writ ordering dismissal of the claim against Kentucky Farm Bureau for lack of personal jurisdiction. Id. at 30. We agree with the majority of other states that there is a distinction between cases where an out-of-state insurer is required to defend its insured and a case where the dispute and any claims arising from that dispute are wholly tied to Michigan.

Further, we agree with the circuit court that even if Christa's Estate could establish personal jurisdiction to pursue a bad faith claim under the long-arm statute, it presented no evidence that MemberSelect could be subject to jurisdiction under a constitutional due process analysis. MemberSelect did not have minimum contacts with Kentucky, nor did it personally avail itself such that it would reasonably expect to be haled into Kentucky to defend a bad faith action that alleged underpaying or delay of payment under the Michigan policy. We agree that subjecting MemberSelect to the jurisdiction of this Commonwealth would not comport with due process. In fact, no contacts with this Commonwealth were shown until suit was filed and counsel was brought in to defend it. We have found nothing in the record to suggest that any actions of MemberSelect were conducted in Kentucky before the suit was filed. The policy was bought and paid for in Michigan by Michigan residents. MemberSelect conducts no business in Kentucky nor does it advertise or solicit any business here. It has no offices, agents, or employees in Kentucky. Thus, we cannot agree that MemberSelect purposefully availed itself of conducting activities here. See White, 83 S.W.3d at 534-35.

Finally, Christa's Estate argues that MemberSelect waived its objections to the lack of personal jurisdiction. It contends that MemberSelect requested dismissal on the merits of the bad faith claim and presented arguments related to coverage, settlement, and remedies available. CR 12.02 specifically provides that the defense of lack of personal jurisdiction is not waived by being joined with one or more other defenses. Our Civil Rules eliminated the former distinction between general and special appearances. See Braun, 2025 WL 2998495, at *1 n.1.

Accordingly, the Judgment of the Scott Circuit Court is AFFIRMED.

FOOTNOTES

1.   The parties’ briefs both discuss recent amendments to Michigan's insurance code, as well as recent cases in Michigan that address the extent of limits available, but we need not address those in light of our ruling herein.

2.   Effective July 15, 2024, the long-arm statute was amended to read that a court may exercise jurisdiction over a party on any basis consistent with the Constitution of Kentucky and the Constitution of the United States. Where the new statute applies, courts need consider only whether an assertion of personal jurisdiction would comport with due process and other constitutional requirements. This case falls under the prior version.

3.   Although not published, this Court has also held that the Kentucky courts lacked personal jurisdiction over an Indiana carrier when an Indiana resident sued for underinsured motorist benefits and the only nexus to Kentucky was that the accident occurred in Kentucky. See Taylor v. Bristol West Insurance Co., No. 2014-CA-001648-MR, 2016 WL 675912 (Ky. App. Feb. 19, 2016). In that case, the insurer was authorized to sell insurance and transacted business in the Commonwealth but was still not found to have a direct nexus to the acts alleged in the complaint. Id. at *4.

4.   See also id. (citing Bahn v. Chicago Motor Club Ins. Co., 634 A.2d 63, 71 (Md. 1993); Carter v. Mississippi Farm Bureau Cas. Ins. Co., 109 P. 3d 735, 741-42 (Mont. 2005); and Erie Ins. Exch. v. Larose, 202 So.3d 148, 155 (Fla. Dist. Ct. App. 2016) (“[T]he mere provision of coverage for accidents nationwide is not enough, standing alone, to confer jurisdiction over a non[-]resident defendant insurer that has not otherwise taken steps to purposefully avail itself of a particular forum.”)).

CETRULO, JUDGE:

ALL CONCUR.