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Colter v. Omni Insurance Co.

United States District Court, D. South Carolina, Columbia Division

July 12, 2016

Allison Colter, on behalf of herself and all others similarly situated, Plaintiff,
Omni Insurance Company and Omni Indemnity Company, Defendants.


         Plaintiff Allison Colter ("Plaintiff"), on behalf of herself and all others similarly situated, filed the instant putative class action seeking damages from Defendants Omni Insurance Company and Omni Indemnity Company (together "Defendants") for their alleged imposition of an illegal and unauthorized "betterment" or depreciation charge on property settlements for accidents. (ECF No. 1-1.)

         This matter is before the court on Defendants' Motion to Dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (ECF No. 8) on the basis that Plaintiff lacks standing to raise a breach of contract class claim. (ECF No. 12 at 3.) Plaintiff opposes Defendants' Motion to Dismiss asserting that she "has standing to assert the contract claim on behalf of the [putative] class members because the injuries suffered by . . . [Plaintiff] and the purported class members . . . are identical" and is entitled to discovery before dismissal of a breach of contract class claim. (ECF No. 15 at 1.) For the reasons set forth below, the court DENIES Defendants' Motion to Dismiss.


         On February 17, 2015, Plaintiff was involved in a motor vehicle accident with Defendants' insured. (ECF No. 1-1 at 3 ¶ 5.) After determining that their insured was liable for the damage to Plaintiff's vehicle, Defendants told Plaintiff that she would receive an amount equal to her repair estimate minus a betterment or depreciation charge for certain damaged parts. (Id. at ¶ 6; see also ECF No. 1-1 at 9.) Plaintiff alleges that Defendants' attempt to enforce the "illegal" betterment charge delayed the repair of her vehicle and caused her to incur increased fees for storage of her vehicle and to hire an attorney. (Id. at ¶ 8.)

         Because she believes the betterment charge is illegal and not allowed under South Carolina law, Plaintiff filed an action in the Richland County (South Carolina) Court of Common Pleas on September 18, 2015, asserting causes of action against Defendants for breach of contract, fraud, violation of the South Carolina Unfair Trade Practices Act ("SCUTPA"), SC Code Ann. §§ 39-5-10 to -560 (2014), negligent misrepresentation, and negligence. (ECF No. 1-1 at 4-7.) On October 8, 2015, Defendants removed the matter to this court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. (ECF No. 1.) After removing the matter, Defendants filed their Motion to Dismiss on November 3, 2015. (ECF No. 8.) Plaintiff filed opposition to Defendants' Motion to Dismiss on December 4, 2015. (ECF No. 15.)

         On June 28, 2016, the court held a hearing on the pending Motion to Dismiss. (ECF No. 66.)


         The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) based on Defendants' allegations that there is complete diversity of citizenship between Plaintiff and Defendants, and the amount in controversy herein exceeds the sum of Seventy-Five Thousand ($75, 000.00) Dollars, exclusive of interest and costs. (See ECF No. 1 at 2 ¶¶ 4-5.)


         Article III of the Constitution limits the jurisdiction of the federal courts to the consideration of "cases" and "controversies." U.S. Const. art. III, § 2. "Federal courts are courts of limited subject matter jurisdiction, and as such there is no presumption that the court has jurisdiction." Pinkley, Inc. v. City of Fredrick, Md., 191 F.3d 394, 399 (4th Cir. 1999). A Rule 12(b)(1) motion for lack of subject matter jurisdiction raises the fundamental question of whether a court has jurisdiction to adjudicate the matter before it. Fed.R.Civ.P. 12(b)(1). In determining whether jurisdiction exists, the court is to "regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). "The moving party should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Id. (citation omitted). The plaintiff bears the burden of proof on questions of subject matter jurisdiction. See Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).

         Standing implicates the court's subject matter jurisdiction and is governed by Rule 12(b)(1). Crumbling v. Miyabi Murrells Inlet, LLC, C/A No. 2:15-cv-4902-PMD, 2016 WL 3351351, at *1 (D.S.C. June 16, 2016). "It is well established that standing is a threshold jurisdictional issue that must be determined first because ‘[w]ithout jurisdiction the court cannot proceed at all in any cause.'" Covenant Media of N.C., LLC v. City of Monroe, N.C. , 285 F.App'x 30, 34 (4th Cir. 2008) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998)). "To possess the constitutional component of standing, a party must meet three requirements: (1) [the party] has suffered an ‘injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." McBurney v. Cuccinelli, 616 F.3d 393, 410 (4th Cir. 2010) (citing, e.g., Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000)).

         A case must be brought by a party with a "personal stake" in the litigation. See U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 396 (1980); United States v. Hardy, 545 F.3d 280, 283 (4th Cir. 2008). "When the case is a class action lawsuit, the named class representatives ‘must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong.'" Pasby v. Delia, 709 F.3d 307, 316 (4th Cir. 2013) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). "[I]f none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class." O'Shea v. Littleton, 414 U.S. 488, 494 (1974) (citation omitted).

         IV. ANALYSIS

         A. The ...

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