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Whitehead v. The Travelers Indemnity Company of America

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

September 27, 2016

Jodi A. Whitehead Plaintiff,
The Travelers Indemnity Company of America, Plaintiff's UIM Insurance, Defendant.


         Plaintiff Jodi A. Whitehead (“Plaintiff”) filed this action alleging claims for breach of contract, bad faith, and negligent misrepresentation, and other claims[1] against Defendant The Travelers Indemnity Company of America (“Defendant”)[2] arising from Defendant's refusal to pay benefits under an underinsured motorist policy (“UIM”). (ECF No. 1-1 at 7-17.) This matter is before the court on Defendant's Motion for Summary Judgment (ECF No. 14). For the reasons that follow, the court GRANTS IN PART and DENIES IN PART Defendant's Motion for Summary Judgment (ECF No. 14) and DISMISSES all claims in Plaintiff's Complaint (ECF No. 1-1 at 7-17), save Plaintiff's South Carolina Unfair Trade Practices Act (“SCUTPA”) claim.


         The material facts are not in dispute. On October 15, 2012, Plaintiff, while driving her truck, was involved in a collision with a tractor-trailer operated by Rodney Jermain Dove. Plaintiff's truck was damaged, and Plaintiff incurred injuries, requiring medical treatment and rehabilitation, and missed work between October 15, 2012, and December 5, 2012, causing her lost wages.

         Dove was insured by State Farm Insurance Companies (“State Farm”). On January 28, 2014, State Farm and Plaintiff entered a Covenant not to Execute (the “Covenant”). The Covenant specified that Plaintiff retained “the right to bring suit against . . . Dove and prosecute [the suit] to final judgment.” (ECF No. 23-5 at 3.) However, the Covenant stated that, in exchange for $25, 000, Plaintiff agreed to “not enforce against . . . Dove . . . any judgment” obtained through an action based on the October 25, 2012, collision. (Id.) It further specified “that . . . Dove denies any liability to [Plaintiff, ]that this agreement and payment is not intended as, nor should be construed as, an admission of liability, ” and that the “Covenant is not a release, nor shall it be construed as a release . . . .” (Id. at 4-5.) The Covenant contemplates that Plaintiff would be able to seek any available UIM benefits in litigation. (See id.)

         At the time of the collision, Plaintiff had two automobile insurance policies with Defendant that carried UIM coverage of $25, 000. In July 2014, Plaintiff submitted letters to Defendant, demanding payment of benefits under the UIM coverage. After settlement negotiations failed, Defendant refused Plaintiff's demands.

         On August 27, 2015, Plaintiff commenced the instant action in state court by filing a complaint against Defendant and a summons. The complaint contains claims for (1) breach of contract for failure to pay the UIM benefits; (2) bad faith for refusal to pay the UIM benefits; (3) bad faith for failure to handle Plaintiff's claim for UIM benefits; and (4) negligent misrepresentation in Defendant's advertisements regarding its handling of insurance claims. A later-filed amended complaint suggests additional claims of (5) fraudulent misrepresentation and (6) violation of SCUTPA were also contained in the complaint. See supra note 1.

         On December 21, 2015, Defendant filed the instant Motion for Summary Judgment. In the motion, Defendant argues that the undisputed evidence shows that Plaintiff failed to comply with S.C. Code Ann. § 38-77-160 (2015), which, in relevant part, reads: “No action may be brought under the underinsured motorist provision unless copies of the pleadings in the action establishing liability are served in the manner provided by law upon the insurer writing the underinsured motorist provision.” S.C. Code Ann. § 38-77-160. Defendant contends that, because Plaintiff never commenced an action against Dove to establish his liability and therefore never served pleadings of the action, she is barred from recovering under South Carolina's UIM provisions. Moreover, Defendant asserts that, because the statute-of-limitations period for Plaintiff's UIM-related claims has expired, Plaintiff is unable to cure the deficiency, and summary judgment is appropriate.

         On January 27, 2016, Plaintiff claims that she filed a complaint against Dove and a summons in state court and that these pleadings were served on Defendant. The complaint against Dove is, in fact, an amended complaint that amends the complaint filed in the state proceedings that were removed to this court. (Compare ECF No. 1-1, with ECF No. 26-1.) Although the summons issued to Dove names him as a defendant in the caption, the amended complaint does not name Dove as a defendant, does not refer to him as a liable party in any of the numbered causes of action, does not allege that Plaintiff incurred damages as a result of Dove's conduct, and does not seek any relief from Dove. (ECF No. 26-1.)


         Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show 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). “[I]n ruling on a motion for summary judgment, ‘the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in [her] favor.'” Tolan v. Cotton, ___ U.S.___, 134 S.Ct. 1861, 1863 (2014) (per curiam) (brackets omitted) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

         The party seeking summary judgment shoulders the initial burden of demonstrating to the district court that there is no genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made this threshold demonstration, the non-moving party, to survive the motion for summary judgment, may not rest on the allegations averred in her pleadings. Rather, the non-moving party must demonstrate that specific, material facts exist which give rise to a genuine issue. See Id. at 324. Under this standard, the existence of a mere scintilla of evidence in support of the plaintiff's position is insufficient to withstand the summary judgment motion. See Liberty Lobby, Inc., 477 U.S. at 252. A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party, ” and a fact is material if it “might affect the outcome of the suit under the governing law.” Id. at 248.

         A. Claims for breach of contract and bad faith for refusal to pay UIM benefits

         The facts of the instant case are almost identical to the facts in Williams v. Selective Ins. Co. of the Se., 466 S.E.2d 402 (S.C. 1994). In that case,

Williams was injured in an auto accident. She settled with the at-fault driver's liability insurance carrier for $25, 000, the limit available under that policy. In return, she agreed not to execute any judgment obtained against the at-fault driver personally. After the settlement, Williams did not bring an action against the at-fault driver but filed a claim for underinsured motorist benefits under her policy with Insurer claiming her medical bills exceeded $25, 000. When Insurer refused to ...

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