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Davis v. Bankers Life And Casualty Co.

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

June 23, 2017

Sabrina D. Davis, Plaintiff,
Bankers Life and Casualty Company, Defendant.


          Timothy M. Cain United States District Court Judge.

         Plaintiff Sabina D. Davis (“Davis”), proceeding pro se, filed this action against Defendant Bankers Life and Casualty Company (“Bankers Life”) in the Greenville County Court of Common Pleas, alleging that Bankers Life engaged in bad faith and “post-claim underwriting” in denying her claims for benefits from a life insurance policy. On September 13, 2016, Bankers Life timely removed the case to this court. (ECF No. 1). In accordance with 28 U.S.C. § 636(b)(1) and Local Civil Rule 73.02, D.S.C., this matter was referred to a magistrate judge for pretrial handling. Because the magistrate judge received various documents outside the pleadings, he treated the motion to dismiss as a motion for summary judgment. (ECF No. 18 at 2-3). Before the court is the magistrate judge's Report and Recommendation (“Report”), recommending that the court grant Bankers Life's motion for summary judgment. (ECF No. 18). The parties were advised of their right to file objections to the Report. (ECF No. 18 at 5). On March 14, 2017, Davis filed objections. (ECF No. 21). Bankers Life filed a response on March 29, 2017 (ECF No. 27), to which Davis filed a reply on April 6, 2017 (ECF No. 28). On June 16, 2017, Davis filed an emergency motion to remand. (ECF No. 32).

         The recommendations set forth in the Report have no presumptive weight and the responsibility to make a final determination in this matter remains with this court. See Mathews v. Weber, 423 U.S. 261, 270-71 (1976). The court is charged with making a de novo determination of those portions of the Reports to which specific objection is made, and the court may accept, reject, or modify, in whole or in part, the recommendation of the magistrate judge, or recommit the matter with instructions. 28 U.S.C. § 636(b)(1). However, the court need not conduct a de novo review when a party makes only “general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendations.” Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982). In the absence of a timely filed, specific objection, the magistrate judge's conclusions are reviewed only for clear error. See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005).

         I. Motion to Remand

         The record makes clear that this action was removed to this court pursuant to 28 U.S.C. §§ 1441(a) & 1332(a). “When a plaintiff files in state court a civil action over which the federal district courts would have original jurisdiction based on diversity of citizenship, the defendant . . . may remove the action to federal court, provided that no defendant is a citizen of the State in which such action is brought.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996) (internal citations and quotations omitted). The magistrate judge found that Bankers Life's removal of this action was timely. (ECF No. 18 at 1).

         Davis argues that because an agent of Bankers Life, Ursula Schneider-Wewer, is a resident of Spartanburg, South Carolina, diversity is destroyed for the purpose of this court's jurisdiction. (ECF No. 32 at 2). However, a corporation's citizenship is based on its state of incorporation and principal place of business. 28 U.S.C. § 1332(c)(1). The Supreme Court defines principal place of business to mean “the place where the corporation's high level officers direct, control, and coordinate the corporation's activities.” Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010). According to Bankers Life's notice of removal (ECF No. 1 at 5) supported by an affidavit of Karl Kindig[1] (ECF No. 1-2), Bankers Life is an Illinois corporation with its principal place of business in Illinois. Davis has not alleged that South Carolina is Bankers Life's principal place of business or that South Carolina is where the corporation maintains its “nerve center.” Hertz, 559 U.S. at 81, 93. Further, Davis' argument that remand is warranted because South Carolina law is the basis of this case fails because this case was removed for diversity and this court must apply South Carolina law. See 28 U.S.C. §§ 1441 & 1332; Interstate Fire & Cas. Co. v. Dimensions Assurance Ltd., 843 F.3d 133, 136 (4th Cir. 2016) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (explaining that a federal court sitting in diversity jurisdiction must apply the choice of law principles of the forum state)). Therefore, Davis fails to demonstrate that this court lacks subject matter jurisdiction and her motion to remand is denied. See 28 U.S.C. § 1447(c).[2]

         II. Motion to Strike

         On April 6, 2017, Davis filed a reply to Bankers Life's response to her objections. (ECF No. 28). On April 14, 2017, Bankers Life filed a motion to strike Davis' reply, asserting that when replies are allowed they cannot contain new issues, and that Davis' reply centers around previously unpled allegations. (ECF No. 29). Replies are governed by Local Rule 7.07, which states that, “Replies to responses are discouraged. However, a party desiring to reply to maters raised initially in a response to a motion or in accompanying supporting documents shall file the reply within seven (7) days after service of the response, unless otherwise ordered by the court.” Local Rule 7.07, D.S.C.

         Construing Davis' pleadings liberally, Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978), the court will consider Davis' reply to the extent that it does not go beyond the scope of issues addressed or raised in Bankers Life's response. Accordingly, Bankers Life's motion to strike is denied.

         III. Motion for Summary Judgment

         The magistrate judge recommended that the court dismiss Davis' claim because she filed her claim outside of the statutory limitations period. (ECF No. 18 at 4). In South Carolina, claims for breach of insurance contract and insurance bad faith are subject to a three-year statute of limitations, Liberty Mut. Fire Ins. Co. v. J.T. Walker Indus., Inc., No. 2:08-2043-MBS, 2010 WL 1345287 (D.S.C. Mar. 30, 2010) (citing S.C. Code Ann. § 15-3-530), which begins to run when the underlying cause of action reasonably ought to have been discovered, Martin v. Companion Healthcare Corp., 593 S.E.2d 624, 627 (S.C. Ct. App. 2004). According to Davis' complaint, Bankers Life denied her claim for benefits on July 12, 2013.[3] (ECF No. 1-1 at 7). Thus, because it is undisputed that Davis did not file her case in state court until August 10, 2016, the Report recommends that this case is outside of the limitations period and untimely. Despite Davis' argument that she did not actually discover her claim until November or December 2013 (after she and her attorney unsuccessfully attempted to convince Bankers Life to reverse its decision) the magistrate judge found that the limitations period began when Bankers Life denied the claim-July 12, 2013 according to Davis' own admission. (ECF No. 18 at 4); see e.g., Jeri M. Suber Credit Shelter Trust v. State Auto Prop. And Cas. Ins. Co., No. 3:08-3387, 2009 WL 4730630, at *4 n.10 (D.S.C. Dec. 4, 2009) (noting that “the statute of limitations for a bad faith action against [insurer] for denial of additional insurance benefits would begin running when [insurer] denied coverage”).

         As her objection, Davis argues that the magistrate judge incorrectly calculated the statute of limitations. Her argument is based on language in the July 15, 2013 letter[4] stating:

If you believe this claim was denied in error, please submit written comments, documents, or records not already provided to our company for further review. . . . [Bankers Life] will consider your appeal and will contact you upon conclusion of the review.

(ECF Nos. 14-1 at 22 and 21 at 2).[5] Davis alleges that the cause of action did not accrue until December 2, 2013, when Bankers Life declined to change its position. (ECF No. 21 at 2). She argues that Bankers Life did not reach its final decision until December 2, 2013, due to the “appeal” process and that she believed that the additional ...

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