United States District Court, D. South Carolina, Orangeburg Division
John S. Garrett, Plaintiff,
Melvin Bromell, Jr. Individually and as Employee/Agent of Heritage Hauling, Inc.; Heritage Hauling, Inc.; Alexis Winburn, Individually and as Employee/Agent of The Travelers Indemnity Company of Connecticut; and The Travelers Indemnity Company of Connecticut, Defendants.
ORDER AND OPINION
case arises out of an automobile collision between Plaintiff
John S. Garrett (“Garrett”) and Defendant Melvin
Bromell, Jr. (“Bromell”) while Bromell was
driving a vehicle owned by his employer, Defendant Heritage
Hauling, Inc. (“Heritage”). This case
particularly deals with the subsequent denial of
Garrett's claim by Defendant Alexis Winburn
(“Winburn”), an insurance claims adjuster working
on behalf of Defendant The Travelers Indemnity Company of
the court is Defendants' Motion for Judgment on the
Pleadings pursuant to Federal Rule of Civil Procedure 12(c)
in which Defendants request the court to dismiss
Garrett's action because of his failure to state a claim
upon which relief can be granted. (ECF No. 22.) For the
reasons stated herein, the court GRANTS IN PART AND
DENIES IN PART Defendants' Motion for Judgment
on the Pleadings.
FACTUAL AND PROCEDURAL BACKGROUND
January 12, 2016, Garrett was injured in an automobile
collision with Bromell. (ECF No. 1-1 at 7 ¶¶
16-17.) Heritage contracted with Travelers to provide a
policy of automotive liability insurance for the protection
of Heritage and its employees/agents including Bromell.
(Id. at 6 ¶ 12.) This policy was in effect on
the date of the collision. (Id. at ¶ 13.)
Garrett, through his counsel, made a claim under the
insurance policy for his injuries stemming from the
collision. (Id. at 7 ¶ 19.) On April 12, 2016,
Garrett's counsel made a settlement demand. (Id.
at ¶ 22.) On April 29, 2016, Garrett received
communication from Winburn and Travelers that Travelers was
denying his claim. (Id. at ¶ 23.) On the same
day, Garrett's counsel called Winburn to discuss
Garrett's claim and the reason for the denial.
(Id. at ¶ 24.) Garrett alleges that, during
this conversation, Winburn stated that “[because]
Garrett was Caucasian, [and] Bromell was African-American
that such racial considerations were favorable and a factor
for [Traveler's] denial of Garrett's claim.”
(Id. at 8 ¶ 26.)
alleges that the statement by Winburn was given with the
authority of Travelers, Heritage, and Bromell. (Id.
at 8 ¶ 27); see also (Id. at 6 ¶
14, 7 ¶¶ 15, 21.) Garrett further alleges that
Defendants “have a policy, whether written or
otherwise, to use the races of claimants and insureds when
determining if and when to settle claims and determining an
amount to settle such claims” and that there was a
conspiracy to “unlawfully diminish and/or defeat
insurance claims of claimants based on the race, ”
(Id. at 8 ¶¶ 29-30) and because of this
policy he has been damaged. (Id. at ¶ 32.)
has filed four causes of action in this case, (1) an alleged
violation of 42 U.S.C. § 1981 and the Fifth and
Fourteenth Amendments to the United States Constitution, (2)
the tort of outrage, (3) civil conspiracy; and (4)
negligence, gross negligence, and negligence per se.
(Id. at 9-10 ¶¶ 34-39, 10-11 ¶¶
40-46, 11-12 ¶¶ 47-52, 12-14 ¶¶ 53-58.)
case was initially filed in the Court of Common Pleas for the
County of Orangeburg, State of South Carolina (Civil Action
No.: 2016-CP-38-00760) on June 10, 2016. (ECF Nos. 1 at 1
¶ 1; 1-1 at 2.) A Notice of Removal was filed on August
19, 2016, pursuant to the provisions of 28 U.S.C.
§§ 1331, 1332, 1441(b) and 1446. (ECF No. 1 at 1.)
On October 27, 2016, Defendants filed a Motion for Judgment
on the Pleadings pursuant to Fed.R.Civ.P. 12(c). (ECF No.
22.) On November 14, 2016, Garrett filed a Response to
Defendants' Motion. (ECF No. 23.) On December 12, 2016,
after having been granted an extension by the court,
Defendants filed a Reply to Garrett's Response. (ECF Nos.
initial matter, the court must determine whether it has
jurisdiction over the causes of action alleged in this case.
Federal courts are courts of limited jurisdiction. This case
was removed to this court under 28 U.S.C. §§ 1331,
1332, 1441(b) and 1446.
is proper within this court pursuant to 28 U.S.C.
§§ 1331 (federal question jurisdiction) and 1367
(supplemental jurisdiction). Under section 1331, district
courts have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the
United States. Garrett's claim of Defendants'
violation of 42 U.S.C. § 1981, a federal statute, and
the Fifth and Fourteenth Amendments to the United States
Constitution support federal question jurisdiction.
courts also have jurisdiction over claims that are connected
to claims in which the district court has original
jurisdiction. District courts have “. . . supplemental
jurisdiction over all [ ] claims that are so related to
claims in the action within such original jurisdiction that
they form part of the same case or controversy. . .” 28
U.S.C. § 1367(a). Garrett has alleged three South
Carolina state law causes of action, (1) outrage, (2) civil
conspiracy, and (3) negligence. These claims are related to
Garrett's 42 U.S.C. § 1981 claim. A district court
may decline to exercise supplemental jurisdiction over a
claim if the claim involves a novel or complex issue of state
law. 28 U.S.C. § 1367(c)(1). However, “[g]enerally
state tort claims are not considered novel or complex.”
Parker v. Scrap Metal Processors, Inc., 468 F.3d
733, 743-44 (11th Cir. 2006). Therefore, this court has
supplemental jurisdiction over Garrett's state law claims
pursuant to section 1367.
also requested removal to this court on the grounds of
diversity of citizenship pursuant to 28 U.S.C. § 1332
and the court finds that jurisdiction on this basis is
improper. Defendants removed the case on this ground, due to
the alleged fraudulent joinder of Bromell, Heritage, and
Winburn. (ECF No. 1 at 5-6 ¶ 11, 6-7 ¶ 13.)
of citizenship must be established at the time of the filing
of the action in order for the court to determine if it has
jurisdiction over the case on this basis.
Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S.
426, 428 (1991). Citizenship depends on domicile. Axel
Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660,
663 (4th Cir. 1998).
this action was commenced, the Complaint alleged that Garrett
is a citizen of Orangeburg County, South Carolina (ECF No.
1-1 at 5 ¶ 1), that Travelers is licensed to do business
in South Carolina (Id. at 6 ¶ 5), and that
Winburn and Bromell are citizens and residents of South
Carolina (Id. at 5 ¶ 2, 4)-Winburn being a
resident of Lexington County, and Bromell, a resident of
Horry County. (Id.) The Complaint also alleges that
Heritage is a corporation, organized and existing under the
laws of the state of South Carolina with its principal place
of business in Horry County. (Id. at ¶ 3.)
asserts that Heritage, Winburn, and he were fraudulently
joined in this action and that their South Carolina residency
should be disregarded, thereby making diversity jurisdiction
appropriate with Garrett being a citizen and resident of
South Carolina and Travelers being incorporated and having
its principal place of business in Connecticut. (ECF No. 1 at
2 ¶ 4, 3 ¶ 5, 6-7 ¶ 13.) The court will
address whether Bromell, Heritage and Winburn were
fraudulently joined, which will determine whether this case
has been properly brought under diversity jurisdiction in
addition to federal question jurisdiction.
order to establish Defendants' liability for his claims,
Garrett pleads that Winburn and Travelers act on behalf of
and with the authority of Bromell and Heritage. (ECF No. 1-1
at 6 ¶ 14, 7 ¶¶ 15, 21, 8 ¶ 27), that
Bromell is the agent of Heritage (Id. at 6 ¶
10), and that Winburn is the agent of Travelers (Id.
at 6 ¶ 11.) Plaintiff in pleading that Winburn and
Travelers act on behalf of Heritage and Bromell, pleads that
there is a principal/agent relationship between the parties,
thus Heritage and Bromell are responsible for Winburn's
fraudulent joinder, the removing party must demonstrate
either “outright fraud in the plaintiff's pleading
of jurisdictional facts” or that “there is no
possibility that the plaintiff would be able to establish a
cause of action against the in-state defendant in state
court.” Hartley v. CSX Transp., Inc., 187 F.3d
422, 424 (4th Cir. 1999) (citing Marshall v. Manville
Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)).
“The burden on the defendant claiming fraudulent
joinder is heavy: the defendant must show that the plaintiff
cannot establish a claim against the non-diverse defendant
even after resolving all issues of fact and law in the
plaintiff's favor.” Marshall, 6 F.3d at
232-33 (citing Poulos v. Naas Foods, Inc., 959 F.2d
69, 73 (7th Cir. 1992)). “Th[e] standard [for
fraudulent joinder] is even more favorable to the plaintiff
than the standard for ruling on a motion to dismiss under
Fed.R.Civ.P. 12(b)(6).” Hartley, 187 F.3d at
424. In addition, “[a]ll the plaintiff needs to show is
that there is a “glimmer of hope, ” or a
“slight possibility of a right to relief” in
state court.” Sibert v. Raycom Media, Inc.,
No. 3:17-CV-1544-CMC, 2017 WL 3721238, at *2 (D.S.C. Aug. 29,
2017) (citations omitted).
do not allege outright fraud in the pleading of the
jurisdictional facts, but allege that no cause of action can
be established against Heritage, Bromell or Winburn. (ECF No.
1 at 5-6 ¶ 11, 6-7 ¶ 12-13.) Upon review of these
allegations, the court finds that, Bromell, Heritage and
Winburn have not been fraudulently joined.
the alleged denial of Garrett's insurance claim on the
basis of his race (ECF No. 1-1 at 8 ¶ 26), he brings
four causes of action. As to Garrett's claim of
Defendants' alleged violation of 42 U.S.C § 1981,
“[t]o [establish] a section 1981 claim, a plaintiff
must prove that the defendant intended to discriminate on the
basis of race, and that the discrimination interfered with a
contractual interest [the ability to make or enforce a
contract].” Denny v. Elizabeth Arden Salons,
Inc., 456 F.3d 427, 434 (4th Cir. 2006). Garrett has not
pled that he is a party to the insurance policy (contract),
only that he filed a claim stemming from the collision under
the policy. (ECF No. 1-1 at 7 ¶ 19.) Garrett is a
third-party and under South Carolina Law, a third-party who
is not a party to an insurance contract, cannot sue an
insurer to enforce the contract. See Trancik v. USAA Ins.
Co., 581 S.E.2d 858, 861 (S.C. Ct. App. 2003) (a
third-party who is not a party to a contract cannot bring
suit for breach of contract).
section 1981 is a two-part statute. A person's right to
“enforce” a contract must not be impaired on the
basis of race, but a person's right to “make”
a contract cannot be impaired either. Patterson v. McLean
Credit Union, 491 U.S. 164, 176-77 (1989),
superseded by statute on other grounds (citing 42
U.S.C. § 1981(a)). The denial of Garrett's alleged
claim for the insurance proceeds as a result of the
collision, on the basis of race falls within the confines of
section 1981 because Travelers prevented Garrett from having
the opportunity to make a contract. See Broomes v.
Schmidt, No. CIV. A. 95-4845, 1996 WL 229369, at *2
(E.D. Pa. May 3, 1996) (court states that a private
party's “racially motivated refusal to
contract” was actionable under section 1981.) Garrett
was not given the opportunity to enter into a settlement
agreement, thus his ability to contract was impaired. See
Singh v. State Farm Mut. Auto. Ins. Co., 860 P.2d 1193
(Alaska 1993) (“It is well established that a
settlement is a contract, provided that it meets minimal
contractual requirements.”) Garrett, therefore has pled
enough facts to establish that he has the possibility of
relief against Defendants under section 1981.
also brings a negligence cause of action against Defendants
under the theories of negligence, gross negligence and
negligence per se. (ECF No. 1-1 at 12-14
¶¶ 53-58.) Among Garrett's allegations are that
“Defendants have a duty to ensure that individuals,
claimants, and consumers are not discriminated against based
upon their race” (Id. at 12 ¶ 54) and
that Defendants also have a “duty to follow ...