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Robinson v. American United Life Insurance Company

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

July 2, 2018

Sadie H. Robinson, Plaintiff,
v.
American United Life Insurance Company and Wateree Community Actions, Inc., Defendants, Wateree Community Actions, Inc., Third Party Plaintiff,
v.
James L. Coleman, Third Party Defendant.

          ORDER AND OPINION

         This matter is before the court on Third Party Defendant James L. Coleman's (“Coleman”) Motion to Dismiss Third Party Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(1), and the Younger and Colorado River abstention doctrines (ECF No. 25). Third Party Plaintiff Wateree Community Actions, Inc. (“Wateree”) did not file a response to Coleman's Motion. For the reasons set forth below, the court GRANTS Coleman's Motion to Dismiss Third Party Complaint (ECF No. 25).

         I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

         This matter was filed on June 16, 2017, in South Carolina state court, against Wateree and American United Life Insurance Company (“United Life Insurance”) on behalf of Plaintiff Sadie H. Robinson, alleging violations of the Employment Retirement Income Security Act (“ERISA”). On June 16, 2017, United Life Insurance filed a Notice of Removal. (ECF No. 1.) On July 7, 2017, Wateree filed its Answer to the Complaint, which included a Third Party Complaint against Coleman, asserting causes of action for breach of contract, breach of contract accompanied by fraudulent acts, and breach of fiduciary duty. (ECF No. 18.) In its Third Party Complaint, Wateree further asserts a demand for actual damages in the amount of one million two hundred thousand dollars ($1, 200, 000.00). (Id.)

         Previously, on March 8, 2016, Coleman filed a complaint against Wateree in South Carolina state court alleging that Wateree violated the South Carolina Payment of Wages Act.[1](ECF No. 25-2.) On April 19, 2016, Wateree filed its Answer to Coleman's complaint, which included counterclaims against Coleman. (ECF No. 25-3.) Wateree's counterclaims assert the identical facts and damages that Wateree asserted in its Third Party Complaint filed in this matter. (Id.; see also ECF No. 18.) Wateree's counterclaims in Coleman's state action assert that Coleman breached its employment contract with Wateree and its Board of Directors and that Coleman allegedly committed deceitful and fraudulent acts which caused Wateree actual financial damages in the amount of $1, 200, 000.00. (See ECF No. 25-2.) Coleman's case against Wateree continues to remain on the active jury docket in Richland County.

         II. LEGAL STANDARD

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) examines whether the complaint fails to state facts upon which jurisdiction can be found. The burden of proving subject matter jurisdiction in response to a Rule 12(b)(1) motion to dismiss is on the plaintiff, the party asserting jurisdiction. See Richmond, Fredericksburg & Potomac R.R. v. U.S., 945 F.2d 765, 768 (4th Cir. 1991). In evaluating a defendant's challenge to subject matter jurisdiction, 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.” Id. The court should grant the motion “only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999) (internal quotation marks and citations omitted).

         III. ANALYSIS

         A. The Younger Abstention Doctrine

         The Supreme Court has recognized several doctrines under which a federal court must abstain from hearing a case over which it would otherwise have jurisdiction. In Younger v. Harris, 401 U.S. 37, 44 (1971), the United States Supreme Court established that abstention is mandated in the criminal context if a state's interest in the proceedings are so important that the exercise of federal judicial power would disregard the comity between the states and the federal government.

         In a subsequent opinion, Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 10 (1987), Younger was extended to civil actions. Younger “is fully applicable to noncriminal judicial proceedings when important state interests are involved.” Martin Marietta Corp. v Md. Comm'n on Human Relations, 38 F.3d 1392, 1396 (4th Cir. 1994) (citing Middlesex Cty. Ethics Comm. v. Garden St. Bar Assn, 457 U.S. 423, 432 (1982)).

         Younger abstention is appropriate when: “(1) there is an ongoing state judicial proceeding, (2) that implicates important state interests, and (3) there is an adequate opportunity to present the federal claims in the state proceeding.” Employers Res. Mgmt Co., Inc. v. Shannon, 65 F.3d 1126, 1134 (4th Cir. 1995) (citing Middlesex, 457 U.S. 432).

         The ongoing state judicial action implicates important state interests because the present Third Party Complaint could be a challenge or attack on a judgment rendered by one of South Carolina's circuit courts. This attack on “state court judgments cuts to the state's ability to operate its own judicial system, a vital interest for Younger purposes.” Harper v. Pub. Serv. Comm'n of W.VA., 396 F.3d 348, 352 (4th Cir. 2005); see, e.g., Pennzoil, 481 U.S. at 12-13. Wateree has an adequate opportunity to present all of its claims asserted in their Third Party Complaint against Coleman in state court as they have done in their counterclaims against Coleman in the state court matter. The issues of breach of contract, breach of contract accompanied by fraudulent acts, and breach of fiduciary duty are squarely presented by Wateree's own counterclaims in the state court proceeding. Further, there are no federal claims asserted in Wateree's state court counterclaims or its federal court Third Party Complaint.

         B. The Colorado River Abstention Doctrine

         Colorado River allows the court discretion to stay or dismiss a suit in exceptional and limited circumstances where there is a substantially similar suit pending in state court. Colo. River Water Conservation Dist. v. U.S., 424 U.S. 800, 818-20 (1976). Under Colorado River, a federal court may abstain in the interest of wise judicial administration when concurrent state and federal suits are parallel. Id. at 817. The state and federal suits do not have to be identical to be parallel, but they must involve substantially the same parties and substantially the same claims. AAR Int'l, Inc. v. Nimelias Enters, S.A., 250 F.3d 510, 517-20 (7th Cir. 2001). Further, courts may only abstain where the state proceeding will dispose of all claims presented in the federal suit, even if those claims could have been raised in a ...


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