United States District Court, D. South Carolina, Charleston Division
ORDER AND OPINION
Richard M. Gergel United States District Court Judge
matter is before the Court on Defendants William Edmund
Reynolds, Jr., Angela D. Reynolds and Christopher Kamil
Waymer's Motions to Dismiss (Dkt. Nos. 10, 12). For the
reasons set forth below, the Court denies the
case arises out of a car accident on December 16, 2013 (the
"accident") in Colleton County between William
Reynolds and his wife, Angela Reynolds and Plaintiff
Christopher Waymer. (Dkt. No. 1 at ¶ 10.) The Reynolds
were injured during the accident. (Id. at ¶
12.) Plaintiff Waymer was allegedly insured at the time by a
$1 million commercial liability insurance policy issued by
Defendant Columbia Insurance Company ("CIC").
(Id. at ¶ 11.) CIC retained an attorney, James
M. Saleeby, Jr. to represent Defendant Waymer with regard to
the accident, and Defendant Waymer ultimately also retained
his own counsel, Matthew V. Creech. (Id. at
¶¶ 14 -15.) The Reynolds Defendants retained
counsel as well. (Id. at ¶ 15.)
January 23, 2014, counsel for the Reynolds sent a demand
letter, offering to settle for the $1 million policy limit.
(Id. at ¶ 15.) The settlement offer was time
limited and was not accepted by its expiration date of
February 6, 2014. (Id. at ¶ 18.) Plaintiff CIC
alleges that the offer was not accepted as Mr. Saleeby
informed the Reynolds' counsel that he would be unable to
respond to the settlement offer within the time limit as he
was still investigating the claims and he had not received
the Reynolds' medical records by the time the offer
expired. (Id. at ¶¶ 22 - 35.)
April 4, 2014, the Reynolds separately filed a tort action
against Plaintiff Waymer in the Colleton County Court of
Common Pleas (the "State Court
Actions"). (Id. at ¶ 36.) On April 28,
2014, CIC offered to tender the full policy limit as a
settlement offer, however the Reynolds declined.
(Id. at ¶¶ 38 - 39.) A subsequent
"high-low" settlement offer by the Reynolds, for a
"high" of $3, 500, 000 and a "low" of $1,
000, 000" dependent on a trier of facts determination of
bad faith, was also declined by Defendant CIC. (Id.
at ¶¶ 39 - 43.)
those actions were pending, Defendant CIC filed a declaratory
judgment action in this Court seeking a declaration that its
actions were reasonable. (See No. 2:14-4739-RMG,
Dkt. No. 1, the "2014 Action.") This Court
ultimately dismissed the case as not ripe as the issue of
good faith and reasonableness were hypothetical during the
pending State Court Actions, and alternatively dismissed the
case on abstention grounds. See Columbia Ins. Co. v.
Reynolds, 225 F.Supp.3d 375 (D.S.C. 2016). Notably, CIC
alleges that before the resolution of the 2014 Action Waymer
shared the defense file of his CIC-provided counsel, Saleeby,
with the Reynolds' counsel in the State Court Actions,
who is also serving as defense counsel to the Reynolds here.
(Dkt. No. 1 at ¶ 46; See 2014 Action Docket
Number 24.) The file allegedly included unredacted versions
of documents that this Court had permitted redactions of.
damages hearing was held on October 24, 2018 in the State
Court Actions, it was determined that those cases will result
in damages against Waymer in excess of the $1 million policy
limit. (Dkt. No. 1 at ¶ 48.) An Order of Judgment dated
November 16, 2018 awarded $3.5 million to Angela Reynolds and
$3 million to William Reynolds. (Dkt. No. 18-9.)
after the October 24th damages hearing, both
Waymer and CIC filed additional actions. On November 2, 2018,
CIC filed this declaratory judgment action, seeking a
declaration that CIC acted reasonably and in good faith in
declining two settlement offers, and a declaration that
Plaintiff Waymer breached his duty to cooperate by providing
privileged documents he acquired from his CIC-provided
counsel in the State Court Actions to opposing counsel in the
State Court Actions. (Id. at ¶¶ 49 - 60.)
Three days later, on November 5, 2018, Plaintiff Waymer filed
the Bad Faith Action against Defendant CIC, alleging breach
of contract and bad faith against CIC, and a civil conspiracy
between CIC and its claim investigators. (See Bad
Faith Action, Dkt. No. 1-1.) Concurrent with this Order, the
Court denied a motion to remand the Bad Faith Action and
dismissed the claim for civil conspiracy.
now file these motions to dismiss, arguing that the case was
not properly brought as a declaratory judgment as there is no
actual controversy, and that the Court should decline to
exercise jurisdiction over this declaratory judgment action
based on the Bad Faith Action, which was previously pending
as a parallel action in state court. (Dkt. No. 10.) Plaintiff
CIC opposes the motion, and Defendants filed a reply. (Dkt.
Nos. 18, 22, 23.)
12(b)(6) of the Federal Rules of Civil Procedure permits the
dismissal of an action if the complaint fails "to state
a claim upon which relief can be granted." Such a motion
tests the legal sufficiency of the complaint and "does
not resolve contests surrounding the facts, the merits of the
claim, or the applicability of defenses.... Our inquiry then
is limited to whether the allegations constitute 'a short
and plain statement of the claim showing that the pleader is
entitled to relief" Republican Party of N.C. v.
Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citations
omitted). In a Rule 12(b)(6) motion, the Court is obligated
to "assume the truth of all facts alleged in the
complaint and the existence of any fact that can be proved,
consistent with the complaint's allegations." E.
Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213
F.3d 175, 180 (4th Cir. 2000). However, while the Court must
accept the facts in a light most favorable to the non-moving
party, it "need not accept as true unwarranted
inferences, unreasonable conclusions, or arguments."
survive a motion to dismiss, the complaint must state
"enough facts to state a claim to relief that is
plausible on its face." BellAtl. Corp. v.
Twombly,550 U.S. 544, 570 (2007). Although the
requirement of plausibility does not impose a probability
requirement at this stage, the complaint must show more than
a "sheer possibility that a defendant has acted
unlawfully." Ashcroft v. Iqbal,556 U.S. 662,
678 (2009). A complaint has "facial plausibility"
where the pleading "allows the court ...