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Waymer v. Columbia Insurance Co.

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

August 7, 2019

Christopher Kamil Waymer, Plaintiff,
Columbia Insurance Company; James C. Green Company; O.W. Ray, Defendants.



         This matter is before the Court on Plaintiff Christopher Kamil Waymer's Motion to Remand (Dkt. No. 8). For the reasons set forth below, the Court denies the Motion.[1]

         I. Background

         This case arises out of a car accident on December 16, 2013 (the "accident") in Colleton County between William Reynolds and Angela Reynolds and Plaintiff Christopher Waymer. (Dkt. No. 1-1 at ¶ 9.) The Reynolds were severely injured during the accident. (Id. at ¶ 10.) 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.) Defendant James C. Greene Company, an independent adjusting company, investigated the accident on behalf of CIC, and Defendant O.W. Ray was the investigator assigned to the claim. (Id. at ¶ 15.) The Reynolds retained counsel on December 30, 2013. (Id. at ¶ 16.)

         On January 23, 2014, counsel for the Reynolds sent a demand letter to Defendant Ray, offering to settle for the $ 1 million policy limit. (Id. at ¶ 19.) The settlement offer was time limited and was not accepted by its stated expiration date of February 6, 2014. (Id. at ¶ 19 - 21.)

         On April 4, 2014, the Reynolds separately filed tort actions against Plaintiff Waymer in the Colleton County Court of Common Pleas (the "State Court Actions"). (Id. at ¶ 21.)[2] On April 28, 2014, CIC offered to tender the full policy limit as a settlement offer, however the Reynolds declined that offer. (Id. at ¶ 22.) 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 ¶¶ 23 - 24.)

         While the State Court Actions were pending, Defendant CIC filed a declaratory judgment action in this Court seeking a declaration that declining the January 2014 settlement offer and its April 28, 2014 offer to tender the full policy limits 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).

         After a damages hearing was held on October 24, 2018 in the State Court Actions, CIC alleges that it was determined that the cases will result in damages in favor of the Reynolds in excess of the $1 million policy limit. (See Declaratory Judgment Action Dkt. No. 1 at ¶ 48.) On November 16, 2018, a special referee issued an Order of Judgment awarding Angela Reynolds $3.5 million and William Reynolds $3 million. (Declaratory Judgment Action, Dkt. No. 18-9.)

         Shortly after the October 24th damages hearing, both Plaintiff Waymer here and Defendant CIC filed actions. On November 2, 2018, Defendant CIC filed a declaratory judgment action in this Court against the Reynolds, Plaintiff Waymer, and Q.E. Trucking, Plaintiffs business, 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.[3] (See Declaratory Judgment Action.) Three days later, on November 5, 2018, Plaintiff Waymer filed this action in state court against Defendant CIC, alleging breach of contract and bad faith for negligently handling his claims, his defense, and failing to accept settlement in the State Court Actions. (Dkt. No. 1-1 at ¶¶ 31 - 34.) Plaintiff Waymer also included a cause of action against Defendants CIC, James C. Greene Company and O.W. Ray for civil conspiracy. (Id. at ¶¶ 35 - 40.) While Defendant Greene Company is organized in North Carolina, Defendant Ray is a citizen of South Carolina. (Id. at ¶¶ 5, 7.)

         Defendant CIC removed the case on January 30, 2019, arguing that Defendants Greene Company and Ray were fraudulently joined because Plaintiff Waymer cannot maintain a claim for civil conspiracy. (Dkt. No. 1.) Plaintiff Waymer now moves to remand the case, arguing that Defendant Greene Company and Ray were not fraudulently joined, and Defendant CIC opposes the motion. (Dkt. Nos. 8, 9, 18, 21.)

         II. Legal Standard

         Federal courts are courts of limited jurisdiction. Strawn v. AT & T Mobility LLC, 530 F.3d 293, 296 (4th Cir. 2008) (citation omitted). A defendant removing a case to federal court bears the burden of establishing that federal jurisdiction is proper. Id. (citations omitted). The existence of federal jurisdiction is determined at the time the defendant files his notice of removal. See Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939) (citations omitted). "On a motion to remand, the court must strictly construe the removal statute and resolve all doubts in favor of remanding the case to state court, indicative of the reluctance of federal courts to interfere with matters properly before a state court." Gallagher v. Fed. Signal Corp., 524 F.Supp.2d 724, 726 (D. Md. 2007) (citation omitted). If there is any doubt regarding the existence of federal jurisdiction, the case must be remanded. Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir. 2005) (citations omitted).

         However, while a Court must resolve all doubt in favor of remand, under the doctrine of fraudulent joinder, "a district court can assume jurisdiction over a case even if...there are nondiverse named defendants at the time the case is removed." Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999). "To show fraudulent joinder, the removing party must demonstrate either outright fraud in the plaintiffs 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 Tramp., Inc., 187 F.3d 422, 424 (4th Cir. 1999) (internal quotation marks omitted) (emphasis in original). This is a heavy burden, and charges the removing party with the duty to prove "the plaintiff cannot establish a claim [against the allegedly fraudulent party] even after resolving all issues of law and fact in the plaintiffs favor." Id. at 424.

         III. ...

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