Campbell v. Ashland Credit Union, CIVIL ACTION NO. 3:10-1341
| Decision Date | 30 September 2011 |
| Docket Number | CIVIL ACTION NO. 3:10-1341 |
| Court | U.S. District Court — Southern District of West Virginia |
| Parties | BILLIE L. CAMPBELL, individually and as Administratrix of the Estate of Dale E. Campbell, Plaintiff, v. ASHLAND CREDIT UNION, a foreign corporation, and SOUTHERN FINANCIAL INSURANCE COMPANY, INC., foreign corporation, Defendants. |
Pending before the Court is Plaintiff Billie L. Campbell's Motion to Amend Complaint [doc. no. 30], Defendant Southern Financial Insurance Company, Inc.'s (hereinafter Southern Financial) Motion to Dismiss under Rule 12 or, in the Alternative, to Transfer to the Eastern District of Kentucky [doc. no. 16], Plaintiff's Motion to Strike Affidavit of Craig Hart [doc. no. 42], and Southern Financial's Motion to Modify Scheduling Order [doc. no. 86]. For the following reasons, the Court GRANTS Plaintiff's Motion to Amend and GRANTS Southern Financial's motion to the extent the Court agrees that personal jurisdiction does not exist and it requests a transfer to the Eastern District of Kentucky. However, the Court DENIES the motion to the extent that Southern Financial asks to be dismissed from this action. In addition, the Court DENIES AS MOOT Southern Financial's Motion to Modify this Court's Scheduling Order, and the Court DENIES AS MOOT Plaintiff's Motion to Strike the Affidavit of Craig Hart.
On November 10, 2010, Plaintiff, in both her personal capacity and as the personal representative of the Estate of Dale E. Campbell, her late husband, filed a Verified Complaint and Request for Preliminary Injunction in the Circuit Court of Wayne County, West Virginia, against Defendant Ashland Credit Union (hereinafter Ashland Credit) and Southern Financial. In her Complaint, Plaintiff alleges that she is a resident of Wayne County, and she and her husband were members of Ashland Credit, which conducts business within the county. On or about August 12, 2002, Plaintiff states that she and her husband entered into a home equity line of credit with Ashland Credit, with a revolving line of credit. The loan was secured by a deed of trust on property located in Wayne County. Plaintiff asserts that Ashland Credit represented to her and her husband that the loan was insured and, if either her or husband were to die, the loan would be paid. Plaintiff states there were several draws on the loan and, with each draw, Ashland Credit represented the loan was insured. On April 14, 2010, Plaintiff's husband died.
Following the death, Plaintiff filed a claim for benefits with Ashland Credit and Southern Financial, which issued the insurance policy. Plaintiff asserts that Ashland Credit told Plaintiff to stop making payments on the loan because it was insured. However, Southern Financial denied coverage, and Plaintiff claims that Ashland Credit now has threatened foreclosure on her house. As a result, Plaintiff filed this action alleging claims for breach of contract, violations of the West Virginia Unfair Trade Practices Act, common law bad faith, reasonable expectations, and negligent representations and failure to properly procure insurance. Plaintiff also stated a claim fora temporary injunction prohibiting Defendants from attempting to collect on the loan and/or foreclosing on her house.
On November 30, 2010, Defendants removed the action to this Court based upon diversity of jurisdiction, as the amount in controversy exceeds $75,0000 and as Ashland Credit is incorporated and has its principal place of business in Kentucky and Southern Financial is incorporated in Kentucky with its principal place of business in Florida. Following removal, on January 3, 2011, Southern Financial moved to dismiss for lack of personal jurisdiction and/or for lack of venue or, in the alternative, to transfer the action to the Eastern District of Kentucky. As part of its argument, Southern Financial argues that the Complaint does not contain sufficient facts with respect to jurisdiction and venue to satisfy the constitutional requirements of minimum contacts over it. Plaintiff not only filed a Response to the motion, but also filed a Motion to Amend the Complaint to add allegations regarding jurisdiction and venue and to correct other errors.
Upon briefing of those motions and Plaintiff's Motion to Strike an affidavit submitted by Southern Financial, the parties jointly moved to withhold ruling to allow the parties to conduct discovery and then convert the motion to dismiss into one for summary judgment by allowing the Court to consider matters outside the pleadings. The Court granted the motion to withhold rulings, and the parties recently submitted supplemental pleadings and exhibits. With briefing now complete, the Court rules upon the pending motions.
Plaintiff moves to amend her Complaint pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure. Rule 15(a)(2) permits amendment of a complaint after a responsive pleading has been filed "with the opposing party's written consent or the court's leave" and leave should be freely given "when justice so requires." In the proposed Amended Complaint, Plaintiff alleges Southern Financial is in the business of selling insurance to West Virginia residents and that Southern Financial "has engaged in the 'transaction of insurance,' as that term is defined in West Virginia Code § 33-44-3(p) by issuing or delivering in West Virginia certificates or contracts of insurance to residents of this state or to persons authorized to do business in West Virginia." Proposed Amended Complaint, at ¶ 5. Plaintiff also alleges that Ashland Credit is and was an agent of Southern Financial, and when draws were made on the equity line, certificates of insurance were mailed to her in West Virginia. Given that Plaintiff moved to amend her Complaint very early in this litigation and these new allegations are the focus of the parties' arguments below, the Court finds that allowing Plaintiff to amend serves the interests of justice in this case. Therefore, for good cause shown, the Court GRANTS Plaintiff's motion for leave to amend the Complaint.
In this case, the parties agreed to conduct discovery and to have this Court treat Southern Financial's motion to dismiss as a motion for summary judgment. However, as Southern Financial has moved to dismiss pursuant to Rule 12(b)(2) and (3) for lack of personal jurisdiction and venue, as opposed to Rule 12(b)(6) for failing to state a claim, the Court need not convert themotion into one for summary judgment. Wilson-Cook Medical, Inc. v. Wilson, 942 F.2d 247, 252 (4th Cir.1991) (); Tetrev v. Pride Intern., Inc., 444 F. Supp.2d 524, 528-29 (D. S.C. 2006) (); Rich Food Services, Inc. v. Rich Plan Corp., No. 5:99-CV-677-BR, 2001 WL 36210598, at *9 n.2 (E.D. N.C. 2001) ().
In considering a Rule 12(b)(2) motion, "the plaintiff ultimately bears the burden of proving to the district court judge the existence of jurisdiction over the defendant by a preponderance of the evidence." New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 005) (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989)). In situations such as this one, where the court resolves the issue on the basis of "motion papers, supporting legal memoranda and the relevant allegations of a complaint, the burden on the plaintiff is simply to make a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge." Id. (). In considering the documents submitted, the court "'must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction.'" Id. (). This court, however, "need not 'credit conclusory allegations or draw farfetchedinferences.'" Masselli & Lane, PC v. Miller & Schuh, PA, No. 99-2440, 2000 WL 691100, at *1 (4th Cir. May 30, 2000) (unpublished) (quoting Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir.1994)). In addition, a plaintiff "may not rest on mere allegations where the defendant has countered those allegations with evidence that the requisite minimum contacts do not exist." IMO Industries, Inc. v. Seim S.R.L., 3:05-CV-420-MU, 2006 WL 3780422, at *1 (W.D.N.C. December 20, 2006). "Rather, in such a case, the plaintiff must come forward with affidavits or other evidence to counter that of the defendant . . . factual conflicts must be resolved in favor of the party asserting jurisdiction . . . ." Id.
In her Supplemental Response to Southern Financial's original motion, Plaintiff argues that personal jurisdiction exists over Southern Financial in West Virginia because of its activities within the State. In determining whether a federal court may exercise personal jurisdiction over a defendant, a federal court must look to see if such jurisdiction is authorized by the long-arm statute of the State in which it sits and whether the exercise of such jurisdiction is consistent with the Due Process Clause of the Fourteenth Amendment, U.S. Const. amend. XIV, § 1. Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003); Fed. R....
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