Garrett v. Bromell, Civil Action No.: 5:16-cv-02888-JMC

• Court: United States District Courts. 4th Circuit. United States District Court of South Carolina
• Parties: John S. Garrett, Plaintiff, v. 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.
• Docket Number: Civil Action No.: 5:16-cv-02888-JMC
• Decision Date: 28 September 2017

John S. Garrett, Plaintiff,
v.
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.

Civil Action No.: 5:16-cv-02888-JMC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA ORANGEBURG DIVISION

September 28, 2017

ORDER AND OPINION

This 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 Connecticut ("Travelers").

Before 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.

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I. FACTUAL AND PROCEDURAL BACKGROUND

On 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.)

Garrett 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.)

Garrett 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

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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.)

This 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. 25, 28.)

II. JURISDICTION

As an 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.

Jurisdiction 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.

District 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

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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.

Defendants 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.)

Diversity 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).

When 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.)

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Bromell 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.

In 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 conduct.

To show 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

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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).

Defendants 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.

Due to the alleged denial of Garrett's insurance claim on the basis of his...