Nationwide Gen. Ins. Co. v. Foust

• Decision Date: 04 March 2022
• Docket Number: Civil Action 1:21-cv-00714-JMC
• Parties: Nationwide General Insurance Company, Plaintiff, v. James E. Foust, Defendant.
• Court: U.S. District Court — District of South Carolina

Nationwide General Insurance Company, Plaintiff,
v.
James E. Foust, Defendant.

Civil Action No. 1:21-cv-00714-JMC

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

March 4, 2022

ORDER AND OPINION

Plaintiff Nationwide General Insurance Company brought the instant declaratory judgment action seeking a declaration as to whether Defendant James E. Foust satisfied the witness affidavit requirement of South Carolina Code Ann. § 38-77-170 (West 2022) sufficient to meet the threshold for uninsured motorist (“UM”) coverage under South Carolina insurance law. (ECF No. 1.)

This matter is before the court on Foust's Motion to Dismiss Nationwide's Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 7.) Nationwide opposes the Motion to Dismiss asserting that the case should proceed in this court. (ECF No. 10.) For the reasons set forth below, the court DENIES Foust's Motion to Dismiss.

I. FACTUAL AND PROCEDURAL HISTORY

Nationwide alleges that it issued a personal auto insurance policy, policy number 6139V 137312 (the “Policy”), with effective dates of April 22, 2020, to October 22, 2020, to Foust and his estranged wife, Tami Foust. (ECF No. 1 at 2 ¶ 6 (referencing ECF Nos. 1-1, 1-2).) On June 20, 2020, Foust was involved in an auto accident wherein he alleges that he had to swerve off the road to avoid an oncoming vehicle in his lane. (ECF No. 7-2 at 3 ¶¶ 3-5.) Although Foust's vehicle never made contact with the unknown vehicle, he attests that he was forced off the road causing him to wreck and sustain bodily injuries. (Id.) Foust avers that he was the only person present at

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the scene of the accident, but he contemporaneously told Tami Foust and their daughter over the phone that another vehicle came into his lane causing him to swerve and wreck. (See ECF No. 7-2 at 6-11.)

Foust subsequently sought coverage from his insurer, Nationwide, who issued the Policy providing UM coverage on his vehicle. (See ECF Nos. 1 at 2 ¶ 10, 10-1 at 1-2.) In support of his claim, Foust provided an affidavit from Tami Foust, dated October 13, 2020 (the “October Affidavit”). (See ECF No. 1-2.) Within the October Affidavit, Tami Foust avers that while on the phone with Foust, she heard him say “hold on, somebody's in my lane” before she heard “screaming and lots of loud noise over the phone.” (Id. at 1 ¶¶ 5, 6.)

Under South Carolina law, an injured driver may not recover UM benefits for damages caused by an unknown driver unless: (1) the accident was reported to police in a reasonable time; (2) “the injury or damage was caused by physical contact with the unknown vehicle, or the accident must have been witnessed by someone other than the owner or operator of the insured vehicle; provided however, the witness must sign an affidavit attesting to the truth of the facts of the accident contained in the affidavit;” and (3) the insured was not negligent in failing to identify the other driver.^[1] S.C. Code Ann. § 38-77-170 (West 2022) (emphasis added). Citing the aforementioned affidavit requirement, Nationwide asserts that it denied UM coverage to Foust stating that the October Affidavit did not satisfy the statutory prerequisite because Tami Foust was

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not a witness with independent knowledge of the unknown vehicle. (ECF No. 10 at 3.) Shortly thereafter, Nationwide initiated this suit on March 12, 2021, seeking declarations that (1) Tami Foust's affidavit fails to satisfy the witness requirement of South Carolina Code Ann. § 38-77-170, and, therefore, (2) Nationwide owes no UM coverage to Foust for his claimed damages. (ECF No. 1 at 4 ¶ 27, 5 ¶ 37.)

After the instant lawsuit was filed, Foust filed suit against the unknown “John Doe” driver in South Carolina state court^[2] seeking actual and punitive damages. (ECF No. 7-2 at 1-5.) Foust attached two (2) affidavits to the state court complaint, including an affidavit from Tami Foust with additional information not present in the October Affidavit and an affidavit from their daughter, Deishawna Foust, including substantially similar allegations as those included in Tami Foust's second affidavit. (Id. at 6-11.) Both affidavits essentially attest to what they heard Foust say over the phone immediately before the accident and then hearing sounds consistent with a wreck. (Id.)

Foust now argues in the instant Motion that Nationwide's Complaint should be dismissed because: (1) the current “action does not present a justiciable ‘case or controversy'”; (2) this action is now moot in light of the state court action; and alternatively (3) the “[c]ourt should abstain from exercising its discretionary jurisdiction under the Declaratory Judgments Act.” (ECF No. 7 at 1.)

II. JURISDICTION

The court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332, because the parties are citizens of different states and the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. For jurisdictional purposes, Nationwide alleges that it

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is “an insurance company organized and existing under the laws of the State of Ohio with its principal place of business in Ohio. (ECF No. 1 at 1 ¶ 1.) Nationwide further alleges that Foust is a citizen and resident of Aiken County, South Carolina. (Id. ¶ 2.) The court is satisfied that the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. (Id. at 2 ¶ 4.)

III. LEGAL STANDARD

A. Motions to Dismiss Pursuant to Rule 12(b)(6)

A complaint may be dismissed if it fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Rule 8 of the Federal Rules of Civil Procedure requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 further requires the complaint to contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face to survive a motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Atlantic Corp. v. Twombly, 550 U.S. 544, 580 (2007).

In reviewing the adequacy of a complaint, a court “should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff.” Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The reviewing court need only accept as true the complaint's factual allegations, not its legal conclusions. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555. According to the United States Court of Appeals for the Fourth Circuit, “a motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief.” Mylan Labs., 7 F.3d at 1134.

When considering a motion to dismiss, a court “may consider documents attached to the complaint or to the motion to dismiss so long as they are integral to the complaint and authentic.” Rockville Cars, LLC v. City of Rockville, 891 F.3d 141, 145 (4th Cir. 2018) (quoting Kensington

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Volunteer Fire Dep't, Inc. v. Montgomery Cty., 684 F.3d 462, 467 (4th Cir. 2012)).

B. Declaratory Judgment Actions

Under the Declaratory Judgment Act, a district court, in a case or controversy otherwise within its jurisdiction, “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-42 (1937)). “[T]he dispute [must] be ‘definite and concrete, touching the legal relations of parties having adverse legal interests.” Medimmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126 (2007) (quoting Haworth, 300 U.S. at 240-41).

The Supreme Court has “repeatedly characterized the Declaratory Judgment Act as ‘an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.'” Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995) (quoting Pub. Serv. Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 241 (1952)). Courts have long interpreted the Act's permissive language “to provide discretionary authority to district courts to hear declaratory judgment cases.” United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493 (4th Cir. 1998). “[A] declaratory judgment action is appropriate ‘when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.'” Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996) (quoting Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)).

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Generally speaking, however, “a motion to dismiss is rarely appropriate in a declaratory judgment action.” Palmer v. Audi of Am., Inc., No. GJH-14-03189, 2015 WL 222127, at *2 (D. Md. Jan. 13, 2015). C. Declaratory Judgment Jurisdiction

Federal courts are courts of limited jurisdiction. Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Standing and ripeness are jurisdictional issues that courts must consider on their own initiative. See FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 230-31 (1990); Nat'l Park Hosp. Ass'n v. Dep't of Interior, 538 U.S. 803, 808 (2003). Standing requires a plaintiff to allege a concrete injury that is “actual or imminent, not ‘conjectural' or ‘hypothetical[.]'” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1990) (quoting Whitmore v. Arkansas, 495 U.S. 149, 155 (1990)). Ripeness determines when a case or...