Robin York v. Property and Casualty Ins.
Filing
UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 2:12-cv-06582 Copies to all parties and the district court/agency. [999473114].. [14-1343]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1343
ROBIN J. YORK, Administratix of the Estate of Adam R. York,
Plaintiff – Appellant,
v.
PROPERTY AND CASUALTY INSURANCE COMPANY OF HARTFORD,
Defendant – Appellee,
and
JOSHUA MILLER; JOHN J. MILLER; MYRA MILLER; PAUL HOWARD,
JR.,
Defendants.
Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston.
Joseph R. Goodwin,
District Judge. (2:12-cv-006582)
Submitted:
October 15, 2014
Decided:
November 12, 2014
Before MOTZ, DUNCAN, and DIAZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
James Graham Bordas, III, Michelle Lee Marinacci, BORDAS &
BORDAS, PLLC, Wheeling, West Virginia; C. Benjamin Salango,
PRESTON & SALANGO, Charleston, West Virginia, for Appellant.
Michael H. Carpenter, Katheryn M. Lloyd, CARPENTER LIPPS &
LELAND LLP, Columbus, Ohio; Catherine M. Stetson, Sean Marotta,
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HOGAN LOVELLS US LLP, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Robin York (York), as administrator of the estate of
her son, Adam York (Adam), appeals orders of the district court
denying York’s motion to remand this action to state court, and
granting
defendant
Property
&
Casualty
Insurance
Company
of
Hartford’s (Hartford) motions for relief from default judgment
under Fed. R. Civ. P. 60(b) and for summary judgment.
suit
alleged
Virginia
that
Unfair
§ 33-11-4(9),
Hartford
Trade
and
violated
Practices
engaged
in
a
Act
common
provision
(WVUTPA),
of
law
York’s
West
Va.
W.
the
Code
bad-faith
claim
handling, in the manner in which it investigated, litigated, and
eventually
settled
against Hartford.
a
claim
York
asserted
under
her
policy
The district court held that (1) Hartford’s
removal was timely; (2) Hartford was entitled to relief from
judgment because its default was the result of excusable neglect
and it possessed a meritorious defense; (3) Kentucky law, rather
than
West
Kentucky
Virginia
law,
law,
York’s
governed
action
was
the
dispute;
untenable.
and
We
(4)
under
affirm
the
judgment of the district court.
I.
Adam York died in a single-vehicle automobile accident
on October 13, 2011, in Mingo County, West Virginia.
passenger in the vehicle driven by Joshua Miller.
3
Adam was a
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Like his parents, Adam was a Kentucky resident.
Adam
was insured through his parents’ policy with Hartford, 1 which
featured
a
$100,000
underinsured/uninsured
motorist
(UIM)
benefit.
Soon after the accident, York, through West Virginia
counsel, notified Hartford of the accident and of York’s suit
for
damages
state court.
against
Miller
and
his
insurer
in
West
Virginia
Hartford assigned the claim to an adjuster located
at one of its offices in Indiana.
In January 2012, York informed Hartford that Miller’s
insurer had offered to settle her claim for its policy limits,
in
exchange
After
two
for
months
a
in
waiver
which
of
Hartford’s
York
and
subrogation
Hartford
each
rights.
apparently
waited for the other to act, York amended her complaint and
added a UIM claim against Hartford, seeking the $100,000 policy
limit.
Although York properly served Hartford, the complaint
was misfiled due to an internal clerical error, and Hartford
failed to answer.
York moved for default.
At the same time, Hartford’s
adjuster continued to converse with York’s counsel in regard to
York’s claim against Miller.
During these conversations, York’s
1
Hartford is an Indiana corporation, whose principal place
of business is in Connecticut.
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counsel never mentioned Hartford’s failure to answer or York’s
pending motion for default.
On June 11, 2012, Hartford offered to settle York’s
claim for the $100,000 policy limit, but received no response.
The next day, York’s counsel appeared in state court, default
was entered against Hartford, and a hearing on damages was set
for the next month.
In late July, York served Hartford with a packet of
materials,
including
settlement
between
notice
York
and
of
a
hearing
Miller,
a
to
verified
approve
petition
the
to
approve the settlement, a notice of a hearing on “a writ of
inquiry in accordance with W. Va. R. Civ. P. 55(b)(2),” and one
certificate
of
service.
The
latter
notice
of
hearing
was
intended to apprise Hartford both of the fact that default had
been entered against it, and of the upcoming hearing for default
judgment.
But other than Hartford’s name, which was on the
caption of each page, and the cross-reference to “W. Va. R. Civ.
P. 55(b)(2),” which establishes the procedure by which judgment
by default may be entered, there was nothing to indicate the
upcoming
Hartford.
hearing
pertained
Although
in
to
receipt
a
default
of
York’s
judgment
packet,
against
Hartford’s
adjuster failed to recognize the significance of the notice of
hearing, and Hartford failed to appear.
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On August 6, the state court entered default judgment
against Hartford for over $4 million, for wrongful death damages
less the $100,000 paid by Miller’s insurer.
The court then
dismissed the Millers as parties and granted York permission to
amend its complaint to file additional claims against Hartford.
On
September
24,
2012,
Hartford
received
York’s
amended complaint, which sought damages for extra-contractual,
common law bad-faith claim handling, and statutory unfair trade
practices claims.
On October 12, Hartford removed the case on
the basis of diversity jurisdiction.
In federal Court, York moved to remand, alleging that
Hartford’s removal was untimely, and Hartford moved to vacate
the state court’s default judgment.
addressing
both
motions,
the
court
In a memorandum opinion
denied
York’s
remand and granted Hartford’s motion to vacate.
motion
to
The court first
explained that Hartford’s removal was timely, as it occurred
within thirty days of the date Hartford first received notice
that the case was removable -- namely, when Hartford received
York’s amended complaint.
The court then held that relief from
the state court’s judgment was proper because Hartford’s default
was
the
product
misfiling)
and
of
excusable
Hartford
had
neglect
a
(the
meritorious
clerical
defense
error
to
in
the
underlying claim (that the damages exceeded the amount demanded
in the complaint).
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York then amended her complaint a second time, reasserting the UIM claim.
Shortly thereafter, however, York and
Hartford settled this claim for the $100,000 policy limit.
After discovery, Hartford moved for summary judgment
on York’s remaining claims.
the
motion,
the
court
In a memorandum opinion addressing
held
that
under
either
the
lex
loci
delicti choice of law test or the Second Restatement’s “Most
Significant Relationship” test, Kentucky law applied.
then
noted
that
Kentucky
law
imposes
a
The court
particularly
high
evidentiary threshold for common law bad-faith claims against
insurers, and granted summary judgment to Hartford because York
had failed to make the requisite showing.
York now appeals.
II.
The standard of review on a motion to remand is de
novo.
Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 815-16 (4th
Cir. 2004) (en banc).
The burden of establishing jurisdiction
rests with the party seeking removal, and removal jurisdiction
is
strictly
construed;
thus,
“if
federal
jurisdiction
doubtful, a remand to state court is necessary.”
is
Id. at 816
(internal alterations omitted).
A notice of removal must be filed within thirty days
“after receipt by the defendant, through service or otherwise,
of a copy of an amended pleading, motion, order or other paper
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from which it may first be ascertained that the case is one
which
is
(2012).
or
has
This
become
thirty-day
removable.”
clock
28
does
not
U.S.C.
begin
§ 1446(b)(3)
to
run
until
“receipt by the defendant” of some indicia of removability.
See
Lovern v. General Motors Corp., 121 F.3d 160, 162 (4th Cir.
1997) (“[O]nly where an initial pleading reveals a ground for
removal will the defendant be bound to file a notice of removal
within 30 days.”).
In
this
case,
Hartford
did
not
receive
a
“motion,
order or other paper” from which it could have “ascertained”
that the case was removable until September 24, when it received
York’s amended complaint.
York contends that the state court’s oral dismissal of
the
Millers
was
sufficient
to
constitute
notice.
Cf.
Yarnevic v. Brink’s, Inc., 102 F.3d 753, 755 (4th Cir. 1996)
(noting
that
1446(b)’s
“‘motion,
order
or
other
paper’
requirement is broad enough to include any information received
by the defendant, whether communicated in a formal or informal
manner” (internal quotation omitted)).
But Hartford was not
present at that hearing and therefore could not have received
such notice,
as is required to start the clock under § 1446(b).
We thus conclude that the district court properly denied York’s
motion to remand.
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III.
We review for abuse of discretion an order vacating a
default judgment under Fed. R. Civ. P. 60(b).
MLC Auto., LLC v.
Town of S. Pines, 532 F.3d 269, 277 (4th Cir. 2008).
Rule 60(b)
is to be “liberally construed in order to provide relief from
the
onerous
Tolson v.
consequences
Hodge,
Accordingly,
411
“[a]ny
of
defaults
F.2d
123,
doubts
about
and
default
130
(4th
whether
judgments.”
Cir.
relief
1969).
should
be
granted should be resolved in favor of setting aside the default
so that the case may be heard on the merits.”
Id.
To obtain relief from a default judgment under Rule
60(b), Hartford must demonstrate that (1) it defaulted for a
reason valid under Rule 60(b)(1)-(5), (2) it timely moved to set
aside
the
judgment,
(3)
relief
will
not
result
in
unfair
prejudice to York, and (4) it has a meritorious defense to the
underlying action.
See Augusta Fiberglass Coatings, Inc. v.
Fodor Contracting Corp., 843 F.2d 808, 811-12 (4th Cir. 1988)
(per curiam).
We
have
reviewed
the
record
and
conclude
that
the
district court did not abuse its discretion in granting Hartford
relief from the state court judgment.
Hartford timely filed for
relief, York suffered no unfair prejudice, the default was the
product
of
an
excusable
clerical
error,
and
Hartford
has
a
meritorious defense -- namely, that the state court’s judgment
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was greater than the amount York demanded in her complaint and
thus, in violation of W. Va. R. Civ. P. 54(c).
We thus conclude
the district court properly granted Hartford’s motion to vacate
the state court judgment.
IV.
We
review
the
district
court’s
grant
of
summary
judgment de novo, drawing reasonable inferences in the light
most favorable to the non-moving party.
Dulaney v. Packaging
Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012).
A moving party
is entitled to summary judgment if the evidence shows no genuine
issue
of
material
fact
and
that
judgment as a matter of law.
such
party
is
entitled
Fed. R. Civ. P. 56(a).
to
“Only
disputes over facts that might affect the outcome of the suit
under
the
governing
summary judgment.”
242, 248 (1986).
the
non-moving
law
will
properly
preclude
the
entry
of
Anderson v. Liberty Lobby, Inc., 477 U.S.
To withstand a motion for summary judgment,
party
genuine
issue
of
Potomac
Elec.
Power
must
material
Co.,
produce
fact
312
for
F.3d
competent
trial.
645,
evidence
See
649
(4th
of
Thompson
Cir.
a
v.
2002)
(“Conclusory or speculative allegations do not suffice, nor does
a
mere
scintilla
of
evidence
in
support
of
[the
party’s] case.” (internal quotation marks omitted)).
10
non-moving
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Where
citizenship,
determined
federal
as
by
it
the
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jurisdiction
does
choice
here,
of
“the
law
depends
on
applicable
rules
of
the
diversity
of
law
be
must
forum
state.”
Brendle v. General Tire & Rubber Co., 408 F.2d 116, 116 (4th
Cir. 1969) (citing Klaxon Co. v. Stentor Mfg. Co., 313 U.S. 487
(1941)).
Thus, West Virginia’s choice of law rules apply here.
York’s claims sound in tort.
See Noland v. Virginia
Ins. Reciprocal, 686 S.E.2d 23, 33-34 (W. Va. 2009) (holding
that
both
statutory
claims
for
unfair
insurance
settlement
practices and common law claims for bad faith claims handling
are torts).
Therein, “West Virginia traditionally applies the
lex loci delicti approach . . . but has in certain circumstances
shown a willingness to apply the Restatement approach to resolve
particularly thorny conflicts problems.”
of
Foresters,
744
F.3d
quotation marks omitted).
901,
907
Kenney v. Indep. Order
(4th
Cir.
2014)
(internal
We “need not determine which approach
West Virginia courts would apply here,” id. at 907-08, because,
having
district
reviewed
court’s
the
relevant
conclusion
authority,
that
we
Kentucky
agree
law
with
applies
the
under
either approach.
Because Kentucky law applies, York has no cause of
action under the WVUTPA, and the district court properly granted
summary
judgment
to
Hartford
on
that
claim.
For
York’s
remaining common law bad-faith claim, Kentucky law requires York
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to prove that Hartford (1) is “obligated to pay the claim under
the terms of the policy”; (2) lacked “a reasonable basis in law
or fact for denying the claim”; and (3) “either knew there was
no reasonable basis for denying the claim or acted with reckless
disregard for whether such a basis existed.”
Wittmer v. Jones,
864 S.W.2d 885, 890 (Ky. 1993) (citation omitted).
Altogether,
York must show that Hartford’s conduct was “outrageous, because
of an evil motive or reckless indifference to his rights. . . .
[M]ere delay in payment does not amount to outrageous conduct
absent
some
Motorists
affirmative
Mut.
Ins.
Co.
act
v.
of
harassment
Glass,
996
or
S.W.2d
deception.”
437,
452
(Ky.
1997).
We have reviewed the record and conclude that York has
not shown the requisite bad faith.
The district court therefore
properly granted Hartford’s motion for summary judgment.
V.
For
district
the
court
is
foregoing
affirmed.
reasons,
We
the
dispense
judgment
with
oral
of
the
argument
because the facts and legal contentions are adequately presented
in the materials before the court and argument would not aid the
decisional process.
AFFIRMED
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