Hughes v. State Farm Mutual Automobile Insurance Company
Filing
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MEMORANDUM AND RECOMMENDATIONS on 7 MOTION for Judgment on the Pleadings filed by State Farm Mutual Automobile Insurance Company ( Objections to M&R due by 2/3/2014), ORDER STAYING CASE, Motion for Leave to File Amended Complaint (document #11) is DENIED.. Signed by Magistrate Judge David S. Cayer on 1/16/2014. (blf)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:13-cv-438-RJC-DSC
JAMES HUGHES, SR.,
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Plaintiff,
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v.
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STATE FARM MUTUAL
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AUTOMOBILE INSURANCE
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COMPANY,
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Defendant.
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______________________________)
MEMORANDUM AND RECOMMENDATION
AND ORDER
THIS MATTER is before the Court on Defendant’s “Motion for Judgment on the
Pleadings” (document #7) and Plaintiff’s “Motion for Leave to File Amended Complaint”
(document #11), as well as the parties’ briefs and exhibits. See documents ## 7, 8, 11 and 12.
This matter was referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. §
636(b)(1), and these Motions are now ripe for the Court’s consideration.
Having fully considered the arguments, the record, and the applicable authority, the Court
will deny Plaintiff’s Motion for Leave to File Amended Complaint. The undersigned respectfully
recommends that the Motion for Judgment on the Pleadings be granted, as discussed below.
I. FACTUAL AND PROCEDURAL BACKGROUND
Accepting the factual allegations of the Complaint as true, Plaintiff was involved in a
motor vehicle collision with Suzanne Alexander on June 28, 2010. Plaintiff was injured and
received the full liability limits of Ms. Alexander’s insurance policy. He then filed a claim with
his insurance carrier, Defendant State Farm, for underinsured motorist (“UIM”) coverage.
Defendant was notified of the UIM claim on October 18, 2012. The claim was mistakenly
filed under a policy belonging to James Hughes, Jr., the Plaintiff’s son. After this was corrected,
Plaintiff told Defendant that the form on file rejecting UIM coverage was signed by his son and
applied only to his son’s policy. Plaintiff alleges that he never rejected the UIM provision and is
therefore entitled to one million dollars in coverage.
It is undisputed that the declarations page of Plaintiff’s policy does not include UIM
coverage. His liability coverage was the statutory minimum of $30,000/$60,000/$25,000. N.C.
Gen. Stat. § 20-279.21(b)(4) (establishing minimum liability coverage on automobile liability
policy of “thirty thousand dollars ($30,000) because of bodily injury to or death of one person in
any one accident and, subject to said limit for one person, sixty thousand dollars ($60,000)
because of bodily injury to or death of two or more persons in any one accident, and twenty-five
thousand dollars ($25,000) because of injury to or destruction of property of others in any one
accident.”)
After reviewing Plaintiff’s policy, Defendant denied the claim based upon there being no
UIM coverage.
On June 26, 2013, Plaintiff filed suit in Gaston County Superior Court. He asserts
claims for a declaratory judgment that the policy includes UIM coverage, bad faith, violations of
the North Carolina Unfair and Deceptive Trade Practices Act and breach of contract.
The
gravamen of all these claims is that Defendant has denied UIM coverage.
On August 2, 2013, Defendant removed the state action to the United States District
Court for the Western District of North Carolina alleging diversity of citizenship subject matter
jurisdiction. Removal has not been challenged and appears proper.
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On November 8, 2013, Defendant filed its Motion for Judgment on the Pleadings,
asserting that Plaintiff was statutorily ineligible for UIM coverage because his policy carried the
minimum liability coverage limits.
On December 27, 2013, Plaintiff filed his “Response … [and] Motion for Leave to File
Amended Complaint” (document #11).
The Motions have been fully briefed and are ripe for determination.
II. DISCUSSION
A. Motion for Judgment on the Pleadings
1. Standard of Review
Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed but
within such time as not to delay the trial, any party may move for judgment on the pleadings.”
Fed.R.Civ.P. 12(c). In resolving a motion for judgment on the pleadings, the court must accept
all of the non-movant’s factual averments as true and draw all reasonable inferences in its favor.
Bradley v. Ramsey, 329 F. Supp.2d 617, 622 (W.D.N.C. 2004). Judgment on the pleadings is
warranted where the undisputed facts demonstrate that the moving party is entitled to judgment
as a matter of law. Id. The court may consider the complaint, answer, and any materials
attached to those pleadings or motions for judgment on the pleadings “so long as they are
integral to the complaint and authentic.” Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180
(4th Cir. 2009); see also Fed.R.Civ.P. 10(c) (stating that “an exhibit to a pleading is part of the
pleading for all purposes.”). Unlike a Rule 12(b)(6) motion, the court may consider the answer as
well on a Rule 12(c) motion. Alexander v. City of Greensboro, 801 F.Supp.2d 429, 433
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(M.D.N.C. 2011).
Although a motion for judgment on the pleadings pursuant to Rule 12(c) is separate and
distinct from a motion to dismiss under Rule 12(b)(6), federal courts apply the same standard for
Rule 12(c) motions as for motions made pursuant to Rule 12(b)(6). Independence News, Inc. v.
City of Charlotte, 568 F.3d 148, 154 (4th Cir. 2009); Burbach Broadcasting Co. of Delaware v.
Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002); Edwards v. City of Goldsboro, 178
F.3d 231, 243 (4th Cir. 1999).
In reviewing a Rule 12(b)(6) motion, “the 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 plaintiff’s “[f]actual allegations
must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). “[O]nce a claim has been stated adequately, it may be
supported by showing any set of facts consistent with the allegations in the complaint.” Id. at
563. A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains
enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id.
In Iqbal, the Supreme Court articulated a two-step process for determining whether a
complaint meets this plausibility standard. First, the court identifies allegations that, because
they are no more than conclusions, are not entitled to the assumption of truth. Id. “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
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suffice.” Id. (citing Twombly, 550 U.S. at 555) (allegation that government officials adopted
challenged policy “because of” its adverse effects on protected group was conclusory and not
assumed to be true). Although the pleading requirements stated in “Rule 8 [of the Federal Rules
of Civil Procedure] mark[] a notable and generous departure from the hyper-technical,
code-pleading regime of a prior era ... it does not unlock the doors of discovery for a plaintiff
armed with nothing more than conclusions.” Id. at 678-79.
Second, to the extent there are well-pleaded factual allegations, the court should assume
their truth and then determine whether they plausibly give rise to an entitlement to relief. Id. at
679. “Determining whether a complaint contains sufficient facts to state a plausible claim for
relief “will ... be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id.. “Where the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has alleged-but it has not
‘show[n]’-‘that the pleader is entitled to relief,’” and therefore should be dismissed. Id. (quoting
Fed. R. Civ. P. 8(a)(2)). In other words, if after taking the complaint’s well-pleaded factual
allegations as true, a lawful alternative explanation appears a “more likely” cause of the
complained of behavior, the claim for relief is not plausible. Id.
Since Plaintiff’s policy carried only the minimum liability limits, he was statutorily
ineligible for UIM coverage. Purcell v. Downey, 162 N.C. App. 529, 530, 591 S.E.2d 556, 558
(2004) (holding that N.C. Gen. Stat. § 20-279.21(b)(4) requires “a policyholder to maintain
liability coverage that is above the statutory minimum in order to be eligible for UIM coverage”)
(quoting Pinney v. State Farm Mut. Ins. Co., 146 N.C. App. 248, 253, 552 S.E.2d 186, 190
(2001)); see also Smith v. Nationwide Mut. Ins. Co., 328 N.C. 139, 147, 400 S.E.2d 44, 50
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(1991). In Purcell, the North Carolina Court of Appeals held that the validity of the purported
selection/rejection form for UIM coverage was immaterial because plaintiff did not purchase a
policy with liability coverage above the statutory minimum. 162 N.C. App. at 530, 591 S.E.2d at
559.
Even accepting the factual allegations of the Complaint as true, Plaintiff is not entitled to
a declaratory judgment that he had UIM coverage under the policy. His remaining claims are
premised on the existence of UIM coverage and must fail as well. For these reasons, and the
other reasons stated in Defendant’s briefs, the undersigned respectfully recommends that its
Motion for Judgment on the Pleadings be granted.
B. Motion to Amend
Federal Rule of Civil Procedure 15(a) provides in relevant part that a party may amend its
own pleading once as a matter of course within twenty-one days after service of a responsive
pleading or twenty-one days after service of a motion under Rule 12(b), (e), or (f), whichever is
earlier. Fed.R.Civ.P. 15(a)(1)(B). Otherwise, a party may amend only with consent of the
opposing party or leave of court. Fed.R.Civ.P. 15(a)(2).
The Fourth Circuit has held that “under Rule 15(a) leave to amend shall be given freely,
absent bad faith, undue prejudice to the opposing party, or futility of amendment.” United States
v. Pittman, 209 F.3d 314, 317 (4th Cir.2000). Further, “the grant or denial of an opportunity to
amend is within the discretion of the District Court.” Pittston Co. v. United States, 199 F.3d 694,
705 (4th Cir.1999). “Where the facts upon which [a] new claim [is] based were known at the
time of the original complaint ..., it is not an abuse of discretion to find bad faith.” Ferguson v.
Maita, 162 F.Supp.2d 433, 441 (W.D.N.C.2000); see also Al– Abood ex rel. Al–Abood v. El–
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Shamari, 217 F.3d 225, 234 (4th Cir.2000). Moreover, where a motion to amend is filed in an
attempt to circumvent a dispositive motion, leave to amend need not be granted. See Googerdy v.
N.C. Agric. & Tech. State Univ., 386 F.Supp.2d 618, 623 (M.D.N.C.2005).
Plaintiff had twenty-one days from the filing of Defendant’s Motion for Judgment on the
Pleadings to file an amended complaint as a matter of right. He failed to do so.
As discussed above, Plaintiff was statutorily ineligible for UIM coverage. Purcell, 162
N.C. App. at 530, 591 S.E.2d at 558.
Plaintiff states only that his “proposed amended complaint is not futile…. [the] proposed
amendment narrows the legal issues and scope of the factual inquiry. Plaintiff can demonstrate a
viable basis for the requested relief and the recent understanding of the facts and circumstances
will solidify and narrow the inquiry for both parties.” Document #11-1 at 2. Plaintiff does not
state what facts he intends to plead or how those facts would salvage his Complaint.
For this reason and the other reasons stated in Defendant’s “Reply …” (document #12),
Plaintiff’s “Motion for Leave to File Amended Complaint” is denied.
III. ORDER
IT IS HEREBY ORDERED that:
1. The Plaintiff’s “Motion for Leave to File Amended Complaint” (document #11) is
DENIED.
2. All further proceedings in this action, including all discovery, are STAYED pending
the District Judge’s ruling on this Memorandum and Recommendation and Order.
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IV. RECOMMENDATION
FOR THE FOREGOING REASONS, the undersigned respectfully recommends that
Defendant’s “Motion for Judgment on the Pleadings” (document #7) be GRANTED.
V. NOTICE OF APPEAL RIGHTS
The parties are hereby advised that, pursuant to 28 U.S.C. §636(b)(1)(c), written
objections to the proposed findings of fact and conclusions of law and the recommendation
contained in this Memorandum must be filed within fourteen (14) days after service of same.
Failure to file objections to this Memorandum with the District Court constitutes a waiver of the
right to de novo review by the District Judge. Diamond v. Colonial Life, 416 F.3d 310, 315-16
(4th Cir. 2005); Wells v. Shriners Hosp., 109 F.3d 198, 201 (4th Cir. 1997); Snyder v. Ridenour,
889 F.2d 1363, 1365 (4th Cir. 1989).
Moreover, failure to file timely objections will also
preclude the parties from raising such objections on appeal. Thomas v. Arn, 474 U.S. 140, 147
(1985); Diamond, 416 F.3d at 316; Page v. Lee, 337 F.3d 411, 416 n.3 (4th Cir. 2003); Wells,
109 F.3d at 201; Wright v. Collins, 766 F.2d 841, 845-46 (4th Cir. 1985); United States v.
Schronce, 727 F.2d 91 (4th Cir. 1984).
The Clerk is directed to send copies of this Memorandum and Recommendation and
Order to counsel for the parties; and to the Honorable Robert J. Conrad, Jr.
SO RECOMMENDED AND ORDERED.
Signed: January 16, 2014
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