White et al v. BB&T Insurance Services, Inc. et al
Filing
109
MEMORANDUM OPINION. Signed by District Judge Glen E. Conrad on 8/30/2013. (lab)
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10CV 00467
M EM O R AN D UM O PIN I N
O
BB& T I SUM N CE SERV I
N
CES,l C.
N ,
: gL,
1-
By:H on.G l E.Conrad
en
Chi fUnie St t D i ti tJ
e
t d a es s rc udge
Def nda s
e nt .
Th sc s i p e e t b f r tec u t ntep an if' to frr le fo j dg n
i a e s r s n l eo e h o r o h litfs moin o eif r m u me t
y
unde Rul 60( oft Fe r Rul ofCi lPr e e. Fort ras s tf t beow,he
r e b) he deal es vi oc dur
he e ons e orh l t
m oton w ilbe de e
i
l
ni d.
Backtround
Del sa LaureW hie( l tvel CheW hie ' a t rt c
mi nd
i
t coleci y,t
t
ts' nd hei wo ompa es
)
ni ,
Cor rt Cusom Homes LLC (s nesone'a Chors& M or Ha
nesone t
,
i
cor rt ' nd
)
e
e ndyma Sevies LLC
n rc ,
(û es& M or' ,fl t sa tononOcobe 18 201 a s ri cli ofpr e so l
t
chor
e' ied hi ci
)
t r , 0, s etng ams ofsina
ne i enc b e c offduc a y du i ,a br ac ofc r taga ns BB& T I ur nc Se v c ,
glg e, r a h i i r tes nd e h
ontac
i t
ns a e r i es
l (1
nc.t
BB&T' a Famesl urnceExc nge(d r r '. Theplitfs camssemmed
' nd r r ns a
)
ha s me s'
Fa
)
anif' li t
f o t a t ofone o t c pa es e pl es who a l dl s ol t sa t ove t
r m he c s
f he om ni ' m oye ,
lege y t e ool nd ook r he
co pa e busne sw hie t W hiesw e e outoft
m ni s' i s
l he
t
r
own i Se e be of2007. The pl ntf s
n pt m r
ai i f
as e t d t tBB& T f l d t pr ur a qua e i t a e t pr t c t c pa e f o t
s r e ha
aie o oc e de t ns l nc o o e t he om ni s r m he
r
e pl ' a tons a t tBB& T f ie t pr de a c a e a c whe t pl i if r pored
m oyee s c i , nd ha
a l d o ovi c ur t dvi e
n he a ntf s e t
t e pl
he m oyee' a tons t BB& T i Oc obe of2007.
s ci o
n t r
1
'The W hiesobt ned t c
t
ai he ompani i a t ough BB&T a t rpe s
es' nsur nce hr
nd hei r onali ur
ns ancet ough
hr
Far s. The cl m sagai tFar er wer vol arl dimi ed.
mer
ai
ns m s e unt iy s ss
RK
;
;
ê
'
,
.
z>
Prort flng t i tnta ton, heW hiestld aCha e 7 ba u cype ii i t
i o ii he nsa c i t
t ie
pt r nkr pt
tton n he
U nie St t s Ba upt y Cour f t W e t r D i ti tofVi gi a. l t ba u c
t d a e nkr c
t or he s e n s rc
r ni n he nkr pt y
pr ee ng,t w hie r pored t tt c pa esha no a s s a t tneihe t c pa es
oc di he
t s e t ha he om ni
d
s et nd ha t r he om ni
nort W hie ha a l ga cl i s a i ta pa t The ba u c c te e e a or r
he
t s d ny e l a m ga ns ny ry.
nkr pt y our nt r d n de
di c r i t W hieso J 23,2008,a on D e e be 7,
s ha g ng he
t n une
nd
c m r 2008, he W hies Cha e 7 t s e
t
t ' pt r nz t e
fl a no as e r po t The ba upt y c e w asc os d on A ugus 24,2009.
ied
s t e r.
nkr c as
l e
t
BB&T mo e frs mmayj d me tnt isa t cino Ap i 1 , 01 . OnJ y23
v d o u r u g n i he n tn a to n rl 1 2 2
ul ,
201 t co tis d am e a
2, he ur s ue
mor ndum o ni a or rgr ntng BB&T' m oton i pa t nd
pi on nd de a i
s i n ra
de ng i pa t a s a ng t ca e f r 60 da . The cou te ai d t tt onl pa t w ih
nyi t r , nd t yi he s o
ys
r xpl ne ha he y r y t
s a ng t pur ue a oft pl i if 'c ai s wast ba upt y t us e snc t pl i t fs'
t ndi o s ny he a ntf s l m
he nkr c r t e, i e he a n if
c ai sa c e bef e t W hie tl f ban u c a t , onge t t ba u cy esa e.
l m c nz d or he
t s i ed or kr pt y nd, hus bel d o he nkr pt
tt
Ra he t n di m i s ng t ca e f rl c ofs a ng, he c t f r d t W hiest oppor uniy
t r ha s s i he s o a k t ndi t our af o de he
t he
t t
t a k t ba
o s he nknl c c tt r pe t ba u c c e t pe m i t t us e t de e m i
pt y our o eo n he nkr pt y as o r t he r t e o t r ne
wh t e t a o to a nd na ycamsta s r i dBB&T' mo inf rs
eh r o d p r ba o n li h t uvve
s to o umma yj d me t
r u g n.
The co tt n a e s t m e isoft c pa es cl i s a i tBB& T. The co t
ur he ddr s ed he r t
he om ni ' a m ga ns
ur
he d t tt c ai f br c offduci r dute wasba r by t a i bl t o- rs a u e of
l ha he l m or ea h i a y i s
r ed
he pplca e w yea t t t
lmi to s Th c u t loc n ld dt a BB&T wa e tte t s mmayj g n o t e
i t in . e o r as o cu e h t
a
s nild o u r ud me t n h
c pa es cl i t tBB& T br a hed a c r t du y a w a ne i nti f ii t i ur
om ni ' a m ha
ec
ontac ual t nd s glge n a lng o ns e
t tt c pani ha ade t c r f t l s s oc as o d by t e pl yee' a tons
ha he om
es d qua e ove age or he os e c i ne
he m o s c i ,
s nce t pl i if pr f r d no e de e t tadd tonali ur nc e sed whi h w ou d ha
i he a ntf s of e e
vi nc ha
ii
ns a e xi t
c
l ve
cover t eom pani l es.
ed he
es' oss
Thecoul de e s
' nid ummayj mentont c
t
r udg
he ompa es cli t taBB&T rpr s nttve
ni ' am ha
e e e ai
ne i nty ad s d t pl i if t tt c pa e had no i ur nc c r f t e pl e'
glge l vi e he a ntf s ha he om ni s
ns a e ove age or he m oye s
a tonsunde t polcest twe epr tr byBB&T. Thepl ntfscli d t ti wa no
ci
r he i i ha r oc led
ai if a me ha t s t
untl2010,w hen t began w or ng w ih a new i ur
i
hey
ki
t
ns ance agent t t l ned t t
, hat hey ear
hat he
c pa esc d ha fl c a m su rt e s i polc e , nd t tt co pa e 'c ai sw e e
om ni oul ve ied l i nde he xitng i i s a ha he m ni s l m
r
utmaeyd n e a u t l tld. W hl BB&T a g e , ns mmayj g n ,h t h
li tl e id s ni y ie
me
ie
r u d o u r ud me tt a t e
c pa es cl i s we e de e f r a onst thad not ng t do w ih t de a d r po tng a
om ni ' a m
r ni d or e s
ha
hi o
t he l ye e r i nd,
t us t tt pl n i f s f r d no da a ,BB& T f l t pr f e de e t s
h , ha he ai t f s uf e e
m ges
aied o ofer vi nc o uppo tt s
r hi
a g e , ne t t g r lla lt polci nort e pl e di ho s y bondsw e e
r um nt and iher he ene a i biiy i es
he m oye s ne t
r
s bmitd b eihe sde. Cons quen l bas d on t r c d be or t cour on s
u te y t r i
e
ty, e
he e or f e he
t ummar
y
j d me tt c u t su a l t c n ld t th c mp n e we en th r db sae n s
u g n ,he o r wa n be o o cu e ha te o a is r o ame y ttme t
a l gedl m ade by t BB& T r pr e a i
le y
he
e es nt tve. A cc di y,t c tde e t m oton f
or ngl he our ni d he
i or
s
ummar udgme wihr pec t t tcli
yj
nt t es t o ha am.
The c ts a t ca e f s x y da t a l t pl ntf st pr s ntt r m ai ng
our t yed he s or i t ys o low he ai i f o e e he e ni
c am t t ba upty tuse Afe t sxt da pe i d e r d wih no f t ra i ha ng
l i o he nkr c r t e. tr he i y- y ro xpie t
' he cton vi
ur
be n t ke by t pl i if o t tuse t co tdi m i s d t r m a ni c a m f rl c of
e a n
he a ntf s r he r t e, he ur s s e he e i ng l i o a k
s a ng a t r i t d t c e fom t c tsa i d ke .
t ndi nd e m na e he as r he our ' ctve oc t
OnJ 1 201 t pl nif fldt i tn moto u rRul 6 b) a g ngt tt
une 7, 3,he aitfs ie he nsa t in nde e 0( , r ui ha he
di m i s loft i c e r ule fom t ra t ne sneg i nce BB & T fl d a brefi oppos ton
s sa
he r as es t d r hei tor y'
lge .
ie
i n
ii
t t m oton a c w ih a tona evi nc i l i t i ur nce polc espr ur d f t
o he i lmg t ddii l de e, nc ud ng he ns a
i i oc e or he
c pa e . The c t d ahe rng on t pl ntf s m oton on J y 22,201 Them oto has
om ni s
our hel
ai
he ai i f ' i
ul
3.
in
be n f l bref d a i rpe f rr vi w .
e uly i e nd s i o e e
Di
scussi
on
Rul 60( oft Fe r lRul ofCi lPr e ea ho iesadititc toga rlef
e b) he de a es
vi oc dur ut rz
src our t rnt ei
fom asna j me f c rai e
r
ludg nt or et n numeae r a o i udi t sa ,na re e, ur ieo
rtd e s ns ncl ng k tke i dve tnc s prs r
mi
e u a l n ge t'o f ri n oh rr ao t a j tse rle . Fe . Ci P. 0 b . k d r
xc s be e lc, r o s y t e e s n h tusi s eif' d R. v. 6 ( ) i e
'
a
'
un
a1t pr ii o Rul 60( ,at es d c ndiim fl gr i t rle i t tt mt nts
1 he ovsons f e b) hr hol o tt tr antng he eif , ha he wa gj
s
de o t a e t tg a i t r le w ilnoti t e ha bee a f ie ge t e by s i t t
m nsr t ha r ntng he e i f l
n he nd ve n utl s ur , how ng ha
( yh v lameio iusd fns o cam. Bo dv. ll, 05F.d7 4 7 9( t Ci.1 9 )
t ae
he
rt ro ee e r li ' y Bu aa 9 2 6 , 6 4h r 9 0 .
'
A fe r vi w i t a tona e d nc pr de by BB& T, he c tc ude t tt pl i if
l r e e ng he ddii l vi e e ovi d
t our oncl s ha he a ntf s
a e u bl t m a t st e hol s i
r na e o ke hi hr s d how ng.
A s s tf r h a
e o t bove, he pl ntf s r m a ni cl i a s t d t BB& T a t d neg i nty
t
ai i f ' e i ng a m s ere hat
ce
lge l
w he t W hie r pored t tone oft i e pl esha sol n f om t c pa es The
n he
t s e t ha
he r m oye
d t e r he om ni .
pl ntf sa l ge t ta BB& T r pr e a i a s d t m t tno hi c d be done bec us t
ai i f le d ha
e es nt tve dvi e he ha t ng oul
a e he
c pa es ge r la lt polc e ha l ps d, nd t tt r pr e a i f ie t r ogni t t
om ni ' ne al i biiy i i s d a e a ha he e es nt tve a l d o ec ze ha
t ge r lla lt polc e we e oc ur e e bas d a t ,t tt pr de cove a f
he ne a i biiy i i s r c r nc - e nd, hus ha hey ovi d
r ge or
l s st toc ured du i t polc pe i e n i t polc e r bef r t c am wa ûl
os e ha c r
rng he i y rod, ve f he i y xpied o e he l i
s ed.
Thepli if f t ral ge t tt r e enttvef ie t a s t t tt c
antfs urhe le d ha he epr s a i a ld o dvie hem ha he ompa e ha
nis d
e pl e diho s y bondst tm i ha c r d s e oft c pa es l s s.
m oye s ne t
ha ght ve ove e om
he om ni ' os e
l rs
n e pons t t i t ntm oto BB& T ha pr de ad tonale de e i l i t
e o he ns a
i n,
s ovi d dii
vi nc nc ud ng he
di hone t bonds a ge r lla lt polc e i s d t Cor r t a Chor & M or I i
s
sy
nd ne a i biiy i i s s ue o ne sone nd
es
e. t s
cea fom t s unc r dit d s
l r r he e onta c e ubmisonst tne t rt dihone t bondsnort gene a
s i ha ihe he s
sy
he
rl
labiiy polc esaf o d cove ag f rt l s s a i s ,a t ,t tt pl i if c nnot
i lt
ii f r
r e o he os e t s ue nd, hus ha he a ntf s a
es a i h t tBB &T pr m a e y c us d t m a da a s Se J
t bls ha
oxi t l a e he ny m ge . e onasB .Cr ke l e es s I
oo nt r t e nc.
v.CTL En:' I , .97 1 97- 357,1 U, App.
q, nc.Nos - 227, 1
999 S.
LEXI 5742,a *8( h Ci. a .
S
t 4t rM r 29,
2009 ($ pr acai f pr e sona neglge e apl ntf mus s w t tapr e so
) iTo ove l m or ofs i l i nc , ai if t ho ha ofsinal
r atons p gi ng r set a dut ofreasonabl car exit be w een t pl nt f and t def
el i hi vi i o
y
e e s ed t
he ai i f
he endant
,
t tt def nda br a he t tdut a t t b ea h wa apr m a ec eoft pli ifs
ha he e nt e c d ha y, nd hat he r c
s oxi t aus
he a ntf '
camedda s' (ii Grcor v.Ha ns 468S. 2d891 893( 1 )
li
mage .) ctng e y
'
wki ,
E.
, Va. 996).
The r or i c t st tChor & M or s dihones y bo w asc nc le s ve alm o hs
ec d ndi a e ha
es
e' s
t nd
a e ld e r
nt
be or t pl ntf s l s oc ur e A ddii ly, he di honesy bondsi s d t Cor r t
f e he ai if ' os es c r d.
tona l t
s
t
s ue o ne sone
a Chor s& M or onl pr dec r gef fa e ordihone ta t t ta et s bl
nd
e
e y ovi ove a or r udulnt
s
s c s ha r s
puniha e
u d rt ci n l o ei tej rs ito wi i whih ( ea tlo c re , a df r iha
n e he rmia c d n h u idci n t n c t cs c u rd' n o wh c n
h
h
'
e o e i Cre a dc vitdb ac u t fp o e j rs ito , (
mply e s iid n on ce y o r o r p r u idcin' BB&T Exs B & C. Th
t
'
.
) e
r c d r ve l t tt pl ntf sw e e ad s d oft s c c i r qui e e i a l te da e
e or e a s ha he ai i f r vi e
hi onvi ton e r m nt n e t r t d
J r 24,2008,afe s ti acam onCo nesone' ds nesybond. (
anuay
tr ubmitng li
r rt s iho t
BB&T Ex. )
A.
Li
kewi e,on J nua y 1 2011, he pl i if we e a s d t tCor r t sdi honesy bond
s
a r 0,
t
a ntf s r dvi e ha
ne s one' s
t
r quiesaci na c ci (
e r rmi l onviton. BB&T Ex. ) Ne rhees,i i undipue t tt e oye
F. ve t l s t s s td ha he mpl e
a cus ofs e lng t c pa e 'pr r y w a ne ra r t d o c r w ih a c i e.
c ed t a i he om ni s ope t s ve r es e r ha ged t r m
Cons
eque l r ga dl s ofw he t c pa e r po t d t rcl i st t s e y, he a e no
nty, e r e s
n he om ni s e r e hei a m o he ur t t y r t
entted t coverage undert di honesy bonds.
il o
he s
t
Li
kewi e t undi put d e de e esa i he t tt compa es a e note il t
s , he
s e vi nc t bls s ha he
ni r
ntted o
c r unde t i ge r lla lt polc e . Ther c d r ve st tChor s& M or sge r
ove age
r her ne a ibiiy ii s
e or e al ha
e
e' ne al
labiiy polcy lps f no
i lt i a ed or npayme oft pr mi i J y of2007,welbe or t e nt
nt he e um n ul
l f e he ve s
occ r d t tg ve r s t t pl i if 'aleg l s . Co eq ty, ha polc af o dsno
ur e ha a i e o he a ntf s l ed os es
ns uen l t t i y f r
co r ge r ga dl s ofw he he i i an oc ur e - s d orc a m s m a polc s nc bot t
ve a e r e s
t rts
c r nce ba e
l i - de i y, i e h he
occ r nce gi ng r s t t l s s a t r po tng oft l s sha ned afe t polc
ur e s vi i e o he os e nd he e r i
he os e ppe
t r he i y
expi ed.
r
Asf Cor rtne' ge rllabiiypolc t pl ntfsa g ons
or ne so s nea i lt iy,he ai if r ued ummayj
r udgme
nt
t tt polcy m i pr de cove a f t s sol n by t i e pl yee s nce t i ur r ha
ha he i
ght ovi
r ge or ool t e
he r m o , i he ns e d
ag e d t pa f sol nt si t pa t Ther co dss it by BB&T i c t t tt i a
r e o y or t e ool n he s .
e r ubm ted
ndi ae ha he nlnd
m a i pori ofCor sone' ge r la lt polc con a nsa toaert tpr des$5, 00
rne ton
nert s ne al i biiy iy t i l t ha ovi
000.
i s cilco r ef C ic la ousTool. (
n pe a veag ord s elne
M
s' BB&T Ex. a RFD 000298. Ho vert
'
lt
) we ,he
polc a s c anst f l wi e l i whih e es l e ude c r gef l s s
i y lo ont i he olo ng xcuson, c xpr sy xcl s ove a or os e
r s li f o e pl e t f :
e u tng r m m oye he t
$ e' do notpa f l s orda ag i one orm or t f l i
( '
W
y or os
m ef
e he olow ng
e l i a yt t l s
xc us ons ppl o he os :
Crm i ,Fr
i nal audul orDi hones A ct - çW e' do notpay
ent
s
t s û '
f l sca e by o r s tng f om c i i l f a
or os us d
r e uli r
r m na , r udul nt
e ,
di honest oril act com m it al ori coluson
s
, legal s
ted one n l i
w ih a he by:
t not r
klr 5.
tgOu '
( Ot r whoha a i ees i t pr ry;
2) he s
ve n ntr t n he ope t
( Ot r t whom i 'e tus t pr ry;
3) he s o
d
you' nr t he ope t
( ) C u 'p rn r, fie s dr co s tu te , on
4 s r' a tes o fc r, ie tr,r se sj it
Yo
advent s'or
urer ,
( Thee oye sora nt of( ) ( ,( ,or( a
5)
mpl e ge s 1, 2) 3) 4) bove,
whe he ornott y a e a w o k,
t r
he r t r
Thi e l i doe no a y t a t ofde t c i by
s xc us on s t ppl o c s
s nz ton
û
l ' e pl es butC 'do no pa f t tby
your' m oye , û
we'
t y or hef
em pl
ovees.
(
BB&T Ex.Ia PL 0232- )(mpha i a d) Ac r ngl Cor rt ' ge rllabiiy
t
233 e
ss dde . co di y, ne sones nea i lt
polc pr vi s no c r f t t st tw e e a l dl s ol n by t pl i if 'e pl yee.
i y o de
ove age or he ool ha r lege y t e
he a ntf s m o
l s ,becaus neihert com pani em pl
n um
e t he
es'
oyee di hones y bondsnort rgener
s
t
hei
al
labiiy polci pr de cover f t l ses ati ue,r
i lt
i es ovi
age or he os
ss egardl s ofw hen t l ses wer
es
he os
e
re t t pl ntf scannotes abls t BB& T act l orpr m at y caus t
pored, he ai i f
t i h hat
ualy
oxi el
ed hem any
6
da a . Cons ue l t pl i if ar t bl t ma at es d s
m ges
eq nty, he antfs e ma e o ke hr hol howi t tt ha a
ng ha hey ve
me iorouscli f ne i nc al t ,t i Rue60( metenmus bede e 2
rt i
am or glge e rd,hus her l b) i
t nid.
C oncl on
usi
Fort r s sae t c twilde t pli if'moto f r i fom j
he ea ons ttd,he our l ny he antfs in or elef r udgme
nt
unde Rul 60( . TheClr i diece t s ndc rii c e oft sme a
r e b)
ek s r td o e e tted opis hi morndum opi ona
ni nd
t a com pa ng or rt a lc ns ofr c d.
he c
nyi
de o l ou el e or
ENTER: s Z
Thi
d y ofAugus,201
a
t 3.
1
+4
Chi fUnie St t D it i tJ
e
t d a es s rc udge
2 H avi g r
n eached t sdecii , t cour need notaddr st addii ar ent r s i BB&T' bre
hi
son he
t
es he
tonal gum s aied n
s if
i opposton t t pl ntfs'moton.
n
ii o he ai if
i
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