Nationwide Property and Casualty Insurance Company et al v. Jacobsen

Filing 19

MEMORANDUM OPINION and ORDER denying 11 Motion to Dismiss. Signed by District Judge David A. Faber on 1/12/15. (sas)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
AT ROANOKE

NATIONWIDE PROPERTY &
CASUALTY INSURANCE CO.
and
NATIONWIDE MUTUAL
INSURANCE CO.,
Plaintiffs,
v.

Civil Action No: 7:14-00516

KELLEE NICHOLE JACOBSEN,
Defendant.

MEMORANDUM OPINION AND ORDER
This matter is before the court on defendant’s motion to
dismiss plaintiffs’ complaint pursuant to Federal Rule of Civil
Procedure 12(b)(7).

(Doc. No. 11).

For the reasons that

follow, the court DENIES defendant’s motion.
I.

Background

The instant dispute arises out of an automobile accident
that occurred on December 8, 2013.

On that date, defendant was

riding in a Hyundai Elantra driven by Krista Crennan in
Arlington County, Virginia.

(Doc. No. 1 at Exh. 5).

In snowy

conditions, a car driven by Gerald Deshunn Newsome crossed the
median and struck Crennan’s Elantra head-on.

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Id.

Defendant

sustained multiple injuries in the accident, including sacral
fractures, a right elbow fracture, and a right collarbone
fracture.

Id.

Months earlier, in February 2013, defendant’s father
contracted with Nationwide agents to purchase automobile
insurance and umbrella insurance coverage for his family.
No. 12.)

(Doc.

The insurance coverage afforded no fewer than five

hundred thousand dollars ($500,000.00) in coverage, which
included expenses for medical payments as well as uninsured and
underinsured motorist (hereinafter “UM/UIM”) coverage.
No. 1).

(Doc.

Defendant already has claimed medical expense benefits

in connection with the injuries she sustained in the accident.
(Doc. No. 12).
In June 2014, defendant initiated litigation in the Eastern
District of Virginia against Newsome to recover damages as a
result of the accident.

(Case No. 1:14-cv-67).

In connection

with the litigation, defendant sought UM/UIM coverage from
plaintiffs.

(Doc. No. 1).

As a result, plaintiffs filed the

instant suit, seeking a declaratory judgment ordering that
plaintiffs have no obligation to provide insurance coverage or
benefits to defendant.

(Doc. No. 1).

Defendant counterclaims

for a declaratory judgment, as well, seeking an order that she
is entitled to UM/UIM coverage and medical expense benefits.
(Doc. No. 12).
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II.

Defendant’s Motion to Dismiss Under Rule 12(b)(7)

Defendant has filed a motion to dismiss plaintiffs’
complaint under Federal Rule of Civil Procedure 12(b)(7),
arguing that plaintiffs have failed to join an indispensible
party.

(Doc. No. 11).

Citing the Supreme Court of Virginia’s

decision in Erie Insurance Group v. Hughes, 393 S.E.2d 210 (Va.
1990), defendant argues that plaintiffs’ suit should be
dismissed because they have not joined Newsome, the alleged
tortfeasor in the underlying accident.

Plaintiffs respond that

Newsome is neither a necessary nor indispensible party, and,
even if this court found Newsome to be either, the appropriate
remedy would be to order plaintiffs to join Newsome, not
dismissal.
1. Standard of Review
Rule 12(b)(7) allows dismissal of a claim for failure to
join a party under Rule 19.

Fed. R. Civ. P. 12(b)(7).

Under

Rule 19, a court must determine whether a party is “necessary”
or “indispensible,” engaging in a two-step inquiry.
Inc. v. Meade, 186 F.3d 435, 440 (4th Cir. 1999).

Owens-Ill.,

Initially, a

court must determine “‘whether a party is necessary to a
proceeding because of its relationship to the matter under
consideration’ pursuant to Rule 19(a).”

Id. (quoting Teamsters

Local Union No. 171 v. Keal Driveway Co., 173 F.3d 915, 917–18

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(4th Cir. 1999)).

If a court determines that a party is

necessary, it must order joinder.

Id.

In certain instances, a party’s joinder destroys diversity
jurisdiction, in which case a court must move to step two of the
inquiry and determine whether the party is indispensible under
Rule 19(b) such that the proceeding cannot continue in the
party’s absence.

In this case, Newsome’s joinder would not

destroy diversity, as he is a citizen of Maryland.

Therefore,

if this court finds Newsome’s presence to be necessary in this
suit, it need not engage in an indispensible party analysis.
Notably, the party asserting the Rule 12(b)(7) defense bears the
burden of showing that a person who has not been joined is a
necessary and indispensible party.

Am. Gen. Life & Accident

Ins. Co. v. Wood, 429 F.3d 83, 92 (4th Cir. 2005).
2. Analysis
The court begins its analysis by determining whether
Newsome is a necessary party to this action.

Under Rule 19(a),

there are two situations where a court may order joinder of a
necessary party:

(1) if, “in that person’s absence, the court

cannot accord complete relief among existing parties;” and (2)
if the person’s absence would “impair or impede the person’s
ability to protect [his] interest” or “leave an existing party
subject to a substantial risk of incurring double, multiple, or

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otherwise inconsistent obligations because of the interest.”
Fed. R. Civ. P. 19(a)(1).
In this case, defendant relies on the Supreme Court of
Virginia’s holding in Hughes to argue that Newsome is a
necessary party.

As eloquently summarized in Trigo v. Travelers

Commercial Insurance Company et al., 2010 WL 3521759, No. 3:10cv-00028 (W.D. Va., Sept. 7, 2010) (Moon, J.), the Supreme Court
of Virginia sustained Erie’s jurisdictional challenge in Hughes
when the plaintiff sued both her own insurance company and Erie,
the tortfeasor’s insurance company.

393 S.E.2d at 210, 212.

Each insurance company refused plaintiff’s claims and she sought
declaratory relief, which Erie challenged.

Id.

Because the

plaintiff sought a determination of the rights owed to her by
the tortfeasor’s insurance company, the tortfeasor was a
necessary party to the action.
cv-00028, at *7.

Id.; 2010 WL 3521759, No. 3:10-

And, because plaintiff had not joined the

tortfeasor in her suit, the court could not bind all parties
with its result.

Id.

However, Newsome’s absence from the present case will not
prevent the action from reaching a sufficient conclusion.

The

parties in the instant dispute do not seek a determination of
the benefits owed to defendant by Newsome’s insurance policy.
Instead, the parties seek a determination of plaintiffs’ duties
to defendant under the Jacobsens’ policy.
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As Newsome was not a

party to this policy and the adjudication of UM/UIM policy
coverage is independent of any potential liability that may be
fixed upon Newsome, his absence will not impair his ability to
protect his interests or leave him subject to a substantial risk
of incurring multiple or inconsistent obligations.

See also

Trigo, 2010 WL 3521759, No. 3:10-cv-00028; Lloyd v. Travelers
Prop. Cas. Ins. Co., 699 F. Supp. 2d 812 (E.D. Va. 2010).
Accordingly, the court finds that Newsome is not a necessary
party.

As a result, defendant’s motion to dismiss plaintiffs’

complaint pursuant to Federal Rule of Civil Procedure 12(b)(7)
is DENIED.
The Clerk is directed to send copies of this Memorandum
Opinion and Order to all counsel of record.
IT IS SO ORDERED this 12th day of January, 2015.
Enter:

David A. Faber
Senior United States District Judge

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