Smith et al v. Scottsdale Insurance Company et al

Filing 211

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT SCOTTSDALE INSURANCE COMPANYSMOTION FOR SUMMARY JUDGMENT, GRANTING THE PLAINTIFFS MOTION TO SEAL ANDDENYING THE PENDING MOTIONS IN LIMINE AS MOOT: 173 Motion for Summary Judgment GRANTED. Following pending motions in limine are DENIED AS MOOT: 181 Motion in Limine; 188 Motion in Limine; 196 Motion in Limine; 197 Motion in Limine; 198 Motion in Limine; 199 Motion in Limine; 200 Motion in Limine; 201 Motion in Limine; [ 202] Motion in Limine; 203 Motion in Limine; 204 Motion in Limine; and 205 Motion in Limine; 192 Motion to Seal is GRANTED (exhibits sealed). This civil action is DIMISSED and STRICKEN from the active docket of this Court. Clerk directed to enter Judgment. Signed by Senior Judge Frederick P. Stamp, Jr on 12/16/14. (cc) Modified on 12/16/2014 to add to text: the pretrial conference and trial are VACATED. (cc).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
LEVERT SMITH and NELSON D. RADFORD,
Co-Administrators of the Estate of
JOSEPH JEREMAINE PORTER,
Plaintiffs,
v.

Civil Action No. 5:12CV86
(STAMP)

SCOTTSDALE INSURANCE COMPANY,
SCOTTSDALE INDEMNITY COMPANY
and NATIONWIDE INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANT SCOTTSDALE INSURANCE COMPANY’S
MOTION FOR SUMMARY JUDGMENT,
GRANTING THE PLAINTIFFS’ MOTION TO SEAL AND
DENYING THE PENDING MOTIONS IN LIMINE AS MOOT
I.

Procedural History

The plaintiffs originally filed this civil action in the
Circuit Court of Ohio County, West Virginia.

Thereafter, the

defendants removed the action to this Court based on diversity
jurisdiction.

The plaintiffs are the Co-Administrators of the

Estate of Joseph Jeremaine Porter.

Mr. Porter was killed in a

shooting involving Police Officer Ronald Lusk (“Officer Lusk”), who
was employed by the City of Huntington’s (“the City”) Police
Department.

The

remaining

defendant

in

this

civil

action,

Scottsdale

Insurance

Company

(“Scottsdale”),1

was

the

City’s

insurer at that time of the shooting.
In an underlying civil action that began before this current
action against Scottsdale (“underlying action”), the plaintiffs
sued the City and Officer Lusk.2

Scottsdale provided the defense

for the City and Officer Lusk in that underlying action. Mediation
and settlement negotiations between the parties ended without
success.

While the underlying action proceeded, the defendants in

this civil action filed a motion to stay proceedings until the
resolution of the underlying action.
granted that motion.

ECF No. 49.

ECF No. 35.

This Court

Eventually, all claims in the

underlying action were resolved in favor of the City and Officer
Lusk, either through summary judgment, judgment as a matter of law,
or through a jury verdict.

Further, the United States Court of

Appeals for the Fourth Circuit affirmed the jury verdict in favor
of the defendants in the underlying action.

ECF No. 173 Ex. O.

Following the resolution of the underlying action, this Court
ordered that the stay of this civil action be lifted.

ECF No. 50.

The civil action addressed in this memorandum opinion arises from
the unsuccessful mediation and settlement negotiations between

1

This Court previously dismissed defendants Scottsdale
Indemnity Company and Nationwide Insurance Company pursuant to the
parties’ stipulation of dismissal. ECF No. 24.
2

Plaintiffs’ claims in the underlying action were for
negligence, wrongful death, and for a deprivation of constitutional
rights under 42 U.S.C. § 1983.
2

Scottsdale and the plaintiffs. The plaintiffs assert two counts in
their complaint.

Count I of the complaint asserts that Scottsdale

violated the West Virginia Human Rights Act (“WVHRA”) when it did
not settle the plaintiffs’ claims against the City and Officer
Lusk.

Count II of the complaint, filed pursuant to the West

Virginia Uniform Declaratory Judgments Act, requested that this
Court determine the rights of the parties as to a consent clause in
the

insurance

policy

between

the

City

and

Scottsdale.

Specifically, the plaintiffs requested that this Court find that
Scottsdale may not rely on the consent clause to defend against its
actions, when it knew or should have known that the City’s refusal
to give consent to settle was motivated by racial considerations.
Only Count I remains, however, because Count II of the complaint
was dismissed pursuant to this Court’s memorandum opinion and order
granting Scottsdale’s partial motion to dismiss.

See ECF No. 67.

At issue in this memorandum opinion are the parties’ most
recent filings. Specifically, the parties filed the following: (1)
Scottsdale filed a motion for summary judgment (ECF No. 173); (2)
the plaintiffs filed a second motion to seal (ECF No. 192); and (3)
the parties both filed several motions in limine.

For the reasons

set forth below, Scottsdale’s motion for summary judgment is
granted, the plaintiffs’ motion to seal is granted, and the
parties’ remaining motions in limine are denied as moot.

3

II.

Facts

On November 8, 2009, police officers for the City responded to
reports of gunshots at a night club in Huntington, West Virginia.
Officer Lusk, one of the responding officers and later a defendant
in the underlying action, shot and killed Joseph Jeremaine Porter.
The grand jury did not indict Officer Lusk, finding Officer Lusk
acted out of self-defense.

ECF No. 173 Ex. D.

The former

administrators of the decedent’s estate in the underlying action
filed a wrongful death suit against the City and Officer Lusk.
They alleged civil rights violations against Officer Lusk, in his
individual capacity, and the City under 42 U.S.C. § 1983.

They

also alleged claims of negligence against those defendants.
Prior to the shooting, Scottsdale issued a public entity
insurance policy to the City.

ECF No. 173 Ex. A.

The insurance

policy provided coverage for “law enforcement wrongful acts” that
occurred

during

activities.”

Id.

the

course

and

scope

of

“law

enforcement

However, regarding Scottsdale’s authority to

settle, the insurance policy contained a consent to settle clause
that prohibited Scottsdale from unilaterally agreeing to settle any
claims. Instead, the provision required the consent of the insured
in order to agree to settle any claims.

Specifically, the clause

states the following:
We [Scottsdale] have the right to investigate any “claim”
or “suit” but we will not settle or compromise a “claim”
or “suit” without your written consent. If consent is
refused and you elect to contest the “claim” or “suit” or
4

continue legal proceedings, then our [Scottsdale]
liability for the “claim” or “suit” will not exceed the
amount for which the “claim” or “suit” could have been
settled, plus “loss adjustment expense” incurred up to
the date of your refusal.
Id. at Ex. A.

Accordingly, Scottsdale could not unilaterally

settle a claim unless the insured, here the City, consented in
writing.
The parties attempted to mediate the underlying case, which
failed. Later, in the underlying action, the City and Officer Lusk
filed motions for summary judgment.

Judge Robert C. Chambers in

the United States District Court for the Southern District of West
Virginia granted summary judgment in favor of the City regarding
the plaintiffs’ § 1983 claim.

ECF No. 173 Ex. J.

Further, Judge

Chambers denied Officer Lusk’s motion and held the remaining state
law claims in abeyance.

Id.

At trial, the jury found in favor of

Officer Lusk, and Judge Chambers then dismissed the remaining
claims against the City.

ECF No. 173 Ex. K.

The plaintiffs in the

underlying action appealed the jury verdict, which the United
States Court of Appeals for the Fourth Circuit affirmed.

ECF No.

173 Ex. O.
The

above-listed

plaintiffs,

who

substituted

the

co-

administrators in the underlying action, then filed this current
civil

action

against

Scottsdale.

As

provided

plaintiffs asserted two counts in their complaint.

earlier,

the

Count I of the

complaint asserted that Scottsdale violated the WVHRA when it did

5

not settle the plaintiffs’ claims against the City and Officer
Lusk.

Specifically, the plaintiffs claim that racial animus

existed between the City’s Police Department and African-Americans.
The plaintiffs point to a series of alleged incidents where police
officers used derogatory language regarding African-Americans as
well as instances that they claim demonstrate a bias against
African-Americans. They argue that such racial animus explains why
the City refused to consent to settle the underlying action.
Further, despite this alleged objective evidence of the City’s
racial animus, the plaintiffs argue that Scottsdale, in violation
of an alleged duty, failed to properly consider or analyze such
racial animus for settlement purposes. The plaintiffs point to the
consent clause, arguing that because Scottsdale adhered to the
consent requirement, it aided and abetted the City’s unlawful
refusal in attempting to resolve or settle the underlying action.
In addition, the plaintiffs also claim that the consent to settle
clause

served

as

a

pretext

for

the

City

and

Scottsdale’s

discriminatory actions.
Count II of the complaint, filed pursuant to the West Virginia
Uniform

Declaratory

Judgments

Act,

requested

this

Court

to

determine the rights of the parties as to the consent clause in the
insurance policy between the City and Scottsdale.

However, only

Count I remains because Count II of the complaint was dismissed

6

under

this

Court’s

memorandum

opinion

Scottsdale’s partial motion to dismiss.

and

order

granting

See ECF No. 67.

The parties have now filed the following documents that are at
issue in this memorandum opinion and order: (1) Scottsdale filed a
motion for summary judgment (ECF No. 173); (2) the plaintiffs filed
a second motion to seal (ECF No. 192); and (3) the parties both
filed several motions in limine.

The motion for summary judgment

and motion to seal are discussed below.

Regarding the motions in

limine, those are discussed later in this memorandum opinion.
A.

Scottsdale’s Motion for Summary Judgment
Scottsdale presents four arguments as to why this Court should

grant its motion. First, Scottsdale claims that the plaintiffs are
attempting to relitigate this case.

Specifically, they point to

the fact that the City prevailed in the underlying action.

They

assert that Judge Chambers dismissed the plaintiffs’ claim against
the City, and that a jury rendered a verdict in favor of Officer
Lusk.

ECF No. 173 Exs. K and L.

They also point to the fact that

the United States Court of Appeals for the Fourth Circuit affirmed
the judgment.

ECF No. 173 Ex. O.

Scottsdale also claims that the

holding in Michael v. Appalachian Heating, LLC, 701 S.E.2d 116 (W.
Va. 2010), which plaintiffs claim creates the duty that Scottsdale
breached, provides that an allegation of racial discrimination in
an insurance claim handling can arise after a settlement has been
reached.

However, Scottsdale asserts that Michael does not permit

7

a discrimination lawsuit related to an insurance claim handling
where the underlying action resulted in a clear verdict as to
liability.

Here,

Scottsdale

distinguishes

Michael

from

the

plaintiffs’ claim, in that the issue of liability in this civil
action remained contested until the underlying action resulted in
judgment for the City and Officer Lusk.

In contrast, Scottsdale

believes that Michael presented a situation where liability was
already determined but that the valuation and settlement process
remained in dispute.

Based on this distinction, Scottsdale argues

that Michael prohibits the plaintiffs’ cause of action against
Scottsdale.

Accordingly, because the underlying action failed on

its merits against the City and Officer Lusk, Scottsdale believes
that the plaintiffs are trying to have a “second bite at the apple”
by focusing on Scottsdale rather than the City or Lusk.
Second,

Scottsdale

claims

that

the

plaintiffs

failed

to

satisfy the elements of a discrimination claim under the WVHRA.
Specifically, it argues that (1) the plaintiffs, namely the Estate,
are not a protected class; (2) the Estate did not suffer an adverse
insurance claim handling decision; (3) no evidence exists showing
that Scottsdale’s decision would have differed “but for” the race
of the deceased; (4) even if a prima facie case exists, Scottsdale
has nondiscriminatory reasons for not settling, such as the consent
clause; and (5) that no pretext for discrimination exists.
Scottsdale

argues

that

the

individual

8

beneficiaries

Third,
to

the

plaintiff are not entitled to recover from Scottsdale.

Here,

Scottsdale relies heavily on AIG Domestic Claims, Inc. v. Hess Oil
Co., Inc., 751 S.E.2d 31 (W. Va. 2013).

Finally, Scottsdale

believes that the plaintiffs are not entitled to punitive damages.
The plaintiffs then filed their response in opposition.
No. 185.

ECF

The plaintiffs appear to first argue that Scottsdale had

a duty to investigate the evidence or complaint of discrimination
in the settlement process.

In support of their argument, the

plaintiffs state they are relying on Michael and the law developed
under the WVHRA.

Further, the plaintiffs look to statistics of

minority settlements to show that Scottsdale would be less likely
to settle with the plaintiffs, or that at least this hardship
should have made Scottsdale more attuned to race being an issue in
the settlement process.

The plaintiffs then provide instances of

alleged racial animus that they argue shows that Scottsdale had a
duty to investigate the risk of racial animus or discrimination in
the settlement process.
Second, the plaintiffs argue that pretext for discrimination
existed.
policy

The plaintiffs point to alleged deviations in company

when

industry

settling

standards

discrimination.

claims,

and

demonstrates

that
a

those

deviations

pretext

for

from

racial

The plaintiffs point to Carlile v. Farmers Ins.

Exchange, 219 Cal. Rptr. 773, 776 (Cal. App. 1985), which they use
to demonstrate a case where an insurer actually conducted the

9

claims

process

in

good

Scottsdale’s conduct.

faith,

as

allegedly

contrasted

by

Finally, the plaintiffs claim that the

Estate is a person for WVHRA purposes.

Further, the plaintiffs

also assert that the beneficiaries will benefit from the proceeds
of a judgment in their favor, and that this beneficiary interest
provides standing for them to proceed.
Scottsdale timely filed a reply.

In its reply, Scottsdale

first claims that Michael does not impose a duty on Scottsdale.
Scottsdale

also

alleges

that

the

plaintiffs

base

their

duty

argument upon the testimony of a questionable expert, Dr. Timothy
J. Berard.

Second, Scottsdale argues that the WVHRA does not

extend standing to the Estate because the Estate is neither a
person nor within the “zone of interest” that the WVHRA intends to
protect.

Third,

Scottsdale

argues

that

the

WVHRA

requires

intentional conduct, which the plaintiffs have failed to provide.
Finally, Scottsdale asserts that the analysis under McDonnell
Douglas

v.

Green,

411

U.S.

792

(1973),

applies

because

the

plaintiffs provide no direct evidence of racial animus or pretext.
Accordingly, their claim has no merit.
B.

The Plaintiffs’ Second Motion to Seal
Following

Scottsdale’s

motion

for

summary

plaintiffs then filed a second motion to seal.

judgment,

ECF No. 192.

the

Prior

to that second motion to seal, the plaintiffs previously filed a
motion to seal, which pertained to sensitive information in their

10

response to Scottsdale’s motion for summary judgment. ECF No. 184.
Out of an abundance of caution, this Court provisionally granted
that motion because the plaintiffs in their prior motion did not
identify what materials needed to be sealed.
their

second

motion

to

seal,

which

is

at

ECF No. 185.
issue

here,

In
they

identified specific materials and again request this Court to seal
them.

Scottsdale did not respond.
III.

Applicable Law

Under Rule 56(c) of the Federal Rules of Civil Procedure,
A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by:
(A) citing to particular parts of materials in the
record, including depositions, documents, electronically
stored
information,
affidavits
or
declarations,
stipulations . . . admissions, interrogatory answers, or
other materials; or
(B) showing that the materials cited do not
establish the absence or presence of a genuine dispute,
or that an adverse party cannot produce admissible
evidence to support the fact.
Fed. R. Civ. P. 56(c).

The party seeking summary judgment bears

the initial burden of showing the absence of any genuine issues of
material fact.
(1986).

See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23

“The burden then shifts to the nonmoving party to come

forward with facts sufficient to create a triable issue of fact.”
Temkin v. Frederick County Comm’rs, 945 F.2d 716, 718 (4th Cir.
1991), cert. denied, 502 U.S. 1095 (1992) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). However, as the
United States Supreme Court noted in Anderson, “Rule 56(e) itself

11

provides that a party opposing a properly supported motion for
summary judgment may not rest upon the mere allegations or denials
of his pleading, but . . . must set forth specific facts showing
that there is a genuine issue for trial.”

Id. at 256.

“The

inquiry performed is the threshold inquiry of determining whether
there is the need for a trial—whether, in other words, there are
any genuine factual issues that properly can be resolved only by a
finder of fact because they may reasonably be resolved in favor of
either party.”

Id. at 250; see also Charbonnages de France v.

Smith, 597 F.2d 406, 414 (4th Cir. 1979) (Summary judgment “should
be granted only in those cases where it is perfectly clear that no
issue of fact is involved and inquiry into the facts is not
desirable to clarify the application of the law.” (citing Stevens
v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950))).
In Celotex, the Supreme Court stated that “the plain language
of Rule 56(c) mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who
fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party
will bear the burden of proof at trial.”

Celotex, 477 U.S. at 322.

In reviewing the supported underlying facts, all inferences must be
viewed in the light most favorable to the party opposing the
motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986).

12

IV.

Discussion

As stated earlier, Scottsdale’s motion for summary judgment
and the plaintiffs’ motion to seal are at issue in this civil
action.

Further, the parties filed several motions in limine.

Those motions are discussed below in the order presented.
A.

Scottsdale’s Motion for Summary Judgment
In its motion for summary judgment, Scottsdale presents the

following four arguments as to why this Court should grant its
motion: (1) that the plaintiffs already litigated this claim in the
underlying action and that Michael v. Appalachian Heating, LLC is
distinguishable from this civil action; (2) that the plaintiffs
fail to prove a prima facie case of racial discrimination under the
WVHRA; (3) that the individual beneficiaries to the Estate are not
entitled to recover pursuant to AIG Domestic Claims, Inc. v. Hess
Oil Co., Inc.; and (4) the plaintiffs are not entitled to punitive
damages.
The plaintiffs argue that this Court should deny Scottsdale’s
motion for the following reasons: (1) Scottsdale had a duty to
investigate incidents of discrimination during the settlement
process and failed to do so; (2) that the consent to settle clause
served as a pretext for discrimination under the WVHRA; and (3)
that an estate can be considered a person under the WVHRA.
Enacted in 1967, the WVHRA reflects the “public policy of the
State of West Virginia in the field of human relations,” meaning

13

that it “is designed to prohibit discrimination in employment, in
housing accommodations and places of public accommodations by
reason of race, religion, color, national origin, ancestry, sex or
age.”

W. Va. Human Rights Comm’n v. Tenpin Lounge, Inc., 211

S.E.2d 349, 350-51 (W. Va. 1975).
has

been

applied

to

many

This broad policy and purpose

contexts,

including

“the

unlawful

discrimination by a tortfeasor’s insurer in the settlement” of a
claim when the insurer bases its discrimination on the prohibited
criteria listed above.

See Michael v. Appalachian Heating, LLC,

701 S.E.2d 116, 124-25 (W. Va. 2010).

Phrased another way, “an

insurer settling a property damage claim with a member of a
protected class in a discriminatory manner that causes economic
loss violates the act.”

Id. at 124.

The WVHRA’s application is further expanded by West Virginia
Code § 5-11-9(7)(A), which creates three distinct causes of action.
Id. at 123.
practice

for

Under that section, it is an unlawful discriminatory
certain

entities

and

groups,

including

persons,

employers, or financial institutions, to do any of the following:
“(1) engage in any form of threats or reprisal;” or “(2) engage in,
or hire, or conspire with others to commit acts or activities of
any nature, the purpose of which is to harass, degrade, embarrass
or cause physical harm or economic loss;” or “(3) aid, abet,
incite, compel or coerce any person to engage in any of the
unlawful

discriminatory

practices”

14

under

West

Virginia

Code

§ 5-11-9.

Id.

Further, an insurance company is considered a

“person” for purposes of § 5-11-9(7).
To

prove

a

prima

facie

case

Id.
of

unlawful

discriminatory

practices under the WVHRA, the plaintiff must show that “(1) the
plaintiff is a member of a protected class,” (2) that the defendant
“made an adverse decision concerning the plaintiff,” and (3) but
for the plaintiff’s protected status, the defendant would not have
made the adverse decision.

Syl. Pt. 3, Conaway v. E. Assoc’d Coal

Corp., 358 S.E.2d 423 (W. Va. 1986); see Smith v. Sears, Roebuck &
Co., 516 S.E.2d 275 (W. Va. 1999); Barefoot v. Sundale Nursing
Home, 457 S.E.2d 152, 161 (W. Va. 1995); McCauley v. Merrimac,
Inc., 460 S.E.2d 484 (W. Va. 1995) (per curiam).

In proving the

third requirement, the plaintiff must show evidence that would
“sufficiently link” the plaintiff’s protected member status and the
defendant’s

decision

to

infer

that

the

defendant

used

discriminatory criteria. Conaway, 358 S.E.2d at 429-430 (footnotes
omitted); Smith, 516 S.E.2d at 279.

This could include an (1)

admission, (2) eliminating an apparently legitimate reason for the
decision

in

showing

unequal

or

disparate

treatment

between

protected class members and others, or (3) “using statistics in a
large operation” to show that protected class members received
“substantially worse” treatment.
(footnotes omitted).

15

Conaway, 358 S.E.2d at 429-30

If a plaintiff satisfies that burden, then the defendant must
offer a legitimate, nondiscriminatory reason for the decision.
Barefoot, 457 S.E.2d 152, 160.

After the defendant presents its

reasons, the plaintiff may then demonstrate that either (1) the
defendant treated discriminatory criteria as a determinative factor
in its decision, or (2) the defendant’s rationale serves as merely
a pretext for discrimination.
must

show

direct

discrimination.

Id.

or

Id.

To show pretext, a plaintiff

circumstantial

evidence

of

falsity

or

“The plaintiff’s failure to come forth with

evidence rebutting the defendant’s explanation may entitle the
defendant to judgment.”

Id.

What can be ascertained under the case law discussed above is
that the WVHRA does provide a third-party cause of action against
an insurer that engaged in unlawful discrimination during the
processing of the tortfeasor’s claim.

See Michael v. Appalachian

Heating, LLC, 701 S.E.2d 116 (W. Va. 2010).

However, the burden

remains on the plaintiff to first demonstrate that a prima facie
case exists before moving forward with the remaining analysis
provided above.

As will be discussed below, the plaintiffs have

not satisfied their burden.
1.

Prima Facie Case

As stated earlier, in order to prove a prima facie case exists
under the WVHRA, the plaintiff must show that “(1) the plaintiff is
a member of a protected class,” (2) that the defendant “made an

16

adverse decision concerning the plaintiff,” and (3) but for the
plaintiff’s protected status, the defendant would not have made the
adverse decision.

Conaway, 358 S.E.2d at Syl. Pt. 3.

Assuming without deciding that the Estate is a person within
a protected class under the WVHRA, the plaintiffs must next show
that Scottsdale made an adverse decision against the Estate.
Regarding this requirement, the plaintiffs appear to argue that the
adverse decision was that the City did not settle or consent to do
so, which Scottsdale allegedly aided and abetted in.

Therefore,

this Court assumes without deciding that the lack of a settlement
could be viewed as an “adverse decision” for purposes of WVHRA.
Thus, the first two requirements of a WVHRA claim are assumed to be
met.
However, as is often the case in WVHRA claims, the “but for”
test proves the most challenging.

Regarding that requirement, the

plaintiffs proffer insufficient evidence to prove that but for the
plaintiffs’ or the Estate’s protected status, Scottsdale would not
have made the adverse decision.

As stated above, examples of

evidence that may satisfy the third requirement include (1) an
admission

of

discriminatory

conduct

by

the

defendant,

(2)

eliminating an apparently legitimate reason for the decision in
showing unequal or disparate treatment between protected class
members and others, or (3) “using statistics in a large operation”
to show that protected class members received “substantially worse”

17

treatment. Conaway, 358 S.E.2d at 429-30 (footnotes omitted). The
“but for” test in a claim under the WVHRA requires only “that a
plaintiff show an inference of discrimination.”
S.E.2d at Syl. Pt. 2.

Barefoot, 457

However, the plaintiffs fail to show such an

inference.
Regarding the third requirement to prove a prima facie case,
the

plaintiffs

evidence.

appear

to

rely

on

essentially

two

groups

of

Because of the number of items that must be discussed,

each group of evidence is separated below.
a.

Instances of Racism by the City of Huntington

First, the plaintiffs rely on alleged instances of racism by
the City and its Police Department. The plaintiffs assert that the
instances

of

Scottsdale

had

racial
a

duty

animus
to

collectively

more

thoroughly

demonstrate

that

investigate

those

instances during the settlement and claims process.

Further, the

plaintiffs also claim that Scottsdale had a duty to investigate
such claims of racial animus in the settlement process pursuant to
Michael v. Appalachian Heating, LLC, 701 S.E.2d 116 (W. Va. 2010).
Indeed, the plaintiffs state their position in their response as
follows:
It is Plaintiffs’ position rather that the [WVHRA] places
a liability on an [sic] “person” commensurate to its
response to a complaint or perceived incident of
discriminatory conduct, and that what duty Scottsdale did
have was at the very least to have investigated the
complaint of improper racial motivation in settlement
efforts . . . and take some reasonable remedial measure
to ensure neither it nor the City was using improper race
18

motivation in refusing to offer to settle, or refusing to
give consent to settle the case, and ensure it was not
assisting the City in its decision not to give consent as
a result of illegal racial motivation.
ECF No. 182. Regarding the instances that triggered such a duty to
investigate,

the

plaintiffs

focus

on

several.

First,

the

plaintiffs rely on the deposition of Scottsdale employees to
attempt to demonstrate that Scottsdale purposefully ignored, or
“kept its head in the sand,” concerning racial animus in the claim
and settlement process.

For example, the plaintiffs claim that

when Scottsdale’s claims analyst was asked if the trial of O. J.
Simpson was racially charged, the analyst stated “I don’t recall
the OJ Simpson [case] having any racial animosity.”

In another

example,

where

the

plaintiffs

employees

indicated

instances

of

that

racial

also

point

they

animus,

to

were
and

statements

unaware
that

of

those

some

the

alleged

instances

may

potentially have been something worth considering in the settlement
process.

Thus, the plaintiffs argue that an alleged attitude of

purposeful

ignorance

pervaded

the

settlement

process

and

demonstrated a violation of Scottsdale’s duty to investigate issues
of racial animus.
Second, the plaintiffs argue that instances of racial animus
by the City’s Police Department against both the decedent and
African-Americans in general put Scottsdale on notice about issues
of race.
Officer

For example, although the grand jury did not indict
Lusk,

the

plaintiffs

claim
19

that

the

City’s

Police

Department displayed racial animus towards the decedent and his
family.

The plaintiffs point to the deposition of the decedent’s

mother, wherein she states that she remembers an instance in the
mid-1990s when an unidentified police officer used a racial slur
against the decedent.

ECF No. 182 Ex. B.

Another instance that

the mother claimed occurred was when the police waited outside her
store for the decedent to exit in order to question him regarding
potential tax evasion charges.

Id.

Another example includes

instances where the plaintiffs claim that altercations between
individuals,

some

of

whom

were

African-American,

and

police

resulted under the guise of racial discrimination. ECF No. 182 Ex.
H.

Finally, the plaintiffs claim that the deposition of Mayor

Wolfe, the mayor of the City at the time of the underlying action,
demonstrates direct evidence of racial animus.

If that were the

case, that would mean the mayor, who was in charge of withholding
or giving consent under the consent to settle clause, theoretically
had

racial

animus.

The

plaintiffs

assert

that

during

his

deposition, when asked if Mayor Wolfe had ever used the “N word,”
the plaintiffs argue the following:
[Direct evidence of racial animus] is shown clearly here
by the Mayor’s own response to a question if he had ever
used the “N word.” “Haven’t you?” he asked plaintiff’s
counsel, as if he expected every Caucasian to have used
the term at one time or another.
ECF No. 182.

The plaintiffs believe that such allegedly direct

evidence satisfies the third requirement under the WVHRA. However,

20

as will be explained below, no duty is imposed on Scottsdale to
investigate whether race played a role in the City’s refusal to
give its consent to settle.

In particular, Michael v. Appalachian

Heating, LLC does not create such a duty.

Finally, the “direct

evidence” that the plaintiffs claim is either insufficient to
demonstrate a prima facie case or, as is the case with Mayor
Wolfe’s deposition, is misquoted and misrepresented.
First, the plaintiffs’ interpretation of Michael is misguided.
In Michael, the plaintiffs, who were African-American, resided in
an apartment located in a public housing development.
at 118.

701 S.E.2d

The County Housing Authority hired defendant Appalachian

Heating, LLC (“Appalachian”), to repair and replace climate control
units

in

the

public

housing

development.

Id.

Later,

the

plaintiffs’ apartment caught fire, allegedly due to Appalachian’s
negligence. Id. All of the plaintiffs’ belongings were destroyed.
Id.

Appalachian’s insurer, defendant State Auto Insurance Company

(“State Auto”), settled the plaintiffs’ claims for $2500, and the
plaintiffs filed suit under the WVHRA against the defendants.
at 119.

Id.

The plaintiffs alleged that State Auto failed to fairly

evaluate the claim and process it because of the plaintiffs’ race.
Id.

State Auto, following an unsuccessful motion to dismiss,

orally moved that a question be certified to the West Virginia
Supreme Court of Appeals (“the Court”), which was granted.

21

Id. at

120.

The

court

reformulated

the

certified

question

as

the

following:
Does
the
[WVHRA]
prohibit
discrimination
by
a
tortfeasor’s insurer in the settlement of a property
damage claim asserted by a member of a protected class
under the [WVHRA]?
Id.

In answering the certified question, the court examined the

text

of

West

Virginia

Code

§

5-11-9(7)(A),

under

which

the

plaintiffs asserted their claims. First, the court determined that
under that section of the WVHRA, it is an unlawful discriminatory
practice

for

certain

entities

and

groups,

including

persons,

employers, or financial institutions, to do any of the following:
“(1) engage in any form of threats or reprisal”; or “(2) engage in,
or hire, or conspire with others to commit acts or activities of
any nature, the purpose of which is to harass, degrade, embarrass
or cause physical harm or economic loss”; or “(3) aid, abet,
incite, compel or coerce any person to engage in any of the
unlawful
§ 5-11-9.
insurance

discriminatory
Id. at 123.
company

§ 5-11-9(7).

is

practices”

under

West

Virginia

Code

Further, the Court also found that an
considered

a

“person”

for

purposes

of

Id. at 124.

In answering the certified question in the affirmative, the
Court

pronounced

two

holdings.

First,

the

Court

held

that

§ 5-11-9(7)(A) of the WVHRA prohibits unlawful discrimination “by
a tortfeasor’s insurer in the settlement of a property damage claim
when the discrimination is based upon race, religion, color,
22

national origin, ancestry, sex, age, blindness, disability, or
familial status.”

Id. at 124-25.

Second, the Court held that a

third-party cause of action against an insurer under § 5-11-9(7)(A)
is not precluded by the West Virginia Unfair Trade Practices Act
(“UTPA”).

Id. at 125.

Specifically, State Auto argued that the

UTPA, under § 33-11-4(a), precluded a third-party action against an
insurer.

Id.

Thus, State Auto asserted that the plaintiffs’ only

remedy was to file an administrative complaint with the Insurance
Commissioner.

Id.

The Court rejected State Auto’s argument,

finding that the UTPA and the WVHRA “seek to remedy different
harms, and no conflict exists between them.”

Id.

In this civil action, the plaintiffs claim that Michael
imposes a duty on Scottsdale to investigate whether race played a
role in the City’s refusal to give its consent to settle.
Court disagrees for several reasons.

This

First, as provided above,

Michael in no way articulates, holds, or discusses any duty on an
insurer

to

investigate

settlement process.
under

the

WVHRA

claims

of

racial

motivation

in

the

Rather, Michael provides a cause of action
against

the

unlawful

discrimination

by

a

“tortfeasor’s insurer in the settlement of a property damage claim
when the discrimination is based upon race, religion, color,
national origin, ancestry, sex, age, blindness, disability, or
familial status.”

Id.

Second, the context of Michael is easily

distinguishable from this civil action.

23

Michael pertained to a

property damage claim and an insurance policy that did not contain
a consent to settle clause. Further, it involved a situation where
liability was clearly determined and not at issue.

Instead, the

disputed valuation and settlement offer were at issue in Michael.
In this civil action, however, liability remained contested in the
underlying action until the matter was resolved in favor of the
City and Officer Lusk at both the district court and the appellate
court

levels.

Further,

no

court

intervention

or

litigation

occurred prior to the discrimination claim in Michael.
civil

action,

the

underlying

action

pertaining

to

In this
liability

remained contested in both the United States District Court for the
Southern District of West Virginia and the United States Court of
Appeals

for

the

Fourth

Circuit.

Accordingly,

distinguishable from this civil action.

Michael

is

More importantly, it does

not create the duty that the plaintiffs claim that Scottsdale
breached. At most, Michael simply recognizes the plaintiffs’ cause
of action.
Notwithstanding the plaintiffs’ misplaced reliance on Michael,
their proffered evidence, both direct and indirect, of racial
animus also fails to demonstrate a prima facie case under the
WVHRA.
the

As discussed above, in proving the third requirement under

WVHRA,

the

plaintiffs

must

show

evidence

that

would

“sufficiently link” the plaintiffs’ protected member status and the
defendant’s

decision

to

infer

24

that

the

defendant

used

discriminatory criteria.

Conaway, 358 S.E.2d at 429-30 (footnotes

omitted); Smith, 516 S.E.2d at 279.

After analyzing the evidence

presented, the plaintiffs fail to demonstrate a sufficient link
between their status as African-Americans and any of Scottsdale’s
decisions during the settlement process.
depositions

of

the

Scottsdale

First, regarding the

employees,

such

as

the

claims

analyst, the statements provided do not demonstrate that but for
the decedent’s race a settlement would have occurred.

As provided

earlier, the insurance policy contained a consent to settle clause
that required the insured to give its consent before any settlement
occurred.

Scottsdale did not have a duty to investigate whether

the City’s refusal to consent was based on racially discriminatory
reasons, which the plaintiffs allege.

Even if it wanted to,

Scottsdale could not unilaterally consent to any settlements.
Further, as this Court understands the plaintiffs’ arguments, the
plaintiffs also fail to show how any of Scottsdale’s employees
included the consent to settle clause in the insurance policy in
order to aid and abet the City in its alleged acts of unlawful
discrimination.

Nonetheless, whether the employees of Scottsdale

did or did not know about any incidents of racial animus proves
immaterial because Scottsdale did not have a duty to investigate
those allegations as to why the City did not settle.

Neither the

insurance policy nor the law impose such a requirement or duty upon
Scottsdale.

25

Second, regarding the alleged instances of racial animus, they
too fail to satisfy the “but for” test.

Notwithstanding the fact

that no duty to investigate the refusal to consent existed, the
alleged instances of racial animus fail to sufficiently link the
plaintiffs’ status as African-Americans with that of any allegedly
adverse decisions that Scottsdale made.

Regarding the proposed

settlement, the insurance policy again prevented Scottsdale from
unilaterally acting.
investigate

instances

Further, even if Scottsdale had a duty to
of

racial

animus

by

the

City’s

Police

Department, the plaintiffs have not demonstrated that Scottsdale
refrained from doing so because the plaintiffs or the decedent are
African-Americans. The fact that offensive acts allegedly occur in
a community does not automatically demonstrate a prima facie case
under the WVHRA.

The plaintiffs have a burden of proof that they

must satisfy, and here they have not created even an inference that
Scottsdale either aided or abetted in, or even directly engaged in,
any form of unlawful discrimination based on race.

Accordingly,

the plaintiffs fail to demonstrate a prima facie case.
It should be noted that the plaintiffs proffer the statements
of Mayor Wolfe as direct evidence of racial animus.

Again, the

plaintiffs provided the following statement in their response:
[Direct evidence of racial animus] is shown clearly here
by the Mayor’s own response to a question if he had ever
used the “N word.” “Haven’t you?” he asked plaintiff’s
counsel, as if he expected every Caucasian to have used
the term at one time or another.

26

ECF No. 182.

However, the plaintiffs misquoted the Mayor’s

statements from his deposition. The exchange actually proceeded as
follows:
Q:
Do you think African-American men are more likely to
be aggressive with police?
* * *
A:
No. No.
Q:
You yourself have not used the N-word?
A:
Possibly in my teenage years in the 1950’s, but not
the last 50 years, no.
Q:
Certainly not since you’ve been in public office?
A:
Have you ever?
Q:
No. And I’ll let you ask that one question of me.
No.
ECF No. 173 Ex. S.

Further, when asked whether “it would be

appropriate to use” the consent clause “as a shield to keep the
City or [Scottsdale] from fairly evaluating the claim,” Mayor Wolfe
directly responded with “No.”

Id.

Not only did the plaintiffs

misquote the Mayor’s statements from the deposition, but the
statements made also provide no direct evidence of a sufficient
link between the plaintiffs’ protected status and any decisions by
Scottsdale or the City.
b.

Expert Testimony of Dr. Berard

Second, the plaintiffs rely on the testimony of their expert
witness, Dr. Berard.
University.

He has a Ph.D. in Sociology from Boston

Dr. Berard concluded that “[i]f the City did harbor

racial prejudice or stereotyping towards the Porter family, to a
reasonable degree of sociological probability, this would likely

27

have affected the decision of the City to give consent to settle.”
ECF No. 173 Ex. P.

Further, Dr. Berard also concluded that

[i]f the insurance company had a duty not to aid and abet
another person (the City) in unlawful discriminatory
conduct, which I cannot say because I am not a legal
expert, then deferring to the City’s refusal to settle
would involve the insurance company in aiding or abetting
conduct which kept the Porter family from getting a
reasonable offer of settlement after Plaintiffs had
raised
concerns
about
racial
prejudice
and
discrimination.
Id.

The

plaintiffs

also

provide

that

Dr.

Berard

allegedly

determined that “12 of 14 Scottsdale cases, where no offer was
made, despite involving a death case, involved racial or ethnic
decedents.”
that

Dr.

Id.

Scottsdale, in its reply memorandum, indicates

Berard’s

Specifically,

“analysis”

Scottsdale

is

points

inaccurate

out

that

Dr.

and

manipulated.

Berard

actually

received 27 cases to evaluate, but that 13 of those did not
identify the race of the decedents. Further, Scottsdale also notes
that none of the cases analyzed by Dr. Berard involved situations
where consent to settle clauses existed.

Finally, Scottsdale also

indicates that the cases Dr. Berard analyzed did not provide
information regarding the assessment of liability.
Dr.

Berard’s

conclusions,

however,

are

insufficient

in

demonstrating that the plaintiffs’ protected status and any adverse
decisions were sufficiently linked as required under the WVHRA.
First,

in

his

deposition

regarding

the

first

above

quoted

statement, Dr. Berard agreed that his conclusion was conditioned

28

upon the City actually harboring racial prejudice. Id. Dr. Berard
then admitted that “I don’t know for a fact that the City did
harbor racial prejudice . . .
all.”

Id. (emphasis added).

I don’t know that it was a factor at
Dr. Berard also stated that “I’m not

aware, in my capacity as an expert, that any decision made by
Scottsdale was due to race.”

Id.

Second, and more damaging than

his prior statements, is that Dr. Berard’s opinions were made
concerning

the

conduct

or

decision-making

of

the

City

and

Scottsdale in the insurance handling context, despite his lack of
expertise in insurance claims or settlements. When asked about his
expertise, the following dialogue occurred between Dr. Berard and
Scottsdale’s counsel:
Q:
Which, if any, of the peer-reviewed journal articles
listed in your CV . . . would relate to the issue of
evaluating a settlement decision or non-settlement
decision in a situation with a consent to settle
requirement?
A:
None of my published work has looked at the
insurance industry or legal settlement procedures.
* * *
[Regarding whether Dr. Berard had any training

or experience in

insurance work or case claims]
Q:
What about review and application of insurance
policies and provisions?
A:
No.
Q:
What about insurance claims handling?
A:
No.
Q:
What about insurance claims settlement?
A:
No.
Q:
What about civil litigation claims settlement?
A:
No.
29

Id. As his own admissions show, his testimony does not demonstrate
an

inference

discrimination

that
by

Scottsdale

engaged

Scottsdale.

Dr.

in

any

form

Berard’s

of

racial

opinions

are

conditioned on whether Scottsdale or the City harbored racial
animus without demonstrating that it was indeed the case.

Dr.

Berard readily admitted that he does not know if race was even a
factor in the settlement and claims process.

Not only is his

status as an expert in this case questionable, but also his
conclusions are based on assumptions of unverified facts that are
necessary to prove a prima facie case.
Further, his opinion fails to demonstrate any genuine issues
of material fact.

Regarding issues of material fact, a nonmoving

party “cannot create a genuine issue of material fact” by “mere
speculation or the building of one inference upon another.”
v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985).

Beale

“Rather, a nonmoving

party must produce some evidence (more than a ‘scintilla’) ‘upon
which a jury could properly proceed to find a verdict for the party
producing it, upon whom the onus of proof is imposed.’”

Othentec

Ltd.

2008)

(quoting

Anderson, 477 U.S. at 251 (internal citations omitted)).

Further,

v.

Phelan,

526

F.3d

135,

140

(4th

Cir.

expert testimony itself does not automatically create issues of
material fact.

See Estate of Shaw v. Sierra, 366 F. App’x 522 (5th

Cir. 2010); Advanced Technology Materials, Inc. v. Praxair, Inc.,
228 F. App’x 983 (Fed. Cir. 2007); Celestine v. Petroleos de

30

Venezuella SA, 266 F.3d 343, 357 (5th Cir. 2001); Kusmirek v. MGM
Grand Hotel, Inc. 7 F. App’x 734 (9th Cir. 2001); Bieghler v.
Kleppe, 633 F.2d 531, 534 (9th Cir. 1980); Robinson v. Resorts
Intern., Inc., 95-CV-0052, 1997 WL 803758 (E.D.N.Y. Dec. 4, 1997).
After examining his statements in the deposition and his
conclusions, Dr. Berard’s conclusions fail to “sufficiently link”
the plaintiffs’ protected member status and Scottsdale’s decision
to

infer

that

Scottsdale

used

discriminatory

criteria.

See

Conaway, 358 S.E.2d at 429-430 (footnotes omitted); Smith, 516
S.E.2d at 279. The conclusions that he provides are not only based
on conditions and assumptions, but also on facts whose existence he
admits he cannot verify.

As he admitted before, he did not know if

the City or Scottsdale harbored any racial animus or if such
discriminatory criteria served as a factor in deciding whether to
settle.

In this case, these conclusions fail to create genuine

issues of material fact.

See generally Major League Baseball

Properties, Inc. v. Salvino, Inc., 542 F.3d 290, 311 (2nd Cir.
2008) (“A party opposing summary judgment does not show the
existence of a genuine issue of fact to be tried merely by making
assertions that are conclusory . . . or based on speculation.”);
Evers v. General Motors Corp., 770 F.2d 984, 987 (11th Cir. 1985)
(“This court has consistently held that conclusory allegations
without specific supporting facts have no probative value.”).
Thus, the plaintiffs’ expert testimony fails to demonstrate either

31

a prima facie case under the WVHRA or a genuine issue of material
fact.
2.

Establishing Pretext

Notwithstanding that the plaintiffs fail to show that a prima
facie

case

exists,

even

if

they

had,

Scottsdale

proffers

legitimate, nondiscriminatory reasons for its decisions. As stated
earlier, if the plaintiffs satisfy their burden of proving a prima
facie

case,

then

the

defendant

must

offer

nondiscriminatory reason for the decision.

a

legitimate,

Barefoot, 457 S.E.2d

152, 160. After the defendant presents its reasons, the plaintiffs
may

then

demonstrate

that

either

(1)

the

defendant

treated

discriminatory criteria as a determinative factor in its decision,
or (2) the defendant’s rationale serves as merely a pretext for
discrimination. Id. To show pretext, a plaintiff must show direct
or circumstantial evidence of falsity or discrimination. Id. “The
plaintiff’s failure to come forth with evidence rebutting the
defendant’s explanation may entitle the defendant to judgment.”
Id.
In arguing that a legitimate reason existed as to why the
claim did not settle in the underlying action, Scottsdale first
argues that the consent to settle clause required the consent of
the City.
settle

any

Therefore, without such consent, Scottsdale could not
claims

pursuant

to

the

insurance

policy’s

terms.

Second, Scottsdale asserts that race did not affect either its

32

assessment of the claim or the City’s refusal to consent to settle.
Scottsdale points to statements from its claims analyst, Gwen
Aliotta

(“Aliotta”),

(“Windsor”).

and

her

supervisor,

Bonnie

Windsor

Scottsdale claims that in their depositions, both

Aliotta and Windsor indicate that the case was not viewed as a
racial one and that the City refused to settle because it honestly
believed it was not liable. Further, Scottsdale also points to the
depositions of Mayor Wolfe and then-Chief of Police Skip Holbrook,
wherein

they

also

indicated

that

race

was

withholding the City’s consent to settle.
Scottsdale

argues

that

legitimate,

not

a

reason

for

For those reasons,

non-discriminatory

reasons

existed as to why the City did not consent to any proposed
settlement.
Looking at Scottsdale’s reasons and accompanying evidence,
Scottsdale has demonstrated that legitimate reasons exist as to why
no settlement occurred.

In Aliotta’s deposition, when asked

repeatedly if the case was racially charged or contained racial
overtones, she consistently answered “No.”

ECF No. 173 Ex. Q.

Further, regarding the decision not to consent to the proposed
settlement, Aliotta provided that she did not develop a negotiation
plan for a settlement because defense counsel for the insured at
that time indicated (1) that the insured would withhold consent,
and (2) that the City and Officer Lusk were not liable.

Id.

In

addition to Aliotta, Windsor also indicated that Scottsdale agreed

33

with the insured’s two main reasons for withholding consent: (1)
that the City should protect their officer, Officer Lusk, and (2)
that a very small percentage of a chance of liability existed. ECF
No. 173 Ex. R.

Further, when asked about whether the underlying

case would succeed at trial was “the fact that it would be an allwhite jury in Huntington, West Virginia hearing [the] case,”
Windsor responded, “Absolutely not. I don’t recall any discussions
like that.”
Finally, in Mayor Wolfe’s deposition, he indicates that one
factor behind refusing to consent to settle resulted from thenChief of Police Skip Holbrook opining that the City had a strong
defense against any claims of excessive force.

ECF No. 173 Ex S.

From the depositions before this Court, it is clear that the City
withheld consent to settle because it viewed the chances of
liability existing as minimal and that the City should protect
Officer Lusk from any insufficient claims.

Further, Scottsdale

demonstrates that the City withheld its consent to settle pursuant
to the consent to settle clause.

Analyzing the statements above,

Scottsdale has satisfied its burden of demonstrating legitimate
reasons behind the decision not to settle.
However, pursuant to West Virginia law, the plaintiffs have an
opportunity to demonstrate that those legitimate reasons served as
mere pretexts for discrimination based upon race.
S.E.2d at 160.

Barefoot, 457

To show pretext, a plaintiff must show direct or

34

circumstantial evidence of falsity or discrimination.

Id.

“The

plaintiff’s failure to come forth with evidence rebutting the
defendant’s explanation may entitle the defendant to judgment.”
Id.

Here, the plaintiffs fail to come forth with rebutting

evidence, and therefore Scottsdale is entitled to summary judgment.
Regarding pretext, the plaintiffs again point to Dr. Berard’s
conclusions and speculation.

Further, they again assert that

Scottsdale had a duty to investigate claims of racial animus. They
also attempt to argue that the consent to settle clause acted as “a
ruse in discriminating against the Estate on the basis of race.”
ECF No. 182.

Finally, they point to alleged deviations in the

insurance handling process that again demonstrate the existence of
pretext.
Those arguments all fail to demonstrate pretext. As discussed
above, Dr. Berard stated in his deposition that “I don’t know for
a fact that the City did harbor racial prejudice . . .
know that it was a factor at all.”

ECF No. 173 Ex. P.

I don’t

Dr. Berard

also stated that “I’m not aware, in my capacity as an expert, that
any decision made by Scottsdale was due to race.”

Id.

After

analyzing the remaining aspects of Dr. Berard’s deposition and
conclusions,

they

fail

to

qualify

as

sufficient

direct

or

circumstantial evidence of falsity or discrimination so as to show
pretext.

Regarding the alleged duty of Scottsdale that the

plaintiffs claim exists under Michael v. Appalachian Heating, LLC

35

to investigate the reasons why an insured refused to consent to
settle, no such duty exists in that case.

In addition, the

plaintiffs’ arguments regarding the consent to settle clause are
conclusory at best.

They articulate no discriminatory reason for

including the clause within the insurance policy, which was issued
before the incident occurred.

Further, they provide no proof,

either direct or indirect, of how the consent to settle clause was
used

as

a

concerning

pretext
the

City

for

discrimination.

and

Scottsdale,

As

none

discussed

of

the

above,

individuals

involved in the settlement or claim process displayed even a hint
of discriminatory behavior or that racially discriminatory criteria
factored into their decision-making process.
Finally, regarding deviations in policy, the plaintiffs claim
that incidents such as Scottsdale’s lack of a negotiation plan
demonstrated a deviation from Scottsdale’s policies.

In the

deposition of Aliotta, the plaintiffs point to the fact that a
formal action plan was not drafted and that Scottsdale itself did
not

respond

to

the

plaintiffs’

counsel’s

letters

regarding

settlement, though Scottsdale allegedly had a duty to do so.
However, Aliotta responded that while Scottsdale, if it had the
authority,
insurance

would
policy

normally
here

respond

contained

a

to

settlement

consent

to

letters,

settle

the

clause.

Further, as Aliotta stated in her deposition, the City refused to
settle and thus, Scottsdale did not respond to any offers of

36

settlement.

ECF

No.

182

Ex

B-1.

As

another

example,

the

plaintiffs point to the fact that Aliotta may not have “properly”
taken notes on the situation.

Despite those “deviations,” the

plaintiffs provide no indications that Scottsdale or the City did
not respond to the settlement offers because of racial animus or
other discriminatory reasons.

Even if an alleged deviation in

proper responses to correspondence occurred, or that Aliotta did
not properly take notes, no direct or indirect proof has been
presented

to

show

that

this

either

resulted

in

a

bad

faith

settlement process, or, more importantly, that it was done as an
excuse for racially discriminatory conduct.

Thus, the plaintiffs

fail to rebut Scottsdale’s legitimate reasons for it and the City’s
actions.
It should be noted that the plaintiffs argue that Carlile v.
Farmer’s Insurance Exchange, 173 Cal.App.3d 975 (Cal. App. 1985),
which Scottsdale originally relied on, applies in their favor
regarding pretext. Specifically, they appear to claim that Carlile
shows what an insurer who actually investigated the claim in good
faith did, and why in that case, unlike here, summary judgment was
granted.

However, this Court finds that again the plaintiffs’

argument is misplaced and also fails to see how it demonstrates any
pretext.

Based on the record before this Court, Scottsdale

conducted a good faith investigation.

Indeed, Aliotta stated in

her deposition that she, and in discussions with her manager,

37

Windsor, “[r]eviewed the information that was coming in, all
aspects of it, and our investigation, and whether or not we thought
there was liability.

We took everything into consideration.”

No.

The

182

Ex.

B-1.

plaintiffs

provide

no

evidence

ECF
that

Scottsdale handled the claim process in bad faith or with any form
of racial animus. As the Court provided in Carlile, which involved
an insurance company that did not consent to settlement pursuant to
a consent to settle clause, “To accept plaintiff’s position would
compel insurers to take every step within their power to settle
before

they

are

deemed

to

have

acted

in

good

faith.”

173

Cal.App.3d at 982. Thus, again, the plaintiffs fail to demonstrate
pretext in the settlement and claims process.
Accordingly, for the reasons stated above, the plaintiffs
failed to demonstrate a prima facie case of a violation under the
WVHRA.

Further, even if a prima facie case existed, Scottsdale

proffered legitimate, non-discriminatory reasons why no settlement
occurred.

The

plaintiffs

failed

to

rebut

it

by

showing

Scottsdale’s reasons were a pretext for unlawful discrimination.
Finally, based on the evidence before this Court, no genuine issues
of material fact exist. Therefore, Scottsdale’s motion for summary
judgment is granted.
3.

Beneficiaries

Scottsdale next argues that the individual beneficiaries to
the

plaintiffs

are

not

entitled

38

to

recover

from

Scottsdale.

However,

because

granted,

this

Scottsdale’s

Court

will

motion

not

for

address

summary

judgment

Scottsdale’s

is

argument

concerning the ability of individual beneficiaries to recover in
this civil action because it is now moot.
4.

Punitive Damages

Finally,

Scottsdale

argues

entitled to punitive damages.

that

the

plaintiffs

are

not

Similar to Scottsdale’s argument

concerning the recovery by individual beneficiaries, this argument
is now moot because Scottsdale’s motion for summary judgment is
granted.

Accordingly, this Court will not address Scottsdale’s

arguments against punitive damages.
B.

Plaintiffs’ Motion To Seal
As stated earlier, the plaintiffs filed a second motion to

seal on November 5, 2014.

ECF No. 192.

Prior to that second

motion to seal, the plaintiffs already filed a motion to seal,
which pertained to sensitive information in their response to
Scottsdale’s motion for summary judgment.

ECF No. 184.

Out of an

abundance of caution, this Court provisionally granted that motion
because the plaintiffs in their prior motion to seal did not
specifically identify what materials needed to be sealed.
185.

ECF No.

In their second motion to seal, which is at issue here, they

identified those specific materials and again request this Court to
seal the materials.

Scottsdale did not respond.

After examining

each of the identified items, this Court concludes that those

39

materials do contain sensitive information, such as social security
numbers.
motion

Regarding this Court’s order provisionally granting the
to

seal,

no

reason

exists

to

change

that

ruling.

Accordingly, the plaintiffs’ motion to seal (ECF No. 192) is hereby
granted.
C.

Remaining Motions
Following

Scottsdale’s

motion

for

summary

parties have each filed several motions in limine.

judgment,

the

ECF Nos. 181,

188, 196, 197, 198, 199, 200, 201, 202, 203, 204, and 205.

Because

this Court grants Scottsdale’s motion for summary judgment, the
motions in limine are moot at this stage. Accordingly, the pending
motions in limine are denied as moot.
V.

Conclusion

For the reasons set forth above, Scottsdale’s motion for
summary judgment is GRANTED.

Accordingly, the pending motions in

limine are hereby DENIED AS MOOT.
to seal is GRANTED.
are VACATED.

Further, the plaintiffs’ motion

The scheduled pretrial conference and trial

It is further ORDERED that this civil action be

DISMISSED and STRICKEN from the active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein. Pursuant to Federal
Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment
on this matter.

40

DATED:

December 16, 2014

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

41