Pauley et al v. E. R. J. Insurance Group, Inc.
Filing
39
MEMORANDUM OPINION AND ORDER denying General Motor's 32 MOTION to dismiss the amended complaint; and denying as moot General Motor's 18 MOTION to dismiss. Signed by Judge John T. Copenhaver, Jr. on 1/25/2017. (cc: counsel of record; any unrepresented parties) (taq)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
BOBBY J. PAULEY, JR.,
and DEBROAH K. PAULEY,
Plaintiffs,
v.
Civil Action No. 2:16-7182
E. R. J. INSURANCE GROUP, INC.,
d/b/a AMERICAN HERITAGE INSURANCE
SERVICES, and REGIONAL ACCEPTANCE
CORPORATION, and LIBERTY MUTUAL
INSURANCE COMPANY, and GENERAL MOTORS
LLC,
Defendants.
MEMORANDUM OPINION AND ORDER
I.
Pending is a motion to dismiss the amended complaint,
filed by defendant General Motors LLC (“General Motors”) on
December 23, 2016.
Plaintiffs Bobby J. Pauley, Jr. and Deborah K. Pauley
(“the Pauleys”) instituted this action by filing a complaint in
the Circuit Court of Kanawha County, West Virginia on June 28,
2016.
Defendant E. R. J. Insurance Group, Inc. (“E. R. J.
Insurance”) removed the action on August 3, 2016 on the basis of
diversity jurisdiction.1
The Pauleys amended their complaint several times, by
motion and consent of the court.
The amended complaints added
defendants Regional Acceptance Corporation, Liberty Mutual
Insurance Company (“Liberty Mutual”) and General Motors, LLC
(“General Motors”).
General Motors filed a motion to dismiss the complaint
for failure to state a claim on November 17, 2016.
In response
to the motion to dismiss, the Pauleys requested to amend their
complaint again.
In a telephonic conference on December 23,
2016, General Motors and the other parties agreed to the filing
of a newly amended complaint, which the Pauleys contended
addressed the deficiencies raised in General Motor’s November
17, 2016 motion to dismiss.
General Motors thereafter filed a
second motion to dismiss for failure to state a claim.2
1
At the time of removal, E. R. J. Insurance was the only
defendant named in the complaint. Because the other defendants
were thereafter added with the court’s permission, their consent
for removal was not required.
2
The November 17, 2016 motion to dismiss filed by General Motors
is still pending. In light of the agreement of the parties to
permit the Pauleys to file the amended complaint and the motion
to dismiss the newly amended complaint filed by General Motors
thereafter, the court ORDERS that the motion to dismiss filed
November 17, 2016, be and it hereby is, denied as moot.
2
The current amended complaint alleges that the Pauleys
purchased a new 2014 Chevrolet Sonic on June 19, 2014 from Mid
State Chevrolet, Oldsmobile, Buick, Inc.
Doc. No. 31) at ¶ I.
Amended Compl. (ECF
They contend that on March 28, 2016, the
vehicle was “totally destroyed by a fire caused by the
separation of the front fuel tank strap bracket leading to the
failure of the other tank support resulting in the fuel tank
coming loose from the vehicle causing a fuel leak.”
Id.
The
fire ignited when one of the Pauleys turned on the ignition
switch to start the engine, and the fire resulted in a total
loss of the vehicle.
Id.
The purchase price of the vehicle was financed through
Regional Acceptance Corporation and “additional” insurance was
provided by E. R. J. Insurance, and included an amount for
Guaranteed Asset Protection Insurance (“GAP Insurance”).
¶¶ II, IV.
Id. at
After the fire, the Pauleys allege that E. R. J.
Insurance paid some amount to them, but has refused to pay $750
of the amount financed.
Id. at ¶ III.
The Pauleys further
allege that the financier, Regional Acceptance Corporation, will
not release its claim because it contends that the portion of
the claim that E. R. J. Insurance did not pay is still
outstanding.
Id. at ¶ IV.
3
Insurance on the vehicle was provided through Liberty
Mutual.
After the vehicle was destroyed, the Pauleys notified
Liberty Mutual, and representative Jennifer Allen of Liberty
Mutual is alleged to have somehow mishandled the Pauleys’ GAP
Insurance claim against E. R. J. Insurance because she did not
contact the Pauleys or provide the necessary documents to the
other defendants.
Id.3
After the fire, the Pauleys allege that they received
a recall notice from General Motors, the manufacture of the
vehicle, which concerned the same issue that caused the vehicle
fire.
Id. at ¶ III.
As a direct and proximate result of the
fire caused by the fuel leak, the Pauleys contend that they
suffered a loss of $17,000, which presumably was the value of
the vehicle at the time of the fire.
Id. at ¶ I.
As a result of these events, the Pauleys claim that
their credit reputation has been permanently damaged, they have
been subject to: humiliation, aggravation, annoyance,
inconvenience, monetary loss, and that they have been unable to
purchase and finance goods, have incurred legal fees, and other
3
The court’s assessment of the complaint necessarily relies on
the language of the complaint, which does not clearly set out
the role of some of the various defendants.
4
substantial damages.
The Pauleys ask for $750,000 in damages
plus interest and costs.
Id. at ¶ V.
In its renewed motion to dismiss, General Motors
alleges that the Pauleys have failed to state a claim under Fed.
R. Civ. P. 12(b)(6).
The Pauleys responded to the motion to
dismiss, to which General Motors has replied.
II.
Federal Rule of Civil Procedure 8(a)(2) requires that
a pleader provide “a short and plain statement of the claim
showing . . . entitle[ment] to relief.”
Fed. R. Civ. P.
8(a)(2); Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007).
Rule
12(b)(6) correspondingly permits a defendant to challenge a
complaint when it “fail[s] to state a claim upon which relief
can be granted . . . .”
Fed. R. Civ. P. 12(b)(6).
The required “short and plain statement” must provide
“‘fair notice of what the . . . claim is and the grounds upon
which it rests.’”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
545 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957),
overruled on other grounds, Twombly, 550 U.S. at 563); see also
Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007).
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In order to survive a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”
Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S.
at 570); see also Monroe v. City of Charlottesville, 579 F.3d
380, 386 (4th Cir. 2009).
Application of the Rule 12(b)(6) standard requires
that the court “‘accept as true all of the factual allegations
contained in the complaint . . . .’”
Erickson, 127 S. Ct. at
2200 (quoting Twombly, 127 S. Ct. at 1965); see also South
Carolina Dept. Of Health And Environmental Control v. Commerce
and Industry Ins. Co., 372 F.3d 245, 255 (4th Cir. 2004)
(quoting Franks v. Ross, 313 F.3d 184, 192 (4th Cir. 2002)).
The court must also “draw[] all reasonable . . . inferences from
th[e] facts in the plaintiff's favor . . . .”
Edwards v. City
of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
III.
General Motors first contends that the Pauleys have
failed to state a claim upon which relief can be granted because
they have failed to state a cause of action against General
Motors entirely.
Memo. in Supp. of Mot. to Dismiss at 4.
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General Motors argues that the amended complaint only states a
cause of action and requests damages for the breach of the GAP
Insurance contract, to which it is not a party.
Id. at 2.
In response, the Pauleys state that the first
paragraph of the amended complaint clearly states a cause of
action against General Motors and the amount of damages sought
against it.
Resp. to Mot. to Dismiss at 1.
The remaining
paragraphs, to which General Motors refers, state a cause of
action against the other defendants, while the last paragraph
asks for damages.
Id.
Although the amended complaint does not explicitly so
state, it appears to state a claim against General Motors for
strict products liability under West Virginia law.
In West Virginia, “‘strict liability in tort’ is
designed to relieve the plaintiff from proving that the
manufacturer was negligent in some particular fashion during the
manufacturing process and to permit proof of the defective
condition of the product as the principal basis of liability.”
Syl. Pt. 3, Morningstar v. Black and Decker Mfg. Co., 162 W. Va.
857, 253 S.E.2d 666 (1979).
A plaintiff establishes strict tort
liability by showing that “the involved product is defective in
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the sense that it is not reasonably safe for its intended use.”
Id. at Syl. Pt. 4.
In Star Furniture Co. v. Pulaski Furniture
Co., the West Virginia Supreme Court of Appeals extended strict
liability in tort to instances where the defective product only
caused property damage, but limited recovery to “property damage
to defective products which results from a sudden calamitous
event.”
Syl. Pt. 3, 171 W. Va. 79, 297 S.E. 854 (1982).
In Capitol Fuels, Inc. v. Clark Equip. Co., the West
Virginia Supreme Court of Appeals reiterated the test
established in Star Furniture, stating, “[i]n order to recover
under Star Furniture, the damage to the product must result from
a sudden calamitous event attributable to the dangerous defect
or design of the product itself.”
181 W. Va. 258, 260, 382
S.E.2d 311, 313 (1989).4
Accordingly, the court must determine whether the
4
A plaintiff need not use direct evidence to establish proof of
defect, but instead may use circumstantial evidence to make a
prima facie case “so long as the evidence shows that a
malfunction in the product occurred that would not ordinarily
happen in the absence of a defect . . . [and that] there was
neither abnormal use of the product nor a reasonable secondary
cause for the malfunction. Syl. Pt. 3, Anderson v. Chrysler
Corp., 184 W. Va. 641, 403 S.E.2d 189 (1991). Whether the
Pauleys have made the requisite showing of a defect, either by
direct or circumstantial evidence, is a matter for the summary
judgment phase of the proceedings.
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amended complaint contains facts, which if true, state a claim
for strict products liability based on the test stated in
Capitol Fuels.
See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
(2009).
In the amended complaint, the Pauleys allege the
following facts, as relevant to their claim against General
Motors:
1.
On June 19, 2014, they purchased a new 2014
Chevrolet Sonic that was manufactured and assembled
by General Motors, LLC;
2.
On March 28, 2016, the Sonic “was totally
destroyed by a fire . . . which was ignited when the
plaintiff driver turned on the ignition switch to
start the engine[;]”
3.
The fire was “caused by the separation of the
front fuel tank strap bracket leading to the failure
of the other tank support resulting in the fuel tank
coming loose from the vehicle causing a fuel
leak[;]”
4.
As a direct and proximate result, the Pauleys
suffered a total loss of the vehicle, which was
valued at $17,000; and
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5.
After the Sonic was destroyed, the Pauleys
“received a recall notice from . . . General Motors
concerning the danger theretofore experienced by
[them.]”
Amended Compl. at ¶¶ I, III.
The fire, which the amended complaint alleges ignited
when one of the Pauleys turned the ignition and caused the Sonic
to be destroyed, qualifies as a calamitous event.
See Star
Furniture Co., 171 W. Va. at 84, 297 S.E.2d at 859 (calling a
fire a “sudden calamitous event”).
That the fire was caused by
a defect in the design or manufacture of the Sonic can be
inferred from the allegations that: (1) the fire was caused by a
fuel leak when the front fuel tank strap bracket separated; and
(2) the Pauleys received a recall notice from General Motors
regarding the danger they experienced after the fire occurred.
Amended Compl. at ¶¶ I, III.
The amended complaint alleges that
the Pauleys sustained a loss of $17,000 as a result of the loss
of the vehicle.
Although not overly detailed, the amended
complaint meets the test from Capitol Fuels and states a claim
against General Motors for strict products liability.
General Motors further argues that the Pauleys have
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admitted in their amended complaint that the other defendants
have totally compensated them for the loss of the vehicle and
that the amended complaint should be dismissed for that reason.
Memo. in Supp. of Mot. to Dismiss at 4.
The amended complaint states that E. R. J. Insurance
“paid the amount financed, except for the sum of $750, and has
failed and refused to pay the same, which it clearly owes.”
Amended Compl. at ¶ III.
While it is true that the amended
complaint appears to allege that E. R. J. Insurance has paid the
Pauleys at least a portion of the amount it financed for the
purchase of the Sonic, it does not allege that the entire value
of the vehicle was returned for the benefit of the Pauleys.
id.
See
The amended complaint further alleges that the financier
has refused to release its claim for the Sonic because only a
portion of the amount owed was paid by E. R. J. Insurance.
at ¶ IV.
Id.
Based on these allegations, the Pauleys at least have
a claim against General Motors for $750, which the amended
complaint alleges is part of the amount financed that has not
been paid.
Accordingly, the Pauleys have stated a claim against
General Motors that entitles them to relief.
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01/28/2016
02/08/2016
Motions under F.R. Civ. P. 12(b), together with
supporting briefs, memoranda, affidavits, or other
such matter in support thereof. (All motions
unsupported by memoranda will be denied without
prejudice pursuant to L.R. Civ. P. 7.1 (a)).
IV.
Last day for Rule 26(f) meeting.
02/15/2016
Last day to file Report of Parties= Planning
For the foregoing reasons, it is ORDERED that General
Meeting. See L.R. Civ. P. 16.1.
Motor’s motion
02/22/2016
32) be, and it
to dismiss the amended complaint (ECF Doc. No.
Scheduling conference at 4:30 p.m. at the Robert C.
Byrd United States It is further ORDERED that
hereby is, denied. Courthouse in Charleston, before
the undersigned, unless canceled. Lead counsel
General Motor’sdirected filed motion to dismiss (ECF Doc. No.
earlier to appear.
02/29/2016
Entry of scheduling order.
18) be, and it hereby is, denied as moot.
03/08/2016
Last day to serve F.R. Civ. P 26(a)(1) disclosures.
The Clerk is directed to transmit copies of this order
The Clerk is requested to transmit this Order and
Notice to all counsel of record and to any unrepresented
to counsel of record and any unrepresented parties.
parties.
DATED: January 25, 2017
DATED: January 5, 2016
John T. Copenhaver, Jr.
United States District Judge
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