Stafford EMS Inc v. J B Hunt Transport, No. 06-1503 (4th Cir. 2010)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 06-1503 STAFFORD EMS, INCORPORATED, Plaintiff - Appellant, v. J. B. HUNT TRANSPORT, INCORPORATED, a Georgia Corporation; CUSTARD INSURANCE ADJUSTERS, INCORPORATED, an Indiana Corporation; TOM ROBERTSON, Defendants - Appellees. Appeal from the United States District Court for the Southern District of West Virginia, at Charleston. John T. Copenhaver, Jr., District Judge. (2:02-cv-00886) Argued: March 26, 2010 Decided: April 28, 2010 Before MICHAEL and DAVIS, Circuit Judges, and Eugene E. SILER, Jr., Senior Circuit Judge of the United States Court of Appeals for the Sixth Circuit, sitting by designation. Affirmed by unpublished opinion. Senior Judge Siler wrote the opinion, in which Judge Michael and Judge Davis concurred. ARGUED: James D. McQueen, Jr., FROST, BROWN & TODD, LLC, Charleston, West Virginia, for Appellant. Thomas Vincent Flaherty, FLAHERTY, SENSABAUGH & BONASSO, PLLC, Charleston, West Virginia; David Edward Rich, BAKER & RICH LAW OFFICES, Huntington, West Virginia, for Appellees. ON BRIEF: Tonya L. Hatfield, TONYA L. MOUNTS, L.C., Gilbert, West Virginia, for Appellant. Roy D. Baker, Jr., BAKER LAW OFFICES, Huntington, West Virginia, for Appellees Custard Insurance Adjusters, Incorporated, and Tom Robertson; Erica M. Baumgras, FLAHERTY, SENSABAUGH & BONASSO, PLLC, Charleston, West Virginia, for Appellee J. B. Hunt Transport, Incorporated. Unpublished opinions are not binding precedent in this circuit. 2 SILER, Senior Circuit Judge: Stafford EMS, Inc. ( Stafford ) appeals the district court s orders denying its motion for remand, dismissing its claims under the West Virginia Unfair Trade Practices Act ( UTPA ), West Virginia Code § 33-11-14, et seq., and denying its motion to certify a question to the Supreme Court of Appeals of West Virginia. For the following reasons, we affirm. In 2002, Stafford filed this action in the Circuit Court of Mingo County, West Virginia, asserting claims of negligence and violations of the UTPA against J.B. Hunt Transport, Inc. ( J.B. Hunt ), Custard Insurance Adjusters, Inc. ( Custard ), and Tom Robertson ( Robertson ) (collectively Defendants ). Stafford s claims arise out of a September 24, 2001 automobile accident in which a tractor-trailer driven by a J.B. Hunt employee collided with and badly damaged one of the ambulances leased and operated by Stafford. J.B. Hunt is a self-insured entity. The company retained Custard, an independent adjusting company, to assess Stafford s property damage claim. Robertson, an employee of Custard, was assigned to investigate Stafford s claim on behalf of J.B. Hunt. According to the complaint, Robertson agreed that would make his best efforts to settle Stafford s claim. he On November 19, 2001, Robertson allegedly advised Stafford that he was giving his claim file over to a representative of J.B. Hunt 3 and informed Stafford that, within five to seven business days, they will cut you a check. Stafford alleges that, in violation of the UTPA, J.B. Hunt acting through its representatives and agents repeatedly requested damages information from Stafford, failed to respond to requests by Stafford for information, and made low-ball offers to settle, all in an attempt to delay the resolution of Stafford s claim in which liability was clear. Defendants removed this case to federal court on the basis of diversity of citizenship and filed motions to dismiss, arguing that the UTPA and the tort of bad faith do not apply to a self-insured entity or its agents. remand. motion Stafford filed a motion to On March 31, 2003, the district court denied Stafford s to remand and granted Stafford s bad faith claims. Stafford filed a motion to Defendants motions to dismiss A little more than a year later, certify to the Supreme Court of Appeals of West Virginia the question of whether the UTPA and the tort of bad faith apply to Defendants. The district court declined to certify the question. Stafford s remaining claims were tried, resulting in a judgment in its favor against J.B. Hunt. As Stafford then filed this appeal. with all questions implicating subject matter jurisdiction, we review de novo the denial of Stafford s motion to remand. 2005). See Lontz v. Tharp, 413 F.3d 435, 439 (4th Cir. We also review de novo the district court s rulings on 4 Defendants motions to dismiss under Rule 12(b)(6), accepting the allegations set forth in Stafford s complaint as true. See Novell, Inc. v. Microsoft Corp., 505 F.3d 302, 307 (2007). We review the district court s decision not to certify a question to the Supreme Court of Appeals of West Virginia for an abuse of discretion. Nat l See Capital Naturists, Inc. v. Bd. Of Supervisors, 878 F.2d 128, 132 (4th Cir. 1989). Defendants assert that diversity of citizenship exists with Plaintiff Stafford, a resident of West Virginia, as to Defendant J.B. Hunt, Indiana a Georgia corporation, corporation, and that and Defendant Defendant Robertson, Virginia resident, was fraudulently joined. that Robertson was an appropriate undermines diversity jurisdiction. Custard, a an West Stafford counters defendant whose residency To show fraudulent joinder, the removing party must demonstrate either outright fraud in the plaintiff s pleading of jurisdictional facts or that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court. Hartley v. CSX Transp. Inc., 187 F.3d 422, 424 (4th Cir. 1999) (internal quotation marks and emphasis omitted). Defendants did not allege any bad faith in pleading; so, the only inquiry is whether Stafford had any possibility of recovering damages from Robertson. For the following reasons, we conclude that, under West Virginia law, Stafford had no possibility of recovering 5 damages from Robertson. Thus, the district court properly denied Stafford s motion to remand. Under West Virginia law, the UTPA and the tort of bad faith apply only to those persons or entities and their agents who are engaged in the business of insurance. Motor Co., 566 S.E.2d 624, 629 (W. Va. 2002). Hawkins v. Ford Consequently, the key inquiry in this case is whether Defendants were engaged in the business of insurance. See id. Moreover, [a] insured entity is not in the business of insurance. self- Id. It logically follows that agents acting on behalf of a self-insured entity are also not engaged in the business of insurance. id. See J.B. Hunt, as a self-insured entity, was not engaged in the business of insurance and could not be held liable under the UTPA or for the tort of bad faith. See id. It necessarily follows that, when acting as J.B. Hunt s agents, Custard and Robertson also were not engaged in the business of insurance and could not be held liable under the UTPA or for the tort of bad faith for their actions on behalf of J.B Hunt. Contrary Supreme Court to of Stafford s Appeals arguments, of West the Virginia See id. holding in of Taylor the v. Nationwide Mut. Ins. Co., 589 S.E.2d 55 (W. Va. 2003), has no bearing on this case. Taylor did not change the underlying inquiry for statutory and common law bad faith claims, i.e., whether the persons or entities and their agents are engaged in 6 the business of insurance. S.E.2d at 629. See id. at 60-61; Hawkins, 566 Rather, Taylor holds that a claims adjuster employed by an insurance company is engaged in the business of insurance and can be held personally liable for violations of the UTPA. Taylor, S.E.2d at 61. Because Custard and Robertson acted as agents of J.B. Hunt, a self-insured entity that was not engaged liable in the under business the UTPA of or insurance, for the tort they of cannot bad be faith. held See Hawkins, 566 S.E.ed at 629 (holding that the UTPA and the tort of bad faith apply only to those persons and entities and their agents who are engaged in the business of insurance. ). Only if the available state law is clearly insufficient should the court certify the issue to the state court. Doe, 28 F.3d 404, 407 (4th Cir. 1994). Roe v. The Supreme Court of Appeals of West Virginia has clear case law stating that the UTPA and the tort of bad faith do not apply to self-insured entities. Hawkins, 566 application of holding this S.E.2d to at the 629. The agents of entity does not require additional precedent. Supreme Court of Appeals of West Virginia straightforward a self-insured Moreover, the has already approvingly cited the district court s holding in this case. Wetzel v. Employers Serv. Corp., 656 S.E.2d 55, 64 (W. Va. 2007) (citing Stafford EMS, Inc., v. J.B. Hunt Transp. Inc., 270 F. Supp. 2d 773, 778-79 (S.D. W. Va. 2003)). 7 Thus, it was not an abuse of discretion for the district court to decline to certify the question to the Supreme Court of Appeals of West Virginia. AFFIRMED 8

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