Evans v. Government Employees Insurance Company et al, No. 3:2014cv00659 - Document 29 (E.D. Va. 2015)

Court Description: MEMORANDUM OPINION. Signed by District Judge James R. Spencer on 1/9/2015. (sbea, )

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Evans v. Government Employees Insurance Company et al Doc. 29 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION EULERIC EVANS, by his Assignee, CRAIG L. COLES Plaintiff, v. Action No. 3:14-CV-659 GEICO GENERAL INSURANCE COMPANY, et al., Defendants. MEMORAN D U M OPIN ION THIS MATTER is before the Court on a Motion to Rem and (“Motion”) filed by Plaintiff Euleric Evans (“Evans”), by his assignee, Craig L. Coles (“Coles”). ECF No. 4. Defendants Governm ent Em ployees Insurance Com pany, GEICO General Insurance Com pany, GEICO Indem nity Com pany, GEICO Casualty Com pany, GEICO Advantage Insurance Com pany, and GEICO Choice Insurance Com pan y (collectively “GEICO”), Eric Rappaport, Tony Parkes (collectively the “Nondiverse Defendants”), 1 and J esse J ones (“J ones”) oppose the Motion. Also before the Court are two Motions to Dism iss—one filed by GEICO, ECF No. 8, and one filed by the Nondiverse Defendants, ECF No. 8. A hearin g was held on Decem ber 18, 20 14 regarding the Motion to Rem and. For the reasons stated from the bench along with those set forth herein, the Court will DENY the Motion to Rem and because diversity jurisdiction is present where the Nondiverse Defendants have been fraudulently joined. Accordingly, the Motion to Dism iss filed by the Nondiverse Defendants will be GRANTED. ECF No. 8 . Finally, the Court will GRANT IN PART and DENY IN PART the Motion to Dism iss filed by GEICO. ECF No. 8. 1 The parties agree that Defendants Eric Rappaport and Tony Parkes (collectively the “Nondiverse Defendants”) are citizens of the Com m onwealth of Virginia and that Defendant J esse J ones (“J ones”) is a citizen of the State of Texas. Thus, there is no jurisdictional dispute. 1 Dockets.Justia.com I. FACTU AL AN D PROCED U RAL BACKGROU N D This action arises out of a m otor vehicle accident on April 9, 20 10 , involving both Coles and Evans. As a result of the collision, Coles sustained serious bodily injury. Evans purchased an autom obile liability insurance policy from GEICO. See ECF No. 1 Ex. 1 Com plaint (“Com pl.”) ¶1; see also id. Ex. L (“Assignm ent”). On October 8, 20 10 , Coles filed suit against Evans in the Circuit Court of Henrico County seeking com pensation for the injuries he sustained in the crash. See Com pl. ¶ 14. Prior to trial, Coles attem pted to settle his claim s against Evans through negotiations with several GEICO adjusters—i.e., the Nondiverse Defendants and J ones— who have been individually nam ed in the instant lawsuit. Com pl. ¶¶ 1516. 20 , 22-31. On March 20 , 20 12, the case was tried on dam ages and the jury returned a verdict of $ 275,0 0 0 .0 0 . Com pl. ¶ 32. On October 7, 20 13, Evans assigned and transferred his rights, claim s, and causes of actions against “GEICO General Insurance Com pany,” Com pl. Ex. L. (“Assignm ent”), “to the [p]laintiff in the instant action, Craig L. Coles,” Com pl. ¶ 33. Then, on August 25, 20 14, Coles filed a Com plaint in the Circuit Court for the City of Richm ond, Virginia, against GEICO, the Nondiverse Defendants, and J ones seeking to collect on an insurance policy GEICO issued to Evans. Mem orandum in Opposition to Motion to Rem an d (“Defs.’ Mem . Opp’n Mot. Rem and”) at 1. The Com plaint, essentially arising out of the $ 275,0 0 0 .0 0 jury verdict, alleges m ultiple claim s. In Count I, Coles alleges a breach of contract claim against GEICO. In Count II, Coles alleges a breach of the im plied covenant of good faith and fair dealing against GEICO and its adjusters, including the Nondiverse Defendants and J ones. In Count III, Coles alleges unfair claim settlem ent practices against GEICO, the Nondiverse Defendants, and J ones under Va. Code Ann. § 38.2-510 . In Count IV, Coles alleges bad faith failure to pay a m otor vehicle insurance claim of m ore than $ 3,50 0 .0 0 under Va. Code Ann. § 8.0 1-66.1(D)(1) against GEICO. To be clear, in Counts II and III, Coles alleges claim s against the Nondiverse Defendants and J ones both in their individual and representative capacities. Coles requests dam ages in the am ount determ ined by a jury, but no less than 2 $ 6,40 0 ,0 0 0 .0 0 . Specifically, pursuant to sections 38.2-20 9 and 8.0 1-66.1, he requests (a) $ 1,20 0 ,0 0 0 .0 0 in com pensatory dam ages (b) attorneys’ fees; (c) costs incurred in connection with this action; (d) prejudgm ent and post-judgm ent interest from Septem ber 7, 20 10 at the m axim um rate allowed by law; (e) direct and consequential dam ages that “include collection dam ages and forseeable losses for GEICO’s breach of the duty of good faith”; and (f) such other relief as is just and proper. See Com pl. at 15-16. GEICO and the other defendants were served with the Com plaint on Septem ber 2, 20 14 and Septem ber 3, 20 14, respectively. On Septem ber 25, 20 14, GEICO, the Nondiverse Defendants, and J ones rem oved the above-captioned m atter to this Court. See ECF No. 1 (“Notice of Rem oval”). Coles filed a Motion to Rem and on October 10 , 20 14. ECF No. 4. Together, GEICO, the Nondiverse Defendants, and J ones filed an Opposition to Coles’ Motion to Rem and on October 17, 20 14. ECF No. 9. Coles filed his Reply on October 22, 20 14. ECF No. 14. Coles is a citizen of Virginia. He m aintains that the Nondiverse Defendants are each citizens of Virginia, who work or worked for GEICO. J ones reportedly is a citizen of the State of Texas. Defendants Governm ent Em ployees Insurance Com pany, GEICO General Insurance Com pany, GEICO Indem nity Com pany, and GEICO Casualty Com pany are Maryland corporations, with their principal places of business in Chevy Chase, Maryland. Defendants GEICO Advantage Insurance Com pany and GEICO Choice Insurance Com pany are Nebraska corporations, with their principal places of business in Chevy Chase, Maryland. II. STAN D ARD OF REVIEW a. Mo tio n to Re m an d “Federal courts are courts of lim ited jurisdiction . . . [and] possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am ., 511 U.S. 375, 377 (1994). Federal district courts have original jurisdiction over civil actions that arise under the Constitution, laws, or treaties of the United States pursuant to 28 U.S.C. § 1331, and where the am ount in controversy exceeds $ 75,0 0 0 and the m atter is between citizens of 3 different states pursuant to 28 U.S.C. § 1332. Federal diversity jurisdiction only exists under § 1332 where there is com plete diversity, that is, “when no party shares com m on citizenship with any party on the other side.” May es v. Rapport, 198 F.3d 457, 461 (4th Cir. 1999) (internal citations om itted). A court exercising diversity jurisdiction applies the substantive law of the forum state. Erie R.R. v. Tom pkins, 30 4 U.S. 64, 78– 79 (1938). The “rem oval statute,” 28 U.S.C. § 1441, provides that a case filed in state court m ay be rem oved to federal court when it is shown by the defendant that the federal court has original jurisdiction. See Mulcahey v. Colum bia Organic Chem s. Co., 29 F.3d 148, 151 (4th Cir. 1994). A defendant m ay rem ove a case from state to federal court if the federal court has original jurisdiction over the m atter, but if a case is rem ovable based solely on diversity jurisdiction, the case m ay not be rem oved if any of the defendants is a citizen of the state where the action was brought. 28 U.S.C. §§ 1441(a), (b). The party seeking rem oval has the burden of establishing federal jurisdiction. Mulcahey , 29 F.3d at 151; see Jackson v. Nationw ide Ins. Co. of Am ., No. CIV.A. 4:14-945-BHH, 20 14 WL 4349738, at *1 (D.S.C. Sept. 2, 20 14) (citing St. Paul Mercury Indem . Co. v. Red Cab Co., 30 3 U.S. 283, 291 (1938)) (confirm ing that the party rem oving an action bears the burden of dem onstrating that jurisdiction properly rests with the court at the tim e the petition for rem oval is filed). Because rem oval of a case from state court im plicates “significant federalism concerns,” rem oval jurisdiction m ust be strictly construed, and “if federal jurisdiction is doubtful, a rem and is necessary.” Mulcahey , 29 F.3d. at 151. If at any tim e before final judgm ent it appears the district court lacks jurisdiction, the court m ust rem and the case. 28 U.S.C. § 1447(c). When a defendant has been fraudulently joined, however, com plete diversity is not required to create federal jurisdiction prem ised upon § 1332. Under the fraudulent joinder doctrine, a federal court m ay assum e jurisdiction over a case where there is not com plete diversity and dism iss the in-state defendants if it finds that the nondiverse defendants were fraudulently joined in order to destroy the court’s federal diversity jurisdiction. May es, 198 F.3d 4 at 461. Therefore, the doctrine of fraudulent joinder allows “a district court to disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assum e jurisdiction over a case, dism iss the nondiverse defendants, and thereby retain jurisdiction.” Id. “To show fraudulent joinder, the rem oving party m ust dem onstrate 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) (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)) (internal quotation m arks om itted). “The party alleging fraudulent joinder bears a heavy burden—it m ust show that the plaintiff cannot establish a claim even after resolving all issues of law and fact in the plaintiff’s favor. . . . This standard is even m ore favorable to the plaintiff than the standard for ruling on a m otion to dism iss under Fed. R. Civ. P. 12(b)(6).” Id. (internal citations om itted). “In order to determ ine whether an attem pted joinder is fraudulent, the court is not bound by the allegations of the pleadings, but m ay instead ‘consider the entire record, and determ ine the basis of joinder by any m eans available.’” AIDS Counseling & Testing Centers v. Group W Television, Inc., 90 3 F.2d 10 0 0 , 10 0 4 (4th Cir. 1990 ) (internal citations om itted). The Court m ay consider affidavits and deposition transcripts subm itted by the parties, and “[i]n this respect, the ‘proceeding appropriate for resolving a claim of fraudulent joinder is sim ilar to that used for ruling on a m otion for sum m ary judgm ent under Fed. R. Civ. P., Rule 56(b).’” Beaudoin v. Sites, 886 F. Supp. 130 0 , 130 2 (E.D. Va. 1995) (internal citations om itted). “Nom inal” parties that have been joined to the action m ust be disregarded and the court only rests upon the citizenship of the real parties to the controversy. See e.g., Ass’n v. Lee, 446 U.S. 458 , 460 -61 (1980 ). As the Fourth Circuit defines, “[n]om inal m eans sim ply a party havin g no im m ediately apparent stake in the litigation either prior or subsequent to the act of rem oval. In other words, the key inquiry is whether the suit can be resolved without affecting the . . . nom inal defendant in any reasonably forseeable way.” Hartford Fire Ins. Co. v. Harley sville 5 Mut. Ins. Co., 736 F.3d 255, 260 (4th Cir. 20 13). Indeed, “the word nom inal should be taken to m ean what a good dictionary says it should m ean: ‘trifling’ or ‘[e]xisting in nam e only.’” Id. at 260 (citing Black's Law Dictionary 1148(9th ed.20 0 9)). Additionally, when determ ining what constitutes a “nom inal party” for rem oval purposes, courts have reviewed whether there is any “legal possibility for predicting” that the party could be found liable. See Creed v. Virginia, 596 F. Supp. 2d 930 (E.D. Va. 20 0 9) (citing Allen v. Monsanto Co., 396 F. Supp. 2d 728, 733 (S.D. W. Va. 20 0 5)). Courts have also considered “whether a court would be able to enter a final judgm ent favoring the plaintiff in the absence of the purportedly nom inal defendant without m aterially affecting the relief due to the plaintiff.” Creed, 596 F. Supp. 2d at 935; accord Blue Mako, Inc, v. Minidis, 472 F. Supp. 2d 690 , 696 (M.D.N.C. 20 0 6). Finally, this Court has stated that “parties . . . [are] ‘nom inal’ where, for exam ple, the causes of action asserted against them . . . [are] clearly unavailable as a m atter of law. Creed, 596 F. Supp. 2d at 936. b. Mo tio n to D is m is s A m otion to dism iss pursuant to Rule 12(b)(6) challenges the legal sufficiency of a com plaint, and “does not resolve contests surrounding the facts, the m erits of a claim , or the applicability of defenses.” Republican Party of N .C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citation om itted). A court ruling on a Rule 12(b)(6) m otion m ust take as true all of the plaintiff’s well-pleaded allegations and should view the com plaint in the light m ost favorable to the plaintiff. My lan Labs., Inc. v. M atkari, 7 F.3d 1130 , 1134 (4th Cir. 1993). The com plaint m ust contain “‘a short and plain statem ent of the claim showing that the pleader is entitled to relief’ in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 555 (20 0 7) (quoting Conley v. Gibson, 355 U.S. 41, 47(1957)). The pleadings need not m ake “detailed factual allegations,” id., but they m ust allege sufficient facts, accepted as true, to “state a claim for relief that is plausible on its face,” id. at 570 . The pleading standard of Rule 8 “dem ands m ore than an unadorned, the-defendant-unlawfully-harm ed-m e-accusation,” id. at 678 , and “while a plaintiff is not 6 required to plead facts that constitute a prim a facie case in order to survive a m otion to dism iss, ‘[f]actual allegations m ust be enough to raise a right to relief above the speculative level.’” Colem an v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 20 10 ) (quoting Tw om bly , 550 U.S. at 555 (internal citation om itted)). III. D ISCU SSION a. AN ALYSIS—Mo tio n to Re m an d Regarding diversity jurisdiction, neither party disputes that the am ount in controversy exceeds $ 75,0 0 0 .0 0 . Therefore, the relevant question before the Court is whether this dispute is between citizens of different states. Coles is a citizen of Virginia. He m aintains that the Nondiverse Defendants are each citizens of Virginia, who work or worked for GEICO. J ones reportedly is a citizen of the State of Texas. Governm ent Em ployees Insurance Com pany, GEICO General Insurance Com pany, GEICO Indem nity Com pany, and GEICO Casualty Com pany are Maryland corporations with their principal places of business in Chevy Chase, Maryland. GEICO Advantage Insurance Com pany and GEICO Choice Insurance Com pany are Nebraska corporations with their principal places of business in Chevy Chase, Maryland. As such, Coles insists that this case should be rem anded to state court because com plete diversity does not exist am ong the parties. Mot. to Rem and at 2. GEICO, the Nondiverse Defendants, and J ones, collectively, m aintain that there will be com plete diversity once the Nondiverse Defendants are rightfully dism issed from the case. Defs.’ Mem . Opp’n Mot. Rem and at 11. Here, the Nondiverse Defendants do not allege outright fraud in Coles' pleadings. Therefore, to defeat Coles’ Motion, the Nondiverse Defendants m ust establish by clear and convincing evidence that, even resolving all issues of fact and law in Coles’ favor, Coles fails to allege any possible claim against them . The Nondiverse Defendants have m et this burden. Because Coles’ grounds for relief are based upon Virginia law, the Court looks to the law of the Com m onwealth to determ ine whether the Nondiverse Defendants were fraudulently joined. 7 Coles asserts causes of action against the Nondiverse Defendants for breach of the im plied covenant of good faith and fair dealing and Unfair Claim Settlem ent Practices under Virginia Code § 38.2-510 . Although the fraudulent joinder standard is rigorous, there are a few cases, such as this one, where the standard is m et. A. There Has N ot Been a Valid Assignm ent From Evans to Coles for Claim s Against the N ondiverse Defendants The entire basis of the causes of action contained in Coles’ Com plaint is predicated on the Assignm ent, in which Evans assigned and transferred his rights, claim s, and causes of action against GEICO to Coles. See Com pl. ¶ 33. As a threshold m atter, Coles fails to allege any argum ent or authority regarding his ability to m aintain his causes of action against the Nondiverse Defendants based on the plain language of the Assignm ent. See Com pl. Ex. L. Coles’ Com plaint m erely asserts, “On October 7, 20 13 Euleric Evans assigned and transferred his rights, claim s, and causes of action against GEICO for breach of contract and bad faith failure to settle under an insurance contract, and any and all other claim s he has against GEICO to the Plaintiff in the instant action, Craig L[sic] Coles. A copy of said assignm ent of claim s is annexed hereto as Exhibit L.” Com pl. ¶ 33. In turn, the Assignm ent— Exhibit L—defines “GEICO” as “GEICO General Insurance Com pan y.” Com pl. Ex. L. The Nondiverse Defendants argue, therefore, that the absence of any m ention of them in the Assignm ent yields the conclusion that Evans did not assign or transfer to Coles the rights, claim s, or causes of action he m ay have had against the Nondiverse Defendants. This Court finds their argum ent persuasive. In general, the “Fourth Circuit has held that in a first-party or third-party Virginia insurance relationship, liability for bad faith conduct is a m atter of contract rather than tort law.” TIG Ins. Co. v. Alfa Laval, Inc., No. CIV.A. 3:0 7CV683, 20 0 8 WL 639894, at *2 (E.D. Va. Mar. 5, 20 0 8) (citing A & E Supply , 798 F.2d at 672; Bettius & Sanderson, P.C. v. Nat’l Union Fire Ins. Co., 8 39 F.2d 20 0 9, 10 16 (4th Cir. 1988)). An interpretation of a contract presents a question of law for the 8 Court. Bala v. Com m onw ealth of Virginia Dep't of Conservation & Recreation, No. 3:12CV748HEH, 20 14 WL 1281235, at *2 (E.D. Va. Mar. 27, 20 14) (citing N ehi Bottling Co. v. All– Am erican Bottling Corp., 8 F.3d 157, 161– 62 (4th Cir. 1993)). To interpret the term s of the contract, the Court will rely on the principles of Virginia law. The Com m onwealth follows the “plain m eaning” rule, whereby the court is not at liberty to search for the contract's m eaning beyond the instrum ent when the writing is a final agreem ent of the parties. Berry v. Klinger, 225 Va. 20 1, 20 8 , 30 0 S.E.2d 792 (1983) (citation om itted); Am chem Prods. v. N ew port New s, 264 Va. 89, 98 (20 0 2) (citation om itted) (“[W]hen the term s of a contract are clear and unam biguous, a court m ust give them their plain m eaning.”). “The guiding light in the construction of a contract is the intention of the parties as expressed by them in the words they have used, and courts are bound to say that parties intended what the written instrum ent plainly declares.” Id. (citation om itted); see Richfood, Inc. v. Jennings, 255 Va. 588, 591 (1998) (finding that the express intention of the parties determ ines the scope of the agreem ent); First Security Federal Savings Bank, Inc. v. McQuilken, 253 Va. 110 , 113 (1997) (“The scope of a release agreem ent, like the term s of any contract, is generally governed by the expressed intention of the parties.”); accord Ohio Valley Envtl. Coal. v. Aracom a Coal Co., 556 F.3d 177, 211 (4th Cir. 20 0 9). It follows then that where the language is clear, extrinsic evidence of the contracting parties' intentions will not be perm itted. Berry , 225 Va. at 20 8 . Thus, the parties' intent should be discerned solely from the four corners of the agreem ent. Grant v. Carotek, Inc., 737 F.2d 410 , 412 (4th Cir. 1984). In any event, when the contract provisions are “too plain to be m isunderstood[,] there is nothing to construe.” Kennard v. Travelers' Protective Ass'n, 157 Va. 153, 158 (1931). The Nondiverse Defendants’ argum ent that the express, unam biguous term s of the Agreem ent support the conclusion that Coles does not have the right to assert any cause of action against any other defendant other than “GEICO General Insurance Com pany” aligns with well-established principles of contract interpretation. This Court has stated that “[w]hen the 9 language of a written instrum ent like an assignm ent is clear on its face, parol evidence is not considered, and the docum ent is read within the four corners.” See New com Holdings Pty ., Ltd. v. Im bros Corp., 369 F. Supp. 2d 70 0 , 70 9 (E.D. Va. 20 0 5) (citing 35 U.S.C. § 261; Utsch v. Utsch, 266 Va. 124, 129 (20 0 3) (quoting Py ram id Dev., L.L.C. v. D & J Assocs., 262 Va. 750 , 754 (20 0 1)) (stating this proposition in regard to a deed of a m arital residence)). Applying those principles to the instant case, the Court will determ ine what is apparent on the face of the Assignm ent. In a m yriad of places, the Assignm ent explicitly refers only to “GEICO,” which the Assignm ent clearly defines as “GEICO General Insurance Com pany,” who issued the “GEICO Policy.” See Com pl. Ex. L. It m akes no m ention of the Nondiverse Defendants whatsoever—not in their derivative or direct capacity. As only a few exam ples dem onstrating this finding, the Assignm ent states the following: “in consideration of the m utual prom ises contained herein, . . . the parties agree” that: (1) Evans agrees to cooperate fully and execute any and all supplem entary docum ents and to take all additional actions which m ay be necessary or appropriate for the prosecution of the “Assigned Claim s” against GEICO. Any failure to cooperate will be considered a breach of this Agreem ent; (2) Upon resolution of the “Assigned Claim s”, Coles further agrees to pay to Evans 5% of the gross am ount of any sum s recovered from GEICO above the am ount of the total judgm ent and accrued interest; and (3) “Evans further acknowledges that Coles will retain counsel to prosecute the claim s against GEICO and that no attorney client relationship will exist between Evans and counsel retained by Coles;” Com pl. Ex. L (em phasis added). The very plain language of the written instrum ent is clear and, thus, the Court “will not disrupt agreem ents whose term s are clearly and explicitly presented in a contract.” New com Holdings, 369 F. Supp. at 70 9 (citing Am os v. Coffey , 228 Va. 8 8, 9(1984)). Moreover, as the drafter of the Assignm ent, Coles is not prejudiced by being held to the explicit term s of the Assignm ent. See id. at 11. The Assignm ent unam biguously states that Coles received from Evans full rights, claim s, and causes of action against GEICO General Insurance Com pany. Because the Assignm ent leaves no am biguity requiring clarification, Court finds there has not been an assignm ent concerning the Nondiverse Defendants, whether in their 10 derivative or individual capacity. Accordingly, in turn, the Court finds that they have been fraudulently joined. B. Coles Has “N o Possibility ” of Recovering Against the Nondiverse Defendants in State Court Because He Fails To Establish a Cause Of Action Against Them For Breach of the Im plied Covenant of Good Faith and Fair Dealing Coles alleges a breach of the im plied covenant of good faith and fair dealing against the Nondiverse Defendants. However, Coles did not include the Nondiverse Defendants in the breach of contract count in the Com plaint. Thus, the Nondiverse Defendants contend, Count II Coles’ Com plaint fails to adequately allege the existence of a contract or agreem ent between them and Coles. As a threshold m atter, Coles’ claim against the Nondiverse Defendants does not com port with Rule 8 of the Federal Rules of Civil Procedure, which requires that a com plaint allege facts showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). In support of his claim that the Nondiverse Defendants breached the im plied covenant of good faith and fair dealing, Coles argues that the Nondiverse Defendants: (i) failed to get a m edical opinion from a retained expert prior to negotiating; (ii) ignored the m edical opinion furnished by GEICO’s own retained expert stating that Coles had sustained a traum atic brain injury; and (iii) ignored the advice of GEICO’s staff counsel that Coles sustained a traum atic brain injury based upon GEICO’s retained m edical expert’s opinion. Reply Brief In Support of Plaintiff’s Motion to Rem and (“Coles’ Reply”) at 6; see Com pl. ¶¶ 59-70 . However, before addressing whether Coles has a glim m er of hope of recovering against the Nondiverse Defendants related to the breach of the im plied covenant of good faith and fair dealing, the Court m ust initially consider whether his Com plaint contains any allegations against the Nondiverse Defendants supporting the existence of a contract between Coles and the Nondiverse Defendants in their individual capacities. This Court finds that it does not. There can be no doubt that the Com plaint is devoid of any allegation of a contract between Coles and the Nondiverse Defendants. 11 As he fails to allege a contractual relationship between him self and the Nondiverse Defendants, Coles necessarily fails to state a cause of action against them for breach of the im plied covenant of good faith and fair dealing in his Com plaint. In Virginia, the elem ents of a claim for breach of the im plied covenant of good faith and fair dealing are: (1) a contractual relationship between the parties and (2) a breach of the im plied covenant. Stoney Glen, LLC v. Southern Bank & Trust Co., 944 F. Supp. 2d 460 , 466 (E.D. Va. 20 13) (internal citations om itted); see also A & E Supply Co. v. Nationw ide M ut. Fire Ins. Co., 798 F.2d 669, 676 (4th Cir. 1986) (citing Restatem ent (Second) of Contracts § 20 5 (1981)) (noting that only contracting parties in the perform ance of an existing agreem ent owe a duty of good faith); see also Shrew sbery v. Nat'l Grange M ut. Ins. Co., 183 W. Va. 322, 325 (1990 ) (finding that an insurance agent is “not party to a contract with the insured; rather, he helps the com pany procure and service the com pany's contract with the insured.”). In the absence of any allegations regarding the existence of a contract to which the Nondiverse Defendants were a party, there is no legally enforceable obligation on the Nondiverse Defendants to support a breach thereof. Additionally, to the extent that Coles argues that the Nondiverse Defendants could be held liable under a general agency theory, he is incorrect. An agent of a disclosed principal is not liable in contract or tort “where the agent's acts are those of the insurance com pany.” 3 Am .J ur.2d Insurance § 161; see Berry v. Clark, 42 Va. Cir. 1 (1997) (citing 1A M.J ., Agency, §71 (1993)) (“An agent is not in any case liable in an action ex contractu unless the credit has been given to him or he has expressly agreed to be liable . . . A duly authorized agent acting in behalf of his principal is not personally responsible on the contract when the third party knows that he acts in the nam e and on behalf of the principal . . . Where the agent contracts for a disclosed principle, credit is extended to the principal, and the benefits of the contract ate accepted by the principal, there is no personal liability on the agent.”). As an agent of GEICO, the Nondiverse Defendants cannot be held liable for any alleged contract between Evans and GEICO because GEICO is a disclosed principal. See Calkins v. Pacel Corp., No. 3:0 7- 12 CV-0 0 0 25, 20 0 7 WL 230 1626, at *2 (W.D. Va. Aug. 7, 20 0 7) (citing House v. Kirby , 355 S.E.2d 30 3, 30 5 (Va. 1987)). As a result, the Nondiverse Defendants were fraudulently joined. As an agent of GEICO, the Nondiverse Defendants cannot be held liable for any alleged contract between Evans and GEICO because GEICO is a disclosed principal. See Calkins v. Pacel Corp., No. 3:0 7-CV-0 0 0 25, 20 0 7 WL 230 1626, at *2 (W.D. Va. Aug. 7, 20 0 7) (citing House v. Kirby , 355 S.E.2d 30 3, 30 5 (Va. 1987)). In sum , there is no support for Coles’ argum ent that the Nondiverse Defendants, professional adjusters, can be held personally liable because they owed a duty to the insured—or to Coles—to exercise good faith in adjusting claim s and breached that duty in adjusting claim s during settlem ent negotiation. Thus, in the absence of a duty arising from a contractual relationship, there is sim ply nothing to support a breach of the im plied covenant of good faith and fair dealing on the part of the Nondiverse Defendants towards Coles. C. “Unfair Claim Settlem ent Practices” Under Va. Code Ann. §38.2-510 Coles argues that he sufficiently alleges a cause of action for unfair claim settlem en t practices against the Nondiverse Defendants under Va. Code Ann. §§38.2-510 (A)(4) and (6), which is part of the Unfair Trade Practices Act. Mot. to Rem and at 12. Coles’ argum ent is unavailing because the established law in Virginia is that Va. Code Ann. § 38.2-510 does not create a private cause action. See A & E Supply , 798 F.2d at 674 (finding that it is clear that the Unfair Trade Practices Act does not create a private right of action in tort); Salom on v. Transam erica Occidental Life Ins. Co., 8 0 1 F.2d at 661. Moreover, in his argum ent for rem and, Coles highlights the latter half Va. Code Ann. § 38.2-510 (B) to suggest that he m ay m aintain a cause of action pursuant thereto. However, such a reading would negate the language in the form er half expressly providing no private cause of action exists. This Court has not been able to locate one case validating Coles’ reading of the statute so as to create a private right of action nor does Coles cite any authority concerning this point. Therefore, there is no possibility that Coles would be able to establish a cause of action against the Nondiverse Defendants. 13 b. AN ALYSIS—Mo tio n s to D is m is s To show fraudulent joinder, the rem oving party m ust dem onstrate 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) (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)) (internal quotation m arks om itted). “Nom inal” parties that have been joined to the action m ust be disregarded and the court only rests upon the citizenship of the real parties to the controversy. See e.g., Ass’n v. Lee, 446 U.S. 458, 460 -61 (1980 ). As to the Nondiverse Defendants, Coles argued in his m oving papers and at the hearing that the “glim m er of hope” standard “is even m ore favorable to the plaintiff than the standard for ruling on a m otion to dism iss under Fed. R. Civ. P. 12(b)(6).” Thus, because the Court does not even find a “slight possibility of a right to relief” or a “glim m er of hope” for Coles, then he necessarily has not stated a claim for relief under Rule 12(b)(6). As to the GEICO entities, the aforem entioned analysis regarding the Nondiverse Defendants applies with equal force as to all of the GEICO entities except for GEICO General Insurance Com pany. Coles asserts that Evans assigned and transferred his rights, claim s, and causes of action against GEICO to Coles pursuant to the Assignm ent. However, Coles’ allegations, as asserted in the Com plaint, only involve one GEICO entity—GEICO General Insurance Com pany—and his claim s arise out of one autom obile insurance policy issued by GEICO General Insurance Com pany. Furtherm ore, the Assignm ent only involves GEICO General Insurance Com pany. Therefore, Plaintiff has asserted no claim , right of recovery, as to the other GEICO entities. As indicated above, a distinction em erges, however, with regards to GEICO General Insurance Com pany. That com pany is a different breed from the rest for a few reasons. To recall, in Count I, Coles alleges a breach of contract claim against GEICO. In Count II, Coles 14 alleges a claim a breach of the im plied covenant of good faith and fair dealing against GEICO. In Count III, Coles alleges a claim for unfair claim settlem ent practices against GEICO under Va. Code Ann. § 38.2-510 . In Count IV, Coles alleges a claim of bad faith failure to pay a m otor vehicle insurance claim of m ore than $ 3,50 0 .0 0 under Va. Code Ann. § 8.0 1-66.1(D)(1) against GEICO. Regarding the first claim , under Virginia law, a defendant is liable for breach of contract when the plaintiff can plead and prove: “(1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant's violation or breach of that obligation; and (3) injury or dam age to the plaintiff caused by the breach of obligation.” Sunrise Continuing Care, LLC v. W right, 277 Va. 148, 154 (20 0 9) (citing Filak v. George, 267 Va. 612, 619 (20 0 4)). Coles’ first cause of action in the Com plaint for breach of contract states a cause of action under Virginia law upon which judgm ent m ay be granted against GEICO General Insurance Com pany. The Com plaint clearly alleges that this com pany issued and entered into a valid contract for autom obile insurance with Evans. Additionally, the Com plaint sufficiently alleges, which the plain language of the Assignm ent supports, that Evans assigned his rights, claim s, and causes of action against GEICO General Insurance Com pany to Coles. Regarding the second claim , in Virginia, the elem ents of a claim for breach of the im plied covenant of good faith and fair dealing are: (1) a contractual relationship between the parties and (2) a breach of the im plied covenant. Stoney Glen, LLC v. Southern Bank & Trust Co., 944 F. Supp. 2d 460 , 466 (E.D. Va. 20 13) (internal citations om itted); see also A & E Supply Co. v. N ationw ide Mut. Fire Ins. Co., 798 F.2d 669, 676 (4th Cir. 1986) (citing Restatem ent (Second) of Contracts § 20 5 (1981)). The first prong has been m et, as the Court explained above regarding the Assignm ent of the rights and claim s under the contract for insurance from Evans to Coles. Accordingly, regarding the second prong, in this case, Coles sufficiently alleges facts which could support an im plied duty of good of good faith and fair dealing and a breach thereof by GEICO General Insurance Com pany. 15 However, regarding the third claim for unfair claim settlem ent practices under Va. Code § 38.2-510 , the aforem entioned analysis regarding the Nondiverse Defendants applies with equal force as to GEICO General Insurance Com pany. Thus, as to this claim , Coles fails to state a cause of action as to GEICO General Liability upon which judgm ent m ay be granted. Sim ilarly, as to the fourth cause of action for bad faith failure to pay a m otor vehicle insurance claim of m ore than $ 3,50 0 .0 0 under Va. Code § 8.0 1-66.1(D)(1), Coles fails to state a claim under Virginia law upon which judgm ent m ay be granted against GEICO General Insurance Com pany.2 Virginia Code Section 8.0 1-66.1(D)(1) provides: Whenever a court of proper jurisdiction finds that an insurance com pany licensed in this Com m onwealth to write insurance as defined in § 38.2-124 denies, refuses or fails to pay to its insured a claim of m ore than $ 3,50 0 in excess of the deductible, if any, under the provisions of a policy of m otor vehicle insurance issued by such com pany to the insured and it is subsequently found by the judge of a court of proper jurisdiction that such denial, refusal or failure to pay was not m ade in good faith, the com pany shall be liable to the insured in the am ount otherwise due and payable under the provisions of the insured's policy of m otor vehicle insurance, plus interest on the am ount due at double the rate provided in § 6.2-30 1 from the date that the claim was subm itted to the insurer or its authorized agent, together with reasonable attorney's fees and expenses. The express language of Va. Code Ann. § 8 .0 1-66.1(D)(1) concerns a denial or refusal to “pay to its insured” a claim of m ore than $ 3,50 0 .0 0 . Section 8.0 1-66.1(D)(1) does not include a failure or refusal to pay to a third party claim ant a claim of m ore than $ 3,50 0 .0 0 . In the case at bar, Coles does not allege a first party claim has been presented by the GEICO insured, Evans. The refusal or failure of GEICO to pay, as alleged in Plaintiff’s Com plaint, was not to GEICO’s insured, Evans, but rather to Coles. See e.g., Com pl. ¶¶ 47, 49 (“GEICO breached the policy agreem ent by failing to settle Plaintiff Craig L. Coles claim within the applicable policy lim its . . . Defendant GEICO failed to take advantage of num erous opportunities to settle Plaintiff Craig 2 If a bad faith claim is proven, Va. Code § 38.2-20 9(A) authorizes a court to award attorney’s fees and costs. A dem and under §38.2-20 9 is not an independent substantive cause of action. Salom on v. Transam . Occidental Life Ins. Co., 80 1 F.2d 659, 661 (4th Cir. 1986) (finding that a previous version of § 38.2-20 9 did not “create a cause of action, but m erely perm it[ted] the award of attorney fees where a private cause of action already exists”). Therefore, a § 38.2—20 9 claim is not pled separately; instead, it is treated as “a request in conjunction with the claim from which it arises.” Sty les v. Liberty Mutual, No. 7:0 6CV0 0 311, 20 0 6 WL 189-1-4, at # 2 (W.D. Va. J uly 7, 20 0 6). 16 Coles claim within policy lim its . . .”(em phasis added)). Moreover, Coles’ claim was not denied and the judgm ent up to the am ount of the insurance has been paid. Therefore, Coles fails to state a cause of action upon which relief m ay be granted pursuant to Rule 12(b)(6). IV. CON CLU SION Because each of the Nondiverse Defendants was fraudulently joined and diversity jurisdiction is present in this m atter, Coles’ Motion to Rem and is hereby DENIED. ECF No. 4. Accordingly, the Nondiverse Defendants’ Motion to Dism iss will be GRANTED. ECF No. 8. Further, the Court will GRANT IN PART and DENY IN PART the Motion to Dism iss filed by GEICO—specifically, the Court will GRANT the Motion to Dism iss with respect to Governm ent Em ployees Insurance Com pany; GEICO Indem nity Com pany; GEICO Casualty Com pany; GEICO Advantage Insurance Com pany; and GEICO Choice Insurance Com pany but, with respect to GEICO General Insurance Com pany, the Court will DENY the Motion as to Counts I and II of the Com plaint and GRANT the Motion as to Counts III and IV. ECF No. 8. Let the Clerk send a copy of this Mem orandum Opinion to all counsel of record. An appropriate Order shall issue. ______________________/s/_______________ James R. Spencer Senior U. S. District Judge ENTERED this 9th day of J anuary 20 15 17

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