Court Opinion

ID: 145135
Source: CourtListenerOpinion
Date Created: 2010-04-29 00:29:51+00
Date Added: 2024-06-11T09:41:04.018749
License: Public Domain

UNPUBLISHED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Affirmed by unpublished opinion.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Unpublished opinions are not binding precedent in this circuit.

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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    he

would make his best efforts to settle Stafford’s claim.                        On

November 19, 2001, Robertson allegedly advised Stafford that he

was giving his claim file over to a representative of J.B. Hunt

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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.                Stafford filed a motion to

remand.     On March 31, 2003, the district court denied Stafford’s

motion    to    remand     and   granted     Defendants’    motions    to    dismiss

Stafford’s bad faith claims.               A little more than a year later,

Stafford    filed      a   motion   to   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.     Stafford then filed this appeal.

     As        with     all      questions       implicating     subject      matter

jurisdiction, we review de novo the denial of Stafford’s motion

to remand.        See Lontz v. Tharp, 413 F.3d 435, 439 (4th Cir.

2005).     We also review de novo the district court’s rulings on

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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.        See      Nat’l      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,   a   Georgia          corporation,    and      Defendant    Custard,    an

Indiana    corporation,         and     that     Defendant      Robertson,     a     West

Virginia resident, was fraudulently joined.                       Stafford counters

that   Robertson      was      an    appropriate     defendant       whose   residency

undermines diversity jurisdiction.                 “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.”                        Hawkins v. Ford

Motor Co., 566 S.E.2d 624, 629 (W. Va. 2002).                       Consequently, the

key inquiry in this case is whether Defendants were “engaged in

the   business    of    insurance.”           See    id.      Moreover,     “[a]     self-

insured entity is not in the business of insurance.”                            Id.     It

logically follows that agents acting on behalf of a self-insured

entity are also not “engaged in the business of insurance.”                           See

id.    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.                       See id.

      Contrary    to        Stafford’s    arguments,          the     holding   of     the

Supreme   Court        of    Appeals     of       West     Virginia    in   Taylor     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.”                     See id. at 60-61; Hawkins, 566

S.E.2d at 629.            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    in    the     business       of   insurance,”        they      cannot     be   held

liable    under     the      UTPA   or    for       the   tort   of    bad      faith.      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.”                                  Roe v.

Doe, 28 F.3d 404, 407 (4th Cir. 1994).                           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   S.E.2d         at    629.     The     straightforward

application      of   this     holding        to    the   agents      of   a    self-insured

entity does not require additional precedent.                                  Moreover, the

Supreme     Court       of     Appeals        of     West     Virginia          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)).                          Thus, it was not an

                                                7
abuse of discretion for the district court to decline to certify

the question to the Supreme Court of Appeals of West Virginia.

                                                         AFFIRMED

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