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Cook v. Nationwide Insurance Co.

United States District Court, Fourth Circuit

August 23, 2013

SEAN D. COOK, Plaintiff,


Paul W. Grimm United States District Judge

This Memorandum Opinion addresses:

(1) Defendants’ Motion to Dismiss the Complaint filed by Defendants Nationwide Insurance Company, Nationwide Mutual Insurance Company, Nationwide General Insurance Company, Eric C. Hitzel, Andrew B. Greenspan, and the Law Offices of Andrew B. Greenspan, ECF No. 7, and supporting Memorandum (“Defs.’ Dismissal Mem.”), ECF No. 7-1; Plaintiff Sean D. Cook’s Opposition, ECF No. 16, and supporting Memorandum (“Pl.’s Dismissal Opp’n Mem.”), ECF No. 16-1; and Defendants’ Reply (“Defs.’ Dismissal Reply”), ECF No. 22;
(2) Plaintiff’s Motion to Remand, ECF No. 11, and supporting Memorandum (“Pl.’s Remand Mem.”), ECF No. 11-1, and Defendants’ Opposition (“Defs.’ Remand Opp’n”), ECF No. 19;
(3) Defendants’ Motion to Strike Plaintiff’s Amended Complaint, ECF No. 18; Plaintiff’s Opposition, ECF No. 23; and Defendants’ Reply, ECF No. 30;
(4) Plaintiff’s Motion for Leave to File Amended Complaint, ECF No. 24, and supporting Memorandum (“Pl.’s Am. Mem.”), ECF No. 24-1, and Defendants’ Opposition (“Defs.’ Am. Opp’n”), ECF No. 29;
(5) Plaintiff’s Motion for Leave to File a Surreply to Defendants’ Supplemental Memorandum in Support of Motion to Dismiss, ECF No. 28, and supporting Memorandum (“Pl.’s Surreply Mem.”), ECF No. 28-1, and Defendants’ Opposition, ECF No. 31; and
(6) Defendants’ Motion for Leave to File an Amended Notice of Removal in Light of Plaintiff’s Request to Amend Complaint, ECF No. 35.[1]

A hearing is not necessary. See Loc. R. 105.6. For the reasons stated herein, Defendants’ Motion to Dismiss the Complaint is GRANTED with respect to the Attorney Defendants and the Law Office, and is otherwise DENIED without prejudice; Plaintiff’s Motion to Remand is DENIED; Defendants’ Motion to Strike Plaintiff’s Amended Complaint is GRANTED; Plaintiff’s Motion for Leave to File Amended Complaint is GRANTED with respect to Count I only and otherwise DENIED; Plaintiff’s Motion for Leave to File a Surreply to Defendants’ Supplemental Memorandum in Support of Motion to Dismiss is DENIED; and Defendants’ Motion for Leave to File an Amended Notice of Removal in Light of Plaintiff’s Request to Amend Complaint is DENIED as moot.


For purposes of resolving the dizzying array of pending motions, this Court accepts the facts Plaintiff alleged in his initial Complaint as true. See Aziz v. Alcoac, 658 F.3d 388, 390 (4th Cir. 2011). Plaintiff alleges several claims in connection with the Defendants’ role in the 2010 trial of an automobile tort in Maryland state court. In the underlying car accident, Antonio Alvarez was driving while intoxicated and on a suspended license when he negligently collided with the car of Plaintiff Sean Cook. Compl. ¶¶ 7-9, ECF No. 2. At that time, Alvarez was insured by any or all of Defendants Nationwide Insurance Company (“Nationwide Insurance”), Nationwide Mutual Insurance Company (“Nationwide Mutual”), and Nationwide General Insurance Company (“Nationwide General, ” and, together with Nationwide Insurance and Nationwide Mutual, “Nationwide”).[2] Id. ¶ 12. Plaintiff sustained considerable injuries and, after attempts to obtain compensation from Nationwide without litigation, Plaintiff brought a civil suit against Alvarez in the Circuit Court for Prince George’s County, Maryland. Id. ¶¶ 17, 19.

Nationwide retained Defendants Eric Hitzel and Andrew Greenspan (the “Attorney Defendants”) to represent Alvarez and trial commenced on June 21, 2010.[3] On the first day of trial, Nationwide “sent their duly authorized servant, agent and/or employee, on their behalf, to settle the matter with Plaintiff.”[4] Id. ¶ 20. Plaintiff offered to settle the case for $71, 000, an amount calculated as the $50, 000 policy limit on Alvarez’s insurance “plus $21, 000.00 in trial costs incurred as a result of the necessity of filing suit and Nationwide’s previous refusal to identify policy limits.” Id. ¶ 21. Nationwide’s agent indicated that he thought the demand was fair and reasonable and that he would recommend it to Nationwide. Id. ¶ 22. However, the Attorney Defendants subsequently informed Plaintiff that Nationwide had rejected the settlement offer and made a counteroffer of the $50, 000 policy limit plus $4, 000 in trial costs. Id. ¶ 23. Plaintiff rejected this offer and no settlement was reached. Id. ¶¶ 24-25.

Trial was completed on June 22, 2010 when a judgment was returned against Alvarez in the amount of $892, 050.52. Id. ¶ 25. Since then, Alvarez has executed an assignment to Plaintiff “of any and all rights he has against [Nationwide and the Attorney Defendants], of any and all claims that he has against them as a result of actions” alleged in the Complaint. Id. ¶ 31.

Pursuant to the assignment, Plaintiff filed suit against Nationwide, the Attorney Defendants, and the Law Office in the Circuit Court for Prince George’s County Maryland on February 19, 2013, asserting one count of “Bad Faith/Negligence” against all Defendants. Id. at 3. Defendants removed the case to this Court by Notice of Removal filed on March 22, 2013, pursuant to 28 U.S.C. §§ 1441(b) and 1446. Although it is undisputed that both Plaintiff and the Attorney Defendants are citizens of the State of Maryland, Defendants argue that this case is removable under this Court’s diversity jurisdiction, 28 U.S.C. § 1332(a)(1), because the Attorney Defendants were fraudulently joined. Notice of Removal ¶¶ 4.A-C, 8. Defendants also moved to dismiss on March 29, 2013.

Plaintiff responded by filing a motion to remand the case to state court on April 19, 2013 and filed an Amended Complaint (the “First Amended Complaint”), ECF No. 14, on May 6, 2013, thirty-eight days after Defendants moved to dismiss. On May 20, 2013, Defendants moved to strike the First Amended Complaint as untimely under Fed.R.Civ.P. 15(a). On June 6, 2013, Plaintiff filed a Motion for Leave to File Amended Complaint, which attached a complaint (the “Second Amended Complaint”) that appears to differ from both the original Complaint and the First Amended Complaint. See Second Am. Compl., ECF No. 24-3. Apparently in response to Plaintiff’s motion to amend his complaint, Defendants filed a motion for leave to file a surreply to Plaintiff’s motion to dismiss on June 21, 2013, and a motion for leave to file an amended notice of removal on August 8, 2013.[5]


As a threshold question, this Court first must consider Plaintiff’s motion to remand the case because it implicates the Court’s subject matter jurisdiction. “‘Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is the power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.’” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998) (quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506, 513 (1868)).

If, and only if, this Court holds that the motion to remand should be denied, it then can turn its attention to determining which is the operative complaint and addressing Defendants’ motion to dismiss.

A. Motion to Remand

Under 28 U.S.C. § 1332(a), federal district courts “have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between—(1) citizens of different States.” When a plaintiff files such an action in state court, the action “may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Diversity jurisdiction “applies only to cases in which the citizenship of each plaintiff is diverse from the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Further, even an action that normally would fall under this Court’s diversity jurisdiction “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which the action is brought.” 28 U.S.C. § 1441(b)(2). Whether removal is proper must “be determined according to the plaintiffs’ pleading at the time of the petition for removal.” Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939).

Under some circumstances, “[t]he ‘fraudulent joinder’ doctrine permits removal when a non-diverse party is (or has been) a defendant in the case.” Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999). As Judge Nickerson recently explained in Barlow v. John Crane Houdaille, Inc., Civ. No. WMN-12-1780, 2012 WL 5388883, at *2 (D. Md. Nov. 1, 2012):

Defendants opposing remand, when removal was based on the doctrine of fraudulent joinder, carry a very heavy burden. Mayes v. Rapoport, 198 F.3d 457, 464 (4th Cir. 1999). The defendant must show either that (1) there has been outright fraud in the plaintiff’s pleading, or (2) “there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court.” Id. (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)).

This is a high bar to clear and, to defeat a motion to remand, a plaintiff need only show a “glimmer of hope” or “a slight possibility of a right to relief.” Hartley v. CSX Transp., Inc., 187 F.3d 422, 426 (4th Cir. 1999).

B. Amending the Complaint

Under Fed.R.Civ.P. 15(a), “[a] party may amend its pleading once as a matter of course” either twenty-one days after serving it or within twenty-one days after service of a responsive pleading or a motion under Fed.R.Civ.P. 12(b), (e), or (f). Fed.R.Civ.P. 15(a). Thereafter, amending a pleading requires “the opposing party’s written consent or the court’s leave.” Fed.R.Civ.P. 15(a)(2). “The court should freely give leave when justice so requires, ” id., and should deny leave to amend only if amendment “would prejudice the opposing party, reward bad faith on the part of the moving party, or . . . amount to futility, ” MTB Servs., Inc. v. Tuckman-Barbee Constr. Co., No. RDB-12-2109, 2013 WL 1819944, at *3 (D. Md. Apr. 30, 2013); see Foman v. Davis, 371 U.S. 178, 182 (1962) (stating that the court also may deny leave if the plaintiff has amended more than once already without curing the deficiencies in the complaint); Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (“Delay alone . . . is an insufficient reason to deny the plaintiff’s motion to amend.”). Otherwise, “[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief” and the plaintiff moves to amend, the Court should grant the motion to give the plaintiff “opportunity to test his claim on the merits.” Foman, 371 U.S. at 182.

Determining whether amendment would be futile does not involve “‘an evaluation of the underlying merits of the case.’” MTB Servs., 2013 WL 1819944, at *3 (quoting Next Generation Grp. v. Sylvan Learning Ctrs., LLC., No. CCB–11–0986, 2012 WL 37397, at *3 (D. Md. Jan. 5, 2012)). Rather, “the merits of the litigation” are relevant to the Court’s ruling on a motion for leave to amend only if “a proposed amendment may clearly be seen to be futile, ” Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980), such as “if the proposed amended complaint fails to state a claim under the applicable rules and accompanying standards, ” Katyle v. Penn Nat’l Gaming Inc., 637 F.3d 462, 471 (4th Cir. 2011); see MTB Servs., 2013 WL 1819944, at *3.

C. Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(6) provides for “the dismissal of a complaint if it fails to state a claim upon which relief can be granted.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule’s purpose “‘is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.’” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Rule 8, Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim for relief, ” as “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, ” Iqbal, 556 U.S. at 678–79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663.

“Matters outside of the pleadings are generally not considered in ruling on a Rule 12 motion.” Williams v. Branker, 462 F. App’x 348, 352 (4th Cir. 2012). However, “when a defendant attaches a document to its motion to dismiss, ‘a court may consider it in determining whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the plaintiffs do not challenge its authenticity.’” Am. Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) (quoting Phillips v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir. 1999) (emendations in original)).


A. Plaintiff’s Motion to Remand

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