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Harris v. ACCC Insurance Co.

United States District Court, M.D. Alabama, Northern Division

September 28, 2017

ROSIE HARRIS, Plaintiff,
v.
ACCC INSURANCE COMPANY, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          TERRY F. MOORER UNITED STATES MAGISTRATE JUDGE.

         This action is assigned to the undersigned magistrate judge to conduct all proceedings and order entry of judgment by consent of all the parties (Docs. 17-19, filed 9/1/16) and 28 U.S.C. § 636(c). Pending before the Court are Defendants' Motion for Summary Judgment and Memorandum Brief in Support Thereof (Doc. 26, filed 2/23/17). The motion has been fully briefed and is ripe for review. Having considered the motion and relevant law, the Court finds the motion for summary judgment is due to be GRANTED.

         I. Jurisdiction

         The district court has subject matter jurisdiction over the claims in this action pursuant to 28 U.S.C. § 1332 (diversity jurisdiction) as there is diversity of citizenship and the amount in controversy exceeds $75, 000 exclusive of interest and costs.

         The parties do not contest personal jurisdiction or venue, and there are adequate allegations to support both.

         II. Background and Procedural Background

         A. Procedural Background

Plaintiff Rosie Harris (“Harris” or “Plaintiff”) filed her original complaint in the Circuit Court of Lowndes County, Alabama on September 23, 2015. See Doc. 1, Atch 1, Complaint. Harris is an Alabama citizen. The suit alleged breach of contract and bad faith against Defendants ACCC Insurance Company, ACCC Claims, Central Alabama Insurance Agency, Inc., and Steve Cole. The allegations against all Defendants involved solely Alabama state law issues and relate to the denial of Plaintiff's insurance claim for the loss of her vehicle.

         Central Alabama Insurance Agency, Inc. and Steve Cole were both considered Alabama citizens. As such, the case was not removable due to lack of diversity in citizenship. On July 11, 2016, Harris filed a second amended complaint which added Defendant James A. Potts (“Potts”) as a defendant and asserted two Alabama state law claims against him. Specifically, the claims against Potts were Interference with a Contractual Relationship and Outrage. See Doc. 1, Atch 10, Second Amended Complaint. As part of the claims process, the ACCC Defendants hired Defendant Potts - a licensed Alabama attorney - to represent ACCC Insurance for the limited purposes obtaining an examination under oath from Plaintiff Harris. Defendant Potts sent Plaintiff numerous letters which attempted to schedule the examination under oath and required her to bring certain documents to the examination. Plaintiff refused to attend the examination. The ACCC Defendants denied her car insurance claim. A few weeks later, Plaintiff filed the instant suit.

         On August 2, 2016, shortly after Plaintiff's dismissal of Central Alabama Insurance Agency, Inc. and Steve Cole, Defendants ACC Insurance Company and ACCC Claims Service, Inc. (collectively “the ACCC Defendants”) filed a Notice of Removal in this court based on an assertion of diversity jurisdiction. See Doc. 1, generally. Specifically, the ACCC Defendants asserted diversity jurisdiction exists in this case because the amount in controversy exceeds the $75, 000 jurisdictional threshold and complete diversity of citizenship exists among the “true parties” when considering Defendant Potts has been fraudulently joined and Defendants Central Alabama Insurance Agency, Inc. and Steve Cole had previously been voluntarily dismissed.

         Shortly after removal, Defendant Potts filed a motion to dismiss based on fraudulent joinder and Plaintiff filed a motion to remand. See Docs. 5, 11. On November 28, 2016, the Court issued its memorandum opinion denying the motion to remand and granting the motion to dismiss the fraudulently joined Defendant Potts because the claims against him failed as a matter of law. See Doc. 20.

         The Court turns to the remaining defendants (ACCC Insurance Company and ACCC Claims Service) and claims (Breach of Contract and Bad Faith for Refusal to Pay). The underlying facts of this case are necessarily viewed in favor of the nonmovant plaintiff.

         B. Underlying Facts and Insurance Policy

         At some point prior to the events below, Plaintiff obtained a personal auto policy from ACCC Insurance Company. The relevant policy is attached to Defendants' summary judgment motion. See Doc. 26, Ex. 2. On August 21, 2014, [1] Plaintiff's 2005 Nissan Pathfinder had a mechanical break-down on U.S. Highway 80 around the 103-mile marker near Tyler, Alabama. A friend picked up Plaintiff to give her a ride and she was forced to abandon the vehicle on the roadside shoulder. When she returned around 3 hours later, the vehicle was gone. On August 22, 2014, Plaintiff reported the theft to the Lowndes County Sheriff's Office.[2]See Doc. 26, Ex. 1, ...


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