Melissa Avery Dumas v. ACCC Insurance Company ( 2009 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
Oct. 20, 2009
No. 09-13027 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket Nos. 09-00548-CV-WSD-1
09-00230 CV-WSD
MELISSA AVERY DUMAS,
CAMILLE J.(DUMAS) WATSON,
Plaintiffs-Appellants,
versus
ACCC INSURANCE COMPANY,
f.k.a. American Century Casualty Company,
MARK MCMASTERS,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(October 20, 2009)
Before CARNES, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
Melissa Dumas and Camille Dumas Watson appeal the judgment in favor of
American Century Casualty Company and against the Dumases’ complaint of bad
faith. The Dumases challenge the decisions of the district court to deny their
motion to remand and to dismiss Mark McMasters as a party fraudulently joined to
defeat diversity jurisdiction. We affirm.
I. BACKGROUND
Tammy Carter drove her car off a road in Decatur, Georgia, and struck and
killed John Dumas. Carter later pleaded guilty to driving under the influence of
alcohol and homicide by vehicle. At the time of the accident, Carter was insured
by American Century through an automobile policy that provided coverage for
bodily injuries of $25,000 per person and $50,000 per accident. Dumas’s
surviving spouse, Melissa, and daughter, Camille, sought to recover from Carter,
and American Century assigned McMasters, an insurance adjuster, to resolve their
claim.
The Dumases mailed to McMasters a settlement demand for Carter’s policy
limit of $25,000. The Dumases agreed to accept the policy limit and to release
American Century, but the Dumases refused to release Carter from personal
liability for John Dumas’s death. McMasters “agree[d] to the terms of [the]
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demand” and tendered to the Dumases a $25,000 check, accompanied by a release
of both American Century and Carter. American Century later asserted that
McMasters had agreed to the demand by mistake, and the Dumases sued American
Century to enforce the terms of the settlement agreement. American Century
agreed to pay the Dumases $25,000, and the Dumases dismissed their lawsuit.
The Dumases filed a complaint in a Georgia court alleging that Carter
caused the wrongful death of John Dumas. American Century retained counsel to
represent Carter and defended her in the lawsuit for over a year. The Dumases
reached an agreement with Carter in which Carter consented to a judgment for four
million dollars and assigned to the Dumases her potential claims against American
Century and the Dumases relinquished their right to collect from Carter. Carter did
not receive permission from American Century to settle the action.
American Century filed a complaint in federal court seeking a declaration
that it was not liable to the Dumases as assignees of Carter. American Century
alleged that Carter had breached her contractual duty as an insured to cooperate to
resolve a claim. American Century also alleged that Carter had colluded with the
Dumases to manufacture a claim against American Century.
The Dumases filed a complaint in a Georgia court that alleged American
Century and McMasters acted with negligence and in bad faith by accepting the
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demand of the Dumases without requiring them to relinquish all claims against
Carter. The Dumases sought as damages the difference between the consent
judgment and Carter’s policy limit.
American Century and McMasters removed the action filed by the Dumases
to a federal court based on diversity of citizenship. 28 U.S.C. § 1332. American
Century and McMasters moved to dismiss McMasters and alleged that the
Dumases fraudulently joined McMasters to defeat diversity jurisdiction. The
Dumases moved to remand the case to state court.
The district court denied the Dumases’ motion to remand. The district court
ruled that McMasters could not be held liable for negligence and dismissed him
from the action as fraudulently joined. The court concluded that McMasters, as an
adjuster, did not have a contractual relationship with Carter and did not owe her an
implied duty to act in good faith.
The district court consolidated the actions by American Century and the
Dumases, and the parties agreed to submit a stipulation of facts to resolve the
corresponding duties of American Century and Carter. The district court entered a
judgment in favor of American Century. The district court concluded that
American Century was not guilty of bad faith by failing to obtain a release for
Carter because the Dumases had stated they would not settle with Carter for the
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limits of her policy.
II. STANDARD OF REVIEW
We review de novo the denial of a motion to remand. Florence v. Crescent
Res., L.L.C., 484 F.3d 1293, 1297 (11th Cir. 2007).
III. DISCUSSION
The Dumases challenge the denial of their motion to remand their action
against McMasters and American Century to a Georgia court. The Dumases argue
that McMasters was an agent of American Century and liable for his negligence to
Carter. This argument fails.
When a defendant removes an action to federal court based on diversity of
citizenship and the plaintiff and any defendant are citizens of the state in which the
action has been filed, a district court is required to remand the action unless a party
has been fraudulently joined. Florence, 484 F.3d at 1297. To dismiss a party as
fraudulently joined, a defendant must prove that “there is no possibility the
plaintiff can establish a cause of action against the resident defendant.” Id. If the
defendant satisfies this “heavy” burden, Crowe v. Coleman, 113 F.3d 1536, 1538
(11th Cir. 1997), then the district court must dismiss the non-diverse defendant and
deny the motion to remand. Florence, 484 F.3d at 1297.
Under Georgia law, an insurance company has a duty “‘to use ordinary care
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and good faith in the handling of a claim against its insured.’” Metro. Prop. & Cas.
Ins. Co. v. Crump, 237 Ga. App. 96, 97, 513 S.E.2d 33, 34 (1999) (quoting Francis
v. Newton, 75 Ga. App. 341, 344, 43 S.E.2d 282, 284 (1947)). The obligation to
act in good faith “arises out of the relationship between the insurer and the insured
created by the contract or policy of insurance.” Id. That relationship also “creates
an independent duty, implied from the terms of the contract, between insurer and
insured” that the insurer not injure the insured through negligence or acts of bad
faith. Delancy v. St. Paul Fire & Marine Ins. Co., 947 F.2d 1536, 1545–46 (11th
Cir. 1991). Cf. J. Smith Lanier & Co. v. Se. Forge Inc., 280 Ga. 508, 510, 630
S.E.2d 404, 406–07 (2006) (ruling that insurance brokers are not held “to the same
standard of liability as that of [an] insurer” and are liable to the extent they
“breach . . . a contract to obtain insurance coverage” for an insured).
The Georgia courts have held that insurance adjusters do not share the same
relationship with an insured. Georgia courts have held that “there is no
confidential relationship between an insured and the insurer’s adjuster.” Irons v.
CSX Transp., Inc., 481 S.E.2d 575, 576 (Ga. Ct. App. 1997); Moss v. Cincinnati
Ins. Co., 154 Ga. App. 165, 166, 268 S.E.2d 676 (1980); see, e.g., Henry v.
Allstate Ins. Co., 129 Ga. App. 223, 227, 199 S.E.2d 338, 342 (1973), overruled on
other grounds by Tucker v. Chung Studio of Karate, Inc., 142 Ga. App. 818, 237
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S.E.2d 223 (1977). In the absence of privity of contract, an insurance adjuster is
not liable to an insured for a failure to settle a claim against an insured.
The Dumases, as assignees of Carter, cannot establish a cause of action
against McMasters for negligence. Carter and American Century had a contractual
relationship that required American Century to handle the claim against Carter in
good faith, but McMasters did not owe Carter an independent duty to act in good
faith. In the absence of a cause of action against McMasters, the district court
correctly dismissed him from the action and denied the Dumases’ motion to
remand the action to state court.
IV. CONCLUSION
We AFFIRM the dismissal of the Dumases’ complaint against McMasters.
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