2:15-cv-00040
E.D. Va.Oct 21, 2015Background
- Continental Casualty issued a professional liability policy to Dr. Glennetta B. White (and Spa Dentistry) covering claims from July 22, 2011–July 22, 2012. Plaintiff Continental defended under reservation of rights after a malpractice suit by Kwanza Al‑Amin in Virginia state court.
- Continental alleges Dr. White repeatedly failed to cooperate: certified/reservation-of-rights letters (including one signed for on July 18, 2013), unsuccessful calls, and a January 31, 2014 phone call in which Dr. White said she would sign a non‑consent form but never returned it. Continental asserts it reasonably attempted contact.
- Continental filed this federal suit seeking (1) breach of contract for failure to cooperate and (2) declaratory judgment relieving Continental of duty to defend/indemnify. Al‑Amin intervened and moved to dismiss.
- Al‑Amin argued Continental did not plead willful noncooperation and further that Va. Code § 38.2‑2226 (statutory notice to claimants of reservation of rights) barred Continental’s coverage defense. He initially asked the court to decline jurisdiction under Nautilus but withdrew that argument at hearing.
- The court accepted the complaint allegations as true for Rule 12(b)(6) purposes, found both parties’ filings timely, and limited the remaining questions to timeliness, sufficiency of the breach claim, and applicability of Va. Code § 38.2‑2226.
Issues
| Issue | Plaintiff's Argument (Continental) | Defendant's Argument (Al‑Amin) | Held |
|---|---|---|---|
| Timeliness of filings | Opposition timely under Fed. R. Civ. P. 6(d) (14 days) | Motion to dismiss timely though filed with answer; Opposition untimely under local rule | Both filings were timely (12(b)(6) motion may be filed with responsive pleading; 6(d) extends local 11‑day period to 14 days) |
| Sufficiency of breach‑of‑contract (willful noncooperation) claim | Allegations of multiple unreturned reservation‑of‑rights letters, a signed delivery, and an actual phone contact showing Dr. White promised non‑consent but did not act suffice to plead willful noncooperation and reasonable insurer efforts | Alleged facts are conclusory; Continental must plead an affirmative uncooperative act and show more robust efforts to contact insured | Complaint states a plausible breach: facts alleged (signed letter, phone contact, pattern of nonresponse) are sufficient to plead willful noncooperation and reasonable insurer efforts |
| Applicability of Va. Code § 38.2‑2226 (notice to claimant) | Cannot decide on 12(b)(6); factual record needed to show whether Continental notified claimant within 45 days of reservation of rights | Argues Continental waived its defense by failing to notify Al‑Amin within 45 days after the July 18, 2013 reservation letter | Court held § 38.2‑2226 may apply and could bar the defense, but record is insufficient on a motion to dismiss; issue reserved for summary judgment with evidence |
| Decline of federal jurisdiction (Nautilus factors) | N/A (Continental litigates in federal court) | Asked court to decline jurisdiction in favor of state court originally, then withdrew the request because state court stayed proceedings | Motion to decline jurisdiction withdrawn; court did not address Nautilus factors |
Key Cases Cited
- Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250 (4th Cir. 2009) (Rule 12(b)(6) pleading standard; court may consider complaint and incorporated documents)
- Continental Casualty Co. v. Burton, 795 F.2d 1187 (4th Cir. 1986) (under Virginia law insurer must prove insured willfully breached cooperation clause and insurer made reasonable efforts to secure cooperation)
- Angstadt v. Atlantic Mutual Ins. Co., 492 S.E.2d 118 (Va. 1997) (willful noncooperation may be inferred from a single egregious refusal to cooperate)
- Cooper v. Employers Mutual Liability Ins. Co., 103 S.E.2d 210 (Va. 1958) (willful noncooperation may be found from a pattern of failures to notify, forward process, or cooperate in litigation)
- Filak v. George, 594 S.E.2d 610 (Va. 2004) (elements of breach of contract under Virginia law)
- E.I. du Pont de Nemours & Co. v. Kolon Industries, Inc., 637 F.3d 435 (4th Cir. 2011) (court may consider documents attached to or incorporated into the complaint)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions unsupported by factual allegations are not entitled to the assumption of truth)