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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

SKIPPER et al v. ACE PROPERTY AND CASUALTY INSURANCE COMPANY et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
1:14-cv-00444 Search Pacer
Opposing Party: 
George Skipper
Court Type: 
Federal
US District Court: 
District of South Carolina
Date Filed: 
Feb 20 2014

THE COMPLAINT
1. On January 15, 2014, Plaintiffs George Skipper, Veronica Skipper, Specialty
Logging, LLC, Michael Bowers, and Harold Moors commenced a civil action in the Court of
Common Pleas of Allendale County, South Carolina. ACE was served with the Complaint
on January 24, 2014. A true and correct copy of the Complaint is attached to this Notice of
Removal as Exhibit 1. This Notice of Removal is timely filed pursuant to 28 U.S.C.
§ 1446(b) in that it is filed within thirty (30) days from the date on which ACE was first
served with the summons and Complaint.
2. The Complaint asserts various state-law causes of action and claims for relief
against ACE, all of which purportedly arise from ACE's alleged bad faith and mishandling
of personal injury and related loss of consortium claims that Plaintiffs George and Veronica
Skipper (the "Skipper Plaintiffs") asserted against ACE's insured Specialty Logging, LLC
and its insured driver Harold Moors (who together with Plaintiff Michael Bowers are the
"Specialty Logging Plaintiffs"). The Skipper Plaintiffs' underlying claims arose from a
September 22, 2010 accident involving Plaintiff George Skipper and a Specialty Logging
truck driven by Moors.
3. The Complaint also asserts various state-law causes of action and claims for
relief against Defendants Brantley Rowlen and Erin Coia, both of whom are attorneys in the
Atlanta, Georgia office of the law firm of Lewis Brisbois Bisgaard & Smith LLP, and
therefore are referred to as the "Lewis Brisbois Defendants." ACE retained Lewis Brisbois
to represent Specialty Logging's and Moors' interests and defend them against the
underlying claims.
4. The Skipper Plaintiffs' claims against ACE and the Lewis Brisbois Defendants
derive entirely from a purported assignment of claims from the Specialty Logging Plaintiffs
to the Skipper Plaintiffs. The assignment was part of a larger Settlement Agreement,
Agreement to Stay Execution of Judgment, and Springing Covenant Not to Execute between
the Skipper Plaintiffs and the Specialty Logging Plaintiffs dated January 9, 2014 (the
"Settlement Agreement and Assignment"), a copy of which is attached to the Complaint as
Exhibit B
5. Pursuant to the Settlement Agreement and Assignment, the Specialty Logging
Plaintiffs agreed to admit liability for the Skippers Plaintiffs' underlying claims and execute
a Confession of Judgment against them in the amount of $4,500,000 in exchange for the
Skipper Plaintiffs' agreement that they would not enforce, execute, or levy upon the
Specialty Logging Plaintiffs' personal assets for the judgment. Ex. B to Ex. 1, §§ 3.1, 4.3. A
copy of the Confession of Judgment is attached to the Complaint as Exhibit A. Further,
pursuant to the Confession of Judgment, the Skipper Plaintiffs agreed that their counsel
would hold the Confession of Judgment in trust until such time as the Specialty Logging
Plaintiffs failed to meet the terms or the conditions precedent to the filing of the Confession
of Judgment. Ex. A to Ex. 1,1J2.

GROUNDS FOR REMOVAL
6. The Court has diversity jurisdiction over this action pursuant to 28 U.S.C.
§ 1332(a).
7. The amount in controversy exceeds $75,000. Although the Complaint does
not pray for a specific sum, it is apparent that Plaintiffs seek to recover at least $4,500,000,
the amount of the confessed judgment. See Ex. A to Ex. 1 at 2.
8. ACE respectfully submits that the Court should deem this action as being
between citizens of different States. As further described below, the Skipper Plaintiffs have
no valid claims to assert because the Settlement Agreement and Assignment is invalid, the
Skipper Plaintiffs' claims against the Lewis Brisbois Defendants were fraudulently joined,
or, on information and belief, the assignment of claims against the Lewis Brisbois
Defendants was collusive and designed to defeat diversity jurisdiction. When the
fraudulently joined parties and/or the collusively assigned claims are excluded from the
analysis, then this action is between citizens of different States.
9. The Skipper Plaintiffs are citizens and residents of Georgia, Ex. 1 ]fl, but their
residency must be disregarded for the reasons set forth below.
10. The Specialty Logging Plaintiffs are citizens and residents of South Carolina.
Id. 1HJ2-4.
11. The Complaint does not specifically allege ACE's domicile. See id. \6. ACE
is an insurance company organized and existing under the laws of the Commonwealth of
Pennsylvania with its principal place of business in Philadelphia, Pennsylvania. Thus, for
purposes of diversity jurisdiction, ACE is a citizen of Pennsylvania. See 28 U.S.C.
§ 1332(c)(1).
12. The Lewis Brisbois Defendants are citizens and residents of Georgia,
Ex. 1 1fl[7-8, but their residency must be disregarded for the reasons set forth below.
13. "Complete diversity" exists in the absence of the Skipper Plaintiffs and the
claims they have asserted against the Lewis Brisbois Defendants. For jurisdictional
purposes, the Skipper Plaintiffs and the claims they have asserted should be disregarded for
several reasons.
14. First, the Settlement Agreement and Assignment is invalid as a matter of law.
"The Fourth Circuit, applying South Carolina law, has held that a settlement agreement
between an insured and an injured party in which the insurer remains liable while the insured
is insulated from any personal liability is presumptively unreasonable and therefore invalid."
St. Paul Travelers v. Payne, AAA F. Supp. 2d 519, 521 (D.S.C. 2006) (invalidating a
settlement agreement in which the insured confessed judgment for a specified amount in
exchange for a promise that satisfaction of the judgment will not be sought against him)
(citing Stonehenge Eng'g Corp. v. Emp'rs Ins. ofWausau, 201 F.3d 296, 306 (4th Cir. 2000)
(holding as unreasonable and invalid a confession of judgment because "an insured should
not be allowed to seek indemnity from a liability carrier for 'amounts that the insured does
not expect to pay out of its own resources'") (quoting Hitt v. Cox, 737 F.2d 421, 426 (4th
Cir. 1984))). This Court recently applied this rule to invalidate a settlement agreement and
assignment under circumstances virtually identical to this case. See Peak Prop. & Cas. Ins.
Corp. v. Davis, 2013 WL 1182679, *2-4 (D.S.C. Mar. 21, 2013) (Anderson, J.) (included in
Exhibit 2), overruling objections to Magistrate Judge's Report and Recommendation 2013
WL 1182683 (D.S.C. Jan. 22, 2013) (Gossett, Mag. J.) (included in Exhibit 2).
15. Because the Settlement Agreement and Assignment is invalid, the Skipper
Plaintiffs have no claims to assert against the Lewis Brisbois Defendants (or ACE), and
therefore cannot possibly recover against them. As such, the Skipper Plaintiffs and the
claims they have asserted against ACE and the Lewis Brisbois Defendants have been
"fraudulently joined." See Hartley v. CSX Transp., Inc., 187 F.3d 422, 424 (4th Cir. 1999)
("To show fraudulent joinder, the removing party must demonstrate either (1) outright fraud
in the plaintiffs pleading of jurisdictional facts or (2) 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.").1
16. Second, even if the Settlement Agreement and Assignment is not invalid in its
entirety under the above-cited authorities, the Skipper Plaintiffs cannot possibly recover from
the Lewis Brisbois Defendants. The Court therefore should disregard the fact that the
Skipper Plaintiffs and the Lewis Brisbois Defendants are non-diverse. The Skipper
Plaintiffs' first cause of action against the Lewis Brisbois Defendants is for legal malpractice.
Ex. 1 fflf 58-63. That claim is not assignable under South Carolina law. See, e.g., Pavilion
Dev. Corp. v. Nexsen Pruet, LLC, 2013 WL 5925732, *4-9 (S.C. Com. PI. Oct. 9, 2013)
(conducting an exhaustive multi-state survey and holding that the assignment of a legal
malpractice claim between adversaries in the litigation in which the alleged malpractice arose
was void as against public policy) (included in Exhibit 2).
17. The Skipper Plaintiffs' second cause of action against the Lewis Brisbois
Defendants is for breach of fiduciary duty. Ex. 1 fflf 64-69. That claim provides no more
basis for relief than the invalidly assigned legal malpractice claim because the South
Carolina Supreme Court has held that a claim for breach of fiduciary duty is duplicative of a
legal malpractice claim where, as in this case, the duty allegedly breached arises from the
attorney-client relationship. RFTMgmt. Co., L.L.C v. Tinsley & Adams L.L.P., 732 S.E.2d
166, 173 (S.C. 2012).
18. All of the Skipper Plaintiffs' remaining claims against the Lewis Brisbois
Defendants are an obvious sham, such as their claim for breach of an implied duty of
workmanlike service, which no South Carolina court has ever applied to lawyers, and their
claim for barratry, which plainly does not fit the facts alleged in the Complaint.
19. Third, even if the claims against the Lewis Brisbois Defendants were not
fraudulently joined for the reasons stated above, ACE alleges on information and belief that
the partial assignment to the Skipper Plaintiffs of claims against the Lewis Brisbois
Defendants was collusive and designed to destroy diversity jurisdiction. As such, the
assigned claims may be disregarded for jurisdictional purposes. See, e.g., Carter v. Seaboard
Coast Line R. Co., 318 F. Supp. 368, 373-74 (D.S.C. 1970). The Court may disregard the
assignment even if it is valid under state law, and even if the Court does not find that the
claims against the Lewis Brisbois Defendants were "fraudulently joined." See Grassi v.
Ciba-Geigy, Ltd., 894 F.2d 181, 184, 186 (5th Cir. 1990). To the extent Plaintiffs challenge
removal, ACE reserves the right to seek jurisdictional discovery into the intended purpose of
the assignment of claims against, and joinder of, the Lewis Brisbois Defendants.
20. Fourth, the Court may ignore the residency of the Skipper Plaintiffs and/or the
Lewis Brisbois Defendants under the doctrine of procedural or fraudulent "misjoinder." The
Skipper Plaintiffs and/or the Lewis Brisbois Defendants were joined in an effort to defeat
diversity. The claims asserted against the Lewis Brisbois Defendants have no real
connection to the claims asserted against ACE.
21. Fifth, even if the Court determines that the Settlement Agreement and
Assignment is valid and that there was no fraudulent joinder or collusion to defeat diversity
jurisdiction, ACE respectfully submits that the Court should drop the Lewis Brisbois
Defendants from this action, or sever any validly asserted claims against them, pursuant to
the Court's broad discretion under F.R.Civ.P. 21. The Lewis Brisbois Defendants are not
indispensable parties to this action.
22. This Notice of Removal complies with the requirements of 28 U.S.C. §§ 1441
and 1446. All Defendants consent to removal and none of the Defendants is a citizen of
South Carolina. See Exhibit 3 (Lewis Brisbois Defendants' notice of consent to removal)
This Notice of Removal has been timely filed within thirty (30) days of service of the
Complaint upon ACE.
23. The Aiken Division of the United States District Court for the District of
South Carolina is the proper venue because it is the "district and division" embracing
Allendale County. 28 U.S.C. §§ 1441(a), 121(4)
24. ACE submits this Notice of Removal without waiving any defenses to the
claims asserted by Plaintiffs or conceding that Plaintiffs have pled claims upon which relief
can be granted.
WHEREFORE, ACE prays that the above action now pending against it in the Court
of Common Pleas for Allendale County, South Carolina, be removed therefrom to this Court,
that this Court exercise jurisdiction over this action, and that this Court grant such other
further relief as this Court deems just and necessary.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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