United States District Court, S.D. West Virginia, Charleston
ROBIN L. HINKLE, individually and on behalf of those similarly situated, Plaintiff,
CASEY JOE MATTHEWS; TIMOTHY MAY and CONNIE MAY, husband and wife; SANTANDER CONSUMER, USA, INC., an Illinois corporation; SAFE-GUARD PRODUCTS INTERNATIONAL, LLC, a Georgia limited liability company; and JOHNNY HINKLE, Defendants.
MEMORANDUM OPINION AND ORDER
T. Copenhaver, Jr. Senior United States District Judge.
is defendant Safe-Guard Products International, LLC's
motion for summary judgment filed November 8, 2016.
Robin L. Hinkle is a resident of Delbarton, West Virginia.
Am. Compl. ¶ 1. Defendant Safe-Guard Products
International, LLC ("Safe-Guard") is a Georgia
limited liability company that offers Guaranteed Auto
Protection ("GAP") insurance to vehicle purchasers
in West Virginia. Id. ¶¶ 5, 17. In the
event of an accident resulting in the total loss of a
vehicle, GAP insurance is generally used to cover any
"gap" between the purchaser's outstanding
balance owed on the automobile and the amount paid by the
purchaser's primary insurer. See id. ¶ 26
and see Mot. Summary Judgment, "ECF # 73,"
Ex. B, 1.
2006, Johnny and Robin Hinkle entered into a "Retail
Installment Contract and Security Agreement" for the
purchase of a vehicle from C&O Motors, Inc. of Saint
Albans, West Virginia. Id. ¶ 25. The vehicle
cost $20, 552.70, of which the Hinkles financed $19, 718.20
over a period of six years with an interest rate of 14.25%.
See ECF # 73, Ex. A, 2. The Hinkles agreed to
payment of monthly installments of $411.38, with a 5% late
charge if a payment was more than ten days late. Id.
of that same transaction, the Hinkles purchased GAP insurance
from Safe-Guard for $4 95.00, which they agreed to pay as
part of the Retail Installment Contract and Security
Agreement. Id. The terms of the GAP insurance
the Dealer/Assignee agrees to cancel a portion of the
Customer's indebtedness in the event of a Total Loss of
the Vehicle as defined herein. The Deficiency Waiver Addendum
will waive the amount equal to the Unpaid Net Balance less
the Actual Cash Value (ACV) of the vehicle, both as defined
herein . . . [.]
Summary Judgment, "ECF # 73," Ex. B, 1.
"Unpaid Net Balance" is defined as excluding,
inter alia, "any and all . . .late charges,
delinquent payments, deferred payments, uncollected service
charges, . . . and penalty fees . . . [.]" Id.
The GAP insurance addendum was sold to the Hinkles by C&O
salesman Paul L. Waugh, who, according to Ms. Hinkle's
affidavit, "led [Mr. and Ms. Hinkle] to believe that
[they] were purchasing an insurance policy that would protect
[them] from continuing to owe any outstanding balance still
owed on the loan after a total loss, whatever the
circumstances." Plaintiff's Mem. in Opposition,
"ECF # 77," Ex. B, 3. Ms. Hinkle reviewed the Gap
insurance addendum, which named both of the Hinkles, at the
time of purchase and it was properly signed by Mr. Hinkle and
the dealer. ECF # 73 Ex. B, 1; Ex. C, 43.
after purchasing the automobile, the Hinkles began falling
behind on their payment schedule and accruing significant
late fees. ECF # 73, Ex. C, 52-53. Approximately five years
after the purchase, there was an accident which resulted in
the Hinkles' automobile being considered a total loss.
Based on the estimated cash value of the automobile, Ms.
Hinkle's insurer, State Farm, issued a check in the
amount of $7, 285.00 to Santander Consumer USA Inc.
("Santander"), the lienholder on the automobile.
ECF # 73, Ex. D, 1. At the time of the accident, Hinkle had a
payoff balance of $11, 983.81, which included late charges
and deferred payments. Am. Compl. ¶ 29; ECF # 73, Ex. E.
When Santander sought to collect the remaining $4, 698.81 not
covered by State Farm's payment, Hinkle tried to invoke
her Safe-Guard policy. Am. Compl. ¶¶ 29, 30.
Safe-Guard denied her claim, evaluating her
"Re-Amortized Balance at Date of Loss" at only $5,
283.68 due to "inconsistencies in [Hinkle's] payment
history, such as late payments[.]" ECF # 73, Ex. E. The
State Farm payoff would have more than covered this amount,
with a leftover "Negative Gap" of $2, 001.32.
Id. Accordingly, Safe-Guard found that no coverage
filed her original complaint in the Circuit Court of Mingo
County, bringing claims for breach of contract, common law
bad faith, and violations of the West Virginia Unfair Trade
Practices Act ("WVUTPA"), as well as separate
counts for a declaratory judgment to recover benefits under
the GAP contract and punitive damages. The complaint named
Safe-Guard as a defendant, along with Santander (the assignee
of plaintiff's car loan), three individuals involved in
the car accident, and Johnny Hinkle. On October 16, 2014, the
circuit court denied Santander's motion for summary
judgment as to the breach of contract, bad faith, WVUTPA, and
punitive damages claims. See ECF # 77, Ex. A.
March 11, 2015, the West Virginia Supreme Court of Appeals
affirmed the circuit court's finding that the GAP policy
was insurance. See State of West Virginia, ex rel.
Safe-Guard Products Int'l, LLC, v. Thompson, 235
W.Va. 197 (2015).
October 9, 2015, the case was removed to this court pursuant
to the Class Action Fairness Act, 28 U.S.C. § 1453.
Plaintiff filed her amended class action complaint on
December 23, 2015. See ECF # 25. The new complaint
contained class action claims for violations of the West
Virginia Consumer Credit and Protection Act
("WVCCPA"), which Safe-Guard moved to dismiss. The
court dismissed those claims in an order entered on August
31, 2018. See ECF # 121. Safe-Guard now seeks
summary judgment on the remaining claims for breach of
contract, common law bad faith, unfair trade practices under
the WVUTPA, declaratory judgment to recover benefits under
the GAP contract, and punitive damages.
judgment is appropriate only "if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). "Material" facts are those
necessary to establish the elements of a party's cause of
action. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986); see also News & Observer Publ'g
Co. v. Raleigh-Durham Airport Auth., 597 F.3d 570, 576
(4th Cir. 2010). A "genuine" dispute of material
fact exists if, in viewing the record and all reasonable
inferences drawn therefrom in a light most favorable ...