                             UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                             No. 11-1009


CALVIN BEN COLLINS,

                Plaintiff - Appellant,

          v.

AUTO-OWNERS INSURANCE COMPANY,

                Defendant - Appellee.



Appeal from the United States District Court for the District of
South Carolina, at Florence.   Terry L. Wooten, District Judge.
(4:09-cv-00696-TLW)


Submitted:   June 30, 2011                 Decided:   July 14, 2011


Before KING, DUNCAN, and WYNN, Circuit Judges.


Affirmed by unpublished per curiam opinion.


Stephen J. Wukela, WUKELA LAW FIRM, Florence, South Carolina,
for Appellant.     Charles R. Norris, NELSON MULLINS RILEY &
SCARBOROUGH LLP, Charleston, South Carolina, for Appellee.


Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

            Calvin Ben Collins appeals the district court’s order

granting    summary     judgment      in     favor         of    Auto-Owners       Insurance

Company    (“Auto-Owners”)          and     dismissing           Collins’s       claims     for

breach of contract and bad faith refusal to pay an insurance

claim.     On appeal, Collins has abandoned his breach of contract

claim and argues solely that the court erred in granting summary

judgment on his bad faith claim.                 Finding no error, we affirm.

            In 2002, Collins was involved in a vehicular accident

with Mark Frasier, who did not have insurance.                                  Frasier lost

consciousness       while     driving,       veered         into       oncoming     traffic,

collided with several vehicles, and caused injury to Collins and

others.       Collins       was     insured           by   Auto-Owners          under     three

uninsured motorist policies of $500,000 each.                                 Following the

accident,     Collins       made    claims            totaling        $1.5     million,    but

Auto-Owners declined to pay these claims.                              Collins ultimately

brought    suit     against       Frasier        in    South         Carolina    court;     the

litigation was captioned Collins v. Frasier.                                 Auto-Owners, as

the carrier of Collins’s uninsured motorist liability coverage,

defended the suit.

            Prior     to    trial     in     Collins            v.    Frasier,     Collins’s

attorney and attorneys for Frasier and Auto-Owners engaged in

extensive    settlement       negotiations.                Collins       demanded       several

different amounts during the course of the negotiations, but

                                             2
never    less    than    $1   million.        Auto-Owners      offered       $100,000,

although there is evidence in the record that at least one Auto-

Owners   claims       adjuster   valued    the   claim    at   $150,000.         Auto-

Owners believed that Frasier had legitimate defenses to both

liability       and   damages,    and     thus   did     not   offer     a     greater

settlement      amount.       Collins     insisted     that    Auto-Owners’       fair

evaluation of his claims was considerably higher than $100,000

and accused his insurer of bad faith.                Auto-Owners believed that

Collins’s demands were excessive, and thus would not offer a

higher amount.

             The jury ultimately returned a verdict for Frasier,

finding that he had suffered a sudden, unforeseeable incapacity

to operate his vehicle and was thus not liable to Collins.                         See

Collins v. Frasier, 662 S.E.2d 464, 465 (S.C. Ct. App. 2008).

This verdict was affirmed on appeal.                 See id.     In 2006, during

the pendency of Collins v. Frasier, Collins sued Auto-Owners in

state court for breach of contract and bad faith failure to

settle an insurance claim.           Auto-Owners removed the case to the

district court pursuant to the court’s diversity jurisdiction.

             In the district court, Collins argued that Auto-Owners

breached the insurance agreement and acted in bad faith.                           The

district court granted summary judgment in favor of Auto-Owners,

dismissed the claims, and this timely appeal followed.



                                          3
             We review de novo a district court’s order granting

summary judgment, viewing the facts and inferences in the light

most favorable to the nonmoving party.                        Rowzie v. Allstate Ins.

Co., 556 F.3d 165, 167 (4th Cir. 2009).                          Summary judgment is

appropriate when no genuine issue of material fact exists and

the moving party “is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a).             Summary judgment will be granted unless

“a   reasonable      jury    could      return     a    verdict       for       the   nonmoving

party” on the evidence presented.                       Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986).

             Under     South           Carolina        law     (which           governs        the

substantive      questions        at    issue     in    this    diversity             suit),    an

insurer   that    unreasonably           refuses       to    settle    a    claim       with   an

insured within policy limits is subject to liability in tort.

Tyger River Pine Co. v. Md. Cas. Co., 170 S.E. 346 (S.C. 1933).

“[I]f   an   insured        can   demonstrate          bad    faith        or    unreasonable

action by the insurer in processing a claim under their mutually

binding insurance contract, he can recover consequential damages

in a tort action.”           Nichols v. State Farm Mut. Auto. Ins. Co.,

306 S.E.2d 616, 619 (S.C. 1983).                   Because, under South Carolina

law, a bad faith action exists separately from an action in

contract, a bad faith claim may exist even in the absence of any

violation    of   an    insurance         contract          provision.           See    Tadlock

Painting Co. v. Md. Cas. Co., 473 S.E.2d 52, 55 (S.C. 1996).

                                             4
               The elements of a bad faith refusal to pay a claim

action are

     (1) the existence of a mutually binding contract of
     insurance between the plaintiff and the defendant;
     (2) refusal by the insurer to pay benefits due under
     the contract; (3) resulting from the insurer’s bad
     faith or unreasonable action in breach of an implied
     covenant of good faith and fair dealing arising on the
     contract; (4) causing damages to the insured.

Howard v. State Farm Mut. Auto. Ins. Co., 450 S.E.2d 582, 586

(S.C. 1994).

               We have reviewed the record, including the parties’

correspondence        and    Auto-Owners’       internal       memoranda,    and    we

cannot conclude, on these facts, that Auto-Owners acted in bad

faith.      It is clear that even before the jury’s verdict in

Collins    v.     Frasier,     Auto-Owners        had   legitimate     reservations

about    the    validity     of    Collins’s      claims.      In    contemporaneous

memoranda       and   letters       to   Collins’s       attorney,     Auto-Owners’

attorneys       and   claims      adjusters     expressed      their   belief      that

Frasier    had    meritorious       defenses      to    both   liability    and    the

extent of Collins’s damages.                While Collins (and his attorney)

clearly   believed      that      Collins   was    entitled     to   more   than   the

$100,000 offered by Auto-Owners, the fact that the parties had

different estimations of the value of a claim is not, under

South Carolina law, evidence of bad faith on the part of the

party offering the lower amount.




                                            5
             Collins       argues,   though,          that   because          internal   Auto-

Owners    documents        suggest    that       at    least       one    claims       adjuster

initially valued his claim at $150,000, Auto-Owners’ $100,000

offer represented less than its own estimate of what the claim

was worth, and was thus made in bad faith.                               We do not agree.

“If there is reasonable ground for contesting a claim, there is

no bad faith” even where the insurer makes no offer to settle.

Snyder v. State Farm Mut. Auto. Ins. Co., 586 F. Supp. 2d 453,

458 (D.S.C. 2008) (citing Crossley v. State Farm Mut. Auto. Ins.

Co., 415 S.E.2d 393, 397 (S.C. 1992)).                             Thus, because Auto-

Owners had a reasonable ground for contesting the claim, and was

not   even     obligated     to   make   the          initial      $100,000          settlement

offer, we cannot say it exercised bad faith in failing to make a

higher offer.

             We    accordingly       affirm      the    judgment          of    the    district

court.       We dispense with oral argument because the facts and

legal    contentions        are   adequately          presented          in    the    materials

before   the      court,    and   argument       would       not    aid       the    decisional

process.

                                                                                       AFFIRMED




                                             6
