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Evanston Insurance Co. v. R & L Development Corporation, LLC

United States District Court, D. South Carolina, Orangeburg Division

December 15, 2014

Evanston Insurance Company, Plaintiff,
v.
R & L Development Corporation, LLC, Claflin University, and General Board of Higher Education and Ministry, Defendants.

ORDER AND OPINION

J. MICHELLE CHILDS, District Judge.

Plaintiff Evanston Insurance Company ("Evanston") filed this declaratory judgment action against Defendants R & L Development Corporation, LLC ("R&L"), Claflin University ("Claflin"), and General Board of Higher Education and Ministry ("GBHEM") seeking a declaration by the court that Evanston does not have an obligation to provide coverage to R&L under commercial general liability insurance ("CGLI") policy number CL100201331 (the "Evanston Policy"), which policy was issued by Evanston to R&L. (ECF No. 1 (referencing ECF No. 1-2).) In an order filed on April 9, 2014 (the "April Order"), the court granted Evanston's Motion for Summary Judgment and declared that (1) Evanston did not have to provide coverage to R&L under the Evanston Policy, and (2) Evanston did not have to indemnify Claflin and GBHEM (together the "University Defendants") for property damage to the James S. Thomas Science Building as contended for in an underlying lawsuit. (ECF No. 48 at 16.)

This matter is before the court by way of University Defendants' Motion to Alter or Amend Judgment (i.e., the April Order) pursuant to Fed.R.Civ.P. 59(e) (the "Rule 59(e) motion"). (ECF No. 50.) Evanston opposes University Defendants' Rule 59(e) motion asserting that it is wholly and utterly without legal merit. (ECF No. 51.) For the reasons stated below, the court DENIES University Defendants' Rule 59(e) motion.

I. RELEVANT BACKGROUND TO PENDING MOTION[1]

On September 21, 2012, Evanston filed a declaratory judgment action in this court seeking a declaration that "it is under no obligation or duty to defend and/or indemnify... R&L... under the Evanston Policy in any manner..., and for an Order that the... [University Defendants] are not entitled to any award, judgment, indemnity or relief from Evanston, ...." (ECF No. 1 at 15-16.) The paramount issue in the matter involved interpreting paragraph I.3 of the Contractor Limitation Endorsement to the Evanston Policy, which provided as follows:

CONTRACTOR LIMITATION ENDORSEMENT

I. The coverage under this policy does not apply to "bodily injury, " "property damage, " or "personal and advertising injury;"
* * *
3. Caused by, arising out of, resulting from, or in any way related to the invasion or existence of water or moisture including but not limited to mold, mildew, rot, or related deterioration of any property.

(ECF No. 1-2 at 19.)

University Defendants and R&L separately answered the Complaint on December 6, 2012. (ECF Nos. 8, 11.) On September 19, 2013, Evanston and University Defendants filed cross motions for summary judgment pursuant to Fed.R.Civ.P. 56 ("Rule 56 motion"). (ECF Nos. 28, 29.) University Defendants filed opposition to Evanston's Rule 56 motion on September 27, 2013, to which Evanston filed opposition to University Defendants' Rule 56 motion on October 7, 2013. (ECF Nos. 32, 35.) University Defendants filed a reply in support of their Rule 56 motion on October 18, 2013. (ECF No. 37.) On January 14, 2014, the court held a hearing on the pending motions. (ECF No. 46.) Thereafter, the court issued the April Order granting Evanston's Rule 56 motion and denying University Defendants' Rule 56 motion. (ECF No. 48.) In the April Order, the court provided the following reasons for finding that Evanston did not have a duty to indemnify University Defendants for the damages suffered:

Upon its review, the court considered the parties' arguments and finds that the plain meaning of the Contractor Limitation Endorsement unambiguously excludes from coverage the property damage at issue in the Underlying Lawsuit. More specifically, the court finds that the plain language of the Contractor Limitation Endorsement excludes all property damage caused by water and only identifies mold, mildew, and rot as examples of the types of property damage that are excluded. In this regard, the court finds that the Evanston Policy is not susceptible to more than one reasonable interpretation. Moreover, this finding is persuasively supported by the reasoning of the Western District of Texas, which court reviewed this specific Contractor Limitation Endorsement and reached a similar conclusion. See Charlton v. Evanston Ins. Co., 502 F.Supp.2d 553, 561 n.4 (W.D. Tex. 2007) (Further, as to Casey's claims regarding water damage, the Court agrees with Evanston that there is no coverage because the Contractor Limitation Endorsement precludes coverage for "property damage"... "caused by the existence of water or moisture."). Based on the foregoing, the court concludes that the Evanston Policy does not cover property damage caused by water at the James S. Thomas Science Building, and declares that Evanston owes no duty to indemnify the Underlying Defendants.

(ECF No. 48 at 15-16.) The court entered Judgment for Evanston on April 9, 2014. (ECF No. 49.)

On April 22, 2014, University Defendants filed the pending Rule 59(e) motion asserting that the South Carolina Supreme Court's decision in Bell v. Progressive Direct Ins. Co., 757 S.E.2d 399 (S.C. 2014), establishes that the court committed "a clear error of law which resulted in manifest injustice" to them. (ECF No. 50.) On May 12, 2014, Evanston filed a memorandum in opposition to the Rule 59(e) motion of ...


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