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Garrison Property and Casualty Insurance Co. v. Cothran

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

July 14, 2016

Garrison Property and Casualty Insurance Company, Plaintiff,
Alexander C. Cothran and Candace Rickborn, Defendants.


          PATRICK MICHAEL DUFFY United States District Judge

         This matter is before the Court on Defendant Alexander Cothran's renewed motion to dismiss Defendant Candace Rickborn's cross-claim pursuant to Federal Rule of Civil Procedure 12(b)(6) (ECF No. 29). The Court grants Cothran's motion.


         This case arises from a 2012 automobile collision between Cothran and Rickborn, who was at fault. The case's primary issue is whether an insurance policy that Plaintiff Garrison Property and Casualty Insurance Company issued to Cothran provides liability benefits to Rickborn. Garrison argues the policy provides no coverage, while Rickborn contends just the opposite. The current motion, however, involves Rickborn's allegations that Cothran has breached a contract between them relating to the collision.

         The collision occurred while Cothran was driving his employer's truck. Accordingly, in 2013, Rickborn sued Cothran and his employer in South Carolina state court for negligence. State Farm Mutual Automobile Insurance Company, the employer's insurer, undertook the defense of both defendants. Meanwhile, Rickborn made a claim to Garrison seeking additional liability benefits under the policy it issued to Cothran for his personal vehicle.

         State Farm later offered Rickborn its policy's limit, $25, 000, in exchange for Rickborn agreeing not to execute against Cothran or State Farm any judgment she might obtain in her negligence suit. In addition to such forbearance, Rickborn would also have to promise that, "upon a final determination of whether any additional or secondary liability coverage and/ or underinsured motorist benefits will be paid, " she would file a satisfaction of judgment in state court. (Am. Cross-cl., Ex. C., ECF No. 10-3, Covenant Not to Execute, at ¶ 5.)

         Having received the $25, 000 from State Farm and another $7, 000 from Cothran's employer, in April 2015, Rickborn signed a covenant not to execute (the "Covenant") containing the above-mentioned obligations. Three months later, she obtained a judgment against Cothran in the amount of $208, 122.22. As Garrison's filing of this lawsuit demonstrates, Rickborn has not yet succeeded in getting Garrison to pay her any of the outstanding amount of that judgment. In her cross-claim, Rickborn alleges Cothran has refused to cooperate in her pursuit of benefits from Garrison and has instead unduly interfered with that process. She further alleges Cothran's recalcitrance has prevented her from getting her claim with Garrison resolved and from filing a satisfaction of her judgment against him. According to Rickborn, Cothran is therefore liable for breaching the Covenant's implied covenant of good faith and fair dealing.


         Garrison filed its declaratory judgment complaint against Rickborn and Cothran in October 2015. In response, Rickborn filed an answer and the breach of contract cross-claim now at issue.[1] Garrison failed to serve Cothran, and it has since voluntarily dismissed the portion of its claim seeking declaratory relief against him.

         In March 2016, Cothran moved to dismiss the cross-claim for failure to state a claim and for insufficient service of process. Rickborn filed a memorandum opposing the motion, to which Cothran replied. In May, the Court denied the motion without prejudice because the time for Rickborn to serve Cothran had not yet expired. Shortly thereafter, Cothran waived service of the cross-claim and then renewed the portion of his motion to dismiss based on Rule 12(b)(6).[2] This matter is now ripe for consideration.


         A motion to dismiss pursuant Rule 12(b)(6) for failure to state a claim "challenges the legal sufficiency" of a pleading. Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Glynn v. EDO Corp., 641 F.Supp.2d 476, 482 n.5 (D. Md. 2009) (noting that Rule 12(b)(6) applies to cross-claims). To be legally sufficient, a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2).

         Our courts use a "two-pronged approach" to assess a claim's legal sufficiency. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). First, the court identifies all of the pleading's factual allegations, assumes they are true, and construes all of their reasonable inferences in favor of the pleader. E.g., E.I. du Pont de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir. 2011); see also Iqbal, 556 U.S. at 678 ("[T]he tenet that a court must accept as true all of the allegations . . . is inapplicable to legal conclusions."). Then, it determines whether those presumed-true allegations "contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when" it contains "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). The pleading must demonstrate that the pleader's right to relief is more than a mere possibility, but it need not rise to the level of ...

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