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Williford Roofing, Inc. v. Endurance American Specialty Insurance Co.

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

February 6, 2017




         This matter comes before the court on defendant Endurance American Specialty Insurance Company's (“Endurance”) motion for summary judgment, ECF No. 28. For the reasons set forth below, the court denies Endurance's motion for summary judgment.

         I. BACKGROUND

         This insurance coverage action arises out of an underlying state court action, Williford Roofing, Inc. v. Anne Devore a/k/a/ Annette N. Devore and James Bale, Case No. 2014-CP-10-2606 (the “Underlying Lawsuit”). Def's Mot. at 2. In the Underlying Lawsuit, Williford alleged that a homeowner, Annette Devore (“Devore”), owed Williford $5, 449 for roofing work performed on her home in James Island, South Carolina. Id. Devore filed an answer to the complaint and asserted counterclaims against Williford stemming from the rainwater that entered her home after Williford removed the shingles from her home and allegedly left it exposed to heavy rains. Pl.'s Resp., Ex. 2, Devore Counterclaims. Devore set forth causes of action for negligence, breach of express and implied warranties, breach of contract, intentional infliction of emotional distress, fraud and misrepresentation, negligent misrepresentation, and unfair trade practices. Id. Williford then filed an amended reply to the counterclaim and asserted claims of negligence, breach of contract, breach of warranties, and indemnification against James Bayle, a subcontractor who performed the actual roofing work on Devore's home in an effort to recover any damages that it owed Devore. Id. at 2. The Underlying Lawsuit eventually settled for $35, 000, and Williford incurred attorney's fees and defense costs in the amount of $29, 107.50. Id at 3.

         On April 29, 2016, Williford filed an action against Endurance American Specialty Insurance Company, Essex Insurance Company, and Canopius U.S. in the Charleston County Court of Common Pleas, which was removed to this court on June 9, 2016. ECF No. 1. Williford asserts claims against Endurance for breaching its contractual duty to defend and indemnify Williford in the Underlying Action, and acting in bad faith in failing to defend and indemnify Williford. The case was removed to this court on June 6, 2016. Endurance filed the instant motion for summary judgment on all of Williford's claims on December 14, 2016, ECF No. 28, to which Williford responded on January 16, 2017, ECF No. 38, and Endurance replied on January 23, 2017, ECF No. 42. The matter has been fully briefed and is now ripe for the court's review.

         II. STANDARD

         Summary judgment is appropriate “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). “Rule 56(c) of the Federal Rules of Civil Procedure requires that the district court enter judgment against a party who, ‘after adequate time for discovery . . . fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'” Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 190 (4th Cir. 1997) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). Any reasonable inferences are to be drawn in favor of the nonmoving party. See Webster v. U.S. Dep't of Agric., 685 F.3d 411, 421 (4th Cir. 2012). However, to defeat summary judgment, the nonmoving party must identify an error of law or a genuine issue of disputed material fact. See Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).

         Although the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson, 477 U.S. at 252; Stone, 105 F.3d at 191. Rather, “a party opposing a properly supported motion for summary judgment . . . must set forth specific facts showing that there is a genuine issue for trial.” Bouchat, 346 F.3d at 522 (internal quotations omitted). If the adverse party fails to provide evidence establishing that the factfinder could reasonably decide in his favor, then summary judgment shall be entered “regardless of ‘[a]ny proof or evidentiary requirements imposed by the substantive law.'” Id. (quoting Anderson, 477 U.S. at 248).


         Endurance moves for summary judgment on each of Williford's claims as well as for declaratory relief. Endurance insured Williford pursuant to a commercial general liability policy (“the Policy”) at the time of the incidents giving rise to Devore's counterclaims in the Underlying Action. After Williford learned of such counterclaims, it filed an insurance claim under the Policy, which Endurance investigated and notified Williford that it was denying coverage pursuant to the Roofing Limitation Endorsement contained in the Policy. Def.'s Mot., Ex. 4, Endurance Letter. The Policy states that Endurance will defend and indemnify Williford for any “occurrences” that result in “bodily injury” or “property damage.” Id., Ex. 5, Endurance Policy. Endurance contends, however, that coverage is barred under the Roofing Limitation Endorsement limitation.[1] Id. at 19. Since there is no coverage for any of the counterclaims asserted against Williford in the Underlying Action, Endurance asks the court for summary judgment on Williford's breach of contract and bad faith claims. Id. at 21.

         1. Coverage is barred under the Roofing Limitation Endorsement

         Endurance argues that coverage is barred under the Roofing Limitation Endorsement, which provides as follows:

It is hereby agreed that we do not cover claims, loss, costs or expense due to “property damage” arising out of wind, hail, snow, rain, ice or any combination of these unless a suitable waterproof temporary covering, able to withstand the normal elements and large enough to cover the area being worked on, has been properly secured in place. This cover is to be put into place any time the contractor leaves the job site. This limitation applies to any sub-contracted work performed on behalf of the insured, including any sub-contractors of sub-contractors.

Def.'s Mot., Ex. 6, Endurance Policy at 53. The applicability of the Roofing Limitation Endorsement to bar coverage for Williford turns on whether a “suitable waterproof temporary covering” had been properly secured on the Devore roof. A review of the affidavits and deposition testimony of Williford employees and Devore's counterclaims demonstrate that there is a factual dispute over whether a covering had been secured on the roof. Since the Policy does not define the term “suitable” and there is no judicially-determined definition ...

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