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Rhodes v. State Farm Mutual Automobile Insurance Co.

United States District Court, D. South Carolina, Rock Hill Division

March 30, 2017

Barbara Rhodes, Plaintiff,
v.
State Farm Mutual Automobile Insurance Company and Evanston Insurance Company as successor by merger with Associated International Insurance Company, Jointly and Severally, Defendants.

          OPINION AND ORDER GRANTING MOTION TO DISMISS

          CAMERON MCGOWAN CURRIE Senior United States District Judge.

         Through this action, Plaintiff, Barbara Rhodes (“Plaintiff”), seeks a declaratory judgment that she is entitled to excess insurance coverage under an excess insurance policy issued by Defendant Evanston Insurance Company as successor by merger with Associated International Insurance Company (“Defendant”) to First Fire and Safety, LLC (“FFS”) for claims arising from a September 17, 2012 accident in which Plaintiff was injured.[1] Those claims are now pending in Rhodes v. Glenn et al., SC Com. Pl. Case No. 2014-CP-46-342 (“Underlying Action”), which has been stayed pending the outcome of this declaratory judgment action.

         The matter is before the court on Defendant's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim. ECF No. 13. For the reasons set forth below, the motion is granted.

         STANDARD

         A motion under Federal Rule of Civil Procedure 12(b)(6) should be granted only if, after accepting all well-pleaded allegations as true, it appears certain that the non-moving party (here, Plaintiff) cannot prove any set of facts in support of her claims that entitles her to relief. See Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). Although the court must take the facts in the light most favorable to the non-moving party, it “need not accept the legal conclusions [that party would draw] from the facts.” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000)). The court may also disregard any “unwarranted inferences, unreasonable conclusions, or arguments.” Id.

         The Rule 12(b)(6) standard has often been expressed as precluding dismissal unless it is certain that the non-moving party is not entitled to relief under any legal theory that plausibly could be suggested by the facts alleged. See Mylan Labs., Inc. v. Markari, 7 F.3d 1130, 1134 (4th Cir. 1993). Nonetheless, the party must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (quoted in Giarratano, 521 F.3d at 302). Thus, in applying Rule 12(b)(6), the court also applies the relevant pleading standard. Despite the liberal pleading standard of Rule 8, a party advancing a claim must include more than mere conclusory statements in support of a claim. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (court need only accept as true the complaint's factual allegations, not its legal conclusions); see also McCleary-Evans v. Maryland Dept. of Trans., 780 F.3d 582, 587 (4th Cir. 2015) (noting “Iqbal and Twombly articulated a new requirement that a complaint must allege a plausible claim for relief, thus rejecting a standard that would allow a complaint to survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some set of [undisclosed] facts to support recovery.” (emphasis and alteration in original, internal quotation marks omitted)); Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Robertson v. Sea Pines Real Estate Companies, Inc., 679 F.3d 278 (4th Cir. 2012) for proposition party need not forecast evidence sufficient to prove the elements of a claim, but must allege sufficient facts to establish those elements).

         FACTS

         On September 17, 2012, Plaintiff suffered “significant physical injuries including but not limited to her neck, lower back, arms, head/headaches and both legs” when her automobile was struck by a Chevrolet Van being driven by Murray Glenn and owned by FFS. Compl. ¶¶ 12-13. She alleges Glenn and FFS are liable because Glenn was driving “recklessly, carelessly, inattentively, and too fast for conditions” when he “disregarded a stop sign and collided with the vehicle being operated by Plaintiff.” Id. at ¶ 13.

         Plaintiff filed suit against FFS and Glenn in the underlying action, and received the policy limits of $250, 000 in mediation from a State Farm policy of automobile insurance issued to FFS. Id. at ¶ 19, 23. Plaintiff has identified three other insurance policies which she alleges should apply; two that were issued by State Farm to Glenn on his personal vehicles[2] and an excess liability policy (“excess policy”) issued to FFS by Defendant. Id. at ¶¶ 20-22.

         The excess policy[3] issued by Defendant to FFS states:

We will pay on behalf of the insured those sums in excess of the limits shown in Item 5 of the Declarations Schedule of Underlying Insurance that you become legally obligated to pay as damages because of injury to which this insurance applies, provided that the underlying insurance also applies, or would apply but for the exhaustion of its applicable Limits of insurance.

Compl. Exhibit D at 1 (ECF No. 1-1 at 28). The excess policy defines “Underlying Insurance” as “the policies or self-insurance in the Schedule of Underlying Insurance, any replacements thereof and other policies purchased or issued for newly acquired or formed organizations.” Id. at 3 (ECF No. 1-1 at 30). The Declarations page lists, under Schedule of Underlying Insurance, a Colony Insurance Company General Liability Policy. Id. at “Declarations” (ECF No. 1-1 at 25). Under “Other Underlying Insurance, Coverage: Auto Liability, ” it says “Excluded.” No State Farm policy is listed and no dollar amount provided for the Underlying Limits of Liability for Auto Liability claims.

         DISCUSSION

         Defendant raises three arguments as to why its motion to dismiss should be granted: Plaintiff is not an insured under the policy and therefore not entitled to declaratory relief; Plaintiff has not alleged the underlying primary general liability insurance policy has been exhausted; and Plaintiff is not entitled to relief because she has not obtained a judgment against FFS, the insured. ECF No. 13-1. In response, Plaintiff argues she has a right to assert a declaratory judgment action with regard to coverage issues even if she is not the named insured, the automobile policy underlying the ...


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