United States District Court, D. South Carolina, Greenville Division
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT AND GRANTING PLAINTIFF'S MOTION FOR SUMMARY
GEIGER LEWIS, UNITED STATES DISTRICT JUDGE
an insurance declaratory judgment action filed by Plaintiff
State Farm Fire and Casualty Company (State Farm) against
Defendant Morningstar Consultants, Inc. (MCI). The Court has
jurisdiction over the matter under 28 U.S.C. § 1332.
before the Court are two motions for summary judgment: one
from MCI, asking the Court to dismiss State Farm's claim,
and the other from State Farm, requesting the Court to hold
MCI's insurance claim is excluded from coverage. Having
considered the motions, the responses, the record, and the
applicable law, it is the judgment of the Court it will deny
MCI's motion and grant State Farm's motion.
FACTUAL AND PROCEDURAL HISTORY
case concerns whether State Farm has a duty to defend and
cover MCI for eight state lawsuits (the state lawsuits)
arising out of alleged property damage to certain
construction projects of which MCI allegedly provided
inspection services. In the state lawsuits, the plaintiffs
brought allegations against MCI concerning its purported
negligence in its rendering or failing to provide inspections
of the building units. Centex Homes, the builder of all of
the pertinent construction projects, hired MCI to conduct
inspections of Centex's and its subcontractor's work.
parties agree there are two insurance policies at issue here
(collectively, the two policies). The initial policy State
Farm issued to MCI covered the time period February 9, 2000,
to February 9, 2012 (the first policy). The first policy
contains the following relevant language: “This
insurance does not apply . . . to bodily injury, property
damage or personal injury due to rendering or failure to
render any professional services or treatments. This includes
. . . supervisory or inspection services[.]” ECF No. 1
other policy applies to the time period February 9, 2012 to
February 9, 2016 (the second policy). It states:
“[T]his insurance does not apply to . . . [b]odily
injury[, ] property damage[, ] or personal and advertising
injury arising out of the rendering or failure to render any
professional service or treatment. This includes . . .
[s]upervisory [and] inspection . . . activities[.]”
Id. at 7 (internal quotation marks omitted).
MCI became aware of the state lawsuits, it gave timely notice
to State Farm of them. State Farm then filed suit in this
Court seeking a declaratory judgement it owes no duty to
defend or indemnify MCI against the state lawsuits.
Thereafter, each party filed their motions for summary
agreed to allow State Farm's motion for summary judgment
to serve as its response to MCI's motion; and State Farm
has consented to having MCI's motion for summary judgment
be construed as its response to State Farm's motion. The
Court, having been fully briefed on the relevant issues, will
now adjudicate both motions.
STANDARD OF REVIEW
judgment is appropriate only “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). In deciding whether a genuine issue of
material fact exists, the evidence of the non-moving party is
to be believed and all justifiable inferences must be drawn
in his favor. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986). The moving party has the burden of
proving summary judgment is appropriate. Once the moving
party makes this showing, the opposing party is unable to
rest upon mere allegations or denials, but rather must, by
affidavits or other means permitted by the Rule, set forth
specific facts showing that there is a genuine issue for
trial. See F e d . R. Civ. P. 56; see also
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A
party asserting that a fact is genuinely disputed must
support the assertion by “citing to particular parts of
materials in the record, including depositions, documents,
electronically stored information, affidavits or
declarations, stipulations (including those made for purposes
of the motion only), admissions, interrogatory answers, or
other materials.” Fed.R.Civ.P. 56(c)(1)(A). A litigant
is unable to “create a genuine issue of material fact
through mere speculation or the building of one inference
upon another.” Beale v. Hardy, 769 F.2d 213,
214 (4th Cir. 1985). Therefore, “[m]ere unsupported
speculation . . . is not enough to defeat a summary judgment
motion.” Ennis v. Nat'l Ass'n of Bus. &
Educ. Radio, Inc., 53 F.3d 55, 62 (4th Cir. 1995).
the record taken as a whole could not lead a rational trier
of fact to find for the non-moving party, disposition by
summary judgment is appropriate.” Teamsters Joint
Council No. 83 v. Centra, Inc., 947 F.2d 115, 119 (4th
Cir. 1996). “Summary judgment is proper only when it is
clear that there is no dispute concerning either the facts of
the controversy or the inferences to be drawn from those
facts.” Pulliam Inv. Co. v. Cameo Props., 810
F.2d 1282, 1286 (4th Cir. 1987). The Court must determine
“whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of
law.” Anderson, 477 U.S. at 251-52.
South Carolina law, insurance policies are subject to the
general rules of contract construction. Nationwide Mut.
Ins. Co. v. Commercial Bank, 479 S.E.2d 524, 526 (S.C.
1996). The Court must afford policy language its plain,
ordinary, and popular meaning. Diamond State Ins. Co. v.
Homestead Indus. Inc., 456 S.E.2d 912, 915 (S.C. 1995).
The meaning of a particular word or phrase is not determined
by considering the word or phrase by itself, but by reading
the policy as a whole and considering the context and subject
matter of the insurance contract. Yarborough v. Phoenix
Mut. Life Ins. Co., 225 S.E.2d 344, 349 (S.C. 1976).
Court will look to the reasonable expectations of the insured
at the time when he entered into the contract if the terms
thereof are ambiguous or conflicting, or if the policy
contains a hidden trap or pitfall, or if the fine print takes
away that which has been given by the large print. But the
doctrine is not a rule granting substantive rights to an
insured when there is no doubt as to the meaning of policy
language.” Bell v. Progressive Direct Ins.
Co., 757 S.E.2d 399, 407 (S.C. 2014) (citation omitted)
(internal quotation marks omitted).
clear, the insurer's duty under a policy of insurance is
set forth by the terms of the policy and cannot be enlarged
by judicial construction. S.C. Ins. Co. v. White,
390 S.E.2d 471, 474 (S.C. 1990). The Court is “without
authority to alter a contract by construction or to make new
contracts for the parties.” C.A.N. Enterps., Inc.
v. S.C. Health & Human Servs. Fin. Comm'n, 373
S.E.2d 584, 587 (1988) (citation omitted). Instead, its
“duty is limited to the interpretation of the contract
made by the parties themselves[, ] regardless of its wisdom
or folly, apparent unreasonableness, or failure to guard
their rights carefully.” Id. (citation
omitted) (internal quotation marks omitted) (alteration
omitted). When ambiguous or ...