United States District Court, D. South Carolina, Beaufort Division
Lowcountry Block LLC; Lowcountry Paver LLC, and Thomas Curry, Plaintiffs,
The Cincinnati Insurance Companies, the Cincinnati Insurance Company, and the Cincinnati Insurance Group, Defendants.
ORDER AND OPINION
Richard Mark Gergel United States District Court Judge
matter is before the Court on Defendants' motion to
dismiss the amended complaint. For the reasons set forth
below, the Court grants the motion to dismiss.
Lowcountry Block, Lowcountry Paver, and Thomas Curry filed
suit in the Jasper County Court of Common Pleas on December
23, 2016, alleging Defendant Cincinnati Insurance Company
failed to pay a claim arising from a theft on September 23,
2013, as required under an insurance policy it issued to
Lowcountry Block, and asserting claims for breach of
contract, bad faith denial of insurance benefits, and a
statutory claim under South Carolina Code § 38-59-20.
The complaint identifies Lowcountry Paver and Thomas Curry as
additional Plaintiffs, and the Cincinnati Insurance Group and
the Cincinnati Insurance Companies as additional Defendants,
but those parties' relationship to the dispute is
unclear. The complaint was served on or about April 8, 2017,
and Cincinnati removed to this Court on May 3, 2017.
10, 2017, Defendants moved to dismiss the complaint.
Defendants argue that the complaint is barred by a three-year
statute of limitations, which is also an express contractual
term of the insurance policy, and that the complaint lacks
sufficient allegations to state a plausible claim for breach
of an insurance contract or for bad faith denial of insurance
benefits. In addition to opposing Defendants' motion,
Plaintiffs moved for leave to amend the complaint on June 2,
Court granted leave to amend the complaint, noting that the
original "three-page complaint is obviously
deficient." (Dkt. No. 17.) On July 24, 2017, Defendants
moved to dismiss the amended complaint.
12(b)(6) of the Federal Rules of Civil Procedure permits the
dismissal of an action if the complaint fails "to state
a claim upon which relief can be granted." Such a motion
tests the legal sufficiency of the complaint and "does
not resolve contests surrounding the facts, the merits of the
claim, or the applicability of defenses. . . . Our inquiry
then is limited to whether the allegations constitute 'a
short and plain statement of the claim showing that the
pleader is entitled to relief."' Republican
Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.
1992) (quotation marks and citation omitted). In a Rule
12(b)(6) motion, the Court is obligated to "assume the
truth of all facts alleged in the complaint and the existence
of any fact that can be proved, consistent with the
complaint's allegations." E. Shore Mkts., Inc.
v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th
Cir. 2000). However, while the Court must accept the facts in
a light most favorable to the non-moving party, it "need
not accept as true unwarranted inferences, unreasonable
conclusions, or arguments." Id
survive a motion to dismiss, the complaint must state
"enough facts to state a claim to relief that is
plausible on its face." BellAtl. Corp. v.
Twombly, 550 U.S. 544, 570(2007). Although the
requirement of plausibility does not impose a probability
requirement at this stage, the complaint must show more than
a "sheer possibility that a defendant has acted
unlawfully." Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A complaint has "facial plausibility"
where the pleading "allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Id.
South Carolina law provides a three-year limitations period
for breach of contract. S.C. Code § 15-3-530(1). South
Carolina law also allows contracting parties to set their own
limitations periods so long as the agreed period does not
shorten the statutory limitations period. Scott v.
Guardsmark Sec, 874 F.Supp. 117, 121 (D.S.C. 1995). The
insurance contract at issue here provides that actions must
commence "within 3 years after the date on which the
direct physical loss ('loss') or damaged
occurred." (Dkt. No. 18-1 at 16.) Bad faith denial of
insurance benefits is a tort claim also subject to a
three-year statute of limitations. (See Dkt. No.
21-1 (Plaintiffs conceding bad faith claims are subject to
the three-year statute of limitations provided by S.C. Code
§ 15-3-530(5)).) Thus, the applicable limitations period
in this case is three years.
however, correctly argue the limitations period accrues from
the date of the breach and not the date of the loss. See
Maher v. Tietex Corp., 500 S.E.2d 204, 207 (S.C. Ct.
App. 1998). This is as true in insurance actions as in other
breach of contract actions. See S.C. Farm Bureau Mut.
Ins. Co. v. Kelly, 547 S.E.2d 871, 873 (S.C. Ct. App.
2001); see also Dilmar Oil Co. v. Federated Mut. Ins.
Co., 129 F.3d 116, 1997 WL 702267, at *3 (4th Cir. Nov.
5, 1997) (unpublished decision applying South Carolina law).
Contractual language providing for accrual from the date of
loss is ineffective to the extent it results in a shorter
limitations period than South Carolina contract law provides.
See Johnston v. Commercial Travelers Mut. Accident Ass
'n of Am., 131 S.E.2d91, 94(S.C. 1963). Further,
"[p]ursuant to the discovery rule, a breach of contract
action accrues not on the date of the breach, but rather on
the date the aggrieved party either discovered the breach, or
could or should have discovered the breach through the
exercise of reasonable diligence." CoastalStates
Bank v. Hanover Homes of S.C, LLC, 759 S.E.2d 152, 156
(S.C. Ct. App. 2014) (citation and internal quotation marks
omitted). Tort claims are also subject to the discovery rule.
S.C. Code § 15-3-535.
defendant raises an affirmative defense, like a statute of
limitations, on a Rule 12(b)(6) motion to dismiss, all facts
necessary for the Court to draw a conclusion that the claims
are barred must appear on the face of the Complaint.
Healey v. Abadie, 143 F.Supp.3d 397, 402-03 (E.D.
Va. 2015). "In order to rule in Defendant's favor on
a statute of limitations defense brought pursuant to Rule
12(b)(6), the Complaint must conclusively foreclose a finding
that the action is not time barred." Id. at
present case, Plaintiffs amended complaint does not allege a
date of breach other than the date of loss-even though the
Court observed the same when ruling on Defendants' motion
to dismiss the original complaint. (See Dkt. No. 17
(this Court noting, "the complaint does not provide any
allegations from which a date of an alleged breach, other
than the September 23, 2013 date of loss, could be
inferred").) The only dates appearing in the complaint
are September 23, 2013 (the date of loss) and July 1, 2016
(when Plaintiffs provided certain information to Defendants,
presumably at Defendants' request). In opposition to the
motion to dismiss, Plaintiffs offer two possible accrual
dates for their claims: September 2016, when Defendants
closed the claims file upon the expiration of the statute of
limitations, or in January 2017, when the insurer refused to
re-open the claim file (January 2017 is after the filing of
the present action). ...