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State Farm Fire & Casualty Insurance Co. v. Sproull

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

July 17, 2018

State Farm Fire & Casualty Insurance Company, Plaintiff,
v.
Horace Miller Sproull, III, Personal Representative of the Estate of Horace Miller Sproull, IV, Johnny R. Lee, Personal Representative of the Estate of Joshua Lee, Todd Harlan Vande Berg, Personal Representative of the Estate of Sarah Vande Berg, Felicia Ahlborg, LaDonna Campbell, Robert Henry Campbell and Shawn M. Campbell, Personal Representative of the Estate of James Robert Campbell, Defendants. Johnny R. Lee, Personal Representative of the Estate of Joshua Lee, Plaintiff,
v.
Robert Henry Campbell, LaDonna Campbell, State Farm Mutual Automobile Insurance Company, Defendants.

          OPINION AND ORDER

          A. MARVIN QUATTLEBAUM, JR. UNITED STATES DISTRICT JUDGE

         This is an action for declaratory relief brought pursuant to 28 U.S.C. § 2201 concerning claims for insurance coverage arising out of an accident. Before this Court is the Motion for Summary Judgment filed by State Farm Fire and Casualty Insurance Company (hereinafter “State Farm”)[1] brought pursuant to Rule 56 of the Federal Rules of Civil Procedure. (ECF No. 53.) The Court held a hearing on this motion on May 30, 2018, and has considered the arguments of the parties, as well as the briefing submitted and the entire record in this case. For the reasons set forth herein, this Court grants in part and denies in part the Motion as set forth herein.

         FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff State Farm filed this action on December 27, 2016, seeking a declaration regarding the rights, status and legal relationship of the parties concerning claims for insurance coverage arising out of an accident that occurred on October 11, 2015. (ECF No. 1 at ¶ 1.) The accident involved a vehicle owned by LaDonna Campbell and operated by her grandson, James Robert Campbell, deceased (“James”). The insurance policy at issue in this case was issued by State Farm to LaDonna and her husband, Robert Campbell, residents of Greenville County, South Carolina. (ECF No. 1 at ¶ 1.) Jurisdiction is premised upon 28 U.S.C. § 1332 based on the diversity of citizenship amongst the parties and the amount in controversy exceeding $75, 000.

         As alleged in the complaint, on or about October 11, 2015, James was a student at the University of South Carolina Upstate and resided in Spartanburg County at the time of the accident. (ECF No. 1 at ¶ 9.) James was driving a 2014 Ford Mustang owned by his grandmother when he was involved in a single car accident. (ECF No. 1 at ¶ 9.) Horace Miller Sproull, IV, Joshua Lee and Sarah Vande Berg, who were passengers, died in the accident. Felicia Ahlborg, who was also a passenger, was injured in the accident, but survived. James also died in the accident. (ECF No. 1 at ¶ 9.)

         State Farm Mutual Automobile Insurance Company had issued an automobile liability policy to LaDonna Campbell which covered the automobile involved in the accident. (ECF No. 1 at ¶ 10.) LaDonna and Robert Campbell were also insured under a State Farm personal liability umbrella policy, which is described in the record as PLUP S.C. Policy #4BVG578-5/Forms: FP/7950/2 (hereinafter the “PLUP S.C. Policy”). Settlements have been accepted and approved in state court as it relates to the automobile liability policy and UIM (underinsured) automobile policy limits and the claims of the guest passengers. (ECF No. 1 at ¶ 12.) Thus, it is the PLUP S.C. Policy that is at issue in this case.

         State Farm's complaint for declaratory judgment in this case makes reference to certain “claims” asserted by the Defendants Johnny R. Lee, Todd Harlan Vande Berg, and Horace Miller Sproull, III (hereinafter “Defendants”) against LaDonna Campbell and Robert Campbell for insurance coverage under the PLUP S.C. Policy. (ECF No. 1 at ¶¶ 9, 13.) In its complaint, State Farm alleges that James was not an insured under the PLUP S.C. Policy. State Farm also claims that the policy does not provide coverage for any such claims asserted against LaDonna and Robert Campbell, including any “potential claim under the Family Purpose Doctrine or under a theory of negligent entrustment in connection with the use of the vehicle by James Robert Campbell (deceased) in the above-referenced accident.” (ECF No. 1 at ¶ 13.) State Farm asserts three “causes of action” in this regard: (1) “James Robert Campbell was not covered under his grandparents' personal liability umbrella policy (PLUP);” (2) “there is no valid claim for negligent entrustment with regard to coverage under the personal liability umbrella policy issued to LaDonna Campbell and Robert Henry Campbell;” and (3) “there is no valid claim under the Family Purpose Doctrine for coverage under the personal liability umbrella policy issued to LaDonna Campbell and Robert Henry Campbell.” (ECF No. 1.) Because State Farm contends that the facts and circumstances of the automobile accident do not give rise to claims under these South Carolina legal doctrines, it asserts that it is entitled to a declaration that no coverage is available under the PLUP S.C. Policy in connection with any claims. (ECF No. 1 at ¶ 23.)

         Previously, the Honorable Mary G. Lewis granted State Farm's Motion to Consolidate the instant civil action with Johnny R. Lee, Personal Representative of the Estate of Joshua Lee v. Robert Henry Campbell et al., Civil Action No. 7:17-00234 (D.S.C) (hereinafter the “Related Action”), and denied motion to remand filed by Johnny R. Lee concerning diversity jurisdiction filed in that case. (ECF No. 46.) Additional factual background and procedural history is set forth in that opinion and order and need not be repeated here. For the purposes of this motion, the Court highlights that the Related Action was a declaratory judgment action initially filed in state court by Johnny R. Lee concerning potential additional coverage with regard to the PLUP S.C. Policy. The Related Action was subsequently removed to this Court by State Farm. The Declaratory Judgment Action filed by State Farm (No. 7:16-cv-03998) was designated by the Court as the lead case for filing purposes. (ECF No. 47.)

         On December 4, 2017, Plaintiff State Farm filed the instant Motion for Summary Judgment.[2] (ECF No. 53.) Defendants filed a Response in Opposition to Summary Judgment on February 23, 2018. (ECF No. 64.) State Farm's Reply to the Response in Opposition to the Motion for Summary Judgment was filed on March 9, 2018. (ECF No. 67.)

         STANDARDS OF REVIEW

         Summary Judgment:

         A court shall grant summary judgment if the moving party shows that there is no genuine dispute as to any material fact and the party 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 that summary judgment is appropriate. Once the moving party makes this showing, however, the opposing party may not 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 Fed.R.Civ.P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317 (1986). A litigant “cannot 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).

         Further, at the summary judgment stage, the judge is not to weigh the evidence, but rather determine if there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If no material factual disputes remain, then summary judgment should be granted against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party bears the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, at the summary judgment phase, “[t]he pertinent inquiry is whether there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Variety Stores, Inc. v. Wal-Mart Stores, Inc., No. 17-1503, 2018 WL 1916320, at *3 (4th Cir. Apr. 24, 2018)(internal citation and quotation marks omitted). “[W]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, disposition by summary judgment is appropriate.” Teamsters Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 119 (4th Cir.1996).

         Declaratory ...


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