United States District Court, D. South Carolina, Charleston Division
CHURCH CREEK CONSTRUCTION, LLC, KEVIN MOLONY, and LARRY ELSEY, as Assignor Plaintiffs,
MT. HAWLEY INSURANCE COMPANY, ESSEX INSURANCE COMPANY, EVANSTON INSURANCE COMPANY, WOOD SPECIAL RISK BROKERS, LLC, and INSURANCE OFFICE OF AMERICA, INC., Defendants. and MEPKIN PLACE HOMEOWNERS ASSOCIATION, LLC, LAVONIA MITCHELL individually and on behalf of all other similarly Situation, ANDREW BLALOCK, KELLY BLALOCK, BEN YASCHIK, MARTIN YASCHIK, S. EMORY BULL HIOTT, NORMA F. CALLEN, FARZAN SOODAVAR AVINA ADAMIVAT, ROBERT P. LEDFORD, JR., CHRISTOPHER MIMS, PATRICK J. MALLARD, ERIC CROTTS, MARY GRAY, NICHOLAS HARGREAVES, JANE F. MITCHELL, JOSHUA SEARS, JULIUS MCMILLAN, LINDA MCMILLAN, STEPHANIE SLAN, and PATRICK J. MALLARD, as Assignee Plaintiffs, Plaintiffs,
C. NORTON, UNITED STATES DISTRICT JUDGE
following matter is before the court on defendant Mt. Hawley
Insurance Company's (“Mt. Hawley”) motion for
partial dismissal and/or a more definitive statement, ECF No.
67, and defendants Essex Insurance Company
(“Essex”) and Evanston Insurance Company's
“Evanston”) motion for partial dismissal and/or a
more definitive statement, ECF No. 78. For the reasons set
forth below, the court grants the motions, dismissing Counts
II, IV, and V without prejudice and finding the issues of a
more definitive statement as moot.
case arises out of an insurance coverage dispute for an
underlying state court judgment. Assignor plaintiff Church
Creek Construction LLC is owned by assignor plaintiffs Kevin
Molony and Larry Elsey (collective, “Church
Creek”). Church Creek constructed Mepkin Place, a
residential condominium complex. Assignee plaintiffs are
Mepkin Place Homeowner's Association, LLC and individual
condominium owners. Defendants have all provided insurance
services to Church Creek.
plaintiffs filed a lawsuit in state court alleging
construction deficiencies at Mepkin Place against Church
Creek, and judgment for $33, 802, 788.00 was entered against
Church Creek on July 22, 2016 (“underlying
judgment”). Assignee plaintiffs then filed a
declaratory action suit in state court against Church Creek,
Mt. Hawley, and defendant Wood Special Risk Brokers, LLC
(“WSRB”) to determine whether Mt. Hawley was
responsible for providing insurance coverage for the
underlying judgment.Mt. Hawley removed the declaratory action
to this court.
Hawley initially challenged assignee plaintiffs' standing
to bring this action because they had submitted no proof that
Church Creek, the insured, had assigned its rights to pursue
such an action to assignee plaintiffs. As a result, the
assignee plaintiffs sought leave to file an amended complaint
to realign Church Creek as assignor plaintiffs (together with
assignee plaintiffs, “plaintiffs”). The court
held a hearing on the matter and allowed assignee plaintiffs
to amend their complaint. However, the court limited
discovery at that time to a statute of limitations issue
raised by Mt. Hawley. Then plaintiffs filed another motion to
amend the complaint so they could add additional defendant
insurance companies and eliminate their duty to defend claim,
which plaintiffs argue would resolve the statute of
limitations issue. The court held a hearing on this motion
and allowed the amendment, which added Evanston as a
second amended complaint, now the operative complaint, levies
the following claims: (1) a declaratory judgment declaring
plaintiffs are entitled to coverage under Mt. Hawley's
and Evanston's insurance policies for the full amount of
coverage up to the amount of the underlying judgment; (2)
another declaratory judgment declaring that Mt. Hawley and
Evanston are responsible for the entire amount of the
underlying judgment because they negligently failed to settle
the underlying claim; (3) a bad faith claim against Mt.
Hawley and Evanston for denying coverage; (4) a violation of
the South Carolina Unfair Trade Practices Act
(“SCUTPA”); (5) reformation of the insurance
policies so that plaintiffs are provided coverage in the
event the court finds no coverage; and (6) negligence against
WSRB and defendant Insurance Office of America, Inc. Mt.
Hawley filed a motion for partial dismissal and/or for a more
definite statement on November 16, 2018. ECF No. 67.
Plaintiffs filed their response, ECF No. 80, and Mt. Hawley
filed a reply, ECF No. 81. Evanston also filed a motion for
partial dismissal and/or for a more definite statement on
December 19, 2018. ECF No. 78. Plaintiffs filed their
response, ECF No. 82, and Evanston replied, ECF No. 83. The
court held a hearing on the motions on February 12, 2019. The
motions are ripe for review.
12(b)(6) motion for failure to state a claim upon which
relief can be granted “challenges the legal sufficiency
of a complaint.” Francis v. Giacomelli, 588
F.3d 186, 192 (4th Cir. 2009) (citations omitted); see
also Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992) (“A motion to dismiss under Rule
12(b)(6) . . . does not resolve contests surrounding the
facts, the merits of a claim, or the applicability of
defenses.”). To be legally sufficient, a pleading must
contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion should not be
granted unless it appears certain that the plaintiff can
prove no set of facts that would support his claim and would
entitle him to relief. Mylan Labs., Inc. v. Matkari,
7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule
12(b)(6) motion, the court should accept all well-pleaded
allegations as true and should view the complaint in a light
most favorable to the plaintiff. Ostrzenski v.
Seigel, 177 F.3d 245, 251 (4th Cir.1999); Mylan
Labs., Inc., 7 F.3d at 1134. “To survive a motion
to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
Motion for Dismissal of Counts II, IV, and V
and Mt. Hawley (for the purposes of this order,
“defendants”) argue that Counts II, IV, and V
must be dismissed. The court agrees.
Declaratory Judgment for Unreasonable Failure to Settle
Count II, plaintiffs allege that defendants were given the
opportunity to settle the claim for the underlying judgment
but were “negligent, careless and reckless in their
conduct and unreasonably failed and refused to provide
coverage for, participate in and/or settle the claims for an
amount within policy limits.” Second Am. Comp. ¶
16. As a result, plaintiffs seek a ...