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Auto-Owners Insurance Co. v. Cincinnati Insurance Co.

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

June 6, 2019

Auto-Owners Insurance Company, Plaintiff,
v.
The Cincinnati Insurance Company, Defendants.

          ORDER AND OPINION

         Plaintiff Auto-Owners Insurance Company filed this declaratory judgment action against Defendant The Cincinnati Insurance Company seeking a declaration by the court that a commercial general liability policy (“CGL”) issued by Plaintiff to Hamilton and Dorothy Williams (the “Named Insureds”) and bearing policy No. 072316-35293100-12 (the “Policy”) does not provide coverage to Defendant's insured, Melvin K. Younts, with regard to the lawsuit styled Mary Joan Ball v. Melvin K. Younts, 2016-CP-38-00295, which was tried to a verdict in the Court of Common Pleas for Orangeburg County (the “Underlying Action”). (ECF No. 1.) In the alternative, Plaintiff seeks a declaration that the Policy sits in excess over Defendant's policy issued to Younts and does “not drop down to provide coverage since the limits of [Defendant] Cincinnati's policy in question were sufficient to pay off the judgment entered against Mr. Younts in the Underlying Action.” (ECF No. 40 at 2.) In response to the foregoing, Defendant counterclaims against Plaintiff seeking (1) a declaration that Younts is an insured under the Policy and (2) contribution from Plaintiff for one-half of the $214, 000.00 used to settle the Underlying Action. (ECF No. 9 at 4 ¶ 27-8 ¶ 49.)

         This matter is before the court on the parties' cross Motions for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (ECF Nos. 40, 41.) The parties oppose each other's Motions respectively. (ECF Nos. 47, 48.) For the reasons set forth below, the court GRANTS Plaintiffs Motion for Summary Judgment and DENIES Defendant's Motion for Summary Judgment.

         I. JURISDICTION

         The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) based on Plaintiffs allegations that the action is between citizens of different states and the amount in controversy is in excess of $75, 000.00, exclusive of costs and interest. (ECF No. 1 at 1 ¶ 1-2 ¶ 4.)

         II. RELEVANT BACKGROUND TO THE PENDING MOTIONS

         In the Underlying Action, Ball alleged that she was injured on May 7, 2013 at or around 11 p.m., when she slipped and fell in the parking lot outside of The Liquid Center, one of the tenants of the Orangeburg Plaza Shopping Center. (ECF No. 40-9 at 9 ¶¶ 14-18.) “Hamilton Williams and Eston Williams, Jr., owned the portion of the Orangeburg Plaza shopping center where Liquid Center and the surrounding parking area were physically located.” (ECF No. 41-1 at 2.) “Younts, along with some family members, owned other portions of the Orangeburg Plaza shopping center that did not include Liquid Center and the surrounding parking area.” (Id.) “Ball asserted her accident resulted from the poorly maintained condition of the parking lot.” (Id. at 3.)

         On or about March 1, 2016, Ball filed the Underlying Action alleging claims against Younts, Hamilton Williams, and others[1] for premises liability, negligent and reckless conduct, and negligence per se. (ECF No. 1-2 at 2-11.) Defendant immediately provided a defense for Younts in the Underlying Action, while Plaintiff eventually agreed to provide Younts a defense pursuant to a reservation of rights. (See ECF No. 41-7.) The Underlying Action proceeded to trial on November 13, 2017, and “[t]he jury returned a verdict against Mr. Younts in the amount of $314, 001.32 but found Ms. Ball to be 50% negligent.” (ECF No. 41-1 at 4.) “Pursuant to the terms of a pre-trial agreement, [Defendant] CIC paid $214, 000 to satisfy the judgment against Mr. Younts following the verdict.” (Id.)

         On October 31, 2017, Plaintiff filed the instant declaratory judgment action in this court. (ECF No. 1.) On December 21, 2017, Defendant filed its Answer and asserted counterclaims for declaratory judgment and for contribution. (ECF No. 9.) Plaintiff answered Defendant's counterclaims on December 22, 2017. (ECF No. 11.) After engaging in discovery, each party respectively moved for summary judgment on January 18, 2019, and responded to their opponent's Motion for Summary Judgment on February 1, 2019. (See ECF Nos. 40, 41, 47, 48.)

         Thereafter, on March 5, 2019, the court heard oral argument from the parties on the instant Motions. (ECF No. 54.)

         III. LEGAL STANDARD

         A. Declaratory Judgment Actions

         Under the Declaratory Judgment Act, a district court, in a case or controversy otherwise within its jurisdiction, “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). The Supreme Court has “repeatedly characterized the Declaratory Judgment Act as ‘an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.'” Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995) (quoting Pub. Serv. Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 241 (1952)). Courts have long interpreted the Act's permissive language “to provide discretionary authority to district courts to hear declaratory judgment cases.” United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493 (4th Cir. 1998). “[A] declaratory judgment action is appropriate ‘when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.'” Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996) (quoting Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)).

         B. Summary Judgment Generally

         Summary judgment should be granted “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). A fact is “material” if proof of its existence or non-existence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). A genuine question of material fact exists where, after reviewing the record as a whole, the court finds that a reasonable jury could return a verdict for the nonmoving party. Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d 423, 434 (4th Cir. 2011).

         In ruling on a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123-24 (4th Cir. 1990). The non-moving party may not oppose a motion for summary judgment with mere allegations or denials of the movant's pleading, but instead must “set forth specific facts” demonstrating a genuine issue for trial. Fed.R.Civ.P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Anderson, 477 U.S. at 252; Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir. 1991). All that is required is that “sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” Anderson, 477 U.S. at 249. “Mere 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).

         C. General Principles of South ...


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