United States District Court, D. South Carolina, Florence Division
JAMES DEFEO; and COASTAL ELITE, LLC, d/b/a WOK ON THE BEACH, Plaintiffs,
BLACKBOARD INSURANCE COMPANY; and YORK RISK SERVICES GROUP, INC. Defendants.
BRYAN HARWELL CHIEF UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant York Risk Services
Group, Inc.'s (“York”) motion to dismiss
under Rule 12(b)(6) of the Federal Rules of Civil Procedure.
ECF No. 6. For the reasons set forth below, the Court grants
York's motion to dismiss, and dismisses with prejudice
Plaintiffs' claim for breach of contract as to York.
Allegations and Procedural Background
case arises out of an insurer's refusal to pay a claim
made under a policy by its insured. See, generally,
ECF No. 1-2 (“Compl.”). Plaintiff James DeFeo is
a citizen and resident of Horry County, South Carolina.
Id. ¶ 1. Plaintiff Coastal Elite, LLC, d/b/a
Wok on the Beach (“Coastal Elite, ” collectively
with James DeFeo, “Plaintiffs”) is a South
Carolina corporation with its principal place of business in
Horry County, South Carolina. Id. ¶ 2. Wok on
the Beach is a restaurant in Horry County, South Carolina.
Id. ¶¶ 2, 10. Defendant Blackboard
Insurance Company (“Blackboard ”) i s a D e l a w
a r e corporation with its principal place of business in New
York. Id. ¶ 3, ECF No. 1 ¶ 4. Blackboard
is “engaged in the writing of insurance . . . .”
Compl. ¶ 3. York is a Pennsylvania company, with its
principal place of business in Pennsylvania. ECF No. 1 ¶
5. York provides claims review and loss mitigation services
to insurers doing business in South Carolina. Compl. ¶
August 20, 2018, Blackboard issued a business insurance
policy to Coastal Elite. Compl ¶ 7, ECF No. 4-1 at 1.
The policy ran from August 20, 2018 to August 20, 2019, and
provided coverage for, inter alia, loss of income,
spoilage, and equipment breakdown. Compl. ¶¶ 7-8,
ECF No. 4-1. Plaintiffs made the first premium payment
approximately August 20, 2018. Compl. ¶ 8.
September 11, 2018, in preparation for the anticipated
landfall of Hurricane Florence, the Governor of South
Carolina issued a mandatory evacuation. Id. ¶
9. Hurricane Florence made landfall in Horry County
approximately three days later. Id. Due to the
evacuation, Plaintiffs closed Wok on the Beach on September
11, 2018; they did not reopen until September 25, 2018, when
power was restored, debris cleaned up, equipment repaired,
and the restaurant made safe for staff and customers.
Id. ¶ 10. On September 26, 2018, Plaintiffs
submitted a claim under the policy to Blackboard for,
inter alia, loss of income, spoilage, equipment
breakdown, and advertising. Id. ¶ 11. On
October 4, 2018, the claim was denied. Id.
Plaintiffs allege the denial was without basis. Id.
April 9, 2019, Plaintiffs filed the instant lawsuit in the
Court of Common Pleas for Horry County, South Carolina.
Compl. In their Complaint, Plaintiffs brought causes of
action against both Blackboard and York for breach of
contract and bad faith refusal to pay first party benefits
under an insurance policy. Id. Both claims arose out
of the denial of Plaintiff's claim for benefits. See
Id. On May 31, 2019, Blackboard removed the action to
this Court. ECF No. 1.
7, 2019, York filed a motion to dismiss seeking dismissal of
Plaintiffs' breach of contract cause of action as to
York. ECF No. 6. Plaintiffs responded on July 5, 2019, ECF
No. 15, and York replied on July 12, 2019, ECF No. 16.
Accordingly, this matter is now ripe before the Court.
motion filed under Rule 12(b)(6) challenges the legal
sufficiency of a Complaint . . . considered with the
assumption that the facts alleged are true[.]”
Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir.
2009) (citations omitted). The Court measures legal
sufficiency by determining whether the Complaint meets the
Rule 8 standards for a pleading. Id. Rule 8
requires, in pertinent part, that a claim for relief contain
a “statement of the claim showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a). “Each
allegation must be simple, concise, and direct.”
reviewing a motion under Rule 12(b)(6), the Court must
“accept all well-pleaded allegations in the
plaintiff's Complaint as true and draw all reasonable
factual inferences from those facts in the plaintiff's
favor[.]” Edwards v. City of Goldsboro, 178
F.3d 231, 244 (4th Cir. 1999). However, the Court need not
accept as true allegations that are contradicted by exhibits
to the Complaint. Veney v. Wyche, 293 F.3d 726, 730
(4th Cir. 2002) (citation omitted). To survive a Rule
12(b)(6) motion to dismiss, the plaintiff's
“[f]actual allegations must be enough to raise a right
to relief above the speculative level.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“[O]nce a claim has been stated adequately, it may be
supported by showing any set of facts consistent with the
allegations in the Complaint.” Id. at 563. A
Complaint need not assert “detailed factual
allegations”; however, it must contain “more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action” will not suffice.
Id. at 555 (citations omitted). Furthermore,
“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
Twombly, 550 U.S. at 570). A claim has “facial
plausibility” where the pleading “allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id.
moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss
Plaintiffs' breach of contract cause of action as to
York. ECF No. 6. In support of its motion, York argues it is
not liable for breach of contract as it was not a party to
the insurance contract. Id. In response, Plaintiffs
first note their allegations regarding York in their bad
faith failure to pay benefits cause of action. ECF No. 15 at
1-4. Plaintiffs next advance they will file a motion to amend
the Complaint to add a negligence cause of action against
York. Id. at 2. Plaintiffs argue they have alleged
enough negligence and bad faith on the part of York to
overcome York's motion to dismiss, and the Court should
deny York's motion to allow the parties to conduct
discovery on the novel issue of whether York owes a duty of
good faith and fair dealing to Coastal Elite. Id. at
preliminary matter, the Court notes Plaintiffs state they
will be filing a motion to amend their Complaint to add a
negligence claim against York. Id. at 2. However, no
such motion has been filed. Rule 15(a)(2) of the Federal
Rules of Civil Procedure directs that leave to amend
“shall be freely give[n] . . . when justice so
requires.” Leave to amend should be denied only when
the amendment would prejudice the opposing party, the moving
party has acted in bad faith, or the amendment would be
futile. Johnson v. Orowheat Foods Co., 785 F.2d 503,
509 (4th Cir. 1986). Leave to amend is properly denied where
the requested leave to amend is not accompanied by a motion
to amend or a proposed amended Complaint. See Cozzarelli
v. Inspire Pharms., Inc., 549 F.3d 618, 630-31 (4th Cir.
2008) (finding no abuse of discretion by district court in
denying leave to amend where plaintiffs requested leave ...