United States District Court, D. South Carolina, Columbia Division
action arises from an insurance contract dispute between
Plaintiff RLI Insurance Company (“RLI”), a
professional liability insurer, and Defendant Architrave,
Inc. (“Architrave”), an architecture firm. The
matter before the court is RLI's Motion to Alter or Amend
a Judgment filed on October 17, 2019 (ECF No. 40).
FACTUAL AND PROCEDURAL BACKGROUND
issued two insurance policies (the “Policies”) to
Architrave: (1) “Professional Liability Policy Design
Professionals number RDP0024719 for the Policy Period May 6,
2016 to May 6, 2017” (“Policy 2016-17”) and
(2) “Professional Liability Policy Design Professionals
number RDP0028866 for the Policy Period May 6, 2017 to May 6,
2018, (“Policy 2017-18”) (Id. at 2
¶¶ 6, 7.) The Policies are “Claims Made and
Reported Polic[ies]” that “provide coverage,
pursuant to their terms and conditions, for ‘Damages or
Claim Expenses as a result of a Claim for a Wrongful Act'
which is ‘first made against the Insured during the
Policy Period . . . .'” (Id. at 6.)
September 26, 2018, RLI filed a Complaint pursuant to the
Federal Declaratory Judgment Act, 28 U.S.C. § 2201
(2010). (ECF Nos. 1, 5.) On October 8, 2018, RLI amended the
Complaint, adding Defendant Mount Moriah Missionary Baptist
Church, Inc., (“the Church”). (ECF No.
On September 25, 2017, the Church filed a lawsuit in the
Charleston County, South Carolina Court of Common Pleas
(“Underlying Lawsuit”) arising from the
construction of its worship center. (Id. at 5 ¶
20 (citing Mt. Moriah Missionary Baptist Church v.
Architrave, Inc., et. al., C/A No. 2017-CP-10-4880.) RLI
alleges that, on November 6, 2017, “Architrave provided
notice of the Underlying Lawsuit to [RLI] under [Policy
2017-18] . . . at which time [RLI] requested information
regarding the claim, including requests for ‘any
correspondence in your possession pertaining to the issues
set forth in the complaint.'” (Id. at 4
¶ 14.) Architrave allegedly represented that it
communicated with the builder, Bobbit Design Build, and
“attended a meeting in February of 2017 where the
Church's construction problems were discussed and Bobbit
offered a proposal to address the issues.”
(Id. at 4 ¶ 15.) RLI maintains that
“Architrave asserted that after the meeting, it
‘did not hear anything else about the matter or realize
that the church was considering a lawsuit until we were
served.'” (Id.) On December 1, 2017, RLI
agreed to defend Architrave under Policy 2017-18.
(Id. at 4 ¶ 16.) Architrave subsequently
provided RLI with the Church's letters dated October 17,
2016 (“October Letter”) and December 21, 2016
(“December Letter”) (collectively, the
“Demand Letters”) (Id. at 4 ¶ 17.)
Upon receiving the Church's Demand Letters, RLI issued a
supplemental reservation of rights letter to Architrave
(Id. at 5 ¶ 21) and filed a Complaint (ECF No.
November 19, 2018, RLI filed a Motion for Judgment on the
Pleadings, claiming that Architrave “has not met its
burden of showing that coverage has been triggered under
either policy, and [RLI] owes no duty to defend or indemnify
[Architrave]” in the Underlying Lawsuit. (ECF No. 18 at
1-2.) As such, RLI requests (1) a court order declaring that
RLI “owes no duty to defend or indemnify [Architrave]
because the Claim was not first made and reported to [RLI]
during an applicable Policy Period” and (2) seeks the
recovery of costs and expenses incurred defending Architrave
in the Underlying Lawsuit. (Id. at 3 ¶ 9.) On
December 17, 2018, Architrave also filed a Motion for
Judgment on the Pleadings, seeking a court order declaring
that RLI has a duty to defend and indemnify Architrave
because the Underlying Lawsuit, not the Church's letters,
triggered the Policies. (ECF No. 24 at 1.) On September 25,
2019, the court entered an order denying both parties'
Motions for Judgment on the Pleadings. (ECF No. 36.) RLI
filed the present Motion to Amend pursuant to Fed.R.Civ.P.
59(e) on October 17, 2019. (ECF No. 40.) Architrave filed a
Response on October 31, 2019 (ECF No. 42), to which RLI filed
a Reply on November 5, 2019 (ECF No. 43).
Motion to Alter or Amend
Rule 59(e) of the Federal Rules of Civil Procedure, a
district court may alter or amend an earlier judgment
“(1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not
available at trial; and (3) to correct a clear error of law
or prevent manifest injustice.” Fed.R.Civ.P. 59(e);
see also Pac. Ins. Co. v. Am. Nat. Fire Ins. Co.,
148 F.3d 396, 403 (4th Cir. 1998). However, motions to alter
or amend “may not be used to relitigate old matters, or
to raise arguments or present evidence that could have been
raised prior to the entry of judgment.” Exxon
Shipping Co. v. Baker, 554 U.S. 471, 486 n.5 (2008)
(quoting 11 C. Wright & A. Miller, Federal Practice and
Procedure § 2810.1, pp. 127-128 (2d ed. 1995) (footnotes
omitted)). It is the moving party's burden to establish
one of these three grounds in order to obtain relief under
this Rule. See Loren Data Corp. v. GXS, Inc., 501 F.
App'x. 275, 285 (4th Cir. 2012). The decision whether to
reconsider an order pursuant to Rule 59(e) is within the
discretion of the district court. See Hughes v.
Bedsole, 48 F.3d 1376, 1382 (4th Cir. 1995).
South Carolina Insurance Contracts
South Carolina law, insurance policies are contracts and are
subject to the general rules of contract construction.
See Am. Credit of Sumter, Inc. v. Nationwide Mut. Ins.
Co., 663 S.E.2d 492, 495 (2008) (citation omitted). When
interpreting an insurance application or insurance policy,
courts “must give policy language its plain, ordinary,
and popular meaning.” Id. Moreover, an
“insurance policy is to be liberally construed in favor
of the insured and strictly construed against the insurer . .
. [and] exclusions in an insurance policy are always
construed most strongly against the insurer.”
Id. South Carolina courts have concluded that,
“[a]n insurance policy is a contract between the
insured and the insurance company, and the policy's terms
are to be construed according to the law of contracts.”
Williams v. Gov't Emps. Ins. Co., 762 S.E.2d
705, 709 (S.C. 2014). “The burden of proof is on the
insured to show that a claim falls within the coverage of an
insurance contract.” Sunex Int'l, Inc. v.
Travelers Indem. Co. of Ill., 185 F.Supp.2d. 614, 617
(D.S.C. 2001). “‘Where the contract's
language is clear and unambiguous, the language alone
determines the contract's force and effect.'”
Id. (quoting McGill v. Moore, 672 S.E.2d
571, 574 (S.C. 2009)). “‘It is a question of law
for the court whether the language of a contract is
ambiguous.'” Id. at 710 (quoting S.C.
Dep't of Nat. Res. v. Town of McClellanville, 550
S.E.2d 299, 302-03 (S.C. 2001)). “‘A contract is
ambiguous when it is capable of more than one meaning when
viewed objectively by a reasonably intelligent person who has
examined the context of the entire integrated agreement and
who is cognizant of the customs, practices, usages and
terminology as generally understood in the particular trade
or business.'” Id. (quoting Hawkins v.
Greenwood Dev. Corp., 493 S.E.2d 875, 878 (S.C.
Ct. App. 1997)). “However, these rules of construction,
inuring to the benefit of the insured, do not trump clear and
unambiguous policy terms because ‘if the intention of
the parties is clear, courts have no authority to torture the
meaning of policy language to extend or defeat coverage that
was never intended by the parties.'” MGC Mgmt.
of Charleston, Inc. v. Kinghorn Ins. Agency, 520 S.E.2d
820, 823 (S.C. Ct. App. 1999) (citing Diamond State Ins.
Co. v. Homestead Indus., Inc., 456 S.E.2d 912, 915 (S.C.
The Parties' Arguments
asserts that “the [c]ourt committed clear error of law
in its [o]rder by applying a ‘reasonable
expectation' standard to prong one of the Insurance
Agreement, and, therefore, should amend its prior [o]rder and
enter judgment on the pleadings in RLI's favor”
because “each of [the] three prongs must independently
be met by Architrave in order for coverage to have been
triggered.” (ECF No. 40 at 1-2.) RLI claims that the
Demand Letters sent to Architrave by the Church
“indisputably met the policy definition of a
Claim.” (Id. at 4.) Therefore, “[i]f
Architrave cannot meet its burden of showing that this first
requirement is satisfied . . . there is no coverage
regardless of what Architrave reasonably expected.”
asserts that RLI only aims to relitigate the issues
previously contemplated by the court. (ECF No. 42 at 1
(“RLI's present motion is essentially the same
argument it made in support of its Motion for Judgment on the
Pleadings albeit stated in slightly different terms.
Regardless, the core issue raised by RLI remains the same: Do