Auto-Owners Ins. Co. v. Cincinnati Ins. Co.
| Decision Date | 06 June 2019 |
| Docket Number | Civil Action No. 5:17-cv-02943-JMC |
| Citation | 395 F.Supp.3d 686 |
| Court | U.S. District Court — District of South Carolina |
| Parties | AUTO-OWNERS INSURANCE COMPANY, Plaintiff, v. The CINCINNATI INSURANCE COMPANY, Defendants. |
Morgan S. Templeton, Wall Templeton and Haldrup, Thomas Brian Boger, Elmore and Wall, Charleston, SC, for Plaintiff.
John M. Montgomery, Rachel M. Hutchens, Rebecca Laffitte, Vordman Carlisle Traywick, Robinson Gray Stepp and Laffitte LLC, Columbia, SC, for Defendants.
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 number 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 Plaintiff's Motion for Summary Judgment and DENIES Defendant's Motion for Summary Judgment.
The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) based on Plaintiff's 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.)
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 others1 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.)
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, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995) (quoting Pub. Serv. Comm'n of Utah v. Wycoff Co. , 344 U.S. 237, 241, 73 S.Ct. 236, 97 L.Ed. 291 (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) ).
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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (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, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson , 477 U.S. at 252, 106 S.Ct. 2505 ; 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, 106 S.Ct. 2505. "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).
Under South Carolina law, insurance policies are subject to the general rules of contract construction. B.L.G. Enters., Inc. v. First Fin. Ins. Co. , 334 S.C. 529, 514 S.E.2d 327, 330 (1999). "When a contract is unambiguous, clear, and explicit, it must be construed according to the terms the parties have used." Id. The court must enforce, not write, contracts of insurance and must give policy language its plain, ordinary, and popular meaning. Id. "[I]n construing an insurance contract, all of its provisions should be considered, and one may not, by pointing out a single sentence or clause, create an ambiguity." Yarborough v. Phoenix Mut. Life Ins. Co. , 266 S.C. 584, 225 S.E.2d 344, 348 (1976). "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." Hawkins v. Greenwood Dev. Corp. , 328 S.C. 585, 493 S.E.2d 875, 878 (App. 1997). "Where language used in an insurance contract is ambiguous, or where it is capable of two reasonable interpretations, that construction which is most favorable to the insured will be adopted." Poston v. Nat'l Fid. Life Ins. Co. , 303 S.C. 182, 399 S.E.2d 770, 772 (1990).
An insurer's obligation under a policy of insurance is defined by the terms of the policy itself and cannot be enlarged by judicial construction. S.C. Ins. Co. v. White , 301 S.C. 133, 390 S.E.2d 471, 474 (App. 1990). A policy clause extending coverage must be liberally construed in favor of coverage, while insurance policy exclusions are construed most strongly against the insurance company, which also bears the burden of establishing the exclusion's applicability. M & M Corp. of S.C. v. Auto–Owners Ins. Co. , 390 S.C. 255, 701 S.E.2d 33, 35 (2010) ; Owners Ins. Co. v. Clayton , 364 S.C. 555, 614 S.E.2d 611, 614 (2005). "However, if the intention of the parties is clear, courts have no...
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