Dan Ryan Builders W. Va., LLC v. Main St. Am. Assurance Co.

Citation452 F.Supp.3d 374
Decision Date03 April 2020
Docket NumberNo. 2:18-cv-00589-DCN,2:18-cv-00589-DCN
Parties DAN RYAN BUILDERS WEST VIRGINIA, LLC, f/k/a Dan Ryan Builders Inc. and Dan Ryan Builders South Carolina, LLC, Plaintiffs, v. MAIN STREET AMERICA ASSURANCE COMPANY, Selective Insurance Group, Inc., the Cincinnati Insurance Company, Frankenmuth Mutual Insurance Co., State Automobile Mutual Insurance Company, Pennsylvania National Security Insurance Company, and Pennsylvania National Mutual Casualty Insurance Company, Defendants.
CourtU.S. District Court — District of South Carolina

Douglas M. Zayicek, Holly Michelle Lusk, Bellamy Rutenburg Copeland Epps Gravely and Bowers, Myrtle Beach, SC, for Plaintiffs.

Matthew Adams Abee, Nelson Mullins Riley and Scarborough LLP, Columbia, SC, Robert C. Calamari, Nelson Mullins Riley and Scarborough, Myrtle Beach, SC, for Defendant Selective Insurance Group Inc.

Michal Kalwajtys, Thomas F. Dougall, William Ansel Collins, Jr., Dougall and Collins, Elgin, SC, for Defendant Main Street America Assurance Company.

Alan Ross Belcher, Jr., Elizabeth F. Wieters, Hall Booth Smith PC, Mt. Pleasant, SC, for Defendant Cincinnati Insurance Company.

John Elliott Rogers, II, Ginger D. Goforth, Ward Law Firm PA, Spartanburg, SC, for Defendant Frankenmuth Mutual Insurance Co.

Nicholas Andrew Farr, Natalie Rae Ecker, Gallivan White and Boyd, Greenville, SC, for Defendant State Auto Property and Casualty Company.

John Irvin Malone, Jr., Goldberg Segalla, Greensboro, NC, for Defendants Penn National Insurance, Pennsylvania National Security Insurance Company, Pennsylvania Mutual Casualty Insurance Company.

Nicholas Andrew Farr, Gallivan White and Boyd, Greenville, SC, for Defendant State Automobile Mutual Insurance Company.



This matter is before the court on plaintiffs Dan Ryan Builders West Virginia, LLC and Dan Ryan Builders South Carolina, LLC's (collectively, "DRB") motion for partial summary judgment, ECF No. 54, and defendant The Cincinnati Insurance Company's ("Cincinnati") motion for summary judgment, ECF No. 139. For the reasons set forth below, the court denies DRB's motion and grants in part and denies in part Cincinnati's motion.


This insurance dispute arises from a construction project managed by DRB, a construction company that primarily builds new homes. DRB secured a contract to construct new homes in a community known as the Foxbank Subdivision in Berkeley County, South Carolina ("Foxbank" or the "Foxbank Subdivision"). In order to perform this contract, DRB hired various subcontractors. The defendants in this case are insurers of those subcontractors. Relevant to the instant motions, Cincinnati is the insurer of Firm Foundations, Inc. ("Firm Foundations"), one of DRB's subcontractors. Firm Foundations maintained a commercial general liability ("CGL") policy with Cincinnati (the "Cincinnati Policy") during the time that it allegedly performed work for DRB on Foxbank.

On April 24, 2014, two Foxbank Subdivision homeowners filed suit against DRB in the Court of Common Pleas for Berkeley County, South Carolina (the "Dickerson Lawsuit"). The Dickerson Lawsuit is a class action on behalf of other similarly situated owners of homes that were built by DRB. The lawsuit alleges property damage, such as "slabs and building components moving and/or cracking .. repeatedly and/or continuously and continu[ing] to occur causing damage to building components, the finish and structural elements of the home[s]." ECF No. 54-1 at 9. On March 22, 2017, more Foxbank homeowners filed a second action against DRB and several subcontractors, alleging similar harms as in the Dickerson Lawsuit (the "Tipton Lawsuit"). The two lawsuits have been consolidated in state court (the "underlying lawsuit").

After it received claims from the Foxbank homeowners but before the homeowners filed suit, DRB notified Firm Foundations and Greg Seidel, a claims representative for Cincinnati, of the Foxbank Homeowner's claims against it and tendered a demand for defense and indemnity via two letters dated January 8, 2014 and January 15, 2014. After Foxbank homeowners filed the Dickerson lawsuit, DRB renewed its demand for defense and indemnity to Seidel on or around September 19, 2014. On October 1, 2014, Seidel responded, informing DRB that Cincinnati was denying DRB's claim for defense and indemnity. Cincinnati now argues that DRB is not an insured under the Cincinnati Policy.

On March 1, 2018, DRB filed this lawsuit against the insurers of the subcontractors who allegedly performed work on the Foxbank project, seeking a declaratory judgment that the underlying lawsuits set forth claims that are covered under each of defendant's CGL policies and that defendants have a duty to defend and indemnify DRB in these underlying lawsuits. DRB also brought claims for bad faith refusal to pay first party benefits and for indemnification / contribution. On September 27, 2018, DRB filed an amended complaint, adding a fourth cause of action for promissory estoppel, arguing that defendants allowed certificates of insurance to be issued to DRB upon which DRB reasonably relied.

On October 3 and 26, 2018, DRB filed motions for partial summary judgment against all insurer-defendants, asking the court to declare that it is entitled to coverage. ECF Nos. 54, 55, 56, 57, 74, and 75, respectively. Each of the insurer-defendants have since also filed motions for summary judgment. ECF Nos. 118, 135, 138, 139, 140, and 143. The court held a hearing on DRB's motions on January 8, 2019 and a hearing on the defendants’ motions on August 8, 2019. In all, twelve summary judgment motions await the court's resolution.

This order resolves two of those motions. On October 3, 2018, DRB filed a motion for partial summary judgment on its declaratory judgment claim against Cincinnati. On November 1, 2018, Cincinnati responded, ECF No. 80, and on December 12, 2018, DRB replied. ECF No. 112. On June 10, 2019, Cincinnati filed a cross-motion for summary judgment on all of DRB's claims against it. ECF No. 139. On June 20, 2019, DRB responded, ECF No. 154, and on June 26, 2019, Cincinnati replied, ECF No. 156. Thus, this matter is ripe for the court's review.


Summary judgment shall be granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Rule 56(c) of the Federal Rules of Civil Procedure requires that the district court enter judgment against a party who, " ‘after adequate time for discovery ... fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.’ " Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 190 (4th Cir. 1997) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). "[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. "[S]ummary judgment will not lie if the dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

"[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249, 106 S.Ct. 2505. When the party moving for summary judgment does not bear the ultimate burden of persuasion at trial, it may discharge its burden by demonstrating to the court that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The non-movant must then "make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. 2548.

Any reasonable inferences are to be drawn in favor of the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505, Webster v. U.S. Dep't of Agric., 685 F.3d 411, 421 (4th Cir. 2012). However, to defeat summary judgment, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505 ; Stone, 105 F.3d at 191. Rather, "a party opposing a properly supported motion for summary judgment ... must ‘set forth specific facts showing that there is a genuine issue for trial.’ " Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (2003) (quoting Fed. R. Civ. P. 56(e) (2002) (amended 2010)). If the adverse party fails to provide evidence establishing that the fact finder could reasonably decide in his favor, then summary judgment shall be entered "regardless of [a]ny proof or evidentiary requirements imposed by the substantive law.’ " Id. (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ).


At the outset, the court wishes to clarify a matter of insurance law. It is well-settled in South Carolina that a liability insurer has a duty to defend its insured in a suit that alleges harms payable under the terms of the policy. B.L.G. Enterprises, Inc. v. First Fin. Ins. Co., 334 S.C. 529, 514 S.E.2d 327, 330 (1999) (citing Sloan Constr. Co. v. Central Nat'l Ins. Co. of Omaha, 269 S.C. 183, 236 S.E.2d 818 (...

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