Fancy That! Bistro & Catering LLC v. Sentinel Ins. Co.
| Decision Date | 13 October 2021 |
| Docket Number | Civil Action 3:20-cv-2382-BHH |
| Court | U.S. District Court — District of South Carolina |
| Parties | FANCY THAT! BISTRO & CATERING, LLC, Plaintiff, v. SENTINEL INSURANCE COMPANY, LIMITED and THE HARTFORD FINANCIAL SERVICES GROUP, INCORPORATED, d/b/a THE HARTFORD, Defendants. |
This matter is before the Court on Defendant The Hartford Financial Services Group, Incorporated's (“HFSG”) motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6). (ECF No. 12.) For the reasons set forth in this Order, the motion is granted.
Plaintiff Fancy That! Bistro & Catering, LLC (“Fancy That”) is a catering company located in Columbia, South Carolina, that has served as the preferred caterer for minor league baseball team Columbia Fireflies and the South Carolina Bar Association. (Compl. ¶¶ 12-13, ECF No 1.) Fancy That also provided the local college community with student dorm delivery. (Id. ¶ 14.) Moreover Fancy That derived a significant portion of its revenue from weddings and large events with hundreds of people in attendance. (Id. ¶ 15.)
This action arises out of the COVID-19 pandemic and the Spectrum Business Owner's Policy, No. 22 SBA AE3310 (the “Policy”) issued to Fancy That by Defendant Sentinel Insurance Company, Limited (“Sentinel”). (See ECF No. 12-1.) After the novel coronavirus (SARS-CoV-2) and the disease caused by this virus, COVID-19 (the “Virus”), caused the suspension of non-essential businesses in South Carolina, Fancy That submitted a claim for business interruption under the Policy and alleged that its claim was wrongfully denied. (Compl. ¶¶ 11, 21 33, 58.) Rather than suing Sentinel alone, Fancy That also sued Sentinel's corporate parent, HFSG; however, other than lumping Sentinel and HFSG together under the monikers, “Defendants” and “Insurers” (see Compl. passim), the complaint does not allege any specific dealings between Fancy That and HFSG.
Fancy That alleges that HFSG “serves as a holding company for several smaller insurer subsidiaries including Sentinel.” (Compl. ¶ 3.) It further alleges that HFSG is a Delaware corporation, while acknowledging that Sentinel is a Connecticut corporation. (Id. ¶¶ 2-3.) Thus, the complaint recognizes that Defendants are distinct corporate entities. It does not include any factual allegations designed to show that corporate separateness should be disregarded. Fancy That asserts that the Policy “includes the names of both Defendants, and various claims materials including the denial letter include one or the other, and sometimes both names and/or logos of the companies[;]” from this, Fancy That concludes “the Insurers appear to have jointly issued the subject policy and adjusted the claims that are [sic] subject of this suit.” (Id. ¶ 20.) Fancy That cites references to “The Hartford” in the Policy and the claims correspondence to support its allegation that it believed “The Hartford” was its insurer. (Id. ¶¶ 20, 58.)
Fancy That submitted a claim under the Policy for its alleged business income losses due to the Virus and the claim was denied. The denial letter stated it was from “The Hartford Cat Claim Office” and contained a Hartford logo. (Id. ¶ 58.) Fancy That filed the instant lawsuit against Sentinel and HFSG, asserting breach of contract and declaratory judgment claims. (Id. ¶¶ 95-193.) Fancy That seeks to represent a class of similarly situated policy holders who (1) purchased a “Spectrum Business Owner's Policy” with business income coverage and (2) were denied business income interruption claims due to the Virus.
HFSG filed a motion to dismiss for lack of standing, lack of personal jurisdiction, and failure to state a claim on October 28, 2020. (ECF No. 12.) The motion is fully briefed, the matter is ripe for disposition, and the Court now issues the following ruling.
When a party challenges the factual basis for a federal court's subject matter jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of proving the district court possesses subject matter jurisdiction. Richmond Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982)). In considering a Rule 12(b)(1) motion to dismiss, the district court is to regard the pleadings as mere evidence on the issue of subject matter jurisdiction and may consider evidence outside the pleadings without converting the proceeding into one for summary judgment. Id. (citing Adams, 697 F.2d at 1219; Trentacosta v. Frontier Pacific Aircraft Indus., 813 F.2d 1553, 1558 (9th Cir. 1987)). Federal district courts have original jurisdiction over all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between citizens of different States. 28 U.S.C. § 1332(a)(1). However, even if the jurisdictional requirements of complete diversity and amount in controversy are satisfied, subject matter jurisdiction is lacking if a plaintiff's allegations do not demonstrate Article III standing to sue the defendant. See S. Walk at Broadlands Homeowner's Ass'n, Inc. v. OpenBand at Broadlands, LLC, 713 F.3d 175, 185 (4th Cir. 2013) (). The “irreducible constitutional minimum of” of Article III standing has three elements. Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016), as revised (May 24, 2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).). “The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id.
When personal jurisdiction is challenged by a defendant, the plaintiff bears the burden of showing that jurisdiction exists. See In re Celotex Corp., 124 F.3d 619, 628 (4th Cir. 1997). If the court addresses the issue of jurisdiction on the basis of pleadings and supporting legal memoranda without an evidentiary hearing, “the burden on the plaintiff is simply to make a prima facie showing of a jurisdictional basis in order to survive the jurisdictional challenge.” Combs v. Bakker, 886 F.2d 673, 675 (4th Cir. 1989). In deciding such a motion, “the court must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction.” Id. at 676.
Specific jurisdiction over a cause of action arising from a defendant's contacts with the State is granted pursuant to South Carolina's long arm statute, SC Code Ann. § 36-2-803. South Carolina's long-arm statute has been construed to extend to the constitutional limits imposed by the due process clause of the U.S. Constitution. Young v. Jones, 816 F.Supp. 1070, 1073 (D.S.C. 1992) (citing Triplett v. R.M. Wade & Co., 200 S.E.2d 375, 379 (S.C. 1973)). The specific jurisdiction inquiry under the due process clause “focuses on the relationship among the defendant, the forum, and the litigation.” Walden v. Fiore, 571 U.S. 277, 283-84 (2014) (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984)) (quotation marks omitted). “For a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State.” Id. at 284. “[T]he relationship [between the suit-related conduct and the forum] must arise out of contacts that the ‘defendant [it]self' creates with the forum State.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)) (emphasis in original). “[T]he plaintiff cannot be the only link between the defendant and the forum.” Id. at 285.
A corporation is subject to general personal jurisdiction where its “affiliations with the State are so ‘continuous and systematic' as to render [it] essentially at home in the forum State.” Daimler AG v. Bauman, 571 U.S. 117, 138-39 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). The “paradigm” forums for general jurisdiction are a corporation's place of incorporation and principal place of business. Id. at 137. General jurisdiction over a corporation in a forum other than its formal place of incorporation or principal place of business would be an “exceptional case.” See Id. at 139 n.19 ().
A motion to dismiss for failure to state a claim upon which relief can be granted pursuant to 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) (internal citations omitted). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. at 556)). Although the allegations in a complaint generally must be accepted as true, that principle “is inapplicable to legal conclusions, ” and the Court is “not bound to accept as true a legal conclusion...
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