Md. Cas. Co. v. Shamblen
| Decision Date | 13 April 2015 |
| Docket Number | CIVIL ACTION NO. 2:13-cv-05395 |
| Court | U.S. District Court — Southern District of West Virginia |
| Parties | MARYLAND CASUALTY COMPANY, Plaintiff, v. DOLORIS SHAMBLEN, et al., Defendants. |
(Plaintiff's Motion for Summary Judgment, Defendant Doloris Shamblen's Motion to Dismiss Count II of the Amended Complaint, and the Parties' Joint Motion to Vacate Amended Scheduling Order)
Pending before the court is the plaintiff Maryland Casualty Company's ("MCC") Motion for Summary Judgment [Docket 68] and Defendant Doloris Shamblen's Motion to Dismiss Count II of the Amended Complaint [Docket 57]. Responses and replies have been filed, and both motions are ripe for review. For the reasons explained below, MCC's Motion for Summary Judgment [Docket 68] is DENIED. I GRANT summary judgment in favor of Ms. Shamblen as to Count I of the Amended Complaint. Ms. Shamblen's Motion to Dismiss Count II of the Amended Complaint [Docket 57] is GRANTED.
On April 7, 2015, the parties filed a joint motion to vacate the amended scheduling order until the court entered a ruling on the motions at issue in this order [Docket 57 & 68]. The parties' Joint Motion to Vacate Amended Scheduling Order [Docket 76] is DENIED as moot.
This case arises out of a deadly fire that occurred on March 24, 2012 at a residential rental property (the "Arlington Property") in Charleston, West Virginia owned by Ms. Shamblen. (See Am. Compl. [Docket 44], at 4). At the time of the fire, the Arlington Property was covered by insurance issued by SAFE Insurance Company. (Id.). Ms. Shamblen also owned three office buildings in West Virginia. (Id. at 3-4). Two of those office buildings were covered by MCC Commercial Property Coverage and Commercial General Liability policies beginning in 2003, and the third office building was covered under that same insurance by way of an Endorsement beginning in 2008. (Id. at 4).
Ms. Shamblen first applied for the MCC policies on April 1, 2003, when she did not yet own the Arlington Property. . When asked on the application whether there existed "[a]ny Commercial operation or property owned, leased, or occupied that is not covered under this policy[,]" Ms. Shamblen answered "[n]o." (Ex. 1 MCC Appl. [Docket 68-1], at 18). The MCC policies were renewed annually through April 1, 2013. (Id.). However, there is no evidence that Ms. Shamblen was asked this question again.
As noted above, the MCC insurance consisted of several policies, including a Building and Personal Property Form and a Commercial General Liability Coverage Form. (Ex. 2 MCC Ins. [Docket 68-2], at 23, 64). Ms. Shamblen's three office buildings were scheduled in the Commercial General Liability Coverage Form. (Id. at 63). The insurance renewals did notspecifically identify the Arlington Property as included. However, Ms. Shamblen contends that MCC must nevertheless defend and indemnify her for damages arising from the fire.1
After Ms. Shamblen's attorney provided MCC with a tender of defense and indemnity concerning this matter, MCC cancelled her insurance for the stated reason: "The insured owns and manages property that is not scheduled to this policy, this represents a material change in known risk exposure, and the polciy [sic] will be cancelled[.]" (Ex. 6 Cancellation Notice [Docket 68-6], at 3; see Ex. 3 Tender [Docket 68-3], at 3). Ms. Shamblen argues that this termination was unlawful and has asserted counterclaims against MCC for breach of contract and breach of the implied covenant of good faith and fair dealing. (See Def. Doloris Shamblen's Answer to Am. Compl. & Countercl. [Docket 59], at 3-6).
By way of this lawsuit, MCC requests the court to view the insurance as one policy and to declare that "MCC has no duty to defend and/or indemnify Shamblen under the MCC Policy for any claims arising out of the Arlington Property Fire[,]" (see Count I of Am. Compl. [Docket 44], at 6-7), and that "MCC's cancellation of the MCC Policy was warranted[,]" (see Count II of Am. Compl. [Docket 44], at 7). (MCC's Mot. for Summ. J. [Docket 68], at 2).
To obtain summary judgment, the moving party must show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). In considering a motion for summary judgment, the court will not "weigh the evidence and determine the truth of the matter." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,249 (1986). Instead, the court will draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986).
Although the court will view all underlying facts and inferences in the light most favorable to the nonmoving party, the nonmoving party nonetheless must offer some "concrete evidence from which a reasonable juror could return a verdict in his [or her] favor[.]" Anderson, 477 U.S. at 256. Summary judgment is appropriate when the nonmoving party has the burden of proof on an essential element of his or her case and does not make, after adequate time for discovery, a showing sufficient to establish that element. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The nonmoving party must satisfy this burden of proof by offering more than a mere "scintilla of evidence" in support of his or her position. Anderson, 477 U.S. at 252.
A motion to dismiss filed under Rule 12(b)(6) tests the legal sufficiency of a complaint or pleading. Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). Federal Rule of Civil Procedure 8 requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). As the Supreme Court stated in Ashcroft v. Iqbal, that standard "does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]" Twombly, 550 U.S. at 555 (). A court cannot accept as true legal conclusions in a complaint that merely recite the elements of a cause of action supported by conclusory statements. Iqbal, 556 U.S. at 677-78. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. at 678 (quoting Twombly, 550 U.S. at 570). To achieve facial plausibility, the plaintiff must plead facts that allow the court to draw the reasonable inference that the defendant is liable, and those facts must be more than merely consistent with the defendant's liability to raise the claim from merely possible to probable. Id.
In determining whether a plausible claim exists, the court must undertake a context-specific inquiry, "[b]ut where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief.'" Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). A complaint must contain enough facts to "nudge[] [a] claim[] across the line from conceivable to plausible[.]" Twombly, 550 U.S. at 570.
I will first address MCC's summary judgment argument concerning its request for a declaration that it has no duty to indemnify and defend Ms. Shamblen. Then, I will address both MCC's summary judgment argument and Ms. Shamblen's dismissal argument concerning MCC's request for a declaration that its cancellation of Ms. Shamblen's insurance was warranted.
The West Virginia Supreme Court makes clear that, "[w]here provisions in an insurance policy are plain and unambiguous and where such provisions are not contrary to a statute,regulation, or public policy, the provisions will be applied and not construed." Syl. pt. 1, Kelly v. Painter, 504 S.E.2d 171, 172 (W. Va. 1998) (citations and internal quotation marks omitted); see Boggs v. Camden-Clark Mem'l Hosp. Corp., 693 S.E.2d 53, 57-58 (W. Va. 2010) ( ) (citation omitted); Blankenship v. City of Charleston, 679 S.E.2d 654, 659 (W. Va. 2009) () (citation omitted); Essex Ins. Co. v. Tri-Area Amusement Co., No. 5:09CV23, 2010 WL 148381, at *5-6 () (citation omitted).
"Where the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended." Syl. pt. 2, Kelly, 504 S.E.2d at 172 (citations and internal quotation marks omitted); see Boggs, 693 S.E.2d at 58 (...
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