Stoneledge At Lake Keowee Owners Ass'n, Inc. v. Cincinnati Ins. Co.
Decision Date | 13 March 2018 |
Docket Number | Civil Action No. 8:14–cv–01906–BHH |
Citation | 301 F.Supp.3d 620 |
Court | U.S. District Court — District of South Carolina |
Parties | STONELEDGE AT LAKE KEOWEE OWNERS ASSOCIATION, INC., Plaintiff, v. CINCINNATI INSURANCE COMPANY and Builders Mutual Insurance Company, Defendants. |
Robert T. Lyles, Jr, Lyles and Associates LLC, Lee Anne Walters, Lyles and Lyles LLC, Marshall Austin, US Attorneys Office, Charleston, SC, for Plaintiff.
John Robert Murphy, Timothy J. Newton, Murphy and Grantland, Columbia, SC, Lee Anne Walters, Lyles and Associates LLC, Charleston, SC, for Defendants.
Plaintiff Stoneledge at Lake Keowee Owners Association, Inc. ("Plaintiff" or "HOA") filed the instant action against Defendant Cincinnati Insurance Company ("CIC") in the Oconee County Court of Common Pleas in March of 2014; the matter was removed on May 13, 2014. (See generally Dkt. No. 1.) On December 15, 2014, the parties filed a Consent Motion to Stay, asking that the case sub judice be stayed "until such time as the underlying South Carolina State Court action Stoneledge At Lake Keowee Owners' Association Inc. v. IMK Development Company, LLC, Case No. 2009–CP–37–0652 (hereinafter ‘the underlying case’)" was concluded. (Dkt. No. 23.) The parties noted that the underlying action was tried to a verdict in November of 2013, but, at the time the Consent Motion to Stay was filed, "post-trial motions, including motions to determine set-offs from settlements Plaintiff made with other underlying defendants, remain[ed] pending." (Dkt. No. 23 at 1–2.) The Honorable Bruce Howe Hendricks granted the Consent Motion to Stay on December 16, 2014. (Dkt. No. 24.)
On November 5, 2015, Plaintiff filed a Motion to Lift the Stay, asserting that the "underlying trial court has ruled on all post-trial motions, judgments have been entered, and the underlying defendants have appealed to the South Carolina Court of Appeals." (Dkt. No. 26 at 1.) CIC opposed the motion because the underlying case was on appeal. (See generally Dkt. No. 27.) Judge Hendricks granted the Plaintiff's motion on June 20, 2016. (Dkt. No. 31.) On June 30, 2016, CIC filed a Motion for Reconsideration of Judge Hendricks' Order; she denied the Motion for Reconsideration on August 30, 2016. (Dkt. No. 34; Dkt. No. 38.) On September 14, 2016, Plaintiff filed a Motion to Amend its Complaint, stating that it "seeks to amend its Complaint for filing in this Court to add allegations related to the underlying litigation and to join Builders Mutual Insurance Company as an additional defendant." (Dkt. No. 40 at 1.) Judge Hendricks granted Plaintiff's motion, and on September 16, 2016, Plaintiff filed an Amended Complaint, wherein Builders Mutual Insurance Company ("Builders") was added as a Defendant. (See Dkt. No. 41; Dkt. No. 42.)
Defendant CIC answered the Amended Complaint and filed a counterclaim seeking a declaratory judgment. (Dkt. No. 44.) Defendant Builders also answered the Amended Complaint and filed a counterclaim seeking a declaratory judgment. (Dkt. No. 50.)
On April 28, 2017, Defendants filed a Motion to Stay. (Dkt. No. 66.) On April 28, 2017, Defendant Builders filed a Motion for Summary Judgment, (Dkt. No. 67), as did Plaintiff, (Dkt. No. 81). Also on April 28, 2017, Defendant CIC filed a Motion for Partial Summary Judgment. (Dkt. No. 80.) On August 18, 2017, Defendants filed a Motion to Certify Questions to the Supreme Court of South Carolina. (Dkt. No. 103.) The Motion to Stay and Motion to Certify Questions to the Supreme Court of South Carolina have been referred to the undersigned. (Dkt. No. 109.)
On February 22, 2018, the undersigned held a hearing on the Motion to Stay and the Motion to Certify Questions to the Supreme Court of South Carolina. (Dkt. No. 114.) As allowed at the hearing, Plaintiff filed a Reply pertaining to Defendants' reformulated proposed certified questions. (Dkt. No. 118.)
Plaintiff alleges that it "is a South Carolina non-profit corporation that manages a horizontal property regime known as Stoneledge at Lake Keowee, consisting of 80 dwelling units located on Lake Keowee in Oconee County, South Carolina." (Am. Compl. ¶ 1.) Plaintiff further alleges that it "brought suit against Marick Home Builders, LLC (‘Marick Builders’), and against its principal and member Rick Thoennes (‘Theonnes’) [sic] (referred to collectively as the ‘Insureds’)...relating to the construction of Stoneledge at Lake Keowee (hereinafter the ‘Project’) in Oconee County, South Carolina, Civil Action No. 2009–CP–37–0652 (the ‘Underlying Action’)." (Am. Compl. ¶ 2.)1 According to Plaintiff, it "is a judgment creditor of the Insureds" and "has standing to sue CIC and Builders Mutual to satisfy the judgment and stipulated damages." (Am. Compl. ¶ 6.)
Plaintiff alleges that CIC issued a Commercial General Liability policy to Marick Builders and that Builders Mutual issued a policy to the Insureds. (Am. Compl. ¶¶ 9–10.) According to Plaintiff, Thoennes is an insured under both policies. (Am. Compl. ¶ 11.) The insured tendered the Underlying Action to their insurance carriers "requesting that their carriers provide a defense and indemnify the Insureds in the event they incurred losses as a result of the Underlying Action." (Am. Compl. ¶ 13.) The "Underlying Action was divided for trial into two separate actions, Phase I and Phase II." (Am. Compl. ¶ 14.)
As to Phase I, the jury found in favor of the HOA, and against Marick and Thoennes; "[j]judgment was entered against Marick and Thoennes, which was subsequently amended by order dated January 30, 2015, to an amount, after credit for set-offs, of $2,144,088.23, which is accruing interest at the statutory rate." (Am. Compl. ¶¶ 15–16.) Plaintiff alleges that in the Underlying Action, "the HOA alleged, and the evidence establishes[,] that as a direct and proximate result of the negligence of the Insureds, physical injury to tangible property occurred, as well as damage to the work of others, including loss of use, with such damage being caused by the continuous repeated exposure to the same general harmful conditions." (Am. Compl. ¶ 17.) In anticipation of the Phase II trial, the HOA, Marick, Thoennes, and the Insurers "stipulated that the damages the HOA would be entitled to recover from Marick" and Thoennes was $2,000,000.00 "and that trial for the sole purpose of establishing the exact amount of damages was unnecessary." (Am. Compl. ¶ 19.) Plaintiff alleges the "HOA and the Insurers agreed to proceed with a declaratory judgment action for determination of coverage for HOA's Total Phase II Damages under the policies issued by the Insurers." (Am. Compl. ¶ 20.) Plaintiff seeks "a Declaratory Judgment that CIC and Builders Mutual are obligated to pay the Phase I Judgment and the Total Phase II Damages plus post-judgment interest." (Am. Compl. ¶ 26.)
As noted above, on December 15, 2014, the parties filed a Consent Motion to Stay, asking that this case be stayed until the underlying state action was concluded; the parties noted that although the underlying action was tried to a verdict in November of 2013, at the time the Consent Motion to Stay was filed, "post-trial motions, including motions to determine set-offs from settlements Plaintiff made with other underlying defendants, remain[ed] pending." (Dkt. No. 23 at 1–2.) Judge Hendricks granted the Consent Motion to Stay on December 16, 2014. (Dkt. No. 24.)
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