FCCI Insurance Company v. Island Pointe LLC et al

Filing 201

ORDER to Administratively Close Case: The Court finds that a Motion for a new trial in the underlying case for this declaratory judgment action is currently pending before the South Carolina Court of Appeals. The parties advis ed the Court that they anticipate that the S.C. Court of Appeals will schedule argument on the matter for late spring or early summer of 2021. The Court Orders that this action is administratively closed, subject to reinstatement on the motion of either party should the determination of WC Service's liability in the Underlying Action change, or as is otherwise appropriate. Signed by Honorable Margaret B Seymour on 9/18/2020. (vdru, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
FCCI Insurance Company,

)
)
Plaintiff,
)
)
v.
)
)
Island Pointe LLC, et al.,
)
)
Defendants.
)
__________________________________________)

C/A No. 2:17-cv-01976-MBS

ORDER

This case is a declaratory judgment action arising out of the construction of Palmetto
Pointe at Peas Island, a condominium complex in Charleston, South Carolina. Palmetto Pointe at
Peas Island Condominium Property Owners Associ
complaint in state court against a number of subcontractors alleging latent construction defects
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that caused water intrusion and

Plaintiff FCCI Insurance

respect to its duties to its insured in the Underlying Action. FCCI asserted subject matter
jurisdiction pursuant to 28 U.S.C. § 1332. During the course of this litigation and through the
disposition of various motions to dismiss and notices of voluntary dismissal, the only parties that
remain in the lawsuit are Defendant/Cross Claimant Nationwide Mutual Insurance Company

class representative, Elizabeth A. Bushey (colle
claim against Palmetto Pointe for declaratory

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See Palmetto Pointe at Peas Island Condominium Property Owners Association, et al. v. Island
Pointe, LLC, et al., Case No. 2015-CP-10-00955.

judgment regarding its duty to indemnify its insured WC Services,
Underlying Action.2 See ECF No. 26.
The Underlying Action was ultimately tried to a jury who on May 16, 2019 returned a
defense verdict as to WC Services. The state c
and Palmetto Pointe appealed. The
for new trial is currently pending before the South Carolina Court of Appeals.
On May 14, 2020, Nationwide filed a motion for summary judgment on the issue of its
duty of indemnification. ECF No. 179. Palmetto Pointe filed a response in opposition, ECF No.
184, and Nationwide filed a reply, ECF No. 185. On September 16, 2020, the court held a
telephonic status conference to discuss its concerns regarding subject matter jurisdiction
considering the posture of the Underlying Action. Specifically, the court asked the parties to
speak to whether, in light of the defense verdict entered against WC Services, the present lawsuit
presents a live case and controversy and whether the amount in controversy necessary to
establish diversity subject matter jurisdiction is satisfied at this point in time. ECF Nos. 195,
197. In advance of the status conference, Nationwide filed a written brief asserting its position
that the court has subject matter jurisdiction and should proceed with the adjudication of the
motion for summary judgment, ECF No. 198, and Palmetto Pointe filed a written brief asserting
its position that the court lacks subject matter jurisdiction and should dismiss the action, ECF
No. 199. During the status conference, counsel represented that Palmetto

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Nationwide asserted a cross claim for declaratory
judgment against Palmetto Pointe, WC Services, and Island Pointe, LLC. Nationwide alleged
upon information and belief that WC Services was a South Carolina corporation that was
dissolved in 2009. ECF No. 26 at ¶ 4. WC Services has never appeared in this action.
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new trial is still on appeal and that the parties subject to the appeal anticipate that the court of
appeals will schedule argument on the matter for late spring or early summer of 2021.
As it expressed during the status conference, the court has grave concerns regarding its
subject matter jurisdiction over the claim for declaratory judgment. The court may raise
questions of subject matter jurisdiction at a
ions sua sponte if necessary. Brickwood Contractors, Inc. v.
Datanet Eng'g, Inc.

for a case or controversy . . . is

whether the dispute is definite and concrete, touching the legal relations of parties having
Commercial Union Ins. Co. v. Detyens Shipyard, Inc., 147 F. Supp. 2d
ation marks omitted) (quoting White v. National Union
Fire Ins. Co. of Pittsburgh, Pa.,
justiciable controversy exists, a district court looks to whether the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having adverse legal
interests, of sufficient immediacy
Id. at 421 (internal quotation marks

ory Judgment Act, 28 U.S.C. §

2201, allows a court to issue a judgment before an injury is accomplished, there must be an
ACE American Ins. Co. v. Michelin North America, Inc., 470 F.
Supp. 2d 602, 604 (D.S.C. 2007) (citing Delavigne v. Delavigne, 530 F.2d 598, 601 (4th Cir.
y not be given for a purely hypothetical situation [or as] . .
Id. (quoting A.S. Abell Co. v. Chell, 412 F.2d 712, 719 (4th Cir. 1969)).
While the court is skeptical that an orde

for summary judgment

would constitute anything more than an advisory opinion if rendered at this time, there remains
the possibility that the court of appeals could remand the Underlying Action to state court for a

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ity and that a second jury trial could result in an award of
ngly, and consistent with its comments during
the status conference, the court finds that administrative closure of this case is appropriate. See
Penn-America Ins. Co. v. Mapp, 521 F.3d 290 (4th Cir. 2008) (recognizing administrative
closure as a tool of docket management and not a final, appealable act).
The court hereby ORDERS that this action is administratively closed, subject to
reinstatement on the motion of either party should the determination
the Underlying Action change, or as is otherwise appropriate.
IT IS SO ORDERED.

/s/Margaret B. Seymour________
Margaret B. Seymour
Senior United States District Judge
Dated: September 18, 2020
Charleston, South Carolina

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