QBE Insurance Corporation v. Ocean Keyes Development LLC et al

Filing 46

ORDER granting 45 Motion to Dismiss. Signed by the Honorable R Bryan Harwell on 02/13/2018. (Attachments: # 1 Settlement, Release and Policy Buy-Back Agreement) (lsut, )

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION

QBE INSURANCE COMPANY,
C/A No.: 4:17-cv-016n-RBH

Plaintiff,
V,

OCEAN KEYES DEVELOPN'IENT, LLC;
KEYE CONSTRUCTION COMPANY,
INC.; KEYE COMMUNITIES, LLC;
PINE BLUFF CONSTRUCTION CO.;
KEYE REAL ESTATE, INC.; RUSSELL
BALZTER; MARC HYMAN; BEACH
VILLAS AT OCEAN KEYES

PROPERTY OWNERS ASSOCIATION,
INC., SEASHORE VILLAS AT OCEAN
KEYES PROEPRTY OWNERS

ASSOCIATION, INC., LAKESIDE
TOWNIIOMES AT OCEAN KEYES

HORIZONTAL PROPERTY REGIME,
INC.; LAKESIDE TONWHOMES AT
OCEAN KEYES PROPERTY OWNERS

ASSOCIATION, INC.; HARPER OCEAN

KEYES, LLC; ROBERT F. MCKENNA;
OLGA R. MCKENNA; ROBERT W.
DISMORE; AND LUTHER A.
BEAZLEY, III, TRUSTEE OF THE
l.UTHER A. BEAZLEY REVOCABLE

TRUST;
Detendants.

SETTLEMENT, RELEASE, AND POLICY BUY-BACK AGREEMENT

Tiiis Settlement Agreement, Release, and Polic}' Buy-Back Agreement ("AGREEMENT")
is entered into by QBE Insurance Corporation ("QBE") and each of their past, piesejit, and future
subsidiaries, affiliated companies, owners, principals, shaieliolders, general partners, limited
partners, joint ventures, officers, directors, agents, attorneys, third-party administrators, servants.
Page 1 of 24

employees, predecessors, heirs, successors, assigns, members, and shaieholders, onthe one hand,

and Ocean Keyes Development LLC ("Ocean Keycs"), Kcye Real Estate, Inc. (collectively
"OCEAN KEYES ENTITIES") and each of thekpast, present, and flitiue subsidiaries, affiliated

companies, owners, principals, shaieholders, general paitners, limited partners, joint ventures,

officers, dhectoi-s, agents, attorneys, third-paitj' administrators, servants, employees,
predecessors, lieiis, successors, assigns, members, and shareholders; andKeye Construction Co,,
Inc., Keye Communities, LLC, Pine Bluff Construction Co., Marc Hyman, Russell P. Baltzer

("KEYE-RELATED ENTITIES"); and each of their past, present, and fliture subsidiaries,

affiliated companies, owners, principals, shareholders, general partners, limited partners, joint
ventures, officers, directors, agents, attorneys, third-pjuty administrators, servants, employees,
predecessors, heirs, successors, assigns, members, and shareholders; and Beach Villas at Ocean

Keyes Propert)' Owners Association, Inc., Seashore Villas at Ocean Keyes Propertj' Owners
Association, Inc., Lakeside Townlionies at Ocean Keyes Horizontal Propeitj' Regune, Inc.,

Lakeside Townhomes at Ocean Keyes Propeit)' Owners Association, Inc., Harper Ocean Keyes,
LLC; Robert F. McKemia, Olga R. McKenna, Robert W. Dismore, and Luther A. Beazley, III,
Tnistee of the Luther A. Beazley Revocable Trust (collectively "HOMEOWNER PARTIES")
and each of their past, present, and fliture subsidiaries, affiliated companies, owners, principals,
shareholders, general partners, limited partners, joint ventures, officers, dnectors, agents,
attorneys, third-party administrators, servants, employees, predecessors, heirs, successors,
assigns, members, and shareholders, on the other.

QBE, OCEAN KEYES ENTITIES, KEYE-RELATED ENTITIES, and HOMEOWNER

PARTIES arerefeiTed to herein as the "PARTIES" or mdividually as "PARTY".

Page 2 of 24

I. RECITALS

NOW, THEREFORE, and in consideration of the covenants and conditions contained

herein, the PARTIES agreeas follows:

1.

WHEREAS, THE H0^4E0WNER PARTIES alleged construction defects at their

respective condominium and townliouse projects, including to tlieir individual units and theproject
common aieas against some or all of the OCEAN KEYES ENTITIES and tlie KEYE-RELATED

ENTITIES in the following lawsuits:
a.

Beach Villas at Ocean Keyes Properf}> Owners Association, Inc. v. Ocean

Keyes Development, LLC, et al in the Fifteentli Judicial Circuit in the Court of Common Pleas of

Hony County, South Carolina, Case No. 2014-CP-26-6573 ("the iJeoc/? Villas action").
b.

Seashore Villas at Ocean Keyes Property Owners Association, Inc. v.

Ocean Keyes Development, LLC, et al. in the Fifteenth Judicial Circuit in the Court of Common

Pleas of Hony County, South Carolina, Case No. 2015-CP-26-8308 ("the Seashore Villas
action").

c.

Lakeside Townhomes at Ocean Keyes Horizontal PropertyRegime, Inc., et

al. V. Ocean Keyes Development, LLC, et al in the Fifteenth Judicial Cii'cuit in the Court of

Common Pleas of Hony Count)', South Carolina, Case No. 2015-CP-26-5585 ("the Lakeside
Townhomes action");

d.

Harper Ocean Keyes, LLC, et al v. Ocean Keyes Development, LLC, et

al^ in the Fifteenth Judicial Circuit in the Court of Conmion Pleas of Hony County, South
Carolina, CaseNo. 2015-CP-26-4599 ("the Harper Oceanaction");

Page 3 of24

2.

WHEREAS, The Beach Villas lawsuit. Seashore Villas lawsuit. Lakeside

Townhomes lawsuit, and Harper Ocean lawsuit aie collectivei)' referred to as the
"UNDERLYING ACTIONS".

3.

WHEREAS, QBE issued Policy Number JCG23468, which was effective from

June 29, 2010 to Jime 29, 2011 ("2010-2011 policy") and Policy Number JCG23468-1, wliich

was effective from June 29, 2011 to Jime 29, 2012 ("2011-2012 policy") (collectively, referred
to as the "QBE policies");
4.

WHEREAS, both of the Declaration Pages in the QBE policies list "Keye Real

Estate, Inc." and "Ocean Keyes Development, LLC" as Named Insureds, and identify them in the
business description as; "real estate agent",

5.

WHEREAS, both of the Declaration Pages in the QBE policies state that the

classification and annual premium calculation ($1,479) was based on the following: (1) real

estate agents payioll, and (2) approximately 10,028square feet of building or premises, classified
as: "bank, office-merc, mfg (lessor's risk onl)')";

6.

WHEREAS, each ofthe QBE policies contain a CommercialGeneral Liability

Coverage Part, which has a General Aggregate Limit of $2,000,000, a Products - Completed

Operations Aggi'egate Limit of $2,000,000, and an "Each Occurrence" Limit of $1,000,000;
7.

WHEREAS, both of the QBE policies contain an Additional Insured - Managers

or Lessors of Premises Endorsement, written on Form CG 2011 01 06, which states the
following:
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT
CAREFULLY

ADDITIONAL

INSURED

-

MANAGERS

PREMISES

Page 4 of 24

OR

LESSORS

OF

This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE

1. Designation of Premises (Part Leased to You):
601 HILLSIDE DRIVE N 3000 NORTH MYRTLE BEACH SC
29582

2. Name ofPerson or Organization (Additional Insured):
OCEAN KEYES DEVELOPMENT LLC

3. Additional Premium: $ INCLUDED

(If no entry appears above, the information required to complete this
endorsement wll be shown in the Declarations as applicable to this
endorsement.)

WHO IS AN INSURED (Section II) is amended to include as an insured
the person or organizationshown in the Schedule but only with respect to
liability arising out of the ownersliip, maintenance or use of that part of
the premises leased to you and shown in the Scheduled and subject to the
following additional exclusions:
This insurance does not apply to:

1. Any "occurrence" wliich takes place after you cease to be a tenant in
that premises.

2. Structural alterations, new construction or demolition operations

performed by or on behalfof the pei-son or organization shown in the
Schedule.

8.

WHEREAS, both of the QBE policies also contain a Limitation of Coverage to

Designated Premises or Project Endorsement, written on Form CG 2144 07 98, which states the
following:

Tl-nS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT
CARFULLY

Pages of24

LIMITATION OF
PROJECT

COVERAGE TO

DESIGNATED PREMISES

OR

This endorsementmodifies insiu'ance provided under the following:
COMMERCIAL GENERAL LL\BILITY COVERAGE PART
SCHEDULE

Premises:

601 HILLSIDE DRIVE N 3000 NORTH MYRTLE BEACH SC
29582

Project:

(If no entry appearsabove, the information required to completethis
endorsement v^^ill be shown in the Declarationsas applicable to this
endorsement.)

This insurance applies only to "bodily injury", "property damage",
"personal and advertising injury" and medical expenses arising out
of:

1.

2.
9.

The ownership, maintenance or use ofthe premises shown in the
Schedule and operations necessary or incidental to those
premises; or
The project shown in the Schedule.
WHEREAS, Section IV of the QBE policies contains a condition, titled

"Representations", which states that "[b]y accepting this policy, you agree the statements m the
Declarations are accurate and complete, those statements are based izpon representations you

made to us, and we have issued this policy in reliance upon your representations";
10.

WHEREAS, on or about July 6, 2010, Marc Hyman signed an apphcation for

insurance, in which Keye Real Estate and Ocean Keyes were identified as "real estate agents";

Page 6 of 24

11.

WHEREAS, tlie insurance application also indicated that "Ocean Keyes

Development, LLC" requested to be added as an additional insured for one building: "Lessor^s
Risk Landlord";

12.

WHEREAS, QBE agieed to defend Ocean Keyes against the UNDERLYING

ACTIONS, subject to a reservation ofriglits.

13.

WHEREAS, QBE brouglit a coverage action, titled QBE Insurance Corporation v.

OceanKeyes Development, LLC, ei al in theUnited States Distiict Court for the Distiict of Soudi
Carolina, Florence Division, Case No. 4:17-cv-01611-RBH (the "COVERAGE ACTION");
14.

WHEREAS, the Defendants in the COVERAGE ACTION include tlie OCEAN

KEYES ENTITIES, KEYE-RELATED ENTITIES, and HOMEOWNER PARTIES;

15.

WHEREAS, QBE's COVERAGE ACTION sought a declaration that, under the

terms and conditions of the QBE policies, there is no coverage for Ocean Keyes for the
UNDERLYING ACTIONS, and QBEhas no duty to defend or indemnify OceanKeyes against the
UNDERLYING ACTIONS;

16.

WHEREAS, QBE's COVERAGE ACTION also sought a declaration tliat, under

the temis and conditions of tlie of QBE policies, there is no coverage for Keye Construction

Company, Inc., Pine Bluff Construction Co., Inc., and Key Communities, LLC for the
UNDERLYING ACTIONS, and QBE has no dutj' to defend or indemnify Keye Construction

Compan}', Inc., Pine Bluff Constraction Co., Inc., and Key Communities, LLC against the
UNDERLYING ACTIONS;

17.

WHEREAS, QBE's COVERAGE ACTION also sought a declaration that, imder

the teims and conditions of the QBE policies, tliei-e is no coverage for Russell Baltzer and Marc

Page 7 of24

Hj'inan for the UNDERLYING ACTIONS, and QBEhas no duty to defend or indenmify Russell
Baltzer or Maic Hymau against the UNDERLYING ACTIONS;
18.

WHEREAS, QBE's COVERAGE ACTION also sought a declaration tliat, under

the terms and conditions of the QBE policies, there is no coverage for tlie UNDERLYNG
ACTIONS pursuant to the Limitation of Coverage to Designated Premises or Project Endoi*sement

in the QBE policies, and QBE has no duty to defend or mdemnify any insured against the
UNDERLYING ACTIONS;

19.

WHEREAS, QBE's COVERAGE ACTION also sought a declaration that, under

the tenns and conditions of the QBE policies, tliere was no coverage for the UNDERLYING
ACTIONS because some or all of the property' damage was known to tlie insureds prior to the QBE

policy'seffective dateof June29,2010, andtherefore, QBE hadno duty to defend or indemnify any
msured against the UNDERLYING ACTIONS;

20.

WHEREAS, QBE's COVERAGE ACTION sought Rescission of the QBEpolicies

based on alleged misrepresentations made m the application for insurance which identified Keye
Real Estate,Inc., and Ocean Keyes as "real estate agents";

21.

WHEREAS, QBE's COVERAGE ACTION sought reimbursement of attorneys'

fees and other costs incurred in the UNDERLYING ACTIONS;

22.

WHEREAS, tlie OCEAN KEYES ENTITIES, KEYE-RELATED ENTITIES, and

HOMEOWNER PARTIES disputed QBE's contentions that were alleged in the COVERAGE
ACTION;

23.

WHEREAS, though QBE contends that QBE had no dutyto defend or indemnify

the OCEAN KEYES ENTITIES, KEYE-RELATED ENTITIES, or any other entity agamst tlic

UNDERLYING ACTIONS, QBE agrees to contribute $750,000 towards the settlement or

Page 8 of24

judgment satisfaction of the UNDERLYING ACTIONS, in returnfor a "policybuy-back", i.e. a

complete rescission of tlie QBE policies, subject to the terms and conditions expressed herein.
Therefore, QBE*s $750,000 settlement is consideration for buying back tlie QBE policies from
the OCEAN KEYES ENTITIES;

24.

WHEREAS, QBE desires to effect a full and final settlement, compromise,

mutual release, and resolution of all claims by the HOMEOWNER PARTIES in tlie
UNDERLYING ACTIONS; any unknown Plaintiffs, hojneowners, or claimants in the

UNDERLYING ACTIONS; and any and all disputes and disagreements related to the
UNDERLYING ACTIONS, and to terminate and release any obligations QBE has or ever may

have in the past, present, or future v^rith respect to the UNDERLYING ACTIONS or the QBE
policies, and to effect a policy buy-back of the QBE policies from tlie OCEAN KEYES
ENTIITES fiee and clear of all liens, claims, encumbrances, and other interests, to the lull extent

permitted by lav^f;
25.

WHEREAS, an additional intended scope and operation of this AGREEMENT is

to ensure that the HOMEOWNER PARTIES receive the exclusive benefit of QBE's $750,000

settlement payment in order to satisfy the HOMEOWNER PARTIES* clanns in the
UNDERLYING ACTIONS, either through settlements or judgments in the UNDERLYING
ACTIONS, subject to certain Conditions, as discussed in Section II of this AGREEMENT.

26.

WHEREAS, an additional intended scope and operation this AGREEMENT is to

effectively rescind the QBE policies, ab initio, so that the OCEAN KEYES ENTITIES, KEYERELATED ENTITIES, and HOMEOWNER PARTIES camiot assert or assign any rights or
obligations in any way related to QBE or the QBE policies to any other part)', including any insurer,
subcontractor, plaintiffs, owners, principals, shareholders, general partners, limited partners, joint

Page 9 of 24

ventures, officers, directors, agents, attorneys, third-party administrators, employees,
predecessors, members, and shareholders, or any other entit)', whether known or unknown,
including theii* insurers, or any other entitj', luidcr any circumstance, whether known or unknown,
anticipated or unanticipated.

27.

WHEREAS, through this AGREEMENT, the PARTIES agree that any purported

assignment shallbenulland void andwillnot bind anyof thePARTIES;
28.

WIIEREAS, the PARTIES desire to effect a flill and final settlement,

compromise, mutual release, and resolution of all claims by each PARTY against any other
PARTY relating to the COVERAGE ACTION;

29.

WHEREAS, through tliisAGREEMENT, the PARTIES seek to provideeach other

tlie broadest possible releasewith respect to the QBEpolicies, the COVERAGE ACTION, and any
and all fiiture clamis that relate to the QBE policies, and to provide that, except as set forth in this
AGREEMENT, no PARTY shall have any ftirdiei- obligations witlirespect to tlie QBE policies;
NOW, THEREFORE, in consideration of the pei'formance of the covenants and agi-eements

herein recited and for other good and valuable consideration, the receipt and sufficiency of wliich
are hereby acknowledged,and intendingto be legally bound hereby, the PARTIES agiee as follows:
11. AGREEMENT
1.

THE SETTLEMENT AMOUNT

A.

QBE agrees to pay tlie OCEAN KEYES ENTITIES the amount of$750,000 (Seven

Hundred and Fifty Thousand Dollars and No Cents) ("SETTLEMENT AMOUNT") to be made
payable to "Bellamy, Riitenberg, Copeland, Epps, Gravely & Bowers, P.A Escrow Account,"

and delivered to David B. Miller, Esq. of Bellamy, Rutenberg, Copeland, Epps, Gravely &
Bowers, P.A. at P.O. Box 357, Myrtle Beach, South Carolina 29578.

Page 10 of 24

B.

Ill consideration of the fiill and timely performance ofthe terms and conditions of

this AGREEMENT, QBE agrees to pay the above-referenced SETTLEMENT AMOUNT to the
OCEAN KEYES ENTITIES withintliiitj' (30) calendar days afterthe Courtin tlie COVERAGE

ACTION gi'ants a Consent Order dismissing the COVERAGE ACTION without prejudice
pursuant to Federal Rule of Civil Procedure 41.

C.

In consideration of the flill and timely performance of the terms and conditions of

tliis AGREEMENT, QBE»s obligation to defend the UNDERLYING ACTIONS will end on the

date of the Court's Order in the COVERAGE ACTION granting QBE's Motion to Dismiss
without prejudicepursuant to Federal Rules of Civil Procedure 41.
D.

In considerationof the flill and timely performance of the terms and conditions of

this AGREEMENT, the OCEAN KEYES ENTITIES agree that the SETTLEMENT AMOUNT

thattlie OCEAN KEYES ENTITIES will receive from QBE is intended exclusively to be allocated
towaixis the good faith settlement, or payment of anyjudgment m tlie UNDERLYING ACTIONS.

The SETTLEMENT AMOUNT shall be used, first and foremost, for the purposes of paying any
settlement or judgment amount regaiding the UNDERLYING ACTIONS.

OCEAN KEYES

ENTITIES flirdier agree that it shall place the SETTLEMENT AMOUNT it receives from QBE in
a settlement trast for the exclusive benefit of tlie HOMEOWNER PARTIES in the UNDERLYING

ACTIONS. The HOMEOWNER PARTIES will agree to a separate Escrow Agreement with the
respective OCEAN KEY ENTITIES regarding how the SETTLEMENT AMOUNT will be
disti'ibuted.

E.

In the event that any of tlie UNDERLYING ACTIONS: (i) are not resolved by a

settlement; (ii) the OCEAN KEYES ENTITIES successflilly obtain a defense verdict in all of tlie
UNDERLYING ACTIONS; (iii) tlie settlement and/or judgment amounts in the UNDERLYING

Page 11 of24

ACTIONS are satisfied by aiiy other available Insurance proceeds to OCEAN KEYES ENTITIES

or other parties to the UNDERLYING ACTIONS; and/or (iv) the SETTLEMENT AMOUNT
exceeds that amounts ofsettlement and/orjudgments against the OCEAN KEYES ENTITIES in the
UNDERLYING ACTIONS; then, and only then, shaU the OCEAN KEYES ENTITIES disburse

any remaining SETTLEMENT AMOUNT as tliey deem appropriate. However, m no event shall
the OCEAN KEYES ENTITIES disburse any remaining SETTLEMENT AMOUNT until and

unless all of the UNDERLYING ACTIONS, as well as any appeals in the UNDERLYING
ACTONS, have become final and closed.

F.

The PARTIES agree that, in consideration for QBE's payment of the

SETTLEMENT AMOUNT, the OCEAN KEYES ENTITIES, KEYE-RELATED ENTITIES, and

HOMEOWNER PARTIES cannotand shallnot assign any of tlieirrights or obligations relating to
the COVERAGE ACTION or the QBE policies to any insurer, subcontractor, plaintiffs, owners,
principals, shareholders, geneml partners, Imiited partners, joint ventures, officers, diiectors, agents,

attorneys, tliird-pail)' adminisfcrators, employees, predecessors, members, and shareholders, or any
otherentity, whether known or unknown. The PARTIES agreethat any purported assignment bya
PARTYshall be null and void and not bind on the PARTIES. The PARTIES fiirther agreethat this
provision is intended to apply in the broadestpossible mamier allowable under (he laws of the State

of South Carolina to restrict the PARTIES from assigning its rights or obligations related to QBE in
the UNDERLYING ACTIONS, the DECLARATORY JUDGMENT ACTION, or the QBE
policies.
2.

RELEASE

A.

Release of QBE

Page 12 of24

In consideration of QBE*s payment of the SETTLEMENT AMOUNT and the terms and
conditions of this AGREEMENT, the OCEAN KEYES ENTITIES, KEYE-RELATED

ENTITIES, and HOMEOWNER PARTIES on behalfof themselves as well as their past, present

and fliture parent companies, divisions, subsidiaries, affiliates, partnerships, limited liability
partnerships, corporations, limited liability corporations, business entities, members, owners,
stockholders, directors, officers, employees, insurers, lenders, predecessors, predecessors-ininterest, successors, successors-in-interest, assigns,partners, joint ventures, legal representatives,
agents, attorneys, heirs, administrators, trusts, trustees, beneficiaries, creditors, hereby release

and forever discharge QBE, and each of its past, present and fiiture parent companies, divisions,
subsidiaries, affiliates, partnerships, limited liability partnerships, corporations, Imiited liability
corporations, business entities, members, owners, stockliolders, directors, officers, employees,
insurers, reinsurers, lenders, predecessors, predecessors-in-interest, successors, successors-ininterest, assigns, partners, joint ventures, legal representatives, agents, attorneys, heirs,
admmistrators, trusts, tmstees, beneficiaiies, creditors from any and all claims, demands, actions,
or causes of action, of any kind or jiature, whether known or unknown, from the begimiing of
time, to and including the date hereof, whether based on contract, tort, statute, bad faith, or any
other legal or equitable tlieory of recovery, including but not limited to any claims, demands,

actions, or causes of action wliich in any way arise out of or relate to the following: (1) the
UNDERLYING ACTIONS; (2) the COVERAGE ACTION; (3) any actual or alleged dut}' to
defend or indemnify any of the insureds or additional insureds under the QBE policies in
connection with the UNDERLYING ACTIONS; (4) any actual or alleged duty to defend or
indeimii^' any of the insureds or additional insureds under the QBE policies or insmance issued
or underwritten by the PARTIES or their parent, subsidiaries, affiliates or related business

Page 13 of 24

entities, in connection witli the UNDERLYING ACTIONS; and (5)any and all claims, demands,
or causes of action, asserted, or that could have been asserted by tlie OCEAN KEYES
ENTITIES, KEYE-RELATED ENTITIES, and the HOMEOWNER PARITES against QBE in
tlie COVERAGE ACTION or the UNDERLYING ACTIONS.

B.

Release of the QBE Policies

In consideration of QBE*s payment of tlie SETTLEMENT AMOUNT, tlie OCEAN
KEYES ENTITIES, KEYE-RELATED ENTITIES, and the HOMEOWNER PARTIES

expressly agree, represent, and declare that, upon the occuiTence of QBE's payment of the

SETTLEMENT AMOUNT, the QBE policies will deemed to have rescinded, ab initio, freeand
clear of any and all past, present or futme liens, claims, enciutibrances and other interests, and all
rights of OCEAN KEYES ENTITIES, KEYE-RELATED ENTITIES, HOMEOWNER

PARTIES, and any of the PARTIES, or any party clamiing by, through, or on behalf of, under

OCEAN KEYES ENTITIES, of any nature whatsoever, under the QBE policies shall be
terminated and of no fiuther force and effect. The PARTIES agree that QBE's payment of the

$750,000 SETTLEMENT AMOUNT, piusuant to paragraphs II.A and B of tlie AGREEMENT,
constitutes QBE*s full and complete performance of any and all obligations under the QBE

policies owed to any of the insureds or additional insureds, exliausts all limits of liability of the
QBE policies, and effects a complete sale, outiight, of the QBE policies by OCEAN KEYES
ENTITIES back to QBE. The PARTIES intend that all rights, title, or interest which OCEAN
KEYES ENTITIES, KEYE-RELATED ENTITIES, HOMEOWNER PARTIES, or any other

party, person, or entity mayhave had, may presently have, or in the fiitiue may have in the QBE

Page 14 of 24

policies are hereby released. OCEAN KEYES ENTITIES, KEYE-RELATED ENTITIES,
HOMEOWNER PARTIES, expressly agiee, aiid accept Uie SETTLEMENT AMOUNT in fiiU

and complete satisfaction of ail QBE's past, present, and fiitiire obligations to the OCEAN
KEYES ENTITIES, or any other insiiredor additional insured under the QBE policies or arising
therefrom, as to any and all claims for insurance coverage or policy benefits of any nature
whatsoever, whether legal or equitable, known or unknown, suspected or unsuspected, fixed or
contingent, and regardless of whether or not such clamis are in any way related to, connected
witli, based on, or arise out of the UNDERLYING ACTIONS or the COVERAGE ACTION, or
otherwise.
C.

Release of the OCEAN KEYES ENTITIES

QBE, on behalf of itself, and all of its past, present, and future employees, directors,

officers, shareholders, agents, representatives, attorneys, related entities, affiliates, parents,
subsidiaries, divisions, within or aHiliated with QBE, any predecessors, successors and assigns,
releases the OCEAN KEYES ENTITIES and their respective employees, attorneys, agents,

successors, and assigns, from any and all claims ailsmg under or relating to the QBE policies,
and the COVERAGE ACTION under any theory or combination of theories, whether known or
unknown, including but not limited to any claims for reimbursement of defense costs and

settlement payments made by QBE related to the UNDERLYING ACTIONS, and including but

not limited to, claims sounding in subrogation,contribution, or premium owed.
D.

Release of the ICEYE-RELATEP ENTITIES

QBE, on behalf of themselves, and all of their past, present, and future employees,
directors, officers, shareholders, agents, representatives, attorneys, related entities, affiliates,
parents, subsidiaiies, divisions, witliin or affiliated with QBE, any predecessors, successors and

Page 15 of24

assigns, hereby releases the KEYE-RELATED ENTITIES and their respective employees,
attorneys, agents, successors, and assigns, fiom any and all claims arising under or relating to the

COVERAGE ACTION, under any theory or combmation of theories, whether known or
unknown, including but not Imiited to any claims for reimbuisement of defense costs and

settlement payments related to the UNDERLYING ACTIONS, and including but not limited to,
claims sounding in subrogation, contribution, or premium owed.

E.

Release of the HOMEOWNER PARTIES

QBE, on behalf of tliemselves, and all of their past, present, and future employees,

directors, officers, shareholders, agents, representatives, attorneys, related entities, affiliates,

parents, subsidiaries, divisions, within or affiliated wth QBE, any predecessors, successors and
assigns, hereby releases the HOMEOWNER PARTIES and then* respective employees,

attorneys, agents, successors, and assigns, fiomanyandall claims arising under or relating to the
COVERAGE ACTION, under any theory or combination of theories, wlietlier know or

unknown, including but not limited to any claims for reimbursement of defense costs and

settlement paj'ments related to the UNDERLYING ACTIONS, and including but not limited to,
clamis soundingin subrogation, contribution, or premium owed.
3.

SALE FREE AND CLEAR

This AGREEMENT effects a sale and policy buy-back outright of the QBE policies by the
OCEAN KEYES ENTITIES back to QBE. The OCEAN KEYES ENTITIES hereby sell the

QBE policies back to QBE free and clear of all known Hens, claims, encumbrances, and other
interests. The PARTIES acknowledge and agree that (i) QBE is a good faith purchaser of the

QBE policies, (ii) the consideration exchanged by QBE and OCEAN KEYES ENTITIES

Page 16 of24

pursuant to this AGREEMENT constitutes a fair and reasonable settlement of the COVERAGE

ACTION and of their respective rights and obligations relating to the QBE policies and
constitute reasonably equivalent value, and (iii) the policy "buy-back" of the QBE policies
constitutes a complete satisfaction of all QBE*s past, present, and fiiture obligations to the
OCEAN KEYES ENTITIES, or any other insured or additional insured under the QBE policies

or arising therefioni, as to any and all claims for insurance coverage or policy benefits of any

natuie whatsoever, whether legal or equitable, known or unknown, suspected or unsuspected,
fixed or contingent, and regardless of whether or not such claims aie in any way i-elated to,
connected with, based on, or arise out of tlie UNDERLYING ACTIONS or the COVERAGE
ACTION, or othenvise.
4.

GENERAL RELEASE AND WAIVER

The PARTIES acknowledge and agree that tliis AGREEMENT is a flill and fmal release of
all claims between QBE and the OCEAN KEYES ENTITIES, QBE and the KEYE-RELATED

ENTITIES, and QBE and the HOMEOWNER PARTIES and shall apply to all known and
xmknown and anticipated and unanticipated damages that relate to the UNDERLYING ACTIONS,
the COVERAGE ACTION, and the QBEpolicies. The PARTIES acknowledge and agree thattliis
AGREEMENT is not a foil and final release of any claims between the HOMEOWNER PARTIES
and the OCEAN KEYES ENTITIES, and the HOMEOWNER PARTIES and the KEYERELATED ENTITIES that relate to the UNDERLYING ACTIONS.
5.

NO ADMISSION OF LIABILITY

The PARTIES hereto understand that tliis AGREEMENT is in compromise of disputed

claims, and that neither this AGREEMENT nor tlie settlement contemplated heriein, nor the

Page 17 of24

pajnient of the consideration hereunder, is mtended to be, nor shall be deemed, constiued, oi*

treated in any way as an admission of liability by the PARTIES for any purpose.
6.

WAIVER OF RIGHT TO BRING ACTION

Tlie PARTIES, and each one ofthem, agree that they will not bring, coinmencc, maintain

or prosecute, directly or indirectly, any action at law or any proceeding in equity, or any legal or

administrative proceeding, or any claim for damages or other relief against one anotheror any of
their respective subsidiaries or affiliated companies, owners, principals, shareholders, general

partners, limited partners, joint ventures, members, officers, directors, agents, attorneys,

employees, predecessors, heiis, successor's, or their assigns or their msureds relating to,
comiected with, or arising out of QBE's duty to defend or indenmify any insured or additional
insured in connection witli the UNDERLYING ACTIONS or the COVERAGE ACTION, other

than any action that arises from the breach of any representation, obligation, or warranty
contained in this AGREEMENT.
7.

WARl^TY OF CAPACITY TO EXECUTE AGREEMENT

The PARTIES represent and warrant that each signatory to this AGREEMENT has the

specific authorit}' and power to execute the AGREEMENT. The PARTIES warrant that tliey have
no knowledge that any otherpeison or entity has or has had any interest in the claims, demands,
obligations or causes of action refened to in tliis AGREEMENT, and that tliey have not sold,
assigned, tmnsferied, conveyed or othemise disposed of any.
8.

ENTIRE AGREEMENT

This AGREEMENT contains the entire agieement between the PARTIES and supereedes

and replaces any and all prior or contemporaneous agreements or understandings, written or oral,
with regard to the matters set forth in it. This AGREEMENT may be amended or modified in

Page 18 of 24

wholeor in partat anytimeonlyby an agi^einent in writing executed by all of the PARTIES in the
same mannei- as this AGREEMENT. The PARTIES acknowledge that they have not executed this

AGREEMENT in reliance on any promise, representation, or warranty extraneous to the express
terms oftills AGREEMENT.
9.

BINDING EFFECT

Tliis AGREEMENT shall be binding upon and shall insure to the benefit of the PARTIES,

their respective executors, administrators, heirs, successors and assigns.

10.

CONSTRUCTION BY SOUTH CAROLINA LAW

This AGREEMENT is enteredinto in the State of South Carolmaand shall be constiued and

interpreted according tothe laws ofthe United States ofAmerica and the State ofSouth Carolma.
IL

REPRESENTATION OF COMPIOSHENSION OF DOCUMENT

Inentering into this AGREEMENT, the PARTIES represent that they have relied upon the

legal advice of their attorneys, who are the attorneys oftheir own choice. The undersigned and
counsel have reviewed and revised, or have had the opportunity to review and revise, tliis

AGREEMENT and, accordingly, the normal rule of constixiction to the effect that any ambiguities

are to be resolved against the draftmg paity shall not be employed in the interpretation of this
AGREEMENT or any amendment ofit.
12.

VALID AND ENFORCEABLE

Ifany provision orany part ofany provision ofthis AGREEMENT isfor any reason held
to beinvalid, unenforceable, or contrary to any public policy, law, statute, and/or ordinance, then

Page,19 of 24

the remainder of this AGREEMENT shall not be affected thereby and shall remain valid and
fiilly enforceable.
13.

ENFORCEMENT OF AGREEMENT

III the event legal action becomes iiecessaiy to inteipret, enforce, or seek remedies for a
breach of any part of tills Agieement, tlie prevailing PARTY in such action shall be entitled to
reasonable costsand attorney's feesincurredin seekingsuch enforcement or remedy.
14.

ATTORNEY*S FEES AND COSTS

The PARTIES, and each of them, agree, as to each other only, to bear their own costs of

suit, experts' fees, attorneys' fees, and othercosts and expenses, of any kind or character, arising
out of or relating in any wayto anyof the claims, demands, actions or causesof action which are
being released pursuant to the provisions of this AGREEMENT.
15.

COUNTERPARTS

Tliis AGREEMENT may be executed in several counterparts, and all so executed shall
constitute one AGREEMENT wliich shall be binding upon ail the PARTIES hereto,

notwithstanding that all the PARTIES' signatures do not appear on the same page. The

PARTIES may provide signatures by facsimile or computer transmittal (PDF). A signature
produced by facsimile or computer transmission shall be deemed an original signature.
IN WITNESS HEREOF, the undersigned on behalf of the PARTIES have executed this
Agreement as of the dates indicated below.

Page 20 of24

DATED:

OLGA R. MCKENNA

By:

(Signature)

(Print Name)
Its:

(Title)
DATED:

ROBERT W. DISMORE

By:

(Signature)

(Print Name)
Its:

(Title)
DATED;

LUTHER

BEAZLEY, III, as Trustee ofthe
.uther A. Beazley revocable Trust

By:

(Signature)

-A
(Print Name)
Its:

(Title)

Page 14 of 24

https://.-nail-attachmeut.gooolfiusGrcontent.rom/att3chmfcnt/u/0/...ldVf4hStit80psKBFMP7qBpVQ7bSZ_-up9Sb8KCOTU-Qk6HlajDg

11/1/17, 9:33 PM
P^ge 21 of 21

DATED:

QBEINSURANC
By:

(Print Name)
Its:

(Title)

DATED:

OCEAN KE^SJ^ELOPMEOT, LLj
By:
(Signature)

(Print Name)

Its:
DATED:

(m^

r/-

..INC

KEYECONSTRUC

^^-/(^ in

(Signature)

\
Print Name)
Its:

'

(Title)

DATED:

/-pOAi^O-^

KEYECO:

TIES, LLC

By:

(Signature)

osv
(Print Name)
Its:

(Title)
Page 21 of 24

Ib^^r

DATED:

PINE BLUFF

CTION

OSignatiu'e

n
(Print Name)
Its:

(Title)

KEYE REAL^§TATE, INC.

DATED:

1^ / IT

By:

(Signature)

/iiM
Ch. ^

(Print Name)

DATED;

RUSSELL P.

[T-l\3 n

Siguatui

(Print Name)
Its:

(Title)
DATED:

i^ln/n

MARCHY

By:

(Signatiue)

(Print Name)
Its:

(Title)

Page 22 of24

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ff //yUAQ Cf
^

DATED:

BEACH VILLAS AT OCEAN KEYES PROPERTY

OWNERS ASSOg^ON„JGN^

Oeey. i :Z(s>/7

By:

(Signature)

(Print Nnine)
Its:

(Title)
DATED:

SEASHORE VILLAS AT OCEAN KEYES PROPERTY
OWNERS ASSOCIATrON, TNC
By:

(Signature)

(Print Name)
lls:

(Title)
DATED:

LAKESIDE TOWNHOMES AT OCEAN KEYES

PROPERTYOWNERSASSOCIATION, INC.
By:
(Signature)

(Print Name)
Its:

(Title)
DATED:

HARPER OCEAN KEYES, LLC
By:

(Signature)

(Print Name)
Us:

(Title)

Page 23 of24

DATED:

BEACH VILLAS AT OCEAN KEYES PROPERTY

OWNERS ASSOCIATION, INC.
By:

(Signature)

(Print Name)
Its:

(Title)
DATED:

SEASHORE VILLAS AT OCEAN KEYES PROPERTY

OWNERS ASSOCIATION, INC.
By;

(Signature)

T

ChMmnoi
(Print Name")
'rint Name)
Its:

(Title)
DATED:

LAKESIDE TOWNHOMES AT OCEAN KEYES

PROPERTY OWNERS ASSOCIATION, INC.
By:

(Signature)

(Print Name)
Its:

(Title)
DATED:

HARPER OCEAN KEYES, LLC

By:
(Signature)

(Print Name)
Its:

(Title)

Page 23 of 24

DATED:

BEACH VILLAS AT OCEAN KEYES PROPERTY

OWNERS ASSOCIATION, INC.

By:

(Signature)

(Print Name)
Its:

(Title)
DATED:

SEASHORE VILLAS AT OCEAN KEYES PROPERTY

OWNERS ASSOCIATION, INC.

By:

(Signature)

(Print Name)
Its:

(Title)
DATED:

LAKESIDE TOWNHOMES AT OCEAN KEYES

PROPERTY OWNERS ASSOCIATION, INC.

By:

(Signature)
(Print Name)
Its:

(Title)
DATED:

HARPER OCEAN KEYES, LLC

By:

(Signature)

(Print Name)
Its:

(Title)

Page 23 of 24

(Title)
DATED:

HARPER OCEAN KEYES, LLC

By:

(Bignatnie)

(Print Name)
Its:

(Me)
DATED:

ROBERT F. MCKENNA

By:

(Signature)

(Print Name)
Its:

(Title)
DATED:

OLGA R. MCKENNA

By:
(Signature)

(Print Name)
Its:

(Title)
DATED:

ROBERT W. DISMORE

By:
(Signature)

(Print Name)
Its:
Page 25 of26

CfjnJJQ^

DATED: ///7//7

ROBERT F. MCKENNA

By;
(Signature)

X He?KeA/\iA,.
(Print Name)

Its:

o<iaU/jS7!
(TMe)

=
/y^/

DATED:

OLGAR. MCKENNA

By:

(Sigi«^)

-71. MtiJ<kjJKlA
(Print Name)

Its:

OJCfJiS£K
(TWe)

DATED:

ROBERT W.DISMORE

By:
(Signature)

(Print Name)
Its:

(Title)
DATED:

LUTHER A. BEAZLEY, HI, as Trustee ofthe Luther A.
Beaziey revocable Trust

By:

(Signature)

(Print Name)
Its:

(Title)

Page 24 of24

By:
(Signature)

(Print Name)
Its:

(Title)
DATED:

ROBERT F. MCKENNA

By:

(Signature)

(Print Name)
Its:

(Me)
DATED:

OLGAR MCKENNA

By:

(Signature)

(Print Name)
Its;

(Title)
DATED:

ROBERT W. DISMORE

By:

/y^J
(Signature)

^7^ Wi^/hpc-e.
(PnntName)
Its:

(Htle)

Page 25 of26