LM Insurance Corporation v. Contingent Resource Solutions LLC
Filing
66
OPINION and ORDER denying 48 Motion to Dismiss; denied as moot 52 Motion to Stay. Signed by Honorable Bruce Howe Hendricks on 2/24/16.(alew, )
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
SPARTANBURG DIVISION
LM INSURANCE CORPORATION,
an Illinois corporation,
) Civil Action No.: 7:14-CV-3634-BHH
)
)
Plaintiff, )
vs.
)
Opinion and Order
)
CONTINGENT RESOURCE SOLUTIONS, )
LLC, a South Carolina corporation,
)
)
Defendant and Third-Party Plaintiff, )
)
vs.
)
)
GUARANTEE INSURANCE COMPANY,
)
)
Third-Party Defendant. )
__________________________________ )
This matter is before the Court on Third-Party Defendant Guarantee Insurance
Company’s (“GIC”) Motion to Dismiss (ECF No. 48) the Third-Party Complaint brought
by Defendant and Third-Party Plaintiff Contingent Resource Solutions, LLC (“CRS”) for
failure to state a claim upon which relief can be granted and GIC’s Motion to Stay
Discovery, Disclosure, and Conference Deadlines (ECF No. 52). For the reasons set
forth in this Order, GIC’s Motion to Dismiss is denied and GIC’s Motion to Stay is denied
as moot.
BACKGROUND
By way of its Complaint filed September 12, 2014, LM Insurance Corporation
(“LMIC”) seeks $533,301 in damages from CRS for CRS’s alleged breach (failure to pay
premium) of a workers compensation insurance contract. (ECF No. 1.) CRS filed an
Answer and Counterclaim against LMIC (ECF No. 6), and later an Amended
1
Counterclaim (ECF No. 21) and a Second Amended Counterclaim and Third-Party
Complaint impleading GIC (ECF No. 40).
The State of South Carolina requires employers, subject to certain exceptions, to
purchase workers compensation insurance coverage for their employees.1 If a South
Carolina employer is unable to find an insurance company that will voluntarily sell
workers compensation insurance to that employer, the employer may apply to the
Workers Compensation Insurance Plan (the “Plan”) for an assigned risk market
insurance policy, also known as an “involuntary market policy” or “residual market
policy.” The Plan is a set of rules governing the terms and conditions by which
employers purchase and insurance companies sell assigned risk policies in South
Carolina. An employer seeking an assigned risk policy makes an application on an
approved form to the National Council on Compensation Insurance (“NCCI”). Once an
application is made, NCCI assigns the employer to an insurance company participating
in the Plan.
Premium for such involuntary market policies is determined by the employer’s
payroll and the type of work performed by the insured employees, as categorized by
various job classification codes. The employer discloses on the application the amount
of its anticipated payroll and the classification of work performed by its employees.
Premium rates vary based on the relative hazard associated with different job
classifications, and such rates are set by the State of South Carolina for policies
applicable to South Carolina employees.
1
Except where otherwise indicated, the Court’s factual summary is distilled from LMIC’s allegations in the
initial Complaint (ECF No. 1).
2
On May 23, 2013, CRS applied for an assigned risk policy using the prescribed
form and NCCI subsequently assigned LMIC to provide such a policy. LMIC issued a
workers compensation policy (the “LMIC Policy”) to CRS with a projected coverage
period of May 24, 2013 to May 24, 2014. LMIC alleges that pursuant to the terms of the
LMIC Policy, CRS was to make its books and records available for audit in order that
LMIC might determine the correct amount of payroll and job classifications and thereby
calculate the proper premium due to LMIC.
LMIC contends that its audit revealed that the CRS payroll covered by the LMIC
Policy was $9,209,552 per annum, rather than the $32,000 per annum reflected on
CRS’s application for the assigned risk policy. LMIC calculated the relevant premium as
$973,974, assuming the policy was to be in effect for the full one year term, and
thereafter sought payment from CRS for the premium amount determined by the audit.
LMIC avers that CRS failed to pay the amount due under the policy, and after sending a
notice of pending cancellation if the premium was not paid, LMIC cancelled the policy
effective January 14, 2014. LMIC subsequently conducted a cancellation audit of CRS’s
business records and determined that the amount of payroll putatively covered by the
policy from May 24, 2013 until January 14, 2014 was $5,023,475. Accordingly, LMIC
sent CRS a final invoice seeking payment of $533,301 in premium for the coverage it
claims to have provided during the relevant time period. It is this amount that LMIC
seeks in damages for CRS’s alleged breach of the assigned risk insurance contract.
CRS contends that when it applied to NCCI for the involuntary market policy, it
only sought coverage for a limited subset of employees that were not already covered
by its existing voluntary market policy provided by GIC. (Second Amend. Counterclaim
3
and Third-Party Compl., ECF No. 40.) LMIC appears to dispute that it is possible to
obtain an assigned risk policy to cover only a limited subset of employees. (See Compl.
¶ 15, ECF No. 1 (“An employer’s workers compensation assigned risk policy covers all
of the employees for the employer.”).)
By way of its Second Amended Counterclaim and Third-Party Complaint, CRS
asserts that the vast majority of its employees were already covered by a different
workers compensation insurance policy and that LMIC is not entitled to the monies it
now claims are damages for uncompensated insurance coverage. CRS alleges that
from February 15, 2013 to September 1, 2013, CRS workers in Florida, North Carolina,
South Carolina, and Virginia were covered by GIC Policy No. GWGC374000002-112
(the “First GIC Policy”). (ECF No. 40 at ¶¶ 6-7.) The First GIC Policy purportedly
covered all CRS workers except those workers in North Carolina and Virginia classified
under code 5183 (Plumbing Not Otherwise Classified and Drivers) for workers
compensation insurance. (Id. at ¶ 8.) At the time, GIC allegedly would not provide
voluntary coverage for CRS workers classified under code 5183 in North Carolina and
Virginia but did cover code 5183 workers in South Carolina. (Id. at ¶ 9.) CRS asserts
that GIC received $109,420.58 in premium for the First GIC Policy, though it is nonspecific as to who paid this premium to GIC (i.e. CRS or some other entity). (Id. at ¶ 11.)
Sometime after the First GIC Policy was already in place, CRS anticipated new
operations in South Carolina requiring workers to perform services classified under
codes 5190 (Electrical Wiring – Within Buildings and Drivers) and 6325 (Conduit
Construction – For Cables and Wires and Drivers). (Id. at ¶10.) CRS states that its May
23, 2013 application to NCCI for assigned risk coverage was limited to code 5183
4
workers in North Carolina and Virginia, and codes 5190 and 6325 workers in South
Carolina. (Id. at ¶ 12-13.) CRS asserts that its application explicitly indicated as much,
relying on the following language typed in all capital letters: “THIS POLICY IS BEING
OBTAINED TO COVER DIRECT EMPLOYEES WORKING IN RISKS THAT THE
PEO’S CARRIER WILL NOT APPROVE.” (Id. at ¶ 15; Ex. A, Compl., ECF No. 1 at 13.)
According to CRS, the business requiring services under codes 5190 and 6325 did not
materialize, and CRS workers never performed services or activities under those codes
in South Carolina. (ECF No. 40 at ¶ 14.)
CRS states that it intended and understood the coverage provided by the LMIC
Policy to be limited to those locations and class codes specifically itemized in its
application to NCCI. (Id. at ¶ 15.) CRS avers that LMIC received $5,127 in premium for
the LMIC Policy, which was in effect from May 24, 2013 to January 14, 2014. (Id. at ¶¶
16, 19.) LMIC acknowledges that CRS paid that amount. (See Ex. D, Compl., ECF No.
1 at 94-95.)
CRS further alleges that from September 1, 2013 to September 1, 2014, all CRS
workers were insured under GIC Policy No. WCP00000402GIC (the “Second GIC
Policy”). (ECF No. 40 at ¶ 20.) Coverage under the Second GIC Policy purportedly
extended to all CRS workers in all states and for all class codes. (Id. at ¶ 21.) CRS
asserts that GIC received premium for the Second GIC Policy, though it is non-specific
as to who paid this premium and in what amount. (Id. at ¶ 22.) CRS indicates that it has
declined to pay LMIC the $533,301 premium LMIC claims as a result of the cancellation
audit because such an amount “does not comport with the limited coverage of the LMIC
Policy as applied for by CRS and issued by LMIC and purports to include amounts for
5
coverages on or after September 1, 2013, when all CRS workers were covered by the
Second GIC Policy.” (Id. at ¶ 27.) Ultimately, CRS and LMIC do not agree as to whether
worker classification codes can be split among and between markets and workers
compensation insurance policies, i.e. whether CRS could have insured some workers in
the voluntary market through GIC and other workers through an assigned risk plan with
LMIC. (See id. at ¶ 26.)
By way of relief, CRS first seeks a declaratory judgment that LMIC covered only
those CRS workers in North Carolina and Virginia classified under code 5183 until
September 1, 2013, and GIC covered all other CRS workers during the disputed time
period of May 24, 2013 to January 14, 2014. (Id. at ¶ 31, Count I.) In the alternative,
CRS seeks a declaratory judgment that: (a) the LMIC Policy was void as to all workers
in North Carolina and South Carolina and the First GIC Policy covered all CRS workers
in those states; or (b) if LMIC is deemed to have covered all CRS workers in North
Carolina, South Carolina, and Virginia during the disputed period, then a declaration
that the GIC policies are reformed to eliminate overlapping and duplicative coverage
provided by LMIC during the disputed period.2 (Id. at ¶¶ 32-33, Count I.) CRS next
seeks rescission of the LMIC Policy based on alleged mutual mistakes of fact regarding
the coverage as applied for and as bound. (Id. at ¶¶ 39-40, Count II.) In the alternative,
CRS seeks rescission of the LMIC Policy due to CRS’s unilateral mistake of fact
regarding the scope of coverage, about which LMIC allegedly had knowledge yet
remained silent. (Id. at ¶¶ 41-42, Count II.)
2
Under this third version of the requested declaratory judgment, CRS asserts that GIC must return all
premium and deductibles paid to GIC during the disputed period for workers covered by the LMIC Policy,
and that LMIC must assume all claims from the disputed period. (ECF No. 40 at ¶ 33; see also Count IV.)
6
In the event the LMIC Policy is not rescinded due to either a mutual or unilateral
mistake of fact, CRS seeks to reform the LMIC Policy to cover only those CRS workers
in North Carolina and Virginia classified under code 5183 for a minimum period of May
24, 2013 to September 1, 2013, or a maximum period of May 24, 2013 to January 14,
2014. (Id. at ¶ 47, Count III.) Finally, if the Court determines that LMIC covered all CRS
workers in North Carolina and South Carolina during the disputed period, CRS seeks
reformation (by way of separate Count than the declaratory judgment) of: (a) the First
GIC Policy to cover CRS workers in North Carolina and South Carolina for only that
period of time from February 15, 2013 to May 23, 2013, based upon a mutual mistake
as to the scope of coverage; and (b) the Second GIC Policy to cover CRS workers in
North Carolina, South Carolina, and Virginia for only that period of time from January
15, 2014 to September 1, 2014, based upon a mutual mistake as to the scope of
coverage. (Id. at ¶¶ 49-50, Count IV.) In conjunction with the putative reformation of the
GIC Policies, CRS claims that GIC would be required to refund all premium and
deductibles paid to GIC for coverage of CRS workers in North Carolina, South Carolina,
and Virginia from May 23, 2013 to January 14, 2014. (Id. at ¶ 51, Count IV.)
GIC filed a Motion to Dismiss (ECF No. 48) pursuant to Fed. R. Civ. Pro. 12(b)(6)
on June 18, 2015. CRS filed a Response (ECF No. 58) on July 16, 2015, and GIC filed
its Reply on July 27, 2015 (ECF No. 59). In addition, on June 25, 2015 GIC filed a
Motion to Stay Discovery, Disclosure, and Conference Deadlines (ECF No. 52) pending
the outcome of its Motion to Dismiss. CRS consented in the Motion to Stay; however,
LMIC filed a Response and Objection (ECF No. 55) on July 10, 2015. GIC filed its Reply
7
(ECF No. 56) on July 15, 2015. The Court has thoroughly reviewed these filings and
now issues the following rulings.
STANDARD OF REVIEW
A plaintiff’s complaint should set forth “a short and plain statement . . . showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Rule 8 “does not require
‘detailed factual allegations,’ but it demands more than an unadorned, the-defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “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. (quoting Twombly, 550 U.S. at 570)). “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)). In considering a motion to dismiss under Fed. R.
Civ. P. 12(b)(6), a court “accepts all well-pled facts as true and construes these facts in
the
light
most
favorable
to
the
plaintiff
. . . .”
Nemet
Chevrolet,
Ltd.
v.
Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009). A court should grant a
Rule 12(b)(6) motion if, “after accepting all well-pleaded allegations in the plaintiff’s
complaint as true and drawing all reasonable factual inferences from those facts in the
plaintiff’s favor, it appears certain that the plaintiff cannot prove any set of facts in
support of his claim entitling him to relief.” Edwards v. City of Goldsboro, 178 F.3d 231,
244 (4th Cir. 1999).
As previously noted, to survive a Rule 12(b)(6) motion to dismiss a complaint
must state “a plausible claim for relief.” Iqbal, 556 U.S. at 679 (emphasis added). “The
8
plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts
that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between
possibility and plausibility of entitlement to relief.’” Id. at 678 (quoting Twombly, 550 U.S.
at 557). Stated differently, “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)). Still, Rule 12(b)(6) “does not countenance . . . dismissals based on a judge’s
disbelief of a complaint’s factual allegations.” Colon Health Centers of Am., LLC v.
Hazel, 733 F.3d 535, 545 (4th Cir. 2013) (quoting Neitzke v. Williams, 490 U.S. 319,
327 (1989)). “A plausible but inconclusive inference from pleaded facts will survive a
motion to dismiss . . . .” Sepulveda-Villarini v. Dep’t of Educ. of Puerto Rico, 628 F.3d
25, 30 (1st Cir. 2010).
Generally, “[when] resolving a motion pursuant to Rule 12(b)(6) . . . , a district
court cannot consider matters outside the pleadings without converting the motion into
one for summary judgment.” Occupy Columbia v. Haley, 738 F.3d 107, 116 (4th Cir.
2013). However, “when a plaintiff fails to introduce a pertinent document as part of his
complaint, the defendant may attach the document to a motion to dismiss the complaint
and the [c]ourt may consider the same without converting the motion to one for
summary judgment.” Gasner v. Cnty. of Dinwiddie, 162 F.R.D. 280, 282 (E.D. Va.
1995), aff’d, 103 F.3d 351 (4th Cir. 1996) (citing 5 Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure: Civil, § 1327, at 762-63 (2d ed. 1990)); accord Philips
v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (the court may properly
9
consider documents “attached to the complaint . . . as well those attached to the motion
to dismiss, so long as they are integral to the complaint and authentic”). Indeed, “to
pursue any other tack would risk permitting ‘a plaintiff with a legally deficient claim [to]
survive a motion to dismiss simply by failing to attach a dispositive document upon
which it relied.’” Gasner, 162 F.R.D. at 282 (quoting Pension Ben. Guar. Corp. v. White
Consol. Industries, Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (holding that a court may
consider an undisputedly authentic document that a defendant attaches as an exhibit to
a motion to dismiss if the plaintiff’s claims are based on the document)).
DISCUSSION
I. Third-Party Defendant Motion to Dismiss
Third-Party Defendant GIC seeks dismissal of CRS’s Third-Party Complaint
under Rule 12(b)(6) for two core reasons. First, GIC asserts that CRS has failed to set
forth any mutual mistake of fact regarding the insurance policies at issue between CRS
and GIC that would support its claim for declaratory relief and reformation of contract.
(ECF No. 48 at 1, 6.) According to GIC, any allegations of mutual mistake of fact to
support such relief are conclusory and not backed by well-pled facts. (Id. at 6.) Second,
GIC maintains that CRS’s claims against it are contingent upon there being overlapping
workers compensation insurance between the coverage provided by GIC and the
coverage provided by LMIC; but, argues GIC, this is a legal impossibility because LMIC
was functioning as a provider of residual market insurance and cannot have insured any
risk that GIC insured on the voluntary market. (Id. at 1, 6.) Relatedly, GIC argues that
the terms of LMIC’s residual market policy itself preclude coverage of any risk already
insured. (Id. at 1-2, 6-7.)
10
With regard to the putative lack of any mistake of fact, GIC does not dispute that
the First GIC Policy voluntarily insured all CRS workers except those in code 5183 in
North Carolina and Virginia from February 15, 2013 to September 1, 2013. Nor does it
dispute that the Second GIC Policy insured all CRS workers regardless of class code or
state from September 1, 2013 to September 1, 2014. Moreover, GIC acknowledges that
CRS paid applicable premiums and deductibles in accordance with the terms of both
policies. (Id. at 3.) GIC argues that CRS’s own actions in obtaining residual market
insurance and CRS’s corresponding admissions regarding its understanding of the
scope of the First and Second GIC Policies preclude any plausible inference that CRS
or GIC was mutually mistaken as to the coverage provided. (Id. at 8.)
With regard to the legal impossibility of overlapping coverage, GIC argues that it
may defeat CRS’s Third-Party Complaint by defending against LMIC’s original claim.
(Id. at 9 (citing Fed. R. Civ. P. 14).) GIC avers that as a matter of law, LMIC cannot
have insured any risk also insured by GIC. GIC relies on provisions found in the NCCI
Basic Manual and NCCI Assigned Risk Supplement (attached as Exhibits C and D to its
Motion to Dismiss, respectively) for the assertion that an assigned risk policy and a
voluntary policy cannot overlap.3 (Id. at 9-10 (citing NCCI Basic Manual, Rule
4.A.4.a.(6); NCCI Assigned Risk Supplement 12.B.4.)); see also Avant v. Willowglen
Academy, 367 S.C. 315, 322 (2006) (holding that assigned risk coverage automatically
terminated when workers compensation coverage commenced under voluntary policy).
GIC further cites Rodriguez v. Romero, 610 S.E.2d 488 (S.C. 2005) for the proposition
that an assigned risk policy that purports to cover the same risk as a voluntary policy,
3
Although NCCI is not a regulatory body, its publications, when approved by the Director of the
Department of Insurance, have the force of law regarding the administration and interpretation of residual
market coverage in South Carolina. Avant v. Willowglen Academy, 367 S.C. 315, 319-20 (2006).
11
procured after the voluntary coverage, fails to take effect. Rodriguez, 610 S.E.2d at 492.
Moreover, GIC points to the substance of CRS’s assigned risk application and the LMIC
Policy itself, which itemizes coverage for code 5183 workers in North Carolina and
Virginia and codes 5190 and 6325 workers in South Carolina only, as evidence that
LMIC cannot plausibly have provided overlapping coverage. (ECF No. 48 at 10-14.)
CRS responds that it agrees with GIC that, as a matter of law, LMIC could not
have insured on the involuntary market CRS workers that were already insured on the
voluntary market by GIC. (Third-Party Pl.’s Resp. to Mot. to Dismiss, ECF No. 58 at 1,
4.) CRS correctly points out that if the Court were to grant GIC’s Motion to Dismiss
based on GIC’s arguments regarding exclusive coverage of all but a small subset of
CRS workers, such a ruling would moot LMIC’s breach of contract claim against CRS.
(Id. at 2, 4-5.) CRS maintains that its claims against GIC “are pled only in the event this
Court were to hold LMIC is entitled to any additional premium and/or that GIC did not
insure all CRS workers other than the 5183 [workers in North Carolina and Virginia].”
(Id. at 3.)
CRS asserts that it has indeed alleged a mutual mistake of fact sufficient to state
a claim for reformation of its insurance contracts with GIC in the event that the Court
determines LMIC insured more workers than CRS and GIC understood during the
relevant time period. This common sense argument is persuasive, and the Court
agrees. It is hardly disputable that both CRS and GIC were operating under the
assumption that the First GIC Policy covered all CRS workers except the 5183 workers
in North Carolina and Virginia, and that the Second GIC Policy covered all CRS workers
in all codes in all states. CRS and GIC have repeatedly said as much in their filings. If it
12
now turns out that this essential assumption was wrong, then CRS and GIC were
indeed mutually mistaken about the scope of coverage provided by GIC. CRS sums up
this point nicely: “[A]ssuming arguendo that LMIC’s allegations regarding the scope of
LMIC’s coverage have any merit, there is no better evidence of a mutual mistake than
both GIC and CRS arguing the same scope of coverage under the GIC Policies and
potentially losing that argument to LMIC.” (ECF No. 58 at 7.) Relatedly, if the Court
resolved the overarching dispute in LMIC’s favor, then reformation of the First and
Second GIC Policies would arguably correct the mutual mistake of CRS and GIC,
prevent CRS from paying twice for the same coverage, prevent GIC from paying claims
for workers it did not actually insure, and prevent the duplicative coverage that both
CRS and GIC claim contravenes South Carolina law. The Federal Rules of Civil
Procedure explicitly permit alternative pleading, Fed. R. Civ. P. 8(d)(2), and CRS has
engaged in that method as regards its Counterclaim against LMIC and its Third-Party
Complaint against GIC. The Court finds that CRS has pled a mutual mistake of fact
sufficient to satisfy Rule 8 as to its claim for reformation of the GIC Policies, and the
Motion to Dismiss on these grounds is denied.
From the substance of the briefing on GIC’s Motion to Dismiss, it appears that
this case may permit resolution on solely legal grounds. Even when taking LMIC’s
Complaint into account, it would appear that many of the relevant facts are undisputed.
But the Court is not in a position to dispose of the case in its entirety based on the
current record, particularly in light of the fact that LMIC was not party to the briefing on
GIC’s Motion to Dismiss even while GIC’s arguments for dismissal were largely based
on a critique of LMIC’s, not CRS’s, allegations. LMIC’s damages claim for unpaid
13
premium seems to be based at least in part on the fact that the named insured on the
GIC Policies is InSource Employer Solutions (“InSource”) and/or Entera Work Comp
Solutions, LLC (See Pl.’s Resp. in Opp. to Mot. for Leave to Add a Party and Amend
Counterclaim, ECF No. 28 at 2, 4-9; see also Ex. A, Third-Party Mot. to Dismiss, ECF
No. 48-1.)4 Although South Carolina law about overlapping assigned risk and voluntary
coverage seems relatively clear at first blush, voluntary coverage trumps residual
market coverage (see Avant and Rodriguez), there are open questions about whose
employees GIC was actually covering, whether CRS was leasing those employees from
InSource, and the like. Post hoc agreement between CRS and GIC on these points is
not enough for the Court to lend dispositive weight to a Third-Party Defendant’s
arguments that would subsequently moot the underlying lawsuit.
If LMIC truly bore the risk for more than nine million dollars in annual payroll, it is
certainly entitled to corresponding premium on a pro rata basis. On the other hand, if
the coverage issue is as straightforward as CRS and GIC represent, then LMIC may be
willing to voluntarily withdraw its lawsuit. The Court, however, suspects that resolution of
this dispute is not quite as simplistic as either side wants it to be. For the time being,
CRS has stated a plausible claim to relief against GIC for a declaratory judgment and
reformation of the GIC Policies on the contingency that LMIC, and not GIC, was actually
4
There are limited references to CRS in the First and Second GIC Policies, including an endorsement
purportedly adding CRS to the First Policy (see ECF No. 48-1 at 43-45), two itemized CRS locations on a
“Schedule of Named Insured and Locations” (id. at 46), an endorsement purportedly adding “PEO
Employer Contingent Resource Solutions, LLC effective 9/1/2013” to the Second Policy (id. at 106-107),
an endorsement purportedly adding a CRS workplace location in North Carolina (id. at 151-153), and
numerous references to an “Employee Leasing Policy for Leased Workers of Multiple Client Companies”
applicable to various CRS locations (id. at 109, 112, 116). The Court will note that the Second Policy
indicates a CRS location involving this “Employee Leasing Policy” in Indianapolis, Indiana, which none of
the parties have even mentioned. (Id. at 109.) The question of whose workers were actually being
insured, whether they were leased employees, and whether or not there is in fact a separate body of nonleased employees that LMIC is claiming it covered is anything but clear to the Court.
14
providing workers compensation insurance coverage for the CRS employees in
question. Accordingly, GIC’s Motion to Dismiss is denied.
II. Third-Party Defendant Motion to Stay
Shortly after filing its Motion to Dismiss, GIC filed a Motion to Stay Discovery,
Disclosure, and Conference Deadlines (ECF No. 52) asking the Court to stay these
deadlines until the Motion to Dismiss was resolved. LMIC opposed the stay in its
Response (ECF No. 55), but the issue is now moot given that the Court has resolved
GIC’s Motion to Dismiss herein. Accordingly, GIC’s Motion to Stay is denied as moot.
CONCLUSION
For the reasons set forth above, Third-Party Defendant GIC’s Motion to Dismiss
(ECF No. 48) is DENIED. Moreover, GIC’s Motion to Stay (ECF No. 52) is DENIED as
moot. The parties are directed to confer and file a proposed scheduling order within
fourteen (14) days of the issuance of this Order.
IT IS SO ORDERED.
/s/ Bruce Howe Hendricks
United States District Judge
February 24, 2016
Greenville, South Carolina
15
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