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Houston Casualty Co. v. Thomas Linderman Graham, Inc.

United States District Court, M.D. North Carolina

July 25, 2017

HOUSTON CASUALTY COMPANY, Plaintiff,
v.
THOMAS LINDERMAN GRAHAM, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Thomas D. Schroeder United States District Judge

         Plaintiff Houston Casualty Company (“HCC”) brings this action seeking a declaratory judgment that it owes no further duty to defend its insured, Defendant Thomas Linderman Graham, Inc. (“TLG”), in a State court action presently on appeal. TLG now moves to dismiss the complaint, contending that it contravenes a forum-selection clause in the parties' May 1, 2015 settlement agreement (“Agreement”) in an earlier duty-to-defend declaratory judgment action by HCC involving the same State court action. The forum-selection clause required any action to enforce the Agreement to be brought in Wake County Civil Superior Court. (Doc. 8 at 1.) For the reasons explained below, the court finds that the Agreement's forum-selection clause does not encompass HCC's present action. TLG's motion to dismiss must therefore be denied.

         I. BACKGROUND

         Viewed in the light most favorable to HCC, the operative facts are as follows:

Defendant TLG, a real estate agency, held a professional liability insurance policy with Plaintiff HCC. (Doc. 1 at 8, ¶ 19.) In 2006, the owner of a commercial property in Durham retained TLG to prepare an offering memorandum for prospective purchasers. (Id. at 4, ¶ 12.) Triple Net Properties, LLC, eventually purchased the property and sold fractional interests to a number of parties. (Id. at 4-5, ¶ 12.) The ultimate purchasers sued TLG in 2012, alleging that its memorandum overrepresented the likelihood that existing tenants would renew their leases (and therefore overrepresented the property's value). (Doc. 1 at 5, ¶ 12.)

         While that action was pending, HCC brought a declaratory judgment action against TLG in Wake County Civil Superior Court, seeking a declaration that it had no duty to defend TLG in the property owners' lawsuit. (Id. at 11, ¶¶ 25-26; Doc. 10-1 at 4-6.) TLG filed an answer and counterclaims. (Doc. 1 at 11, ¶ 26.) On January 10, 2014, the Superior Court held that HCC had a duty to defend TLG (Doc. 10-1 at 5-6), and on May 1, 2015, HCC and TLG settled their dispute by entering into the Agreement. The Agreement is a short, three-paragraph document that provides principally that each party dismiss all claims against the other with prejudice, agree to adhere to the Superior Court's rulings, and acknowledge that the Agreement would not release any party from “any potential future contractual duties or obligations which may accrue after April 27, 2015, or any causes of action that arise therefrom.” (Id. at 1-7.) The last sentence reads: “Any action to enforce this Agreement shall be filed in Wake County, North Carolina, Civil Superior Court.” (Id. at 3.)

         Meanwhile, HCC made a settlement offer to the property owners on TLG's behalf in the underlying lawsuit. (Id. at 11, ¶ 29.) The owners accepted the offer, but TLG refused to consent to it. (Id. at 12, ¶ 31.) Thereafter, the court granted TLG's motion for summary judgment and dismissed all the claims then pending. (Doc. 1 at 7, ¶ 16.) The property owners have since appealed that ruling.

         In the present case, HCC contends that under the insurance policy, TLG's refusal to consent to the settlement excused HCC from further defending TLG in the action. (Id. at 12, ¶ 33.) HCC therefore seeks a declaratory judgment from this court that it had no duty to defend TLG following TLG's refusal to consent to the settlement.

         TLG now moves to dismiss the complaint for improper venue on the basis that the Agreement's forum-selection clause makes venue in this court improper.

         II. ANALYSIS

         A. Standard of Review

         A motion to dismiss based on a forum-selection clause is treated as a motion to dismiss for improper venue, pursuant to Rule 12(b)(3). Sucampo Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 550 (4th Cir. 2006). “On a motion to dismiss under Rule 12(b)(3), the court is permitted to consider evidence outside the pleadings. A plaintiff is obliged, however, to make only a prima facie showing of proper venue in order to survive a motion to dismiss. In assessing whether there has been a prima facie venue showing, [the court views] the facts in the light most favorable to the plaintiff.” Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 365-66 (4th Cir. 2012) (citations omitted).

         B. Scope of the Forum-Selection Clause

         1. ...


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