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Nationwide Mutual Insurance Co. v. Creasman

United States District Court, E.D. North Carolina, Western Division

April 11, 2019




         This matter is before the court on defendants' motion for partial judgment on the pleadings, motion to dismiss, and, in the alternative, motion to stay. (DE 7). The motion has been fully briefed and thus the issues raised are ripe for ruling. For the reasons that follow, the court grants in part and denies in part defendants' motion.


         This case arises out of an underlying civil action (“underlying action”) filed against defendants Kevin P. Creasman, Kandy M. Creasman, Holly Creasman, and Tyler Creasman, (collectively, “defendants”), as well as others. The underlying action was filed by Henry Van Buren and Magi Van Buren (“the Van Burens”) on May 23, 2018, in the circuit court of Tennessee for the third judicial district at Morristown with the caption Henry Van Buren and Magi Van Buren v. Kevin Creasman, Kandy Creasman, Holly Creasman, Tyler Creasman, John Lumb, Marnie Lumb, Bryan Lumb, and Erie Insurance Company, 18 CV 077, and asserts claims as to defendants for negligence, intentional misconduct, trover, conversion, personal injury, property damage, and punitive damages for acts and omissions committed by Holly and Tyler Creasman when they were minors and against their parents, Kevin and Kandy Creasman, arising out of negligent supervision.[1]The Van Burens allege they have sustained damages in excess of $10, 000.000.00.

         On August 2, 2018, plaintiffs filed this action seeking declaration there is no liability coverage for the claims brought against defendants in the underlying action pursuant to the following policies issued by plaintiffs to defendants: policy 6132HP379612 (“North Carolina homeowner's policy”), policy 6341HO390810 (“Tennessee homeowner's policy”), and policy 6132PU599285 (“umbrella policy”) (“the policies”). (Compl. (DE 1) ¶10; DE 1-1; DE 1-2; DE 1-3). Plaintiffs attach to their complaint the policies as well the complaint filed in the underlying action.[2]

         Defendants filed the instant motion on October 5, 2018, arguing that 1) plaintiffs have a duty to defend defendants and 2) plaintiffs' claim for declaratory judgment regarding its duty to indemnify is premature, or, in the alternative, a balancing of state and federal interests weighs in favor of staying this action until resolution of the underlying action occurs.


         The facts alleged in the underlying complaint relevant to the resolution of the instant motion may be summarized as follows.

         The Van Burens left Belcaro, their estate, to travel to Miami, Florida in early August, 2013. (See DE 1-4 ¶¶ 1, 9). Before leaving, the Van Burens installed surveillance cameras throughout the property, which revealed the following acts.

         On August 5, 2013, Holly Creasman and a female accomplice drove up to Belcaro's front door to “case” the house. Later, Tyler Creasman and another female accomplice joined them. The four teenagers looked repeatedly under flower pots and other ornamental items. The following day, Tyler Creasman drove up to Belcaro with his young child, his girlfriend, Holly Creasman, and her original female accomplice. Based on the camera footage, it appears that Tyler Creasman broke into Belcaro on August 6, 2013, just after 6 p.m.

         Over the next three to four weeks, camera footage shows repeated incursions upon Belcaro by Holly and Tyler Creasman and others, wherein theft, vandalism, and attempted acts of vandalism occurred, including eventually the disabling of the surveillance cameras on September 12, 2013.

         The Van Burens noticed a significant spike in their utility bill on December 31, 2013 and January 1, 2014, which the Van Burens allege was caused by a New Year's eve party thrown at Belcaro. Before leaving Belcaro for the last time, Holly Creasman, Tyler Creasman, or another person left open multiple skylights, doors and windows, causing the pipes to thereafter freeze and burst, thereby also causing the interior walls and floors to be irreparably damaged by water from both inside and out.

         Most of the Van Burens' personal property inside the house was irreparably damaged or outright destroyed. Upon returning to Belcaro several months later, the Van Burens found the following items missing and presumed stolen: a .357 Ruger handgun model 01707; an AR 15 rifle; two AK 47 rifles; $5, 600.00 in cash; thousands of dollars' worth of expensive champagne and liquor; a $6, 000.00 Rolex; numerous sports and entertainment trading cards, including a Mickey Mantle rookie card and cards featuring Yogi Berra, Hank Aaron, Johnny Bench, Wilt Chamberlain and Johnny Unitas; and numerous articles of clothing including several expensive suits and coats. Additionally, the Van Burens later discovered that antifreeze had been poured directly into their vehicles's crankshaft, destroying the engine of the $80, 000.00 vehicle. Finally, the Van Buren's allege that “Magi Van Buren suffered a significant heart attack likely caused by the stress she was under.” (DE 1-4 ¶ 38).

         As relevant here, the Van Burens claim “damages resulting from negligence, intentional misconduct, trover and conversion, ” that “Kevin Creasman, Kandy Creasman . . . were all negligent in the supervision of their children by failing to prevent them from causing damages that were reasonably foreseeable, ” and that “Tyler Creasman, Holly Creasman . . . were negligent by allowing so many vandals and thieves into Belcaro after Holly Creasman ‘cased' the property and Tyler Creasman broke into it.” (DE 1-4 at 1, ¶¶ 45, 47).


         A. Standard of Review

         Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). In resolving a motion for judgment on the pleadings, the court must accept all of the nonmovant's factual allegations as true and draw all reasonable inferences in their favor. Bradley v. Ramsey, 329 F.Supp.2d 617, 622 (W.D. N.C. 2004). Judgment on the pleadings is warranted where the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Id. The court is permitted to consider the complaint, answer, and any materials attached to those pleadings or motions for judgment on the pleadings “so long as they are integral to the complaint and authentic.” Philips v. Pitt Cty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

         Although a motion for judgment on the pleadings pursuant to Rule 12(c) is separate and distinct from a motion to dismiss under Rule 12(b)(6), federal courts apply the same standard for Rule 12(c) motions as for motions made pursuant to Rule 12(b)(6). Indep. News, Inc. v. City of Charlotte, 568 F.3d 148, 154 (4th Cir. 2009); Burbach Broad. Co. of Delaware v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999).

         A motion to dismiss under Rule 12(b)(6) determines only whether a claim is stated; “it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). A claim is stated if the complaint contains “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In evaluating whether a claim is stated, “[the] court accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff[, ]” but does not consider “legal conclusions, elements of a cause of action, . . . bare assertions devoid of further factual enhancement[, ] . . . unwarranted inferences, unreasonable conclusions, or arguments.” Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 255 (4th Cir. 2009) (citations omitted). In other words, the plausibility standard requires a plaintiff to articulate facts, that, when accepted as true, demonstrate that the plaintiff has stated a claim that makes it plausible he is entitled to relief. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quotations omitted).

         B. Analysis

         1. Defendants' Motion for Partial Judgment on the Pleadings

         In determining whether an insurer has a duty to defend its insured, North Carolina courts use the “comparison test, ” analyzing the insurance policy side-by-side with the underlying complaint, taking all of the claimant's allegations as true. Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1, 7 (2010).[3] As stated by the North Carolina Supreme Court,

When the pleadings state facts demonstrating that the alleged injury is covered by the policy, then the insurer has a duty to defend, whether or not the insured is ultimately liable. Consequently, when the pleadings allege facts indicating that the event in question is not covered, and the insurer has no knowledge that the facts are otherwise, then it is not bound to defend.

Waste Management v. Peerless Ins. Co., 315 N.C. 688, 691 (1986) (citations omitted); see also Harleysville, 364 N.C. at 7 (“In addressing the duty to defend, the question is not whether some interpretation of the facts as alleged could possibly bring the injury within the coverage provided by the insurance policy; the question is, assuming the facts as alleged to be true, whether the insurance policy covers that injury.”).

         When pleadings allege multiple claims, some of which may be covered by the insurer and some of which may not, the mere possibility the insured is liable, and that the potential liability is covered, impose a duty to defend. Waste Management v. Peerless Ins. Co., 315 N.C. at 691 n.2 (“Of course, allegations of facts that describe a hybrid of covered and excluded events or pleadings that disclose a mere possibility that the insured is liable (and that the potential liability is covered) suffice to ...

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