United States District Court, S.D. West Virginia, Charleston Division
MEMORANDUM OPINION AND ORDER
R. GOODWIN UNITED STATES DISTRICT JUDGE.
before the court is Defendant Harco National Insurance
Company's Motion for Summary Judgment as to Claims
Brought By Plaintiffs That Are Not Named Insureds Under the
Harco Policy. [ECF No. 13]. For the reasons that follow, the
Motion is GRANTED.
Automotive, Inc., Rodney LeRose II, Jonathan LeRose,
Mid-State Properties, LLC, and Mid-State Ford, LLC
(“Plaintiffs”) brought the current action against
Defendant Harco National Insurance Co. (“Harco”)
for breach of contract related claims resulting from a June
9, 2017 fire. The fire devasted the building and business
personal property owned by Plaintiffs at 1000 Arbuckle Road,
Summersville, West Virginia.
Automotive, Inc. is a closely-held corporation that operates
Plaintiffs' Sutton and Beckley dealerships. Pls. Resp.
Mot. Summ. J. [ECF 22]. Rodney LeRose, II is its sole
shareholder. Id. Mid-State Properties, LLC is a
limited liability company that owns all of Plaintiffs'
dealership properties. Id. Mid-State Properties has
two members: Rodney LeRose, II and his brother, Jonathan.
Id. Mid-State Properties is the title owner of the
building that was destroyed. Id. Mid-State Ford, LLC
is also a limited liability company in which the LeRose
brothers are the only members. Id. Mid-State Ford
operates Plaintiffs' Ford dealership in Summersville.
August 2015, Plaintiffs obtained insurance coverage from
Harco for the businesses, a Commercial - Special Form
insurance policy, number CPP000654101, with effective dates
of August 15, 2016 through August 15. Compl. [ECF No. 1]
¶ 10, 11. However, “[o]nly two of the five
Plaintiffs in this action (i.e. Mid-State Automotive, Inc.
and Mid-State Ford, LLC) are identified as Named Insureds
under the subject Harco Policy.” Mot. Summ. J. [ECF No.
13] 1. “Plaintiffs Rodney LeRose II, Jonathan LeRose,
and Mid-State Properties, LLC are not identified as Named
Insureds under the Harco Policy.” Id.;
see Exs. 1-5 [ECF No. 15].
initiated the instant action against Defendant alleging a
breach of contract claim in Count I on behalf of Plaintiffs
Mid-State Ford, LLC, Rodney LeRose II, and Jonathan LeRose, a
Hayseeds damages claim in Count II on behalf of all
Plaintiffs, a breach of the implied covenant of good faith
and fair dealing in Count III on behalf of all Plaintiffs,
and an unfair claims settlement practices claim in Count IV
on behalf of all Plaintiffs. Defendant Harco moves for
summary judgment as to the claims brought by Plaintiffs that
are not named insureds under the Harco Policy, Rodney Lerose
II, Jonathan Lerose, and Mid-State Properties, LLC. [ECF No.
obtain summary judgment, the moving party must show that
there is no genuine dispute as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). “Facts are ‘material'
when they might affect the outcome of the case.”
Lester v. Gilbert, 85 F.Supp.3d 851, 857 (S.D. W.Va.
2015) (quoting The News & Observer Publ'g Co. v.
Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th
Cir. 2010)). “A genuine issue of material fact exists
if ... a reasonable fact-finder could return a verdict for
the non-movant.” Runyon v. Hannah, No.
2:12-1394, 2013 WL 2151235, at *2 (S.D. W.Va. May 16, 2013)
(citations omitted); see Williams v. Griffin, 952
F.2d 820, 824 (4th Cir. 1991) (“Disposition by summary
judgment is appropriate ... where the record as a whole could
not lead a rational trier of fact to find for the
non-movant.”). The moving party bears the burden of
showing that “there is an absence of evidence to
support the nonmoving party's case.” Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986).
case, there is no factual dispute as to which parties are the
Named Insureds under the Harco Policy-only Mid-State
Automotive, Inc. and Mid-State Ford, LLC appear as Named
Insureds. The issue here is whether Mid-State Properties,
Rodney LeRose, II, and Jonathan LeRose, though not Named
Insureds under the policy, may sue Harco for breach of
contract under the insurance policy.
West Virginia Supreme Court of Appeals has been clear that
“an individual who is not a party to the insurance
contract cannot maintain a suit on the policy.”
Farmers & Mechanics Mut. Ins. Co. v. Allen, 778
S.E.2d 718, 723 (2015). This is because “a contract of
insurance is a personal contract between the insurer and the
insured named in the policy.” Id. As such,
“[a]n insurance policy and all rights arising from the
policy are controlled by principles of contract, rather than
property law.” Id. at 724. “It is also
axiomatic that an insurance policy is a contract of indemnity
which pertains to the parties to the contract as opposed to
the property being insured.” Id. at 723. It
would be “patently unfair” if a party did not
have a “right to choose whom it will or will not
insure.” Id. at 724. Thus, “[i]f a
contract unambiguously identifies the insureds, then a court
may not, by judicial construction, enlarge the coverage to
include other individuals foreign to the insurer.”
case, Mid-State Properties, Rodney LeRose, II, and Jonathan
LeRose are not named in the insurance contract between Harco
and Mid-State Automotive, Inc. and Mid-State Ford, LLC.
Therefore, they may not maintain a suit under the insurance
argue that even though Mid-State Properties, Rodney LeRose,
II, and Jonathan LeRose are not named under the insurance
policy, they nevertheless have an “insurable
interest.” Pls. Resp. Mot. Summ. J. [ECF 22] 4. In
doing so, they cite a case from 1912, Scott v. Dixie Fire
Ins. Co., 74 S.E. 659, 660 (1912), and a Connecticut
state court case, Wilcox v. Webster Ins. Co., 982
A.2d 1053 (2009). This Court is not required to follow
Connecticut case law. In addition, Plaintiffs mischaracterize
the Scott case, which addressed the interests of a
partnership after an insurance policy was issued to the
partnership and one of the partners had died. See genera
ly Scott, 74 S.E. at 659-61. The case
does not address the issue here. And to clarify, the issue of
“insurable interest” arises when there is a
question as to whether a person or entity that takes out
insurance on the property can recover under the policy.
“[A] person who is not either a party to the insurance
contract or one for whose benefit it was written is not
entitled to a share of the insurance proceeds by the mere
fact they have an insurable ...