Brakebush Brothers, Inc. v. Certain Underwriters at Lloyd's of London - Novae 2007 Syndicate Subscribing to Pol'y No. 93prx17f157

2022 NCBC 23
CourtNorth Carolina Business Court
DecidedMay 11, 2022
Docket20-CVS-367
StatusPublished

This text of 2022 NCBC 23 (Brakebush Brothers, Inc. v. Certain Underwriters at Lloyd's of London - Novae 2007 Syndicate Subscribing to Pol'y No. 93prx17f157) is published on Counsel Stack Legal Research, covering North Carolina Business Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brakebush Brothers, Inc. v. Certain Underwriters at Lloyd's of London - Novae 2007 Syndicate Subscribing to Pol'y No. 93prx17f157, 2022 NCBC 23 (N.C. Super. Ct. 2022).

Opinion

Brakebush Brothers., Inc. v. Certain Underwriters at Lloyd’s of London - Novae 2007 Syndicate Subscribing to Pol’y No. 93PRX17F157, 2022 NCBC 23.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION DAVIE COUNTY 20 CVS 367

BRAKEBUSH BROTHERS, INC. AND HOUSE OF RAEFORD FARMS,

Plaintiffs,

v.

CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON - NOVAE 2007 SYNDICATE SUBSCRIBING TO POLICY WITH NUMBER 93PRX17F157, HALLMARK SPECIALTY INSURANCE CO., ORDER AND OPINION ON EVANSTON INSURANCE CO., DEFENDANTS’ JOINT MOTION TO MAXUM INDEMNITY CO., DISMISS AND CERTAIN HUDSON SPECIALTY INSURANCE DEFENDANTS’ MOTION TO CO., LIBERTY SURPLUS RECONSIDER INSURANCE CORPORATION, IRONSHORE SPECIALTY INSURANCE CO., AND CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON -BRIT SYNDICATE 2987 SUBSCRIBING TO POLICY WITH NUMBER PD-10972-00,

Defendants.

THIS MATTER comes before the Court on Defendants’ Joint Motion to Dismiss

Amended Complaint (“Motion to Dismiss”) (ECF No. 112) and on Defendants Maxum,

Ironshore, Novae, Hallmark, and Hudson’s Motion to Reconsider (“Motion to

Reconsider”) (ECF No. 114).

The Court, having considered the motion, the briefs of the parties, the

arguments of counsel, and all applicable matters of record, CONCLUDES, for the

reasons set forth below, that (1) Defendants’ Motion to Dismiss should be GRANTED, in part, and DENIED, in part; and (2) the Motion to Reconsider should be DENIED

as moot.

Kilpatrick Townsend & Stockton LLP, by Susan Boyles, and Dorsey & Whitney LLP, by Eric Weisenburger, Vernle C. Durocher, and Kathryn Ann Johnson, for Plaintiffs Brakebush Brothers Inc. and House of Raeford Farms.

Nelson Mullins Riley & Scarborough LLP, by G. Gray Wilson and Stuart H. Russell, and Tressler, LLP, by Timothy Jabbour, Anthony Tessitore, and Kiera Fitzpatrick, for Defendants Certain Underwriters at Lloyd’s of London – Brit Syndicate 2987, Evanston Insurance Company, Maxum Indemnity Company, Hudson Specialty Insurance Company, Liberty Surplus Insurance Corporation, and Ironshore Specialty Insurance Company.

Butler Weihmuller Katz Craig LLP, by Clark Schirle, Khrystyne Smith, and L. Andrew Watson, for Defendant Certain Underwriters at Lloyd’s of London Novae 2007 Syndicate.

Akerman, LLP, by Bryan G. Scott, for Defendant Hallmark Specialty Insurance Company.

Davis, Judge.

INTRODUCTION

1. The present motions raise two primary issues. First, the Court must

determine when a new plaintiff may be substituted under N.C. R. Civ. P. 17 as the

real party in interest and allowed to bring certain claims against the named

defendants under a “relation back” theory where the assertion of those claims would

otherwise be barred by the statute of limitations. Second, the Court has been asked—

based on the existence of new case law—to revisit its prior ruling on the issue of

whether North Carolina law allows an assignee of the right to receive proceeds under an insurance policy to sue the assignor’s insurer on theories of bad faith and unfair

and deceptive trade practices.

FACTUAL AND PROCEDURAL BACKGROUND

2. The Court does not make findings of fact on a motion to dismiss under

Rule 12(b)(6) of the North Carolina Rules of Civil Procedure and instead recites those

facts contained in the complaint (and in documents attached, referred to, or

incorporated by reference in the complaint) that are relevant to the Court’s

determination of the motion. See, e.g., Window World of Baton Rouge, LLC v. Window

World, Inc., 2017 NCBC LEXIS 60, at *11 (N.C. Super. Ct. July 12, 2017).

3. On 14 December 2017, a fire caused substantial damage to a chicken

processing facility located in Mocksville, North Carolina. (Amended Complaint, ECF

No. 100, at ¶ 2.) At the time of the fire, the facility was owned by Plaintiff House of

Raeford Farms, Inc. (“Raeford”), but Plaintiff Brakebush Brothers Inc. (“Brakebush”)

“was in the process of purchasing the [facility] from Raeford when the fire occurred.”

(Id.)

4. As of the date of the fire, Raeford had obtained two layers of commercial

property insurance coverage for the facility: (1) a primary insurance policy issued by

“Certain Underwriters at Lloyd’s, London and various syndicates subscribing to that

policy” with a limit of $20,000,000 (“the Primary Policy”); and (2) eight excess

insurance policies that provided, in total, limits of $30,000,000 in “excess of the $20

million primary limits.” (Id. at ¶¶ 33–34.) 1

1In this opinion, these eight policies are at times referred to collectively as the “Excess Policies.” 5. The insurers who issued the Excess Policies were all originally named

as Defendants in this action: Certain Underwriters at Lloyd’s of London – Novae 2007

Syndicate Subscribing to Policy With Number 93PRX17F157 (“Novae”), Hallmark

Specialty Insurance Co. (“Hallmark”), Evanston Insurance Co. (“Evanston”), Maxum

Indemnity Co. (“Maxum”), Hudson Specialty Insurance Co. (“Hudson”), Liberty

Surplus Insurance Corporation (“Liberty”), Ironshore Specialty Insurance Co.

(“Ironshore”), and Certain Underwriters at Lloyd’s of London – Brit Syndicate 2987

Subscribing to Policy With Number PD-10972-00 (“Brit”). (Complaint, ECF No. 3, at

¶ 31.) 2

6. Brakebush and Raeford executed an Asset Purchase Agreement

(“A.P.A.”) on 3 July 2018. (ECF No. 100, at ¶ 30.) As a part of the transaction,

Raeford “attempted to assign Raeford’s right to all insurance benefits, including all

rights and proceeds under its excess property insurance policies relating to the loss”

resulting from the fire. (Id. at ¶ 2.) Approximately five days before the A.P.A. was

executed, the insurers who had issued the Primary Policy gave written consent to this

assignment. (Id. at ¶ 31.)

7. Neither Brakebush nor Raeford, however, obtained consent from any of

the Excess Insurers prior to the assignment of Raeford’s right to collect insurance

proceeds under these policies to Brakebush. (Id.)

8. On 3 February 2020, Brakebush submitted a report to Crawford and

Company, a claims management company hired by one or more of the insurers,

2 Defendants are at times referred to collectively in this opinion as the “Excess Insurers.” claiming that the overall fire damage loss to the insured property totaled $41,274,429.

(Id. at ¶¶ 35–38.) As Raeford had already received $4,241,277.18 under the Primary

Policy prior to the sale, Brakebush asserted that it was entitled to the remaining

$15,758,722.82 of the policy limits under the Primary Policy “for amounts it incurred

after the sale was completed.” (Id. at ¶ 39.) On or about 29 April 2020, Brakebush

received a final payment exhausting the $20 million in coverage under the Primary

Policy. (Id. at ¶ 39.) Brakebush then “contacted counsel for the Excess Insurers and

demanded payment of insurance proceeds for the remainder” of the loss. (Id. at ¶ 40.)

9. The Excess Insurers refused to pay the full amount demanded by

Brakebush, instead offering only a combined $4,221,465.83, a substantially smaller

amount than Brakebush’s demand. (Id. at ¶ 41.) The Excess Insurers initially took

the position that they would make this smaller payment only if Brakebush agreed

that said payment constituted “full and final payment for all covered damages.” (Id.)

10. Since 1 May 2020, Brakebush has repeatedly requested that the Excess

Insurers explain why they refused to pay the remaining $21 million that Brakebush

had demanded. (Id.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Morton v. GTE Southwest Inc. (Wieburg)
272 F.3d 302 (Fifth Circuit, 2001)
Esposito v. United States
368 F.3d 1271 (Tenth Circuit, 2004)
Emory v. Jackson Chapel First Missionary Baptist Church
598 S.E.2d 667 (Court of Appeals of North Carolina, 2004)
Burgess Ex Rel. Burgess v. Gibbs
137 S.E.2d 806 (Supreme Court of North Carolina, 1964)
Brown v. Centex Homes
615 S.E.2d 86 (Court of Appeals of North Carolina, 2005)
Laster v. Francis
681 S.E.2d 858 (Court of Appeals of North Carolina, 2009)
Wood v. Guilford County
558 S.E.2d 490 (Supreme Court of North Carolina, 2002)
Estate of Fennell Ex Rel. Fennell v. Stephenson
554 S.E.2d 629 (Supreme Court of North Carolina, 2001)
Munger v. State
689 S.E.2d 230 (Court of Appeals of North Carolina, 2010)
Rose v. Vulcan Materials Company
194 S.E.2d 521 (Supreme Court of North Carolina, 1973)
Burcl v. North Carolina Baptist Hospital, Inc.
293 S.E.2d 85 (Supreme Court of North Carolina, 1982)
Holloway v. Wachovia Bank & Trust Co., NA
452 S.E.2d 233 (Supreme Court of North Carolina, 1994)
Department of Transportation v. Blue
556 S.E.2d 609 (Court of Appeals of North Carolina, 2001)
Skyline Restoration, Inc. v. Church Mutual Insurance
20 F.4th 825 (Fourth Circuit, 2021)
High v. Pearce
220 N.C. 266 (Supreme Court of North Carolina, 1941)
In re T.R.P.
636 S.E.2d 787 (Supreme Court of North Carolina, 2006)

Cite This Page — Counsel Stack

Bluebook (online)
2022 NCBC 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brakebush-brothers-inc-v-certain-underwriters-at-lloyds-of-london-ncbizct-2022.