Bristol Springs Custom Homes, LLC v. Argo Group US, Inc.

Opinion

USCA4 Appeal: 25-1070 Doc: 63 Filed: 07/24/2026 Pg: 1 of 11

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 25-1070

BRISTOL SPRINGS CUSTOM HOMES, LLC,

Plaintiff - Appellant,

v.

ARGO GROUP US, INC.; COLONY INSURANCE CO.,

Defendants - Appellees.

No. 25-1103

BRISTOL SPRINGS CUSTOM HOMES, LLC,

Plaintiff - Appellee,

v.

ARGO GROUP US, INC.; COLONY INSURANCE CO.,

Defendants - Appellants.

Appeals from the United States District Court for the Northern District of West Virginia, at Martinsburg. Gina M. Groh, District Judge. (3:23-cv-00246-GMG-RWT)

Argued: May 6, 2026 Decided: July 24, 2026

Before WYNN, Circuit Judge, FLOYD, Senior Circuit Judge, and Adam B. ABELSON, United States District Judge for the District of Maryland, sitting by designation. USCA4 Appeal: 25-1070 Doc: 63 Filed: 07/24/2026 Pg: 2 of 11

No. 25-1070 affirmed and No. 25-1103 dismissed by unpublished per curiam opinion.

ARGUED: George Nico Sidiropolis, THE INJURY RIGHTS LAW FIRM, PLLC, Wheeling, West Virginia, for Appellant/Cross-Appellee. Jack Roy Reiter, GRAYROBINSON, P.A., Miami, Florida, for Appellees/Cross-Appellants. ON BRIEF: Aaron C. Amore, AMORE LAW, PLLC, Charles Town, West Virginia, for Appellant/Cross-Appellee. Sydney Feldman D’Angelo, GRAYROBINSON, P.A., Miami, Florida, for Appellees/Cross-Appellants.

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PER CURIAM:

Appellant Bristol Springs Custom Homes, LLC (Bristol) sued its insurance carrier,

Appellee Colony Insurance Co. (Colony or CIC), and Colony’s claims administrator,

Appellee Argo Group US, Inc. (together, “Defendants”), for breach of contract as well as

statutory and common law bad faith. Bristol alleges that Colony acted unreasonably

towards a claim made against Bristol under its third-party general liability insurance policy,

which Bristol says forced it into bankruptcy. The district court granted summary judgment

to Defendants on all claims. We affirm in full.

I.

This case originated out of a lawsuit between Bristol and its customers, the Ritters.

Bristol performed construction work for the Ritters, who later sued Bristol for substandard

and defective work. Bristol countersued for breach of contract and unjust enrichment,

seeking $100,000. Bristol promptly notified Colony of the Ritter suit, believing that its

commercial general liability insurance policy would cover the Ritters’ claim.

As required under the policy, Colony retained defense counsel, Nathan

Marinkovich, to represent Bristol in the Ritter suit. However, in his initial assessment of

the case, Marinkovich determined that not all of the Ritters’ allegations qualified for

coverage under the insurance policy. Thus, Colony informed Bristol that it would “defend

Bristol under a complete reservation of rights,” meaning that Colony reserved the right

under the insurance policy to deny coverage should the Ritters prevail in their suit. J.A.

172.

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Marinkovich engaged in pre-trial mediation with the Ritters. The Ritters initially

demanded $450,000, but lowered to $150,000, contingent on dismissal of Bristol’s

counterclaim. Bristol refused to do so, and the mediation ended without a settlement. The

Ritters ultimately prevailed: on October 11, 2023, a jury awarded them $325,000 and

rejected Bristol’s counterclaims.

On October 19, Bristol informed Colony that it was willing to forgo appeal of its

counterclaim to reach a negotiated resolution with the Ritters. 1 On November 2, the Ritters

responded to a settlement offer with a demand of $391,167, contingent on Bristol’s

withdrawal of its post-trial motion and waiver of its appeal rights.

At some point, Bristol engaged a bankruptcy attorney, Aaron Amore. On November

6, Colony told Amore it had made a settlement offer of $150,000. Amore responded the

same day:

I take the position that the insurance company is free to resolve the matter with its own funds, especially since the funds are directly related to the only claimed unsecured debt in the case. However, the ability to offset the counter-claims of $100k or to pursue the appeal rights are no longer within your purview and are now assets and rights of the Debtor in bankruptcy.

J.A. 255. Also on November 6, Bristol petitioned for bankruptcy. As a result, Colony was

divested of its authority to waive Bristol’s appeal rights as to Bristol’s counterclaim without

approval from the bankruptcy court. On November 13, Bristol filed its complaint against

Defendants for breach of contract as well as statutory and common law bad faith, making

1 While Colony continued negotiations with the Ritters, Bristol filed its post-trial motion on October 30 to preserve its appeal rights.

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its common law claim under Hayseeds v. State Farm Fire & Casualty, 352 S.E.2d 73 (W.

Va. 1986).

Also on November 13, Colony wrote to Amore, expressing concern about the

impact of the bankruptcy petition on negotiations with the Ritters: “Again, plaintiffs’

counsel has made clear that any resolution would release all claims along with foregoing

[sic] post trial motions and appeal rights. As such, please advise on your position on

how negotiations could proceed at this point.” J.A. 267. On November 15, Bristol wrote

to Defendants asking to confirm they were denying coverage but not addressing the status

of negotiations with the Ritters or how to continue negotiating in light of the bankruptcy

filing. On November 22, Colony wrote to Bristol, saying, “CIC repeats its request for

Bristol Springs to resume cooperating with CIC’s efforts to resolve the underlying Ritter

action.” J.A. 271. Colony further noted that Amore’s November 6 email “effectively shut

down CIC’s efforts to resolve the claims against its insured because plaintiffs’ counsel

requires a standard release of claims, which necessarily includes foregoing [sic] appeal of

the judgment” and emphasized that “CIC remains willing to negotiate and fund a

reasonable settlement to resolve the underlying claims. And, again, we request your

input on how that can be accomplished given the bankruptcy action and plaintiffs’

requirement that all claims be released.” J.A. 272, 274.

On December 24, 2023, the Ritters made a settlement demand of $385,000, still

contingent on Bristol abandoning its post-trial motion and appeal. Colony made an offer

of $250,000 on January 16, which the Ritters rejected on February 18. On February 27,

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Colony agreed to pay the $385,000 subject to approval by the Bankruptcy Court. The

Bankruptcy Court approved the settlement, which was fully executed on May 13, 2024.

Following resolution of the Ritter matter, Bristol continued this case against

Defendants. Ultimately, the district court denied Bristol’s initial and renewed motions for

summary judgment and granted Defendants’ motion for summary judgment on all claims.

This appeal follows. Bristol appeals the district court’s order granting judgment to

Defendants on Bristol’s claims for Hayseeds damages and statutory bad faith. Defendants

cross appeal the district court’s finding that the Hayseeds doctrine applies to the instant

case.

II.

We review the district court’s decision on summary judgment de novo. Bandy v.

City of Salem, 59 F.4th 705, 709 (4th Cir. 2023). Summary judgment is appropriate “if the

movant shows that there is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). We construe all facts and

make reasonable inferences in favor of the nonmovant. Bandy, 59 F.4th at 709. But “[t]he

mere existence of a scintilla of evidence,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

252 (1986), or “conclusory allegations or denials, without more,” Wai Man Tom v. Hosp.

Ventures LLC, 980 F.3d 1027, 1037 (4th Cir. 2020), are insufficient to defeat summary

judgment.

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III.

We first address Bristol Springs’s Hayseeds claim and affirm the decision of the

district court. Accordingly, we do not reach the question raised in Defendants’ cross

appeal, whether Hayseeds damages are available for a third-party insurance claim. 2 Next,

we address Bristol’s statutory bad faith claim and affirm the judgment granted to

Defendants.

A.

Bristol contends that it is entitled to Hayseeds damages because Defendants “offered

insignificant amounts for settlement despite the known risk that a verdict would bankrupt

[Bristol] and an actual rendering of [such] a verdict.” Opening Br. at 18. In Hayseeds, the

Supreme Court of Appeals of West Virginia (SCAWV) held that “[w]henever a

policyholder substantially prevails in a property damage suit[3] against its insurer, the

insurer is liable for: (1) the insured’s reasonable attorneys’ fees in vindicating its claim;

(2) the insured’s damages for net economic loss caused by the delay in settlement, and

damages for aggravation and inconvenience.” Syl. Pt. 1, 352 S.E.2d at 80. An insured

2 Even though we need not reach the cross appeal substantively, we nonetheless dismiss the cross appeal as “unnecessary and not properly taken.” al-Suyid v. Hifter, 139 F.4th 368, 373 (4th Cir. 2025) (citation modified). Cross appeals must be dismissed when they “merely seek affirmance of a favorable judgment on alternative grounds,” which is the case here. Id. (citation modified). 3 In later cases, the SCAWV “extended the right of recovery of costs and expenses provided in Hayseeds to include underinsurance claims, and by implication, to all other first party insurance claims.” Hadorn v. Shea, 456 S.E.2d 194, 196 (W. Va. 1995).

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“substantially prevails” when the action against its insurer is resolved, either by settlement

or court judgment, “for an amount equal to or approximating the amount claimed by the

insured immediately prior to the commencement of the action” and when “the [insured’s]

attorney’s services were necessary to obtain payment of the insurance proceeds.” Syl. Pt.

1, Jordan v. Nat’l Grange Mut. Ins. Co., 393 S.E.2d 647, 652 (W. Va. 1990). Here, the

dispute is over the latter factor, the necessity of Bristol’s attorney’s services. We agree

with the district court that the record here does not support necessity.

To establish necessity, “the insured must show more than post hoc, ergo propter

hoc.” Id. at 652. It is not enough that the parties merely settled after suit was filed; “the

insured must show that but for his or her attorney’s services such settlement would not

have been reached.” Id. The SCAWV found this requirement satisfied in Jordan because

“the insurer refused to offer any amount, much less a reasonable amount, until after the

appellants’ attorney was retained, the action was filed and about seventeen months had

passed since the loss had been incurred.” Id.

In Hadorn v. Shea, 456 S.E.2d 194 (W. Va. 1995), the SCAWV provided additional

color on the necessity inquiry. In that case, a personal injury action, Hadorn demanded

$300,000. Id. at 196. The insurer, State Farm, offered $15,000 in response, which Hadorn

rejected. Id. The following month, State Farm offered $22,500, which Hadorn also

rejected. Id. She did not reduce her demand after either offer by State Farm. Id. Following

trial, the jury awarded her $90,000; thereafter, she pursued Hayseeds damages. Id. The

SCAWV held that the plaintiff did not establish that “‘but for’ Ms. Hadorn’s attorney’s

services she would not have been able to get State Farm to settle for $90,000 without

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proceeding to trial,” observing “[i]t takes two to negotiate.” Id. at 198. In that case, the

court said “[t]here may have been no need for a trial, if Ms. Hadorn had engaged in active

settlement negotiations with State Farm.” Id. at 199.

Here, the record also fails to establish that but for Bristol’s attorney’s services,

Colony would not have settled with the Ritters. Pre-trial, Bristol’s refusal to drop its

counterclaim is analogous to Hadorn’s refusal to lower her demand from $300,000. Cf. id.

at 196 (noting “Hadorn stood by her original demand of $300,000” but the jury awarded

only $90,000). Post-trial, Bristol’s bankruptcy filing complicated settlement negotiations,

requiring approval of the bankruptcy court for the release of Bristol’s appeal rights.

Furthermore, after filing for bankruptcy, Bristol failed to reply to Colony’s repeated

attempts to confer on how to proceed with negotiations. Bristol does not dispute this fact,

instead arguing that in light of Colony’s position “minimal or no coverage existed under

the policy[,] . . . making a demand that the judgment be paid in full . . . futile.” Opening

Br. at 18. But Hadorn does not support futility as an excuse for an insured’s failure to

make a demand or meaningfully engage with the insurer.

In sum, these facts establish that summary judgment was appropriate because “no

reasonable jury could find” in Bristol’s favor. See Morrison v. County of Fairfax, 826 F.3d

758, 765 (4th Cir. 2016). The only fact supporting Bristol’s Hayseeds theory is that Colony

increased its settlement offers after Bristol filed its complaint. Bristol must “show more

than the fact that a settlement for all or substantially all of the claim was reached after the

action was brought against the insurer.” See Jordan, 393 S.E.2d at 652. Nonetheless,

making all inferences in Bristol’s favor, there may be a close question as to whether

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Bristol’s filing of the lawsuit at least accelerated Colony’s willingness to settle for the

amount demanded by the Ritters. But critically, Bristol failed to engage in settlement

negotiations once it filed for bankruptcy, declining to respond to Colony’s requests for

discussion. See Hadorn, 456 S.E.2d at 198–99.

Indeed, it is not clear from the record that Bristol ever made a demand of any kind—

its letters do not ask Colony to increase settlement offers or accept the Ritters’ demands.

The closest Bristol comes to such a demand is on January 14, 2024, when its counsel wrote

to Colony, “We remain hopeful that [Defendants] will agree to pay what is owed to the

Ritter family and resolve the unpaid judgment that has bankrupt Bristol Springs Custom

Homes, LLC.” J.A. 495. Absent evidence of any real demand in the record, there is no

basis from which to conclude that Colony failed to meet an obligation to Bristol. Cf. Miller

v. Fluharty, 500 S.E.2d 310, 321 (W. Va. 1997) (“If the policyholder makes a reasonable

demand during the course of the negotiations,” the insurer “must either meet that demand,

or promptly respond to the policyholder” explaining “why such a demand is not

supported.”). Thus, we affirm the judgment of the district court as to Bristol’s Hayseeds

claim.

B.

In addition to seeking Hayseeds damages, Bristol brought statutory bad faith claims

under the West Virginia Unfair Trade Practices Act, codified at West Virginia Code § 33-

11-4(9), alleging that Defendants violated statutory subsections (b), (c), (d), (f), (g), and

(m). The district court held that Bristol’s claims as to subsections (b), (c), (d), (f), and (g)

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fail as a matter of law following from SCAWV cases limiting these subsections to claims

by third parties attempting to recover money from the insured, but excluding claims by the

insured against the insurer. Bristol Springs Custom Homes, LLC v. Argo Grp. US, Inc.,

No. 3:23-CV-246, 2024 WL 5453237, at *3 (N.D. W. Va. Dec. 19, 2024) (citing State ex

rel. State Auto Prop. Ins. Cos. v. Stucky, 806 S.E.2d 160 (W. Va. 2017); State ex rel. W.

Va. Mut. Ins. Co. v. Salango, 866 S.E.2d 74 (W. Va. 2021)). The district court further held

that these cases apply to subsection (m), which uses the same relevant statutory language

as the other subsections. Id. We affirm the reasoning and judgment of the district court as

to these claims.

IV.

For the foregoing reasons, the judgment of the district court is affirmed, and the

cross appeal is dismissed.

No. 25-1070, AFFIRMED; No. 25-1103, DISMISSED