Lexington Ins. Co. v. The State of N.C.

• Court: Court of Appeals of North Carolina
• Decided: September 3, 2025
• Docket: 24-1048
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA24-1048

Filed 3 September 2025

Wake County, No. 22 CVS 000646

LEXINGTON INSURANCE COMPANY, Plaintiff,

v.

THE STATE OF NORTH CAROLINA; NORTH CAROLINA PUBLIC OFFICERS AND EMPLOYEES LIABILITY COMMISSION; CHARLOTTE FOX as administratix of the Estate of KENNETH SNEAD; LEROY ALLEN; J. DUANE GILLIAM, as Guardian of the Estate of Leon Brown; RAYMOND C. TARLTON, as Guardian Ad Litem for Henry Lee McCollum; and KIMBERLY PINCHBECK, as Limited Guardian and Conservator of the Estate of Henry Lee McCollum, Defendants.

Appeal by Plaintiff from order entered 30 August 2024 by Judge Keith O.

Gregory in Wake County Superior Court. Heard in the Court of Appeals 21 May

2025.

Alston & Bird LLP, by Kelsey L. Kingsbery and Alexander S. Lorenzo, for Plaintiff-Appellant.

Cheshire Parker Schneider, PLLC, by Elliot Abrams; and Covington & Burling LLP, by Tyler Weinblatt and Adira Levine, pro hac vice, for Defendants- Appellees Henry Lee McCollum and Leon Brown.

No brief filed for Defendant the State of North Carolina.

No brief filed for Defendant North Carolina Public Officers and Employees Liability Commission. LEXINGTON INS. CO. V. THE STATE OF NORTH CAROLINA

Opinion of the Court

No brief filed for Defendants Charlotte Fox, Leroy Allen, Raymond C. Tarlton, and Kimbery Pinchbeck.

GRIFFIN, Judge.

Plaintiff Lexington Insurance Company appeals from the trial court’s order

granting Defendants J. Duane Gilliam, as Guardian of the Estate of Leon Brown,

Raymond C. Tarlton, as Guardian Ad Litem for Henry Lee McCollum, and Kimberly

Pinchbeck’s, as Limited Guardian and Conservator of the Estate of Henry Lee

McCollum, motion to dismiss. Plaintiff argues the trial court erred by granting

Defendants’ motion based on the prior pending action doctrine. We agree.

I. Factual and Procedural Background

In 1983, Defendants Henry Lee McCollum and Leon Brown were convicted for

the rape and murder of a child. After serving thirty-one years in prison, DNA

evidence exonerated them, and they were released from the State’s custody in 2014.

A year later, they brought civil rights claims in federal court which were in part

settled. Their claims against two former State Bureau of Investigation agents were

tried resulting in a jury verdict of 75 million dollars, later reduced by the United

States Court of Appeals for the Fourth Circuit and memorialized in an amended

judgment entered on 20 April 2023.

Plaintiff Lexington Insurance Company provided indemnity coverage to

Defendant North Carolina Public Officers and Employees Liability Insurance

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Commission (“POELIC”) between 2007 to 2017 by issuing multiple policies during

those years. After the amended judgment was entered, on 1 June 2024, Defendants

McCollum and Brown filed a supplemental complaint against the State of North

Carolina and its insurers, including Plaintiff, seeking to satisfy the judgment. The

supplemental complaint and satisfaction of the judgment are proceeding in federal

court concurrent to this action. See Tarlton ex rel. McCollum v. Allen, No. 5:15-CV-

451BO, 2025 WL 818557 (E.D.N.C. Mar. 13, 2025) (denying Lexington Insurance

Company’s motion to dismiss the supplemental complaint). The State of North

Carolina and Defendant POELIC sought to exercise their rights to indemnity

payments from Plaintiff pursuant to the policies.

Plaintiff takes the position it is not required to indemnify the public entities

because the policies it provided were not entered into when the wrongful acts

occurred, for which Defendants recovered. To this end, Plaintiff filed a complaint

seeking declaratory judgment they are not liable for the judgment under the policies

in Wake County Superior Court on 14 January 2022, which it later amended on 27

March 2024. Defendant filed, on 4 June 2024, a motion to dismiss or, in the

alternative, motion to stay—citing the prior pending action doctrine and forum non

conveniens as grounds for dismissal. After a hearing on the motion, the trial court

granted the motion.

Plaintiff timely appeals.

II. Analysis

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Plaintiff contends the trial court’s judgment was erroneous because the prior

pending action doctrine is inapplicable for multiple reasons. Specifically, Plaintiff

argues the federal action was not a prior pending action because: (1) the federal action

was not a prior pending action when Plaintiff filed this action; (2) the actions do not

involve the same claims in that the federal action was initially for civil rights claims

and the claims here are for declaratory judgment on insurance coverage; and (3) there

is not substantial identity between the parties in both of the actions because the State

and POELIC are insulated from the federal action by the Eleventh Amendment.

Plaintiff also argues the interests of judicial economy weigh in favor of allowing this

action to proceed in state court.

Defendants, in contrast, argue dismissal was proper for two reasons. First,

Defendants contend the trial court granted their motion to dismiss, in part, because

actions for declaratory judgment are improper where a party is seeking an advisory

opinion. Defendants argue this basis, which they allege is not challenged by Plaintiff

on appeal, is sufficient to uphold the trial court’s order. Second, Defendants argue

the prior pending action doctrine supports dismissal as, despite the procedural stalls

in litigation, the federal action was filed in 2015 and the insurance claims made in

their supplemental complaint relate back to that date—therefore, they argue, the

federal action is the “prior pending action” and this action is subject to dismissal. On

this point, Defendants also contend there is substantial similarity between the

material characteristics of each action. Finally, Defendants ask us to remand for

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further consideration of their forum non conveniens argument.

A. Standard of Review

The parties dispute the standard of review applicable here. Plaintiff argues

we review an order granting a motion to dismiss made because of the prior pending

action doctrine de novo. In contrast, Defendants argue we review for an abuse of

discretion because “the Superior Court decided whether a matter is appropriate for

declaratory relief.” Neither Defendants’ motion to dismiss nor the trial court’s order

specifies the ground under Rule 12(b) of the North Carolina Rules of Civil Procedure

that dismissal is premised upon.

Our review of relevant precedent reflects we generally review de novo a motion

to dismiss premised upon the prior pending action doctrine. See Doe v. Wake County,

264 N.C. App. 692, 694, 826 S.E.2d 815, 818 (2019) (reviewing a trial court’s order

dismissing the case, where the defendants raised the prior pending action doctrine

defense, de novo despite it being unclear “which claims were being dismissed on

which grounds”); LMSP, LLC v. Town of Boone, 260 N.C. App. 388, 390, 818 S.E.2d

314, 316 (2018) (reviewing the defendant’s Rule 12(b)(6) motion premised upon the

prior pending action doctrine de novo); Greene v. Trustee Services of Carolina, LLC,

244 N.C. App. 583, 590–91, 781 S.E.2d 664, 670 (2016) (reviewing a Rule 12(b)(6)

motion to dismiss based upon the prior pending action doctrine de novo); but see Johns

v. Welker, 228 N.C. App. 177, 178–79, 744 S.E.2d 486, 488 (2013) (holding record

evidence made clear the trial court’s dismissal was based on Rule 12(b)(1) where the

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prior pending action doctrine was argued, but still reviewing the order de novo).

When reviewing a motion to dismiss de novo, we consider “whether the

allegations in the complaint, if treated as true, are sufficient to state a claim upon

which relief can be granted under some legal theory.” Bridges v. Parrish, 366 N.C.

539, 541, 742 S.E.2d 794, 796 (2013). When doing so, we freely substitute our

“assessment of whether the allegations of the complaint are sufficient to state a claim

for the trial court’s assessment.” Taylor v. Bank of Am., N.A., 382 N.C. 677, 679, 878

S.E.2d 798, 800 (2022) (citations omitted).

Dismissal is proper, on the other hand, where “one of the following three

conditions is satisfied: (1) the complaint on its face reveals that no law supports the

plaintiff’s claim; (2) the complaint on its face reveals the absence of facts sufficient to

make a good claim; or, (3) the complaint discloses some fact that necessarily defeats

the plaintiff’s claim.” Bissette v. Harrod, 226 N.C. App. 1, 7, 738 S.E.2d 792, 797

(2013) (citation and internals marks omitted).

B. Independent Ground

As a threshold matter, we disagree with Defendants’ contention that the trial

court partially based its decision upon the theory that Plaintiff is seeking an advisory

opinion. The portion of the transcript Defendants cite to in support of this argument

does not disclose any mention or argument related to this action being in pursuit of

an advisory opinion—rather, the transcript reflects arguments on the prior pending

action doctrine. Specifically, trial counsel cited Coca-Cola Bottling Company

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Consolidated v. Durham Coca-Cola Bottling Company, 141 N.C. App. 569, 541 S.E.2d

157 (2000), while arguing Plaintiff is forum shopping in this action. In Coca-Cola, we

made apparent the guiding principles of declaratory judgment. Id. at 578–79, 541

S.E.2d at 163–64. During our discussion of the inappropriate uses of an action for

declaratory judgment, we do not discuss obtaining an advisory opinion as one such

inappropriate use. Id. at 579, 541 S.E.2d at 164.

Moreover, this action is consistent with the Declaratory Judgment Act.

Specifically, any party “interested under a . . . written contract . . . or whose rights,

status or other legal relations are affected by a . . . contract, may have determined

any question of construction or validity arising under the . . . contract . . . and obtain

a declaration of rights, status, or other legal relations thereunder.” N.C. Gen. Stat. §

1-254 (2023). An action for declaratory judgment to determine the rights between an

insurer and the insured is well within the scope of this power. See generally North

State Deli, LLC. v. Cincinnati Ins. Co., 386 N.C. 733, 908 S.E.2d 802 (2024) (reviewing

an action by the restaurant-plaintiffs for declaratory judgment that their COVID-19

induced losses were covered by their insurance policies); N.C. Farm Bureau Mut. Ins.

v. Allen, 146 N.C. App. 539, 553 S.E.2d 420 (2001) (reviewing a grant of summary

judgment for the plaintiff insurance company on its claim for declaratory judgment

that the policy did not cover a specific event).

As such, Defendants’ contention that the trial court partially based its order

on Plaintiff attempting to obtain an advisory opinion is without merit. Accordingly,

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we will not affirm the trial court’s order on that ground.

C. Prior Pending Action Doctrine

“‘Under the law of this state, where a prior action is pending between the same

parties for the same subject matter in a court within the state having like jurisdiction,

the prior action serves to abate the subsequent action.’” Nationwide Mut. Ins. v.

Douglas, 148 N.C. App. 195, 197, 557 S.E.2d 592, 593 (2001) (quoting Eways v.

Governor’s Island, 362 N.C. 552, 558, 391 S.E.2d 182, 185 (1990)). “Invocation of the

prior action pending doctrine is a form of ‘plea in abatement.’” LMSP, LLC, 260 N.C.

App. at 390, 818 S.E.2d at 316 (citation modified). We do not construe the language

“same parties for the same subject matter” literally—instead, we ask “do the two

actions present a substantial identity as to parties, subject matter, issues involved,

and relief demanded?” Id. (citation modified). If there is substantial similarity

between those material characteristics of the actions, “the subsequent action is

wholly unnecessary and, in the interests of judicial economy, should be subject to a

plea in abatement.” Signalife, Inc. v. Rubbermaid, Inc., 193 N.C. App. 442, 444, 667

S.E.2d 499, 500 (2008) (citation and internal marks omitted).

The analysis in Signalife provides a simple illustration of how the doctrine

works. There, we addressed whether the prior pending action doctrine barred a state

action where one party filed a complaint in federal court at 12:25 a.m. and another

party filed a complaint in superior court at 9:01 a.m. on the same day. Id. at 443, 667

S.E.2d at 499–500. Determining our precedent requires “the first to file test to be

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applied in cases where the ‘prior action pending’ doctrine is implicated,’” we held that

because the parties and claims were substantially similar, and the federal action was

filed first, the state action was subject to abatement under the doctrine. Id. at 445–

46, 667 S.E.2d 500–01.

Here, the fact the federal action ran its course to a final judgment, and Plaintiff

was only brought into the litigation through a supplemental complaint, complicates

the matter. The federal action was filed in 2015 and the initial complaint in this

action was filed in 2022. At face value, presuming the parties and claims are

substantially similar, this action would be barred. But, “a prior action is pending

until its determination by final judgment.” Clark v. Craven Reg’l Med. Auth., 326

N.C. 15, 20, 387 S.E.2d 168, 171 (1990) (emphasis added); see LMSP, LLC, 260 N.C.

App. at 390–91, 818 S.E.2d at 316 (“‘An action is pending for the purpose of abating

a subsequent action between the same parties for the same cause from the time of

the issuance of the summons until its final determination by judgment.’” (quoting

McDowell v. Blythe Bros. Co., 236 N.C. 396, 398–99, 72 S.E.2d 860, 862 (1952)

(emphasis added))).

A plain reading of our precedent mandates we hold this action to be the prior

action. Being so, this action could not be subject to dismissal based upon the prior

pending action doctrine because, considering the federal action had reached a final

judgment, this action is the prior pending action.

Moreover, while North Carolina subscribes to the rule “that a prior action

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which is pending in the appellate division may serve as a prior action pending for the

purpose of basing a judgment of abatement in a subsequent action between the same

parties upon the same issues[,]” Clark, 326 N.C. at 21, 387 N.C. at 172, the federal

action was not pending in the federal appellate courts when Plaintiff filed its

amended complaint. Rather, Defendants were attempting to execute the judgment

entered upon the amended final judgment. Having determined the prior pending

action doctrine is inapplicable here, we do not endeavor to assess whether there is

substantial similarity between the issues and parties in this action and the federal

action.

Accordingly, the trial court erred by granting Defendants’ motion to dismiss

based upon the prior pending action doctrine, and we reverse that order.

D. Forum Non Conveniens

Defendants invite us to remand this case for further consideration of the

applicability of forum non conveniens. As the trial court reserved ruling on this

ground, we make no determination of its applicability moving forward. See Mclean

Trucking Co. v. Mowless, 249 N.C. 346, 351, 106 S.E.2d 510, 514 (1959) (holding a

“question of law [that] was not passed on by the superior court[] should be before it

can be heard here”).

III. Conclusion

For the aforementioned reasons, we hold the prior pending action doctrine does

not warrant dismissal and therefore we reverse the trial court’s order granting

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dismissal on this basis and remand.

REVERSED AND REMANDED.

Judges TYSON and COLLINS concur.

Report per Rule 30(e).

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