Selective Insurance Company of South Carolina v. R.G. Apel Development, Inc.

• Court: District Court, E.D. Missouri
• Decided: August 21, 2025
• Docket: 4:24-cv-00340
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

SELECTIVE INSURANCE COMPANY OF ) SOUTH CAROLINA, ) ) Plaintiff, ) v. ) Case No. 4:24-cv-00340-SEP ) R.G. APEL DEVELOPMENT, INC., et al., ) ) Defendants. MEMORANDU)M AND ORDER

See Before the Court are Defendants’ motions to dismiss. Docs. [18], [20]. The motions are fully briefed and ready for disposition. Docs. [19], [21], [22], [23], [32], [33]. For the reasons set forth below, the mFoAtiCoTnSs A aNrDe BdAeCnKieGdR.O UND1 On March 15, 2018, Defendants Marvin Dufner and Rene Dufner �iled a lawsuit against Defendant R.G. Apel for events arising out of the construction of the Dufners’ home (“Prior Lawsuit”). Docs. [1] ¶ 7; [1-2]. The Dufners brought four counts: Count 1 – Breach of Contract (Defective Stonework), Count 2 – Breach of Contract (Defective Concrete See Driveway), Count 3 – Breach of Contract (Defective Waterproo�ing), and Count 4 – Negligence. Doc. [1-2]. According to Plaintiff Selective Insurance, the tender of the Id prior lawsuit was Plaintiff’s �irst notice of any claim against Apel. Doc. [1] ¶ 8. The parties Id litigated for four years, and the case was set for trial on December 19, 2022. . ¶ 9. On Id December 9, 2022, the Dufners dismissed the case without prejudice. . The Dufners then re�iled the lawsuit on July 17, 2023 (“Underlying Lawsuit”). . ¶ 10. The new Petition alleges three counts against R.G. Apel: Count 1 – Breach of Contract (Defective Stonework), See Count 2 – Breach of Contract (Defective Concrete Driveway), and Count 3 – Violation of the MMPA. Doc. [1-1]. On March 5, 2024, Plaintiff �iled this action seeking a declaration

1 See Neitzke v. Williams For purposes of the motions to dismiss, the Court takes the factual allegations in the Complaint, that it does not owe a duty to defend or indemnify Defendant R.G. Apel in the Underlying Lawsuit. See Defendants move to dismiss, asserting that Plaintiff’s claim is barred by the statute See of limitations or laches. Docs. [19], [21]. In the alternative, Defendants argue that Plaintiff’s claim is not ripe. Docs. [L1E9G]A, [L2 S1T]A. N DARD Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a claim Huggins v. for “failure to state a claim upon which relief can be granted.” When ruling on a motion to FedEx Ground Package Sys., Inc. dismiss, a court “must liberally construe a complaint in favor of the plaintiff,” Lustgraaf v. Behrens , 592 F.3d 853, 862 (8th Cir. 2010), and “grant all reasonable Braden v. Wal-Mart Stores, Inc. inferences in favor of the nonmoving party,” , 619 F.3d 867, 872-73 (8th Cir. 2010) (citing , 588 F.3d 585, 591 (8th Cir. 2009)). “As a general rule, ‘the possible existence of a statute of limitations defense is not ordinarily Joyce v. Armstrong Teasdale, LLP Jessie v. Potter a ground for Rule 12(b)(6) dismissal unless the complaint itself establishes the defense.’” , 635 F.3d 364, 367 (8th Cir. 2011) (quoting , 516 F.3d 709, 713 n.2 (8th Cir. 2008)). Rule 12(b)(1) permits a party to move to dismiss a claim for lack of subject matter jurisdiction. “In order to properly dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the complaint must b e T s it u u c s c v e . s S s u fu ll l i l v y a c n hallenged on its face or on the factual Osborn v. United States truthfulness of its averments.” , 4 F.3d 590, 593 (8th Cir. 1993) (citing , 918 F.2d 724, 729 n.6 (8th Cir. 1990)). In a factual challenge, the Osborn defendant challenges the factual truthfulness of the assertions, and the Court may consider matters outside the pleadings. , 918 F.2d at 729. “In a facial challenge to jurisdiction, all of the factual allegations concerning jurisdiction are presumed to be true Titus and the motion is successful if the plaintiff fails to allege an element necessary for subject matter jurisdiction.” , 4 F.3d at 593.D ISCUSSION I. The Complaint does not establish a statute of limitations defense. Allen v. Under Missouri law, the insurer’s duty to defend “arises only when there is a Continental Western Ins. Co. potential or possible liability to pay based on the facts at the outset of the case.” insurer’s duty to defend arises only from potential coverage based on facts: (1) alleged in Id the petition; (2) the insurer knows at the outset of the case; or (3) that are reasonably no possibility apparent to the insurer at the outset of the case.” . at 553. “To extricate itself from a duty Truck Ins. Exch. v. Prairie Framing, LLC to defend the insured, the insurance company must prove that there is of coverage.” , 162 S.W.3d 64, 79 (Mo. Ct. App. 2005). Defendants argue that Plaintiff’s declaratory judgment action is barred by a statute of limitations. Plaintiff alleges that the tender of the Prior Lawsuit on March 15, 2018, was Plaintiff’s �irst notice of a claim against R.G. Apel. Doc. [1] ¶¶ 7, 8. Because this lawsuit was �iled on March 5, 2024—more than �ive years thereafter—Defendants maintain that it is barred under Mo. Ann. Stat. § 516.120(1). 2 Plaintiff disagrees, arguing that the statute of limitations did not begin to run until the Underlying Lawsuit was �iled on July 17, 2023. According to Plaintiff, “it is indisputable that [the insurance company] could not eliminate all possibility of coverage at the time the 3 Dufners’ lawsuit was �irst �iled in 2018.” Docs. [22] at 8; [23] at 7. The Prior Lawsuit Compare with included a negligence claim that does not appear in the Underlying Lawsuit, based on allegations that have likewise been abandoned. Doc. [1-1], Doc. [1-2]. Through “discovery and dispositive motion brie�ing in the 2018 iteration of the lawsuit,” Plaintiff claims to have become aware of “details that materially alter[ed] the duty to defend analysis.” Docs. [22] at 8; [23] at 8. When the Dufners �iled the Underlying Lawsuit Allen in 2023, Plaintiff claims there were facts “reasonably apparent” to it “at the outset of the case” that eliminated all possibility of coverage. , 436 S.W.3d at 553. Beavers v. In Missouri, “with respect to proceedings for a declaratory judgment, the statute of Recreation Ass’n of Lake Shore Estates, Inc. limitations does not begin to run until an actual controversy has occurred.” , 130 S.W.3d 702, 716 (Mo. Ct. App. 2004) (citation modi�ied). How Missouri applies that general principle in an action seeking declaratory relief with respect to a duty to defend or duty to indemnify is unclear. Neither

2 Plaintiff also argues that the action is subject to Mo. Rev. Stat. § 516.110(1)’s ten-year statute of limitations. Because Plaintiff’s claim survives either way, the Court does not reach that issue. 3 the parties nor the Court has found any Missouri case directly on point. In fact, it appears Gibraltar Insurance Company v. Varkalis that very few cases have addressed the parties’ exact issue in any jurisdiction. In , 46 Ill. 2d 481, 485 (Ill. 1970), the Illinois Supreme Court held that the plaintiff’s declaratory cause of action accrued when plaintiff Id was “called upon to defend the conduct of its insured,” not on the date of the wrongful death. . The Illinois Supreme Court explained: At the time of the accrual of the wrongful death action it was merely a matter of speculation as to whether such a controversy would ever arise. Thus no one could say with any certainty on May 13, 1961, or for some time thereafter that any claim or action would ever be pursued on behalf of the estate of Veronica Varkalis so as to actualize the potential dispute as to coverage under the insurance policy. To assert that Wa ed ebcellaiervaeto trhya ct ainu scea soefs awchteiorne, naos nheetrhee, laelsl sd eatreorsme iinna ftaivveo rfa ocft tsh gei viinnsgu rriasnec teo ctohme ppoatneyn taita tlh paotl itcimy e fails tcoo vreercaoggen diziesp tuhties himavpeo ortcacnutr rreeda lpisrtiiocr c toon tshied einriattiiaoln d.e mand upon the insurance company, no actual controversy arises among the parties until such time as the issuing company is called upon to either pay or defend a claim on behalf of its insured under the terms of the policy in question. Id Westport Insurance Corporation v. Stengel . (emphasis added). In , 571 F. Supp. 2d 737, 740 (E.D. Tex. 2005), a federal district court found that the insurance company’s declaratory judgment action regarding its duty to defend accrued at the time the original petition in the underlying action was �iled, because the original petition contained facts that put the Selective Way Insurance Company v. Hospitality Group Services, Inc. insurance company on notice that certain exclusions of the policy applied. Finally, in , 119 A.3d 1035, 1038 (Pa. Super. Ct. 2015), the court held that “the statute of limitations for a declaratory judgment action brought by an insurance company regarding its duty to defend and indemnify begins to run when a cause of action for a declaratory judgment arises.” But “[u]ntil an insurance company has a suf�icient factual basis to decline to defend (and thus, Id decline to indemnify) its insured in a third party’s action, there is no justiciable controversy for the trial court to decide, and no cause of action for declaratory judgment.” . at 1050. Thus, the court must “determine when the insurance company had a suf�icient factual basis to support its contentions (as set forth in its complaint for declaratory judgment) that it has Id no duty to defend or indemnify the insured.” . at 1051. “[I]t is possible,” the court explained, “for the insurance company to possess suf�icient information at the time it receives a complaint to cause the statute of limitations to begin to run; or that may not Id occur until the case develops and the claim is winnowed down to a recovery the insurance Gibraltar Westport 4 company believes is not covered by the policy of insurance.” . In and , the insurance company could discern at the time of the initial �iling a basis for seeking a declaration that it had no duty to defend. Here, assuming Plaintiff’s allegations are true and granting all reasonable inferences in its favor, neither the Gibraltar petition nor any facts known to Plaintiff at the time of the �iling of the Prior Lawsuit put Westport Selective Way Plaintiff on notice that it had no duty to defend. This case is thus unlike and and instead falls into the category contemplated by , in which an insurance company lacks a “suf�icient factual basis to support its contention[ ] . . . that it has Selective Way no duty to defend” at the time the original lawsuit was �iled. 119 A.3d at 1051. Consistent with Missouri’s statute of limitations doctrine and , the Court �inds that the cause of action for a declaratory judgment denying a duty to defend could not have accrued until Plaintiff was in possession of the facts that support its claim. See Joyce McClurg v. The Court may dismiss this case under Rule 12(b)(6) only if it is apparent on the Mallinckrodt, Inc. face of the Complaint that the claim is time-barred. , 635 F.3d at 367; , 2015 WL 867455, at *5 (E.D. Mo. Feb. 27, 2015) (denying motions to dismiss because it was “not clear from the face of Plaintiffs’ complaints when they �irst knew or reasonably should have known of either the cause of their injuries or the wrongful nature of their decedents’ deaths”). Defendants may later argue with the bene�it of a developed evidentiary record that the cause of action accrued earlier than the �iling date of the Underlying Lawsuit, but there is no basis for that conclusion on the face of the

4 Selective Way’s contemplation of the accrual of a cause of action based on facts gleaned in discovery does not contradict Missouri law mandating assessment of the duty to defend based on the facts that were known or reasonably ascertainable at the outset of the underlying lawsuit. See Allen, 436 S.W.3d at 553; Trainwreck West Inc. v. Burlington Ins. Co., 235 S.W.3d 33, 39 (Mo. Ct. App. 2007) (“Thus, in reviewing whether a genuine issue of material fact exists regarding whether Burlington owed Trainwreck a duty to defend, we do not rely upon ‘facts that emerged during discovery’ and will examine only those facts known to or reasonably ascertainable by Burlington at the time Ms. Neff filed her Petition.” (citing Esicorp, Inc. v. Liberty Mut. Ins. Co., 193 F.3d 966, 969 (8th Cir. 1999)). The two doctrines impose distinct constraints: one on when a company may file and the other on the substance of its claim. Complaint. From the Complaint, it is apparent only that Selective was in possession of the relevant facts on the date that it filed the Underlying Lawsuit, July 17, 2023. Because July 17, 2023, is safely within even the narrower five-year statute of limitations, the case will not be dismissed under Rule 12(b)(6) on statute of limitations grounds. Il. The Complaint is not barred by laches. Defendants also argue that the Complaint is barred by laches. “Laches precludes a lawsuit when a plaintiff is guilty of unreasonable and unexcused delay in asserting his claim, resulting in prejudice to the defendant.” Baker v. Baker, 951 F.2d 922, 926 (8th Cir. 1991) (citing Grieshaber v. Grieshaber, 793 S.W.2d 161, 163 (Mo. Ct. App. 1990)). “Mere delay does not of itself constitute laches, the delay must be unreasonable and unexplained and must be shown to have caused disadvantage and prejudice to the defendant.” Id. (quoting Perez v. Missouri State Bd. of Registration for the Healing Arts, 803 S.W.2d 160, 166 (Mo. Ct. App. 1991)). In general, “the doctrine of laches will not bar a suit where the statute of limitation has not run as long as extraordinary facts do not warrant relief.” Empiregas, Inc. of Palmyra v. Zinn, 833 S.W.2d 449, 451 (Mo. Ct. App. 1992) (citing State ex rel. Gen. Elec. Co. v. Gaertner, 666 S.W.2d 764, 767 (Mo. 1984) (en banc)). Because it is not apparent from the Complaint that Plaintiff's claim is barred by the statute of limitations and there are no extraordinary facts warranting relief, the Court declines to dismiss the Complaint on the basis of laches. Il. Plaintiff's claim is ripe. Finally, Defendants argue that Plaintiff's claim is not ripe. For the reasons set forth in Certain Underwriters at Lloyd’s, London v. CS&S Properties, LLC, 2022 WL 103303, at *3- *4 (E.D. Mo. Jan. 11, 2022), the Court rejects that argument. Accordingly, IT IS HEREBY ORDERED that Defendants’ Motions to Dismiss, Docs. [18], [20], are DENIED. Dated this 21st day of August, 2025. / ) aot of f4f2 “ft? Swe” Aaa | tte SARAH E. PITLYK het UNITED STATES DISTRICT JUDGE