Opinion
Case No. 2:17-cv-2802-BHH-MGB
02-25-2020
Coastal Select Insurance Company, Plaintiff, v. Stephen Rice and John Quick, Jr., Defendants.
REPORT AND RECOMMENDATION
This is a declaratory judgment case. See 28 U.S.C. § 2201. Coastal Select Insurance Company seeks a ruling that it has no duty to defend or indemnify John Quick, Jr. in a lawsuit Stephen Rice filed against him and others. Because Quick is representing himself in this declaratory judgment case, pretrial proceedings have been referred to the undersigned. See Local Civ. Rule 73.02(B)(2)(e) (D.S.C.).
Rice and Quick have recently settled their dispute in the underlying lawsuit. Consequently, the undersigned recommends dismissing Coastal Select's case as moot.
BACKGROUND
Rice and Quick are former corporate officers of M-E-C Company. In March 2017, Rice sued M-E-C, Quick, and M-E-C board members, alleging claims relating to his employment and termination. See Rice v. M-E-C Co., No. 2:17-cv-1274-BHH-BM (D.S.C.). Several months later, Coastal filed this action, asking for declaratory relief on three homeowners policies it sold Quick. Coastal asks the Court to declare the policies do not obligate Coastal to defend or indemnify Quick in Rice's lawsuit. (See Dkt. No. 1.)
On February 3, 2020, Rice settled his claims against Quick. Quick is no longer a party in M-E-C. Rice v. M-E-C is still pending as to the other defendants.
Coastal has moved for summary judgment in this case. (Dkt. No. 36.) While working on that motion, the undersigned learned Rice had settled with Quick in M-E-C. On February 11, she directed the parties to brief whether that partial settlement made this case moot. (Dkt. No. 39.) On February 17, Coastal and Rice informed the Court they believe it is moot. (Dkt. No. 41.) Quick did not submit a brief.
DISCUSSION
This Court has jurisdiction only over "cases" and "controversies." See United States v. Wolfe, 442 F. App'x 16, 17 (4th Cir. 2011) (per curiam) (citing U.S. Const. art. III, § 2). Article III's case-or-controversy requirement deprives federal courts of jurisdiction over cases that have become moot, which happens "when resolution of the issues presented no longer implicates a legally cognizable interest." Id. (citing Townes v. Jarvis, 577 F.3d 543, 546 (4th Cir. 2009)); see also United States v. Hardy, 545 F.3d 280, 283 (4th Cir. 2008) ("[M]ootness constitutes a part of the constitutional limits of federal court jurisdiction . . . . [A] case is moot when the issues presented are no longer 'live' or the parties lack a legally cognizable interest in the outcome." (quotations and citations omitted)).
As Coastal and Rice acknowledge, there are no longer any live issues for this Court to adjudicate in this case. Rice's settlement with Quick ends any potential duties Coastal may have had to defend or indemnify him. Cf. Scottsdale Ins. Co. v. Simco, Inc. of Charleston, No. 2:12-cv-678-RMG, 2012 WL 13005829, at *2 (D.S.C. Dec. 5, 2012) (finding insurance-coverage declaratory judgment case moot because underlying case settled). Thus, the undersigned believes this case is moot, which means the Court lacks jurisdiction. Although no party has sought dismissal on that basis, the Court nevertheless must dismiss the case. See Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the case."); see also Griffin v. Padula, 518 F. Supp. 2d 671, 677 (D.S.C. 2007) ("[A] federal court is obligated to raise questions concerning its own subject matter jurisdiction sua sponte in all cases . . . ." (citation omitted)).
CONCLUSION
The undersigned recommends that the Court dismiss this case for lack of subject-matter jurisdiction.
IT IS SO RECOMMENDED. February 25, 2020
Charleston, South Carolina
/s/_________
MARY GORDON BAKER
UNITED STATES MAGISTRATE JUDGE
The parties' attention is directed to the Important Notice on the next page.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
Post Office Box 835
Charleston, South Carolina 29402
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).