United States District Court, E.D. Virginia, Richmond Division
DENISE A. PENN, et al., Plaintiffs,
1ST SOUTHERN INSURANCE SERVICES, INC., et al., Defendants.
E. PAYNE SENIOR UNITED STATES DISTRICT JUDGE
matter is before the Court on DEFENDANTS' RULE 12(b)(6)
MOTION TO DISMISS (ECF No. 7) . For the following reasons,
the motion will be granted.
Denise Penn and Houstonia Clymer filed this action against
Defendants, 1st Southern Insurance Services, Inc., George
Roberts, and Fran Pless, for their failure to procure proper
insurance coverage for Jimmy Barker and Barker & Son
Forestry Services, Inc. Defendants have moved for dismissal
of the Complaint (ECF No. 1) pursuant to Fed.R.Civ.P.
Factual Context (As Set Forth in the Complaint)
following factual overview is based on the allegations in the
case arises out of an insurance policy selected and placed by
Defendants on behalf of Jimmy Barker and Barker & Son
Forestry Services, Inc. (collectively "Barker").
contracted with Barker to advise as to the kinds and amount
of insurance that Barker had to purchase under applicable law
(i.e., for a trucking business operating in at least
four states) and to select and place that insurance. Compl.
*6-8. Barker had no special experience in insurance matters
and therefore relied entirely on Defendants and their
promised expertise for the selection and placement of
insurance. Compl. *4. Barker's reliance arose, at least
in part, from Defendants' claimed experience in insuring
truckers. Compl. *4. Defendants were aware that Barker
counted on them to secure all required insurance. Compl. *5.
Defendants selected and placed a policy that did not meet
mandatory minimum financial responsibility federal trucking
standards. Compl. *5. That policy did not contain a MCS-90
endorsement, and it failed to satisfy coverage minimums.
Compl. *5. As to the latter deficiency, the minimum financial
responsibility protection required under federal law is $750,
000 in liability coverage, but the policy provided only $100,
000. Compl. *2.
and Clymer were severely injured in an accident caused by
Justin Colvard, while he was driving a truck for Barker.
Compl. *2. That accident occurred while the policy at issue
here was in effect. See Compl. *2-5. Thereafter,
Penn and Clymer secured judgments against the Barker &
Son business in the Circuit Court of Brunswick County,
Virginia. Compl. *2. Penn was awarded damages in the amount
of $2, 4 50, 000. Compl. *2. Clymer was awarded damages in
the amount of $275, 000. Compl. *2.
insurer refused to pay the additional amount required to meet
minimum insurance standards under federal law ($650, 000).
See Compl. *2-3. Barker, therefore, assigned all of
its rights against Defendants to Penn and Clymer, who now sue
Defendants for their failure to provide proper guidance and
for failure to obtain proper coverage for Barker. Compl.
Additional Factual Context
allege that the Complaint omits a substantial amount of
relevant information. Defs.' Br. 2, 4-5. This information
is discussed here, although whether it can be considered in
resolving Defendants' motion shall be addressed below.
observe that the policy at issue was "procured and
issued in 2004 for a policy period that terminated
in 2005." Defs.' Br. 2. Furthermore, they
claim that the accident in which Penn and Clymer were injured
occurred on August 2, 2005. Defs.' Br. 2, 4-5. And, they
note that the policy at issue was previously considered by
this Court in a declaratory judgment action in 2007 (to which
Penn and Clymer were parties) . See Defs.' Br.
5. In a ruling affirmed by the Fourth Circuit in 2009, this
Court found that the policy provided only $100, 000 in
liability coverage. See Defs.' Br. 2, 5. To
support those factual claims, Defendants attach as exhibits:
(1) the declarations pages of the policy at issue; (2) the
complaint in the declaratory judgment action (which itself
includes a copy of the policy); (3) the answers filed by Penn
and Clymer in that action; (4) the district court's final
order in that action; and (5) the Fourth Circuit's
opinion affirming the district court's ruling.
See Defs.' Br. 2, 2 n.l, 4-5; Defs.' Br.
procedural history in this case is short. Penn and Clymer
filed their Complaint on November 11, 2017. They alleged six
claims: Count I-breach of contract; Count II-breach of oral
contract; Count Ill-breach of implied contract; Count
IV-negligence; Count V-professional negligence; and Count
Vl-direct negligence (against Penn and Clymer personally).
After Defendants filed their motion to dismiss, Counts IV
(negligence) and VI (direct negligence) were dismissed by
agreement. ORDER (ECF No. 20).
GOVERNING MOTIONS TO DISMISS UNDER FED. R.
CIV. P. 12(b) (6)
standards governing motions to dismiss under Fed.R.Civ.P.
12(b)(6) are clear:
Federal Rule of Civil Procedure 8(a)(2) requires only "a
short and plain statement of the claim showing that the
pleader is entitled to relief." When ruling on a motion
to dismiss [pursuant to Fed.R.Civ.P. 12(b)(6)], courts must
accept as true all of the factual allegations contained in
the complaint and draw all reasonable inferences in favor of
To survive a motion to dismiss, Plaintiffs' factual
allegations, taken as true, must "state a claim to
relief that is plausible on its face." The plausibility
standard is not a probability requirement, but "asks for
more than a sheer possibility that a defendant has acted
unlawfully." Although it is true that "the
complaint must contain sufficient facts to state a claim that
is plausible on its face, it nevertheless need only give the
defendant fair notice of what the claim is and the grounds on
which it rests." Thus, we have emphasized that "a
complaint is to be construed liberally so as to do
Hall v. DIRECTV, LLC, 846 F.3d 757, 765 (4th Cir.
2017) (citations omitted).
argue, inter alia, that all counts are barred by
applicable statutes of limitations. See Defs.'
Br. 2. The Court agrees and therefore grants Defendants'
motion on that ground.
Choice of Law
preliminary matter involves which state's law governs the
relevant issues in this case. There is no dispute between the
parties that Virginia law governs the statutes of limitations
questions at issue here (including when a claim accrues), and
the Court concurs in the parties' assessment.
See Defs.' Br. 5; Pls.' Opp'n 4 n.8.
The Relevant Statutes of Limitations
Virginia law, for actions upon a written contract, the
limitations period is five years. See Va. Code Ann.
§ 8.01-246(2). For actions upon an unwritten contract,
the statute of limitations is three years. See id.
§ 8.01-246(4). For professional negligence claims, the
limitations period is the same as for breach of contract.
See Browning v. Tiger's Eye Benefits Consulting,
313 Fed.Appx. 656, 664 (4th Cir. 2009); White v. BB &
T Ins. Servs., Inc., 7:10-cv-467, 2012 WL 3018048, at
*5, 7 (W.D. Va. July 23, 2012).
remaining claims involve only breach of contract and
professional negligence. Consequently, the applicable
limitations period is, at most, five years. The parties do
not dispute this conclusion. See Defs.' Br. 7-8,
13; Pls.' Opp'n 4 n.8.
The Parties' Arguments
main dispute in this case involves when the claims accrued.
Defendants argue that the statutes of limitations began to
run no later than 2004, when the inadequate policy was
issued. Defs.' Br. 8, 12-13. They also note that, even
using the date of Penn and Clymer's accident (in 2005) or
the date that the declaratory judgment action was resolved
(in 2009) as the accrual date, Penn and Clymer's claims
are time barred. See Defs.' Br. 9, 12-13.
and Clymer respond that injury is necessary for a claim to
accrue, and they contend that no injury occurred until the
judgments in their favor were entered against Barker &
Son (less than one year before this action was filed)
because, before that time, the insurer provided all that it