National Enterprises v. SC Insurance Company ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NATIONAL ENTERPRISES,
INCORPORATED,
Plaintiff-Appellee,
v.
SOUTH CAROLINA INSURANCE
No. 97-2185
COMPANY,
Defendant-Appellant,
v.
JON F. CARMAIN; LINDA B. CARMAIN,
Third Party Defendants.
Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Matthew J. Perry, Jr., Senior District Judge.
(CA-96-1381-3-10)
Submitted: September 15, 1998
Decided: October 29, 1998
Before WIDENER and HAMILTON, Circuit Judges, and
HALL, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
William B. Woods, Donna Seegars Givens, WOODS & GIVENS,
Lexington, South Carolina, for Appellant. David W. Robinson, II, D.
Clay Robinson, ROBINSON, MCFADDEN & MOORE, P.C.,
Columbia, South Carolina, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
The South Carolina Insurance Company (SCIC) appeals from the
district court's order awarding summary judgment to National Enter-
prises, Inc., (NEI) on its action to recover under a flood insurance pol-
icy issued by SCIC. For the reasons that follow, we affirm.
The relevant facts are undisputed. In 1980, Jon and Linda Carmain
purchased a cottage in Nags Head, North Carolina, which they
financed through Atlantic Permanent Federal Savings and Loan.
SCIC issued a flood insurance policy on the property. After the prop-
erty was destroyed by storms in late 1991 and early 1992, the Car-
mains made no further mortgage payments on the note which, by that
time, had been assigned to Trustbank and later to the Resolution Trust
Corporation (RTC). In 1993, the Carmains sued SCIC to recover on
the flood insurance policy and obtained a default judgment which
SCIC ultimately paid.
In 1995, NEI acquired the mortgage and note and brought this
action against SCIC to recover under the flood insurance policy. The
district court found that under the plain terms of the policy, NEI was
the primary insured and thus entitled to full payment. Rejecting each
of SCIC's defenses, the district court awarded summary judgment in
favor of NEI. SCIC appeals, raising six claims.
We review a grant of summary judgment de novo. See Higgins v.
E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir. 1988).
Summary judgment is appropriate only when the court, viewing the
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record as a whole and in the light most favorable to the non-moving
party, finds there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-24
(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986).
First, SCIC contends that NEI is not entitled to payment of the pro-
ceeds because it was not an "insured person" under the terms of the
policy. The policy provides that "persons insured" include "any mort-
gagee . . . named in the application and declaration page." SCIC
claims that because NEI's name does not appear in the Declaration
Pages for 1991 and 1992, it was not an "insured person." The policy
states that any loss "shall be payable to the aforesaid as mortgagee (or
trustee) as interest may appear under all present or future mortgages
upon the property described in which the aforesaid may have an inter-
est." The amendment to the declaration page issued by SCIC for the
year January 22, 1991 through January 22, 1992, lists Trustbank as
mortgagee. We agree with the district court's conclusion that, when
NEI purchased the note and mortgage from the RTC, it acquired the
interests of its predecessor owners under the flood insurance policy.
Accordingly, the district court properly determined that NEI was an
"insured person" entitled to the policy proceeds.
Second, SCIC contends that the district court erred in applying the
South Carolina doctrine of election of remedies because NEI had ear-
lier filed suit on the note against the Carmains in Colorado state court.
The district court properly declined to apply the South Carolina rule
which bars double recovery because NEI did not recover from the
Carmains. See Save Charleston Found. v. Murray , 333 S.E.2d 60, 63-
64 (S.C. Ct. App. 1985) ("When an identical set of facts entitles the
plaintiff to alternative remedies, he may plead and prove his entitle-
ment to either or both; however, the plaintiff may not recover both.").
The mere possibility that SCIC may have to pay twice is not sufficient
to invoke the doctrine.
Third, SCIC contends that the district court erred as a matter of law
by rejecting its defense of laches. NEI acquired the note in July 1995
and contacted SCIC the following month--before SCIC paid the Car-
mains on the default judgment--and then brought this action in May
1996. We find that the record reveals no lack of diligence by NEI nec-
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essary to support SCIC's defense of laches. See Mogavero v.
McLucas, 543 F.2d 1081, 1083 (4th Cir. 1976) (holding that defense
of laches requires proof of both lack of diligence by the party against
whom the defense is asserted and prejudice to the party asserting the
defense).
Fourth, SCIC claims that the district court erred in finding that it
had actual notice of NEI's status as successor mortgagee. The policy
required payment to a mortgagee either if the mortgagee was listed on
the declaration page of the policy or if "the insurer has actual notice
prior to the payment of loss proceeds under the policy." It is undis-
puted that NEI contacted SCIC prior to its payment to the Carmains
on the default judgment.
SCIC claims, as its fifth assignment of error, that the district court
erred in rejecting the forum selection clause in the policy. The flood
policy required that any claim be filed "in the United States District
Court for the district in which the insured property was located at the
time of loss"--in this case, the Eastern District of North Carolina. The
district court rejected the clause for two reasons. First, the property
had been completely destroyed and was, therefore, unavailable for
viewing or inspection by a jury. Second, NEI had unsuccessfully
attempted to intervene in an action between the Carmains and SCIC
which was filed in the Eastern District of North Carolina. Therefore,
the district court concluded, "NEI had reason to abandon the Eastern
District of North Carolina in favor of this District encompassing the
SCIC home office."
A forum selection clause is generally binding and will be enforced
unless enforcement is "``unreasonable' under the circumstances." See
The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A choice
of forum provision may be found unreasonable if (1) its formation
was induced by fraud or overreaching; (2) the complaining party "will
for all practical purposes be deprived of his day in court" because of
the grave inconvenience or unfairness of the selected forum; (3) the
fundamental unfairness of the chosen law may deprive the plaintiff of
a remedy; or (4) its enforcement would contravene a strong public
policy of the forum state. See Carnival Cruise Lines, Inc. v. Shute,
499 U.S. 585, 595 (1991).
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NEI failed to establish one of the above grounds for setting aside
the forum selection clause. Nevertheless, we find any error by the dis-
trict court on this issue was harmless for two reasons. First, SCIC has
failed to show how it was prejudiced by the rejection of the clause,
given that it did not have to defend the suit in a foreign jurisdiction.
Second, SCIC has not presented any evidence to establish that the
result would have been any different had the case been tried in North
Carolina.
Finally, SCIC maintains that the district court erred as a matter of
law in calculating actual damages. Specifically, SCIC claims that the
assessment of prejudgment interest on the outstanding principle bal-
ance of the mortgage as of the date of loss (November 21, 1991) is
"patently unjust in light of the parties' actions." (See Brief of Appel-
lant, p. 12). South Carolina law provides for prejudgment interest on
actions for sums certain. See S.C. Code Ann.§ 34-31-20(A) (Law.
Co-op 1987). Interest runs from the date of the loss. See Jacobs v.
American Mut. Fire Ins. Co., 340 S.E.2d 142 (S.C. 1986); Flynn v.
Nationwide Mutual Ins. Co., 315 S.E.2d 817 (S.C. Ct. App. 1984).
Accordingly, the district court correctly included prejudgment interest
in its order awarding judgment to NEI.
For the foregoing reasons, we affirm the district court's order. We
dispense with oral argument because the facts and legal contentions
are adequately presented in the materials before the court and argu-
ment would not aid in the decisional process.
AFFIRMED
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