United States District Court, D. Maryland
Richard D. Bennett, United States District Judge.
Arch Insurance Company (“Plaintiff” or
“Arch”) of Jersey City, New Jersey brings this
action against Defendant U.S. Silica Company
(“Defendant” or “Silica”) of
Frederick, Maryland, alleging that the Defendant has failed
to abide by its contractual obligations to document the
transfer of its rights against a third party to the
Plaintiff. (Am. Compl., ECF No. 15.) The jurisdiction of this
Court is predicated on diversity of citizenship pursuant to
28 U.S.C. § 1332(a). Silica has filed a Motion to
Dismiss the Amended Complaint, arguing, inter alia,
that it has in fact executed an assignment of its rights to
Arch. (ECF No. 16.) The submissions have been reviewed and no
hearing is necessary. See Local Rule 105.6 (D. Md.
2016). As explained in more detail below, the Plaintiff does
not sufficiently allege that the executed assignment fails to
satisfy Silica's contractual obligations. Accordingly,
this Court GRANTS the Defendant's Motion to Dismiss (ECF
No. 16) and Plaintiff's claims are DISMISSED WITHOUT
PREJUDICE. Arch shall be permitted to file a Second Amendment
Complaint within 14 days. Failure to do so will result in a
Dismissal WITH PREJUDICE.
ruling on a motion to dismiss, this Court “accept[s] as
true all well-pleaded facts in a complaint and construe[s]
them in the light most favorable to the plaintiff.”
Wikimedia Found. v. Nat'l Sec. Agency, 857 F.3d
193, 208 (4th Cir. 2017) (citing SD3, LLC v. Black &
Decker (U.S.) Inc., 801 F.3d 412, 422 (4th Cir. 2015)).
Plaintiff Arch Insurance Company (“Plaintiff” or
“Arch”) issues liability insurance policies. (Am.
Compl., ECF No. 15 at ¶ 6.) Arch and Defendant U.S.
Silica Company (“Defendant” or
“Silica”) entered into an insurance contract
whereby Arch issued a primary commercial general liability
policy to Silica as the named insured for September 1, 2013
through September 1, 2014 (the “Arch Policy”).
(Id. at ¶¶ 7-8.) The Arch Policy included
a $250, 000 self-insured retention and up to $1, 750, 000 of
liability insurance per occurrence against covered
“bodily injury.” (Id. at ¶ 10.) In
addition, the Arch Policy contained “Commercial General
Liability Conditions” which included:
2. Duties in the Event of Occurrence, Offense, Claim
. . .
c. You and any other involved insured must:
. . .
(4) Assist us, upon our request, in the enforcement of any
right against any person or organization which may be liable
to the insured because of injury or damage to which this
insurance may also apply.
8. Transfer of Rights of Recovery Against Others to
Us If the insured has rights to recover all or part
of any payment we have made under this Coverage Part, those
rights are transferred to us. The insured must do nothing
after loss to impair them. At our request, the insured will
bring “suit” or transfer those rights to use and
help us enforce them.
(ECF No. 15-2.)
around November 26, 2008, Silica and a third party, Union
Pacific, entered into an Industry Track Agreement governing
the use and operation of a particular railway track that runs
through the Silica facility in Pacific, Missouri. (ECF No. 15
at ¶¶ 13-14.) Under Article 9 of the Industry Track
Agreement, Union Pacific owes indemnity to Silica “from
and against any and all claims for loss arising from or
growing out of the negligent acts or omissions of the
Railroad.” (ECF No. 15-3.) On or about May 2, 2014,
Kevin King, Jr. (“Mr. King”) filed a complaint
against Union Pacific, claiming that he suffered injuries as
a result of Union Pacific's alleged negligence (the
“King claim”). (ECF No. 15 at ¶¶
20-21.) Mr. King subsequently amended his complaint, adding
Silica as a defendant. (Id. at ¶ 23.)
summer of 2015, Union Pacific, Silica, Arch, and National
Union Fire Insurance Company of Pennsylvania (“National
Union”) negotiated toward a resolution of the King
claim. (Id. at ¶ 24.) On or around August 24,
2015, the four parties entered into an agreement setting
forth each of their assumed obligations in connection with
the settlement efforts and respective positions regarding
such obligations (the “Mediation Agreement”).
(ECF No. 15-6.) This agreement provided that “$1, 750,
000 of any such settlement shall be paid by Arch on behalf of
U.S. Silica above U.S. Silica's self-insured
retention” and “U.S. Silica shall provide
cooperation to Arch . . . in any post settlement proceeding
pursued by Arch . . . against Union Pacific.”
(Id.) Ultimately, Arch paid $1, 750, 000 toward
settling the King claim on behalf of U.S. Silica above U.S.
Silica's self-insured retention, and Mr. King released
all claims against Silica and Arch. (ECF No. 15 at
settling the King claim, Arch has initiated attempts to
recover its payment from Union Pacific, including through
informal negotiation and mediation. (ECF No. 15 at
¶¶ 30-31.) In these efforts, Arch has requested
that-pursuant to the Arch Policy and Mediation
Agreement-Silica document the transfer of its rights against
Union Pacific to Arch, as may be required for Arch to
formally initiate and pursue arbitration against Union
Pacific. (Id. at ¶¶ 33-34.) On June 9,
2017, Arch sent Silica a proposed assignment of claim. (ECF
No. 15-8.) The Amended Complaint asserts, however, that
“[t]o date, Silica has refused to ...