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Kelaher, Connell & Conner, P.C. v. Auto-Owners Ins. Co.

United States District Court for the District of South Carolina, Florence Division

February 24, 2020, Decided; February 24, 2020, Filed

C/A No. 4:19-cv-00693-SAL



Before the court is a Motion for Summary Judgment filed by Defendant Auto-Owners Insurance Company ("Auto-Owners") as to all claims asserted by Plaintiff Kelaher, Connell & Conner, P.C. ("Kelaher"). [ECF No. 13.] The dispute concerns whether Kelaher is entitled to coverage pursuant to a civil authority provision in a business interruption insurance policy issued by Auto-Owners. The civil authority order at issue required coastal residents to evacuate in preparation for Hurricane Florence making landfall. Kelaher evacuated, returned to the business 3.5 days later, filed a claim for business losses during the period covered by the evacuation order, and Auto-Owners denied the claim.

Kelaher filed this lawsuit on January 28, 2019, in the Court of Common Pleas for Horry County, alleging breach of contract, breach of contract accompanied by fraudulent act, and bad faith refusal [*2]  to pay insurance benefits. Auto-Owners timely removed the case to this court on the basis of diversity jurisdiction, 28 U.S.C. § 1332. On June 25, 2019, Auto-Owners filed the motion that is the subject of this Order. The motion was fully briefed and counsel for the parties appeared for a hearing on February 19, 2020.1 For the reasons outlined, the court finds that there is no genuine dispute as to any material fact, and Auto-Owners is entitled to judgment as a matter of law on all claims.


The facts are undisputed. Kelaher is a law firm in Horry County, South Carolina. [ECF No. 1-1.] It is insured through a Businessowners Insurance Policy, No.94-302-959-00 (the "policy"), purchased from Auto-Owners, which includes a type of business interruption insurance known as civil authority coverage. [ECF Nos. 1-1, at ¶¶ 3, 5; 4, at ¶¶ 2-3.] The civil authority coverage is found in a coverage extension. The Coverage Extension reads:

A. COVERAGE, 5. Additional Coverages, the following Additional Coverage is added:

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2020 U.S. Dist. LEXIS 31081 *; 2020 WL 886120

Kelaher, Connell & Conner, P.C., Plaintiff, v. Auto-Owners Insurance Company, Defendant.


civil authority, coverage, insured, evacuation, summary judgment, premises, unambiguous, destruction of property, adjacent property, direct result, interruption, destruction, described premises, property damage, ambiguity, genuine, executive order, preposition, mandatory, adjacent, cases, insurance policy, latent ambiguity, business income, plain terms, parties