LINEAGE LOGISTICS, LLC v. NAT'L UNION FIRE INS. CO. OF PITTSBURGH, PA., 2023 NCBC 54

STATE OF NORTH CAROLINA
IREDELL COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
21 CVS 2372
LINEAGE LOGISTICS, LLC; and
PRIMUS BUILDERS, INC.,
Plaintiffs,
v.
NATIONAL UNION FIRE
INSURANCE COMPANY OF
PITTSBURGH, PA; TRAVELERS
PROPERTY CASUALTY COMPANY
OF AMERICA; HARTFORD FIRE
INSURANCE COMPANY; and
REPUBLIC REFRIGERATION,
INC.,
Defendants.
ORDER AND OPINION ON
TRAVELERS PROPERTY CASUALTY
COMPANY OF AMERICA’S MOTIONS
TO DISMISS PLAINTIFFS’ AMENDED
COMPLAINTS, REPUBLIC
REFRIGERATION, INC’S MOTION TO
DISMISS LINEAGE LOGISTICS,
LLC’S AMENDED COMPLAINT, AND
REPUBLIC REFRIGERATION, INC’S
MOTION TO STAY
LINEAGE LOGISTICS, LLC,
Crossclaimant,
v.
PRIMUS BUILDERS, INC.,
Crossclaim
Defendant.
1. 	THIS MATTER is before the Court on four motions (collectively, the
“Motions” and each a “Motion”) brought under Rules 12(b)(1), 12(b)(6), and 12(b)(7)
of the North Carolina Rules of Civil Procedure (the “Rule(s)”):
Lineage Logistics, LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2023 NCBC
54.

a) Defendant 	Travelers 	Property 	Casualty 	Company 	of 	America’s
(“Travelers”) Motion to Dismiss the Second Amended Complaint of
Lineage Logistics, LLC (“Lineage”) (the “Travelers-Lineage Motion”);1
b) Defendant Travelers’s Motion to Dismiss Second Amended Complaint of
Primus Builders, Inc. and P3 Advantage, Inc. (collectively, “Primus”)
(the “Travelers-Primus Motion”);2
c) 	Defendant Republic Refrigeration, Inc.’s (“Republic”) Motion to Dismiss
(the “Republic Motion”);3 and
d) Defendant Republic’s Motion to Stay (the “Stay Motion”).4
2. 	For the reasons set forth below, the Court GRANTS the Travelers-Lineage
Motion, GRANTS the Travelers-Primus Motion, GRANTS in part and DENIES in
part the Republic Motion, and DENIES the Stay Motion.5
McGuireWoods LLP, by Alec Covington, Zachary McCamey, Anthony
Tatum, 	and 	Shelby 	Guilbert, 	for 	Plaintiff/Crossclaimant 	Lineage
Logistics, LLC.
1 (Def. Travelers’s Property Casualty Company of America’s Mot. Dismiss Second Am. Compl.
Lineage Logistics, LLC [Rule 12(b)(1), 12(b)(6) and 12(b)(7)] [hereinafter “Travelers Mot.
Dismiss Lineage”], ECF No. 132.)
2 (Def. Travelers’s Property Casualty Company of America’s Mot. Dismiss Second Amended
Compl. Primus Builders, Inc. and P3 Advantage, Inc. [Rule 12(b)(1), 12(b)(6), and 12(b)(7)]
[hereinafter “Travelers Mot. Dismiss Primus”], ECF No. 136.)
3 (Republic Refrigeration, Inc.’s Mots. Dismiss, Mot. Stay Answer Pl. Lineage Logistics, LLC’s
Second Am. Compl. [hereinafter “Republic Mots.”], ECF No. 130.)
4 (Republic Mots.) Republic presented its two motions together, but briefed them separately.
5 After the completion of briefing on these four motions, Primus filed a motion to sever. (See
Primus Builders, Inc. and P3 Advantage, Inc’s Mot. Sever, ECF No. 151.) Because the Court’s
rulings on the Motions moots the Motion to Sever, the Court will issue a separate order
denying the Motion to Sever as moot.

Taylor English Duma, LLP, by Ryan M. Arnold, Gregory G. Schultz, and
Stephen L. Wright, for Plaintiff/Crossclaim Defendant Primus Builders,
Inc.
Womble Bond Dickinson (US) LLP, by M. Elizabeth O’Neill, Grady
Michael Barnhill, and Jonathan R. Reich, for Defendant Travelers
Property Casualty Co. of America.
Robinson Elliot & Smith, by William C. Robinson and Dorothy M.
Gooding, for Defendant Republic Refrigeration, Inc.
Bledsoe, Chief Judge.
I.
FACTUAL AND PROCEDURAL BACKGROUND
A. 	Factual Background
1. 	The Parties, Operative Contracts, and Insurance Policies
3. 	The Court does not make findings of fact on motions presented under Rule
12 of the North Carolina Rules of Civil Procedure (the “Rule(s)”). Rather, the Court
recites the allegations asserted and documents referenced in the pleadings that are
relevant to the Court’s determination of the Motions.
4. 	Lineage operates a cold storage facility in Statesville, North Carolina that
stores temperature-controlled food products for customers (the “Facility”).6 Lineage
6 (Pl. Lineage’s Second Am. Compl. and Crosscl. ¶ 1 [hereinafter “Lineage Am. Compl.”], ECF
No. 121; Pl. Primus’s Second Am. Compl. ¶¶ 9–10 [hereinafter “Primus Am. Compl.”], ECF
No. 122.) For ease of reference, the Court will refer to Lineage’s Second Amended Complaint
and Primus’s Second Amended Complaint as the “amended complaints” and to each as the
respective party’s “amended complaint.”

assumed ownership of the Facility after it merged with Millard Refrigerated Services,
LLC (“Millard”).7
5. 	Primus is a general contractor specializing in the construction of large,
refrigerated buildings.8 	Primus contracted with Millard (the “Primus Contract”) to
design and construct six blast cells at the Facility (the “Project”).9 	In the Primus
Contract, Primus promised to name Lineage and Millard as additional insureds
under several insurance policies and to indemnify Lineage against claims and
damages that arose out of Primus’s performance on the Project.10
6. 	Republic entered a subcontract with Primus to perform services on the
Project (the “Republic Subcontract”).11 	Under the Republic Subcontract, Republic
promised to name Lineage as an additional insured under several insurance policies
and to indemnify Lineage against any claims or damages that arose out of Republic’s
performance on the Project.12
7. 	There are four insurance policies at issue in this case: two were issued to
Primus, and two to Republic (each a “Policy” and together, the “Policies”).13
7 (Lineage Am. Compl. ¶ 2; Primus Am. Compl. ¶¶ 10–11.)
8 (Primus Am. Compl. ¶ 1.)
9 (Lineage Am. Compl. ¶ 5; Primus Am. Compl. ¶ 11.)
10 (Lineage Am. Compl. ¶¶ 27–29.)
11 (Lineage Am. Compl. ¶ 7; Primus Am. Compl. ¶¶ 12–13.)
12 (Lineage Am. Compl. ¶¶ 7, 30–31; Lineage Am. Compl. Ex. B Design/Build Subcontract
[hereinafter “Republic Subcontract”], ECF No. 121.2.)
13 On 25 July 2023, the parties entered into a stipulation representing that certain
documents, attached as exhibits A-E to the stipulation, were the accurate and correct copies

8. 	National Union Fire Insurance Company of Pittsburgh, P.A. (“National
Union”) 	and 	Primus 	entered 	into 	a 	Commercial 	General 	Liability 	Policy 	(the
“National Union Policy”), which lists Primus as the named insured and Lineage and
Millard as additional insureds, and which provides a $1 million per occurrence limit
of liability.14 	Lineage and Primus named National Union as a defendant in their
original complaints, but all claims against it were subsequently dismissed pursuant
to a settlement agreement, and it is no longer a party to this case.15
9. 	Travelers and Primus entered into an Umbrella/Excess Coverage Policy (the
“Travelers-Primus Policy”), which lists Primus as the named insured and Lineage
and Millard as additional insureds, and which provides a $20 million per occurrence
and aggregate limit of liability.16
10. 	Hartford Fire Insurance Company (“Hartford”) and Republic entered into a
Commercial General Liability Policy (the “Hartford Policy”), which lists Republic as
of the relevant insurance Policies, and consenting to the Court’s consideration of the exhibits
in its decision on the Motions. (See generally Parties’ Joint Stipulation Relating Insurance
Policies Issued by Travelers Property Casualty Company of America, The Hartford Fire
Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA, and New
Hampshire Insurance Company [hereinafter “Joint Stipulation”], ECF No. 153.) 	For
example, the National Union Policy is Exhibit A to the stipulation. (See Joint Stipulation Ex.
A, Policy No. GL 518-01-98 [hereinafter “National Union Policy”], ECF No. 153.1.)
14 (Lineage Am. Compl. ¶ 6; Primus Am. Compl. ¶¶ 15–16.)
15 (See generally Compl. [hereinafter “Lineage Original Compl.”], ECF No. 3; Pl. Primus
Builders Inc.’s Compl. [hereinafter “Primus Original Compl.”], ECF No. 36; Voluntary
Dismissal with Prejudice All Claims Made Against Def. National Union Fire Insurance
Company of Pittsburgh, PA., ECF No. 104; Stipulation of Dismissal, ECF No. 105.)
16 (See Joint Stipulation Ex. B, Policy No. ZUP-15S19150-19-NF [hereinafter “Travelers-
Primus Policy”], ECF No. 153.2; Primus Am. Compl. ¶ 17; Lineage Am. Compl. ¶¶ 37–38.)

the named insured and Lineage and Primus as the additional insureds, and which
provides a $1 million per occurrence limit of liability and $2 million aggregate limit
of liability.17 	Lineage and Primus named Hartford as a defendant in their original
complaints, but subsequently dismissed all claims against Hartford pursuant to a
settlement agreement.18 As a result, Hartford is also no longer a party to this case.
11. 	Travelers and Republic entered into an Umbrella/Excess Coverage Policy
(the “Travelers-Republic Policy,” together with the Travelers-Primus Policy, the
“Travelers Policies”), which lists Republic as the named insured and Lineage and
Primus as additional insureds, and which provides a $10 million per occurrence and
aggregate limit of liability.19
2. 	The 10 January 2020 Incident
12. 	On 10 January 2020, two employees of Primus affiliate P3 Advantage,
LLC—Anthony Lamattina (“Lamattina”) and Carson Brandon Drawdy (“Drawdy”)—
17 (See Joint Stipulation Ex. D, Policy No. 83 UEN OD1146 [hereinafter “Hartford Policy”],
ECF No. 153.4; Primus Am. Compl. ¶¶ 19, 21, 35; Lineage Am. Compl. ¶¶ 8–9.)
18 (Lineage Original Compl.; Primus Original Compl.; Voluntary Dismissal with Prejudice All
Claims Made Against Def. Hartford Fire Insurance Company, ECF No. 111; Notice of
Voluntary Dismissal, ECF No. 112.)
19 (See Joint Stipulation Ex. E, Policy No. ZUP-91M48318-20-NF [hereinafter “Travelers-
Republic Policy”], ECF No. 153.5; Primus Am. Compl. ¶¶ 20, 30; Lineage Am. Compl. ¶ 8.)
Primus erroneously identifies this Policy as a “Commercial General Liability Policy” in its
Amended Complaint, (Primus Am. Compl. ¶ 20), when it is in fact an umbrella policy, (see
Travelers-Republic Policy, at TRAV 00069). 	Also, Lineage mistakenly alleges that the
Travelers-Republic Policy has a $20 million limit when it in fact provides a $10 million limit.
(Compare Lineage Am. Compl. ¶ 43 with Travelers-Republic Policy, at TRAV 00069.)

were using a scissor lift to work on one of the blast cells at the Facility.20 	Lineage
alleges that after Lamattina and Drawdy completed their initial task, a Republic
employee requested that they remain on the lift and remove ice from an evaporator
on one of the blast cells.21 	While removing the ice, Lamattina inadvertently
punctured a coil containing liquid anhydrous ammonia, releasing nearly 1,000
pounds of ammonia into the Facility (the “Incident”).22 Lamattina was exposed to the
ammonia and died at the scene. Drawdy was also exposed, but he was able to jump
to the floor and escape the building. 	He was later hospitalized with significant
injuries from the exposure.23
13. 	In addition to the human cost, the release of ammonia caused Lineage to
incur massive cleanup and investigation costs, disruption to its business operations,
and significant loss of products that were destroyed or rendered unusable because of
the ammonia exposure.24 Lineage and Primus allege that they have been named as
defendants in numerous lawsuits related to the Incident, including a wrongful death
action by Lamattina’s estate and suits from customers seeking to recover for damage
20 (Lineage Am. Compl. ¶ 57; Primus Am. Compl. ¶¶ 22–26.) Primus’s Amended Complaint
does not identify Drawdy by name.
21 (Lineage Am. Compl. ¶ 58.) Primus’s Amended Complaint does not allege that a Republic
employee requested Lamattina to remain on the scissor lift or remove ice. 	(Primus Am.
Compl. ¶¶ 22–26.)
22 (Lineage Am. Compl. ¶ 59; Primus Am. Compl. ¶ 22.)
23 (Lineage Am. Compl. ¶ 60; Primus Am. Compl. ¶ 26.)
24 (Lineage Am. Compl. ¶¶ 62–63.)

to property stored at the Facility (each an “Underlying Action”).25 	Lineage and
Primus also allege that they face claims from property owners who have not yet
brought lawsuits.26
3. 	Plaintiffs’ Efforts to Seek Coverage
i. 	Primus
14. 	Primus alleges that it has requested that Travelers agree to defend and
indemnify Primus for all claims and consequent losses from the incident, but that
Travelers has refused to indemnify Primus.27
ii. 	Lineage
15. 	On 13 January 2020, Lineage provided National Union and Travelers with
a notice of claim on the National Union Policy and the Travelers-Primus Policy, and
requested 	an 	acknowledgment 	that 	these 	insurers 	had 	a 	duty 	to 	defend 	and
indemnify Lineage for claims and losses arising from the Incident.28
25 Each amended complaint identifies three pending lawsuits: Stone ex rel. Estate of Anthony
Lamattina v. Lineage Logistics, LLC, Case No. 20-CVS-3109 (N.C. Super. Ct. 2020); DFA
Dairy Brands, LLC v. Primus Builders, Inc., Case No. 5:21-cv-00025-KDB-DSC (W.D.N.C.
2021); and Equatorial Seafood, LLC v. Lineage Logistics, LLC, Case No. 21-CVS-2360 (N.C.
Super. Ct. 2021). (Lineage Am. Compl. ¶ 64; Primus Am. Compl. ¶ 27.) Primus’s amended
complaint also names a separate action brought by Lineage against Primus, Lineage
Logistics, LLC v. Primus Builders, Inc., Case No. 23-CVS-62 (N.C. Super. Ct. 2023). (Primus
Am. Compl. ¶ 27.)
26 (Lineage Am. Compl. ¶ 29; Primus Am. Compl. ¶ 33.)
27 (Primus Am. Compl. ¶¶ 31, 36.)
28 (Lineage Am. Compl. ¶ 68.)

16. 	Lineage alleges that Travelers has refused to accept its contractual duty to
defend Lineage against claims or indemnify Lineage for losses arising from the
Incident.29
17. 	On 28 December 2020, Lineage provided Hartford and Travelers with
notices of claims under the Hartford Policy and the Travelers-Republic Policy and
requested that these insurers acknowledge a duty to indemnify and defend Lineage
as an additional insured for all claims and losses resulting from the Incident through
these two Policies.30 Lineage alleges that Travelers has declined to do so.31
B. 	Procedural Background
18. 	On 26 August 2021, Lineage filed its original complaint, asserting a single
claim against National Union, Travelers, and Hartford for a declaratory judgment
that Lineage is an additional insured under each Policy and is entitled to coverage
up to the combined limits of liability under the Policies.32
19. 	The Court permitted Primus to intervene in this action on 29 November
2021, and Primus filed its original complaint the following day.33 Although Primus
had not made any claims against it, Hartford filed an answer to Primus’s original
29 (Lineage Am. Compl. ¶ 70.)
30 (Lineage Am. Compl. ¶ 69.)
31 (Lineage Am. Compl. ¶ 70.)
32 (Lineage Original Compl. ¶¶ 47–53.)
33 (Order on Primus’s Mot. Intervene as Pl., ECF No. 31; Primus Original Compl.)

complaint on 15 December 2021.34 	Later that same day, Primus filed an amended
complaint (“Primus’s Amended Complaint”) adding claims against Hartford.35
20. 	Lineage filed an amended complaint and cross-claim on 5 January 2022,
adding claims against Hartford, National Union, Primus, and Republic.36
21. 	On 1 September 2022, National Union and Plaintiffs reached a settlement
agreement, under which National Union paid its full per occurrence limit, and
Plaintiffs agreed to dismiss their claims against National Union (the “National Union
Settlement”).37 	A 	portion 	of 	the 	funds 	from 	this 	settlement 	went 	towards 	a
concurrent settlement of one of the Underlying Actions.38 	The Travelers-Primus
Policy is excess to the National Union Policy, and so after this settlement, Travelers
agreed to defend Lineage and Primus under the Travelers-Primus Policy, but still
refuses to indemnify them.39
22. 	Following the National Union Settlement, Hartford contacted Lineage to
express interest in a similar settlement arrangement.40 	Lineage, Hartford, and
34 (Def. Hartford’s Answer to Pl. Primus’s Compl., ECF No. 41.)
35 (Pl. Primus Builders, Inc.’s Am. Compl. [hereinafter “Primus First Am. Compl.”], ECF No.
42.) 	Before Lineage filed its Amended Complaint, National Union and Travelers filed
motions to dismiss or stay Primus’s Original Complaint, (ECF Nos. 48, 50), which this Court
declared moot by an order dated 19 January 2022, (ECF No. 60).
36 (See generally Pl. Lineage Logistics LLC’s First Am. Compl. and Cross Claim [hereinafter
“Lineage First Am. Compl.”], ECF No. 55.)
37 (Lineage Am. Compl. ¶ 72.)
38 (Lineage Am. Compl. ¶ 73.)
39 (Lineage Am. Compl. ¶¶ 73–75; Primus Am. Compl. ¶¶ 36–37.)
40 (Lineage Am. Compl. ¶ 76.)

Primus negotiated a settlement agreement during September and early October
2022, before reporting a settlement in principle to the Court on 6 October 2022.41
However, after declining to engage in negotiations, Republic lodged a last-minute
objection to the proposed settlement with Hartford, and suggested that the Hartford
Policy should instead be saved to settle claims at a then-upcoming mediation of one
of the Underlying Actions.42 	Lineage alleges that Republic knew that Lineage was
entitled to recovery under the Hartford Policy, but pressured Hartford to pay up to
its Policy limits in settlement of the Underlying Actions, rather than as part of a
settlement agreement with Lineage.43 	Hartford ultimately exhausted its Policy
limits at mediation, rather than through a settlement with Lineage.44
23. 	Because the Travelers-Republic Policy is excess to the Hartford Policy,
Travelers agreed to defend Lineage and Primus subject to a reservation of rights after
the exhaustion of the Hartford Policy, but refuses to indemnify them.45
41 (Lineage Am. Compl. ¶ 77.)
42 (Lineage Am. Compl. ¶ 78.)
43 (Lineage Am. Compl. ¶¶ 80–87.)
44 (Lineage Am. Compl. ¶ 84.)
45 (Lineage Am. Compl. ¶¶ 97, 103; Primus Am. Compl. ¶¶ 36–37.)

24. 	On 18 October 2022, the Court stayed this action at the parties’ joint request
to permit settlement talks to proceed.46 This stay expired under its own terms on 19
December 2022.47
25. 	After the voluntary dismissal of National Union and Hartford from the
action, Lineage and Primus sought and received unopposed leave to amend their
complaints a second time, and filed new complaints on 24 and 28 February 2023,
respectively.48
26. 	Under their respective operative complaints, Lineage and Primus seek
declarations that they are covered as additional insureds under the Travelers Policies
up to the full extent of their liability limits, and that they are entitled to a defense
and to indemnification under those Policies.49
27. 	Lineage advances more claims than Primus. 	In addition to its declaratory
judgment claim against Travelers, Lineage has also lodged claims for:
a) Breach of contract against Travelers;50
46 (See Order Staying Case, ECF No. 107.)
47 (See Order Staying Case.)
48 (Lineage Am. Compl.; Primus Am. Compl.)
49 (Primus Prayer for Relief ¶¶ 1–3; Lineage Am. Compl. ¶¶ 104–10.) The paragraphs of each
amended complaint’s prayer for relief are numbered separately from the rest of the
complaint, so the Court cites to the amended complaints and prayers for relief separately
when necessary.
50 (Lineage Am. Compl. ¶¶ 111–21.)

b) A declaratory judgment against Primus that Primus must defend and/or
indemnify Lineage for losses sustained as a result of the Incident under
the Lineage-Primus Contract;51
c) 	Breach of the Lineage-Primus Contract against Primus;52
d) A declaratory judgment that Republic must indemnify Lineage under
the Republic Subcontract;53
e) 	Tortious interference with contract against Republic;54 and
f) 	Breach of the Republic Subcontract against Republic.55
II.
LEGAL STANDARD
28. 	The Motions are brought under Rules 12(b)(1), 12(b)(6), and 12(b)(7). When
considering a motion under Rule 12(b)(1), “the trial court may consider and weigh
matters outside of the pleadings.” 	Yeager v. Yeager, 228 N.C. App. 562, 566 (2013)
(cleaned up).
29. 	In contrast, because “[t]he only purpose of a Rule 12(b)(6) motion is to test
the legal sufficiency of the pleading against which it is directed,” White v. White, 296
N.C. 661, 667 (1979), “[a]s a general proposition . . . matters outside the complaint
51 (Lineage Am. Compl. ¶¶ 133–38.)
52 (Lineage Am. Compl. ¶¶ 139–46.)
53 (Lineage Am. Compl. ¶¶ 147–52.)
54 (Lineage Am. Compl. ¶¶ 122–32.)
55 (Lineage Am. Compl. ¶¶ 153–60.)

are not germane to a Rule 12(b)(6) motion.” Weaver v. Saint Joseph of the Pines, Inc.,
187 N.C. App. 198, 203 (2007).
30. 	However, a court may properly consider documents which are the subject of
a plaintiff’s complaint and to which the complaint specifically refers even though they
are presented by the defendant. Wells Fargo Ins. Servs. USA, Inc. v. Link, 372 N.C.
260, 266 (2019); see, e.g., Deluca v. River Bluff Holdings II, LLC, 2015 NCBC LEXIS
12, at *8 (N.C. Super. Ct. Nov. 6, 2015) (under Rule 12(b)(6), “a trial court may
properly consider a contract that is the subject matter of the complaint, even if the
plaintiff did not attach it to the complaint”).
31. 	Under Rule 12(b)(7), a necessary party 	must be joined to an action.
Strickland v. Hughes, 273 N.C. 481, 485 (1968). A necessary party is any person or
entity with a material interest in the subject matter of the controversy, and whose
interests will be directly affected by an adjudication thereof. 	Equitable Life Assur.
Soc. of U.S. v. Basnight, 234 N.C. 347, 352 (1951). 	Dismissal for failure to join a
necessary party is proper only if the defect cannot be cured, and may not be with
prejudice. Lambert v. Town of Sylva, 259 N.C. App. 294, 307 (2018).
32. 	Pursuant 	to 	the 	North 	Carolina 	Uniform 	Declaratory 	Judgment 	Act,
N.C.G.S. §§ 1-253–67, (the “DJA”), courts have the authority to enter declaratory
judgments as follows:
Courts of record within their respective jurisdictions shall have power
to declare rights, status, and other legal relations, whether or not
further relief is or could be claimed. 	No action or proceeding shall be
open to objection on the ground that a declaratory judgment or decree is
prayed for. 	The declaration may be either affirmative or negative in

form and effect; and such declarations shall have the force and effect of
a final judgment or decree.
N.C.G.S. § 1-253.
33. 	“[T]o 	invoke 	the 	provisions 	of 	the 	[DJA] 	there 	must 	be 	a 	justiciable
controversy between the parties,” City of New Bern v. New Bern-Craven Cnty. Bd. of
Educ., 328 N.C. 557, 559 (1991), and the “controversy must exist between the parties
at the time the pleading requesting declaratory relief [was] filed.” 	Sharpe v. Park
Newspapers of Lumberton, Inc., 317 N.C. 579, 584 (1986). “A justiciable issue . . . is
real and present as opposed to imagined or fanciful.” 	Sunamerica Fin. Corp. v.
Bonham, 328 N.C. 254, 257 (1991) (cleaned up).
34. 	Thus, a trial court “has jurisdiction to render a declaratory judgment only
when the pleadings and evidence disclose the existence of a genuine controversy
between the parties to the action, arising out of conflicting contentions as to their
respective legal rights and liabilities under a deed, will, contract, statute, ordinance,
or franchise.” Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285, 287 (1964). To avoid
dismissal, a plaintiff “must allege in his complaint that a real and justiciable
controversy, arising out of opposing contentions as to respective legal rights and
liabilities, exists between or among the parties, and that the relief prayed for will
make certain that which is uncertain and secure that which is insecure.” 	Singleton
v. Sunset Beach & Twin Lakes, Inc., 147 N.C. App. 736, 741 (2001). “When the record
shows that there is no basis for declaratory relief, as when the complaint does not
allege an actual, genuine existing controversy, this may be taken advantage of by a
Rule 12(b)(6) motion to dismiss.” Kirkman v. Kirkman, 42 N.C. App. 173, 176 (1979).

35. 	Pursuant to N.C.G.S. § 1-254, this power to declare rights applies to written
instruments:
Any person interested under a deed, will, written contract or other
writings constituting a contract, or whose rights, status or other legal
relations are affected by a statute, municipal ordinance, contract or
franchise, may have determined any question of construction or validity
arising under the instrument, statute, ordinance, contract, or franchise,
and obtain a declaration of rights, status, or other legal relations
thereunder. 	A contract may be construed either before or after there
has been a breach thereof.
36. 	“[Section] 1-254 makes a declaratory judgment proceeding available where
there is a dispute concerning contracts of any kind, [including] liability insurance
policies.” Barnes v. Hardy, 98 N.C. App. 381, 382 (1990). “A question concerning the
liability of an insurance company under its policy is generally a proper subject for
declaratory judgment, provided a genuine controversy exists between the parties.”
Ramsey v. Interstate Insurors, Inc., 89 N.C. App. 98, 100 (1988); see also, e.g.,
Nationwide, 261 N.C. at 287 (“Generally, questions involving the liability of an
insurance company under its policy are a proper subject for a declaratory judgment.”).
III.
ANALYSIS
A. 	Travelers’s Motion to Dismiss Lineage’s Amended Complaint
1. 	Declaratory Judgment Claims
37. 	Lineage seeks a declaratory judgment that it is an additional insured under
the Travelers Policies, and that Travelers has duties to defend and to indemnify it
under those Policies. 	Travelers seeks to dismiss Lineage’s declaratory judgment

claims under Rule 12(b)(1) and, in the alternative, under Rule 12(b)(7).56 Because a
moot or unripe case is unsuitable for judicial resolution, In re Peoples, 296 N.C. at
147 (mootness); Fleischauer, 258 N.C. App. at 232 (ripeness), the Court addresses
these arguments first.
38. 	Travelers contends that the Court cannot grant the declaratory relief that
Lineage seeks because Lineage’s claims on the duty to defend are moot, and its claims
56 Although Travelers does not explicitly cite to Rule 12(b)(1) in support of its declaratory
judgment arguments, it makes arguments on the doctrines of ripeness and mootness. (Def.
Travelers Property Casualty Company America’s Br. Supp. Mot. Dismiss Second Am. Compl.
Lineage Logistics, LLC [Rule 12(b)(1), 12(b)(6), and 12(b)(7)] 13–21, [hereinafter “Travelers
Br. Supp. Lineage”], ECF No. 133.)
Ripeness implicates the Court’s subject matter jurisdiction under Rule 12(b)(1). 	See
Fleischhauer v. Town of Topsail Beach, 258 N.C. App. 228, 232 (2018) (noting that ripeness
is a matter of subject matter jurisdiction, properly raised under Rule 12(b)(1)).
Mootness is, strictly speaking, a doctrine based on “judicial restraint” rather than subject
matter jurisdiction, Comm. to Elect Dan Forest v. Emps. Pol. Action Comm., 376 N.C. 558,
595 n.39 (2021), but it is generally applied in the same manner as subject matter jurisdiction
doctrines. 	See, e.g., In re Peoples, 296 N.C. 109, 147 (1978) (stating that mootness is a
prudential doctrine but that moot cases “should” be dismissed); Pearson v. Martin, 319 N.C.
449, 451 (1987) (stating that a moot case “must” be dismissed). This approach contrasts with
mootness doctrine in the federal courts, which is well-established to be a question of subject
matter jurisdiction. E.g., Simmons v. United Mortg. and Loan Inv., LLC, 634 F.3d 754, 762
(4th Cir. 2011).
The Court recognizes that some North Carolina Court of Appeals cases have framed mootness
as a subject matter jurisdiction doctrine. 	Yeager v. Yeager, 228 N.C. App. 562, 565 (2013).
However, the decisions of the Supreme Court of North Carolina govern to the extent that the
Court of Appeals decisions are inconsistent.
But whether mootness is a matter of subject matter jurisdiction or merely a prudential
doctrine, the result is the same here: because a moot case at minimum “should” be dismissed,
In re Peoples, 296 N.C. at 147, the Court will consider Travelers’s arguments under these
doctrines before its other arguments. Travelers advances arguments under Rule 12(b)(7) as
an alternative in the event the Court rejects its other contentions. 	(Travelers Br. Supp.
Lineage 23.)

on 	the 	duty 	to 	indemnify 	are 	not 	ripe.57 	Lineage 	responds 	that 	Travelers’s
reservation of rights preserves the duty to defend issue for review, that North
Carolina courts routinely issue declarations of coverage before the underlying case
triggering coverage has been resolved, and that Travelers’s litigation conduct in the
Underlying Actions preserves Lineage’s insured status claim for review.58
39. 	Actions seeking declarations of insurance coverage may be brought by
insured and insurer alike. W & J Rives, Inc. v. Kemper Ins. Grp., 92 N.C. App. 313,
320 (1988) (“Plaintiff[-insured] brought a declaratory judgment action to have the
rights and relations between the insured and insurers clarified. This is quite proper
under § 1-254.”); accord Alston v. ACE Am. Ins. Co., No. 1:20-cv-00090, 2020 WL
8084324, at *4 (D.N.D. Dec. 30, 2020) (collecting cases from multiple jurisdictions,
including the United States Supreme Court, for the point that “insureds should have
the same opportunity [as insurers] to seek declaration prior to the underlying action
being resolved”).
40. 	The general rule is that “[a]n insurer’s duty to defend is ordinarily measured
by the facts as alleged in the pleadings [while] its duty to pay is measured by the facts
ultimately determined at trial.” Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield,
LLC, 364 N.C. 1, 6 (2010) (citation omitted).
57 (See Travelers Br. Supp. Lineage 13–21.)
58 (Pl. Lineage Logistics, LLC’s Opp’n Def. Travelers Property Casualty Company America’s
Mot. Dismiss [hereinafter “Lineage Br. Opp’n Travelers”] 18–25, ECF No. 143.)

41. 	North Carolina courts therefore separately analyze the duty to defend and
the duty to indemnify to determine whether a declaratory judgment action seeking
insurance coverage determination is a justiciable controversy. See, e.g., Durham City
Bd. of Educ. v. Nat’l Union Fire Ins. Co., 109 N.C. App. 152, 157 (1993) (comparing
underlying allegations to the insurance policy to determine whether insurer had a
duty to defend in a declaratory judgment action); accord Lafarge Can. Inc. v. Am.
Home Assurance Co., No. 15-CV-8957 (RA), 2018 WL 1634135, at *4 (S.D.N.Y. Mar.
31, 2018) (“Courts often distinguish between the duty to defend and the duty to
indemnify in determining whether each issue posed in a declaratory judgment action
is ripe for adjudication, because the duties are usually triggered by different
conditions.” (cleaned up)). 	“Although the insurer’s duty to defend an action is
generally determined by the pleadings, facts learned from the insured and facts
discoverable by reasonable investigation may also be considered.” Duke Univ. v. St.
Paul Fire & Marine Ins. Co., 96 N.C. App. 635, 638 (1990). 	In line with these
principles, the Court examines each issue in turn.
a) Duty to Defend
42. 	Travelers has already agreed to defend Lineage under both Travelers
Policies under a reservation of rights.59 	Lineage therefore effectively presents two
sets of claims: one on Travelers’s present obligations to defend, and another on its
future obligations to continue to do so. Travelers argues that its agreement to defend
59 (Travelers Br. Supp. Lineage Ex. A, ECF No. 133.2; Travelers Br. Supp. Lineage Ex. B,
ECF No. 133.3.)

moots any declaratory judgment claim on its present obligations, and that Lineage’s
claims on its future obligations are not ripe.60
43. 	The Court begins with Travelers’s present obligations. 	Neither party cites
authority that the Court finds persuasive. 	Travelers argues that North Carolina
courts have repeatedly discussed insurance cases that proceeded under reservations
of rights without judicial objection. 	E.g., Fortune Ins. Co. v. Owens, 351 N.C. 324
(2000). But Fortune and Travelers’s other cases merely demonstrate the absence of
a per se rule prohibiting a defense under a reservation of rights, such that the Court
could effectively strike down Travelers’s reservation here and force Travelers to
proceed unconditionally. 	This point does not speak, however, to whether Lineage’s
claim is moot, as Travelers’s cases contain no discussion of mootness or ripeness. See
generally id.; Shearin v. Globe Indem. Co., 267 N.C. 505 (1966); Jamestown Mut. Ins.
Co. v. Nationwide Mut. Ins. Co., 266 N.C. 430 (1966).61
44. 	For its part, Lineage cites two non-binding cases to argue that an insurer’s
provision of a defense does not necessarily moot a duty to defend declaratory
judgment claim. But these two cases arose in a different procedural posture. In both,
the insurers sought a declaratory judgment that they were not bound to incur the
60 (Travelers Br. Supp. Lineage 13–15.)
61 These cases’ lack of discussion of mootness also does not demonstrate that duty to defend
claims are inherently ripe even when a defense is being provided. Because mootness is not a
matter of subject matter jurisdiction in North Carolina, the courts there were not under an
independent obligation to consider mootness sua sponte on appeal. 	This approach is in
contrast with the rules that govern the federal courts. See Already, LLC v. Nike, Inc., 568
U.S. 85, 90–91 (2013) (noting that mootness destroys federal subject matter jurisdiction);
Brickwood Contractors, Inc. v. Datanet Eng’g, Inc., 369 F.3d 385, 390 (4th Cir. 2004) (stating
that federal courts must raise subject matter jurisdiction issues sua sponte).

present and future costs of providing ongoing defenses the insurers believed were not
legally required. 	See Great W. Cas. Co. v. Packaging Corp. of Am., 444 F. Supp. 3d
664, 673 (M.D.N.C. 2020); Landmark Am. Ins. Co. v. Rural Comm. Hosps. of Am.,
LLC, No. 5:15-CV-390, 2015 WL 12860287, at *2 (E.D.N.C. Dec. 22, 2015). Thus, the
insurers sought a change in the status quo, rather than to preserve the situation that
already existed.
45. 	In contrast, Lineage requests that the Court order Travelers to maintain the
status quo in perpetuity by continuing to provide what Lineage has already received.
This argument clashes with a cornerstone of mootness doctrine: that a case is moot
when the requesting party already has the relief it seeks. 	The Court cannot order
Travelers to provide what it has already given. 	See In re Peoples, 296 N.C. at 147
(“[When] . . . it develops that the relief sought has been granted . . . the case should
be dismissed[.]”); cf. Chicora Country Club v. Town of Erwin, 128 N.C. App. 101, 110,
112–13 (1997) (holding challenge to town ordinance moot when the town repealed the
law during the litigation).
46. 	Next, 	Lineage 	argues 	that 	Travelers’s 	reservation 	of 	rights 	permits
Travelers to withdraw its defense at any time, which renders this claim ripe as it
relates to Travelers’s future obligations to continue defending Lineage.62 	But
Travelers has not even attempted to withdraw its defense, and the possibility that a
claim may become ripe sometime in the future does not revive it in the present. See,
e.g., In re Washington Cnty. Sheriff’s Off., 271 N.C. App. 204, 207–09 (2020) (reversing
62 (Lineage Br. Opp’n Travelers 19–20.)

as not ripe an order contingent on a particular individual testifying in a hypothetical
future case); State v. Herrin, 213 N.C. App. 68, 74–75 (2011) (holding an issue not
ripe because it would arise only if a future sentence were imposed in a certain way);
State v. Coltrane, 188 N.C. App. 498, 508 (2008) (holding an issue not ripe because it
would arise, if at all, only if the Supreme Court of North Carolina issued a particular
ruling).63
47. 	In sum, Lineage’s duty to defend claim is moot insofar as it asks the Court
to order Travelers to deliver a defense which Travelers has already agreed to provide.
Similarly, Lineage’s claim is not ripe insofar as it seeks to effectively enjoin Travelers
from withdrawing from the defense at some hypothetical point in the future. 	The
Court will therefore grant the Motion insofar as it seeks dismissal of Lineage’s duty
to defend declaratory judgment claim. 	However, recognizing that this issue may
become ripe in the future should Travelers actually attempt to withdraw from its
defense, this dismissal is without prejudice.64
b) Duty to Indemnify
48. 	Lineage seeks declaratory relief on two indemnification issues: that the
Travelers Policies apply up to their full limits to Lineage for its claimed damages, and
63 See also Texas v. United States, 523 U.S. 296, 300 (1998) (“A claim is not ripe for
adjudication if it rests upon contingent future events that may not occur . . . at all.” (cleaned
up)); Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289, 298–99 (1979) (noting that
a party must possess a “credible threat of prosecution” to challenge a criminal statute on
constitutional grounds).
64 As discussed throughout this Order and Opinion, the Court dismisses several claims
without prejudice. The Court emphasizes that it expresses no view or comment on the merits
of any future claims or suits.

that Travelers has a duty to indemnify Lineage for the customer claims that Lineage
has already paid to third parties.65
i. 	Coverage
49. 	A declaratory judgment on Lineage’s coverage and right to indemnity under
the Travelers Policies is premature.
50. 	The Supreme Court of North Carolina has reasoned that the duty to
indemnify cannot be determined before the underlying litigation has concluded. See
Buzz Off, 364 N.C. at 7 (“[I]n determining whether an insurer has a duty to indemnify,
the facts as determined at trial are compared to the language of the insurance policy.”
(emphasis added)); Waste Mgmt. of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688,
691 (1986) (“[An insurer’s] duty to pay is measured by the facts ultimately determined
at trial.” (emphasis added)). 	“If the insurance policy provides coverage for the facts
as found by the trier of fact, then the insurer has a duty to indemnify.” Buzz Off, 364
N.C. at 7 (emphasis added).
51. 	Buzz Off and Peerless therefore require courts to compare an insurance
policy against facts ultimately found by a jury or judge at trial. A court cannot do so
before the trier of fact makes those findings in resolving the underlying litigation.
See also N.C. Farm Bureau Ins. Co. v. Cox, 263 N.C. App. 424, 440 (2019) (“[R]eview
of the duty to indemnify is appropriate after the facts have been determined at trial.”
(emphasis in original)); City of Hickory v. Grimes, No. COA17-441, 2018 WL 2642125,
at *6 (N.C. Ct. App. June 5, 2018) (“[B]ecause the facts of the underlying case have
65 (Lineage Prayer for Relief ¶¶ 2, 7.)

not been determined, we cannot reach [insurer’s] duty to indemnify the City of
Hickory.”). 	This solid bloc of appellate authority demonstrates that the duty to
indemnify depends on factfinding and so, ordinarily, a court cannot adjudicate such
a claim before that process occurs.66
52. 	Lineage cites two cases for the proposition that a declaratory judgment
before the resolution of the underlying litigation is appropriate, even on the duty to
indemnify: Smith v. Nationwide Mut. Ins. Co., 97 N.C. App. 363, 366–67 (1990), rev’d
on other grounds, 328 N.C. 139 (1991), and Nationwide Mut. Ins. Co. v. Roberts, 261
N.C. 285, 287–88 (1964).67 However, each case dealt with a pure question of law. In
Smith, the insured sought a declaratory judgment that the language of two policies
permitted their limits to be combined, Smith, 97 N.C. App. at 365, while Roberts
examined whether an insurance contract issued under North Carolina’s mandatory
motor insurance statute covered intentional torts, see generally Roberts, 261 N.C. 285.
Each case resolved a pure question of law, interwoven with statutory interpretation.
See id. at 290–91 (examining the legal question of whether a given insurance
66 Moreover, this is a widely accepted cornerstone of insurance coverage law. 	See, e.g.,
Travelers Indem. Co. of Am. v. Moore & Assocs., Inc., 216 S.W.3d 302, 305 (Tenn. 2007) (“[T]he
duty to indemnify is based upon the facts found by the trier of fact.” (emphasis added));
Skinner v. Allstate Ins. Co., 127 P.3d 359, 363 (Mont. 2005) (to similar effect); Constitution
Assocs. v. N.H. Ins. Co., 930 P.2d 556, 563–64 (Colo. 1996) (same); Eighth Floor Promotions,
LLC v. Cincinnati Ins. Cos., 71 N.E.3d 1262, 1272 (Ohio Ct. App. 2016) (same); Selective Way
Ins. Co. v. Hosp. Grp. Servs., Inc., 119 A.3d 1035, 1046 (Pa. Super. Ct. 2015) (same); Am.
States Ins. Co. v. Herman C. Kempker Const. Co., Inc., 71 S.W.3d 232, 239 (Mo. Ct. App. 2002)
(same); Weber v. St. Paul Fire & Marine Ins. Co., 622 N.E.2d 66, 68 (Ill. App. Ct. 1993) (“[T]he
duty to indemnify will not be defined until adjudication of the [underlying action].”).
67 (Lineage Br. Opp’n Travelers 21–23.)

provision contravened a particular statute); Smith, 97 N.C. App. at 368 (discussing
the legal question of combining policies under a particular statute and public policy).
53. 	These cases therefore represent a narrow exception to the broad and
otherwise governing principle that a declaratory judgment claim on an insurer’s duty
to indemnify is premature if brought before a determination of the underlying facts.
See, e.g., Buzz Off, 364 N.C. at 7. 	Indeed, one of the very cases on which Lineage
relies in its duty to defend arguments68 illustrates the critical distinction: “North
Carolina law dictates that an insurer’s duty to indemnify cannot be determined until
the conclusion of the case, if necessary facts remain in dispute.” 	Great W. Cas. Co.,
444 F. Supp. 3d at 674 (citing Buzz Off, 364 N.C. at 7) (emphasis added).
54. 	But Lineage’s claim does not fit within this tight exception. It does not seek
a declaration that, for example, a given insurance term is void as contrary to statute
or public policy. Instead, Lineage requests a judgment declaring that it is entitled to
indemnification whatever the outcome of the Underlying Actions.69 But Travelers’s
duty to indemnify depends on the outcome of the Underlying Actions, with all the
other factual issues that this umbrella question encompasses. The Court cannot rule
on Lineage’s entitlement to future indemnification without prematurely deciding a
68 (Lineage Br. Supp. Travelers 19–20.)
69 (See Lineage Am. Compl. ¶ 110, Prayer for Relief ¶ 7 (requesting declaratory judgment that
it is entitled to coverage and indemnification without any qualification or limitation).)

cascade of unresolved factual issues on various parties’ liabilities.70 	This claim
therefore is not ripe for decision.
ii. 	Customer Claims
55. 	Lineage 	also 	requests 	a 	declaratory 	judgment 	that 	Travelers 	owes 	it
indemnification for the approximately $3.3 million in customer claims which Lineage
has already paid to its third party customers.
56. 	The parties’ disagreement on this issue revolves around the meaning of the
phrase “legally obligated to pay,” which appears in all four Policies, but which is not
defined.71
57. 	In Lida Mfg. Co. v. U.S. Fire Ins. Co., 116 N.C. App. 592 (1994), the North
Carolina Court of Appeals stated that when an insurance policy does not define the
phrase, a third party is “legally entitled to recover” from an insured when the third
party has a cause of action against the insured and a remedy by which to reduce the
right to damages to judgment. Id. at 595.
58. 	This 	Court 	has 	subsequently 	applied 	this 	reasoning 	to 	the 	inverse
formulation of whether an insured was “legally obligated to pay . . . damages” to a
third party. AP Atl., Inc. v. Crescent Univ. City Venture, LLC, 2017 NCBC LEXIS 59,
at *13–15 (N.C. Super. Ct. July 13, 2017). 	In AP Atlantic, this Court held that a
70 The Court emphasizes that nothing in this Order and Opinion is a comment on whether
any party is, will be, or should be found liable for any of the underlying events.
71 (See National Union Policy, at NATIONAL UNION 000010; Travelers-Primus Policy, at
TRAV 00012; Hartford Policy, at HARTFORD 000028; Travelers-Republic Policy, at TRAV
00079; Lineage Am. Compl. ¶¶ 36, 38, 42, 44; Travelers Br. Supp. Lineage 15–17; Lineage
Br. Opp’n Travelers 10–13.)

plaintiff-insured had failed to allege its legal obligation to pay damages when its
complaint did not allege that any third party had a legal claim against the plaintiff.
See id. at *15–16. 	Specifically, the plaintiff-insured alleged merely that it was
obligated to repair the collapsed floor of its housing complex because the situation
created “life-safety consequences.” Id. at *15.
59. 	As alleged in the AP Atlantic complaint, the plaintiff-insured took action as
a prophylactic measure against possible future litigation or out of a feeling of moral
obligation to third parties, rather than because it had actually incurred any tort or
contract liabilities. 	See id. at *15–16. 	This absence doomed the plaintiff-insured’s
argument that it was “legally obligated” to pay damages. See id. Finally, AP Atlantic
also observed, citing Lida, that third parties need not actually assert their claims to
make an insured “legally obligated” to pay damages. 	See id. at *13–14. 	The mere
existence of potential claims sufficed. Id.
60. 	In stark contrast to the facts alleged in AP Atlantic, here Lineage’s amended
complaint states, and the Court must accept as true at the Rule 12 stage, that Lineage
was contractually obligated to pay or recover approximately $3.3 million in claims to
various customers.72 While no third party has obtained a judgment or litigated claims
against it, Lineage has adequately alleged the existence of liabilities to third parties,
and thus its legal obligation to pay damages under Lida and AP Atlantic.
61. 	But this conclusion is not the end of the analysis. 	The Travelers Policies
impose an additional caveat upon the key phrase, to limit coverage to damages
72 (Lineage Am. Compl. ¶ 63.)

Lineage is legally obligated to pay as a result of the acts or omissions of Primus and/or
Republic.73 	Thus, while Lineage sufficiently alleges its legal obligation to pay
damages, it fails to allege a determination that such liabilities resulted from the
conduct of Primus and/or Republic, because most of the Underlying Actions are
ongoing. Lineage’s requested relief on its customer claims is therefore premature for
the same reasons as is its coverage claim. A ruling on Travelers’s duty to indemnify
would require the Court to peer into the future to divine whether and to what extent
a future factfinder might find Primus and/or Republic liable. This claim therefore is
also not ripe for decision.
62. 	The Court will therefore grant the Motion insofar as it seeks dismissal of
Lineage’s duty to indemnify claims. But recognizing that factual developments in the
Underlying Actions may eventually render these issues ripe, the Court does so
without prejudice.
c) 	Insured Status
63. 	Lineage seeks a declaratory judgment that it enjoys additional insured
status under the Travelers Policies,74 but Travelers has already recognized Lineage
73 The National Union Policy states that it covers Lineage only for Primus’s acts or omissions,
and the Travelers-Primus Policy incorporates that term. 	(See National Union Policy, at
NATIONAL UNION 000028; Travelers-Primus Policy, at TRAV 000012.) The Hartford and
Travelers-Republic Policies include materially identical provisions that limit the Policies to
cover Lineage only for Republic’s acts or omissions. 	(See Hartford Policy, at HARTFORD
000056; Travelers-Republic Policy, at TRAV 00079.)
74 (Lineage Am. Compl. ¶ 110.)

as an additional insured under both Policies.75 This claim is therefore moot for the
same reasons as Lineage’s duty to defend claim on Travelers’s present obligations: it
seeks relief which Lineage already possesses.
64. 	Lineage also argues that Travelers’s reservation of rights and assertion of
potential future limitations on Lineage’s insured status renders its declaratory
judgment claim ripe, insofar as it seeks a declaration on Travelers’s future obligations
in the event of certain contingencies.76 	But, again, these possible future scenarios
are 	dependent 	on 	as-yet 	unresolved factual 	determinations in 	the 	Underlying
Actions. 	They do not render this claim ripe, for the same reasons Lineage’s duty to
defend claim on Travelers’s future obligations, and its duty to indemnify claim, are
not ripe as discussed above.
65. 	Lineage further argues that this claim is ripe because National Union and
Hartford paid out on their Policies but Travelers refuses to do so, and because
Travelers participated in the settlement of one of the Underlying Actions.77 	But
neither event legally binds Travelers such that this Court could issue a declaratory
judgment on the duty to defend, duty to indemnify, or Lineage’s status, for two
reasons.
75 (Travelers Br. Supp. Lineage Ex. A, ECF No. 133.2; Travelers Br. Supp. Lineage Ex. B,
ECF No. 133.3.)
76 (See Lineage Br. Opp’n Travelers 23–24.)
77 (Lineage Br. Opp’n Travelers 23–25.)

66. 	First, that National Union and Hartford elected to settle and pay out their
Policy limits to Lineage is irrelevant to Travelers’s obligations. Primary and excess
insurers are independent and are free to make differing assessments of liability and
coverage. See, e.g., Daileader v. Certain Underwriters at Lloyd’s London – Syndicate
1861, 22 Civ. 5408, 2023 WL 3026597, at *14 (S.D.N.Y. Apr. 20, 2023); Allmerica Fin.
Corp. v. Certain Underwriters at Lloyd’s, London, 871 N.E.2d 418, 426–27 (Mass.
2007) (rejecting argument that excess insurers are bound by primary insurers’
decisions on coverage, liability, and settlement); Allstate Ins. Co. v. Dana Corp., 759
N.E.2d 1049, 1058–60 (Ind. 2001) (rejecting primary insurer’s argument that excess
insurer was bound by primary insurer’s understanding of a policy); R.T. Vanderbilt
Co., Inc. v. Hartford Accident and Indem. Co., 156 A.3d 539, 602–03 (Conn. App. Ct.
2017).78
67. 	Second, Travelers’s participation in the settlement of one of the Underlying
Actions does not bind Travelers now, because Travelers settled under an express
reservation that its participation and ultimate decision to settle would be without any
precedential value in any other matter.79
78 In addition to these express holdings, some courts have recognized causes of action that
Lineage’s premise would render incoherent. See, e.g., In re Farmers Tex. Cnty. Mut. Ins. Co.,
621 S.W.3d 261, 268 (Tex. 2021) (recognizing that “an excess carrier may sue a primary
carrier that negligently settles for more than policy limits”); Metro. Prop. and Cas. Ins. Co. v.
GEICO Gen. Ins. Co., 130 N.Y.S.3d 847, 849 (N.Y. App. Div. 2020) (recognizing that an excess
insurer may sue a primary insurer for settling an underlying case in bad faith).
79 (Lineage Am. Compl. Ex. D, ECF No. 121.4.)

68. 	In sum, Lineage’s present insured status claim is moot. 	Correspondingly,
Lineage’s effort to prospectively bind Travelers not to retract its recognition of
Lineage’s status is not ripe, for the same reasons as the future-facing portion of
Lineage’s duty to defend claim. The Court therefore grants Travelers’s Motion insofar
as it seeks dismissal of Lineage’s insured status claim, without prejudice.
2. 	Breach of Contract Claim
69. 	Lineage also lodges a breach of contract claim against Travelers, which
Travelers seeks to dismiss under Rule 12(b)(6).80
70. 	“The elements of a claim for breach of contract are (1) existence of a valid
contract and (2) breach of the terms of the contract.” 	Wells Fargo Ins. Servs. USA,
Inc. v. Link, 372 N.C. 260, 276 (2019) (cleaned up).
71. 	Lineage asserts that Travelers has breached its contractual duties to defend
and to indemnify under the Travelers Policies. 	The Court’s discussion therefore
parallels its examination of Lineage’s declaratory judgment claims on these issues.
72. 	As an initial matter, Lineage’s amended complaint asserts its claim, in part,
on Travelers’s refusal to defend Lineage in the Underlying Actions.81 But Travelers
began defending Lineage in the Underlying Actions under both Travelers Policies
after the filing of the operative complaint82 and, in apparent recognition that this
80 (Lineage Am. Compl. ¶¶ 113–21; Travelers Br. Supp. Lineage 21–22.)
81 (Lineage Am. Compl. ¶¶ 119–20.)
82 (See Lineage Am. Compl. (24 February 2023); Travelers Br. Supp. Lineage Ex. B (10 April
2023).)

development defeats its claim on this issue, Lineage advances no argument on the
duty to defend in its brief.83 	The Court therefore deems this argument waived, see
Vanguard Pai Lung, LLC v. Moody, 2023 NCBC LEXIS 84, at *16 n.2 (N.C. Super.
Ct. June 27, 2023), and proceeds to the claim insofar as it rests upon Travelers’s
alleged indemnification obligations.
73. 	The Court concludes that Lineage’s breach of contract claim predicated on
Travelers’s alleged failure to indemnify does not survive Travelers’s Motion. 	As
discussed above with reference to Lineage’s declaratory judgment claims, Lineage
has adequately alleged that it is “legally obligated to pay damages” under the
Travelers Policies. 	However, Lineage must also allege a determination that such
obligations arose because of the actions or omissions of Primus and/or Republic. But
no such factual determination has been alleged, and so Travelers by definition cannot
have breached this contract term unless and until Primus and/or Republic are found
to have caused the events that created Lineage’s customer liabilities.
74. 	The Court will therefore grant Traveler’s motion on Lineage’s breach of
contract claim. But recognizing that, as with Lineage’s declaratory judgment claims,
future events in the Underlying Actions and Travelers’s responses might render these
claims ripe and constitute contractual breaches, the Court dismisses these claims
without prejudice.
83 (See Lineage Br. Supp. Travelers 9–18.)

75. 	Because the Court concludes that Travelers’s arguments on mootness and
ripeness defeat all of Lineage’s claims at this stage, the Court need not consider
Travelers’s Rule 12(b)(7) arguments.
B. 	Travelers’s Motion to Dismiss Primus’s Amended Complaint
76. 	Primus’s claims against Travelers largely parallel Lineage’s: Primus seeks
a 	declaratory 	judgment 	that 	Travelers 	owes 	it 	the 	duties 	of 	defense 	and
indemnification, and that Primus is an additional insured under the Travelers-
Republic Policy.84
1. 	Duty to Defend
77. 	Primus 	is 	currently 	defending 	two 	Underlying 	Actions: 	(1) 	the 	same
Lamattina wrongful death suit which Lineage is defending, and (2) an action by
Lineage for damages arising from the Incident (“Lineage II”).85 Travelers argues that
a claim for defense in each suit is moot.86
78. 	First, Travelers is already defending Primus in Lineage II, and so the Court
finds Primus’s arguments and authority that this claim is ripe unpersuasive, for the
same reasons discussed above with reference to Lineage’s claims. In each of the cases
on which Primus relies for its support, the plaintiff sought a declaratory judgment
that would have altered the status quo. See Liberty Mut. Fire Ins. Co. v. Sutton, No.
84 (Primus Am. Compl. ¶¶ 39–47.)
85 (Primus Am. Compl. ¶ 27.)
86 (Def. Travelers Property Casualty Company of America’s Br. Supp. Mot. Dismiss Second
Am. Compl. of Primus Builders, Inc. and P3 Advantage, Inc. [Rule 12(b)(1), 12(b)(6), and
12(b)(7)] 13–14 [hereinafter “Travelers Br. Supp. Primus”], ECF No. 137.)

21-1277, 2022 WL 11112589, at *1 (4th Cir. Oct. 19, 2022) (insurer sought declaratory
judgment that it had no duty to defend after agreeing to provide a defense); Gov.
Emps. Ins. Co. v. Loyal, 629 F. Supp. 3d 343, 345 (M.D.N.C. 2022) (insurer sought
declaratory judgment that it could withdraw its defense); Voyager Indem. Ins. Co. v.
Gifford, No. 1:21-cv-00242, 2022 WL 4798306, at *1 (W.D.N.C. Oct. 1, 2022) (seeking
declaratory judgment that insurer could “withdraw its defense of [insured]”); see
generally Estate of Bridges ex rel. Wright v. N.C. Farm Bureau Ins. Co., Inc., No.
COA12-566, 2013 WL 432601 (N.C. Ct. App. Feb. 5, 2013) (discussing a plaintiff-
insured’s declaratory judgment claim on its entitlement to a defense when the insurer
refused to provide one).87
79. 	Second, the parties agree that Primus is currently receiving a defense in the
underlying Lamattina wrongful death suit from another insurer (“NHIC”), which is
not a party to this action.88 The parties have jointly acknowledged this development
in prior filings89 of which the Court can take judicial notice. 	State ex rel. Expert
Discovery, LLC v. AT&T Corp., 287 N.C. App. 75, 85 (2022) (noting that courts may
87 The Court recognizes that N.C. Farm Bureau Ins. Co., Inc. v. Hague, 283 N.C. App. 215
(2022), could conceivably be read to support Primus’s position. 	However, Hague does not
state whether the insurer was already defending the insured when it sought a declaratory
judgment, and thus whether the plaintiff-insurer sought a change in the status quo or not.
See generally id. Hague therefore does not carry the interpretative weight Primus suggests,
because its effect on whether Primus’s claim is moot is unclear. Another of Primus’s cases,
Connelly v. Prudential Ins. Co., 610 F.2d 1215 (4th Cir. 1979), suffers from the same
ambiguity, and in addition was a diversity action “governed by Virginia law[.]” Id. at 1216.
The Court therefore finds this case similarly unpersuasive.
88 (Mem. Law Resp. Def. Travelers Property Casualty Company of America’s Mot. Dismiss 4
[hereinafter “Primus Br. Opp’n Travelers”], ECF No. 142; Travelers Br. Supp. Primus 2–3.)
89 (See Joint Status Report ¶ 19, ECF No. 108.)

take judicial notice even at the Rule 12 phase); In re Byrd, 72 N.C. App. 277, 279
(1985) (“[A] court may take judicial notice of earlier proceedings in the same cause.”).
80. 	Travelers has no duty to defend Primus if any other insurer has a duty to
defend,90 and Primus concedes in its brief that Travelers does not currently have a
duty to defend Primus in this Underlying Action.91 Thus, Primus asks the Court to
gaze into the future to determine whether Travelers would have a duty to defend if
the NHIC policy is exhausted or if NHIC withdraws its defense. 	This is a purely
hypothetical question, reliant on assumptions on future events, on which declaratory
judgment is inappropriate.
81. 	Primus also argues that accepting Travelers’s arguments would thwart the
purposes of the DJA by, in practice, permitting only insurers to bring declaratory
judgment claims absolving them of their duty to defend.92 But this argument ignores
the key distinction outlined above in discussion of Lineage’s parallel claims: an
insured remains free to bring a declaratory judgment claim against an insurer which
refuses to defend. See, e.g., Ramara, Inc. v. Westfield Ins. Co., 814 F.3d 660, 668–72
(3d Cir. 2016) (affirming grant of summary judgment to insured on declaratory
judgment claim after noting that, because the insurer refused to defend the insured,
the order upholding entitlement to a defense was effectively an injunction ordering
insurer to provide one); Lambe Realty Inv., Inc. v. Allstate Ins. Co., 137 N.C. App. 1,
90 (Travelers-Primus Policy, at TRAV 00014–00015.)
91 (Primus Br. Opp’n Primus 8 n.6.)
92 (See Primus Br. Opp’n Travelers 10–11.)

3, 12 (2000) (affirming grant of declaratory relief to plaintiff-insured on the duty to
defend when insurer refused to provide a defense).
82. 	The Court will therefore grant Travelers’s Motion insofar as it seeks
dismissal of Primus’s claims on the duty to defend. But, as with Lineage’s claims, the
Court recognizes that future events may eventually render this claim ripe. 	The
dismissal is therefore without prejudice.
2. 	Duty to Indemnify
83. 	Primus also seeks a declaratory judgment that Travelers has a duty to
indemnify it for its losses in two Underlying Actions.93
84. 	The Court concludes that this issue is not ripe for the same reasons as
Lineage’s parallel claims. 	Declaratory relief on the duty to indemnify is improper
while the Underlying Actions are proceeding, and before their facts are determined
by a factfinder or admitted in a settlement. See, e.g., Buzz Off, 364 N.C. at 7.
85. 	Primus cites several cases in which North Carolina courts 	permitted
declaratory judgment actions on the duty to indemnify to proceed prior to a verdict in
the underlying suits,94 but these cases collide with the principle discussed above with
reference to Lineage’s claims: each of Primus’s cases involved only questions of law,
not unresolved questions of fact.
86. 	In Metro. Prop. & Cas. Ins. Co. v. Caviness, 124 N.C. App. 760 (1996), the
insurer was undisputedly responsible for damages, and the question was instead
93 (Primus Am. Compl. ¶¶ 36, 43, 45, 47.)
94 (Primus Br. Opp’n Travelers 12, 12 n.7.)

whether the relevant policy and a statute together established a maximum liability.
See id. at 761–63. As put by Travelers in its brief, the question was “how much,” as
a matter of statutory interpretation, not “whose fault.”95 Indeed, the Court of Appeals
there announced its disposition of the case “as a matter of law.” 	Id. at 765. 	The
court’s analysis resolved a pure question of law, and so it is inapposite to this action,
in which Primus seeks a declaratory judgment that would circumvent future factual
determinations.
87. 	The same is true of Lunsford v. Mills, 367 N.C. 618 (2014), which involved
statutory interpretation of this state’s underinsured motorist statutes. 	See id. at
619–22, 623–29 (posing 	question 	as a matter of 	statutory interpretation, 	and
conducting detailed analysis of the pertinent statute). Further, W & J Rives, Inc., 92
N.C. App. 313, another case relied upon by Primus, dealt with the duty to defend, not
the duty to indemnify. See id. at 317–20 (discussing only the duty to defend). Primus
also cites Smith, which the Court has addressed above with reference to Lineage’s
claims.
88. 	The Court will therefore grant Travelers’s Motion insofar as it seeks
dismissal of Primus’s claims on the duty to indemnify. 	But again recognizing that
future developments may eventually make this claim ripe, dismissal is without
prejudice.
95 Def. Travelers Property Casualty Company of America’s Reply Br. Supp. Mot. Dismiss
Second Am. Compl. Primus Builders, Inc., and P3 Advantage, Inc. [Rule 12(b)(1), 12(b)(6),
and 12(b)(7)] 6 [hereinafter “Travelers Br. Reply Primus”], ECF No. 148.)

3. 	Insured Status
89. 	Primus’s claim for a declaratory judgment on its additional insured status
under the Travelers-Republic Policy can be dealt with summarily.96 	Travelers has
recognized Primus’s additional insured status under this Policy.97 And Primus is an
additional insured under this Policy only for liability caused by the actions or
omissions of Republic.98 For the reasons discussed above with reference to Lineage’s
insured status claim, this claim is therefore moot insofar as it seeks declaratory
judgment on Travelers’s present obligations, and not ripe insofar as it seeks relief on
Traveler’s future obligations.
90. 	In sum, the Court will grant the Travelers-Primus Motion and dismiss
Primus’s claims against Travelers without prejudice.
C. 	Republic’s Motion to Dismiss Lineage’s Amended Complaint
91. 	Lineage pursues three claims against Republic: that Republic tortiously
interfered with Lineage’s Policy contract with Hartford;99 for a declaratory judgment
that Republic owes Lineage indemnification under the Republic Subcontract;100 and
that Republic’s failure to provide indemnification constitutes a breach of the Republic
96 (Primus Prayer for Relief ¶ 1.)
97 (Travelers Br. Supp. Primus Ex. A, at 2–3, ECF No. 137.2.)
98 (See Hartford Policy, at HARTFORD 000056; Travelers-Republic Policy, at TRAV 00079.)
99 (Lineage Am. Compl. ¶¶ 122–32.)
100 (Lineage Am. Compl. ¶¶ 133–38.)

Subcontract.101 	Republic 	has 	moved 	to 	dismiss 	all 	three 	claims 	under 	Rule
12(b)(6).102
1. 	Indemnification Claims
92. 	Republic argues that both of Lineage’s claims related to the Republic
Subcontract’s indemnification clause, for breach of contract and for declaratory
judgment, should be dismissed.103 	Republic argues first that these claims must be
dismissed 	as 	premature, 	and 	that 	the 	Republic 	Subcontract’s 	indemnification
provision is void as against public policy.104 	Because Republic advances expressly
identical arguments on these two claims,105 the Court can resolve the Motion on both
claims in its discussion of the breach of contract claim.
a) Ripeness
93. 	Republic 	argues 	that 	the 	Republic 	Subcontract 	conditions 	Republic’s
indemnity obligations on a factual determination that Republic was responsible for
any claims or losses for which Lineage seeks indemnification.106 	Republic thus
101 (Lineage Am. Compl. ¶¶ 153–60.)
102 (Republic Refrigeration, Inc.’s Br. Supp. Mot. Dismiss Pl. Lineage Logistics, LLC’s Second
Am. Compl. Pursuant Rule 12(b)(6) 1 [hereinafter “Republic Br. Supp. Lineage”], ECF No.
138.)
103 (See generally Republic Br. Supp. Lineage.)
104 (See Republic Br. Supp. Lineage 7–11.)
105 (See Republic Br. Supp. Lineage 11 (incorporating by reference arguments made on breach
of contract claim).)
106 (Republic Br. Supp. Lineage 10–11.)

argues that because no such determination has been made in the Underlying Actions,
any claim on its indemnity obligations is premature.107
94. 	However, the clause at issue states that Republic’s obligations activate in
response to “any such claims . . . caused in whole or part by any act or omission, or
alleged act or omission, of [Republic], anyone directly or indirectly employed by
[Republic], or anyone for whose acts [Republic] may be liable[.]”108 	Crucially,
Lineage’s amended complaint contains detailed allegations that Republic and its
employees were responsible for the Incident.109 Republic is therefore presented with
a complaint that its “alleged act[s] or omission[s]”110 caused the Incident and thus
gave rise to Lineage’s various losses and costs. 	Lineage has therefore sufficiently
alleged that Republic’s indemnification obligations are ripe, and the Court rejects
Republic’s arguments to the contrary.
b) Public Policy
95. 	Republic also contends that the Republic Subcontract’s indemnity clause is
contrary to public policy as expressed by N.C.G.S. § 22B-1 and therefore void.111
96. 	Section 	22B-1 	states 	that 	“provisions 	in . . . a 	construction
agreement . . . purporting to require a promisor to indemnify or hold harmless the
107 (Republic Br. Supp. Lineage 10–11.)
108 (Republic Subcontract 6–7 (emphasis added).)
109 (Lineage Am. Compl. ¶¶ 48–58.)
110 (Republic Subcontract 6–7.)
111 (Republic Br. Supp. Lineage 7–11.)

promisee . . . against liability for damages arising out of . . . the negligence, in whole
or in part, of the promisee . . . is against public policy, void, and unenforceable.” Id.
In other words, a party to a construction contract cannot promise to indemnify a
second party for damages caused by the second party’s own negligence.
97. 	This Court may excise language from a contract that violates a statute or
public policy, see Jackson v. Associated Scaffolders and Equip. Co., Inc., 152 N.C. App.
687, 691 (2002), and turns to the language of the indemnification provision with this
principle in mind.
98. 	Given 	Lineage’s 	status 	as 	the 	plaintiff 	seeking 	indemnification, 	the
language of the provision would violate section 22B-1 only if the clause, or a part of
it, requires Republic to indemnify Lineage for Lineage’s own acts. 	But only two
discrete portions of the clause could even potentially be read to raise this possibility.
99. 	First, the phrase “regardless of whether any such claims, losses, liabilities
or expenses are caused in part by a party indemnified hereunder” clearly permits a
party to pursue and enforce indemnification for its own negligence, and therefore
plainly violates section 22B-1.
100. 	Second, the last few words of the clause could, conceivably, be read to cover
Lineage’s acts or omissions. 	The clause ends with the phrase “resulting from the
performance of this Subcontract and/or the Work.”112 	The “Work” is defined in the
Subcontract to refer to all the obligations contained in Schedule A, which in turn sets
112 (Republic Subcontract 11.)

out in detail the parties’ respective responsibilities on the worksite.113 	The vast
majority of Schedule A establishes obligations for Primus and Republic, but a few
relate to Lineage, such as the requirement that Republic comply with Lineage’s site
specifications and safety requirements.114 	The phrase “and/or the Work” could
therefore potentially be read to apply to actions or omissions of Lineage.
101. 	But having concluded that the indemnity clause violates section 22B-1 in at
least one way, the Court agrees with Lineage that the troublesome phrases are easily
severable from the rest of the clause.115 	If a contract provision is valid after the
removal of an illegal portion, that provision is enforceable. Int’l Paper Co. v. Corporex
Constructors, Inc., 96 N.C. App. 312, 315 (1989).
102. 	The Court concludes that Vecellio & Grogan, Inc. v. Piedmont Drilling &
Blasting, Inc., 183 N.C. App. 66 (2007), controls on this issue. In Vecellio, the Court
of 	Appeals 	examined 	a 	very 	similar 	indemnity 	clause, 	which 	provided 	for
indemnification “regardless of whether or not such [claim] is caused in part by a party
indemnified hereunder.” 	Id. at 72–73. 	The court there determined that simply
removing this “offending phrase” would render the rest of the indemnity provision
enforceable, and placed special weight on the provision’s severability clause, which
113 (Republic Subcontract 1, 12–16.)
114 (Republic Subcontract 13.)
115 (Pl. Lineage Logistics, LLC’s Opp’n Def. Republic Refrigeration, Inc.’s Mot. Dismiss 8–13
[hereinafter “Lineage Br. Opp’n Republic”], ECF No. 144.)

provided for enforcement only “[t]o the fullest extent permitted by law[.]” Id. at 72;
see also Int’l Paper Co., 96 N.C. App. at 315–16 (to similar effect).
103. 	The indemnity clause here aligns neatly with the provision that Vecellio held
enforceable-as-severed. Here, as there, the indemnity section includes a severability
clause providing for enforcement only “to the fullest extent permitted by law[.]”116
This limiting clause reflects an intent to confine the application of the indemnity
provision to lawful circumstances, including by altering the clause if necessary.
Furthermore, the Court concludes, as did the Vecellio court, that the “offending”
phrases are easily removed without rewriting the contract. 	See Vecellio & Grogan,
183 N.C. App. at 72–73. 	The only portions that must be removed to render the
provision enforceable are the phrase “regardless of whether any such claims, losses,
liabilities, or expenses are caused in part by a party indemnified hereunder,” which
clearly 	contravenes 	section 	22B-1, 	and 	the 	phrase 	“and/or 	the 	Work,” 	which
encompasses some acts by Lineage and thus might be read to require indemnification
for those acts.
104. 	Without these phrases, the indemnification provision reads sensibly and
naturally:
[Republic] shall, to the fullest extent permitted by law and to the extent
that any such [claims or losses] are caused . . . by any act or omission, or
alleged act or omission, of [Republic], anyone directly or indirectly
employed by [Republic] [,] or anyone for whose acts [Republic] may be
liable, [indemnify] each and all of the indemnitees . . . against any and
116 (Republic Subcontract 6.)

all [claims] . . . arising out of or in any manner caused by, connected
with, or resulting from the performance of this Subcontract.117
105. 	Republic’s argument that the Court would have to excise most of the
indemnity clause is unpersuasive. Editing the indemnity clause as Republic suggests
might indeed constitute an impermissible wholesale rewriting of the contract rather
than a limited excision of language that violates a statute. See Tillman v. Com. Credit
Loans, Inc., 362 N.C. 93, 108 (2008) (noting that courts cannot use severability
clauses to entirely rewrite contracts).
106. 	But Republic’s revisions hack out much language that poses no problem for
the clause.118 	Specifically, Republic suggests that the Court must remove all the
language that covers it and its employees.119 	This revision might indeed make the
clause meaningless or constitute rewriting, but it is unnecessary. After removing the
“offending” phrase to produce the formulation above, the clause provides merely that
Republic will indemnify the indemnitees for any losses caused by Republic’s alleged
or actual acts or omissions. This severed provision preserves the intent of the parties
and does not violate section 22B-1.
107. 	Finally, Republic’s argument on this very contract has already been rejected
twice by the United States District Court for the Western District of North Carolina.
See DFA Dairy Brands, LLC v. Primus Builders, Inc., No. 5:21-CV-00026, 2021 WL
117 (See Republic Subcontract 6–7.)
118 (See Republic Br. Supp. Lineage 7–10.)
119 (Republic Br. Supp. Lineage 9; Republic Subcontract 9–10.)

4258797, at *4–6 (W.D.N.C. July 27, 2021), recommendation adopted, No. 5:21-CV-
00026, 2021 WL 3616711 (W.D.N.C. Aug. 16, 2021). 	That court held that under
Vecellio, the indemnity provision is enforceable as severed. The undersigned agrees
with the federal court’s well-reasoned analysis.
108. 	The Court therefore concludes that Lineage’s indemnification and breach of
contract claims are ripe, and that the contract provision around which they revolve
is enforceable as severed. 	As a result, Republic’s motion will be denied insofar as it
seeks dismissal of this claim.
2) Tortious Interference with Contract
109. 	Lineage contends that Republic’s actions to derail settlement talks with
Hartford constituted tortious interference with contract.120
110. 	The elements of tortious interference with contract are that “(1) a valid
contract between the plaintiff and a third person . . . [exists]; (2) the defendant knows
of the contract; (3) the defendant intentionally induces the third person not to perform
the contract; (4) and in doing so acts without justification; (5) resulting in actual
damage to plaintiff.” 	Beverage Sys. of the Carolinas, LLC v. Associated Beverage
Repair, LLC, 368 N.C. 693, 701 (2016).
111. 	Lineage’s amended complaint states that it negotiated a settlement with
Hartford in September and October 2022, under which Hartford would pay out its
Policy limits to Lineage.121 According to Lineage, Republic refused to participate in
120 (Lineage Am. Compl. ¶¶ 122–32.)
121 (Lineage Am. Compl. ¶¶ 76–77.)

these talks, and lodged an objection to the settlement at the eleventh hour, which
caused Hartford to withdraw from the settlement with Lineage and instead pay its
limits to Republic as part of the settlement of an Underlying Action.122
112. 	Republic expressly concedes that Lineage has adequately alleged each
element of this tort but argues that it has simultaneously alleged a fact fatal to the
claim: that Republic is not an outsider to the contract.123 	See Fussell v. N.C. Farm
Bureau Mut. Ins. Co., Inc., 364 N.C. 222, 225 (2010) (“A complaint may be dismissed
pursuant to Rule 12(b)(6) . . . if facts are disclosed which will necessarily defeat the
claim.”).
113. 	Generally, a party cannot interfere with its own contract. E.g., Urquhart v.
Trenkelbach, 2017 NCBC LEXIS 12, at *15 (N.C. Super. Ct. Feb. 8, 2017). Republic
contends that Lineage’s amended complaint alleges that Republic was a party to the
pertinent contract, the Hartford Policy, which necessarily defeats this claim.124 The
Court agrees.
114. 	Lineage’s amended complaint states that Lineage is an additional insured
under the Hartford Policy, which Hartford issued to Republic.125 	The amended
complaint therefore identifies one contract, to which all three entities are party.
122 (Lineage Am. Compl. ¶¶ 78–87.)
123 (Republic Refrigeration, Inc.’s Reply to Pl. Lineage Logistics, LLC’s Opp’n to Def. Republic
Refrigeration, Inc.’s Mot. Dismiss 9 [hereinafter “Republic Reply Lineage”], ECF No. 146.)
124 (Republic Br. Supp. Lineage 6.)
125 (Lineage Am. Compl. ¶¶ 8, 40–42, 122–32.)

115. 	Lineage argues that a “separation of insureds” provision in the Policy
creates an entirely independent contract between Hartford and Lineage, which
excludes Republic.126 The Court finds this argument unpersuasive.
116. 	This “separation” provision, by its plain terms, does not apply to the Policy’s
limits.127 This exclusion means that Lineage has no separate coverage beyond what
Republic bargained for. Simply put, the Policy creates a pool of money which would
not exist, and to which Lineage would have no independent claim, without the
insurance Policy into which Republic entered.
117. 	Even more fundamentally, if Republic had not bargained for the Hartford
Policy, Lineage would have no contractual rights vis-à-vis Hartford at all. The very
separation of insureds provision upon which Lineage relies appears in, and exists
only through, the Policy between Hartford and Republic. 	This reality cuts strongly
against Lineage’s contention that the Republic Policy spontaneously generated a
separate contract between Lineage and Hartford that has life independent from the
Hartford-Republic relationship.
118. 	Neither party offers any cases that involved similar circumstances. Indeed,
the Court’s research has discovered only one, but that case’s common-sense analysis
is highly illustrative. In Nucor Steel Tuscaloosa, Inc. v. Zurich Am. Ins. Co., 343 So.
3d 458 (Ala. 2021), the Supreme Court of Alabama confronted a similar series of
events. 	A steel mill contracted with a staffing agency; as part of their contract, the
126 (Lineage Br. Opp’n Republic 16–17.)
127 (See Hartford Policy, at HARTFORD 000077.)

agency had to procure insurance and name the steel mill as an additional insured.
See id. at 461–62. 	One of the agency’s candidates was killed in an accident at the
steel mill, the candidate’s estate sued the mill for wrongful death, and the mill settled
without participation by the agency. 	See id. at 463–64. 	Eventually, the mill sued
both the agency and the insurer for tortious interference with contract, premised on
their coordinated refusal to indemnify the steel mill for its losses. See id. at 467.
119. 	The Alabama court dispensed with the tortious interference claim on highly
pragmatic, practical grounds. 	It first noted that under Alabama law, as in North
Carolina, a party cannot tortiously interfere with its own contract. See id. at 476–77.
Applying this principle, the court held that because the parties’ obligations all flowed
from “interwoven contractual arrangements,” and because the mill would have no
claim on the insurance policy without its own contract with the agency, the agency
was not an outsider to the mill-insurer relationship. See id. at 477.
120. 	The Court finds the Alabama court’s treatment of this issue persuasive. The
relationship between Lineage and Hartford exists only because of Republic’s own
contract with Hartford. Lineage’s relationship with Hartford is entirely a creature of
Republic’s 	bargaining. 	Because 	Lineage 	has 	no 	connection 	with 	Hartford
independent of Republic, Republic does not qualify as an outsider to the relationship
between Lineage and Hartford.
121. 	As a fallback argument, Lineage argues that North Carolina’s malice
exception saves its claim.128 	Under this 	exception, a contractual insider can
128 (Lineage Br. Opp’n Republic 17–21.)

tortiously interfere with his or her own contract by acting with legal malice. 	See
Kingsdown, Inc. v. Hinshaw, 2015 NCBC LEXIS 30, at *41 (N.C. Super. Ct. Mar. 25,
2015). 	Legal malice does not mean actual, subjective malice, but rather the
commission of a wrongful act or overstepping of legal right or authority. See id.
122. 	Indeed, “[i]f [a party] has sufficient lawful reason for inducing the breach of
contract, he is exempt from any liability, no matter how malicious in actuality his
conduct may be.” 	See, e.g., Robinson, Bradshaw & Hinson, P.A. v. Smith, 129 N.C.
App. 305, 318 (1998); see also Murphy v. McIntyre, 69 N.C. App. 323, 328–30 (1984)
(affirming directed verdict against a tortious interference claim when defendant
acted 	“reprehensibl[y],” 	“underhanded[ly],” 	and 	“below 	the 	board,” 	but 	within
defendant’s legal authority).
123. 	Put another way, the existence of a legitimate or rational economic motive,
notwithstanding any subjective malice, shields a defendant’s conduct, so long as the
defendant did not engage in independently unlawful conduct. 	See, e.g., Link, 372
N.C. at 284–85; Pinewood Homes, Inc. v. Harris, 184 N.C. App. 597, 605 (2007);
Filmar Racing, Inc. v. Stewart, 141 N.C. App. 668, 674 (2001); Privette v. Univ. of
N.C. at Chapel Hill, 96 N.C. App. 124, 134–35 (1989); see also Smith v. Ford Motor
Co., 289 N.C. 71, 94–95 (1976) (upholding a tortious interference claim when the
defendant acted with subjective, personal malice and without any rational economic
justification).
124. 	The allegations here demonstrate that Republic had a rational economic
motive for its actions and that it did not engage in any independent unlawful conduct.

125. 	Lineage’s amended complaint alleges that Lineage’s use of the Hartford
Policy’s limits to cover its own losses was within its rights, and that Republic had the
“exact same rights” as Lineage;129 thus, Republic was within its own rights to use the
Hartford limits to cover its own losses. 	Further, using an insurance policy to cover
losses is plainly a rational economic motive.
126. 	In addition, Lineage’s amended complaint does not adequately allege that
Republic’s actions constituted a crime, another tort, or any other independent
wrongful act. For example, Lineage does not allege that Republic persuaded Hartford
to act as it did through fraud.130 	Cf. New Restoration & Recovery Servs., LLC v.
129 (See Lineage Am. Compl. ¶¶ 80–82.)
130 The Court recognizes that one sentence in Lineage’s amended complaint might be read to
accuse Republic of extorting Hartford. Lineage’s amended complaint states that “Republic
threatened Hartford with repercussions if Hartford allotted any of its coverage to Lineage.”
(Lineage Am. Compl. ¶ 86.) 	Depending on what “repercussion” means, this conclusory
sentence may reflect that Republic extorted Hartford. A party commits extortion, which is a
crime, by threatening another with the intention to thereby wrongfully obtain anything of
value. 	N.C.G.S. § 14-118.4. 	“Anything of value” has been defined very broadly, and
encompasses economic consideration. E.g., In re J.A.D., 283 N.C. App. 8, 21 (2022) (noting
that the definition would include food); State v. Greenspan, 92 N.C. App. 563, 566 (1989)
(cash). North Carolina does not recognize a “claim of right” defense, so Republic’s actual legal
entitlement to the insurance proceeds is irrelevant, if Republic used unlawful means to obtain
them. See State v. Privette, 218 N.C. App. 459, 476 (2012).
This 	issue 	therefore 	revolves 	around 	whether 	Republic’s 	threatened 	“repercussions”
constituted threats within the meaning of the statute. Certainly many forms of threats would
qualify under the statute, but not all. For example, a threat to file a lawsuit, which is lawful
conduct, does not fall within the purview of the statute. See Harris v. NCNB Nat’l Bank of
N.C., 85 N.C. App. 669, 675–76 (1987); accord Various Markets, Inc. v. Chase Manhattan
Bank, N.A., 908 F. Supp. 459, 468 (E.D. Mich. 1995) (noting that a “distasteful” threat to sue
could not meet this element under Michigan’s analogous extortion law). Thus if Republic’s
threatened “repercussions” were, for example, merely to file a lawsuit if Hartford paid its
limits to Lineage, Republic would not have extorted Hartford.
However, the pleading burden rests upon Lineage to allege that Republic committed a
wrongful act that gives rise to legal malice. 	In turn, for extortion, this burden requires
Lineage to allege that Republic communicated an unlawful threat within the meaning of the

Dragonfly Pond Works, LLC, 2023 NCBC LEXIS 80, at *16–18 (N.C. Super. Ct. June
15, 2023) (holding that misappropriation of trade secrets, as an independent tortious
act, supported legal malice).
127. 	Because Lineage fails to allege that Republic acted with legal malice, either
through a lack of an economic motive or through the commission of an independent
wrongful act, Lineage’s claim does not qualify for the malice exception. Consequently,
Republic’s status as a party to the relevant contract is fatal to this claim.
128. 	The 	Court 	will 	therefore 	grant 	Republic’s 	motion 	insofar 	as 	it 	seeks
dismissal of Lineage’s tortious interference with contract claim.
D. 	Republic’s Motion to Stay
129. 	Finally, Republic seeks a stay of this action. 	This Court has the inherent
power and discretion to control its docket, including by staying, or refusing to stay,
the cases before it. Watters v. Parrish, 252 N.C. 787, 791–92 (1960).
130. 	Republic argues that the resolution of many issues in this case will depend
on the outcome of the Underlying Actions, so that a stay is appropriate until their
conclusion.131 	But as discussed at length above, the Court has dismissed all of the
declaratory judgment and other claims that depend on the outcome of the Underlying
Actions, and will therefore deny the Motion to Stay.
extortion statute. 	Lineage’s threadbare reference to “repercussions” does not meet this
burden. While the Court must treat all the amended complaint’s allegations as true at this
stage, reading Lineage’s amended complaint to allege an extortionate threat would amount
at least to improperly accepting “unwarranted deductions of fact,” e.g., Mitchell v. Pruden,
251 N.C. App. 554, 558 (2017), if not to judicially rewriting the amended complaint.
131 (See generally Republic Refrigeration, Inc.’s Br. Supp. Mot Stay, ECF No. 139.)

IV.
CONCLUSION
131. 	WHEREFORE, for the foregoing reasons, the Court hereby ORDERS as
follows:
a. 	Travelers’s Motion to Dismiss Lineage’s Amended Complaint, (ECF No.
132), is GRANTED, and Lineage’s claims against Travelers are hereby
DISMISSED without prejudice;
b. 	Travelers’s Motion to Dismiss Primus’s Amended Complaint, (ECF No.
136), is GRANTED, and Primus’s claims against Travelers are hereby
DISMSSED without prejudice;
c. 	Republic’s Motion to Dismiss Lineage’s Amended Complaint, (ECF No.
134), is GRANTED in part and DENIED in part as follows:
a. 	The Motion is denied as to the following claims against Republic,
which shall proceed to discovery:
i. 	Lineage’s claim for declaratory judgment; and
ii. 	Lineage’s claim for breach of contract;
b. 	The 	Motion 	is 	granted 	as 	to 	Lineage’s 	claim 	for 	tortious
interference with contract, which is hereby DISMISSED with
prejudice; and
d. 	Republic’s Motion to Stay, (ECF No. 139), is DENIED.

SO ORDERED, this the 10th day of August, 2023.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge