Balt. Scrap Corp. v. Exec. Risk Specialty Ins. Co., 388 F. Supp. 3d 574

Background

Baltimore Scrap discovered that employee Kenneth Grimes repeatedly weighed in loaded trucks, exited via a back gate without unloading, then weighed out empty and collected payments; criminal and civil actions against Grimes followed, yielding a civil judgment ~ $196,081.05.
Baltimore Scrap sought coverage for the Grimes loss under a first-party Crime Policy issued by Executive Risk; Executive Risk denied coverage in a May 1, 2015 denial letter, citing a voluntary-exchange exclusion (surrender of money) and lack of robbery.
Baltimore Scrap filed suit on September 5, 2018 alleging breach of contract against Executive Risk (Count II) and RLI (Count I); Executive Risk moved to dismiss Count II under Fed. R. Civ. P. 12(b)(6) as time-barred by Maryland’s three-year statute of limitations (C.J. § 5-101).
Executive Risk attached the May 1, 2015 denial letter to its motion; the court treated the letter as integral to the complaint and therefore properly considered it on the Rule 12(b)(6) motion.
Plaintiff argued accrual did not occur until resolution of the underlying civil litigation against Grimes (May 7, 2016), relying on Luppino and the idea that factual resolution of underlying liability postponed accrual; Executive Risk argued accrual occurred on the date of its denial letter.
The court concluded this is a first-party coverage claim (not a continuing duty-to-defend third-party case) and held the claim accrued on May 1, 2015 when the insurer denied coverage; Count II was dismissed with prejudice as time-barred.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did Baltimore Scrap’s breach-of-contract claim against Executive Risk accrue for statute-of-limitations purposes?	Accrual occurred May 7, 2016 (when judgment against Grimes established liability and damages); underlying litigation resolution triggered accrual.	Accrual occurred May 1, 2015 (date of insurer’s denial letter); insured knew of its right to sue then.	Accrued May 1, 2015; suit filed Sept. 5, 2018 was untimely; Count II dismissed with prejudice.

Key Cases Cited

In re Birmingham, 846 F.3d 88 (4th Cir. 2017) (Rule 12(b)(6) motion tests legal sufficiency of complaint)
Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159 (4th Cir. 2016) (documents attached to or integral to complaint may be considered on Rule 12(b)(6))
Goodman v. Praxair, Inc., 494 F.3d 458 (4th Cir. 2007) (affirmative defenses apparent on the face of the complaint may be reached on 12(b)(6))
Dual Inc. v. Lockheed Martin Corp., 383 Md. 151 (Md. 2004) (discovery rule and accrual in contract cases)
Georgia-Pacific Corp. v. Benjamin, 394 Md. 59 (Md. 2006) (explanation of discovery/inquiry-notice accrual test)
Luppino v. Gray, 352 Md. 481 (Md. 1999) (duty-to-defend accrual may be continuing; limitation may run from termination of underlying litigation)
Curry v. Trustmark Ins. Co., [citation="600 F. App'x 877"] (4th Cir. 2015) (distinguishing continuing breaches from an initial denial where accrual occurs at first denial)
Mobley v. New York Life Ins. Co., 295 U.S. 632 (1935) (refusal to pay due benefit is sufficient to constitute a breach)