        THE STATE OF SOUTH CAROLINA
            In The Court of Appeals

PCS Nitrogen, Inc., Appellant,

v.

Continental Casualty Company, Admiral Insurance
Company, United States Fire Insurance Company, ACE
Property & Casualty Insurance Company, Certain
Underwriters at Lloyd's London, the Aviva Companies,
the Winterthur Companies, Certain London Market
Insurance Companies, Providence Washington Insurance
Company (as Successor in Interest by way of Merger to
Seaton Insurance Company, f/k/a Unigard Security
Insurance, f/k/a Unigard Mutual Insurance Company),
Berkshire Hathaway Specialty Insurance Company (f/k/a
Stonewall Insurance Company), Lexington Insurance
Company, Starr Indemnity & Liability Company (f/k/a
Republic Insurance Company), First State Insurance
Company, Century Indemnity Company (f/k/a California
Union Insurance Company and Insurance Company of
North America), Respondents.

Appellate Case No. 2016-001140



             Appeal From Charleston County
        G. Thomas Cooper, Jr., Circuit Court Judge


                   Opinion No. 5699
     Heard March 12, 2019 – Filed December 18, 2019


                      AFFIRMED
William Howell Morrison, of Haynsworth Sinkler Boyd,
PA, of Charleston; and Michael H. Ginsberg and
Matthew R. Divelbiss, both of Pittsburgh, PA; all for
Appellant.

Morgan S. Templeton, of Wall Templeton & Haldrup,
PA, of Charleston, and Patrick F. Hofer, of Washington,
D.C., for Respondent Continental Casualty Company;
Robert Holmes Hood, Jr., of Hood Law Firm, LLC, of
Charleston, and Robert F. Walsh, Patricia B. Santelle,
and Thomas M. Going, of Philadelphia, PA, for
Respondents United States Fire Insurance Company,
ACE Property & Casualty Insurance Company, Century
Indemnity Company (f/k/a California Union Insurance
Company and Insurance Company of North America); R.
Scott Wallinger, Jr. and Christian Stegmaier, of Collins
& Lacy, PC, of Columbia, and John S. Favate and
Michael Forino, of Springfield, NJ, for Respondent
United States Fire Insurance Company; John Robert
Murphy, Adam J. Neil, and Wesley Brian Sawyer, of
Murphy & Grantland, PA, of Columbia, for Respondent
Admiral Insurance Company; John Thomas Lay, Jr. and
Laura Watkins Jordan, of Gallivan, White & Boyd, PA,
of Columbia, and Helen Franzese, of Greensboro, NC,
for Respondent Certain London Market Insurance
Companies; Robert Michael Ethridge, of Ethridge Law
Group, LLC of Mount Pleasant, and Wayne S. Karbal
and Paul Parker, of Chicago, IL, for Respondent First
State Insurance Company; John C. Bonnie, of Weinberg
Wheeler Hudgins Gunn & Dial, LLC, of Atlanta, GA, for
Respondent Lexington Insurance Company; Edward K.
Pritchard, III, of Pritchard Law Group LLC, of
Charleston, and Richard McDermott and Seth M. Jaffe,
of Chicago, IL, for Respondent Certain Underwriters at
Lloyd's London, Respondent the Aviva Companies,
Respondent the Winterthur Companies, Respondent
Berkshire Hathaway Specialty Insurance Company (f/k/a
Stonewall Insurance Company), Respondent Starr
Indemnity & Liability Company (f/k/a Republic
Insurance Company); Elizabeth Janelle Palmer, of Rosen
             Rosen & Hagood, LLC, of Charleston, and Harry Lee
             and Molly Woodson Poag, of Washington, DC, for
             Respondent Providence Washington Insurance Company
             (as Successor in Interest by way of Merger to Seaton
             Insurance Company, f/k/a Unigard Security Insurance,
             f/k/a Unigard Mutual Insurance Company); and Elizabeth
             Fraysure Fulton, of Hall Booth Smith, PC, of Mount
             Pleasant, for Respondents Certain Underwriters at
             Lloyd's London, the Aviva Companies, the Winterthur
             Companies, Starr Indemnity & Liability Company (f/k/a
             Republic Insurance Company).


MCDONALD, J.: In this insurance coverage dispute, PCS Nitrogen, Inc., argues
the circuit court erred in finding it was not entitled to coverage rights under
Columbia Nitrogen Corporation's (Old CNC) insurance policies issued by
Respondents.1 Specifically, PCS Nitrogen asserts the circuit court erred in finding
it was not entitled to coverage rights under either a post-loss assignment of the
rights under Old CNC's policies or as the corporate successor of Old CNC via de
facto merger. We affirm the circuit court's order granting Respondents' motions
for summary judgment.

Facts and Procedural History

From 1966 until 1972, Old CNC operated phosphate fertilizer plants in Charleston
(the Charleston Site). From 1966 to 1985, Old CNC purchased primary and excess
liability insurance policies from Respondents. Old CNC was the named insured on
the policies, which stated, "The company will pay on behalf of the insured all sums
which the insured shall become legally obligated to pay as damages because
of . . . property damage . . . to which this insurance applies, caused by an



1
  The coverage determination is necessary due to the Fourth Circuit's affirmance of
the South Carolina District Court's allocation of responsibility to PCS Nitrogen for
Old CNC's superfund liabilities under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601–9675
(2013). See PCS Nitrogen, Inc. v. Ashley II of Charleston, LLC, 714 F.3d 161 (4th
Cir. 2013).
occurrence . . . ."2 (emphasis added). The policies further provided, "Assignment
of interest under this policy shall not bind the company until its consent is
endorsed hereon." (emphasis added). Regarding actions against the insurer, the
policies stated:

             No action shall lie against the company, unless, as
             condition precedent thereto, there shall have been full
             compliance with all of the terms of this policy, nor until
             the amount of the insured's obligation to pay shall have
             been finally determined by judgment against the insured
             after actual trial or by written agreement of the insured,
             the claimant and the company.

             Any person or organization or the legal representative
             thereof who has secured such judgment or written
             agreement shall thereafter be entitled to recover under
             this policy to the extent of the insurance afforded by the
             policy.

(emphasis added).

In October 1986, Old CNC entered into a transaction with CNC Corp. (New CNC)
in which it sold some of its assets to New CNC via an acquisition agreement; this
transaction did not include the sale of the Charleston Site, which was sold to a third
party in 1985. In addition to some of Old CNC's assets, New CNC assumed some
of Old CNC's liabilities as detailed in the acquisition agreement, which stated New
CNC assumed liabilities related to the "acquired business." The acquisition
agreement defined the acquired business as "a business that produces and sells
ammonia and nitrogen-based products." Additionally, the acquisition agreement
included a document titled "Assignment of Insurance Benefits," which was signed
by Old CNC. It stated,

             [B]y an Acquisition Agreement, dated as of October 31,
             1986, entered into between [Old CNC] and [New
             CNC] . . . [Old CNC] has agreed to sell, convey, transfer,

2
 This language is from Continental Casualty's policy; however, the circuit court
found all of Respondents' policies contained substantially similar language, and the
parties do not dispute this finding.
                and assign . . . all of [Old CNC]'s rights, proceeds and
                other benefits to and under all of [Old CNC]'s insurance
                policies . . . .

                ....

                [Old CNC] by these presents does hereby transfer and
                assign to [New CNC], its successors and assigns forever,
                all of [Old CNC]'s rights, title and interest, legal and
                equitable, in the benefits and proceeds under all of its
                insurance policies to the extent the same may be
                transferred and assigned . . . .

(emphasis added).

Prior to the closing of the asset sale, Old CNC composed a checklist of tasks that
needed to be completed before or on the date of closing. The checklist included a
section titled "Documents to be exchanged at Closing." This section stated the
parties were to exchange "[a]ssignment of insurance policies with the consent of
the insurance companies endorsed thereon." (emphasis added).

By letter dated December 6, 1986, the parties summarized the disposition of Old
CNC's insurance policies at the closing on November 1, 1986. The letter stated,

                [Old CNC] had insurance coverages as listed on the
                attached insurance policy schedule as of October 31,
                1986. Most all of those policies were cancelled at
                closing . . . and pre-payments were refunded . . . . In
                these cases, new separate policies were issued
                to . . . [New CNC].

According to an attached schedule, New CNC obtained insurer consent and
endorsement as to one liability policy3 and cancelled the remaining policies.

Following the closing of the transaction, Old CNC filed a certificate of dissolution
on November 19, 1986. Subsequently, New CNC changed its name to Columbia
Nitrogen Corporation. On November 29, 1989, New CNC merged with Fertilizer

3
    This insurer is not a party to this appeal.
Industries, Inc., which changed its name to Arcadian Corporation on November 30,
1989. In March 1997, Arcadian Corporation merged with PCS Nitrogen.

On September 26, 2005, Ashley II of Charleston, LLC, then owner of the
Charleston Site, filed a declaratory judgment action against PCS Nitrogen in
federal court, alleging PCS Nitrogen was liable for environmental remediation at
the Charleston Site because New CNC acquired Old CNC's CERCLA liabilities in
the 1986 transaction.4 The district court found PCS Nitrogen liable as a corporate
successor to Old CNC under three theories, including a de facto merger theory.
PCS Nitrogen, 714 F.3d at 172–73. PCS Nitrogen appealed, and the Fourth Circuit
affirmed the district court but only as to one theory. Id. at 173–76. Specifically,
the Fourth Circuit held PCS Nitrogen was liable as a corporate successor to Old
CNC because New CNC contractually assumed Old CNC's liabilities via the 1986
transaction. Id. at 176.

On March 24, 2015, PCS Nitrogen filed an amended complaint in state court,
seeking to enforce its coverage rights under Old CNC's liability insurance
policies.5 Specifically, PCS Nitrogen asserted it was entitled to enforce these
rights because (1) Old CNC contractually assigned its insurance rights to benefits
and proceeds under the policies to New CNC and (2) it was the corporate successor
to Old CNC via de facto merger. Continental Casualty moved for summary
judgment; the other carriers joined in this motion. Following a hearing, the circuit
court granted summary judgment to Continental Casualty and the other moving
insurers. The circuit court found none of the challenged policies were assigned to
New CNC because Old CNC did not obtain consent from the insurers as required
by the language of the policies and South Carolina law. The court held that
because there were no vested claims from prior actions against Old CNC at the
time of the assignment, PCS Nitrogen was not entitled to anything under the
policies, explaining post-loss assignments were only enforceable if assigning a
chose in action. The circuit court additionally found PCS Nitrogen was not
entitled to Old CNC's insurance rights under a theory of de facto merger. The

4
 In the federal litigation, PCS Nitrogen denied any liability as a corporate
successor to Old CNC. PCS Nitrogen, 714 F.3d at 171.
5
 PCS Nitrogen originally filed its complaint with the circuit court on January 18,
2011, after the district court held it was liable as Old CNC's corporate successor,
but the circuit court stayed the action until PCS Nitrogen's appeal to the Fourth
Circuit on the underlying allocation of CERCLA responsibility had concluded.
court explained the de facto merger theory was "legally untenable" because New
CNC contractually assumed Old CNC's liabilities; therefore, it was an available
party for any potential "creditors of the predecessor." PCS Nitrogen moved for
reconsideration, which the circuit court denied.6

Standard of Review

"In reviewing a grant of summary judgment, our appellate court applies the same
standard as the trial court under Rule 56(c), SCRCP." Woodson v. DLI Properties,
LLC, 406 S.C. 517, 528, 753 S.E.2d 428, 434 (2014).

            Summary judgment is proper if, viewing the evidence
            and inferences to be drawn therefrom in a light most
            favorable to the nonmoving party, the pleadings,
            depositions, answers to interrogatories, admissions, and
            affidavits, if any, show that there is no genuine issue of
            material fact and that the moving party is entitled to a
            judgment as a matter of law.

Id. "We review questions of law de novo." Callawassie Island Members Club,
Inc. v. Dennis, 425 S.C. 193, 198, 821 S.E.2d 667, 669 (2018). "Because the
ambiguity of contracts and statutes are questions of law, we do not view the
evidence in any particular light. Rather, we read the contract or statute to
determine if its meaning is clear and unambiguous." Id.

Law and Analysis

Assignment of Insurance Policies


6
  Continental Casualty and certain other insurers simultaneously moved for
summary judgment based on a "pollution exclusion" contained in the various
policies. The circuit court issued a separate order on these motions, finding the
question of the pollution exclusions moot in light of its grant of summary judgment
on the carriers' assignment and corporate succession grounds. However, a South
Carolina district court, affirmed by the Fourth Circuit, has already resolved the
issue of the pollution exclusion adversely to PCS Nitrogen in a related matter. See
Ross Dev. Corp. v. PCS Nitrogen, Inc., 526 F. App'x 299 (4th Cir. 2013) (affirming
district court's ruling that pollution exclusion applied to bar coverage for
underlying CERCLA liability and potential liability in two related actions).
PCS Nitrogen argues the circuit court erred in granting Respondents' motions for
summary judgment because New CNC received a valid assignment of Old CNC's
insurance coverage rights through the 1986 transaction. Thus—PCS Nitrogen
asserts—it is entitled to seek coverage under those policies. PCS Nitrogen claims
it was not required to obtain insurer consent for the assignment of the benefits
under the policies because these were post-loss assignments made after the
environmental contamination of the Charleston Site occurred during the policy
terms. PCS Nitrogen contends this argument is supported by the supreme court's
reasoning in Narruhn v. Alea London Limited, 404 S.C. 337, 343–45, 745 S.E.2d
90, 93–94 (2013) (noting in dicta that "it is generally held that an
assignment after a loss has already occurred does not require an insurer's
consent.").

"The cardinal rule of contract interpretation is to ascertain and give legal effect to
the parties' intentions as determined by the contract language." Palmetto Mortuary
Transp., Inc. v. Knight Sys., Inc., 424 S.C. 444, 460, 818 S.E.2d 724, 733 (2018)
(quoting Schulmeyer v. State Farm Fire & Cas. Co., 353 S.C. 491, 495, 579 S.E.2d
132, 134 (2003)). "If the contract's language is clear and unambiguous, the
language alone determines the contract's force and effect." Id. (quoting
Schulmeyer, 424 S.C. at 460, 818 S.E.2d at 733). "When a contract is
unambiguous a court must construe its provisions according to the terms the parties
used; understood in their plain, ordinary, and popular sense." Id. (quoting
Schulmeyer, 424 S.C. at 460, 818 S.E.2d at 733). Thus, "[t]his court is 'without
authority to alter an unambiguous contract by construction or to make new
contracts for the parties.'" First S. Bank v. Rosenberg, 418 S.C. 170, 180, 790
S.E.2d 919, 925 (Ct. App. 2016) (quoting S.C. Dep't of Transp. v. M & T Enters. of
Mt. Pleasant, LLC, 379 S.C. 645, 655, 667 S.E.2d 7, 13 (Ct. App. 2008)).

In determining whether the circuit court erred in granting summary judgment, we
must look to the terms of the policies and the assignment agreement at issue.
Under the policies, Old CNC was the named insured. The policies stated, "The
company will pay on behalf of the insured all sums which the insured shall become
legally obligated to pay as damages because of . . . property damage . . . to which
this insurance applies, caused by an occurrence . . . ." (emphasis added). The
policies further provided, "Assignment of interest under this policy shall not bind
the company until its consent is endorsed hereon." (emphasis added).

The policies additionally included a section titled "Actions Against Company,"
which stated:
            No action shall lie against the company, unless, as
            condition precedent thereto, there shall have been full
            compliance with all of the terms of this policy, nor until
            the amount of the insured's obligation to pay shall have
            been finally determined by judgment against the insured
            after actual trial or by written agreement of the insured,
            the claimant and the company.

            Any person or organization or the legal representative
            thereof who has secured such judgment or written
            agreement shall thereafter be entitled to recover under
            this policy to the extent of the insurance afforded by the
            policy.

(emphasis added).

The portion of the acquisition agreement titled "Assignment of Insurance Benefits"
stated:

            [B]y an Acquisition Agreement, dated as of October 31,
            1986, entered into between [Old CNC] and [New
            CNC] . . . [Old CNC] has agreed to sell, convey, transfer,
            and assign . . . all of [Old CNC]'s rights, proceeds and
            other benefits to and under all of [Old CNC]'s insurance
            policies . . . .

            ....

            [Old CNC] by these presents does hereby transfer and
            assign to [New CNC], its successors and assigns forever,
            all of [Old CNC]'s rights, title and interest, legal and
            equitable, in the benefits and proceeds under all of its
            insurance policies to the extent the same may be
            transferred and assigned . . . .

(emphasis added).

Although the policies included the aforementioned anti-assignment clause, the
majority rule is that such clauses are generally only enforceable before a loss
occurs. See 3 Couch on Insurance § 35:8 (3d ed. 2018) ("Although there is some
authority to the contrary, the great majority of courts adhere to the rule that general
stipulations in policies prohibiting assignments of the policy, except with the
consent of the insurer, apply only to assignments before loss, and do not prevent an
assignment after loss, for the obvious reason that the clause by its own terms
ordinarily prohibits merely the assignment of the policy, as distinguished from a
claim arising under the policy, and the assignment before loss involves a transfer
of a contractual relationship while the assignment after loss is the transfer of a right
to a money claim." (emphasis added)); 17 Williston on Contracts § 49:126 (4th ed.
2018) ("As a general principle, a clause restricting assignment does not in any way
limit the policyholder's power to make an assignment of the rights under the
policy—consisting of the right to receive the proceeds of the policy—after a loss
has occurred." (emphasis added)); id. ("After a loss occurs, the indemnity policy is
no longer an executory contract of insurance. It is now a vested claim against the
insurer and can be freely assigned or sold like any other chose in action or piece of
property.").

Our supreme court has noted this principle in prior opinions. See Narruhn, 404
S.C. at 343–45, 745 S.E.2d at 93–94 ("Although we need not reach the issue here,
it appears the referee did not believe Insurer's approval of the assignment of RKC's
rights was required, and we note it is generally held that an assignment after a loss
has already occurred does not require an insurer's consent."); Ligon v. Metropolitan
Life Ins., Co., 219 S.C. 143, 155, 64 S.E.2d 258, 264 (1951) ("It is well stated in 29
Am. Jur., Sec. 506, Page 410: 'General stipulations, in policies, prohibiting
assignment thereof, except with the insurer's consent or upon giving some notice,
or like conditions, have universally been held to apply only to assignments before
loss, and, accordingly, not to prevent an assignment after loss or death, or the
maturity of the policy, of the claim or interest in the insurance money then due.'").

Therefore, the pivotal inquiry in the case sub judice is at what point did the "loss,"
or as stated in the policy, the "occurrence," triggering coverage occur? See Moore
v. Weinberg, 373 S.C. 209, 220, 644 S.E.2d 740, 745 (Ct. App. 2007) ("South
Carolina jurisprudence has long recognized that a chose in action can be validly
assigned in either law or equity."); Singletary v. Aetna Cas. & Sur. Co., 316 S.C.
199, 201–02, 447 S.E.2d 869, 870 (Ct. App. 1994) ("An assignee of a chose in
action can claim no higher rights than his assignor had at the time of the
assignment."); id. at 202, 447 S.E.2d at 870 ("Under South Carolina law, a party is
not entitled to receive insurance proceeds in excess of their interest in the
property.").
Although the property damage insured against—environmental contamination—
occurred during the covered policy terms, the plain language of the policies state
that Old CNC was not entitled to coverage "until the amount of the insured's
obligation to pay shall have been finally determined by judgment against the
insured after actual trial or by written agreement of the insured, the claimant and
the company." (emphasis added). Because no actions were filed against Old CNC
prior to the asset sale with New CNC, the loss insured against—as defined in the
terms of these particular policies—had not yet occurred, and thus, no vested claims
existed. Therefore, we find no error in the circuit court's determination that the
assignments to the benefits and proceeds were pre-loss assignments requiring
insurer consent, which was not obtained. Accordingly, the assignment agreement
was essentially ineffective, and if PCS Nitrogen wanted to ensure its rights to
enforce potential claims under the policies, it should have obtained insurer consent
as it did for the liability policy not at issue in this case. See Schulmeyer, 353 S.C.
at 495, 579 S.E.2d at 134 ("The cardinal rule of contract interpretation is to
ascertain and give legal effect to the parties' intentions as determined by the
contract language."); id. ("Parties to a contract have the right to construct their own
contract without interference from courts to rewrite or torture the meaning of the
policy to extend coverage."); Travelers Cas. & Sur. Co. v. U.S. Filter Corp., 895
N.E.2d 1172 (Ind. 2008) (where injuries had occurred but not yet been reported at
the time of the relevant transactions, they did not constitute transferable choses in
action for purposes of coverage when considered in context of consent-to-assign
clauses); Del Monte Fresh Produce (Haw.) Inc. v. Fireman's Fund Ins. Co., 117
Haw. 357, 369–70, 183 P.3d 734, 746–47 (2007) (no duty to defend or indemnify
in CERCLA fumigant contamination action where attempted assignment by
contract was invalid due to failure to obtain insurer consent).

AFFIRMED.7


7
  PCS Nitrogen further contends the circuit court erred in the analysis of its
argument that PCS is entitled to coverage under a "de facto merger" theory. See
Simmons v. Mark Lift Industries, 366 S.C. 308, 622 S.E.2d 213 (2006) (setting
forth the circumstances in which a plaintiff may maintain a product liability claim
under a successor liability theory against a successor corporation which has
purchased the predecessor's assets). We decline to address this argument because
the cases PCS cites do not address the question of insurance coverage, and it is
unclear how a finding of successor liability under a de facto merger theory would
provide access to coverage rights under Respondents' policies. See Mead v.
Beaufort Cty. Assessor, 419 S.C. 125, 139, 796 S.E.2d 165, 172–73 (Ct. App.
LOCKEMY, C.J., and SHORT, J., concur.




2016) (noting the court may decline to address the merits of a question when
appellant provides no legal authority regarding the particular argument).
