Plaintiff Companion Property and Casualty Insurance Company (“Companion”) brought suit against U.S. Bank National Association (“US Bank”) arising from its role as trustee under various reinsurance collateral trusts that secured certain reinsurers’ obligations to Companion for its participation in a fronted insurance program. Companion asserted the following claims against US Bank: breach of contract (the trust agreements); breach of fiduciary duty; negligence/gross negligence; negligent misrepresentation; equitable estoppel; and violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”). US Bank moved to dismiss each cause of action for failure to state a claim.

The U.S. District Court for the District of South Carolina granted in part, and denied in part, US Bank’s motion. First, the Court found that Companion adequately pled a cognizable claim for breach of the trust agreements, rejecting US Bank’s argument that this claim (as pled) was premised on duties not expressed in those agreements. Next, Companion’s breach of fiduciary duty and negligence claims were ruled actionable, even though they involved US Bank’s purported breach of its contractual duties, because Companion sufficiently alleged the existence of an independent duty of good faith and care owed to it as beneficiary of the trusts. Finally, while Companion adequately pled sufficient facts to establish that US Bank is liable for negligent misrepresentation, the claims for equitable estoppel and for violating SCUTPA failed as a matter of law, because the former cannot be brought affirmatively in a complaint under South Carolina law, and the latter failed to allege facts demonstrating that US Bank’s conduct was the result of “standard procedures or business practices that have an adverse impact on public interest”, as required by SCUTPA. Companion Property & Casualty Insurance Co. (n/k/a Sussex Ins. Co.) v. U.S. Bank NA, No. 3:15-cv-01300 (USDC D.S.C. Nov. 24, 2015).