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Huang v. State Farm Fire and Casualty Co.

United States District Court, E.D. North Carolina, Western Division

March 27, 2015

Shaohua Huang & Biying Huang, Plaintiffs,
State Farm Fire and Casualty Company, Defendant.


ROBERT T. NUMBERS, II, Magistrate Judge.

Defendant State Farm Fire and Casualty Company has asked the court to dismiss to the negligence and breach of the covenant of good faith and fair dealing claim brought by Plaintiffs Shaohua and Biying Huang on the ground that they have failed to state a claim for which relief may be granted. After reviewing the Complaint and the arguments made by the parties, the court has determined that the Complaint does not contain the necessary factual allegations to maintain these claims. Therefore, the Court[1] will grant State Farm's Motion and dismiss the Huang's negligence and bad faith claims.

I. Factual Background

On July 6, 2012, a severe thunderstorm with high winds, large hail, and heavy rains damaged the Huang's home in Apex, North Carolina. (D.E. 1; Compl. at ¶ 8.) After the storm subsided, the Huangs filed claim under their State Farm homeowner's insurance policy for the costs of repairing the storm damage. ( Id. at ¶ 9.)

After receiving the Huang's claim, State Farm assigned an adjuster to evaluate the damage the storm inflicted on the house. ( Id. at ¶ 11.) Although the Complaint does not indicate the amount State Farm offered to repair the Huang's home, it was substantially less than the $36, 000 estimated by the independent adjuster hired by the Huangs. ( See id. at ¶ 18. ) The Huangs contended that the inspection conducted by State Farm's adjustor was inadequate and conducted "using non-industry standard inspection methods to justify denial of the Claim." ( Id. at ¶ 13-14.)

On January 6, 2014, the Huangs filed a Complaint in North Carolina Superior Court asserting five causes of action: 1) breach of contract; 2) unfair and deceptive trade practices; 3) bad faith; 4) negligent misrepresentation; and 5) negligence. ( Id. at 8-12.) These claims are based upon the Huang's assertion that State Farm's estimate "did not allow adequate funds to cover the complete repairs required to restore [the Huangs' home] to its condition prior to the Storm Damage." ( Id. at ¶ 14.) The Complaint further alleged that the inspection "failed to acknowledge, discover, recognize and/or include a majority of the Storm Damage, to propose a viable repair strategy, to evaluate the Storm Damage by a measurable/mutually agreed upon standard and/or to offer adequate coverage" under the Huangs' policy. ( Id. at ¶ 13.)

State Farm removed this action to federal court and, after filing an Answer (D.E. 4), filed a motion seeking to dismiss two of the Huang's claims.

II. Standard of Review

State Farm's Motion to Dismiss argues that the Huang's claims of negligence and bad faith should be dismissed because they failed to state a claim upon which relief may be granted. A motion under Rule 12(b)(6) must technically be filed before the close of pleadings. See Fed.R.Civ.P. 12(b) . Federal courts will often, however, construe untimely Rule 12(b) motions as Rule 12(c) motions for judgment on the pleadings. See Fed.R.Civ.P. 12(h)(2) ; Burbach Broad. Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 405 (4th Cir. 2002). The distinction makes no practical difference to the parties because the court reviews Rule 12(c) motions according to the same standard applied to motions under Rule 12(b)(6). Burbach, 278 F.3d at 405.

The Supreme Court has explained that in order to withstand a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court explained that "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Therefore, while a court must accept all the factual allegations contained in a complaint as true, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice." Id.

After Iqbal, a court considering a motion under Rule 12(b)(6) must subject a complaint to a two-part test. First, the court must identify the allegations in the complaint that are not entitled to the assumption of truth because they are conclusory in nature or nothing more than a formulaic recitation of the elements of a claim. Id. at 679. Then, taking the remaining factual allegations as true, the court must determine whether the complaint "plausibly suggest[s] an entitlement to relief." Id. If, after conducting this two-part analysis, "the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not shown' - that the pleader is entitled to relief'" Id. If a party fails to show that they are entitled to relief, the court must dismiss the deficient claim.

III. Analysis

A. Insurance bad faith claim

First, State Farm asks the court to dismiss the Huangs' bad faith claim. "To prevail on a claim of bad faith in the insurance context, a complainant must establish that there was: 1) a refusal to pay after recognition of a valid claim; 2) bad faith'; and 3) aggravating or outrageous conduct.'" Blis Day Spa, LLC v. Hartford Ins. Grp., 427 F.Supp.2d 621, 631 (W.D. N.C. 2006) (citing Topsail ...

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