United States District Court, M.D. North Carolina
CARLTON TILLEY, JR. SENIOR UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant State Farm Fire and
Casualty Company's Motion to Dismiss Plaintiff Christina
Lockhart's claim of unfair and deceptive trade practices
for failure to state a claim upon which relief can be granted
[Doc. #9]. For the reasons that follow, the motion is
to the Complaint, Lockhart owned real property located at
1013 North Main Street, Salisbury, North Carolina and
purchased a dwelling fire loss policy from State Farm Fire
and Casualty Company (“State Farm”) which was in
full force and effect on December 20, 2016 when
Lockhart's residence was destroyed by fire. (Compl.
¶¶ 3-5 [Doc. #6].) Lockhart submitted timely proof
of loss, but State Farm “without lawful excuse, has
failed, refused and neglected to pay” the claim.
(Id. ¶¶ 6-7.) Although State Farm's
liability to Lockhart became reasonably clear on or before
August 14, 2017, State Farm “has embarked upon a course
of conduct designed to artificially create an excuse, first
to delay payment” and “then, to deny” the
claim “notwithstanding [Lockhart's] good faith and
substantial compliance”. (Id. ¶¶ 8,
9.) State Farm “falsely claimed that plaintiff had not
cooperated or otherwise provided truthful information
relating to her claim.” (Id. ¶ 9.) As a
result, Lockhart sued State Farm for breach of contract and
unfair and deceptive trade practices. (Id.
unfair and deceptive trade practices claim finds its basis in
N.C. Gen. Stat. § 58-63-15(11), (Compl. ¶ 18), but
State Farm argues that Lockhart has failed to allege any
facts in support of her conclusory assertions, (Mem. of Law
in Supp. at 1 [Doc. #11]). In response, Lockhart presents
facts not alleged in her Complaint, (Mem. of Law in Opp'n
§ II [Doc. #15]), and maintains that she “alleged,
in detail, numerous violations of” North Carolina
General Statute § 58-63-15(11), (id. at 4).
survive a Rule 12(b)(6) motion, the 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) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “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. (citing Twombly, 550 U.S. at 556);
see also McCleary-Evans v. Md. Dep't of Transp.,
State Highway Admin., 780 F.3d 582, 585 (4th Cir. 2015)
(noting that a complaint must “contain sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face in the sense that the
complaint's factual allegations must allow a court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged”). When evaluating whether
the complaint states a claim that is plausible on its face,
the facts are construed in the light most favorable to the
plaintiff and all reasonable inferences are drawn in her
favor. U.S. ex rel. Oberg v. Pa. Higher Educ. Assistance
Agency, 745 F.3d 131, 136 (4th Cir. 2014). Nevertheless,
“labels and conclusions[, ]” “a formulaic
recitation of the elements of a cause of action[, ]”
and “naked assertions . . . without some further
factual enhancement” are insufficient.
Twombly, 550 U.S. at 557.
75-1.1(a) of the North Carolina General Statutes declares
that “unfair or deceptive acts or practices in or
affecting commerce” are unlawful. The elements of a
claim for unfair or deceptive trade practices are: an unfair
or deceptive trade practice in or affecting commerce which
proximately caused plaintiff actual injury. Town of
Belhaven, NC v. Pantego Creek, LLC, 793 S.E.2d 711, 720
( N.C. Ct. App. 2016). “A practice is unfair when it
offends established public policy as well as when the
practice is immoral, unethical, oppressive, unscrupulous, or
substantially injurious to consumers.” Elliott v.
Am. States Ins. Co., 883 F.3d 384, 396 (4th Cir. 2018)
(quoting Walker v. Fleetwood Homes of N.C., Inc.,
653 S.E.2d 393, 398 ( N.C. 2007)). Conduct in violation of
N.C. Gen. Stat. § 58-63-15(11) “'constitutes a
violation of N.C. G.S. § 75-1.1, as a matter of
law,' because ‘such conduct is inherently unfair,
unscrupulous, immoral, and injurious to
consumers.'” Id. (quoting Gray v. N.C.
Ins. Underwriting Ass'n, 529 S.E.2d 676, 683 ( N.C.
2000) & Country Club of Johnston Cty., Inc. v. U.S.
Fid. & Guar. Co., 563 S.E.2d 269, 278 ( N.C. Ct.
App. 2002)); see also Country Club of Johnston Cty.,
563 S.E.2d at 279 (recognizing that “the types of
conduct prohibited by N.C. Gen. Stat. §
58-63-15(11)” are “examples of conduct which
would constitute an unfair and deceptive act or
although Lockhart alleges that State Farm failed “to
acknowledge and act reasonably promptly upon communications
with respect to claims arising under insurance
policies”, (Compl. ¶ 18.a.), prohibited conduct
under N.C. Gen. Stat. § 58-63-15(11)(b), there are no
supporting factual allegations. Likewise, while Lockhart
alleges that State Farm refused “to pay claims without
conducting a reasonable investigation based upon all
available information”, (Compl. ¶ 18.b.),
prohibited conduct under N.C. Gen. Stat. §
58-63-15(11)(d), there are simply no factual allegations to
support such an assertion.
further alleges that State Farm failed “to affirm or
deny coverage of claims within a reasonable time after
proof-of-loss statements have been completed”, (Compl.
¶ 18.c.), prohibited conduct under N.C. Gen. Stat.
§ 58-63-15(11)(e). However, there are no facts about
when Lockhart submitted her proof of loss statements or when
State Farm did or did not act such that it could be
reasonably inferred that State Farm failed to act in a
reasonable period of time.
also alleges that State Farm did not attempt “in good
faith to effectuate prompt, fair and equitable settlements of
claims in which liability has become reasonably clear”,
(Compl. ¶ 18.d.), prohibited conduct under N.C. Gen.
Stat. § 58-63-15(11)(f). Although she alleges that State
Farm's liability under the policy became reasonably clear
on or before August 14, 2017 and that State Farm
“embarked upon a course of conduct designed to
artificially create an excuse, first, to delay payment . . .
and then, to deny the aforesaid claim”, there are no
factual allegations of what State Farm actually did or did
not do with respect to settling the claim that would support
a reasonable inference that State Farm failed to act in good
faith in doing so.
Lockhart alleges that State Farm failed “to promptly
provide a reasonable explanation of the basis in the
insurance policy in relation to the facts or applicable law
for denial of a claim or for the offer of a compromise
settlement”, (Compl. ¶ 18.e.), prohibited conduct
under N.C. Gen. Stat. § 58-63-15(11)(n). Not only are
there no facts to support this assertion, but Lockhart
alleges that State Farm did tell her why it denied her claim
- because she “had not cooperated or otherwise provided
truthful information relating to her claim”, (Compl.
although Lockhart identifies specific prohibited conduct in
which she alleges State Farm participated, the factual
allegations do not allow the court to draw the reasonable
inference that State Farm committed these, or any other,
unfair or deceptive trade practices.
reasons explained above, IT IS HEREBY ORDERED that Defendant
State Farm Fire and Casualty Company's Motion to Dismiss
Plaintiff's Unfair and Deceptive Trade Practices Claim
[Doc. #9] be GRANTED.