United States District Court, W.D. North Carolina, Statesville Division
D. Whitney, Chief United States District Judge
MATTER is before the Court on Defendant's Motion to
Dismiss (Doc. No. 16) Plaintiff's Amended Complaint (Doc.
No. 13), pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure for failing to state a claim upon which
relief can be granted. Plaintiff responded in a timely manner
(Doc. No. 19). For the reasons stated below, the Court DENIES
Defendant's Motion to Dismiss Count IV.
Eileen Hunter (“Plaintiff”) alleges causes of
action arising out of Defendant State Farm Fire and Casualty
Company's (“Defendant”) repeated denial of
Plaintiff's insurance claims. According to the Amended
Complaint,  Plaintiff has a Homeowners Insurance
policy (“the Policy”) with Defendant on a house
which has experienced extensive water and structural damage.
(Doc. No. 13, 3-5, ¶¶ 7-17). Plaintiff filed claims
in 2009, 2013, 2014, 2015, and 2016, and Defendant denied all
of them. (Doc. No. 13, at 4, ¶ 10; at 5, ¶¶
assessing Plaintiff's claims, Defendant retained Donan
Engineering Co., Inc. (“Donan”), an engineering
firm, to inspect the structure and file reports (“Donan
reports”) concerning Donan's findings. (Doc. No.
13, at 11, ¶ 32). The Donan reports attributed the water
damage to improperly installed window trim, deteriorating
window sealant, which continuously led to more leakage,
deterioration and rot. (Doc. No. 13, at 5-6, ¶ 20). The
2014 Donan report stated, “[t]he basement has three
sets of windows and doors on the east side, ” and the
“central door . . . was not operable due to a sagging
header, and the sills and the top of the board have some
water stains.” (Doc. No. 13-14, at 5). Further, it
detailed, “[t]he long-term intrusion has also resulted
in wood rot that has weakened the horizontal members between
the living room windows and the basement window and door
headers, ” and recommended that the wall be
“exposed to properly determine the extent of structural
damage.” (Doc. No. 13-14, at 6).
hired a construction consultant in 2015, who tore open the
walls and reported the “structural members supporting
the windows had failed as a result of the hidden decay to
those members” and certain parts of those
“members had caved in causing certain parts of the home
to be uninhabitable without causing a catastrophic failure of
the entire wall resulting in additional property damage and
potential bodily injury.” (Doc. No. 13, at 4-5, ¶
“at the recommendation of experts moved out of the home
because it had become dangerously uninhabitable.” (Doc.
No. 13, at 9-10, ¶ 25). In between March and November of
2016, Plaintiff made repairs to the home, which cost a total
of $308, 564.96. (Doc. 13, at 10, ¶ 28-29).
alleges multiple causes of action, including: (1) the
Policy's language supports Plaintiff's
interpretation; (2) the Policy's language is ambiguous,
and as a result, the Policy covers repair costs to
Plaintiff's home; (3) Breach of Contract; and (4) Unfair
and Deceptive Trade Practices (“UDTP”). For these
claims, Plaintiff seeks damages in the amount of at least
$308, 564.96, plus attorney's fees and court costs, (Doc.
No. 13, at 17-18, ¶ 54), (Doc. No. 13, at 20-21, ¶
70), (Doc. No. 13, at 28-29, ¶ 96), except as to the
Breach of Contract claim, which Plaintiff requests this Court
to enter a judgment in favor of plaintiff for at least $50,
000 and costs of the suit, (Doc. No. 13, at 22, ¶ 78).
Defendant moves the Court to dismiss Plaintiff's fourth
claim alleging UDTP under Federal Rule of Civil Procedure
STANDARD OF REVIEW
purpose of a Rule 12(b)(6) motion is to test the sufficiency
of a complaint"-"not resolve contests surrounding
the facts, the merits of a claim, or the applicability of
defenses." Edwards v. City of Goldsboro, 178
F.3d 231, 243(4th Cir. 1999) (quoting Republican Party v.
Martin, 980 F.2d 943, 952 (4th Cir. 1992)). The court
accepts all well-pleaded allegations in the complaint as true
and draws all reasonable factual inferences from those facts
in the plaintiff's favor. Edwards, 178 F.3d at
244 (citations omitted); see also Mylan Labs., Inc. v.
Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993) (“In
considering a motion to dismiss, the court should accept as
true all well-pleaded allegations and should view the
complaint in a light most favorable to the
plaintiff.”). Well-pleaded allegations "must
contain sufficient factual matter . . . to 'state a claim
to relief that is plausible on its face.'"
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007)). "A claim has facial plausibility when the
plaintiff pleads sufficient factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Iqbal, 556
U.S. at 678 (citing Twombly, 550 U.S. at 556). While
the Court accepts plausible factual allegations in the
complaint as true and considers those facts in the light most
favorable to a plaintiff in ruling on a motion to dismiss, a
court "need not accept as true unwarranted inferences,
unreasonable conclusions, or arguments." E. Shore
Mkt.'s Inc. v. J.D. Assoc.'s, LLP, 213 F.3d 175,
180 (4th Cir. 2000).
and deceptive trade practices are generally prohibited by
North Carolina's Unfair and Deceptive Trade Practices Act
(“UDTPA”). N.C. Gen. Stat. § 75-1.1; see
also N.C. Gen. Stat. § 58-63-15(11) (defining
unfair practices in the settlement of insurance claims).
While § 75-1.1 provides a private cause of action for
violations, § 58-63-15(11) does not. Instead, “the
remedy for a violation of [§] 58-63-15 is the filing of
a [§] 75-1.1 claim.” Country Club of Johnston
Cty., Inc. v. U.S. Fid. & Guar. Co., 150 N.C.App.
231, 244, 563 S.E.2d 269, 278 (2002). Thus, an individual may
file an independent § 75-1.1 claim, or may file a §
75-1.1 claim that relies on a violation of §
58-63-15(11). Elliott v. Am. States Ins. Co., 883
F.3d 384, 396 (4th Cir. 2018) (citing Gray v. N.C. Ins.
Underwriting Ass'n, 352 N.C. 61, 529 S.E.2d 676, 684
N.C. Gen. Stat. § 75-1.1, the three elements for a UDTP
claim are "(1) defendant committed an unfair or
deceptive act or practice, (2) the action in question was in
or affecting commerce, and (3) the act proximately caused
injury to the plaintiff." Dalton v. Camp, 353
N.C. 647, 656, 548 S.E.2d 704, 711 (2001). “Under the
UDTPA, the occurrence of the alleged conduct, damages, and
proximate cause are fact questions for the jury.”
ABT Bldg. Prod. Corp. v. Nat'l Union Fire Ins. Co. Of
Pittsburgh, 472 F.3d 99, 122-23 (4th Cir. 2006). The
determination that a trade practice is unfair or deceptive is
a question of law for the court. Elliott, 883 F.3d
at 396 (4th Cir. 2018) (quoting Gray, 352 N.C. at
68, 529 S.E.2d at 681). “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, 883 F.3d at 396 (quoting Walker v.
Fleetwood Homes of N.C., Inc., 362 N.C. 63, 653 S.E.2d
393, 398 (2007)). The determination that a trade practice is
unfair or deceptive "depends upon the facts of [the]
case and the impact the practice has in the
marketplace." Marshall v. Miller, 302 N.C. 539,
548, 276 S.E.2d 397, 403 (1981) (citation omitted). “As
a result, the intent of the actor is not relevant and the
‘unfairness and deception is gauged by considering the
effect of the practice on the marketplace' and the
‘consuming public.'" Legacy Data Access,
LLC v. Mediquant, Inc., 2017 WL 6001637, *7 (W.D.N.C
Dec. 04, 2017) (quoting Marshall, 302 N.C. at 548,
276 S.E.2d at 403 (1981) (citation omitted).
although N.C. Gen. Stat. § 58-63-15(11) requires a
showing of a ‘frequency indicating a general business
practice, a claim brought under the UDTPA does not require a
frequency showing.'” Majstorovic v. State Farm
Fire & Cas. Co., 2018 WL 1473427, at *4 (E.D. N.C.
Mar. 24, 2018) (quoting Gray, 529 S.E.2d at 683).
No. showing is required because conduct in violation of
§ 58-63-15(11) also violates N.C. G.S. § 75-1.1 as
a matter of law, as “such conduct is inherently unfair,
unscrupulous, immoral, and injurious to consumers.”
Elliott, 883 F.3d at 396 (citing Gray, 529
S.E.2d at 683 (applying ...