Avent et al v. State Farm Fire and Casualty Company
Filing
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ORDER denying 6 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 11 Motion to Amend; denying 17 Motion to Strike. Plaintiffs shall file not later than November 14, 2016, an amended complaint reflecting the additional factual matter as alleged in the amended complaint filed on August 31, 2016. Signed by District Judge Terrence W. Boyle on 10/21/2016. Certified copy sent to pro se plaintiff via US Mail to 701 Hammond Street, Rocky Mount, NC 27804. (Stouch, L.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:16-CV-278-BO
VERNIECEE WHITAKER AVENT and
the ESTATE OF LUCINDA ALSTON
WHITAKER,
Plaintiffs,
v.
STATE FARM FIRE AND CASUALTY,
Defendant.
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ORDER
This cause comes before the Court on defendant’s motion to dismiss, plaintiffs’ motion to
amend their complaint, and defendant’s motion to strike. The appropriate responses and replies
having been filed or the time for doing so having expired, the matters are now ripe for ruling.
For the reasons discussed below, defendant’s motions to dismiss and to strike are denied and
plaintiff’s motion to amend is granted in part.
BACKGROUND
Plaintiffs, proceeding pro se, filed this action in Nash County Superior Court alleging that
a home located at 707 Hammond Street in Rocky Mount, North Carolina incurred fire damage
and that at the time of the damage plaintiff1 had in full force and effect a written insurance policy
with defendant. Plaintiff alleges that all premiums have been paid and that plaintiff has fully
performed or been excused from performing all terms and conditions required by the policy.
Plaintiff seeks a declaration that defendant is obligated to pay all sums up to the policy limits as
well as allowable punitive damages for plaintiff’s claim.
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Although two plaintiffs are named in the complaint, the body of the complaint refers to a
singular plaintiff.
On May 20, 2016, defendant removed the action to this Court pursuant to its diversity
jurisdiction. 28 U.S.C. §§ 1332; 1441. Defendant then moved to dismiss the complaint for
failure to state a claim upon which relief could be granted. Fed. R. Civ. P. 12(b)(6). Plaintiff
responded to the motion to dismiss and also filed a motion to amend the complaint. Thereafter
plaintiff filed an amended complaint, which defendant has moved to strike.
DISCUSSION
The Court considers first plaintiffs’ motion to amend the complaint. Rule 15(a)(2) of the
Federal Rules of Civil Procedure provides that “a party may amend the party’s pleading only by
leave of court or by written consent of the adverse party; and leave shall be freely given when
justice so requires.” See also Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999)
(noting that the Supreme Court has declared that courts must heed the directive of Rule 15(a) that
leave to amend be freely given). A court should only deny leave to amend a pleading when the
amendment would be prejudicial to the opposing party, where there has been bad faith on the
part of the moving party, or when the amendment would be futile. Johnson v. Oroweat Foods
Co., 785 F.2d 503, 509 (4th Cir. 1986) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
Plaintiffs seek to amend their complaint to add a claim under the Racketeer Influenced
and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962, a claim for fraud, and a claim for
unfair and deceptive trade practices (UDTP). N.C. Gen. Stat. § 75-1.1. The Court agrees with
defendant that the addition of these claims would be futile. 2 A RICO plaintiff must “adequately
plead at least two predicate acts of racketeering that form a pattern of racketeering” in order to
state a claim. Am. Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 233 (4th Cir.
2004) (internal quotation and citation omitted). A racketeering activity is defined to include,
2
There has been no assertion that the proposed amendments were made in bad faith or would
prejudice defendants.
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inter alia, murder, kidnapping, extortion, wire fraud, and witness tampering. 18 U.S.C. §
1961(1). Although plaintiffs make brief mention of extortion by defendant, they have failed to
plausibly allege at least two predicate acts of racketeering and thus allowing an amendment to
include such claim would be futile. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (a
complaint must allege enough facts to state a claim for relief that is facially plausible).
Plaintiffs also appear to seek to allege a claim for fraud in the selling of the insurance
policy and in handling plaintiffs’ claims. A claim for fraud must satisfy a heightened pleading
standard, Fed. R. Civ. P. 9(b); Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784
(4th Cir. 1999), which plaintiffs’ conclusory allegations do not do.
Plaintiffs have further failed to sufficiently allege a UDTP claim. In the context of
insurance, the North Carolina Unfair and Deceptive Trade Practices Act is violated if an insurer
employs unfair methods of competition or engages in unfair and deceptive acts as set out in
N.C.Gen. Stat. § 58-63-15(11). See ABT Bldg. Prod. Corp. v. Nat’l Union Fire Ins. Co. Of
Pittsburgh, 472 F.3d 99, 123 (4th Cir. 2006); Gray v. N. Carolina Ins. Underwriting Ass’n, 352
N.C. 61, 71 (2000). Plaintiffs have alleged, inter alia, that defendant misrepresented pertinent
facts by failing to provide an accurate copy of the policy on request, failed to acknowledge and
act reasonably promptly on communications by failing to respond to plaintiffs’ repeated requests,
failed to affirm or deny coverage within a reasonable time, and failed to attempt in good faith to
effectuate prompt and fair settlement of claims in which liability has become clear. N.C.Gen.
Stat. § 58-63-15(11)(g). Even construing plaintiffs’ pro se claim liberally as it must, Erickson v.
Pardus, 551 U.S. 89, 94 (2007), the Court finds that plaintiffs’ allegations are conclusory and fail
to allege conduct which would demonstrate sufficiently substantial aggravating circumstances to
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support an unfair and deceptive trade practice claim. Broussard v. Meineke Discount Muffler
Shops, 155 F.3d 331, 347 (4th Cir. 1998).
The Court has also reviewed the allegations set forth in the amended complaint filed by
plaintiffs without leave and finds that it provides sufficient enhancement to plaintiff’s breach of
insurance contract claim to survive the motion to dismiss. A claim for breach of contract
requires a showing of a valid contract and breach, and when the contract is an insurance contract
the insured has the burden of bringing itself within the language of the policy. Nelson v.
Hartford Underwriters Ins. Co., 177 N.C. App. 595, 606 (2006). Plaintiffs have alleged that the
complaint arises out of property damage and loss from a fire which occurred on the insured
property, that plaintiff was insured at the time of the fire under a home owner’s liability policy
issued by defendant, and that all premiums had been paid and that plaintiff had fully performed
or been excused from performing all terms and conditions required by the policy. Plaintiffs
further allege that defendant has been negligent of its duties under the terms of the policy. The
Court finds that when liberally construed, plaintiffs’ claim for breach of insurance contract states
a claim for relief. Accordingly, the Court grants plaintiffs’ motion to amend in part and denies
defendant’s Rule 12(b)(6) motion.
Finally, the Court addresses an issue not raised by defendant. This action was brought by
two plaintiffs, Ms. Avent, presumably on behalf of herself, and the Estate of Lucinda Whitaker
on behalf of itself. Although Ms. Avent has referred to herself as administrator in the original
complaint, it is not clear from the filings whether Ms. Avent seeks to proceed on behalf of the
plaintiff Estate as its administrator. “Although the Fourth Circuit has not yet directly addressed
the issue of whether or under what circumstances a Plaintiff may proceed pro se on behalf of an
estate, other circuits have held that where an administrator or executor of an estate is not the sole
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beneficiary or where the estate has creditors, then he or she may not represent the estate pro se in
federal court." McAdoo v. United States, No. 1:12CV328, 2014 WL 359043, at *1 (W.D.N.C.
Feb. 3, 2014).
Here, there is no indication that Ms. Avent is the administrator of the plaintiff Estate or
whether there are other beneficiaries or creditors involved. Ms. Avent shall therefore respond to
this order not later than November 14, 2016, and clarify her suitability to proceed on behalf of
the plaintiff Estate or otherwise retain counsel.
CONCLUSION
For the foregoing reasons, defendant's motion to dismiss [DE 6] is DENIED. Plaintiffs'
motion to amend the complaint [DE 11] is GRANTED IN PART and DENIED IN PART.
Plaintiffs shall file not later than November 14, 2016, an amended complaint reflecting the
additional factual matter as alleged in the amended complaint filed on August 31, 2016. Plaintiff
Avent shall by the same date respond to this order as directed above regarding the propriety of
Ms. Avent proceeding on behalf of the plaintiff Estate. The clerk is DIRECTED to amend the
docket to reflect that the amended complaint filed at docket entry sixteen is a proposed amended
complaint. Defendant's motion to strike [DE 17] is DENIED.
SO ORDERED, this
)1 day of October, 2016.
T RRENCE W. BOYLE
UNITED STATES DISTRI
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JUDGE
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