Barbour v. Fid. Life Ass'n, 5:18-CV-76-D

• Decision Date: 08 January 2019
• Docket Number: No. 5:18-CV-76-D,5:18-CV-76-D
• Citation: 361 F.Supp.3d 565
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: Marie BARBOUR, Plaintiff, v. FIDELITY LIFE ASSOCIATION, Defendant.

361 F.Supp.3d 565

Marie BARBOUR, Plaintiff,

v.FIDELITY LIFE ASSOCIATION, Defendant.

No. 5:18-CV-76-D

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

Signed January 8, 2019

J. Michael Malone, Hendren, Redwine & Malone, PLLC, Raleigh, NC, for Plaintiff.

Katherine L. Villanueva, Drinker Biddle & Reath LLP, Philadelphia, PA, John M. Sperati, Smith Debnam Narron Drake Saintsing & Myers, L.L.P., Raleigh, NC, for Defendant.

ORDER

JAMES C. DEVER III, United States District Judge

On January 24, 2018, Marie Barbour ("Barbour" or "plaintiff") filed a complaint against Fidelity Life Association ("Fidelity Life" or "defendant") in Johnston County Superior Court for breach of contract and violations of North Carolina's Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen. Stat. § 75-1 etseq. [D.E. 1-2]. On February 23, 2018, Fidelity Life removed the action to this court [D.E. 1]. On September 27, 2018, Fidelity Life moved for summary judgment on both claims [D.E. 16], filed a statement of material facts [D.E. 17] and filed a memorandum in support [D.E. 18]. On October 15, 2018, Barbour responded in opposition [D.E. 22]. On November 2, 2018, Fidelity Life replied [D.E. 24]. As explained below, the court grants Fidelity Life's motion for summary judgment.

I.

On October 7, 2017, James Barbour tragically drowned while attempting to save two people in the Atlantic Ocean off the North Carolina coast. See [D.E. 17] ¶ 1; [D.E. 20] ¶ 1. When he died, James Barbour was insured under an accidental death policy that Fidelity Life issued. [D.E. 17] ¶ 2. Marie Barbour, his wife, was the primary beneficiary. [D.E. 17] ¶¶ 2–3; Villanueva Decl., Ex. 1 [D.E. 19] 30–37. On October 23, 2017, Barbour—who at the time of his death was separated from James Barbour—called Fidelity Life and reported his death. See [D.E. 17] ¶ 4. On October 25, 2017, Fidelity Life erroneously informed Barbour that her husband's death was not covered by the policy because he died of natural causes, rather than due to an accident. See id. ¶ 5; Calgaro Decl., Ex. 1 [D.E. 19] 8. Although Fidelity Life characterizes this statement as "inadvertent," Barbour disputes that this statement was an innocent mistake. See [D.E. 17]; [D.E. 20] ¶ 5; Calgaro Decl. [D.E. 19] ¶ 5–6. In the same letter, Fidelity Life requested that Barbour complete a claim form to receive a refund of unearned premiums and submit documentation of her husband's death. See [D.E. 17] ¶ 5; Calgaro Decl., Ex. 1 [D.E. 19] 8. On November 21, 2017, Fidelity Life received the completed claim form. See [D.E. 17] ¶ 6; Calgaro Decl. [D.E. 19] ¶ 8. After receiving the claim form, Fidelity Life began investigating Barbour's claim and the circumstances of James Barbour's death. See [D.E. 17] ¶¶ 7–8. Fidelity Life retained Diligence International Group ("Diligence") to investigate Barbour's claim. See id. ¶ 8.

Fidelity Life updated Barbour concerning its review of her claim at regular intervals during the investigation. See id. ¶ 15. On November 22, 2017, December 12, 2017, and January 15, 2018, Fidelity Life "advised [Barbour] of the status of her claim." Id.; Calgaro Decl. [D.E. 19] ¶¶ 12–16; Calgaro Decl., Ex. 4 [D.E. 19] 18–20. During this time, Diligence investigated Barbour's claim. The investigation included interviewing Barbour on December 11, 2017, and obtaining various medical records concerning James Barbour's death. See [D.E. 17] ¶¶ 8, 10–11, 14, 16; Calgaro Decl., Ex. 2 [D.E. 19] 10–11; Calgaro Decl., Ex. 3 [D.E. 19] 13–16.

On December 18, 2017, Barbour consulted a lawyer to evaluate her legal options. See Ex. 3 [D.E. 21] 43. On January 10, 2018, Barbour filed this action in state court. See Ex. 1 [D.E. 21] 8. On January 24, 2018, Barbour filed an amended complaint seeking relief for breach of contract and UDTPA violations [D.E. 1-2]. On February 2, 2018, Barbour served her complaint on Fidelity Life. See [D.E. 18] 9.

On February 5, 2018, Diligence submitted its final report to Fidelity Life. See [D.E. 17] ¶ 17; Calgaro Decl. [D.E. 19] ¶ 19; Calgaro Decl., Ex. 5 [D.E. 19] 22–27. On February 5, 2018, Fidelity Life paid Barbour the full accidental death benefit, plus interest, in a total amount of $ 504,226.33. Compare [D.E. 17] ¶ 20, and Calgaro Decl. [D.E. 19] ¶ 20, with [D.E. 20] ¶ 20. On September 27, 2018, Fidelity Life moved for summary judgment [D.E. 16].

II.

In considering a motion for summary judgment, the court views the evidence in the light most favorable to the nonmovant and applies well-established principles under Rule 56 of the Federal Rules of Civil Procedure. See, e.g., Fed. R. Civ. P. 56 ; Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) ; Celotex Corp. v. Catrett, 477 U.S. 317, 325–26, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–55, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see Anderson, 477 U.S. at 247–48, 106 S.Ct. 2505. The party seeking summary judgment must demonstrate an absence of a genuine issue of material fact. See Celotex Corp., 477 U.S. at 325, 106 S.Ct. 2548. Once the moving party has met its burden, the nonmoving party then must demonstrate that there exists a genuine issue of material fact for trial. See Matsushita, 475 U.S. at 587, 106 S.Ct. 1348. "[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249, 106 S.Ct. 2505. Conjectural arguments will not suffice. See id. at 249–52, 106 S.Ct. 2505 ; Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985) ("The nonmoving party ... cannot create a genuine issue of material fact through mere speculation or the building, of one inference upon another."). Likewise, a "mere ... scintilla of evidence in support of the [nonmoving party's] position [will not suffice]; there must be evidence on which the [fact finder] could reasonably find for the [nonmoving party]."

Anderson, 477 U.S. at 252, 106 S.Ct. 2505 ; see Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 962 (4th Cir. 1996).

Subject-matter jurisdiction is based on diversity of citizenship, and the court applies state substantive law and federal procedural rules. See Erie R.R. v. Tompkins, 304 U.S. 64, 78–80, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ; Dixon v. Edwards, 290 F.3d 699, 710 (4th Cir. 2002). North Carolina law applies to both claims. See Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 601 (4th Cir. 2004) ; Tanglewood Land Co. v. Byrd, 299 N.C. 260, 261 S.E.2d 655, 656 (1980). Accordingly, this court must predict how the Supreme Court of North Carolina would rule on any disputed state-law issue. See Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt Beverage Co. of S.C., 433 F.3d 365, 369 (4th Cir. 2005) ; Romfo v. Scottsdale Ins. Co., No. 5:17-CV-422-D, 2017 WL 6611511, at *2 (E.D.N.C. Dec. 27, 2017) (unpublished). In doing so, the court must look first to opinions of the Supreme Court of North Carolina. See Twin City Fire Ins. Co., 433 F.3d at 369. If there are no governing opinions from that court, this court may consider the opinions of the North Carolina Court of Appeals, treatises, and "the practices of other states." Id. (quotation omitted).

A.

To prove breach of contract under North Carolina law, a plaintiff must show (1) the existence of a valid contract, and (2) a breach of the terms of the contract. See McLamb v. T.P. Inc., 173 N.C. App. 586, 588, 619 S.E.2d 577, 580 (2005), disc. rev. denied, 360 N.C. 290, 627 S.E.2d 621 (2006) ; Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000) ; LRP Hotels of Carolina, LLC v. Westfield Ins. Co., No. 4:13-CV-94-D, 2014 WL 5581049, at *2 (E.D.N.C. Oct. 31, 2014) (unpublished). A breach of contract occurs when there is "non-performance, unless the person charged shows some valid reason which may excuse the non-performance; and the burden of doing so rests upon him." Abbington SPE, LLC v. U.S. Bank, Nat'l Ass'n, No. 7:16-CV-249-D, 352 F.Supp.3d 508, 516–17, 2016 WL 6330389, at *4 (E.D.N.C. Oct. 27, 2016) (unpublished) (alterations and quotations omitted), aff'd, 698 F. App'x 750 (4th Cir. 2017) (per curiam) (unpublished). An insurance policy is a contract, and the policy's provisions govern the rights and duties of the contracting parties. See Gaston Cty. Dyeing Mach. Co. v. Northfield Ins. Co., 351 N.C. 293, 299, 524 S.E.2d 558, 563 (2000) ; C.D. Spangler Constr. Co. v. Indus. Crankshaft & Eng'g Co., 326 N.C. 133, 142, 388 S.E.2d 557, 562 (1990). The insured party "has the burden of bringing itself within the insuring language of the policy." Cleveland Constr., Inc. v. Fireman's Fund Ins. Co., 819 F.Supp.2d 477, 481 (W.D.N.C. 2011) (quotation omitted).

Under North Carolina law, interpreting a written insurance contract is a question of law for the court. See Briggs v. Am. & Efird Mills, Inc., 251 N.C. 642, 644, 111 S.E.2d 841, 843 (1960) ; N.C. Farm Bureau Mut. Ins. Co. v. Mizell, 138 N.C. App. 530, 532, 530 S.E.2d 93, 95 (2000). When interpreting a written insurance policy, "the goal of construction is to arrive at the intent of the parties when the policy was issued." Gaston Cty., 351 N.C. at 299, 524 S.E.2d at 563 (quotation omitted); see Stewart Eng'g, Inc. v. Cont'l Cas. Co., No. 5:15-CV-377-D, 2018 WL 1403612, at *3–4 (E.D.N.C. Mar. 20, 2018) (unpublished), aff'd, No. 18-1386, 751 Fed.Appx. 392, 2018 WL 5832805 (4th Cir. Nov. 7, 2018) (per curiam) (unpublished); Plum Props., LLC v. N.C. Farm Bureau Mut. Ins. Co., 802 S.E.2d 173, 175 (N.C. Ct. App. 2017). Moreover, courts construe coverage provisions broadly and exclusionary provisions narrowly. See Plum Props., 802 S.E.2d at 175–76.

As for Barbour's...