McDaniel v. Liberty Mut. Ins. Co.

• Decision Date: 19 January 2023
• Docket Number: 3:21-cv-00610-FDW-DSC
• Parties: TIGRESS SYDNEY ACUTE MCDANIEL, Plaintiff, v. LIBERTY MUTUAL INSURANCE COMPANY et al., Defendants.
• Court: U.S. District Court — Western District of North Carolina

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TIGRESS SYDNEY ACUTE MCDANIEL, Plaintiff, v. LIBERTY MUTUAL INSURANCE COMPANY et al., Defendants.

No. 3:21-cv-00610-FDW-DSC

United States District Court, W.D. North Carolina, Charlotte Division

January 19, 2023

ORDER

Frank D. Whitney, United States District Judge.

THIS MATTER is before the Court on Defendants' Motions to Dismiss Plaintiff's Third Amended Complaint (“TAC”), (Docs. Nos. 96, 102) for Failure to State a Claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. These motions have been fully briefed and are ripe for review. For the reasons set forth below, the Liberty Mutual Defendants'^[1] (“LM”) Motion to Dismiss is GRANTED and Plaintiff's claims against LM are DISMISSED WITH PREJUDICE; Defendant MIB Group, Inc.'s (“MIB”) Motion to Dismiss is GRANTED IN PART with respect to Plaintiff's claims under 42 U.S.C. § 1981, 42 U.S.C. § 1986, North Carolina gross negligence law, North Carolina defamation law, and § 1681e(b) of the Fair Credit Reporting Act (“FCRA”),^[2]which are DISMISSED WITH PREJUDICE, and DENIED IN PART with regard to Plaintiff's claims under § 1681g(a)(1) and § 1681i(a) of the FCRA.

I. Background

On June 2, 2022, pro se^[3] Plaintiff Tigress McDaniel (“Plaintiff”) filed her TAC against Defendants LM and MIB (collectively “Defendants”). (Doc. No. 91). In her TAC, Plaintiff asserts five causes of action: (1) the violation of her rights under 42 U.S.C. § 1981; (2) the violation of her rights under 42 U.S.C. § 1986; (3) violations of the FCRA; (4) Gross and Vicarious Negligence under North Carolina law; and (5) Defamation under North Carolina law. (Id. at 3).

In 2019, Plaintiff sought and received renter's and car insurance from LM, which she subsequently terminated due to her suspicion of discriminatory underwriting practices resulting in unfairly high premiums. Id. at 3-4. Specifically, Plaintiff alleges that, as an “African American or Black or Black American or Diasporan African, of Haitian and Native American dissent,” she was subjected to unlawful “[i]nsurance racial stratification” by Defendants. Id. at 6, 14. On September 9, 2019 Plaintiff alleges she received notice from credit bureaus of an outstanding debt of $434.00 to LM. Id. at 4. Plaintiff originally disputed this balance with Defendants and, after being denied a life insurance policy from United of Omaha Life Insurance Company due to her criminal record, requested full disclosure of her MIB Consumer File. Id. On March 24, 2021, Plaintiff received a copy of her MIB Consumer File, which she alleges contained “wholly or partially falsified, inaccurate and/or otherwise misrepresentatively [sic] duplicative reports of criminal activity in her file,” as well as the disputed debt, which had been furnished to MIB by LM. Id. at 4-5. Plaintiff was convicted of Identity Theft and Obtaining Property by False Pretenses in Cabarrus County in 2006. Id. at 15. Plaintiff mentions a defamation suit she alleges to have filed in connection with the Charlotte Observer's reporting on her convictions, but she does not mention any direct appeal of these convictions. Id. Plaintiff submitted new disputes to Defendants on July 15, 2021, and subsequently filed her original complaint on November 10, 2021, (Doc. No. 1), after LM ‘“maintain[ed] its position”' on the $434.00 balance and MIB failed to respond to her dispute. (Doc. No. 91, p. 5).

This Court granted Plaintiff's request to proceed in forma pauperis, (Doc. No. 2), and during its subsequent review,^[4] dismissed without prejudice plaintiff's § 1985 and § 1986 claims against all defendants, as well as Plaintiff's FCRA claim against LM, while allowing Plaintiff's FCRA claim against MIB and her negligence claims against Defendants to proceed.^[5] (Doc. No. 4, § III). Plaintiff's first Motion for Leave to Amend her Original Complaint was granted on February 2, 2022. (Doc. No. 40). Plaintiff filed her First Amended Complaint on March 3, 2022, (Doc. No. 41). This Court construed her Second Amended Complaint, (Doc. No. 86), as a Motion for Leave to Amend, which the Court granted with caution to Plaintiff that “she will not be given a third opportunity to amend her complaint absent extraordinary circumstances.” (Doc. No. 90, p. 3).

On June 3, 2022, Plaintiff filed her TAC. (Doc. No. 91). Defendants LM moved to Dismiss Plaintiff's TAC on June 16, 2022, (Docs. Nos. 96, 97), and Defendant MIB moved to Dismiss Plaintiff's TAC on July 7, 2022. (Docs. Nos. 102, 103). Plaintiff responded to LM's Motion to Dismiss on July 15, 2022, (Doc. No. 105), and LM filed its Reply on July 21, 2022, (Doc. No. 109). Plaintiff responded to MIB's Motion to Dismiss on July 22, 2022, (Doc. No. 110), and MIB filed its reply on July 28, 2022, (Doc. No. 112). Plaintiff also filed two Motions for Leave to File Sur-Reply, (Docs. Nos. 111, 113), which this Court denied.^[6]

II. Standard of Review

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that a motion may be dismissed for failure to state a claim upon which relief can be granted. A Rule 12(b)(6) inquiry is limited to determining if the pleader's allegations constitute “a short and plain statement of the claim showing the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a 12(b)(6) motion to dismiss, Plaintiff's “complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists only when the factual content allows a court to draw the reasonable inference that the defendant is liable for the misconduct. Iqbal 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). The Court must draw all reasonable factual inferences in favor of the party asserting the claim. Priority Auto Grp., Inc. v. Ford Motor Co., 757 F.3d 137, 139 (4^th Cir. 2014).

In a Rule 12(b)(6) analysis, the Court must separate facts from legal conclusions, as mere conclusions are not entitled to a presumption of truth. Iqbal, 556 U.S. at 678. Importantly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. However, well-pled factual allegations are entitled to a presumption of truth, and the court should determine whether the allegations plausibly give rise to an entitlement to relief. Id. at 679.

Complaints written by pro se plaintiffs are construed liberally in favor of the plaintiff, so courts will hold a pro se plaintiffs' documents “to a less stringent standard than those drafted by attorneys.” See Smith v. Greenville Cnty. Sch. Dist., No. 6:10-2478, 2010 WL 4484099 at *1 (Oct. 5, 2010) (citing Erickson v. Pardus, 551 U.S. 89 (2007); Estelle v. Gamble, 429 U.S. 97 (1976)). However, even under this less stringent standard, “the pro se complaint is subject to summary dismissal” if the court is unable to “reasonably read the pleadings to state a valid claim on which plaintiff could prevail” without “constructing] plaintiff's legal arguments for her.” Id. (citing Small v. Endicott, 988 F.2d 411, 417-18 (7th Cir. 1993). To survive a Rule 12(b)(6) motion, a pro se complaint must allege sufficient facts to support all the legal elements of the claim. Bass v. E.I. Dupont de Nemours & Co., 324 F.3d 761 (4th Cir. 2003) (“While a plaintiff is not charged with pleading facts sufficient to prove her case, as an evidentiary matter, in her complaint, a plaintiff is required to allege facts that support a claim for relief.” (emphasis in original)); see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”).

Finally, a court has the discretion to dismiss under Rule 12(b)(6) either with or without prejudice. See Ostrzenski v. Seigel, 177 F.3d 245, 252-53 (4th Cir. 1999). The Fourth Circuit has held that:

A dismissal under Rule 12(b)(6) generally is not final or on the merits and the court normally will give plaintiff leave to file an amended complaint. The federal rule policy of deciding cases on the basis of the substantive rights involved rather than on technicalities requires that plaintiff be given every opportunity to cure a formal defect in his pleading. This is true even though the court doubts that plaintiff will be able to overcome the defects in his initial pleading. Amendment should be refused only if it appears to a certainty that plaintiff cannot state a claim. The better practice is to allow at least one amendment regardless of how unpromising the initial pleading appears because except in unusual circumstances it is unlikely that the court will be able to determine conclusively on the face of a defective pleading whether plaintiff actually can state a claim.

Id. (quoting 5A Charles Allen Wright & Arthur R. Miller, Federal Practice and Procedure § 1357, at 360-67 (2d ed. 1990)) (emphasis omitted). Thus, even where a plaintiff is proceeding pro se, a court may refuse to allow amendments to the pleadings where permitting proposed changes would be futile, and in such cases dismissal with prejudice is appropriate. Id.; see also Foman v. Davis, 371 U.S. 178, 182 (1962) (holding that permissible reasons for denying leave to amend pleadings include “repeated failure to cure deficiencies by amendments previously allowed . . . [and] futility of amendment”).

III. Analysis

Plaintiff in her TAC, asserts five claims for relief, stemming from violations under 42 U.S.C. § 1981, 42 U.S.C. § 1986, North Carolina defamation law, North Carolina gross negligence law, and the FCRA. Defendants move for dismissal of all Plaintiff's claim, arguing her TAC fails to state a claim for which relief can be granted. As such, the Court will address each...