Newman v. N.C. Ins. Underwriting Ass'n
| Decision Date | 17 February 2022 |
| Docket Number | 5:20-CV-610-FL |
| Parties | BARBARA NEWMAN, Plaintiff, v. NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION/NORTH CAROLINA JOINT UNDERWRITING ASSOCIATION, KELLOGG-MORGAN AGENCY, INC., NINA WETHINGTON, Defendants. |
| Court | U.S. District Court — Eastern District of North Carolina |
MEMORANDUM AND RECOMMENDATION
This matter is before the court on the motion by Defendants North Carolina Insurance Underwriting Association (“Defendant NCIUA”) and North Carolina Joint Underwriting Association (“Defendant NCJUA”) (collectively “NC Associations” or “Defendants”) to dismiss [DE-46] the complaint of pro se Plaintiff Barbara Newman (“Plaintiff”). Defendants move to dismiss Plaintiff's complaint for: (1) lack of personal jurisdiction resulting from insufficient process and insufficient service of process pursuant to Rules 12(b)(2), 12(b)(4), and 12(b)(5) of the Federal Rules of Civil Procedure; and (2) failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendants filed a memorandum in support of the motion to dismiss. [DE-47] Plaintiff responded in opposition [DE-49] and filed a declaration in support of the same [DE-50].[1] The time for filing responsive briefs has expired and the pending motion is ripe for adjudication. The motion was referred to the undersigned magistrate judge for a memorandum and recommendation pursuant to 28 U.S.C. § 636(b)(1). For the reasons set forth below, it is RECOMMENDED that Defendants' motion to dismiss for lack of personal jurisdiction be DENIED and the deadline for Plaintiff to perfect service be extended as provided below. Additionally, it is RECOMMENDED that Defendants' motion to dismiss for failure to state a claim be DENIED AS MOOT without prejudice.
On February 12, 2020, Plaintiff filed a complaint [DE-1] in the United States District Court for the District of New Jersey against the KM Agency, Nina Wethington, and Defendants. In her complaint, plaintiff alleges as follows:
In 2004, Plaintiff purchased a home in North Carolina with the intention of using the property as her retirement home. Compl. [DE-1] at ¶ 8. Plaintiff subsequently invested thousands of dollars into renovating the property in 2011 and 2012. Id. at ¶ 9. However, in 2013 Plaintiff decided to relocate to New Jersey to be closer to family. Id. at ¶ 10. Prior to relocating Plaintiff's property was insured by NC Associations.[2] Id. at ¶¶ 2, 11. Kellogg-Morgan Agency, Inc. (“KM Agency”) was the insurance agent for Plaintiff's policy. Compl. [DE-1] at ¶¶ 3, 11.
After relocating to New Jersey, Plaintiff was notified by either Defendants or the KM Agency that her insurance policy had been canceled due to the property being vacant. Id. at ¶ 11. As a result, Plaintiff sought to rent the property. Id. at ¶ 12. On December 1, 2015, Plaintiff began leasing the property to Nina Wethington. Id. After inspecting the property and verifying that the property was occupied by Ms. Wethington, Defendants through the KM Agency reinstated Plaintiff's insurance policy. Id. at ¶ 14. A “new” insurance policy was issued to Plaintiff by Defendants through the KM Agency on December 4 2017. Id. at ¶ 15. The declaration page for the policy stated:
Id. at Ex. B, at 1. Ms. Wethington continued to occupy the property at this time. Id. at ¶ 15.
During the first week of May 2018, Ms. Wethington contacted Plaintiff to inform her that the property had been burglarized in late April 2018. Id. at ¶¶ 21-22. Ms. Wethington also informed Plaintiff that she had filed a report about the burglary with local law enforcement at the Hertford County Sheriff's Office. Id. On May 10, 2018, a next-door neighbor of the property contacted Plaintiff to notify her that the property had been “gutted and turned into a shell.” Id. at ¶ 23. Five days later, on May 15, 2018, Plaintiff contacted the KM Agency to file an insurance claim for the loss and damage to her property. Id. at ¶ 24. On May 19, 2018, Ms. Wethington informed Plaintiff that she had surrendered the keys to the property to local law enforcement. Id. at ¶ 25. Plaintiff visited the property on May 23, 2018 and discovered that the property was no longer occupied. Id. at ¶ 26. Upon inspection, Plaintiff also discovered that the property “displayed malicious acts of vandalism, destruction and damage[, ]” and her personal property had been stolen. Id. Plaintiff blames Ms. Wethington for these acts. Id.
On May 24, 2018, an insurance adjuster sent by Defendants met with Plaintiff to assess the damage to her property. Id. at ¶ 29. Following the assessment, Plaintiff received a letter from Defendants dated June 29, 2018, denying her claim. Id. at ¶ 32. Among other things, the letter stated:
This is to confirm our discussion of June 28, 2018 in connection with the above reported vandalism claim. We have received and reviewed report prepared by the independent adjuster. The damage he observed appeared to be resulting from a remodel in process. Walls, flooring, fixtures and appliances have been moved or removed. New framing is in place for remodel. Bedrooms 2 & 3 have been open and combined. A report from the local Sheriff's Department was never produced.
Id. at Ex. E.
Following the denial of her claim, Plaintiff contacted the KM Agency by telephone on several occasions for further explanation of why coverage was denied. Id. at ¶ 35. Plaintiff also requested that the KM Agency forward her a copy of her declaration page and full insurance policy. Id. at ¶ 36. On August 3, 2018, in response to Plaintiff's request, an Account Manager of the KM Agency emailed Plaintiff a copy of the declaration page. Id. at ¶ 36. However, instead of sending a full copy of Plaintiff's insurance policy, the KM Agency sent Plaintiff only a Microsoft Excel Spreadsheet. Id. at ¶ 36. Plaintiff then appealed Defendants' insurance denial on September 10, 2018. Id. at ¶ 37. She has yet to receive a response from either Defendants or the KM Agency. Id.
In her complaint, Plaintiff asserts claims against Defendants for (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) intentional infliction of emotional distress; (4) unjust enrichment; (5) unfair and deceptive trade practices in violation of N.C. Gen. Stat. §§ 75-1.1 to -35.[3] Id. at ¶¶ 42-84. On November 13, 2020, this case was transferred from the District of New Jersey to the United States District Court for the Eastern District of North Carolina by order of United States District Judge Robert B. Kugler [DE-14], pursuant to 28 U.S.C. § 1406(a), for the reasons expressed in his corresponding opinion [DE-13].
On April 28, 2021, Defendants filed the instant motion to dismiss [DE-46] seeking dismissal of Plaintiff's complaint on two grounds. First, Defendants seek dismissal of Plaintiff's entire complaint for lack of personal jurisdiction. Second, if personal jurisdiction is established, Defendants alternatively seek dismissal of four of the five claims asserted by Plaintiff for failure to state of claim upon which relief can be granted, those claims being: breach of implied covenant of good faith and fair dealing; intentional infliction of emotional distress; unjust enrichment; and unfair and deceptive trade practices. Defendants do not seek dismissal of Plaintiff's breach of contract claim for failure to state a claim.
STANDARD OF REVIEW UNDER RULES 12(b)(2), 12(b)(4), 12(b)(5), AND 12(b)(6)
A motion to dismiss under Rule 12(b)(4) challenges the sufficiency or “form” of the process itself while a motion to dismiss under Rule 12(b)(5) challenges the sufficiency of the act of “service” of process. See Fed. R. Civ. P. 12(b)(4), (b)(5); Lee v. City of Fayetteville, No. 5:15-CV-638-FL, 2016 WL 1266597, at *2 (E.D. N.C. Mar. 30, 2016). In essence, a Rule 12(b)(4) motion to dismiss objects to a defect in the content of the documents served, while a Rule 12(b)(5) motion to dismiss objects to a defect in the act (or lack) of delivery. See, e.g., 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1353 (3d ed. 2004). A typical Rule 12(b)(4) challenge alleges that the entity named in the summons is different from the entity named in the complaint, and a typical Rule 12(b)(5) challenge alleges that the process was delivered by a person incapable of serving process (e.g., a party), to a person or entity incapable of receiving service (e.g., a minor), or that the service was delivered in an improper way (e.g., via first-class mail). See Stokes v. JPMorgan Chase Bank, NA, No. JFM 8:11-cv-2620, 2012 WL 527600, at *5-6 (D. Md. Feb. 16, 2012). Plaintiff bears the burden of establishing proper process and service of process. See Mylan Lab'ys, Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993); Armco, Inc. v. Penrod-Stauffer Bldg. Sys., Inc., 733 F.2d 1087, 1089 (4th Cir. 1984); Dalenko v. Stephens, 917 F.Supp.2d 535, 542 (E.D. N.C. 2013). When process or service of process is deficient, dismissal is proper under Rule 12(b)(2) for lack of personal jurisdiction. See, e.g., Armco, Inc., 733 F.2d at 1089. Further, “dismissal of a case on an issue relating to the merits of the dispute, such as failure to state a claim, is improper without resolving threshold issues of jurisdiction, including personal jurisdiction.” Boykin Anchor Co.v....
To continue reading
Request your trial