Popper v. The Hartford Fin. Servs. Grp.

• Decision Date: 18 April 2023
• Docket Number: 7:22-CV-148-D
• Parties: SUZANNE FOX POPPER as Executrix of the ESTATE OF JANICE FOX, Plaintiff, v. THE HARTFORD FINANCIAL SERVICES GROUP, INC., and HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendants.
• Court: U.S. District Court — Eastern District of North Carolina

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SUZANNE FOX POPPER as Executrix of the ESTATE OF JANICE FOX, Plaintiff, v. THE HARTFORD FINANCIAL SERVICES GROUP, INC., and HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendants.

No. 7:22-CV-148-D

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

April 18, 2023

ORDER

JAMES C. DEVER III, United States District Judge

On August 19, 2022, Suzanne Fox Popper (“Popper” or “plaintiff”), in her role as executrix of the estate of Janice Fox (“Fox”), filed this action seeking to recover $40,000 in death benefits under an insurance policy. Fox died after a truck hit Fox while she was walking in the parking lot of the New Hanover Regional Medical Center. Hartford Financial Services Group, Inc., and Hartford Life and Accident Insurance Company (collectively “defendants”) refused to pay the $40,000 under the policy after concluding that the accident was not a “Covered Accident.” In Popper's complaint Popper alleges violations of North Carolina's Unfair and Deceptive Trade Practices Act (“UDTPA”) and breach of contract [D.E. 1].

On October 17,2022, defendants moved to dismiss the complaint for failure to state a claim upon which relief can be granted [D.E. 12] and filed a memorandum in support [D.E. 13]. See Fed.R.Civ.P. 12(b)(6). On November 1, 2022, Popper responded in opposition [D.E. 16]. On November 15, 2022, defendants replied [D.E. 17]. In this case, the court must decide whether the New Hanover Regional Medical Center parking lot is an “open public street or highway” within the meaning of the insurance policy. Because the hospital's parking lot is not an “open public street or highway” under the policy, the court grants defendants' motion to dismiss and dismisses the complaint with prejudice.

I.

On April 5, 2022, at approximately 9:00 p.m., a Ford F-150 pick-up truck struck and killed Fox while Fox was walking to her car in the parking lot of New Hanover Regional Medical Center. See Compl. [D.E. 1] ¶20; [D.E.1-3]4; [D.E. 1-6] 7-8. When the accident occurred, it was dark and raining. See [D.E. 1-6] 7-8. The driver never saw Fox. See id. The hospital parking lot was intended for those working at the hospital or visiting the hospital, but was open to the public. Fox died at the scene. See Compl. at ¶ 20. The police report stated that the motorist was at fault for Fox's death and identified Fox as a pedestrian. See Id. at ¶ 22; [D.E. 1-3]; [D.E. 1-6] 7-8.

When Fox died, Fox held a AAA Classic Care Accident Insurance Rewards Plan (“the Plan”) insured through defendants. See Compl. ¶¶ 13-16. The Plan contained an accidental death benefit. See Id. at ¶ 18. The death benefit under the Plan was $40,000. See Id. at ¶ 24.

The Plan contained a definitions section explaining what kind of events it included as a “Covered Accident.” See Id. at ¶ 25. The Plan defined “Pedestrian” as “You or Your Dependents while You or they are standing or walking on an open public street or highway.” Id. at ¶ 27; [D.E 1-5] 13. The Plan did not define “open public street or highway.” See Compl. ¶ 28. Popper contends that the public parking lot area where the truck struck and killed Fox qualifies as an “open public street” under the policy, thus qualifying Fox for death benefits as a “pedestrian.” See id. at ¶¶ 33-36.

On May 11,2022, Popper submitted a claim to defendants for accidental death benefits under the Plan. See Id. at ¶ 37. On June 29,2022, defendants sent a letter to Popper denying the claim. See id, at ¶ 38. In the letter, defendants explained that Fox was struck in a parking lot, not an open public street or highway, and thus her estate was not eligible to recover the accidental death benefits under the Plan. See id. Popper responds that defendants denied benefits based on “hyper-technical” interpretation of the Plan. See id. at ¶ 40. Popper seeks relief for breach of contract and a violation of the UDTPA. See id. at ¶¶ 46-62.

II.

Defendants move to dismiss under Rule 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the complaint's legal and factual sufficiency. See Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009); Bell Atl. Corp, v. Twombly, 550 U.S. 544, 554-63 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187,190 (4th Cir. 2010), affd, 566 U.S. 30 (2012); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule 12(b)(6) motion, a pleading “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550 U.S. at 570; Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the facts and reasonable inferences “in the light most favorable to the [nonmoving party].” Massey v, Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of Gilbert, 576 U.S. 155(2015). A court need not accept as true a complaint's legal conclusions, “unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302 (quotation omitted); see Iqbal, 556 U.S. at 678-79. Rather, a plaintiff's factual allegations must “nudge[ ] [her] claims,” Twombly, 550 U.S. at 570, beyond the realm of “mere possibility” into “plausibility.” Iqbal, 556 U.S. at 678-79.

When evaluating a motion to dismiss, a court considers the pleadings and any materials “attached or incorporated into the complaint.” E.L du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435,448 (4th Cir. 2011); see Fed.R.Civ.P. 10(c); Goines v. Valley Cmty, Servs. Bd, 822 F.3d 159,166 (4th Cir. 2016); Thompson v. Greene, 427 F.3d 263,268 (4th Cir. 2005). A court may also consider a document submitted by a moving party if it is “integral to the complaint and there is no dispute about the document's authenticity.” Goines, 822 F.3d at 166. Additionally, a court may take judicial notice of public records without converting the motion to dismiss into a motion for summary judgment. See, e.g., Fed.R.Evid. 201; Tellabs, Inc, v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176,180 (4th Cir. 2009).

A.

Popper alleges violations of the UDTPA and statutory good faith under N.C. Gen. Stat. 58-63-15 (11). Although N.C. Gen. Stat. § 58-63-15(11) does not include a private cause of action, a plaintiff may obtain relief under the UDTPA for violations of N.C. Gen. Stat. § 58-63-15(11). See Gray v, N.C. Ins. Underwriting Ass'n, 352 N.C. 61,69-71,529 S.E.2d 676,682-83 (2000); see also Elliott v. Am, States Tns. Co., 883 F.3d 384,396 (4th Cir. 2018); Burch v. Lititz Mut. Ins. Co., No. 7:12-CV-107, 2013 WL 6080191, at *8 (E.D. N.C. Nov. 19, 2013) (unpublished). The UDTPA provides that “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.” N.C. Gen. Stat. § 75-1.1(a). To state an unfair and deceptive trade practices claim, a plaintiff must plausibly allege: (1) an unfair or deceptive act or practice, (2) in or affecting commerce, and (3) which proximately caused injury to plaintiffs. See Barbour v. Fid. Life Ass'n, 361 F.Supp.3d 565, 573 (E.D. N.C. 2019) (collecting cases); Kelly v, Ga.-Pac., LLC, 671 F.Supp.2d 785,798 (E.D. N.C. 2009) (same); SciGrip, Inc, v. Osae, 373 N.C. 409,426, 838 S.E.2d 334,347 (2020); Walker v. Fleetwood Homes of N.C., Inc., 362 N.C. 63,71-72,653 S.E.2d 393,399 (2007). “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. A practice is deceptive if it has the capacity or tendency to deceive.” Walker, 362 N.C. at 72,653 S.E.2d at 399 (cleaned up). A plaintiff need not “show fraud, bad faith, deliberate or knowing acts of deception, or actual deception, but plaintiff must show that the acts complained of possessed the tendency or capacity to mislead, or created the likelihood of deception.” Gress v. Rowboat Co., 190 N.C.App. 773,776,661 S.E.2d 278,281 (2008) (cleaned up); see Overstreet v. Brookland, Inc., 52 N.C.App. 444,452-53,279 S.E.2d 1,7 (1981). However, a “mere breach of contract, even if intentional, is not an unfair or deceptive act[.]” Waddell v. U.S. Bank Nat'l Ass'n. 395 F.Supp.3d 676,684 (E.D. N.C. 2019) (collecting cases); see PCS Phosphate Co, v. Norfolk S. Corp., 559 F.3d 212,224 (4th Cir. 2009); Repress v. Crop Prod. Servs., Inc., No. 4:15-CV-00176,2016 WL 3821163, at *5 (E.D. N.C. July 13,2016) (unpublished); see SciGrip, 373 N.C. at 427,838 S.E.2d at 34; Bob Timberlake Collection, Inc, v. Edwards, 176 N.C.App. 33,42, 626 S.E.2d 315, 323 (2006); Mitchell v. Linville, 148 N.C.App. 71, 75, 557 S.E.2d 620, 623-24 (2001); Branch Banking & Tr. Co, v. Thompson, 107 N.C.App. 53, 61-62,418 S.E.2d 694, 700 (1992).

Conduct violating N.C. Gen. Stat. § 58-63-15(11) violates the UDTPA. Such “conduct is inherently unfair, unscrupulous, immoral, and injurious to consumers.” Gray, 352 N.C. at 71,529 S.E.2d at 683; see Barbour, 361 F.Supp.3d at 573, Walker, 362 N.C. at 70-71, 653 S.E.2d at 398-99; Country Club of Johnston Cty., Inc, v. U.S. Fid, & Guar. Co., 150 N.C.App. 231,246,563 S.E.2d 269, 279 (2002). Although N.C. Gen. Stat. § 58-63-15(11) requires a showing of a “frequency indicating a ‘general business practice,'” a UDTPA claim does not. Gray, 352 N.C. at 71, 529 S.E.2d at 683; see Westchester Fire Ins. Co. v. Johnson, 221 F.Supp.2d 637, 643 (M.D. N.C. 2002).

North Carolina law “does not permit a party to transmute a breach of contract claim into a... UDTPA claim because awarding punitive or treble damages would destroy the parties' bargain....” PCS Phosphate, 559 F.3d at 224; see ...