{
  "id": 8527061,
  "name": "JUNIOR WILLIAM BENTLEY, Plaintiff v. NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Corporate Defendant, and MATHESON INSURANCE AGENCY, INC., Corporate Defendant, and W. A. DEAL, Individual Defendant, Jointly and Severally",
  "name_abbreviation": "Bentley v. North Carolina Insurance Guaranty Ass'n",
  "decision_date": "1992-07-21",
  "docket_number": "No. 9022SC1355",
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    "parties": [
      "JUNIOR WILLIAM BENTLEY, Plaintiff v. NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Corporate Defendant, and MATHESON INSURANCE AGENCY, INC., Corporate Defendant, and W. A. DEAL, Individual Defendant, Jointly and Severally"
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      {
        "text": "PARKER, Judge.\nPlaintiff appeals from summary judgment granted in favor of all defendants. On 2 August 1989 plaintiff filed a complaint against defendants Interstate Casualty Insurance Company, Inc. (\u201cInterstate\u201d), Matheson Insurance Agency, Inc., and W.A. Deal. Alleging fire loss under a dwelling policy, plaintiffs claims included (i) bad faith refusal to settle plaintiff\u2019s claim for loss, (ii) negligence and breach of fiduciary duty, and (iii) unfair or deceptive trade practices. Relief prayed for included compensatory damages in the amount of $65,000.00, punitive damages, treble damages, and prejudgment interest. By order of the trial court filed 1 August 1990, defendant North Carolina Insurance Guaranty Association (\u201cthe Association\u201d) was substituted as the real party in interest for Interstate.\nOn appeal, plaintiff presents two contentions. He contends granting summary judgment effected an impermissible taking of plaintiff\u2019s property under Article I, Section 19, of the North Carolina Constitution and deprived plaintiff of the right to trial by jury under Article I, Section 25. Plaintiff\u2019s second contention is that the court erred in granting summary judgment on his claims for bad faith refusal to settle, negligence and breach of fiduciary duty, and unfair or deceptive trade practices. For reasons which follow, we affirm summary judgment for all defendants.\nI.\nDefendant Association did not participate in any of the settlement negotiations at issue. On appeal defendant Association argues that as a matter of law, it cannot be held liable for the torts of an insolvent insurer. This is an issue of first impression requiring interpretation of General Statutes Chapter 58, Article 48. We find defendant\u2019s argument persuasive. \u25a0\nThe Association was created by the Insurance Guaranty Association Act, N.C.G.S. \u00a7\u00a7 58-48-1 through 58-48-100 (1991). According to the Act, \u201cThe purpose of [Article 48] is to provide a mechanism for the payment of covered claims under certain insurance policies . . . .\u201d N.C.G.S. \u00a7 58-48-5 (1991). The Act provides in addition\n\u201cCovered claim\u201d means an unpaid claim, including one of unearned premiums, which is in excess of fifty dollars ($50.00) and arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this Article applies as issued by an insurer, if such insurer becomes an insolvent insurer after the effective date of this Article .... \u201cCovered claim\u201d shall not include any amount awarded as punitive or exemplary damages ....\nN.C.G.S. \u00a7 58-48-20(4) (1991) (emphasis added). The Act provides further\n(a) The Association shall:\n(1) Be obligated to the extent of the covered claims existing prior to the determination of insolvency .... This obligation includes only the amount of each covered claim that is in excess of fifty dollars ($50.00) and is less than three hundred thousand dollars ($300,000). . . .\n(2) Be deemed the insurer to the extent of the Association\u2019s obligation on the covered claims and to such extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent.\nN.C.G.S. \u00a7 58-48-35 (1991).\nUnder the plain language of section 58-48-20(4), punitive damages cannot be recovered from the Association. Other jurisdictions have construed similar statutes to exclude claims based on bad faith of the insolvent insurer. The Florida First District Court of Appeal held that the Florida Insurance Guaranty Association (\u201cFIGA\u201d) \u201cis not liable for any amounts in excess of policy limits and is not vicariously liable for tortious acts of members\u2019 insurers.\u201d Rivera v. Southern Am. Fire Ins. Co., 361 So. 2d 193, 194 (1978), cert. denied, 368 So. 2d 1372 (1979). The court so held even though the Florida statute did not specifically exclude punitive damages. Fla. Stat. Ann. \u00a7 631.57(1)(a)(3) (West 1984). Similarly, the Washington Court of Appeals rejected an argument that the Washington Insurance Guaranty Association \u201cstepped into the shoes of\u201d an insolvent insurer. Quoting statutory language the court said, \u201cA covered claim is an \u2018unpaid claim . . . which arises out of and is within the coverage of an insurance policy to which [the Act] applies.\u2019 \u201d The court held that since an action by an insured against his insurer for bad faith in handling a claim or suit sounds in tort, rather than contract, such an action could not constitute a covered claim. Vaughn v. Vaughn, 23 Wash. App. 527, 529-30, 597 P.2d 932, 934, disc. rev. denied, 92 Wash. 2d 1023 (1979) (not available on Westlaw). Other jurisdictions have also held insurance guaranty associations to be immune from suit arising from their own tortious conduct in settling claims after insolvency of an insurer. Isaacson v. California Ins. Guar. Ass\u2019n., 44 Cal. 3d 775, 750 P.2d 297, 244 Cal. Rptr. 655 (1988) (wherein insolvent\u2019s insureds sued California Insurance Guaranty Association for alleged bad faith in settling malpractice claim against insureds); Florida Ins. Guar. Ass\u2019n. v. Giordano, 485 So. 2d 453 (1986) (wherein insolvent\u2019s insured sued FIGA based on the latter\u2019s rejection of settlement offer).\nPunitive or exemplary damages may be recovered \u201cin breach of contract actions that \u2018smack of tort because of the fraud and deceit involved\u2019 or those actions \u2018with substantial tort overtones emanating from the fraud and deceit.\u2019 \u201d Dailey v. Integon Ins. Corp., 75 N.C. App. 387, 394, 331 S.E.2d 148, 153 (quoting Oestreicher v. Stores, 290 N.C. 118, 136, 225 S.E.2d 797, 809 (1976)), disc. rev. denied, 314 N.C. 664, 336 S.E.2d 399 (1985). There must be an identifiable tort and \u201cthe tortious conduct must be accompanied by or partake of some element of aggravation before punitive damages will be allowed.\u201d Newton v. Insurance Co., 291 N.C. 105, 112, 229 S.E.2d 297, 301 (1976) (citing Oestreicher).\nNorth Carolina cases permit recovery of punitive damages for breach of contract only for identifiable torts accompanied by aggravation. The plain language of Article 48 both speaks of contracts and precludes recovery of punitive damages. Finding the reasoning of the Florida and Washington courts to be persuasive, we hold the Association is not subject to vicarious liability for the tortious conduct of insolvent insurers.\n\u201cAn action for unfair or deceptive acts or practices is \u2018the creation of . . . statute. It is, therefore, sui generis. It is neither wholly tortious nor wholly contractual in nature.\u2019 \u201d Bernard v. Central Carolina Truck Sales, 68 N.C. App. 228, 230, 314 S.E.2d 582, 584 (quoting Slaney v. Westwood Auto, Inc., 366 Mass. 688, 704, 322 N.E.2d 768, 779 (1975)), disc. rev. denied, 311 N.C. 751, 321 S.E.2d 126 (1984). Given that actions for unfair or deceptive practices sound partly in tort, because we have held the Association is not liable for the torts of insolvent insurers, we hold further that no action will lie against the Association for an insolvent insurer\u2019s violation of the Unfair or Deceptive Trade Practices Act.\nSummary judgment \u201cshall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u201d N.C.G.S. \u00a7 1A-1, Rule 56(c) (1990). Since, as a matter of law, defendant Association was not vicariously liable for the torts or unfair practices of Interstate, we hold the trial court did not err in granting summary judgment for defendant Association on these claims.\nPlaintiff also contends the granting of summary judgment for the Association violated his rights under the North Carolina Constitution. Plaintiff argues that the inclusion of an appraisal clause in his insurance policy deprived him of his property without due process of law and, alternatively, that the appraisal process as carried out violated his right to due process. Plaintiff also argues the appraisal clause deprived him of the right to a jury trial. Since in following the statutory mandate to pay covered claims, defendant Association could pay claims settled through the appraisal process, we conclude plaintiff may properly raise as against defendant Association claims arising from alleged violations of constitutional rights. Nevertheless, we do not find plaintiff\u2019s arguments persuasive.\nEvery policy of fire insurance written in North Carolina must conform to the provisions of the standard fire insurance policy provided by statute. N.C.G.S. \u00a7 58-44-15 (1991). The Standard Policy provides\nAppraisal In case the insured and this Company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of the insured or this Company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item, and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss.\nN.C.G.S. \u00a7 58-44-15 at lines 123-137 (1991). \u201c[T]he statutory Standard Fire Insurance Policy is incorporated into every policy of fire insurance issued in North Carolina.\u201d Star Varifoam Corp. v. Buffalo Reinsurance Co., 64 N.C. App. 306, 309, 307 S.E.2d 194, 195 (1983) (citations omitted), disc. rev. denied, 310 N.C. 154, 311 S.E.2d 294 (1984). The appraisal clause in plaintiff\u2019s policy was essentially the same as that in the statutory standard policy.\nThe North Carolina Supreme Court long ago upheld the validity of a similar appraisal clause, stating\nIt is, we think, well settled that such a provision in a contract of insurance is not against public policy, and that it will be upheld by the courts, in so far as it provides for the submission to arbitration of the amount of loss or damage sustained by the [in]sured.\nMfg. Co. v. Assurance Co., 106 N.C. 28, 46-47, 10 S.E. 1057, 1058 (1890). See also Green v. Insurance Co., 233 N.C. 321, 327, 64 S.E.2d 162, 166 (1951) (holding mortgagee bound by appraisal or arbitration had in good faith between mortgagor and insurance company); Young v. Insurance Co., 207 N.C. 188, 192, 176 S.E. 271, 273 (1934) (stating that award for loss made upon proper procedure under fire insurance policy appraisal clause is presumed valid absent evidence of fraud, mistake, duress, or other impeaching circumstance); Braddy v. Insurance Co., 115 N.C. 354, 355, 20 S.E. 477, 477 (1894) (stating, \u201c[I]t is well settled that an agreement in a policy of insurance to submit to arbitrators the single question of the amount of loss by fire sustained by the person insured is not invalid.\u201d).\nTurning to the more narrow question of whether the appraisal clause violated plaintiff\u2019s right to due process of law, the North Carolina Constitution provides, \u201cNo person shall be ... in any manner deprived of his . . . property, but by the law of the land. No person shall be denied the equal protection of the laws . . . .\u201d N.C. Const, art. I, \u00a7 19. \u201cLaw of the land\u201d is synonymous with \u201cdue process of law\u201d under the Fourteenth Amendment; and United States Supreme Court interpretations of the latter, though not binding, are highly persuasive in construing the former. Watch Co. v. Brand Distributors and Watch Co. v. Motor Market, 285 N.C. 467, 474, 206 S.E.2d 141, 146 (1974). The United States Supreme Court long ago upheld the constitutionality of a similar appraisal clause, stating\n[T]he arbitration clause has long been voluntarily inserted by insurers in fire policies, and ... in the appraisal of the loss by arbitration, expert knowledge and prompt inspection of the damaged property may be availed of to an extent not ordinarily possible in the course of the more deliberate processes of a judicial proceeding. . . . Hence the requirement that disputes of this type arising under this special class of insurance contracts be submitted to arbitrators cannot be deemed to be a denial of either due process or equal protection of the laws.\n. . . [T]he requirements of the 14th Amendment . . . are satisfied if the substitute remedy is substantial and efficient. We cannot say that the determination by arbitrators, chosen as provided by the present statute, of the single issue of the amount of loss under a fir'e insurance policy, reserving all other issues for trial in court, does not afford such a remedy, or that in this respect it falls short of due process . . . .\nHardware Dealers Mut. Fire Ins. Co. of Wisconsin v. Glidden Co., 284 U.S. 151, 159-60, 76 L. Ed. 214, 219-20 (1931). Since the appraisal clause in the case under review is similar to that in Hardware Dealers, we find the reasoning of that case persuasive. We hold the clause did not deprive plaintiff of his right to due process under the North Carolina Constitution.\nPlaintiff also contends the appraisal process as applied deprived him of the right to due process. He argues the appointment of the umpire was arbitrary and plaintiff did not receive a copy of the appraisal report until the day defendant Association filed its motion for summary judgment.\nThe validity of the appointment of an umpire by a judge may be adjudicated when the question is raised in a properly instituted civil action. In re Roberts Co., 258 N.C. 184, 128 S.E.2d 137 (1962). Plaintiff, however, attempts to challenge validity of the appointment of the umpire by plaintiff\u2019s and Interstate\u2019s designated appraisers. The affidavit of plaintiff\u2019s appraiser, Billy Lynn Millsaps, indicates Millsaps agreed to the appointment of Paul W. Gadd as umpire. The affidavit of Larry G. Austin, Interstate\u2019s appraiser, shows he also agreed to the appointment of Gadd. According to Gadd\u2019s affidavit, on 24 February 1990, he and Millsaps agreed on an award of $33,000.00. Defendant Association\u2019s motion for summary judgment was not filed until 31 July 1990. Before this Court plaintiff does not show fraud, mistake, duress, or other evidence of wrongdoing in the appraisal process as applied to him. We conclude that under all the circumstances, plaintiff cannot challenge the validity of appointment of Gadd or timing of the report.\nWe next consider whether plaintiff was deprived of his right to trial by jury. \u201cIn all controversies at law respecting property . . . trial by jury . . . shall remain sacred and inviolable.\u201d N.C. Const. art. I, \u00a7 25. Notwithstanding this provision, the North Carolina Supreme Court has repeatedly approved appraisal as a means of settling the single issue of amount of loss sustained by an insured. E.g., Green v. Insurance Co., 233 N.C. 321, 64 S.E.2d 162 (1951). In general, there exists in North Carolina \u201ca strong public policy favoring the settlement of disputes by arbitration.\u201d Servomation Corp. v. Hickory Construction Co., 316 N.C. 543, 544, 342 S.E.2d 853, 854 (1986). Accord Johnston County v. R.N. Rouse & Co., 331 N.C. 88, 91, 414 S.E.2d 30, 32 (1992). Addressing the constitutionality of a mandatory binding arbitration clause in an automobile insurance policy, the Supreme Court of Delaware recently stated\nIn arguing against enforcement of the arbitration clause, [plaintiffs] attempt to appeal to \u201cthe old judicial hostility to arbitration.\u201d . . . Over time . . . the judicial view of arbitration has evolved from hostility to eager acceptance. In part, this change has been fostered by a recognition of the efficiency and specialized expertise- available in an arbitral forum. . . .\n... In short, the public policy of this state favors the resolution of disputes through arbitration.\nGraham v. State Farm Mut. Automobile Ins. Co., 565 A.2d 908, 910-11 (1989) (quoting Kulukundis Shipping Co. v. Amtorg Trading Corp., 126 F.2d 978, 985 (2d Cir. 1942)) (citations omitted). These words recall the United States Supreme Court\u2019s statement in Hardware Dealers that expert knowledge and prompt inspection of damaged property are not as readily available in the judicial forum. We find the reasoning of the Delaware court persuasive, and in light of the numerous North Carolina cases approving appraisal as a means of settling the single issue of amount of loss and strong policy favoring arbitration, we hold plaintiff\u2019s right under the North Carolina Constitution to trial by jury was not abridged by the appraisal clause.\nFor all the foregoing reasons, we conclude summary judgment was properly granted in favor of defendant Association.\nII.\nWe next consider whether the trial court erred in granting summary judgment in favor of defendants Matheson and Deal. The pleadings, depositions, exhibits, and affidavits before the trial court showed these defendants were not parties to the settlement negotiations between plaintiff and Interstate. Nevertheless, defendant Deal, as the employee of defendant Matheson, made several telephone calls on behalf of plaintiff in an attempt to find out what Interstate intended to do and to urge the company to settle quickly with plaintiff. Defendant Matheson\u2019s only involvement was through the acts of defendant Deal.\nPlaintiff contends the court'ei;red in granting summary judgment on his claim for bad faith refusal to settle plaintiff\u2019s claim nnd\u00e9r the policy. We disagree with this contention.\nThe North Carolina Supreme Court has held that once an agent has procured an insurance contract, the agent is not a party to the contract and is not liable under it \u201cirrespective of any default in the performance thereof by th<e insurer and irrespective of the insured\u2019s lack of success in an antion against such defaulting insurer.\u201d Mayo v. Casualty Co., 282 N.C. 346, 354, 192 S.E.2d 828, 833 (1972). We conclude that defendants Matheson and Deal could not be held liable for any bad faith refusal to settle by Interstate.\nPlaintiff\u2019s next contention is that the court erred in granting summary judgment on his claim for negligence. Again we disagree.\n\u201cIf an insurance agent . . . undertakes to procure for another insurance against a designated risk, the law imposes upon him the duty to use reasonable diligence to procure such insurance and holds him liable to the proposed insured for loss proximately caused by his negligent failure to do so.\u201d Id. at 353, 192 S.E.2d at 833. It follows that if defendants Matheson\u2019s and Deal\u2019s alleged negligence was not the proximate cause of plaintiff\u2019s loss, summary judgment could properly have been granted for these defendants. See Collingwood v. G.E. Real Estate Equities, 324 N.C. 63, 66, 376 S.E.2d 425, 427 (1989) (stating movant meets burden of establishing lack of triable issue by proving essential element of opposing party\u2019s claim is nonexistent or showing through discovery that opposing party cannot produce evidence to support .an essential element of its claim).\nPlaintiff\u2019s argument is that on account of defendants\u2019 negligence he was unable to recover the value of his property. However, regardless of plaintiff\u2019s sincere belief as to the value of his property, and notwithstanding the stated face value of the policy, under the entire policy as written, plaintiff could not recover more than the actual cash value of the property at the time of loss.\nNorth Carolina insurance law provides\nNo insurance ... agent shall knowingly issue any fire insurance policy . . . for an amount which, together with any existing insurance thereon, exceeds the fair value of the property . . . : Provided, any fire insurance company authorized to transact business in this State may, by appropriate riders or endorsements or otherwise, provide insurance indemnifying the insured for the difference between the actual value of the insured property at the time any loss or damage occurs, and the amount actually expended to repair, rebuild or replace . . . property . . . destroyed by fire ....\nN.C.G.S. \u00a7 58-43-5 (1991). The North Carolina Rate Bureau is charged with promulgating rates for insurance against loss, including fire loss, to residential real property with not more than four housing units located in North Carolina. N.C.G.S. \u00a7 58-36-1 (1991). The Bureau must maintain reasonable records of the policy or bond forms made or used by it. N.C.G.S. \u00a7 58-36-15(c) (1991). No policy form applying to insurance on risks covered by General Statutes Chapter 58, Article 36, including risk of loss by fire, may be issued for delivery unless filed by the Bureau with the Commissioner of Insurance and approved explicitly or .through default as provided by statute. N.C.G.S. \u00a7 58-36-55 (1991).\nThe Rate Bureau\u2019s basic form dwelling policy, Form DP-1, includes the following loss Settlement provision: \u201c5. Loss Settlement. Covered property losses are settled at actual cash value at the time of loss but not. exceeding the amount necessary to repair or replace the damaged property.\u201d A separate approved form, DP 00 62, entitled \u201cReplacement Cost,\u201d begins with the following language, \u201cFor the premium charged for this policy, Policy Condition 5 \u2014 Loss Settlement is amended to read as follows.\u201d Plaintiff\u2019s policy was a basic form' dwelling policy; nothing of record shows the policy included an approved replacement cost rider or endorsement form.\nDefendant Deal testified that regardless of what values he might have stated on the application for insurance, actual cash value at the time of loss, as.determined by the appraisal process, would control the insured\u2019s recovery. Asked whether he explained actual cash value to plaintiff, Deal testified, \u201cWell, you know, I don\u2019t know whether I ever-made him understand that or not. I said, \u2018It is not like a policy like Steve [plaintiff\u2019s nephew] has . . . where we replace the -house. It\u2019s based on what the actual cash value is at the time of loss.\u2019 \u201d Deal testified further, \u201cI think I basically told him down\u201dhere in the office when we were trying to explain [it] to him. I said, \u2018Junior, you can basically insure this thing for anything you want to, but it is still only going to be worth so much at the time of loss under this policy.\u2019 \u201d\nAffidavits before the trial court showed that plaintiff\u2019s and Interstate\u2019s appraisers were unable to agree on an appraisal value of the fire loss. Plaintiff\u2019s appraiser, Millsaps, and umpire Gadd subsequently agreed on an award of $33,000.00 for the actual cash value of plaintiff\u2019s loss. Assuming arguendo that plaintiff sustained a loss, we conclude that under all the circumstances, negligence, if any, of defendants Deal and Matheson could not be the proximate cause thereof.\nPlaintiff also contends the trial court erred in granting summary judgment on plaintiffs claim for breach of fiduciary duty. Again we disagree.\n\u201c[T]here is a fiduciary duty on the part of the insurance agent to keep the insured correctly informed as to his insurance coverage.\u201d R-Anell Homes v. Alexander & Alexander, 62 N.C. App. 653, 659, 303 S.E.2d 573, 577 (1983). The duty arises where plaintiff shows a continuing relationship between agent and insured and a request for advice on some change or contemplated change in the insured\u2019s circumstances. In such a situation, the giving of false assurances concerning the extent of insurance coverage may constitute breach of fiduciary duty. Id. at 657-59, 303 S.E.2d at 576-77.\nIn the instant case, no evidence showed an ongoing relationship between plaintiff and defendant Matheson or Deal. No evidence showed that after purchasing the fire loss policy, plaintiff requested further advice or sought assurances from defendant Deal about coverage under the policy. Th\u00e9re was no evidence that plaintiff sought to purchase additional insurance from these defendants.\nFurthermore, this Court has stated,\nIt is clearly not the duty of an insurer or its agent to inquire and inform an insured as to all parts of his policy:\nWe cannot approve the position that in the absence of a request it was the agent\u2019s legal duty to explain the meaning and effect of all the provisions in the policy, or that his failure to inquire . . . was a waiver of the requirement .... Hardin v. Ins. Co., 189 N.C. 423, 427, 127 S.E. 353, 355 (1925).\nGreenway v. Insurance Co., 35 N.C. App. 308, 314, 241 S.E.2d 339, 343 (1978).\nDefendants\u2019 evidence showed defendant Deal explained to plaintiff that recovery under the policy would be based on actual cash value at time of loss and that the policy was different from another policy of which plaintiff had some knowledge. Under these circumstances, plaintiff had the burden of forecasting evidence of negligent false assurances by Deal as to the extent of insurance coverage. Plaintiff\u2019s evidence was that defendant Deal told plaintiff his house was covered for $65,000.00. Since, in the event of loss, plaintiff could not recover more than actual cash value, even viewed indulgently, plaintiff\u2019s evidence did not show any false assurance by defendant Deal as to the extent of coverage. We conclude plaintiff failed to meet the burden of showing defendant Deal made negligent false assurances\u2019.-.as to the extent of coverage.\nFinally plaintiff contends the trial court erred in granting summary \u25a0 judgment for defendants on plaintiffs unfair or deceptive trade practices claim. Again we disagree.\n\u201cUnfair or deceptive trade practices in the insurance industry are governed by N.C.G.S. \u00a7 58-54.4 [now \u00a7 58-63-15].\u201d Pearce v. American Defender Life Ins. Co., 316 N.C. 461, 468, 343 S.E.2d 174, 179 (1986). A violation of this statute \u201cas a matter of law constitutes an unfair or deceptive trade practice in violation of N.C.G.S. \u00a7 75-1.1.\u201d Id. at 470, 343 S.E.2d at 179. Prohibited practices include \u201c[c]ommitting or performing with such frequency as to indicate a general business practice any of the following: . . . Not attempting in good faith to, effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.\u201d N.C.G.S. \u00a7 58-63-15(11)f (1991).\nFrom our conclusion that defendants Matheson and Deal are not liable for the insurer\u2019s bad faith refusal to settle plaintiff\u2019s claim it follows that these defendants have no liability for the same conduct by the insurer if constituting unfair or deceptive practices under sections 58/63-15(11)1 and 75-1.1. We note also that under the predecessor of section 58-63-15(11), the appellate courts repeatedly emphasized the necessity of allegations of engaging in prohibited acts with frequency so as to indicate a general business practice. E.g., Beasley v. National Savings Life Ins. Co., 75 N.C. App. 104, 109, 330 S.E.2d 207, 210 (1985), disc. rev. improvidently allowed, 316 N.C. 372, 341 S.E.2d 338 (1986).\nFor all the foregoing reasons we hold the trial court did not err in granting summary judgment for defendants Matheson and Deal.\nAffirmed.\nJudges Wells and Wynn concur.",
        "type": "majority",
        "author": "PARKER, Judge."
      }
    ],
    "attorneys": [
      "Edward Jennings for plaintiff-appellant.",
      "Moore & Van Allen, by Joseph W. Eason, Christopher J. Blake, and Margaret A. Nowell, for defendant-appellee North Carolina Insurance Guaranty Association.",
      "Yates, McLamb & Weyher, by R. Scott Brown, for defendant-appellee North Carolina Insurance Guaranty Association.",
      "Kennedy Covington Lobdell & Hickman, by Wayne P. Huckel and Michelle C. Landers, for defendant-appellees Matheson Insurance Agency, Inc., and W.A. Deal."
    ],
    "corrections": "",
    "head_matter": "JUNIOR WILLIAM BENTLEY, Plaintiff v. NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Corporate Defendant, and MATHESON INSURANCE AGENCY, INC., Corporate Defendant, and W. A. DEAL, Individual Defendant, Jointly and Severally\nNo. 9022SC1355\n(Filed 21 July 1992)\n1. Insurance \u00a7 43 (NCI4th)\u2014 bad faith refusal to settle by insurer \u2014insurer insolvent \u2014liability of Guaranty Association\nUnder the plain language of N.C.G.S. \u00a7 58-48-20(4), punitive damages cannot be recovered from the North Carolina Insurance Guaranty Association where plaintiff had filed a claim against Interstate, its insurer, and others, alleging a bad faith refusal to settle, negligence, and unfair or deceptive trade practices and the Guaranty Association was substituted as the real party in interest for Interstate. Moreover, since the Association is not liable for the torts of insolvent insurers and actions for unfair or deceptive practices sound partly in tort, no action will lie against the Association for an insolvent insurer\u2019s violation of the Unfair or Deceptive Trade Practices Act.\nAm Jur 2d, Damages \u00a7\u00a7 785 et seq.\nRecoverability of punitive damages in action by insured against liability insurer for failure to settle claim against insured. 85 ALR3d 1211.\n2. Insurance \u00a7 815 (NCI4th(\u2014 fire insurance \u2014appraisal clause \u2014 valid \u2014 no constitutional violation\nNeither an appraisal clause in a fire insurance policy nor the appraisal process as carried out deprived plaintiff of his property without due process. Every fire insurance policy written in North Carolina must conform to the provisions of the standard fire insurance policy provided by N.C.G.S. \u00a7 58-44-15; the North Carolina Supreme Court long ago upheld the validity of a similar appraisal clause; and the United States Supreme Court long ago upheld the constitutionality of a similar appraisal clause. Plaintiff does not show fraud, mistake, duress, or other evidence of wrongdoing in the appraisal process as applied to him.\nAm Jur 2d, Insurance \u00a7\u00a7 1680 et seq.\nNecessity and sufficiency of notice of and hearing in proceedings before appraisers and arbitrators appointed to determine amount of loss. 25 ALR3d 680.\n3. Insurance \u00a7 815 (NCI4th)\u2014 fire insurance \u2014appraisal clause \u2014 no deprivation of trial by jury\nPlaintiff\u2019s right to trial by jury was not abridged by an appraisal clause in a fire insurance policy. The North Carolina Supreme Court has repeatedly approved appraisal as a means of settling the single issue of amount of loss sustained by an insured.\nAm Jur 2d, Insurance \u00a7\u00a7 1680 et seq.\n4. Insurance \u00a7 75 (NCI4th)\u2014 insurance agent \u2014settlement negotiations \u2014 insurer\u2019s bad faith refusal to settle \u2014no liability of agent\nThe trial court did not err by granting summary judgment in favor of an insurance agency and its employee on a claim of bad faith refusal to settle by the insurer where these defendants were not parties to the settlement negotiations, but the employee made several telephone calls on behalf of plaintiff . in an attempt to learn the insurer\u2019s intentions and to urge the company to settle with plaintiff quickly. Once an agent has procured an insurance contract, the agent is not a party to the contract and is not liable under it.\nAm Jur 2d, Insurance \u00a7\u00a7 133 et seq., 1399 et seq.\n5. Insurance \u00a7 73 (NCI4th)\u2014 fire insurance \u2014 recovery limited to actual cash value \u2014 negligence\u2014summary judgment for agent proper\nSummary judgment was properly granted for an insurance agent on a negligence claim arising from a disputed fire insurance policy where, regardless of plaintiff\u2019s sincere belief as to the value of his property,-and notwithstanding the stated face value of the policy, under the entire policy as written plaintiff could not recover more than the actual cash value of the property at the time of the loss. Assuming that plaintiff sustained a loss, under all the circumstances the negligence of defendants Deal and Matheson, if any, could not be the proximate cause.\nAm Jur 2d, Insurance \u00a7\u00a7 1500 et seq.\n6. Insurance \u00a7 75 (NCI4th)\u2014 fire insurance \u2014recovery limited to actual cash value \u2014fiduciary duty of agent \u2014summary judgment for agent\nSummary judgment was properly entered for an insurance agent on a claim of breach of fiduciary duty arising from a disputed fire insurance policy where there was no evidence of an ongoing relationship between plaintiff and the agency or agent, no evidence that plaintiff requested further advice or sought assurances from defendant Deal about coverage under the policy after purchasing the policy, and no evidence that plaintiff sought to purchase additional insurance from these defendants. Deal explained to plaintiff that recovery under the policy would be based on actual cash value at the time of loss and that the policy was different from another policy of which plaintiff had some knowledge. Even viewed indulgently, plaintiffs evidence did not show any false assurance by defendant Deal as to the extent of coverage.\nAm Jur 2d, Insurance \u00a7\u00a7 128, 1500 et seq., 1622.\n7. Insurance \u00a7 75 (NCI4th>\u2014 fire insurance \u2014bad faith refusal to settle \u2014unfair or deceptive practice \u2014agent not liable\nThe trial court did not err by granting summary judgment for an insurance agent and agency on plaintiff\u2019s unfair or decep-\ntive practices claim arising from a disputed fire insurance policy where defendants were not responsible for the insurer\u2019s bad faith refusal to settle.\nAm Jur 2d, Insurance \u00a7\u00a7 1399 et seq.\nAPPEAL by plaintiff from order entered 16 August 1990 by Judge Samuel T. Currin in ALEXANDER County Superior Court. Heard in the Court of Appeals 26 September 1991.\nEdward Jennings for plaintiff-appellant.\nMoore & Van Allen, by Joseph W. Eason, Christopher J. Blake, and Margaret A. Nowell, for defendant-appellee North Carolina Insurance Guaranty Association.\nYates, McLamb & Weyher, by R. Scott Brown, for defendant-appellee North Carolina Insurance Guaranty Association.\nKennedy Covington Lobdell & Hickman, by Wayne P. Huckel and Michelle C. Landers, for defendant-appellees Matheson Insurance Agency, Inc., and W.A. Deal."
  },
  "file_name": "0001-01",
  "first_page_order": 29,
  "last_page_order": 43
}