{ "id": 685063, "name": "JACK S. GRAY and MARY B. GRAY t/a TOWER CIRCLE MOTEL v. NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION", "name_abbreviation": "Gray v. North Carolina Insurance Underwriting", "decision_date": "2000-06-16", "docket_number": "No. 84PA99", "first_page": "61", "last_page": "76", "citations": [ { "type": "official", "cite": "352 N.C. 61" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "510 S.E.2d 396", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "opinion_index": -1 }, { "cite": "132 N.C. App. 63", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11236940 ], "year": 1999, "opinion_index": -1, "case_paths": [ "/nc-app/132/0063-01" ] }, { "cite": "454 S.E.2d 225", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "pin_cites": [ { "page": "228", "parenthetical": "stating that \"violations of statutes designed to protect the consuming public and violations of established public policy may constitute unfair and deceptive practices.\"" } ], "opinion_index": 0 }, { "cite": "339 N.C. 717", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2557296 ], "year": 1995, "pin_cites": [ { "page": "723", "parenthetical": "stating that \"violations of statutes designed to protect the consuming public and violations of established public policy may constitute unfair and deceptive practices.\"" } ], "opinion_index": 0, "case_paths": [ "/nc/339/0717-01" ] }, { "cite": "358 S.E.2d 83", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "85", "parenthetical": "holding that N.C.G.S. \u00a7 75-16.1 includes fees for services rendered at all stages of litigation, including appeals" } ], "opinion_index": 0 }, { "cite": "86 N.C. App. 446", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12133470 ], "year": 1987, "pin_cites": [ { "page": "449-50", "parenthetical": "holding that N.C.G.S. \u00a7 75-16.1 includes fees for services rendered at all stages of litigation, including appeals" } ], "opinion_index": 0, "case_paths": [ "/nc-app/86/0446-01" ] }, { "cite": "421 S.E.2d 350", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "opinion_index": 0 }, { "cite": "332 N.C. 482", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2506529, 2506243, 2504999, 2504620, 2504310 ], "year": 1992, "opinion_index": 0, "case_paths": [ "/nc/332/0482-01", "/nc/332/0482-04", "/nc/332/0482-03", "/nc/332/0482-02", "/nc/332/0482-05" ] }, { "cite": "418 S.E.2d 694", "category": "reporters:state_regional", "reporter": "S.E.2d", "pin_cites": [ { "page": "700" } ], "opinion_index": 0 }, { "cite": "107 N.C. App. 53", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527122 ], "pin_cites": [ { "page": "62" } ], "opinion_index": 0, "case_paths": [ "/nc-app/107/0053-01" ] }, { "cite": "400 S.E.2d 440", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "442" } ], "opinion_index": 0 }, { "cite": "328 N.C. 240", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2541708 ], "year": 1991, "pin_cites": [ { "page": "243" } ], "opinion_index": 0, "case_paths": [ "/nc/328/0240-01" ] }, { "cite": "411 S.E.2d 133", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "138", "parenthetical": "stating the standard of review of directed verdict" } ], "opinion_index": 0 }, { "cite": "330 N.C. 314", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2509560 ], "year": 1991, "pin_cites": [ { "page": "322-23", "parenthetical": "stating the standard of review of directed verdict" } ], "opinion_index": 0, "case_paths": [ "/nc/330/0314-01" ] }, { "cite": "735 F. Supp. 1320", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 4072165 ], "year": 1990, "pin_cites": [ { "page": "1328" } ], "opinion_index": 0, "case_paths": [ "/f-supp/735/1320-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 58-54.4", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "parenthetical": "1 l" } ], "opinion_index": 0 }, { "cite": "268 S.E.2d 271", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1980, "pin_cites": [ { "page": "273" } ], "opinion_index": 0 }, { "cite": "48 N.C. App. 180", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8549607 ], "weight": 2, "year": 1980, "pin_cites": [ { "page": "183" } ], "opinion_index": 0, "case_paths": [ "/nc-app/48/0180-01" ] }, { "cite": "331 S.E.2d 677", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "pin_cites": [ { "page": "681" } ], "opinion_index": 0 }, { "cite": "314 N.C. 90", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4696461 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "97" } ], "opinion_index": 0, "case_paths": [ "/nc/314/0090-01" ] }, { "cite": "442 S.E.2d 316", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "pin_cites": [ { "page": "318", "parenthetical": "acknowledging that the Court in Pearce held that a violation of N.C.G.S. \u00a7 58-63-15(1) constituted a violation of N.C.G.S. \u00a7 75-1.1" } ], "opinion_index": 0 }, { "cite": "336 N.C. 49", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2534772 ], "year": 1994, "pin_cites": [ { "page": "53", "parenthetical": "acknowledging that the Court in Pearce held that a violation of N.C.G.S. \u00a7 58-63-15(1) constituted a violation of N.C.G.S. \u00a7 75-1.1" } ], "opinion_index": 0, "case_paths": [ "/nc/336/0049-01" ] }, { "cite": "343 S.E.2d 174", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1986, "pin_cites": [ { "page": "179" }, { "page": "179" }, { "page": "180" } ], "opinion_index": 0 }, { "cite": "316 N.C. 461", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4694338 ], "weight": 3, "year": 1986, "pin_cites": [ { "page": "470" }, { "page": "469" }, { "page": "471" } ], "opinion_index": 0, "case_paths": [ "/nc/316/0461-01" ] }, { "cite": "400 S.E.2d 38", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "42" } ], "opinion_index": 0 }, { "cite": "328 N.C. 202", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2543010 ], "year": 1991, "pin_cites": [ { "page": "208" } ], "opinion_index": 0, "case_paths": [ "/nc/328/0202-01" ] }, { "cite": "388 S.E.2d 127", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1990, "pin_cites": [ { "page": "131" }, { "page": "131" } ], "opinion_index": 0 }, { "cite": "326 N.C. 219", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 5309520 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "226" }, { "page": "226" } ], "opinion_index": 0, "case_paths": [ "/nc/326/0219-01" ] }, { "cite": "507 S.E.2d 56", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1998, "pin_cites": [ { "page": "63" }, { "page": "63" } ], "opinion_index": 0 }, { "cite": "131 N.C. App. 242", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11198692 ], "weight": 2, "year": 1998, "pin_cites": [ { "page": "252" }, { "page": "252" } ], "opinion_index": 0, "case_paths": [ "/nc-app/131/0242-01" ] }, { "cite": "276 S.E.2d 397", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1981, "pin_cites": [ { "page": "403" }, { "page": "403" } ], "opinion_index": 0 }, { "cite": "302 N.C. 539", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567785 ], "weight": 3, "year": 1981, "pin_cites": [ { "page": "548" }, { "page": "548" } ], "opinion_index": 0, "case_paths": [ "/nc/302/0539-01" ] }, { "cite": "510 S.E.2d 396", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1999, "pin_cites": [ { "page": "402" }, { "page": "403" }, { "page": "402" }, { "page": "401" }, { "page": "400" } ], "opinion_index": 0 }, { "cite": "132 N.C. App. 63", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11236940 ], "weight": 2, "year": 1999, "pin_cites": [ { "page": "73" }, { "page": "69" } ], "opinion_index": 0, "case_paths": [ "/nc-app/132/0063-01" ] } ], "analysis": { "cardinality": 1098, "char_count": 34894, "ocr_confidence": 0.762, "pagerank": { "raw": 9.059539839445889e-07, "percentile": 0.9791248447303298 }, "sha256": "0fab9f3ba4c9e61eb1742727783307bd13bdf3bd486106e4f08e2747a03b60b3", "simhash": "1:af55b366756920d2", "word_count": 5638 }, "last_updated": "2023-07-14T16:59:29.406982+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Justice Martin did not participate in the consideration or decision of this case.", "Justice Martin did not participate in the consideration or decision of this case." ], "parties": [ "JACK S. GRAY and MARY B. GRAY t/a TOWER CIRCLE MOTEL v. NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION" ], "opinions": [ { "text": "FRYE, Chief Justice.\nThis case involves the relationship between N.C.G.S. \u00a7 75-1.1, which prohibits unfair and deceptive acts or practices, and N.C.G.S. \u00a7 58-63-15(11), which defines unfair practices in the settlement of insurance claims. See N.C.G.S. \u00a7 75-1.1(a) (1999); N.C.G.S. \u00a7 58-63-15(11) (1999). Plaintiffs contend that there is competent evidence to support a jury finding that defendant engaged in one or more acts prohibited by N.C.G.S. \u00a7 58-63-15(11), with such frequency as to indicate a general business practice constituting a violation of N.C.G'.S. \u00a7 75-1.1; that the jury\u2019s special verdict and the trial court\u2019s findings in the amended judgment entitle plaintiffs to a finding that the said acts constituted a violation of N.C.G.S. \u00a7 75-1.1 separate from and not based upon the conclusions made by the trial court in reliance upon a per se violation of N.C.G.S. \u00a7 58-63-15(11); that plaintiffs are entitled to treble damages in the amount of $1,119,770.73; and that plaintiffs are entitled to reasonable attorneys\u2019 fees pursuant to N.C.G.S. \u00a7 75-16.1. For the reasons stated below, we reverse and remand the decision of the Court of Appeals and hold that defendant violated N.C.G.S. \u00a7 75-1.1 separate and apart from any violation of N.C.G.S. \u00a7 58-63-15(11).\nDefendant, the North Carolina Insurance Underwriting Association, is an association of insurance carriers created by the General Assembly under N.C.G.S. \u00a7 58-45-10 for the purpose of providing \u201cessential property insurance\u201d for the \u201cbeach area.\u201d N.C.G.S. \u00a7\u00a7 58-45-1, -5, -10 (1999). Defendant issued a commercial windstorm and hail policy of insurance, effective 14 August 1993, to plaintiffs trading as the Tower Circle Motel. The Tower Circle Motel, which consisted of five buildings, was located in the Village of Buxton on Hatteras Island.\nThe policy insured the Tower Circle Motel against windstorm and hail damage but not against damage arising from flooding or rain. The policy did not provide fire insurance. The policy contained a standard mortgage clause, which provided in pertinent part:\n7. MORTGAGE HOLDERS\na. The term \u201cmortgage holder\u201d includes trustees.\nb. We will pay for covered loss of or damage to buildings or structures to each mortgage holder shown in the Declarations in their order of precedence, as interests may appear.\nNo mortgage holders were listed in the declarations. Further, under the declarations in the insurance policy, plaintiffs\u2019 limits for covered losses were as follows: Buildings One and Two in the amount of $116,000 on each building; Buildings Three and Four in the amount of $58,000 on each building; and Building Five in the amount of $81,000. The policy limit for the covered loss to contents was $17,000 each for Buildings One and Two; $5,000 each for Buildings Three and Four; and $8,000 for Building Five.\nOn 31 August 1993, Hurricane Emily struck the Outer Banks and caused extensive damage to Hatteras Island, including the Tower Circle Motel. Plaintiffs timely filed a claim under their policy with defendant for the wind damage to their property. Defendant contracted with Crittenden Adjustment Company (Crittenden) to adjust plaintiffs\u2019 claim. In a report dated 30 September 1993, Crittenden informed defendant that wind damage to Buildings One and Two exceeded the policy limits and recommended damage settlement of $116,000 each for Buildings One and Two. Crittenden also recommended damage settlements for Building Three in the amount of $4,276.38; Building Four in the amount of $4,144.38; and Building Five in the amount of $6,053. Crittenden\u2019s assessment of the cause of damages by wind to Buildings One and Two was later substantially corroborated, as were Crittenden\u2019s damages estimates. However, defendant did not pay the claims. Defendant concluded that the photographs taken by Crittenden did not reflect substantial damage and did not support the conclusion that Buildings One and Two were \u201ctotal losses.\u201d On 6 October 1993, defendant assigned Martin Cutler as a co-adjuster. About two weeks later, defendant asked Crittenden to withdraw from further handling plaintiffs\u2019 claims.\nOn or about 30 September 1993, during the adjustment process, Georgia Gray, plaintiff Jack Gray\u2019s sister-in-law, through her counsel, forwarded to defendant a deed of trust on plaintiffs\u2019 property. In a letter accompanying the deed of trust, Ms. Gray\u2019s counsel indicated that the deed of trust in favor of Ms. Gray\u2019s deceased husband, Charles Gray, was outstanding and that Ms. Gray had succeeded to Charles Gray\u2019s interest in the property. Ms. Gray\u2019s counsel requested \u201cthat any loss payment be made payable to the note holder.\u201d Defendant then issued an \u201cadvance payment\u201d of $25,000 on 21 October 1993, in the form of a check made payable to plaintiffs and Georgia B. Gray as joint payees. Plaintiffs returned the check on 5 November 1993, advising defendant that Georgia Gray was not a payee on their policy and that plaintiffs\u2019 obligation on the deed of trust had been paid in full.\nOn 10 May 1994, pursuant to a recommendation by Martin Cutler, defendant offered plaintiffs $60,821.51 in settlement of plaintiffs\u2019 claims under the policy. Plaintiffs rejected that offer.\nPlaintiffs commenced a civil action against defendant in July 1994, asserting claims of breach of contract and unfair and deceptive practices and seeking declaratory judgment. On 10 August 1995, plaintiffs filed a motion for partial summary judgment, specifically asking the court to enter an order finding that \u201cGeorgia B. Gray is not entitled to any portion of any payments under the policy of insurance issued by defendant to plaintiffs trading as the Tower Circle Motel.\u201d On 11 September 1995, the trial court denied the motion.\nIn December 1996, plaintiffs\u2019 claims were tried before a jury in the Superior Court, Dare County. After the presentation of evidence from both sides, the trial court submitted issues' that were answered by the jury as follows:\nISSUE ONE:\nDid the defendant, North Carolina Insurance Underwriting Association, breach the terms of the policy of insurance which was issued to the plaintiffs, Jack and Mary Gray?\nANSWER: YES\nISSUE TWO:\nWhat amount of money damages are the Grays entitled to recover?\nANSWER: $256,256.91\nISSUE THREE:\nDid the defendant, North Carolina Insurance Underwriting Association, do at least one of the following:\n[ANSWER:] YES\n(A) Fail to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;\n(B) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clearf;]\n(C) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled;\n(D) Delay in the investigation or payment of claims by requiring an insured claimant to submit a preliminary claim report and then requiring subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;\n(E) Failing to promptly settle claims where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage[.]\nTSSIIE FOUR:\nDid North Carolina Insurance Underwriting Association do any one or more of the above-stated acts with such frequency as to indicate a general business practice?\n[ANSWER:] YES\nTSSIIE FIVE:\nWere the plaintiffs, Jack and Mary Gray, injured as a proximate result of the defendant, North Carolina Insurance Underwriting Association\u2019s conduct?\n[ANSWER:] YES\nTSSIIE SIX:\nWhat amount, if any, have the Grays been injured?\nANSWER: $117,000.00\nTSSIIE SEVEN:\nAre the plaintiffs, Jack and Mary Gray, entitled to be paid the proceeds under the insurance policy free of any claim or interest of any party not entitled to receive payment under said policy?\nANSWER: YES\nOn 26 March 1997, the trial court entered a judgment that incorporated the jury\u2019s verdict and findings. The trial court entered an amended judgment on 22 April 1997, setting out additional findings of fact; awarding plaintiffs $607,256.91, which included breach of contract damages in the amount of $256,256.91 and trebled damages in the amount of $351,000 for defendant\u2019s unfair and deceptive acts; awarding prejudgment interest on all sums awarded; and taxing costs to defendant, including attorneys\u2019 fees in the sum of $117,000. The trial court found that plaintiffs were entitled to the \u201cproceeds under the policy of insurance free of any claim or interest of any party not entitled to receive payment under that policy.\u201d\nDefendant appealed to the North Carolina Court of Appeals. Plaintiffs cross-appealed, contending, among other things, that the trial court erred by not concluding that defendant\u2019s conduct constituted a violation of N.C.G.S. \u00a7 75-1.1 separate and apart from and not based upon a violation of N.C.G.S. \u00a7 58-63-15(11). The Court of Appeals found no error in the judgment awarding damages based on the breach of contract claim. Gray v. N.C. Ins. Underwriting Ass\u2019n, 132 N.C. App. 63, 73, 510 S.E.2d 396, 402 (1999). The Court of Appeals also found no prejudicial error in the trial court\u2019s judgment providing declaratory relief. Id. at 73, 510 S.E.2d at 403. However, the Court of Appeals reversed the trial court\u2019s judgment awarding treble damages and attorneys\u2019 fees, concluding that defendant\u2019s motion for directed verdict on plaintiffs\u2019 N.C.G.S. \u00a7 58-63-15(11) claim should have been granted and that the \u201caward of treble damages and attorneys\u2019 fees based on a violation of Chapters 58 and 75 was erroneous.\u201d Id. at 72, 510 S.E.2d at 402. The Court of Appeals also concluded that the trial court did not abuse its discretion by failing to find a violation of N.C.G.S. \u00a7 75-1.1 separate and apart from any violation of N.C.G.S. \u00a7 58-63-15(11). Id. at 71, 510 S.E.2d at 401. On 24 June 1999, this Court allowed plaintiffs\u2019 petition for discretionary review.\nI.\nPlaintiffs contend that defendant violated N.C.G.S. \u00a7 58-63-15(11) constituting a violation of N.C.G.S. \u00a7 75-1.1 and that defendant violated N.C.G.S. \u00a7 75-1.1 separate from and not based upon a violation of N.C.G.S. \u00a7 58-63-15(11). We agree with plaintiffs\u2019 latter contention.\nN.C.G.S. \u00a7 75-1.1 provides in pertinent part:\n(a) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.\n(b) For purposes of this section, \u201ccommerce\u201d includes all business activities, however denominated, but does not include professional services rendered by a member of a learned profession.\nN.C.G.S. \u00a7 75-1.1(a), (b).\nN.C.G.S. \u00a7 75-16 provides as follows:\nIf any person shall be injured or the business of any person, firm or corporation shall be broken up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have a right of action on account of such injury done, and if damages are assessed in such case judgment shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict.\nN.C.G.S. \u00a7 75-16 (1999).\nIn enacting N.C.G.S. \u00a7\u00a7 75-1.1 and 75-16, the legislature intended to effect a private cause of action for consumers. See Marshall v. Miller, 302 N.C. 539, 276 S.E.2d 397 (1981). In order to establish a violation of N.C.G.S. \u00a7 75-1.1, a plaintiff must show: (1) an unfair or deceptive act or practice, (2) in or affecting commerce, and (3) which proximately caused injury to plaintiffs. See N.C.G.S. \u00a7 75-1.1(a); First Atl. Mgmt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 252, 507 S.E.2d 56, 63 (1998).\nThe determination of whether an act or practice is an unfair or deceptive practice that violates N.C.G.S. \u00a7 75-1.1 is a question of law for the court. See Ellis v. Northern Star Co., 326 N.C. 219, 226, 388 S.E.2d 127, 131 (1990). Ordinarily, once the jury has determined the facts of a case, the court, based on the jury\u2019s findings, then determines, as a matter of law, whether the defendant engaged in unfair or deceptive practices in or affecting commerce. Id. Furthermore, this Court has stated that \u201cit does not invade the province of the jury for this Court to determine as a matter of law on appeal that acts expressly found by the jury to have occurred and to have proximately caused damages are unfair or deceptive acts in or affecting commerce under N.C.G.S. \u00a7 75-1.1.\u201d Id.\nIn Marshall v. Miller, 302 N.C. at 548, 276 S.E.2d at 403, this Court noted that a practice is deceptive if it has the tendency to deceive. This Court has also observed that \u201c[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.\u201d Id. Good faith is not a defense to an alleged violation of N.C.G.S. \u00a7 75-1.1. Id. Moreover, where a party engages in conduct manifesting an inequitable assertion of power or position, such conduct constitutes an unfair act or practice. See Johnson v. Beverly-Hanks & Assocs., 328 N.C. 202, 208, 400 S.E.2d 38, 42 (1991).\nInsurance law in this state is governed by chapter 58 of the North Carolina General Statutes. N.C.G.S. \u00a7 58-63-15(11), the unfair claim settlement practices statute, provides the following:\n(11) Unfair Claim Settlement Practices. \u2014 Committing or performing with such frequency as to indicate a general business practice of any of the following: Provided, however, that no violation of this subsection shall of itself create any cause of action in favor of any person other than the Commissioner:\nb. Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;\nf. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;\nh. Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled;\nl. Delaying the investigation or payment of claims by requiring an insured claimant, or the physician, of [or] either, to submit a preliminary claim report and then requiring the subsequent submission of formal proof-of-loss forms, both of which submissions contain substantially the same information;\nm. Failing to promptly settle claims where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage ....\nN.C.G.S. \u00a7 58-63-15(1 l)(b), (f), (h), (Z), (m) (alteration to (Z) in original).\nThe plain language of N.C.G.S. \u00a7 58-63-15(11) provides that the Commissioner of Insurance has the authority to enforce the provisions of that subsection. See N.C.G.S. \u00a7 58-63-15(11). In Pearce v. American Defender Life Ins. Co., this Court held that a violation of N.C.G.S. \u00a7 58-54.4 (the predecessor to N.C.G.S. \u00a7 58-63-15), as a matter of law, constituted an unfair or deceptive practice in violation of N.C.G.S. \u00a7 75-1.1. Pearce v. American Defender Life Ins. Co., 316 N.C. 461, 470, 343 S.E.2d 174, 179 (1986). However, the Court in Pearce was not interpreting the unfair claims settlement statute, now codified as N.C.G.S. \u00a7 58-63-15(11), but was interpreting what is now codified as N.C.G.S. \u00a7 58-63-15(1), titled \u201cMisrepresentations and False Advertising of Policy Contracts.\u201d See Jefferson-Pilot Life Ins. Co. v. Spencer, 336 N.C. 49, 53, 442 S.E.2d 316, 318 (1994) (acknowledging that the Court in Pearce held that a violation of N.C.G.S. \u00a7 58-63-15(1) constituted a violation of N.C.G.S. \u00a7 75-1.1).\nIn deciding that a violation of N.C.G.S. \u00a7 58-54.4 was a violation of N.C.G.S. \u00a7 75-1.1 as a matter of law, this Court in Pearce found as persuasive the reasoning in Winston Realty Co. v. G.H.G, Inc., 314 N.C. 90, 331 S.E.2d 677 (1985):\n\u201cAlthough defendant is correct in pointing out that Chapter 95 is regulatory in nature, this fact does not prevent the finding of an unfair or deceptive trade practice based on the conduct proscribed by Chapter 95. N.C.G.S. \u00a7 [95-47.6] prohibits private personnel services from engaging in specific conduct and activities, including the conduct specified in subsections (2) and (9) . . . . Although the authority to enforce the Chapter 95 provisions rests with the Commissioner of Labor, it is obvious that the list of proscribed acts found in N.C.G.S. \u00a7 95-47.6 were designed to protect the consuming public. The Court of Appeals confronted a similar issue in Ellis v. Smith Broadhurst, Inc., 48 N.C. App. 180, 268 S.E.2d 271 (1980), where the defendant contended plaintiff could not recover damages under N.C.G.S. \u00a7 75-1.1 because unfair and deceptive acts in the insurance industry were regulated exclusively by the insurance statutes, N.C.G.S. \u00a7 58-54.1, [ch. 58, art. 3A (1982 & Supp. 1985) (amended and recodified as ch. 58, art. 63 (1987))], which do not contain a right of private action. Chapter 95 similarly contains no right of private action. The Ellis court held that N.C.G.S. \u00a7 75-1.1 does provide a remedy for unfair trade practices notwithstanding that insurance is regulated by statute. 48 N.C. App. at 183, 268 S.E.2d at 273. We find this reasoning persuasive and hold that a violation of either or both N.C.G.S. \u00a7\u00a7 95-47.6(2) and (9) as a matter of law constitutes an unfair or deceptive trade practice in violation of N.C.G.S. \u00a7 75-1.1.\u201d\nPearce, 316 N.C. at 469, 343 S.E.2d at 179 (quoting Winston Realty Co., 314 N.C. at 97, 331 S.E.2d at 681).\nWe find this reasoning equally persuasive and applicable in the instant case. Although the authority to enforce N.C.G.S. \u00a7 58-63-15(11) rests with the Commissioner of Insurance, the acts proscribed in N.C.G.S. \u00a7 58-63-15(11) were designed to protect the consuming public. See Stanley v. Moore, 339 N.C. 717, 723, 454 S.E.2d 225, 228 (1995) (stating that \u201cviolations of statutes designed to protect the consuming public and violations of established public policy may constitute unfair and deceptive practices.\u201d).\nWe also find as persuasive the reasoning of a federal district court sitting in this state:\n\u201cFailing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies\u201d and \u201c[n]ot attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear\u201d are prohibited by Chapter 58 with regard to first party claims. N.C. Gen. Stat. \u00a7 58-54.4(1 l)c & f (1982). The court believes these practices, if found by the jury, could support a finding of unfair or deceptive acts or practices under Chapter 75.\nU.S. Fire Ins. Co. v. Nationwide Mut. Ins. Co., 735 F. Supp. 1320, 1328 (E.D.N.C. 1990).\nWe agree with the practice of looking to N.C.G.S. \u00a7 58-63-15(11) for examples of conduct to support a finding of unfair or deceptive acts or practices. Although N.C.G.S. \u00a7 58-63-15(11) does regulate settlement claims in the insurance industry, insurance companies are not immune to the general principles and provisions of N.C.G.S. \u00a7 75-1.1. .\nAn insurance company that engages in the act or practice of \u201c[n]ot 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(ll)(f), also engages in conduct that embodies the broader standards of N.C.G.S. \u00a7 75-1.1 because such conduct is inherently unfair, unscrupulous, immoral, and injurious to consumers. See Marshall, 302 N.C. at 548, 276 S.E.2d at 403. Thus, such conduct that violates subsection (f) of N.C.G.S. \u00a7 58-63-15(11) constitutes a violation of N.C.G.S. \u00a7 75-1.1, as a matter of law, without the necessity of an additional showing of frequency indicating a \u201cgeneral business practice,\u201d N.C.G.S. \u00a7 58-63-15(11).\nIn the instant case, the insurance policy specifically stated that it contained all the terms, agreements, and provisions governing the relationship between plaintiffs and defendant. The policy provided that defendant would pay for a covered loss to each mortgage holder listed in the policy. However, no mortgage holders were actually listed in the policy. The policy did not contain defendant\u2019s unwritten practice of naming as payee on settlement checks any person from whom it receives a letter claiming that such person has an interest in the insured property. In its answer to an interrogatory propounded to defendant by plaintiffs, defendant admitted that it was defendant\u2019s practice to \u201cinclude as payees all persons who have informed defendant of a mortgage or other interest in the property.\u201d At trial, Donald Stauffacher, an assistant plan manager with defendant, testified that \u201c[w]henever we receive notification that there is a lien holder, a mortgagee on a property that we\u2019re insuring, we protect that interest by naming them as a payee on any claims check,\u201d regardless of whether that mortgage holder is listed on the policy. Although the declarations of the policy did not name Georgia or Charles Gray as a mortgage holder and despite plaintiffs\u2019 objections, defendant continued to include Ms. Gray\u2019s name on the settlement checks.\nDefendant contends that it was legally justified in continuing to include Ms. Gray\u2019s name on the settlement checks in order to protect itself from suit. We reject this contention for two reasons. First, assuming arguendo that defendant believed that some third party (here, plaintiff Jack Gray\u2019s sister-in-law) might file a lawsuit against defendant, such a belief would be an insufficient basis for withholding payment of the policy proceeds to the beneficiary of the policy. The third party here was not a mortgage holder listed in the policy of insurance, and nothing in the policy authorized defendant to delay payment to the policyholder by naming as an additional payee anyone who wrote a letter claiming an interest in the property.\nSecond, the threat of a lawsuit by the third party against defendant was tenuous at best. The copy of the deed of trust offered into evidence did not identify Ms. Gray as the beneficiary. In April 1994, Cutler informed defendant that Ms. Gray and her attorney had failed to respond to requests to produce a note and the original deed of trust. Defendant, having a duty to pay insurance proceeds to plaintiffs for wind damage, unnecessarily frustrated plaintiffs\u2019 ability to recover any amount due under the policy by continuing to include Ms. Gray\u2019s name on the settlement checks.\nFurthermore, defendant\u2019s actions were exacerbated by its apparently arbitrary rejection of Crittenden\u2019s damages estimates and its ready acceptance of Cutler\u2019s disparate damages estimate.\nIn the instant case, in answering Issue Three on the verdict sheet, the jury found that defendant committed at least one of the following acts:\n(A) Fail to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;\n(B) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear[;]\n(C) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled;\n(D) Delay in the investigation or payment of claims by requiring an insured claimant to submit a preliminary claim report and then requiring subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;\n(E) Failing to promptly settle claims where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage[.]\nThe Court of Appeals assumed, without deciding, that there was sufficient evidence to warrant submission of Issue Three to the jury but concluded that a reasonable jury could not find that defendant\u2019s acts \u201cwere done with such frequency as to indicate a \u2018general business practice.\u2019 \u201d Gray, 132 N.C. App. at 69, 510 S.E.2d at 400. However, we conclude that the evidence at trial, when taken in a light most favorable to plaintiffs, was sufficient to sustain a jury verdict in plaintiffs\u2019 favor on this issue. See Davis v. Dennis Lilly Co., 330 N.C. 314, 322-23, 411 S.E.2d 133, 138 (1991) (stating the standard of review of directed verdict). Specifically, there was sufficient evidence to sustain a jury verdict that defendant did not attempt in good faith to effectuate prompt, fair and equitable settlements of claims in which liability had become reasonably clear. As we now hold that \u201c[n]ot attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear\u201d is a violation of N.C.G.S. \u00a7 75-1.1, it follows that defendant committed a violation of N.C.G.S. \u00a7 75-1.1 separate and apart from any violation of N.C.G.S. \u00a7 58-63-15(11). Defendant\u2019s conduct constituted an unfair or deceptive act or practice in or affecting commerce that proximately caused injury to plaintiffs. See First Atl. Mgmt. Corp., 131 N.C. App. at 252, 507 S.E.2d at 63. Although the trial court did not make this finding in its amended judgment, the trial court, nevertheless, trebled the jury award of $117,000 to $351,000 upon its finding of a violation of N.C.G.S. \u00a7 75-1.1. Accordingly, we conclude that there is no prejudicial error in the trial court\u2019s amended judgment awarding damages.\nII.\nHaving decided that defendant violated N.C.G.S. \u00a7 75-1.1 separate and apart from any violation of N.C.G.S. \u00a7 58-63-15(11), we need not address plaintiffs\u2019 contention that defendant committed acts proscribed under N.C.G.S. \u00a7 58-63-15(11) with such frequency as to constitute a general business practice and, therefore, violated N.C.G.S. \u00a7 75-1.1.\nIII.\nA.\nPlaintiffs next contend that if defendant violated N.C.G.S. \u00a7 75-1.1, they are entitled to damages in the sum of three times $373,256.91, the total amount fixed by the verdict as damages. We disagree.\nSection 75-16 provides that if anyone is injured \u201cby reason of any act or thing done ... in violation of the provisions of this Chapter,\u201d that person can sue \u201con account of such injury done.\u201d N.C.G.S. \u00a7 75-16. The statute further provides that \u201cin such case judgment shall be rendered... for treble the amount fixed by the verdict.\u201d Id. Thus, if a defendant violates N.C.G.S. \u00a7 75-1.1, treble damages shall be awarded. See Bhatti v. Buckland, 328 N.C. 240, 243, 400 S.E.2d 440, 442 (1991). Plaintiffs contend that the language in N.C.G.S. \u00a7 75-16, \u201ctreble the amount fixed by the verdict,\u201d means that the trial court should treble the entire award that includes damages for breach of contract and damages from the violation of N.C.G.S. \u00a7 75-1.1. However, plaintiffs\u2019 breach of contract damages are not damages arising from a violation of N.C.G.S. \u00a7 75-1.1.\nIn forging N.C.G.S. \u00a7 75-16, the legislature intended for the phrase \u201ctreble the amount fixed by the verdict\u201d to mean that damages proximately caused by a violation of N.C.G.S. \u00a7 75-1.1 shall be trebled, not that damages on every claim that happens to arise in a case involving a violation of N.C.G.S. \u00a7 75-1.1 shall be trebled. This Court has stated that in order to recover treble damages, a plaintiff must show that he \u201csuffered actual injury as a proximate result of defendant\u2019s deceptive statement or misrepresentation.\u201d Pearce, 316 N.C. at 471, 343 S.E.2d at 180; accord Ellis, 326 N.C. at 226, 388 S.E.2d at 131; see also Noel L. Allen, North Carolina Unfair Business Practice \u00a7 10-3(a), at 222 (1995) (\u201cThe damages to be trebled must only be those damages as determined by the factfinder that were a direct and proximate result of the \u00a7 75-1.1 violation.\u201d).\nIn the instant case, the trial court instructed the jury that Issue One involved breach of contract liability and that Issue Two involved damages from that breach of contract, including consequential damages. On Issue Two, the jury determined that plaintiffs were entitled to money damages of $256,256.91 as a result of the breach of contract of insurance. Under Issue Six, the jury determined that plaintiffs were injured in the amount of $117,000 as a result of defendant\u2019s violation^) of N.C.G.S. \u00a7 58-63-15(11). The jury made no specific findings of fact to support the award of damages under Issue Two, other than the finding regarding the breach of contract of insurance. Further, the trial court could not have properly concluded that the breach of contract itself constituted a violation of N.C.G.S. \u00a7 75-1.1, and the trial court could not have properly trebled the breach of contract damages. See Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 62, 418 S.E.2d 694, 700 (holding that a mere breach of contract is not sufficient to make out a claim under N.C.G.S. \u00a7 75-1.1; substantial aggravating circumstances attendant to the breach must be shown), disc. rev. denied, 332 N.C. 482, 421 S.E.2d 350 (1992). After the jury found that defendant violated N.C.G.S. \u00a7 58-63-15(11), the trial court then found, as a matter of law, that defendant violated N.C.G.S. \u00a7 75-1.1. The trial court then trebled the jury award of $117,000 to $351,000 pursuant to N.C.G.S. \u00a7 75-16. Accordingly, the trial court correctly trebled only the damages found by the jury in Issue Six \u2014 those proximately caused by the violation of N.C.G.S. \u00a7 75-1.1.\nB.\nNext, plaintiffs, assuming that they are entitled to treble damages, contend that they should not be required to elect between the breach of contract damages determined in Issue Two of the jury verdict and the \u201cseparate and distinct damages\u201d determined in Issue Six of the jury verdict. Since neither plaintiffs in their petition for discretionary review nor defendant in its response thereto raised the issue of election of remedies, this issue is not properly before the Court, and we decline to address it. See N.C. R. App. P. 16(a).\nIV.\nIn their final argument, plaintiffs contend that the Court of Appeals erred by reversing the trial court\u2019s award of reasonable attorneys\u2019 fees pursuant to N.C.G.S. \u00a7 75-16.1. We agree.\nThe award of attorneys\u2019 fees for an unfair or deceptive practice claim under N.C.G.S. \u00a7 75-1.1 is governed by N.C.G.S. \u00a7 75-16.1:\nIn any suit instituted by a person who alleges that the defendant violated G.S. 75-1.1, the presiding judge may, in his discretion, allow a reasonable attorney fee to the duly licensed attorney representing the prevailing party, such attorney fee to be taxed as a part of the court costs and payable by the losing party, upon a finding by the presiding judge that:\n(1) The party charged with the violation has willfully engaged in the act or practice, and there was an unwarranted refusal by such party to fully resolve the matter which constitutes the basis of such suit; or\n(2) The party instituting the action knew, or should have known, the action was frivolous and malicious.\nN.C.G.S. \u00a7 75-16.1 (1999).\nThe Court of Appeals reversed the award of attorneys\u2019 fees, holding that there was no violation of N.C.G.S. \u00a7 75-1.1. Having concluded that plaintiffs have established such a violation, we reverse that portion of the Court of Appeals\u2019 decision that reverses the trial court\u2019s award of attorneys\u2019 fees. Upon remand, the trial court may consider an award of attorneys\u2019 fees for services rendered after the entry of its judgment. See City Fin. Co. of Goldsboro, Inc. v. Boykin, 86 N.C. App. 446, 449-50, 358 S.E.2d 83, 85 (1987) (holding that N.C.G.S. \u00a7 75-16.1 includes fees for services rendered at all stages of litigation, including appeals).\nFor the foregoing reasons, we reverse the decision of the Court of Appeals as to the issues set forth herein. Accordingly, we remand this case to the Court of Appeals for further remand to the Superior Court, Dare County, for reinstatement of the trial court\u2019s amended judgment.\nREVERSED AND REMANDED.\nJustice Martin did not participate in the consideration or decision of this case.", "type": "majority", "author": "FRYE, Chief Justice." } ], "attorneys": [ "Vandeventer Black LLP, by Norman W. Shearin, Jr., and Robert L. O\u2019Donnell, for plaintiff-appellants.", "Cranfill, Sumner & Hartzog, L.L.P., by William W. Pollock; and Smith Helms Mulliss & Moore, L.L.P., by Larry B. Sitton and Matthew W. Sawchak, for defendant-appellee." ], "corrections": "", "head_matter": "JACK S. GRAY and MARY B. GRAY t/a TOWER CIRCLE MOTEL v. NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION\nNo. 84PA99\n(Filed 16 June 2000)\n1. Unfair Trade Practices\u2014 settlement of insurance claims\u2014 acts prohibited by insurance statute \u2014 separate N.C.G.S. \u00a7 75-1.1 claim\nThe Court of Appeals erred in reversing the trial court\u2019s amended judgment trebling the jury award of $117,000 to $351,000 under N.C.G.S. \u00a7 75-1.1, based on its conclusion that a reasonable jury could not find defendant insurance company\u2019s acts were done with such frequency as to indicate a general business practice, because: (1) although the ability to enforce N.C.G.S. \u00a7 58-63-15(11) rests with the Commissioner of Insurance, the acts proscribed in that statute were designed to protect the consuming public, and therefore, can be looked at for examples of conduct to support a finding of unfair or deceptive acts or practices under N.C.G.S. \u00a7 75-1.1 as a matter of law without the necessity of an additional showing of frequency indicating a \u201cgeneral business practice\u201d; and (2) an insurance company\u2019s conduct of \u201cnot attempting in good faith to effectuate a prompt, fair and equitable settlement of claims in which liability has become reasonably clear\u201d is a violation of N.C.G.S. \u00a7 75-1.1 that is separate and apart from any violation of N.C.G.S. \u00a7 58-63.15(11).\n2. Unfair Trade Practices\u2014 treble damages \u2014 not entire award \u2014 only unfair or deceptive trade practices claim\nThe trial court properly trebled only the damages found by the jury that were proximately caused by the violation of N.C.G.S. \u00a7 75-1.1 because plaintiffs are not entitled to treble damages on the entire amount fixed by the verdict as damages, since plaintiffs\u2019 breach of contract damages are not damages arising from an unfair or deceptive trade practice claim under N.C.G.S. \u00a7 75-1.1.\n3. Unfair Trade Practices\u2014 attorney fees\nThe Court of Appeals erred by reversing the trial court\u2019s award of attorney fees under N.C.G.S. \u00a7 75-16.1 based on the erroneous conclusion that plaintiffs failed to establish an unfair or deceptive trade practice claim under N.C.G.S. \u00a7 75-1.1.\nJustice Martin did not participate in the consideration or decision of this case.\nOn discretionary review pursuant to N.C.G.S. \u00a7 7A-31 of a unanimous decision of the Court of Appeals, 132 N.C. App. 63, 510 S.E.2d 396 (1999), finding no error in part and reversing in part an amended judgment entered by Parker, J., on 22 April 1997 in Superior Court, Dare County. Heard in the Supreme Court 15 November 1999.\nVandeventer Black LLP, by Norman W. Shearin, Jr., and Robert L. O\u2019Donnell, for plaintiff-appellants.\nCranfill, Sumner & Hartzog, L.L.P., by William W. Pollock; and Smith Helms Mulliss & Moore, L.L.P., by Larry B. Sitton and Matthew W. Sawchak, for defendant-appellee." }, "file_name": "0061-01", "first_page_order": 101, "last_page_order": 116 }