Opinion
5:20-CV-610-FL
02-17-2022
BARBARA NEWMAN, Plaintiff, v. NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION/NORTH CAROLINA JOINT UNDERWRITING ASSOCIATION, KELLOGG-MORGAN AGENCY, INC., NINA WETHINGTON, Defendants.
MEMORANDUM AND RECOMMENDATION
Brian S. Meyers, United States Magistrate Judge
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]. 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.
Plaintiff filed a response in opposition [DE-49] and declaration in support thereof [DE-50] to both the motion to dismiss for lack of personal jurisdiction and for failure to state a claim filed by Defendants North Carolina Insurance Underwriting Association and North Carolina Joint Underwriting Association [DE-46], and the motion to dismiss for failure to state a claim filed by Defendant Kellogg-Morgan Agency, Inc. [DE-32]. Both motions to dismiss [DE-32; DE-46] were referred to the undersigned magistrate judge pursuant to 28 U.S.C. § 636(b)(1). The undersigned previously issued a memorandum and recommendation [DE-54] addressing the motion to dismiss for failure to state a claim filed by Defendant Kellogg-Morgan Agency, Inc. [DE-32], as well as the respective filings in support thereof and in opposition thereto. Subsequently, United States District Judge Louise W. Flanagan issued an order [DE-55] granting Defendant Kellogg-Morgan Agency, Inc.'s motion to dismiss and dismissing Plaintiff's claims against Defendant Kellogg-Morgan Agency, Inc. with prejudice. Defendant Kellogg-Morgan Agency, Inc. was then terminated as a party to this case. The instant memorandum and recommendation therefore addresses only the motion to dismiss for lack of personal jurisdiction and for failure to state a claim filed by Defendants North Carolina Insurance Underwriting Association and North Carolina Joint Underwriting Association [DE-46], as well as the respective filings in support thereof and in opposition thereto.
BACKGROUND
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. Id. at ¶¶ 2, 11. Kellogg-Morgan Agency, Inc. (“KM Agency”) was the insurance agent for Plaintiff's policy. Compl. [DE-1] at ¶¶ 3, 11.
The NC Associations provide a market of last resort for those seeking certain types of property insurance in North Carolina, and who would otherwise struggle to find insurance in the voluntary market. Brink Aff. [DE-3] at ¶ 3.
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:
The Association will provide the insurance described in this continuation of coverage application and declaration in return for the premium and compliance of all applicable provisions of the policy.
Your payment of premium is considered a reapplication for coverage and is a representation that there have been no substantial changes to occupancy or condition of the property. . . .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. 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].
Plaintiff also asserts a claim of gross negligence in her complaint. This claim, however, is not asserted against Defendants North Carolina Insurance Underwriting Association and North Carolina Joint Underwriting Association, and is therefore not addressed herein.
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. AT&T Corp., No. 5:10-CV-591-FL, 2011 WL 1456388, at *1 (E.D. N.C. Apr. 14, 2011) (quoting Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548 (4th Cir. 2006)) (declining to address an argument for failure to state a claim under Rule 12(b)(6) when the court first determines that personal jurisdiction is not proper).
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of claims for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A motion to dismiss pursuant to Rule 12(b)(6) should be granted only if “it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). Ordinarily, the complaint need contain simply “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, a complaint is insufficient if it offers merely “labels and conclusions, ” “a formulaic recitation of the elements of a cause of action, ” or “naked assertion[s]” devoid of “further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007) (internal quotation marks omitted)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). A claim is facially plausible if the plaintiff alleges factual content “that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged” and shows more than “a sheer possibility that a defendant has acted unlawfully.” Id.; SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 425 (4th Cir. 2015) (“[I]t is not our task at the motion-to-dismiss stage to determine ‘whether a lawful alternative explanation appear[s] more likely' from the facts of the complaint.” (quoting Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015))), cert. denied, 136 S.Ct. 2485 (2016).
In analyzing a Rule 12(b)(6) motion, a court must accept as true all well-pleaded allegations of the challenged complaint and view those allegations in the light most favorable to the plaintiff. Venkatraman v. REI Sys., Inc., 417 F.3d 418, 420 (4th Cir. 2005) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)); see also Lambeth v. Bd. of Comm'rs, 407 F.3d 266, 268 (4th Cir. 2005) (court must accept as true all factual allegations of the complaint). All reasonable factual inferences from the allegations must be drawn in plaintiff's favor. Edwards, 178 F.3d at 244. However, bare assertions of legal conclusions or formulaic recitations of the elements of a claim are not entitled to be assumed true. Iqbal, 556 U.S. at 681. Complaints filed by pro se plaintiffs are entitled to liberal construction. Kerr v. Marshall Univ. Bd. of Governors, 824 F.3d 62, 72 (4th Cir. 2016) (“We are mindful of our obligation to liberally construe a pro se complaint.”); Jehovah v. Clarke, 798 F.3d 169, 176 (4th Cir. 2015) (“We must construe pro se complaints liberally . . . and [l]iberal construction of the pleadings is particularly appropriate where, as here, there is a pro se complaint raising civil rights issues.” (citations omitted)); White v. White, 886 F.2d 721, 724 (4th Cir. 1989) (“Pro se complaints are to be read liberally”). “Documents attached to the complaint or motion may be considered if ‘they are integral to the complaint and authentic.'” Ferebee v. Dep't of Human Relations Comm., No. CV TDC-16-3803, 2018 WL 731682, at *2 (D. Md. 5 Feb. 2018) (quoting Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007))).
ANALYSIS
I. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
Defendants first seek dismissal of Plaintiff's complaint for lack of personal jurisdiction under Rule 12(b)(2), resulting from insufficient process under Rule 12(b)(4) and insufficient service of process under Rule 12(b)(5).
Under 28 U.S.C. § 1406(a), “[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). However, “[t]ransfer of a case pursuant to 28 U.S.C. § 1406(a) does not confer personal jurisdiction upon the court receiving the case.” Wilson v. St. Mary's Hosp., 822 F.Supp. 1450, 1451 (D. Minn. 1993) (citing Michelson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 709 F.Supp. 1279, 1288 (S.D.N.Y. 1989)). Rather, it only makes personal jurisdiction “possible” in the new court. Id.
“Proper service of process (or waiver of service under Rule 4(d)) is necessary for the court to exercise personal jurisdiction over a defendant.” Richardson v. Roberts, 355 F.Supp.3d 367, 370 (E.D. N.C. 2019) (citing Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999)). “[P]reviously unperfected personal jurisdiction does not attach in a transferee district court until a summons issued by that court is properly served.” Bolus v. Fleetwood RV, Inc., 308 F.R.D. 152, 155 (M.D. N.C. 2015) (quoting Harding v. Williams Prop. Co., No. 96-2713, 1998 WL 637414, at *4 (4th Cir. Aug. 31, 1998)); see also Hansan v. Fairfax Cnty. Pub. Sch. Bd., No. 1:09cv558(GBL), 2010 WL 1779679, at *3 (E.D. Va. Apr. 30, 2010)). In other words, for personal jurisdiction to exist, a summons issued by the transferee court must be served on defendants. See Wilson, 822 F.Supp. at 1451-52 (citing Michelson, 709 F.Supp. at 1288; Steward Coach Indus., Inc. v. Moore, 512 F.Supp. 879, 883-84 (S.D. Ohio 1981)). While requiring “that new service be made in all cases of transfer under § 1406(a) may occasionally penalize plaintiffs with ‘time consuming and justice defeating technicalities,' . . . plaintiffs must always affirmatively show jurisdiction is conferred on the court [and] it must do so in strict compliance with the statute.” Wilson, 822 F.Supp. at 1453 (alteration in original) (quoting Rixner v. White, 417 F.Supp. 995, 997 (D.N.D. 1976)).
Here, after determining that the court lacked personal jurisdiction in New Jersey, and thus, venue was improper, the United States District Judge in the District of New Jersey ordered that this case be transferred to this court, the United States District Court for the Eastern District of North Carolina. N.J. Order [DE-14]. In its opinion, the New Jersey court states that “the Eastern District of North Carolina will almost certainly have personal jurisdiction over Defendant . . . in this matter. Therefore, in the interests of justice, the [c]ourt concludes that transfer under § 1406(a) is appropriate in this case.” N.J. Opinion [DE-13] at 21. The case was transferred to this court on November 18, 2020. [DE-15].
Following transfer to the Eastern District of North Carolina, Plaintiff has not attempted to re-serve Defendants with valid process issued by the Eastern District of North Carolina. In the motion to dismiss, Defendants contend that Plaintiff's failure to re-serve Defendants warrants dismissal. Defs.' Mem. [DE-47] at 8. Specifically, Defendants argue:
Citations to Defendants' Memorandum [DE-47] are to the page numbers assigned by the court's electronic CM/ECF filing system.
[Plaintiff] has failed to validly serve [Defendants] with legally effective process. [Plaintiff] has only ever attempted service on [Defendants] with a summons issued by the District Court for the District of New Jersey. That court lacks personal jurisdiction over [Defendants] and cannot issue a legally effective summons to them. As a result, [Defendants have] never been served with legally effective process for this lawsuit, and the Court should dismiss [Plaintiff's] complaint as against [Defendants] under rules 12(b)(2), 12(b)(4), and 12(b)(5).Defs' Mem. [DE-47] at 8. In her response to Defendants' motion to dismiss, Plaintiff does not respond to this argument. See Pl.'s Resp. [DE-49].
The court finds that Plaintiff has failed to serve Defendants with valid process in the Eastern District of North Carolina. While Plaintiff may have attempted service while the case was pending in the District of New Jersey, Plaintiff was required to re-serve Defendants with a summons from the Eastern District of North Carolina once her case was transferred. Bolus, 308 F.R.D. 152, 154-55 (finding that the plaintiff's attempt at service in the transferring court was insufficient and requiring that the plaintiff to re-serve the defendant with a summons issued by the transferee district); Hansan, 2010 WL 1779679, at *3 (same).
Pursuant to Federal Rule of Civil Procedure 4(m), Plaintiff was required to serve Defendants within ninety days of the filing of her complaint. Fed.R.Civ.P. 4(m). Rule 4(m) provides:
If a defendant is not served within 90 days after the complaint is filed, the court- on motion or on its own after notice to the plaintiff-must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period. . . .Id. Notably, the Rule 4(m) limit does not automatically reset upon transfer of a case. Harding, 1998 WL 637414, at *5; see also Satterfield v. Gov't Emps. Ins. Co., No. 5:18-cv-00024, 2018 WL 10806861, at *1 (W.D. Va. Oct. 5, 2018)). Because Plaintiff's complaint was filed in the United States District Court for the District of New Jersey on February 12, 2020 (Compl. [DE-1]) and Defendants still have not been properly served, Plaintiff has failed to timely serve Defendants in accordance with Rule 4(m).
Nevertheless, the period within which a defendant must be served can be extended in certain circumstances. Under Rule 4(m), if a plaintiff shows “good cause” for the delay in effecting service, the court must extend the time for service. Fed.R.Civ.P. 4(m). As courts in this district have noted, there are six factors a district court must weigh when assessing whether there is “good cause”:
1) whether the delay was outside of plaintiff's control; 2) whether the defendant was evasive; 3) whether the plaintiff acted diligently or made reasonable efforts to serve process; 4) whether the plaintiff is pro se or in forma pauperis; 5) whether the defendant would be prejudiced by an extension; and 6) whether the plaintiff asked for an extension of time before the deadline.Richardson, 355 F.Supp.3d at 371 (citing Scott v. Md. State Dep't of Labor, 673 Fed.Appx. 299, 306 (4th Cir. 2016)). Additionally, “Rule 4(m) . . . permits a district court to enlarge the time for service even if there is no good cause shown.” Durity v. Precision Walls, Inc., No. 5:19-CV-506-FL, 2020 WL 1492812, at *2 (E.D. N.C. Mar. 26, 2020) (alteration in original) (quoting Henderson v. United States, 517 U.S. 654, 658 n.5 (1996)).
As detailed below, it is recommended that the deadline for Plaintiff to perfect service be extended at the court's discretion. In so recommending, the court has considered that Plaintiff is appearing pro se and that her prior attorney was disqualified from this matter following transfer to this district. See [DE-40]. The court has also considered that Defendants are not likely to be prejudiced by an extension. Defendants have been aware of, and actively engaging in, the ongoing litigation since Plaintiff's attempted service in the District of New Jersey. In the motion to dismiss, Defendants also appear to acknowledge a likelihood that such extension may be granted, stating that “[u]ntil the NC Associations are served with validly-issued legal process for this lawsuit, this court lacks personal jurisdiction over them.” Defs.' Mem. [DE-47] at 14.
A lack of competence by Plaintiff's counsel “may well constitute good cause for [P]laintiff's delay, in which case an extension of time to perfect service is not only permitted [but] required.” Durity, 2020 WL 1492812, at *2 n.2.
For the foregoing reasons, it is RECOMMENDED that the court enter an order DENYING Defendants' motion to dismiss for lack of personal jurisdiction and providing as follows:
1. Plaintiff shall have 30 days from the date of entry of the court's order in which to serve process on Defendants;
2. Plaintiff shall file proof of service of process within three days after the date on which Plaintiff alleges process was served;
3. Plaintiff is warned that failure to timely perfect service may result in dismissal of this action without prejudice;
4. Any motion by Defendants challenging service of process shall be filed within 14 days after the date on which Plaintiff timely files proof of service of process or, if to Defendants' knowledge Plaintiff attempts to serve process pursuant to the court's order but does not timely file proof of service of process, within 48 days after the date of entry of the court's order;
5. Any response by Plaintiff to a motion by Defendants challenging service of process shall be filed no later than 14 days after the filing of such motion; and
6. Defendants' motion to dismiss for failure to state a claim upon which relief can be granted is DENIED AS MOOT without prejudice. Should the court determine that it has personal jurisdiction over Defendants, Defendants may reassert the defense of failure to state a claim upon which relief can be granted by filing a motion no later than 14 days from the date of entry of the court's order determining personal jurisdiction. Any response by Plaintiff to a renewed motion to dismiss for failure to state a claim upon which relief can be granted shall be filed no later than 14 days after the filing of such motion.
II. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED
Consistent with the above recommendation that Defendants' motion to dismiss for lack of personal jurisdiction be denied and the deadline for Plaintiff to perfect service be extended as provided above, the arguments made in Defendants' motion to dismiss under Rule 12(b)(6) are presently moot. Should it be determined that the court has personal jurisdiction over Defendants and Defendants reassert defenses under Rule 12(b)(6) on the grounds currently stated in the instant motion [DE-46] and memorandum in support thereof [DE-47], the undersigned makes the below r ecommendations.
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; and (5) unfair and deceptive trade practices in violation of N.C. Gen. Stat. §§ 75-1.1 to -35. Id. at ¶¶ 42-74. By the motion, Defendants seek dismissal under Rule 12(b)(6) of all of Plaintiff's claims against Defendant NCIUA, and dismissal of all claims against Defendant NCJUA except for the claim for breach of contract. Defs.' Mem. [DE-47] at 14. Additionally, Defendants ask the court to find that Plaintiff fails to state facts supporting a claim for punitive damages.
A. Dismissal under Rule 12(b)(6) for failure to state a claim
1. Claims against Defendant NCIUA
The dispute in this case stems from a denial of coverage under the insurance policy between Plaintiff and Defendant NCJUA. Compl. [DE-1] at Ex. B. In her complaint, Plaintiff names both NCJUA and NCIUA as defendants, and consistently refers to NCJUA and NCIUA together as being the insurers under the policy. Compl. [DE-1] at ¶ 2. However, as Defendants correctly assert in the motion to dismiss, NCIUA is not a party to this dispute. While Defendant NCJUA and Defendant NCIUA are both listed on the letterhead of the policy document, the same policy document specifies “COVERAGE PROVIDED THROUGH: NORTH CAROLINA JOINT UNDERWRITING ASSOCIATION, ” making it clear that any coverage under the policy is provided through Defendant NCJUA. Id. at Ex. B, at 25. In her response [DE-49] to Defendants' motion to dismiss, Plaintiff appears to concede this point. Plaintiff refers only to NCJUA, instead of writing NCJUA/NCIUA as she consistently does in her complaint.
It is therefore RECOMMENDED that Defendants' motion to dismiss be GRANTED as to the claims against Defendant NCIUA, and that all claims against Defendant NCIUA be DISMISSED.
2. Breach of implied covenant of good faith and fair dealing
“In every contract there is an implied covenant of good faith and fair dealing that neither party will do anything that injuries the right of the other to receive the benefits of the agreement.” Hancock v. Americo Fin. Life & Annuity Ins. Co., 799 Fed.Appx. 179, 181 (4th Cir. 2020) (citing Bicycle Transit Auth., Inc. v. Bell, 314 N.C. 219, 228, 333 S.E.2d 299, 305 (1985)). Where there is a written contract, “an action for ‘breach of the covenant of good faith and fair dealing is part and parcel of a claim for breach of contract.'” Michael Borovsky Goldsmith LLC v. Jewelers Mut. Ins. Co., 359 F.Supp.3d 306, 313 (E.D. N.C. 2019) (quoting McKinney v. Nationstar Mortg., LLC, No. 5:15-CV-637-FL, 2016 WL 3659898, at *8 (E.D. N.C. July 1, 2016)). “Accordingly, when a court rejects a breach of contract claim, it likewise rejects any claim for breach of the covenant of good faith and fair dealing contained in the contract.” Michael Borovsky Goldsmith, 359 F.Supp.3d at 313 (citing Sun Trust Bank v. Bryant/Sutphin Props., LLC, 222 N.C.App. 821, 833, 732 S.E.2d 594, 603 (2012)); see also Petruzzo v. HealthExtras, Inc., No. 5:12-CV-113-FL, 2013 WL 4517273, at *6 (E.D. N.C. Aug. 23, 2013) (citing cases) (finding that “when a breach of the duty of good faith and fair dealing is based upon the same facts as a breach of contract claim, the breach of duty cannot survive absent the underlying breach of contract”).
Additionally, under North Carolina law a separate claim for breach of an implied covenant of good faith and fair dealing exists “in limited circumstances involving special relationships between parties, [such as] cases involving contracts for funeral services and insurance.” First Protective Ins. Co. v. Rike, 516 F.Supp.3d 513, 530 (E.D. N.C. 2021) (quoting Michael Borovsky Goldsmith, 359 F.Supp.3d at 313-14) (alteration in original). “In the insurance context, a claim for breach of the covenant of good faith and fair dealing requires three elements: ‘(1) a refusal to pay after recognition of a valid claim; (2) bad faith; and (3) aggravating or outrageous conduct.'” First Protective, 516 F.Supp.3d at 531-32 (quoting LRP Hotels of Carolina, LLC v. Westfield Ins. Co., No. 4:13-CV-94-D, 2014 WL 5581049, at *4 (E.D. N.C. Oct. 31, 2014)). A “[l]egitimate and honest disagreement over the scope of coverage under an insurance contract does not amount to bad faith.” Michael Borovsky Goldsmith, 359 F.Supp.3d at 314. Thus, “when an insurer denies a claim because of a legitimate, ‘honest disagreement' as to the validity of the claim, . . . the plaintiff cannot establish bad faith or any tortious conduct on the part of the insurer.” Id. (quoting Topsail Reef Homeowners Ass'n v. Zurich Specialties London, Ltd., 11 Fed.Appx. 225, 238 (4th Cir. 2001) (per curiam)). Likewise, “[b]ad faith does not arise when there is an ‘honest disagreement' regarding the value of a claim.” Essentia Ins. Co. v. Stephens, --- F.Supp.3d. ---, No. 5:20-CV-175-FL, 2021 WL 1206582, at *13 (E.D. N.C. Mar. 30, 2021) (citing Lovell v. Nationwide Mut. Ins. Co., 108 N.C.App. 416, 421, 424 S.E.2d 181, 185 (1993)).
Here, in her complaint, Plaintiff alleges that Defendants breached the implied covenant of good faith and fair dealing in three ways. Compl. [DE-1] at ¶¶ 46-50. First, Plaintiff alleges that Defendants should have known that the insurance policy in dispute covered the damage to her home, and should have recognized that the damage was “more consistent with the perils covered within the insurance policy in dispute instead of remodeling as declared by the Defendants upon denying plaintiff's claim . . . .” Id. at ¶ 48. Second, Plaintiff alleges that Defendants “knew and/or should have known that the Microsoft Excel Spreadsheet forwarded to plaintiff by email upon plaintiff's request for the insurance policy, was not the legally binding insurance policy in dispute.” Id. at ¶ 49. Third, Plaintiff alleges that after she appealed the denial of her claim, Defendants “willfully continued to misrepresent that plaintiff was engaged in remodeling . . . [when] the condition of the subject property . . . is more consistent with . . . actions of theft of personal property therein . . . .” Id. at ¶ 50. In her complaint, Plaintiff also asserts a breach of contract under the insurance policy in dispute. Id. at ¶¶ 42-45. Under this claim, she alleges that Defendants “failed or refused to pay the full amount due under the insurance policy in dispute and have otherwise failed or refused to comply with the terms and provisions of the insurance policy which covers the perils subject of plaintiff's claim . . . .” Id. at ¶ 43.
Plaintiff's claims for breach of implied covenant of good faith and fair dealing and breach of contract are both based on Defendant NCJUA's decision to deny Plaintiff's claim under the insurance policy in dispute. Plaintiff alleges no additional facts in her claim for breach of the implied covenant of good faith and fair dealing. “[T]he weight of North Carolina authority holds that a claim for breach of the covenant of good faith and fair dealing based on facts identical to those supporting a breach of contract claim should not be pursued separately.” Nadendla v. WakeMed, No. 5:18-CV-540-H, 2020 WL 6370979, at *3 (E.D. N.C. Oct. 29, 2020) (alteration in original) (quoting BioSignia, Inc. v. Life Line Screening of America, Ltd., No. 1:12CV1129, 2014 WL 2968139, at *5 (M.D. N.C. July 1, 2014)). Because Plaintiff's claim here “‘rise[s] and fall[s] with the underlying claim[] for breach of contract,' the separate cause of action for breach of the covenant of good faith and fair dealing is . . . duplicative.” Id. Rather than pursue a separate claim for breach of implied covenant of good faith and fair dealing, “Plaintiff's theories of bad faith may be asserted in support of its claim for breach of contract.” Nadendla, 2020 WL 6370979, at *3 (citing BioSignia, 2014 WL 2968139, at *5; Performance Sales & Mktg., LLC v. Lowe's Cos., No. 5:07cv140, 2010 WL 2294323, at *11 (W.D. N.C. June 4, 2010)).
A copy of the insurance policy is attached to Plaintiff's complaint as Exhibit B. Compl. [DE-1] at Ex. B.
Even assuming, arguendo, that Defendants could be held liable for breach of the covenant of good faith and fair dealing due to the “special relationship” that exists in an insurance case, Plaintiff's claim still fails. Under this theory of liability, Plaintiff fails to plead any facts that show “a refusal to pay after recognition of a valid claim.” First Protective, 516 F.Supp.3d at 531-32. Plaintiff states that following inspection by an independent adjuster, Plaintiff's claim was denied by the NC Associations. Compl. [DE-1] at ¶ 32. No additional facts are pled showing that her claim was recognized as valid prior to this denial. Case law is clear that “Plaintiff cannot maintain a cause of action for bad faith in refusing to settle an insurance claim . . . where there is no valid, recognizable claim in the first instance.” Whitmire v. S. Farm Bureau Life Ins. Co., 538 F.Supp.3d. 591, 608 (E.D. N.C. 2021) (citing Lovell v. Nationwide Mut. Ins. Co., 108 N.C.App. 416, 420, 424 S.E.2d 181, 184 (1993)).
Further, Plaintiff fails to show bad faith. Instead, she shows only that an “honest disagreement” exists between her and Defendants over the validity of her claim. Michael Borovsky Goldsmith, 359 F.Supp.3d at 314. Plaintiff attaches to her complaint, as Exhibit E, a copy of the insurance denial letter sent to her. Compl. [DE-1] at Ex. E. The letter states that her claim is denied based on the report of the independent insurance adjuster, who determined that the damage to her home was the result of a remodel in process. Id. Plaintiff alleges in her complaint that this denial is incorrect because the damage to her home was actually the result of vandalism by her former tenant. Id. at ¶ 26. In support of this contention, Plaintiff attaches to her complaint, as Exhibit D, a contradictory report by contractor Kee Builders, allegedly stating that the damage was the result of vandalism. Id. at Ex. D. These facts show only that Plaintiff and Defendants have a legitimate dispute over the cause of the damage to her home, and consequently whether her insurance policy should compensate Plaintiff for the damage. See Id. at ¶ 48 (alleging that the damage to her home was “more consistent with the perils covered within the insurance policy in dispute instead of remodeling . . . .”). Without more, Plaintiff fails to plead facts showing bad faith. Because Plaintiff fails to plead facts showing a refusal to pay after recognition of a valid claim or bad faith, her claim for breach of the covenant good faith and fair dealing fails.
Damage resulting from remodel is not a covered loss under Plaintiff's insurance policy. See Compl. [DE-1] at Ex. B, E.
Damage resulting from vandalism is a covered loss under Plaintiff's insurance policy. See Compl. [DE-1] at Ex. B, E.
Accordingly, taking Plaintiff's allegations as true, as the court must do at this stage, Plaintiff fails to adequately allege a claim for breach of the implied covenant of good faith and fair dealing. Therefore, it is RECOMMENDED that Defendants' motion to dismiss be GRANTED as to this claim, and that the claim be DISMISSED.
3.Intentional infliction of emotional distress
To assert a claim for intentional infliction of emotional distress (“IIED”) under North Carolina law, “a plaintiff must prove ‘(1) extreme and outrageous conduct, (2) which is intended to cause and does cause (3) severe emotional distress to another.'” Williams v. Popular Mortg. Servs., Inc., No. 4:10-CV-00020-F, 2011 WL 2678817, at *6 (E.D. N.C. June 30, 2011) (quoting Beck v. City of Durham, 154 N.C.App. 223, 231, 573 S.E.2d 183, 190-91 (2002)); see also Wells v. Moen, Inc., No. 4:08-CV-00180-FL, 2011 WL 2568186, at *6 (E.D. N.C. Aug. 17, 2009). Under the first element, “extreme and outrageous conduct” is defined as “conduct that exceeds all bounds usually tolerated by decent society.” Wells, 2011 WL 2568186, at *7 (citing Mullis v. Mechs. & Farmers Bank, 994 F.Supp. 680, 688 (M.D. N.C. 1997)). “Whether conduct alleged in a complaint is sufficiently extreme and outrageous to support an IIED action initially is a question of law for the court.” Williams, 2011 WL 2678817, at *6 (citing Lenins v. K-Mart Corp., 98 N.C.App. 590, 599, 391 S.E.2d 843, 848 (1990)).
In deciding whether a claim for IIED could be raised in the insurance context, North Carolina courts have held:
A contract of insurance . . . is a commercial transaction, and absent allegations of specific facts which if proved would demonstrate calculated intentional conduct causing emotional distress directed toward a claimant, a complaint for insurance benefits alleging intentional infliction of emotional distress will not withstand a motion to dismiss under Rule 12(b)(6).Beasley v. Nat'l Sav. Life Ins. Co., 75 N.C.App. 104, 109-10, 330 S.E.2d 207, 210 (1985); see also Majstorovic v. State Farm Fire & Cas. Co., No. 5:16-CV-771-D, 2018 WL 1473427, at *8 (E.D. N.C. Mar. 24, 2018); Williams, 2011 WL 2678817, at *6; von Hagel v. Blue Cross & Blue Shield N.C. , 91 N.C.App. 58, 62, 370 S.E.2d 695, 699 (1988).
Here, Plaintiff bases her claim of IIED on her allegation that Defendants “disregarded their obligations under the insurance policy, deliberately created and adopted a false narrative to deny plaintiff's claim, and the Defendants' unfair and deceptive practices is a proximate cause of the emotional distress suffered by plaintiff.” Compl. [DE-1] at ¶¶ 59, 61. Plaintiff states that Defendants, “at all relevant times, knew and/or should have known that plaintiff's claim made on 05/15/2018 under the insurance policy in dispute and the damage caused to the subject property . . ., ipso facto, were covered perils and did not constitute remodeling as falsely declared by the Defendants.” Id. at ¶¶ 58, 60.
Even accepting all of Plaintiff's factual allegations as true, the court finds that Plaintiff fails to state a claim for IIED. As stated above, Plaintiff must allege specific facts demonstrating “calculated intentional conduct causing emotional distress directed toward a claimant.” Beasley, 75 N.C.App. at 109-10, 330 S.E.2d at 210. Although she makes the conclusory statement that Defendants deliberately created a false narrative to deny her claim, Plaintiff fails to make any factual allegations supporting this conclusion. Instead, her factual allegations show only that Defendants caused Plaintiff emotional distress by refusing to pay her allegedly valid claim for insurance benefits. Such a showing is insufficient to support a claim for IIED here. See von Hagel, 91 N.C.App. at 63, 370 S.E.2d at 700.
Plaintiff also cannot satisfy the third element for a claim of IIED, a showing of severe emotional distress. Such a showing “is satisfied by an allegation of ‘any . . . type of severe or disabling emotional or mental condition which can be generally recognized and diagnosed by professionals trained to do so.'” Wells, 2009 WL 2568186, at *7 (quoting Pardasani v. Rack Room Shoes, Inc., 912 F.Supp. 187, 192 (M.D. N.C. 1996)). While Plaintiff does allege in her complaint that she suffered from a heart attack, her heart attack occurred on June 5, 2018 and was “triggered by the distress upon [] seeing the damage to the subject property . . . .” Compl. [DE-1] at ¶ 30. Her claim was not denied until June 29, 2018, after her heart attack occurred. Id. at ¶ 32. There is no further allegation of a severe or disabling emotional mental condition resulting from this denial.
Accordingly, the court concludes that Plaintiff has failed to plead sufficiently the elements of a claim for IIED. It is RECOMMENDED that Defendants' motion to dismiss be GRANTED as to this claim, and that the claim be DISMISSED.
4.Unjust enrichment
“The general rule of unjust enrichment is that where services are rendered and expenditures made by one party to or for the benefit of another, without an express contract to pay, the law will imply a promise to pay a fair compensation therefor.” Cross v. Ciox Health, LLC, 438 F.Supp.3d 572, 589 (E.D. N.C. 2020) (quoting Krawiec v. Manly, 370 N.C. 602, 615, 811 S.E.2d 542, 551 (2018)). To establish a claim for unjust enrichment, a Plaintiff must: “1) confer a benefit on defendant, 2) the benefit must not have been conferred officiously or gratuitously, 3) the benefit must be measurable, and 4) defendant must have accepted the benefit.” Weare v. Bennett Brothers Yachts, Inc., No. 7:17-CV-155-FL, 2020 WL 398501, at *8 (E.D. N.C. Jan. 23, 2020) (citing Booe v. Shadrick, 322 N.C. 567, 570, 369 S.E.2d 554, 556 (1988)); see also Cross, 438 F.Supp.3d at 589. “A claim of this type is neither in tort nor contract but is described as a claim in quasi contract or a contract implied in law.” Cross, 438 F.Supp.3d at 589 (quoting Booe, 322 N.C. at 570, 369 S.E.2d at 556). Thus, where “there is a contract between the parties the contract governs the claim and the law will not imply a contract.” Id.
Here, in her complaint, Plaintiff alleges that Defendants were unjustly enriched by “receiv[ing] monthly installments of premium payments from Plaintiff towards the insurance policy in dispute . . ., without either of the Defendants fulfilling their respective duties arising from the insurance policy in dispute.” Compl. [DE-1] at ¶ 68.
Plaintiff's claim fails as a matter of law. Weare, 2020 WL 398501, at *8 (citing Vetco Concrete Co. v. Troy Lumber Co., 256 N.C. 709, 713-14, 124 S.E.2d 905, 908 (1962)). In her complaint, Plaintiff expressly states that there is a contract - the insurance policy in dispute - that governs Plaintiff's payment to Defendants. She attaches to her complaint, as Exhibit B, a copy of the insurance policy. Compl. [DE-1] at ¶ 15 n. 1; Ex. B. “[B]ecause ‘[P]laintiff does not allege conferring a benefit in absence of ‘an express contract to pay[, ]'” her claim for unjust enrichment fails. Dillon v. Leazer Grp., Inc., 374 F.Supp.3d 547, 561 (E.D. N.C. 2019) (quoting Krawiec, 370 N.C. at 615, 811 S.E.2d at 542); see also Whitmire v. S. Farm Bureau Life Ins. Co., 538 F.Supp.3d. 591, 608 (E.D. N.C. 2021).
Accordingly, Plaintiff has not stated facts sufficient to assert a claim of unjust enrichment. It is RECOMMENDED that Defendants' motion to dismiss be GRANTED as to this claim, and that Plaintiff's claim of unjust enrichment be DISMISSED.
5.Unfair and deceptive trade practices
In the memorandum in support of the motion to dismiss, Defendants correctly note that Plaintiff “alleges claims . . . for breach of contract, ‘breach of implied covenant of good faith and fair dealing,' intentional infliction of emotional distress, unjust enrichment, and unfair and deceptive trade practices.” Defs.' Mem. [DE-47] at 11. Defendants subsequently assert that “the Court should dismiss . . . all claims except the breach of contract claim against the NCJUA.” Id. at 14. In support of this contention, Defendants include arguments supporting why Plaintiff's claims for breach of implied covenant of good faith and fair dealing, intentional infliction of emotional distress, and unjust enrichment should be dismissed under Rule 12(b)(6). Id. at 16-25. However, Defendants offer no argument in support of why Plaintiff's claim for unfair and deceptive trade practices should be dismissed. Indeed, Defendants' motion and memorandum only mention this claim a single time, when noting that such claim exists in the quotation above. “Accordingly, the court has no alternative other than to deny the motion to dismiss pursuant to Rule 12(b)(6).” Bowe-Connor v. Shinseki, No. 13-01993 DAR, 2015 WL 8023734, at *1 (D.D.C. Dec. 4, 2015); see also Walton Media Grp., LLC v. TextureMedia, LLC, No. 5:18-CV-119-FL, 2019 WL 332799, at *1 n.1 (E.D. N.C. Jan. 25, 2019) (declining to consider a defendant's motion under Rule 12(b)(6) because the defendant “advances no arguments in its memorandum of law to support a motion under this rule”); Hogan v. Fayetteville State Univ., No. 2:17-CV-45-FL, 2018 WL 3847094, at *4 n.4 (E.D. N.C. Aug. 13, 2018) (finding any challenge as to the “adequacy of plaintiff's hostile work environment claims waived” because the defendant “advances no argument pertinent to plaintiff's claims of hostile work environment on Rule 12(b)(6) grounds” in its memorandum in support of motion to dismiss); Ellis v. Bunn, No. 7:08-CV-71-BR, 2008 WL 3876165, at *1 n.2 (E.D. N.C. Aug. 18, 2008) (declining to address one of plaintiff's three claims on a motion to dismiss because “defendants have made no arguments as to the [] claim”).
Accordingly, it is RECOMMENDED that Defendants' motion to dismiss be DENIED as to this claim.
B. Punitive damages
“According to well-established North Carolina law, punitive damages may not be awarded based upon the breach of a contract in the absence of an identifiable tort.” Great American Emu Co. v. E.J. McKernan Co., 509 F.Supp.3d 528, 543 n. 3 (E.D. N.C. 2020) (quoting SciGrip, Inc. v. Osae, 373 N.C. 409, 428, 838 S.E.2d 334 (2020)). “Nevertheless, where there is an identifiable tort even though the tort constitutes, or accompanies, a breach of contract, the tort itself may give rise to punitive damages.” Newton v. Standard Fire Ins. Co., 291 N.C. 105, 111, 229 S.E.2d 297 (1976) (emphasis added) (citing Oestreicher v. Stores, 290 N.C. 118, 134-35, 225 S.E.2d 797 (1976)); see also SciGrip, 373 N.C. at 428, 838 S.E.2d 334.
Here, as discussed above, it is recommended that Plaintiff's claims for unfair and deceptive trade practices survive due to Defendants not having offered any argument in support of the motion to dismiss relating to this particular claim. “However, North Carolina does not permit the recovery of punitive damages for violations of the UDTPA.” Respess v. Crop. Prod. Servs., Inc., No. 4:15-CV-00176-BR, 2016 WL 3821163, at *2 (E.D. N.C. July 13, 2016) (citing Landmar, LLC v. Wells Fargo Bank, N.A., No. 5:11-CV-00097-MOC, 2014 WL 333562, at *2 (W.D. N.C. Jan. 29, . 2014)). Therefore, because punitive damages are unavailable for either of Plaintiff's remaining claims - based on breach of contract or unfair and deceptive trade practices - it is RECOMMENDED that Defendants' motion as to punitive damages be GRANTED.
C. Dismissal with prejudice
For each of the claims recommended for dismissal based on failure to state a claim above - those being, all claims against Defendant NCIUA; and breach of implied covenant of good faith and fair dealing, intentional infliction of emotional distress, and unjust enrichment against Defendant NCJUA - Plaintiff's claims either fail as a matter of law, or there are deficiencies that are unlikely to be cured by an amendment to the factual allegations contained therein. It is therefore RECOMMENDED that any dismissal in this instance be with prejudice.
CONCLUSION
For the reasons stated above, 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 above. Additionally, it is RECOMMENDED that Defendants' motion to dismiss for failure to state a claim upon which relief can be granted be DENIED AS MOOT without prejudice.
IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on the respective parties or, if represented, their counsel. Each party shall have until March 3, 2022 to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct her own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D. N.C. Any response to objections shall be filed within 14 days of the filing of the objections.
If a party does not file written objections to the Memorandum and Recommendation by the foregoing deadline, the party will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, the party's failure to file written objections by the foregoing deadline will bar the party from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins, 766 F.2d 841, 846-47 (4th Cir. 1985).