Opinion
1:22-CV-618
2022-12-16
PIEDMONT ROOFING SERVICES, LLC, Plaintiff, v. MASSACHUSETTS BAY INSURANCE COMPANY, Defendant.
John David Matheny, II, Mooresville, NC, for Plaintiff. Robert D. Whitney, Robert Mills Kennedy, Jr., Phelps Dunbar LLP, Raleigh, NC, for Defendant.
John David Matheny, II, Mooresville, NC, for Plaintiff. Robert D. Whitney, Robert Mills Kennedy, Jr., Phelps Dunbar LLP, Raleigh, NC, for Defendant. ORDER CATHERINE C. EAGLES, UNITED STATES DISTRICT JUDGE
Massachusetts Bay Insurance Company seeks to dismiss Piedmont Roofing Services, LLC's complaint against it for failure to state a claim. Because the applicable insurance policy between Massachusetts Bay and its insured, Persinger Investment Group, LLC, prohibits assignments without Massachusetts Bay's consent, and because there is no allegation or claim that Massachusetts Bay has granted that consent, the motion to dismiss will be granted.
I. Facts Alleged
For purposes of this motion, the Court assumes the truth of the factual allegations contained in the complaint and draws all reasonable inferences in Piedmont Roofing's favor. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
In April 2021, a hailstorm damaged various buildings on a property in Concord, North Carolina owned by Persinger Investment Group LLC. Doc. 3 at ¶¶ 9, 11. That property was insured under an insurance policy between Massachusetts Bay Insurance Company and Persinger. Id. at ¶¶ 8-11. In July 2021, Persinger hired Piedmont Roofing to make repairs to the buildings and assigned to Piedmont Roofing its "rights, title and interest . . . set forth in the insurance policy . . . with respect to any and all claims" Persinger had against Massachusetts Bay "or relating to any loss" associated with the hailstorm. Id. at 9; see also id. at ¶¶ 14, 41, 49, 51.
Massachusetts Bay was erroneously named "The Hanover Insurance Group" in the Complaint, see Doc. 19 at 1, but has since been substituted as the defendant. Id. at 5.
Piedmont Roofing then filed claims under the policy, notifying Massachusetts Bay of the loss. Id. at ¶ 15. Massachusetts Bay did not "pay the appropriate costs to repair" the building, "including overhead and profit, costs in dealing with" Massachusetts Bay, and "other valid charges, expenses, and costs." Id. at ¶ 22. Piedmont Roofing has submitted multiple claims, demands, and requests to Massachusetts Bay, but to no avail. Id. at ¶¶ 21-22, 24-26. To date, Massachusetts Bay has made no payment to Piedmont Roofing. Id. at ¶ 21.
II. Jurisdiction
This Court has subject-matter jurisdiction under 28 U.S.C. § 1332. The case is between citizens of different states, the amount in controversy is greater than $75,000, see Doc. 19 at 4-5, and Massachusetts Bay's removal of this case was proper under 28 U.S.C. § 1441. Id. at 3-4.
This Court also has personal jurisdiction over the defendant, Massachusetts Bay. Massachusetts Bay received a copy of the complaint and knew that the complaint was directed at Massachusetts Bay. Doc. 21. Massachusetts Bay "concedes that this Court properly has personal jurisdiction over it sufficient to proceed with this matter on the merits." Id.
III. Discussion
According to the complaint, Piedmont Roofing is not the insured. Doc. 3 at ¶¶ 8-10. Piedmont Roofing alleges that Persinger, the insured, assigned its rights under the insurance policy to Piedmont Roofing. Id. at ¶ 14. Under North Carolina law, which all parties agree applies, "[a]n action 'arising out of contract' generally can be assigned," and the assignee may bring a breach of contract action. Horton v. New S. Ins. Co., 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996) (citing N.C. Gen. Stat. § 1-57).
However, a provision in a contract prohibiting or limiting assignment is enforceable. See Terrell v. Laws. Mut. Liab. Ins. Co. of N.C., 131 N.C. App. 655, 660, 507 S.E.2d 923, 926 (1998). The language of the contract controls. See, e.g., id.; First-Citizens Bank & Tr. Co. v. Universal Underwriters Ins. Co., 113 N.C. App. 792, 796, 440 S.E.2d 304, 307 (1994); Brakebush Bros., Inc. v. Certain Underwriters at Lloyd's of London - Novae 2007 Syndicate, No. 20-CVS-367, 2021 WL 5099697, at *6 (N.C. Bus. Ct. Nov. 1, 2021).
Here, the language of the policy prohibits assignments absent consent of the insurer: "Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual Named Insured." Doc. 11-2 at 22; see Brakebush, 2021 WL 5099697, at *9 (finding same language to prohibit post-loss assignment). The purported assignment attached to the complaint does not show Massachusetts Bay's consent to the assignment, Doc. 3 at 9, and there is no allegation that Massachusetts Bay consented to the assignment of Persinger's rights under the policy to Piedmont Roofing. See id. In the absence of any allegation or contention that Massachusetts Bay consented, the assignment to Piedmont Roofing was invalid and Piedmont Roofing cannot bring a claim for breach of contract against the insurer. See Brakebush, 2021 WL 5099697, at *9, *12.
Piedmont Roofing has not disputed that the policy submitted by Massachusetts Bay, Docs. 11-1, 11-2, is an accurate copy of the policy issued to Persinger. It is therefore appropriate to consider the policy, which Piedmont Roofing relies upon in its complaint. See Doc. 3 at ¶ 5; Copeland v. Bieber, 789 F.3d 484, 490 (4th Cir. 2015) (on a motion to dismiss, a court may consider documents outside the pleadings if those documents are "integral to and explicitly relied on in the complaint" and their authenticity is unchallenged).
In the briefing, Piedmont Roofing implicitly concedes that Massachusetts Bay did not consent to the assignment. Doc. 14 at 2.
Piedmont Roofing's declaratory judgment claims also fail. "[S]tanding to seek a declaration as to the extent of coverage under an insurance policy requires that the party seeking relief have an enforceable contractual right under the insurance agreement." DeMent v. Nationwide Mut. Ins. Co., 142 N.C. App. 598, 601, 544 S.E.2d 797, 799 (2001). Without a valid assignment, Piedmont Roofing lacks standing under the insurance policy, and its declaratory judgment claims must be dismissed. See Brakebush, 2021 WL 5099697, at *9, *12 (holding that an assignee lacked standing under a policy with the same language and dismissing its declaratory judgment claims).
The rest of Piedmont Roofing's claims are tort claims for bad faith and unfair and deceptive trade practices under N.C. Gen. Stat. § 58-63-15(11) and § 75-1.1. These claims must also be dismissed; the claims are based upon the assignment, and the assignment is invalid. Additionally, bad faith and unfair and deceptive trade practice claims cannot be assigned in North Carolina. See Horton, 468 S.E.2d at 858. These are Persinger's claims to pursue. See Terrell, 507 S.E.2d at 926.
IV. Conclusion
The assignment of rights and duties under the policy was invalid, as there is no allegation that either Piedmont Roofing or Persinger sought Massachusetts Bay's consent to the assignment, or that such consent was granted. For that reason, Piedmont Roofing's complaint will be dismissed.
It is ORDERED that the defendant's motion to dismiss, Doc. 10, is GRANTED. Judgment will be entered separately.