Opinion
No. COA12–266.
2012-11-20
Owen STEELE, Plaintiff, v. SAFECO INSURANCE COMPANY OF AMERICA and MHH Enterprises, Inc. d/b/a/ Servpro of Southern Gaston County, Defendants.
Wimer & Associates, P.C., by Michael G. Wimer, for plaintiff-appellant. Wall Templeton & Haldrup, PA, by J. Mark Langdon and William W. Silverman, for defendant-appellee Safeco Insurance Company of America.
Appeal by plaintiff from order entered 14 October 2010 by Judge Timothy S. Kincaid in Mecklenburg County Superior Court and from order entered 24 August 2011 by Judge Robert C. Ervin in Mecklenburg County Superior Court. Heard in the Court of Appeals 11 September 2012. Wimer & Associates, P.C., by Michael G. Wimer, for plaintiff-appellant. Wall Templeton & Haldrup, PA, by J. Mark Langdon and William W. Silverman, for defendant-appellee Safeco Insurance Company of America.
Hedrick Gardner Kincheloe & Garofalo, LLP, by David L. Levy, for defendant-appellee MHH Enterprises, Inc. d/b/a/ ServPro of Southern Gaston County.
MARTIN, Chief Judge.
Plaintiff Owen Steele appeals from an order dismissing his claims against defendant MHH Enterprises, Inc. pursuant to N.C.G.S. § 1A–1, Rule 12(b)(6), and an order granting partial summary judgment in favor of defendant Safeco Insurance Company of America. We affirm both orders.
According to the limited record on appeal before us, it appears undisputed that on or about 8 July 2007, plaintiff's home in Charlotte, North Carolina caught fire, damaging the home and some of its contents. The home was insured by defendant Safeco Insurance Company of America (“Safeco”). Safeco contacted defendant MHH Enterprises, Inc. d/b/a/ ServPro of Southern Gaston County (“MHH”) to provide fire restoration and cleanup services for plaintiff. On 20 July 2007, plaintiff and MHH executed a contract entitled “Authorization to Perform Services and Direction of Payment.” The contract was signed by plaintiff and Michael Harris, owner of MHH. The contract terms included, among other things, a one-year limitation on actions relating to the subject matter of the contract, beginning from when “the claiming party knew or should have known of the cause of action.”
MHH began removing the contents of plaintiff's home, storing some items and disposing of others, so that repairs to the structure could be undertaken. On 30 June 2008, after storing some of plaintiff's property for almost a year, MHH returned the items of personal property that had been in storage to plaintiff. Plaintiff claimed that MHH had not been authorized to dispose of any of his property.
On or about 31 July 2007, plaintiff retained a public adjuster to assist with his claim. Plaintiff settled his dwelling and loss of use claims with defendant Safeco, which included alternate housing for plaintiff until structural repairs were completed on 14 December 2007. The remaining personal property claim was the subject of continued requests for information by defendant Safeco in late 2007 and early 2008. In April of 2008, plaintiff's public adjuster submitted a $73,769.70 proof of loss for the personal property, $56,613.86 of which was for the discarded items. Since the property had been discarded, allegedly without plaintiff's authorization, the public adjuster based its claim on an estimate of the cost to clean the items had they not been discarded. Safeco rejected this claim for inadequate documentation and requested additional information on 28 May 2008. On 9 August 2008, Safeco paid plaintiff $5,485.56, representing the actual cash value of undisputed items that were damaged and the costs to clean the returned items. Safeco continued to request supporting documentation for the disputed discarded items from the public adjuster until plaintiff retained legal counsel in 2009, at which time Safeco began requesting similar information from plaintiff's counsel in an attempt to settle the remaining claim.
On 2 July 2010, plaintiff filed suit against Safeco and ServPro Industries, Inc. (“ServPro”), the franchisor for MHH. Plaintiff served process for ServPro by mailing the summons and complaint to the address of MHH. On 9 September 2010, ServPro filed a motion to dismiss the claims against it. On 13 September 2010, plaintiff filed an amended complaint, substituting MHH for ServPro as a defendant. On 24 September 2010, a civil summons was issued for MHH. ServPro's motion to dismiss was heard on 13 October 2010, and the trial court determined that the motion “would attack the Complaint, as well as the Amended Complaint.” Based on the one-year limitations period contained in the contract, the trial court granted the motion, dismissing the claims against defendant MHH. Safeco then filed a 29 July 2011 motion for partial summary judgment as to plaintiff's Unfair and Deceptive Practices Act claim, breach of implied duty of good faith and fair dealing claim, and common law bad faith claims. The trial court granted Safeco's motion in a 24 August 2011 order. Plaintiff submitted to a voluntary dismissal without prejudice of his remaining breach of contract claim against Safeco, making the orders final.
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Plaintiff first argues the trial court erred when it dismissed his claims against defendant MHH pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. When an appellant challenges such an order, we “conduct a de novo review of the pleadings to determine their legal sufficiency and to determine whether the trial court's ruling on the motion to dismiss was correct.” Leary v. N.C. Forest Prods., Inc., 157 N.C.App. 396, 400, 580 S.E.2d 1, 4,aff'd per curiam,357 N.C. 567, 597 S .E.2d 673 (2003). When the trial court rules on a motion to dismiss, “the allegations of the complaint must be viewed as admitted, and on that basis the court must determine as a matter of law whether the allegations state a claim for which relief may be granted.” Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979), disapproved of on other grounds by, Dickens v. Puryear, 302 N.C. 437, 446–52, 276 S.E.2d 325, 331–35 (1981).
Plaintiff argues the trial court erred when it dismissed his complaint against defendant MHH because the face of the complaint did not establish the claim was time barred. Plaintiff asserts that in order to calculate whether the claim was time barred, the court would need to know the date upon which plaintiff's property was disposed of—a date plaintiff did not include in his complaint.
“A statute of limitations defense may properly be asserted in a Rule 12(b)(6) motion to dismiss if it appears on the face of the complaint that such a statute bars the claim.” Horton v. Carolina Medicorp, Inc., 344 N.C. 133, 136, 472 S.E.2d 778, 780 (1996) (citing Hargett v. Holland, 337 N.C. 651, 653, 447 S.E.2d 784, 786 (1994)). When breach of contract is the basis for a plaintiff's claims, a trial court may properly consider the language of the contract in deciding a Rule 12(b)(6) motion to dismiss. Coley v. N.C. Nat. Bank, 41 N.C.App. 121, 126, 254 S.E.2d 217, 220 (1979). When there exists no controlling statute to the contrary, parties to a contract are free to contractually limit the time for bringing an action on the contract to a period less than that provided in the general statute of limitations, as long as the shortened period is a reasonable period. Order of United Commercial Travelers of Am. v. Wolfe, 331 U.S. 586, 608, 91 L.Ed. 1687, 1700 (1947).
In the instant case, plaintiff and defendant MHH entered into a 20 July 2007 contract which plaintiff has made the basis of his action against MHH, allowing the trial court to consider the contract as part of the motion to dismiss. See Coley, 41 N.C.App. at 126, 254 S.E.2d at 220. The contract contained a one-year limitation on actions relating to the subject matter of the contract. N.C.G.S. § 1–52, which concerns breach of contract actions, does not prohibit shorter limitations periods than the three years provided by the statute. SeeN.C. Gen.Stat. § 1–52 (2011). Likewise, N.C.G.S. § 75–16.2, which concerns Unfair and Deceptive Practices Act actions, does not prohibit shorter limitations periods than the four years provided by the statute. SeeN.C. Gen. Stat § 75–16.2 (2011). Courts in North Carolina have generally upheld contractual limitations. Badgett v. Fed. Express Corp., 378 F.Supp.2d 613, 623 (M.D.N.C.2005) (concluding North Carolina law permits contractual limitations); Beard v. Sovereign Lodge of Woodmen of the World, 184 N.C. 154, 157, 113 S.E. 661, 662 (1922) (observing that North Carolina has “uniformly adhered to the doctrine that provisions [contractually limiting the period to bring an action] are valid, binding, and enforceable” in the insurance context); Town of Pineville v. Atkinson/Dyer/Watson Architects, P.A., 114 N.C.App. 497, 499–500, 442 S.E.2d 73, 74 (1994) (noting that a performance bond is a contract and upholding a contractual limitation period contained in the performance bond). Our Courts have also upheld contractual limitations of one year as reasonable. See, e.g., Horne–Wilson, Inc. v. Nat'l Sur. Co., 202 N.C. 73, 74–75, 161 S.E. 726, 726–27 (1932) (holding a one-year contractual limitation reasonable and indicating demurrer should have been sustained on that basis); Welch v. Phoenix Ins. Co., 192 N.C. 809, 809–10, 136 S.E. 117, 118 (1926) (affirming dismissal of action as upon nonsuit based on a one-year contractual limitation contained in insurance contract) (per curium); Beard, 184 N.C. at 157, 113 S.E. at 662 (dismissing plaintiff's action based on validity of a one-year contractual limitation). Therefore, we conclude the one-year contractual limitation in this instance is valid and enforceable. See Wolfe, 331 U.S. at 608, 91 L.Ed. at 1700.
The contract at bar indicated that the limitations period began to run when “the claiming party knew or should have known of the cause of action.” Plaintiff's complaint does not contain the date on which plaintiff's claim accrued—the date the property was disposed of. Plaintiff contends his own omission prevented proper testing of the pleading's sufficiency. However, the complaint does indicate that “[o]n or about July 8, 2007, Plaintiff experienced a fire in his home” and that “ [a] lmost three years have elapsed since the loss and notice of the claim” as to defendant Safeco. Additionally, plaintiff's complaint references the contract between plaintiff and MHH by alleging that the contract required an inventory be made of everything removed from plaintiff's home. Located on the same page of the contract as this referenced term is plaintiff's signature dated 23 July 2007 and an additional term indicating that moving and packing is to begin “Monday 7–23 at 8:00AM.” Plaintiff did not file his complaint until 2 July 2010 and did not issue a summons as to MHH until 24 September 2010. We hold that there was sufficient information on the face of the complaint and the contract for the trial court to conclude that more than one year had elapsed since the plaintiff knew or should have known of the cause of action. See Horton, 344 N.C. at 136, 472 S.E.2d at 780;Coley, 41 N.C.App. at 126, 254 S.E.2d at 220. Therefore, the trial court did not err when it determined the action should be time barred by the valid one-year limitation contained in the contract. Plaintiff's argument is without merit.
Because we determine that plaintiff's claim was properly dismissed based on the one-year contractual limitation, we do not address plaintiff's arguments regarding statutory limitations periods and whether the amended complaint corrected a misnomer.
Plaintiff also argues the court erred when it granted the motion to dismiss because the complaint that the motion was directed toward had been superseded when plaintiff later filed an amended complaint, substituting defendant MHH for ServPro. We note that on the date the motion was heard, defendant MHH offered to file a new motion and re-notice it for a later date, if counsel for plaintiff was “inclined not to go forward” at that time. Additionally, plaintiff has not cited any authority or advanced any argument as to why the motion to dismiss should have become moot or why the court could not, in its discretion, treat the motion as attacking both complaints. “Issues ... in support of which no reason or argument is stated, will be taken as abandoned.” N.C.R.App. P. 28(b)(6); Libertarian Party of N.C. v. State, 365 N.C. 41, 45 & n.1, 707 S.E.2d 199, 202 & n.1 (2011). Therefore, this argument must be overruled.
Plaintiff next argues the trial court erred when it granted Safeco's motion for partial summary judgment as to plaintiff's Unfair and Deceptive Practices Act claim, breach of implied duty of good faith and fair dealing claim, and common law bad faith claims. “Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that ‘there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.’ “ In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 523–24, 649 S.E.2d 382, 385 (2007)).
Plaintiff first contends that he “was foreclosed from a meaningful opportunity to forecast evidence in support of [his] claims” because “two days before the summary judgment hearing, Safeco served on plaintiff its brief in support of partial summary judgment, including exhibits containing the evidence Safeco intended to use in support of its motion. Pursuant to Rule 56(c), plaintiff's responsive affidavits were due on the same date.” Plaintiff contends this was an “ambush summary judgment strategy” which should not be allowed. However, plaintiff has cited no legal authority for this proposition or even suggested a Rule of Civil Procedure that was violated. “Issues ... in support of which no reason or argument is stated, will be taken as abandoned.” N.C.R.App. P. 28(b)(6); Libertarian Party of N.C., 365 N.C. at 45 & n.1, 707 S.E.2d at 202 & n.1. Therefore, this argument must be overruled.
Plaintiff next contends the evidence establishes there were genuine issues of material fact precluding summary judgment. Specifically, plaintiff contends that the evidence submitted by defendant Safeco “establishes that Safeco was presented with a claim and inventory valuing plaintiff's personal property at an amount much higher than Safeco was willing to acknowledge or pay.” Plaintiff asserts “Safeco improperly rejected this claim because of inadequate documentation.” Plaintiff then claims “[t]his evidence alone is sufficient to raise fact issues as to whether Safeco conducted a reasonable, objective investigation of the claim and failed to effectuate a prompt, fair and equitable settlement of a claim in which liability had become reasonably clear.”
When a motion for summary judgment is properly supported by affidavits, depositions, and answers to interrogatories, “an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial.” N.C.R. Civ. P. 56(e). If the adverse party fails to respond, “summary judgment, if appropriate, shall be entered against him.” Id. An attorney's arguments during a summary judgment hearing are not considered facts or evidence. Strickland v. Doe, 156 N.C.App. 292, 297, 577 S.E.2d 124, 129,disc. review denied,357 N.C. 169, 581 S.E.2d 447 (2003). Therefore, “[i]nformation adduced from counsel during oral arguments cannot be used to support a motion for summary judgment under Rule 56(c).” Huss v. Huss, 31 N.C.App. 463, 466, 230 S.E.2d 159, 161 (1976).
A cause of action rooted in bad faith in the insurance context means “not based on honest disagreement or innocent mistake.” Lovell v. Nationwide Mut. Ins. Co., 108 N.C.App. 416, 421, 424 S.E.2d 181, 185,aff'd per curium,334 N.C. 682, 435 S.E.2d 71 (1993) (quoting Dailey v. Integon Gen. Ins. Corp., 75 N.C.App. 387, 396, 331 S.E.2d 148, 155,disc. rev. denied, 314 N.C. 664, 336 S.E.2d 399 (1985)) (internal quotations omitted). Likewise, “a mere breach of contract, even if intentional, is not sufficiently unfair or deceptive to sustain an action under N.C.G.S. § 75–1.1.” Burrell v. Sparkkles Reconstruction Co., 189 N.C.App. 104, 111, 657 S.E.2d 712, 717,disc. review denied,362 N.C. 469, 665 S.E.2d 738 (2008) (quoting Branch Banking & Trust Co. v. Thompson, 107 N.C.App. 53, 62, 418 S.E.2d 694, 700,disc. review denied, 332 N.C. 482, 421 S.E.2d 350 (1992)). “Substantial aggravating circumstances must attend a breach of contract to permit recovery as an unfair or deceptive trade practice .” Id.
The record on appeal does not indicate that plaintiff offered any response to the motion for summary judgment in the form of affidavits or deposition testimony. Instead, plaintiff presented an agency argument that he did not plead in either the complaint or the amended complaint. Plaintiff now argues that defendant's evidence supports his claim. We disagree. After a careful review of the record, the evidence presented simply evinces, at best, an honest disagreement, and at worst, a breach of contract. See Lovell, 108 N.C.App. at 421, 424 S.E.2d at 185;Burrell, 189 N.C.App. at 111, 657 S.E.2d at 717. Even viewed in the light most favorable to plaintiff, the record is devoid of any genuine issue of material fact concerning aggravating circumstances or bad faith. See Jones, 362 N.C. at 573, 669 S.E.2d at 576. Therefore, the trial court did not err when it granted Safeco's motion for summary judgment.
Finally, defendant-appellee Safeco has made a motion that this Court enter an order imposing sanctions against plaintiff' appellant Steele for nonjurisdictional violations of the North Carolina Rules of Appellate Procedure related to the settlement of the record on appeal. “[W]hen a party fails to comply with one or more nonjurisdictional appellate rules, the court should first determine whether the noncompliance is substantial or gross under Rules 25 and 34. If it so concludes, it should then determine which, if any, sanction under Rule 34(b) should be imposed.” Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., 362 N.C. 191, 201, 657 S.E.2d 361, 367 (2008). We conclude that any Appellate Rule violations which may have occurred during this appeal, do not rise to level of “substantial” or “gross.” SeeN.C.R.App. P. 25 & 34; Dogwood, 362 N.C. at 201, 657 S.E.2d at 367. Therefore, Safeco's motion is denied.
Affirmed. Judges GEER and STROUD concur.
Report per Rule 30(e).