Transamerica Occiden v. Sanders ( 1996 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY, a California
Corporation,
Plaintiff-Appellee,
No. 96-1147
v.
LAUNEIL SANDERS,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of North Carolina, at Charlotte.
Robert D. Potter, Senior District Judge.
(CA-94-53-3-P)
Submitted: June 18, 1996
Decided: July 8, 1996
Before HALL, MURNAGHAN, and WILKINS, Circuit Judges.
_________________________________________________________________
Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.
_________________________________________________________________
COUNSEL
Launeil Sanders, Appellant Pro Se. Louis Adams Bledsoe, III, Ste-
phen Graham Robinson, ROBINSON, BRADSHAW & HINSON,
P.A., Charlotte, North Carolina, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Launeil Sanders appeals the district court's entry of judgment
against him in this action. Jurisdiction is based on diversity of citizen-
ship. 28 U.S.C. § 1332 (1988). The district court awarded judgment
on the pleadings in favor of the plaintiff, Transamerica Occidental
Life Insurance Company (Transamerica). We affirm in part, vacate in
part, and remand for further proceedings.
Transamerica's action is based on two life insurance policies issued
to Sanders' wife, Evelyn, now deceased. Transamerica paid Sanders
$101,319.34 on one of the policies. The company later discovered
that Evelyn Sanders was receiving treatment for cancer at the time
both applications were submitted, while the applications represented
that Evelyn Sanders never had and did not presently have cancer.
Transamerica filed this action against Sanders on numerous grounds.
After reviewing the complaint and Sanders' responsive pleadings, the
district court granted Transamerica's motion for judgment on the
pleadings. We review such a decision de novo. See Katzer v. Baldor
Elec. Co., 969 F.2d 935, 937 (10th Cir. 1992). Sanders' failure to
deny the material factual allegations in the Complaint was properly
treated as an admission of those facts. Fed. R. Civ. P. 8(d). See North
River Ins. Co. v. Stefanou, 831 F.2d 484, 486 (4th Cir. 1987), cert.
denied, 486 U.S. 1007 (1988). Therefore, we affirm entry of judgment
against Sanders.
The district court entered judgment in favor of Transamerica on a
claim of unfair and deceptive trade practices, N.C. Gen. Stat. § 75-1.1
(1994), and awarded treble damages of $303,958.02 against Sanders
in accordance with N.C. Gen. Stat. § 75-16 (1994). The court also
awarded damages on Transamerica's allegation of fraud, amounting
to $101,319.34. Transamerica is not entitled to damages for both
causes of action based on the same conduct. Winant v. Bostic, 5 F.3d
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767, 775 (4th Cir. 1993); Barbee v. Atlantic Marine Sales & Serv.,
Inc., 446 S.E.2d 117, 122-23 (N.C. App. 1994). Therefore, we vacate
the entry of judgment as to damages and remand so that Transamerica
can elect its remedy: either $101,319.34 on the fraud claim or
$303,958.02 on the unfair and deceptive trade practices claim. See
Ellis v. Northern Star Co., 388 S.E.2d 127, 132 (N.C. App. 1990).
The district court's final judgment allowed recovery of Transameri-
ca's costs and attorneys' fees. Attorneys' fees mandated by state stat-
ute are available in a diversity action. Cotton v. Slone, 4 F.3d 176, 180
(2d Cir. 1993); cf. Culbertson v. Jno. McCall Coal Co., 495 F.2d
1403, 1405 (4th Cir.) (state law on attorney fees should normally be
followed in a diversity action), cert. denied , 419 U.S. 1033 (1974).
Under N.C. Gen. Stat. § 75-16.1, the judge has discretion to allow a
reasonable attorney fee to the prevailing party on a finding by the
judge that (1) the losing party has wilfully engaged in the practice and
there was an unwarranted refusal to resolve the underlying problem;
or (2) the plaintiff in the action knew or should have known it was
frivolous and malicious. Only the first is possible in this case, as
Transamerica prevailed on its claim. Under the statute, the court must
make a specific finding that the actions in question were willful, the
defendant refused to resolve the matter fully, and the attorneys' fees
are reasonable. Barbee, 446 S.E.2d at 117, 121-22. The district court
did not make the requisite finding. Evans v. Full Circle Prods., Inc.,
443 S.E.2d 108, 110 (N.C. App. 1994). On remand, the district court
should consider whether such a finding is possible in this case.
In sum, we affirm the district court's entry of judgment on the
pleadings. We vacate the entry of judgment and remand the case to
the district court so that Transamerica can elect its remedy. On
remand, the district court should consider whether costs and attor-
neys' fees should be awarded in light of the state statute. We deny
Sanders' motion to recuse this court and transfer the case to the Fed-
eral Circuit in Washington, D.C. We dispense with oral argument
because the facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the decisional
process.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED
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