Beasley v. National Savings Life Insurance

330 S.E.2d 207 (1985)

Willie O. BEASLEY
v.
NATIONAL SAVINGS LIFE INSURANCE COMPANY.

No. 8410SC726.

Court of Appeals of North Carolina.

June 4, 1985.

Brenton D. Adams and Delores King, Raleigh, for plaintiff-appellant.

Young, Moore, Henderson & Alvis, P.A. by R. Michael Strickland, David M. Duke and Edward B. Clark, Raleigh, for defendant-appellee.

PARKER, Judge.

As a preliminary matter, we note that the trial court's initial order, entered 5 March 1984, dismissed the claims for relief, other than the contract action, with leave for plaintiff to file an amended complaint. Two days later, plaintiff requested that the trial judge enter final judgment on these claims for relief and to make the finding under G.S. 1A-1, Rule 54(b) that there is "no just reason for delay," so that plaintiff could appeal the Order; this request was granted.

A motion under Rule 12(b)(6) addresses itself solely to the failure of the complaint to state a claim. "A complaint should not be dismissed for insufficiency unless it appears to a certainty that plaintiff is entitled to no relief under any state of facts which could be proved in support of the claim." Newton v. Ins. Co., 291 N.C. 105, 229 S.E.2d 297 (1976). In reviewing the motion, "the complaint is construed in the light most favorable to plaintiff and its allegations are taken as true.... However, the court will not accept conclusory allegations on the legal effect of the events plaintiff has set out if these allegations do not reasonably follow from his description of what happened...." Wright & Miller, 5 Federal Practice & Procedure, § 1357 (1969). Since the trial judge in this case initially dismissed the five causes of action "without prejudice to plaintiff's right to seek leave to further amend the complaint," and plaintiff did not avail himself of the opportunity to allege more specific facts, we are left to assume that the allegations in the complaint are the best they can be in this factual situation.

In plaintiff's second cause of action, he alleged the following events and circumstances in support of his claim for bad faith:

13. That by virtue of the contract of insurance referred to above, the defendant owed to the plaintiff the duty to act in good faith and to deal fairly with the plaintiff.

14. That by reason of the defendant's failure to pay a valid claim under its insurance policy, the defendant violated its covenant of good faith and fair dealing to the plaintiff.

15. That the defendant unreasonably and in bad faith withheld from the plaintiff payment of his claim.

In plaintiff's third cause of action, he alleged defendant had committed fraud upon the plaintiff and asserted that: (i) defendant accepted plaintiff's application for insurance, (ii) defendant accepted the premium payments, (iii) plaintiff relied upon defendant's representations that defendant would pay claims, (iv) the representations were false and untrue in that defendant never had any intention of paying any claims, (v) defendant intended not to deal fairly with plaintiff, (vi) defendant willfully misrepresented a material fact, and (vii) plaintiff relied upon the willful misrepresentations of defendant to his detriment.

In Stanback v. Stanback, 297 N.C. 181, 196, 254 S.E.2d 611, 621 (1979), our Supreme Court stated the general rule regarding a claim for punitive damages in a contract action:

"[Generally], punitive damages are not recoverable for breach of contract with the exception of breach of contract to marry. Newton v. Standard Fire Ins. Co., 291 N.C. 105, 229 S.E.2d 297 (1976); Oestreicher v. Stores, 290 N.C. 118, 225 S.E.2d 797 (1976); King v. Insurance Co., 273 N.C. 396, 159 S.E.2d 891 (1968). But when the breach of contract also constitutes or is accompanied by an identifiable tortious act, the tort committed may be grounds for recovery of punitive damages. [Citation omitted.] Our recent holdings in this area of the law clearly reveal, moreover, that allegations of an identifiable tort accompanying the breach are insufficient alone to support a claim for punitive damages. In Newton the further qualification was stated thusly: `Even where sufficient facts are alleged to make out an identifiable tort, however, the tortious conduct must be accompanied by or partake of some element of aggravation before punitive damages will be allowed.' Newton, supra, at 112, 229 S.E.2d at 301."

Plaintiff contends that the fraudulent acts enumerated above constitute such an "element of aggravation," and can withstand defendant's motion. We do not agree. G.S.1A-1, Rule 9(b) of the Rules of Civil Procedure requires that circumstances constituting fraud must be stated with particularity. Assuming arguendo that plaintiff has successfully pleaded the essential or legal elements of a claim for fraud, plaintiff has failed to allege precisely any facts to support these bare allegations. In particular, plaintiff has pleaded no facts which would support his allegation "[t]hat the representations made by the defendant to the plaintiff were false and untrue in that the defendant never had any intention of paying any claims which the defendant would make ... and the defendant knew that it would deny such claims when and if they were made." Without any essential factual basis to support this critical element, the tort claim for fraud cannot withstand defendant's Motion to Dismiss, and certainly does not constitute "an element of aggravation" as required by Newton.

Similarly, one allegation of bad faith dealing clearly fails to meet the standards enunciated by this Court in Dailey v. Integon General Insurance Co., 57 N.C.App. 346, 291 S.E.2d 331 (1982) and Payne v. N.C. Farm Bureau Mutual Insurance Co., 67 N.C.App. 692, 313 S.E.2d 912 (1984). In both cases, this Court held that the trial court erred in dismissing claims alleging bad faith on the part of the insurer. However, these cases are distinguishable from the case sub judice in that in Dailey and Payne plaintiff alleged sufficient facts to make out a cause of action for "a tortious act accompanied by `some element of aggravation.' " Dailey, supra. For example in Dailey, an action for benefits under a fire insurance policy, plaintiff alleged that defendant's agents offered money to people to discredit plaintiff's claim and refused to negotiate to force a lower settlement. Not only has plaintiff herein failed to sufficiently allege a tortious act, he has failed to allege any accompanying "element of aggravation." Therefore, under the rule of Dailey, we hold that the trial court did not err in dismissing plaintiff's claim for punitive damages based on bad faith and fraud under G.S. 1A-1, Rule 12(b)(6).

Next, plaintiff, in his amended complaint, asserts that defendant violated the Unfair and Deceptive Trade Practices Act. It is clear that plaintiff merely has quoted G.S. 58-54.4(11) in alleging that defendant violated several subsections thereunder. The Act requires that before a violation can be made out, plaintiff must allege that defendant engaged in the prohibited acts "with such frequency as to indicate a general business practice." G.S. 58-54.4(11). Therefore, because plaintiff has failed to allege any facts supporting a violation of G.S. 58-54.4(11), and because plaintiff has failed to plead that the alleged violations occurred "with such frequency as to indicate a general business practice," the court did not err in dismissing this claim in plaintiff's original and amended complaint.

Finally, plaintiff attempted to plead allegations as to intentional infliction of emotional distress and the tort of outrage. We note first that the tort of outrage has not been recognized in this jurisdiction, and we decline to do so under the facts before us. Assuming the pleading was an imperfect attempt to plead the necessary elements of the tort of intentional infliction of emotional distress, we conclude the allegations are fatally defective. Our Supreme Court, in Dickens v. Puryear, 302 N.C. 437, 452, 276 S.E.2d 325, 335 (1981), held that this tort "consists of: (1) extreme and outrageous conduct, (2) which is intended to cause and does cause (3) severe emotional distress to another."

The facts alleged in the plaintiff's complaint clearly are not sufficient to establish the requisite intent to cause severe emotional distress to another. In Stanback, supra, the only case where our Supreme Court has implicitly recognized the tort of intentional infliction of emotional distress in conjunction with a breach of contract, the contract breached was an indemnity agreement to pay taxes as part of a marital separation agreement. In that highly personal situation, a supporting spouse with a mean or malicious propensity can have both the opportunity and the motivation to abuse the dependent spouse and to perpetuate the marital divisiveness and emotional distresses by deliberately failing to comply with the separation agreement. A contract of insurance, however, 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). For the foregoing reasons, the judgment appealed from is

Affirmed.

ARNOLD and EAGLES, JJ., concur.