UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 19-1374

WILLIAM T. HANCOCK, SR., individually and in a representative capacity on behalf of a class of all persons similarly situated,

Plaintiff - Appellant,

v.

AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY; INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA; AMERICO LIFE, INC.,

Defendants - Appellees.

Appeal from the United States District Court for the Eastern District of North Carolina, at Wilmington. Louise W. Flanagan, District Judge. (7:16-cv-00350-FL)

Submitted: December 30, 2019 Decided: February 5, 2020

Before MOTZ, DIAZ, and THACKER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

H. Forest Horne, Jr., John Alan Jones, MARTIN & JONES, PLLC, Raleigh, North Carolina; Mark R. Sigmon, SIGMON LAW, PLLC, Raleigh, North Carolina, for Appellant. Debbie W. Harden, Matthew F. Tilley, WOMBLE BOND DICKINSON (US) LLP, Charlotte, North Carolina; Roger B. Cowie, Carl C. Scherz, Taylor F. Brinkman, LOCKE LORD LLP, Dallas, Texas, for Appellees.

Unpublished opinions are not binding precedent in this circuit. PER CURIAM:

In 1985, William T. Hancock, Sr., purchased a flexible premium adjustable life

insurance policy from Americo Financial Life and Annuity Insurance Company, Investors

Life Insurance Company of North America, and Americo Life, Inc. (collectively,

“Defendants”). The policy provided for a $50,000 death benefit if Hancock died before

the date of maturity, which was his 95th birthday. If Hancock was alive on the date of

maturity, he would receive the cash value of the policy. The policy also provided for an

initial minimum premium of $41.27 per month and a “planned periodic premium” in that

same amount. Hancock alleges that, although he paid $41.27 per month for more than 25

years, Defendants later increased the amount of his monthly premiums and depleted the

cash value of the policy to cover the difference between the initial minimal premium and

the increased monthly premium, depriving Hancock both of the cash value and the

promised death benefit unless he began to pay higher monthly premiums. Hancock appeals

the district court’s order dismissing for failure to state a claim his amended putative class

action complaint in which he asserts claims under North Carolina law for breach of

contract, breach of the duty of good faith and fair dealing, declaratory and injunctive relief,

equitable rescission, and violation of the Unfair and Deceptive Trade Practices Act

(“UDTPA”), N.C. Gen Stat. Ann. § 75-1.1 (2017). We affirm.

“We review de novo the district court’s dismissal of a complaint under Federal Rule

of Civil Procedure 12(b)(6),” and must “accept as true all of the factual allegations

contained in the complaint and draw all reasonable inferences in favor of the plaintiff.”

Hall v. DIRECTV, LLC,

(4th Cir. 2017). “To survive a motion to

2 dismiss, [Hancock’s] factual allegations, taken as true, must state a claim to relief that is

plausible on its face. The plausibility standard is not a probability requirement, but asks

for more than a sheer possibility that a defendant has acted unlawfully.”

(citations and

internal quotation marks omitted).

Under North Carolina law, insurance policies are contracts that courts must interpret

as they are written. Digh v. Nationwide Mut. Fire Ins. Co.,

(N.C. Ct.

App. 2007). In the absence of ambiguity, courts should construe insurance policies “by

the plain, ordinary, and accepted meaning of the language used. An ambiguity exists

where, in the opinion of the court, the language of the policy is fairly and reasonably

susceptible to either of the constructions asserted by the parties.”

(citations and internal

quotation marks omitted). Courts must construe any ambiguities against the insurance

company as the drafting party.

Hancock asserts that the policy could be reasonably interpreted to provide that the

amount of the monthly premium could only be changed by the policyholder, and, as a

result, coverage under the policy would be guaranteed if the policyholder paid $41.27 per

month. Accordingly, he argues, Defendants breached the policy by increasing the

premiums and depleting the cash value of the policy to make up the difference. We have

reviewed the policy and conclude that the district court correctly determined that, reading

the policy as a whole, Defendants were permitted under the policy’s terms to require

Hancock to pay increased premiums if the cost of insurance became greater than the cash

3 value of the policy. The district court therefore correctly dismissed Hancock’s claim for

breach of contract. ∗

Hancock next contends that the district court should not have dismissed his claim

for breach of the duty 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 injures the

right of the other to receive the benefits of the agreement. Bicycle Transit Auth., Inc. v.

Bell,

(N.C. 1985); see Maglione v. Aegis Family Health Ctrs.,

(N. C. Ct. App. 2005) (“[A] party who enters into an enforceable contract

is required to act in good faith and to make reasonable efforts to perform his obligations

under the agreement.”).

We agree with the district court that Hancock’s allegations regarding breach of the

duty of good faith and fair dealing are materially similar to those supporting his claim for

breach of contract. Because the district court properly dismissed the breach of contract

claim and Hancock did not adequately plead an independent claim for breach of the duty

of good faith and fair dealing, the district court properly dismissed this claim.

Finally, Hancock argues that he pled an adequate claim for relief under the UDTPA.

The UDTPA is meant to prevent unfair or deceptive acts or practices in or affecting commerce. In order to state a claim under the UDTPA, a plaintiff must show (1) defendant committed an unfair or deceptive act or practice; (2) the action in question was in or affecting commerce; and (3) the act proximately caused injury to the plaintiff. Whether conduct is unfair or deceptive is a legal issue for the court to decide.

∗ As the district court correctly dismissed this claim, it also correctly dismissed the derivative claims for declaratory and injunctive relief and rescission.

4 Ellis v. La.-Pac. Corp.,

(4th Cir. 2012) (citations and internal quotation

marks omitted). “North Carolina courts have repeatedly held that a mere breach of

contract, even if intentional, is not sufficiently unfair or deceptive to sustain an action under

[the UDTPA.]” PCS Phosphate Co. v. Norfolk S. Corp.,

(4th Cir. 2009)

(internal quotation marks omitted); see Wells Fargo Bank, N.A. v. Corneal,

, 377 (N.C. Ct. App. 2014) (“A UDTPA action is distinct from a breach of contract

action; a plaintiff must allege and prove egregious or aggravating circumstances to prevail

on a UDTPA claim.”). Section 58-63-15 of the North Carolina Code defines unfair

methods of competition and unfair or deceptive acts or practices relating to the business of

insurance, and the North Carolina courts have held that violations of § 58-63-15 also

constitute violations of the UDTPA. Elliott v. Am. States Ins. Co.,

(4th

Cir. 2018). Having reviewed the pleadings, we agree with the district court that Hancock

failed to state a UDTPA claim.

We therefore affirm the district court’s judgment. We dispense with oral argument

because the facts and legal contentions are adequately presented in the materials before this

court and argument would not aid the decisional process.

AFFIRMED

5