court's ruling on remain and then mr proof mr hooks will be addressing the lower court's ruling on the motion to dismiss our motion for remained just based on two reasons number one that it was untimely filed under section fourteen forty six b and number two that there is a lack of diversity of the citizenship under section thirteen thirty two of the u s code the lack of diversity of citizenship under thirteen thirty two is a matter of first impression for this court and the timeliness of the removal is something this court did made a decision on in gordon in an unpublished opinion that was not to be used as precedent but otherwise has not had a published opinion on this issue the only way this case is it is it is a direct action or is it not it is a direct action your honor you want well if you look at the  the rules by which the supreme court is set down in defining terms in removal statute one of the things they say is that in absence of a definition in the statute a term should be given the meaning of ordinary a natural meeting meaning in this case the word direct action was not defined in the statute and so you look to it what is its natural and direct meeting in the f d i c vs meyer case that i'm referring to the court said well let's look at black's law to see if if it's defined there the word direct action is not and a s term it is a well known legal term and it is in fact a found in blacks and it's defined as a lawsuit by an insured against his or her own insurance company rather than against a tortfeasor or is insurer that's the case we have in the case at bar and the second is a lawsuit by a person claiming against an insured but suing the insurer directly instead you have any courts to read with your view of all this term has to be treated like almost all the cases not all of work to the contrary you're correct your honor and i wish i could point you to a case but unfortunately the very first case that dealt with this issue made a mistake they did not use the rules of construction that the supreme court has set out that they're supposed to use and then one case after another started citing them and all of a sudden you get three or four cases in court start saying well this is the this is the majority rule it's all based on a single mistake that was not based on these rules of construction that the supreme court tells us to to use and my point is is to you a saying yes this is a matter of first impression in this court so look at the rules of construction analyze it in terms of the rules of construction that are required of you by the supreme court and certainly you can look at the other cases but they were all early most of them were early and most of them did not use the ones that were before these cases that give rules of construction were not decided by using those  in other words they just simply ignored them and my point here today is yes the case law is against me but i believe that case law was wrong and i believe that if you analyze this based on those rules of construction and give the plain meaning to the word direct action which black's law dictionary tells us is a lawsuit against by an insured against his or her own insurance company rather than against the tortfeasor of the tortfeasor censure it's company that's the death of the plain and simple definition of direct action in black's law as the well accepted definition in our legal community of what a direct action is and that is that congress did not come in and say well we want to direct action but only those direct actions where the end injured party is stealing the tortfeasor is insurance company directly they didn't say that they they just said when the insured when it's a claim against the insurance company where the insured is not a party defendant and it's relating to a policy then that isn't that as a direct action that's what the statute says and when you look at the definition of direct action you will see that that certainly encompasses the facts that we have in the case of bar i'm asking this court to make an independent analysis of it based on those rules of construction i believe that if you do section fourteen forty six provides that it has to be removed within thirty days of service or receipt but what does that mean service or receipt and the supreme court in murphy brothers v machete answered that question for us and murphy brothers the party had received a courtesy copy of the complaint the defendant was then served with s and and and the complaint and the question was for murphy well which one do you go by do you go by actual receipt or do you go by when the party was served with the  the complaint in the court in murphy brother said you go by the date it was served not the date it was received now the defendants try to to distinguish that by saying well that dealt  with a case where the complaint was sent before service and it doesn't deal with an agent appointed to accept service so therefore it's distinguishable but that's a distinguishment without without a difference because the question  murphy is the same question that is before you today and that is when do you start counting the days is that the day they were actually served or the day they actually received there is no reference to statutory agents in the statute or exceptions for statutory agents in this scuse me was very statutory agent murphy no there wasn't it was strictly on the issue of when do you start counting the days so why should you start counting the days starting with one league commissioner of insurance it's obvious why because that's the day that the defendant became legally obligated to appear and to thin and in the case that's the day when the time for answering this complaint began to run on th scuse me sir and know about well the defendant's agent first for service of process did and i would submit to you it's not a statutory agency if you look at black's law dictionary on the definition of a statutory agent a statutory agent is business in north carolina without the appointment of an agent for service of process now and general corporations the requirement is you must appoint an agent that resides in north carolina  and for insurance companies they say you must appoint the the commissioner of insurance but the the agent doesn't arise out of a matter of law if the insurance company begins to do business and having not appointed the insurance commissioner that agency doesn't occur out of just a matter of law now they're in violation of the statutes for conducting business without appointing want but the agent itself is accountability there you know here's the problem with this with this i'm sorry your time has really expired you can use your colleagues time or you can go into your bottle time i'll go to the rebuttal time and i'll be fine i'm ok thank you very much thank you six motion in that setting as your honors are aware we have a situation where you apply federal procedural law but the substantive law is that of north carolina and i would certain suggest this court that applying the north carolina substantive law it is clear that the complaint is the only it filed state a claim on which relief could be granted and therefore  error for the district court to dismiss the quine i think it's important to understand that the complaint first of all asserts a single legal theory we do not assert a theory for breach of the insurance contract this is a point of confusion and the defendants have seem to assert then unless the assurance contract is breach you don't have a claim that is specifically not the case the north carolina authority and specifically the leading case which is the great case has established that there is a claim for violation of our and fair deceptive trade practices statute and that that is separate and distinct cause of action from a breach of contract claim the great case i suggest is controlling in the case in that it speaks to precisely the situation we have and in this case ms elliott is asserting that the defendant turns company violated provisions of the unfair claims handling practices statute gray dealt with that and said a contract under its insurance policy and an obligation which goes under the statute the statute requires simply that it not violate that insurance company not violate any provision of that and that creates a separate cause of action it's not based in any way upon the insurance contract the point here is the insurance company can have obligations by statute that are set by our legislature for public policy reasons that are in addition to or greater than their policy they may not having guy a bill of be under policy we don't allege that here what we allege is that in the handling of this claim they breached  provisions of that claims handling practice and therefore under gray we have a claim for unfair trade practices i think using like skis near anywhere in your complaint you allege an injury caused by the courts and particularly the miller case i believe it is now i'm asking i think a simpler question not what it flows from but where do you allege those damages in your complaint we allege them because we allege we allege the motors provisions and what the what the cases say your honor is that in calculating damages that you calculate that underlying award or the damages you we don't i'm that was put in just in point of saying what we have of course is notice please and yeah but you can't have we know you can't have a threadbare complaint when courts told us that right that's true your honor and what i'm saying is we do allege those i'm repeating myself and i apologize is that by alleging in the complaint which we do that the insurance company offered nothing and we recover that i'm out under our case law we've established that those are the amount of damages the case law then says those damages are troubled and then you you do that before you deduct the credit so what i'm saying is those allegations of those facts establish that basically by were virtue of that violation we've suffered damages of about just under one hundred forty thousand dollars your hon about not paying but in the fact in this case they were forced to pay they were not used i mean i'm just that i'll be interested in seeing what provisions of the might make the year the you know are the miller case speaks directly to this and says that this is how you're supposed to interpret the statute because this that she's supposed to be remedial it's supposed to compensate insure and to deter insurance companies and this is the way to calculate damages which is and what your colleague may also do in rebuttal is tell me what case follows miller finds that there has been this deceptive practice unfair and deceptive trade practices recovery or case holding that there is such a claim that has the facts closest to the ones that are alleged here thank your honor i was wrong as case i will i will attempt to do that thank you renee thank you thank you thank you your honor may please the court my name is william silverman here me half of american state's insurance company with me as my colleague mark langdon of the court's permission i will address the motion remand first and then move to the motion to dismiss  as to the direct action the court seems to have a good grasp of this issue based off the questions nine of the eleven circuits have addressed this exact issue and all have held the exact same way that the district court did hear the purported plain language of the direct action it is plain and it could be interpreted plainly plain direct action both those words we understand in the english language right and it could mean one thing according to the in fact the p d and it could mean another thing right of all chosen one way it would the court your out of the courts have all decided that the that the that the language was not plain that that you needed to look to congressional intent to implement the purpose and that the purpose if you do get beyond the actual language of direct action that the congressional purpose is clear that this was meant to deal with the particular issue from a louisiana state statute in wisconsin state statute that allowed for an injured party to skip over the tortfeasor in terms of suing the tortfeasor liability insurer and the courts in the easy end were being flooded with such claims and this amendment was meant to solve that problem nowhere is there any discussion in there about actions against an interpretation here you could essentially write direct out of the statute that it would be in any action against an insurance company with which the insured is not added as a defendant that the use of that term direct requires going beyond the plain language  and it also the fact that this is followed by it says to which case the insured is not named as a defendant would seem kind of lost in the sense that the insured is the plaintiff here how could  insured be the plaintiff and the defendant in either side and also i would point to the court that to the extent that the court would accept that any action against an insurance company would be a direct action within the meaning of the statute that would lead to a much broader result than was intended by congress that would essentially strip diversity jurisdiction from any action filed by an insured against his or her insurance company if there's no question i'm going to move to the timing of removal the court's permission gordon versus hartford cases on all fours and really the statutory schemes the timing of removal is all very very closely matched with the north carolina decisions here and there with the north carolina statutory provisions here rather and the reasoning is sound we would advocate strongly that the court follow i think it was judges wilkinson shed and duncan a per curiam opinion that decided that there are no other circuit court's opinion on it this is not something that supreme court has addressed directly but as the gordon court noted the vast majority of district courts to have addressed the issue have held exactly as the gordon court is that is when service is made on a statutory agent that the time for removal begins running only upon actual receipt of the of the complaint by the party being served the issue with the construction that the plaintiffs are that mr elliott is asking for here is that conflate service under the state's statute with a receipt by the defendant but fourteen forty six requires receipt and says by service or otherwise but if you look at the rationale and more if you brothers it is to allow thirty days to provide adequate time to give thirty days to make sure thirty days is allocated and justice ginsburg when looking at the the legislative history looks at the you know that was congress intent in adding that language by receipt or otherwise in your honour's as was noted  indirectly by j g you talked about the fact that they don't know about the complaint when it served on the department of insurance that's right that the statutory agent is not the defendant service upon the statutory agent is not a service upon the defended there was no question in the murphy brothers case that there was a receipt there was actual receipt prior to the complaint ever being served the north carolina legislature also recognizes that receipt by the defendant a receipt that a statutory agent is not received by the defendant and if you look at the statute that allows for such service changes in north carolina general statu fifty eight sixteen forty five if an insurance company is served through the department of insurance there are twelve extra days added to the period to be able to answer that is the thirty days that are allowed under north carolina rules civil procedure for you add twelve days to that and coincidentally that twelve day lag between service in the department of insurance and received by my client american states is exactly what happened here there is a provision under north carolina general statutes fifty eight sixteen forty which allows plaintiffs if when they are suing an insurance company to serve them under regular procedures for foreign corporations under a rule for there is no requirement that the service be through the department of elliot's expectations here should have been that the answer would only be due forty two days after service because that's what the statute she served the company under if she had wanted that time that deadline to be earlier certainly that could been accomplished by serving the appointed agent in indiana where american states is located for removal begins with a receipt by statutory agent the privilege to remove could easily be curtailed or abrogated completely this is a broad rule that is being advocated here and we contend that not only this court's holding  gordon but the well reasoned decisions from district courts within this within the fourth circuit and across the country support support finding that the removal here was timely and american states praising this court affirmed the district court's denial of the motion to remand with court's permission i'm going to move on to the motion to dismiss the district court found and we contend correctly so on appeal that miss elliott failed to allege failed to allege two of the elements required for her unfair and deceptive trade practices claim in north carolina she failed to plausibly allege facts to support the unfair deceptive conduct that is the alleged violations of the unfair claims settlement practices act and also failed to allege damages proximately caused by such conduct in any event under insured motorists coverage which has been the subject of course of much litigation within north carolina state courts and is particular in the sense that although it is first party coverage it is a coverage that is provided by and insur in condition on that finding of liability which includes both fault and damages and only wants that coverage is man only once that liability is established is the coverage trigger there are three there are three violations alleged and we would argue alleged without factual support there's an allegation that american state failed to attempt in good faith to effectuate prompt fair equitable settlements which liability had become reasonably clear judgments as you noted in mike in my opposition's direct they in fact did pay here once liability was  was payment there's no dispute that american states paid the arbitration award once it was once it was entered they paid the interest they paid that the costs awarded there's no dispute here that that was paid once liability was  unfair deceptive conduct which is to establish their unfair deceptive trade practices claim they have to show unfair deceptive kind into effect in commerce coaxingly causing damages i misspoke your honor i don't have any confusion but i was talking about the unfair deceptive conduct the first element is missing here and they are correct in the gray case is is law from the north carolina supreme court saying that unfair claim settlement practices act if you violate that it is a per se unfair deceptive act to establish that first element of your unfair trade practices claim however we were not disputing that law i think that seems to be a point of disagreement really after is the allegation of actual injury arising from what i'm sure the company did   reasonably clear we contend that's not the case once liability had been established they paid she claims that the she was compelled to institute litigation to recover amount to do under an insurance policy well the amounts weren't do under the insurance policy until the arbitrator all found that there was liability both fault and the magnitude of damages which were established and finally with regard to attempting to settle a claim for less the amount which a reasonable man would have believe he was entitled first we point to the fact that there wasn't any duty to pay until liability was a stablished and second as to the reasonable man standard plaintiff seems to be substituting her judgment into that in terms of saying that what she said was reasonable in fact her demand at the beginning of the case is alleged in the complaint is two hundred thirty four thousand dollars was her estimate of the damages the end of the day the arbitrator awarded ninety thousand dollars american states even if it had value the claimant zero would have been closer to the ninety than she was at two hundred thirty four thousand dollars i think this is a corollary to the main point is that there is no obligation to make a payment here until there is liability established plaintiff attempts to create a rule to say that an insurance company has to pay when the demand is made under her construction of the statutes here for the in the under insured motorists conduct under insured motorists context is to say that an insurance company can never contest damages they can't say we disagree with your valuation of your claim and therefore are going to go to arbitration to determine what the value of the claim is without risking bad faith they don't just accept the demand and pay it then you better be right because you're going to be subject to bad faith or even if you are right if they were here when they refused to pay her the limit and she ultim recovered ten thousand dollars plus the limits that they could still be somehow liable for bad faith it's an untenable rule for under insured motorists carriers in north carolina if she has a problem with the way the under insured motorist statute is written or that the ra as they are alleged in the complaint the district court notice that there's a threadbare recital that they've been damaged in the mount of twenty five thousand dollars without any factual support for it there was no motion to amend or before your honor's on a close record on the to satisfy elements of the first elements and the third element of the unfair trade practices claim briefly i will address even if the court accepts those additional elaboration that were added in  pellet briefing and frankly in a briefing to the district court as well as we contend that even those damages which are identified as theoretical damages albi it not played in the complaint don't satisfy the proximate cause ation standard first with regard to the actual contract balance as we've noted in as your honor noted on direct this is already been paid that damage first the damage that was awarded in arbitration was proximate they delayed paying and should have paid up front which would clearly do not the most that she would be entitled for is damages for the delay in being paid the damages themselves are not proximately caused by any conduct by my company and your honour's i would also point to the fact that the arbitration award pays missy elliot for compensates mr elliott for that delay in the form of pre judgment interest your honor she's been satisfied for pre judgment interest through the arbitration award she's been satisfied for we courts across the country and we urge that this court to adopt the same rule has been adopted by nine this court sister circuits in holding that a direct action is not satisfied by bad faith play yards unless you have any more questions i'm done with you thank you alleged in the case of washburn versus vanderveer which is cited and the briefs the court says that the damages are treble those are the damages that amount that was obtained those are the violation of the the statute that north carolina has put on how insurance companies are to comport themselves this is not a situation where they made an offer and it was low in the parties couldn't agree so you went to court this was a situation where we made a demand on the first carrier they didn't even question it they paid the the limits and then we set the same demand to two american states and said listen we're will accept the seventy thousand dollars let me interrupt just i just want to make sure i'm following your what you told us the beginning you're saying that the damages under the unfair and deceptive trade practices act are the amount you were aid under the insurance policy because that appears to be what split seventeen eight yes the amount that we recovered in the arbitration which is the seventy thousand or the ninety thousand minus plus all the other costs minus the thirty thousand that we got from the state farm right and that's damages because because the american the defendant forced us to file suit and get to get a judgment and that is one of the specific items listed in the an unfair insurance practices act that the court in gray has said is an unfair and deceptive trade practice they didn't offer a penalty a penny in fact they said we think the other carrier paid too much so they forced us to follow a complaint to even get a even get an offer and we had to go all the way through arbitration and we finally got the award and the award was correct ok and he so he what that insurance company did was a veil itself its rights under the policy right they they acted according to their rights under the policy ye out i'm sorry i'm crime sorry i didn't mean to interrupt us right they did not act under the dictates of the north carolina statute for unfair insurance practices and that's over and above their duties under the policy of we did not choose for breach of the policy ok remember there i had a two part question and i'll get back to this first part in a minute all right but the other part of the question was the case that you have that is closest to this one in which a north carolina court has said that there is a violation of this unfair and deceptive trade practices act that would be the great case ok and if we if we conclude that the gre case is not close to this one where are we if it's a wholly different situation don't be frank with you i don't know because i think the great case is on all fours you think it is i'm there's no case is totally on all fours your honor but it's as close as you can get i believe ok so let's go back just a moment to the amount of damages because i was struck by that didn't mean that you alleged actual injury caused by the unsure because you went to arbitration in fact got the award you got  judgment interest is that correct and post retirement interest as well yes and so i'm still not and in the complaint doesn't tell me where that amount is well the any offer on a claim that was clearly should have been made as evidence by the arbitration award forcing us to go to court that is when the cause of action occurred and that point the damages were not yet set but the damages became the amount of the award now they did subsequently pay that but under an unfair and deceptive trade practice you take those damages you trouble them and then you give credit for what they have paid and that's the reason for the unfair and deceptive trade practice in the penalty portion of it in the public policy portion of it that's the reason this case isn't on a contractual basis relating to the policy it's on the public circuit court of appeals before circuit said that in and determining removal cases there are questions that you have to review it from standards of construction and says that removal statutes must be strictly construed that any doubt resolved in favor of remain and continued jurisdiction for size limits the removal status has to be the exact restrictions of the removal statute define none of the cases cited by the defendant and their brief analyzes this decision based on those factors none of them the court below didn't analyze a decision based on those factors and  i'm impressed that mr silverman didn't mention those factors at all in his his argument today this court in barbour especially on the novo review is this is says that you have to put those factors into place you have to analyze this case based on those factors this whole statute was changed because of inconsistency isn't different results from different times thank you very much we will come down and greet the lawyers and then go directly to