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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.

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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, 846 F.3d 757, 765 (4th Cir. 2017). “To survive a motion to 

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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.” Id. (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., 654 S.E.2d 37, 39 (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.” Id. (citations and internal 

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

company as the drafting party. Id.

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 

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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, 333 S.E.2d 299, 305 (N.C. 1985); see Maglione v. Aegis Family Health Ctrs., 607 

S.E.2d 286, 291 (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.

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Ellis v. La.-Pac. Corp., 699 F.3d 778, 787 (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., 559 F.3d 212, 224 (4th Cir. 2009) 

(internal quotation marks omitted); see Wells Fargo Bank, N.A. v. Corneal, 767 S.E.2d 

374, 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., 883 F.3d 384, 396 (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

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