Opinion ID: 2137291
Heading Depth: 1
Heading Rank: 2

Heading: unfair insurance practices act

Text: Volk asserts that the trial court erred in dismissing his action against WMAC under the Unfair Insurance Practices Act. He contends that WMAC's decision to not approve a deed in lieu of foreclosure constituted a violation of § 26.1-04-03(9)(a) and (d), N.D.C.C., which provide:  26.1-04-03. Unfair methods of competition and unfair or deceptive acts or practices defined. The following are unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:       9. Unfair claim settlement practices. Committing any of the following acts, if done without just cause and if performed with a frequency indicating a general business practice: a. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages at issue.       d. Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims submitted in which liability has become reasonably clear. We need not determine whether Chapter 26.1-04, N.D.C.C., creates a private civil right of action [ see Szarkowski v. Reliance Ins. Co., 404 N.W.2d 502, 504 (N.D.1987); compare Farmer's Union Central Exchange v. Reliance Ins. 626 F.Supp. 583, 590 (D.N.D.1985) with Farmer's Union Central Exchange v. Reliance Ins. Co., 675 F.Supp. 1534, 1536-1538 (D.N.D.1987) and Moradi-Shalal v. Fireman's Fund Ins., 46 Cal.3d 287, 250 Cal. Rptr. 116, 758 P.2d 58 (1988) ], because even assuming that it does, we agree with WMAC that these statutory provisions are as a matter of law not applicable under the circumstances of this case. Section 26.1-04-03(9) specifically requires that the proscribed acts be performed with a frequency indicating a general business practice to constitute an unfair claim settlement practice. Construing similar language in Mead v. Burns, 199 Conn. 651, 509 A.2d 11, 16 (1986), the Supreme Court of Connecticut held that claims of unfair settlement practices under its state act require a showing of more than a single act of insurance misconduct. There is no evidence here that WMAC was involved in insurance misconduct with such a frequency indicating a general business practice. Moreover, even if we were to interpret Volk's claim as alleging breach of an insurer's duty to act in good faith [ see Corwin Chrysler-Plymouth, Inc. v. Westchester Fire Insurance Co., 279 N.W.2d 638 (N.D.1979); Smith v. American Family Mutual Insurance Co., 294 N.W.2d 751 (N.D.1980) ], we have only allowed insureds or intended third-party beneficiaries to sue under that theory. See Szarkowski v. Reliance Ins. Co., supra, 404 N.W.2d at 505. WMAC's mortgage guaranty policy lists SMI as the insured. There is no dispute that the claims against WMAC for losses incurred under the policy were filed by either NDHFA or SMI and that those claims have been paid. Volk has failed to present evidence sufficient to raise a reasonable inference that he was an intended third-party beneficiary of the mortgage insurance contract. See § 9-02-04, N.D.C.C.; Russell v. Bank of Kirkwood Plaza, 386 N.W.2d 892, 895-896 (N.D.1986). We therefore conclude that the trial court did not err in granting summary judgment dismissing Volk's action against WMAC under the Unfair Insurance Practices Act. Accordingly, we affirm the summary judgment dismissal of Volk's action against WMAC under the Unfair Insurance Practices Act. We reverse the summary judgment dismissals of Volk's abuse of process action against the defendants and remand for trial. VANDE WALLE, LEVINE and MESCHKE, JJ., and VERNON R. PEDERSON, Surrogate Judge, concur. VERNON R. PEDERSON, Surrogate Judge, sitting in place of GIERKE, J., disqualified.