Court Opinion

ID: 5135176
Source: CourtListenerOpinion
Date Created: 2021-12-15 20:00:39.485023+00
Date Added: 2024-06-11T08:23:47.942127
License: Public Domain

PUBLISHED

                       UNITED STATES COURT OF APPEALS
                           FOR THE FOURTH CIRCUIT

                                       No. 20-1549

SKYLINE RESTORATION, INC., as assignee of First Baptist Church of Lumberton,
North Carolina,

                     Plaintiff - Appellant,

              v.

CHURCH MUTUAL INSURANCE COMPANY,

                     Defendant - Appellee.

Appeal from the United States District Court for the Eastern District of North Carolina, at
Wilmington. Terrence W. Boyle, District Judge. (7:19-cv-00232-BO)

Argued: September 22, 2021                                  Decided: December 15, 2021

Before GREGORY, Chief Judge, HARRIS, and RUSHING, Circuit Judges.

Affirmed by published opinion. Chief Judge Gregory wrote the opinion, in which Judge Harris
and Judge Rushing joined.

ARGUED: David Stebbins Coats, BAILEY & DIXON, LLP, Raleigh, North Carolina,
for Appellant. Mihaela Cabulea, BUTLER WEIHMULLER KATZ CRAIG LLP, Tampa,
Florida, for Appellee. ON BRIEF: J.T. Crook, BAILEY & DIXON, LLP, Raleigh, North
Carolina, for Appellant. L. Andrew Watson, BUTLER WEIHMULLER KATZ CRAIG
LLP, Charlotte, North Carolina, for Appellee.
GREGORY, Chief Judge:

       In October 2016, First Baptist Church of Lumberton, North Carolina (“First

Baptist”), retained Skyline Restoration, Inc. (“Skyline”), to provide emergency

remediation services to address wind damage to First Baptist’s real estate. In exchange,

Skyline received the right to collect any proceeds from First Baptist’s insurance policy with

Church Mutual Insurance Company (“Church Mutual”). After Church Mutual partially

disputed coverage, Skyline commenced the instant action to recover the value of services

provided to First Baptist but not paid by Church Mutual. The district court dismissed

Skyline’s claims, concluding in part that the claims were barred by the applicable North

Carolina statute of limitations.

       On appeal, Skyline argues that the limitations period began to accrue on the date of

breach, but Church Mutual maintains that the limitations period began to accrue on the date

of loss. For the reasons below, we find that the applicable statute of limitations is three

years from the date of loss, and agree that Skyline’s claims for declaratory judgment and

breach of contract are time barred because Skyline brought this action in November 2019,

more than three years after the time of loss; October 2016. We therefore affirm the

judgment of the district court.

                                             I.

                                             A.

       On October 7, 2016, the First Baptist Church sustained extensive wind damage from

Hurricane Matthew. At the time, Church Mutual provided insurance coverage for First

                                             2
Baptist’s real estate, and First Baptist submitted an initial notice of loss and proof of claim

to Church Mutual on October 15.          Shortly thereafter, on October 18, First Baptist

contracted with Skyline to provide emergency remediation and mitigation services in

accordance with the terms of the insurance policy. 1 On November 28, Church Mutual

agreed to cover part of the initial claim but disputed coverage for a “dislodged ceiling

joist.” J.A. 8–9.

       After completing the remediation services, Skyline issued invoices to First Baptist

for an amount exceeding $75,000 on December 14, 2016. On February 16, 2017, several

months after Skyline performed under contract and in response to First Baptist’s failure to

timely pay for its services, Skyline filed for and perfected a claim of lien against First

Baptist for non-payment. On April 4, 2019, First Baptist submitted a second proof of claim

to Church Mutual for the services provided by Skyline, “none of which has been paid to

date.” J.A. 9. Eventually, Skyline submitted claims directly to Church Mutual for the

amount invoiced under the contract. Church Mutual never responded to Skyline’s claims.

       1
        The insurance policy provides that “in the event of loss or damage to Covered
Property,” the insured must:

       Take all reasonable steps to protect the Covered Property from further
       damage and keep a record of your expenses necessary to protect the Covered
       Property for consideration in the settlement of the claim. This will not
       increase the Limit of Insurance. However, we will not pay for any
       subsequent loss or damage resulting from a cause of loss that is not a Covered
       Cause of Loss. Also, if feasible, set the damaged property aside and in the
       best possible order for examination.

J.A. 64.
                                              3
       To date, neither First Baptist nor Church Mutual has paid Skyline for the

remediation services performed on First Baptist’s property. Pursuant to the remediation

contract, First Baptist assigned all insurance proceeds to Skyline.          First Baptist

subsequently filed for Chapter 11 bankruptcy on August 30, 2018. As part of First Baptist’s

bankruptcy proceedings, First Baptist filed an adversary proceeding against Skyline on

September 9, 2019. To resolve this adversary proceeding, First Baptist further assigned

Skyline “any and all claims against any policies of insurance that may provide payments

for work performed by Skyline.” J.A. 10.

                                            B.

       On November 22, 2019, Skyline, as First Baptist’s assignee, commenced this action

against Church Mutual seeking a declaratory judgment and asserting claims for breach of

contract and unfair claim settlement practices under the Unfair and Deceptive Trade

Practices Act (“UDTPA”).

       Church Mutual moved to dismiss the complaint for failure to state a claim. Church

Mutual argued that the limitations period began to accrue on the date of loss—when

Hurricane Mathew made landfall on October 7, 2016—thus Skyline’s declaratory

judgment and breach of contract claims were time barred. In response, Skyline asserted

that the limitations period began to accrue on the date of breach—November 28, 2016,

                                            4
when Church Mutual first advised First Baptist that part of its claim was not covered. 2

Under Skyline’s approach, the complaint was timely filed.

       The district court, relying on North Carolina General Statute § 1-52(12) and

§ 58-44-16(f)(18), rejected Skyline’s claims and granted Church Mutual’s motion to

dismiss. First, the district court found that Skyline’s declaratory judgment and breach of

contract claims were time barred under the applicable three-year statute of limitations

accruing from the date of loss. The court acknowledged that although the statute of

limitations for breach of contract claims is three years and begins to run from the date of

breach, North Carolina General Statute § 1-52(1), there is a “separate three-year statute of

limitations for certain insurance policies, which begins to run from the date the loss

accrued,” North Carolina General Statute § 1-52(2) and § 58-44-16(f)(18). J.A. 247.

Second, the district court found that First Baptist’s bankruptcy did not toll the statute of

limitations deadline. Finally, the district court dismissed the claim for unfair claim

settlement practices because it was neither cognizable nor sufficiently pled. The court

found that the UDTPA claim was unassignable under North Carolina law and any separate,

direct claim for unfair practices against Church Mutual was not sufficiently pled.

       2
          Skyline originally argued the date of breach did not occur until Church Mutual
filed its motion to dismiss because it had not previously indicated whether it would cover
First Baptist’s claim. On appeal, Skyline contends that the earliest date the statute of
limitations would begin to run is April 4, 2019, when First Baptist submitted its second
proof of claim to Church Mutual. However, Skyline also suggests that Church Mutual
breached the insurance policy when it told First Baptist that part of its claim fell outside
the scope of coverage on November 28, 2016. Regardless of which breach date is used,
the action is timely if the date of breach determines the date of accrual.
                                             5
       This appeal of Skyline’s claims followed. First, Skyline contends the district court

erred in concluding that Skyline’s claims for declaratory judgment and breach of contract

were untimely. Skyline further asserts the applicable statute of limitations is three years

from the date of breach, instead of three years from the date of loss. Next, Skyline alleges

the court erred in failing to extend the statute of limitations based upon the bankruptcy

proceedings of Skyline’s assignor. Finally, Skyline argues the court erred in concluding

that Skyline could not establish a claim for unfair claim settlement practices, either as a

separate claimant or through its position as an assignee.

                                             II.

       This Court reviews a district court’s dismissal under Federal Rule of Civil Procedure

12(b)(6) de novo. E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440

(4th Cir. 2011). The Court must “accept as true all of the factual allegations contained in

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

Rubenstein, 825 F.3d 206, 212 (4th Cir. 2016). To survive a motion to dismiss, a complaint

must contain sufficient facts to “state a claim to relief that is plausible on its face.” Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A pleading that offers only “labels and

conclusions” or “a formulaic recitation of the elements of a cause of action will not do.”

Id. at 555.

       We possess jurisdiction pursuant to 28 U.S.C. § 1332. Because jurisdiction rests on

diversity of citizenship, this Court shall apply North Carolina substantive law and federal

                                              6
procedural law. See Erie R. Co. v. Tompkins, 304 U.S. 64, 79–80 (1938); Guar. Tr. Co. v.

York, 326 U.S. 99, 108–09 (1945).

                                              III.

       We first address Skyline’s claim that the district court erred in applying a three-year

statute of limitations from the date of loss to Skyline’s declaratory judgment and breach of

contract claims. There is no dispute in this case that the applicable statute of limitations is

three years. Instead, the critical question is whether the limitations period for breach of

contract begins to accrue on the date of loss or on the date of breach. Skyline contends that

the limitations period commenced on the date of breach when Church Mutual allegedly

breached its obligations under the insurance policy pursuant to North Carolina General

Statute § 1-52(1). Appellant Br. at 13. Conversely, Church Mutual argues that the

limitations period commenced on the date of loss when Hurricane Matthew made landfall

in North Carolina consistent with North Carolina General Statute § 1-52(12). Appellee Br.

at 10. This distinction is critical as these claims are timely only if they accrued when

Church Mutual allegedly breached its obligations under the insurance policy. Because

North Carolina extends § 1-52(12) and § 58-44-16 to real property insurance policies

regardless of the cause of loss, we conclude that the applicable statute of limitations is three

years from the date of loss. We therefore affirm the district court’s dismissal of Skyline’s

declaratory judgment and breach of contract claims as time barred.

                                               7
                                              A.

       Generally, in North Carolina, a breach of contract claim is subject to a three-year

statute of limitations. N.C. Gen. Stat. § 1-52(1) (applying a three-year statute of limitations

to an action “[u]pon a contract, obligation or liability arising out of a contract, express or

implied, except those mentioned in the preceding sections”). 3          Generally, under the

applicable case law, a breach of contract claim accrues on the date of breach. See

Christenbury Eye Ctr., P.A. v. Medflow, Inc., 802 S.E.2d 888, 892 (N.C. 2017); Schenkel

v. Shultz, Inc. v. Hermon F. Fox & Assocs., P.C., 636 S.E.2d 835, 839 (N.C. Ct. App. 2006).

       However, a separate three-year statute of limitations applies to certain insurance

policies.   N.C. Gen. Stat. § 1-52(12).      Specifically, § 1-52(12) applies a three-year

limitations period to an action “[u]pon a claim for loss covered by an insurance policy that

is subject to the three-year limitation contained in [North Carolina General Statute

§] 58-44-16.” Id. (emphasis added). Under § 58-44-16, such a claim must be brought

within three years of the loss. Id. § 58-44-16(f)(18) (“No suit or action on this policy for

the recovery of any claim shall be sustainable in any court of law . . . unless commenced

within three years after inception of the loss.” (emphasis added)). Accordingly, North

Carolina courts have interpreted “inception of the loss” to refer to the date of loss.

Marshburn v. Associated Indem. Corp., 353 S.E.2d 123, 126 (N.C. Ct. App. 1987) (finding

that “inception of the loss” refers to “the date of the occurrence of the event out of which

the claim for recovery arose”).

       3
          North Carolina General Statute § 1-52 simply contains a list of causes of action
that are subject to a three-year statute of limitations.
                                              8
       We conclude that the district court correctly applied the relevant statutory

provisions, North Carolina General Statute § 1-52(12) and § 58-44-16, to Skyline’s claims

for declaratory judgment and breach of insurance contract. In making this determination,

we first look to § 58-44-16 to ascertain whether the statute governs real property insurance

policies. The title of § 58-44-16—“Fire insurance policies; standard fire insurance policy

provisions”—is misleading, as it would seem to suggest that § 1-52(12) applies only to fire

insurance policies. However, North Carolina courts have extended the limitations period

applicable to fire insurance policies to homeowner’s insurance policies and similar policies

insuring real property. See Page v. Lexington Ins. Co., 628 S.E.2d 427, 428 (N.C. Ct. App.

2006) (homeowner’s property insurance); Marshburn, 353 S.E.2d at 124 (same). 4

Moreover, the Supreme Court of North Carolina previously deemed “[h]omeowners

insurance to be fire insurance” for purposes of the State ratemaking statute. State ex rel.

Comm’r of Ins. v. N.C. Fire Ins. Rating Bureau, 234 S.E.2d 720, 728 (N.C. 1977). Here,

First Baptist purchased property insurance coverage for its real estate. Thus, North

       4
         Although nonbinding, the Western District of North Carolina’s holding in Biltmore
Avenue Condominium Ass’n Inc. v. Hanover American Insurance Co. is informative. No.
1:15CV43, 2015 WL 12731927, at *2 (W.D.N.C. Sept. 3, 2015), report and
recommendation adopted, No. 1:15-CV-43-MR-DLH, 2016 WL 406463 (W.D.N.C. Feb.
2, 2016). Specifically, in Biltmore Avenue Condominium, the court applied § 1-52(12) and
§ 58-44-16 to an alleged breach of a commercial property insurance policy. 2015 WL
12731927, at *2 (holding the plaintiff had three years from the date of the loss to bring suit
against the defendant). Thus, the policy type covered by § 58-44-16 is not exclusively fire
insurance policies. Instead, North Carolina has held that claims for loss covered by
homeowners’ insurance and commercial property insurance are subject to the three-year
limitation in § 58-44-16.
                                              9
Carolina precedent provides support for extending the limitations period in § 1-52(12) and

§ 58-44-16 to the property insurance policy in question.

       Next, we review whether North Carolina law extends the application of § 58-44-16

to losses that are not fire related. Notably, North Carolina courts have extended the

limitations period applicable to fire insurance policies and homeowner’s insurance

policies, even when the damage was not fire related. See Page, 628 S.E.2d at 430 (loss

caused by ruptured sewer pipeline); Marshburn, 353 S.E.2d at 126–28 (loss caused by

lightning strike); Quillen v. Allstate Corp., No. 1:14-CV-00015-MR-DLH, 2014 WL

6604897, at *3 (W.D.N.C. Nov. 20, 2014) (loss caused by explosion). In the instant case,

the damage to First Baptist’s property was not caused by fire. Instead, the loss was caused

by windstorm. Thus, under the relevant legal framework, the Court may apply § 58-44-16

to loss by windstorm. At this stage of the proceedings, the insurance policy’s coverage is

what subjects the relevant policy to the statute of limitations under § 58-44-16(f)(18)

regardless of the scope of the policy’s coverage. See N.C. Gen. Stat. § 58-44-16(f)(18)

(applying to any “suit or action on [a real property insurance] policy for the recovery of

any claim,” regardless of whether the claimed loss is fire related).

       Because § 58-44-16 extends to insurance policies covering real property for fire and

non-fire losses, we conclude that the district court correctly applied the relevant statutory

provisions, North Carolina General Statute § 1-52(12) and § 58-44-16, to Skyline’s claims

for declaratory judgment and breach of insurance contract. In the instant case, the statute

of limitations began to accrue on the date of loss, October 7, 2016, when hurricane-force

winds damaged First Baptist’s real property. Because Skyline brought this action on

                                             10
November 22, 2019, more than three years after the date of loss, the district court properly

dismissed Skyline’s declaratory judgment and breach of contract claims as time barred.

                                               B.

       In challenging this conclusion, Skyline argues the district court overlooked North

Carolina General Statute § 58-3-35. 5 Appellant Br. at 11. North Carolina General Statute

§ 58-3-35(b) prohibits an insurer from “limit[ing] the time within which any suit or action

. . . may be commenced to less than the period prescribed by law.” However, the district

court relied exclusively on the statutory three-year limitations period, not the insurance

policy’s limitations period. See N.C. Gen. Stat. §§ 1-52(12), 58-44-16.

       Moreover, in the instant case, the limitations period in the insurance policy mirrors

§ 1-52(12) and § 58-44-16, which is three years from the date of loss. Because neither the

governing statute nor the policy language shorten the limitations period to less than three

years from the date of loss, even if the district court had relied on both the statutory

limitations period and contractual limitations period, there is no § 58-3-35 violation.

       5
          We are unpersuaded by Skyline’s arguments relating to F&D Co. v. Aetna
Insurance Co., 287 S.E.2d 867 (N.C. 1982); United States Leasing Corp. v. Everett,
Creech, Hancock & Herzing, 363 S.E.2d 665 (N.C. App. 1988); and Piles v. Allstate
Insurance Co., 653 S.E.2d 181 (N.C. App. 2007), as none of these cases relate to the case
at hand. F&D Co. involves a marine insurance policy, which is an explicit exception to
§ 58-44-16. 287 S.E.2d at 867. Specifically, § 58-44-16(b) states “With the exception of
policies covering . . . (ii) marine and inland marine insurance, no fire insurance policy shall
be made . . . by any insurer . . . on any property in this State, unless it conforms in substance
with all of the provisions . . . in subsection (f) of this section.” N.C. Gen. Stat. § 58-44-
16(b). Further, United States Leasing Corp. is a non-insurance case concerning the
application of the statute of limitations for a breach of an office equipment lease. 363
S.E.2d at 669. Finally, Piles concerns a breach of automobile insurance, which is subject
to a different statutory framework than property insurance. 653 S.E.2d at 185.
                                               11
       As for the insurance policy’s limitations period, the parties’ dispute, in part, arises

from two different statute of limitations provisions within the insurance policy. First, the

insurance policy was modified to provide that “[n]o one may bring a legal action against

[Church Mutual] . . . unless . . . [t]he action is brought within three years after the date on

which the direct physical loss or damage occurred.” J.A. 118 (emphasis added). Second,

the Standard Fire Policy endorsement provides that “[n]o suit or action on this policy for

recovery of any claim shall be sustainable in any court . . . unless commenced within three

(3) years next after [sic] inception of the loss.” J.A. 122 (emphasis added). However,

North Carolina courts have interpreted “direct physical loss or damage occurred” and

“inception of the loss” to mean the date of loss. See Cleveland Constr., Inc. v. Fireman’s

Fund Ins. Co., 819 F. Supp. 2d 477, 482 (W.D.N.C. 2011); Marshburn, 353 S.E.2d at 126.

Thus, the limitations period is three years from October 7, 2016, regardless of which

insurance policy provision the parties choose to rely upon.

       Accordingly, Skyline’s claims for declaratory judgment and breach of contract, filed

more than three years after the date of the loss, are time barred.

                                             IV.

       Next, Skyline contends that, regardless of the accrual date, as an assignee of First

Baptist, its cause of action against Church Mutual was tolled by First Baptist’s bankruptcy

proceedings. Appellant Br. at 20–24. We disagree.

                                              12
                                              A.

       Section 108(a) of the Bankruptcy Code provides that, if a debtor in bankruptcy has

an unexpired legal claim, the bankruptcy trustee may commence such action before the end

of the claim’s limitations period or two years after the order for relief, whichever is later.

       Moreover, § 1107(a) of the Bankruptcy Code confers the rights and powers of a

trustee upon a debtor-in-possession, including the two-year extension of the limitations

period. 11 U.S.C. § 1107(a); see Coliseum Cartage Co. v. Rubbermaid Statesville, Inc.,

975 F.2d 1022, 1025 (4th Cir. 1992). In sum, a trustee and debtor-in-possession may utilize

§ 108(a) to toll the limitations period for unexpired legal claims. Significantly, the

Bankruptcy Code does not extend this tolling provision to any other actors, including

creditors.

                                              B.

       Skyline is neither the trustee nor the debtor-in-possession in First Baptist’s

bankruptcy proceedings. Instead, Skyline relies on its position as an assignee of First

Baptist to avail itself of § 108(a)’s two-year extension of the limitations period. However,

Skyline’s position as an assignee is notably different from the role of a trustee or a debtor-

in-possession. A trustee and a debtor-in-possession owe fiduciary duties to all creditors of

the bankrupt. See Wolf v. Weinstein, 372 U.S. 633, 649 (1963) (“[S]o long as the Debtor

remains in possession, it is clear that the corporation bears essentially the same fiduciary

obligation to the creditors as does the trustee . . . .”); CFTC v. Weintraub, 471 U.S. 343,

355 (1985) (“[T]he fiduciary duty of the trustee runs to shareholders as well as to

creditors.”). Yet an assignee does not owe a similar fiduciary duty to the bankrupt’s

                                              13
creditors. In fact, an assignee may act in its own self-interest, which can serve to the

detriment of the bankrupt’s other creditors.

       To address this concern, § 108(a) limits the use of the tolling provision to the trustee

and debtor-in-possession. Specifically, the district court acknowledged that the purpose of

§ 108(a) is to aid the trustee and debtor-in-possession in carrying out this fiduciary duty.

See United States ex rel. Am. Bank v. C.I.T. Constr. Inc. of Tex., 944 F.2d 253, 260 (5th

Cir. 1991) (“The purpose of section 108(a) dictates the conclusion that its rights extend

only to trustees and debtors-in-possession, and not to creditors. This is so because both

trustees and debtors-in-possession have a fiduciary obligation to ‘all the creditors of the

bankrupt.’” (quoting Natco Indus., Inc. v. Fed. Ins. Co., 69 B.R. 418, 419 (S.D.N.Y.

1987))). Because the trustee and debtor-in-possession owe a fiduciary duty to all creditors,

the trustee and debtor-in-possession may use this right to recover assets for the bankruptcy

estate, which in turn, benefits the estate’s creditors. See id. To the contrary, Skyline’s

breach of contract claims could not possibly enhance the assets of the bankruptcy estate

because it is attempting to recover monetary relief, not as a fiduciary of the bankrupt or for

the benefit of the estate, but for itself. Therefore, if Skyline, as an assignee of First Baptist,

were permitted to use this tolling provision to bring its claims, this would run counter to

creditor interests.

       Next, Skyline contends that under North Carolina law, “[i]n equity the assignee

stands absolutely in the place of his assignor, and it is the same, as if the contract had been

originally made with the assignee, upon precisely the same terms as with the original

parties.” Smith v. Brittain, 38 N.C. 347, 354 (1844). However, assuming that Skyline had

                                               14
a valid assignment with First Baptist, First Baptist’s bankruptcy proceeding did not prohibit

Skyline from timely filing a cause of action against Church Mutual under that assignment.

As of October 18, 2016, Skyline had an assignment from First Baptist to recover the value

of its services from Church Mutual pursuant to the remediation contract with First Baptist.

Thus, Skyline, as an assignee of First Baptist, may have recovered from Church Mutual for

declaratory judgment and breach of contract had it filed its claims within three years from

the date of loss. Regardless of the merits of Skyline’s claims, these claims are time barred

under the applicable statute of limitations and § 108(a) simply does not extend the deadline

for an assignee. For these reasons, we affirm that Skyline’s claims for declaratory

judgment and breach of contract are time barred.

                                             V.

       Finally, Skyline contends that the district court misapplied the Twombly standard in

dismissing its UDTPA claims. See generally Twombly, 550 U.S. 544; see also Appellant

Br. at 25–28. Skyline alleges that Church Mutual refused to respond to invoices for the

work that Skyline had performed. Based on this conduct, Skyline argues that Church

Mutual violated North Carolina General Statute § 58-63-15(11)(f), which, in turn,

constitutes a violation of North Carolina General Statute § 75-1.1. We disagree.

                                             A.

       North Carolina General Statute § 58-63-15 governs the unfair or deceptive trade

practices of insurers. It prohibits an insurance company from “[n]ot attempting in good

faith to effectuate prompt, fair and equitable settlements of claims in which liability has

                                             15
become reasonably clear.” N.C. Gen. Stat. § 58-63-15(11)(f). Under § 75-1.1, “unfair or

deceptive acts or practices in or affecting commerce, are declared unlawful.” N.C. Gen.

Stat. § 75-1.1. Accordingly, a violation of § 58-63-15(11)(f) constitutes a violation of

North Carolina General Statute § 75-1.1. See Gray v. N.C. Ins. Underwriting Ass’n, 529

S.E.2d 676, 683 (N.C. 2000) (“An insurance company that engages in the act or practice

of ‘[n]ot attempting in good faith to effectuate prompt, fair and equitable settlements of

claims in which liability has become reasonably clear,’ [North Carolina General Statute

§ 58-63-15(11)(f)], also engages in conduct that embodies the broader standards of [North

Carolina General Statute § 75-1.1] because such conduct is inherently unfair,

unscrupulous, immoral, and injurious to consumers.”).

                                             1.

       Skyline alleges that Church Mutual’s actions proximately caused its damages, and

it thus asserts a direct claim, not by way of assignment, against Church Mutual for violation

of North Carolina General Statute § 75-1.1. However, North Carolina “does not recognize

a [separate] cause of action for third-party claimants against the insurance company of an

adverse party[6] based on unfair and deceptive trade practices under [North Carolina

General Statute] § 75-1.1.” Craven v. Demidovich, 615 S.E.2d 722, 724 (N.C. Ct. App.

       6
          In the instant case, the adverse party for purposes of evaluating the UDTPA claim
is First Baptist. Skyline was aggrieved by First Baptist for not compensating Skyline for
its remediation services performed on First Baptist’s property. This ultimately led Skyline
to file this present action against Church Mutual, the insurance company of First Baptist,
for the sole purpose of receiving compensation for the services rendered. Thus, in this
case, Skyline, the third-party, asserts a claim against the insurer, Church Mutual, of an
adverse party, First Baptist. See, e.g., Lee v. Mut. Cmty. Sav. Bank, SSB, 525 S.E.2d 854,
856 (N.C. Ct. App. 2000).
                                             16
2005) (internal quotations omitted); see Wilson v. Wilson, 468 S.E.2d 495, 498 (N.C. Ct.

App. 1996) (“[A]llowing a third-party claim against the insurer of an adverse party for

violating [North Carolina General Statute] § 58-63-15 may result in a conflict of interest

for the insurance company.”). This is true when the plaintiff is “neither an insured nor in

privity with the insurer.” Prince v. Wright, 541 S.E.2d 191, 197 (N.C. Ct. App. 2000). In

the instant case, Skyline is neither the insured nor in privity with Church Mutual.

Additionally, Skyline’s complaint does not assert or suggest that there is any privity

between it and Church Mutual. Without privity, Skyline cannot prevail on its direct

UDTPA claim.

                                            2.

       Additionally, Skyline pleads a UDTPA claim against Church Mutual as an assignee

of First Baptist. However, claims for unfair and deceptive trade practices under North

Carolina General Statute § 75-1.1 are not assignable. See Horton v. New S. Ins. Co., 468

S.E.2d 856. 858 (N.C. App. 1996) (holding that although an action arising out of contract

generally can be assigned, “assignments of personal tort claims [such as UDTPA claims]

are void as against public policy”). Therefore, Skyline cannot pursue an UDTPA claim as

an assignee of First Baptist under North Carolina law.

                                            B.

      Accordingly, we affirm the district court’s dismissal of Skyline’s UDTPA claims.

Skyline cannot prevail on an independent UDTPA claim against Church Mutual because

North Carolina does not recognize a cause of action for third-party claimants against the

insurance company of an adverse party. See Craven, 615 S.E.2d at 724. Additionally,

                                            17
Skyline, as an assignee of First Baptist, may not pursue a claim for unfair business practices

because these types of claims are not assignable under North Carolina law. See Horton,

468 S.E.2d at 858.

                                             VI.

       For these reasons, we affirm the district court’s judgment. We deny as moot Church

Mutual’s motion to strike part of Skyline’s reply brief.

                                                                                 AFFIRMED

                                             18