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Rush v. Zurich American Insurance Co.

United States District Court, D. South Carolina, Florence Division

July 20, 2016

Rudolph Rush, Plaintiff,
Zurich American Insurance Company, Defendant.



         This action arises from a contractual dispute between Plaintiff Rudolph Rush and Defendant Zurich American Insurance Company. Plaintiff filed this action in state court, but Defendant removed it to this Court on October 27, 2015. See ECF No. 1. Presently before the Court is Defendant’s Motion for Partial Dismissal of Plaintiff’s claims brought under the South Carolina Improper Claims Practices Act[1] and the South Carolina Insurance Trade Practices Act.[2] See ECF No. 6. For the reasons set forth below, the Court grants in part and denies in part Defendant’s motion.[3]


         In October 2012, Plaintiff, a truck driver, sustained a shoulder injury while making a delivery. His employer maintained an insurance policy with Defendant that provided benefits to Plaintiff as an injured person under the policy. Plaintiff reported his injury to his employer, sought treatment from his physician, and submitted a claim to Defendant seeking the benefits under the policy. Defendant responded by requesting additional documentation concerning Plaintiff’s claim. Plaintiff complied, yet Defendant still requested more information. This back-and-forth occurred several more times without Defendant processing Plaintiff’s claim.

         In October 2015, Plaintiff filed a complaint in state court alleging five causes of action: breach of contract, improper claims practice, improper trade practices, breach of contract accompanied by a fraudulent act, and bad faith. See Complaint, ECF No. 1-1. Defendant removed the action to this Court and filed a motion for partial dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), seeking dismissal of Plaintiff’s causes of action brought under the Improper Claims Practices Act and the Insurance Trade Practices Act on the basis that neither law creates a private cause of action. See ECF No. 6. Plaintiff filed a response in opposition, and Defendant filed a reply. See ECF Nos. 13 & 14.

         Standard of Review

         When deciding a motion to dismiss made under Federal Rule of Civil Procedure 12(b)(6), the Court must accept all well-pled facts alleged in the complaint as true and draw all reasonable inferences in the plaintiff’s favor. Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 253 (4th Cir. 2009). A complaint must state a “‘plausible claim for relief’” to survive a 12(b)(6) motion to dismiss. Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The Court will not dismiss the plaintiff’s complaint so long as he provides adequate detail about his claims to show he has a “more-than-conceivable chance of success on the merits.” Owens v. Baltimore City State’s Attorneys Office, 767 F.3d 379, 396 (4th Cir. 2014) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2006)). “Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Twombly, 550 U.S. at 563. A complaint will survive a motion to dismiss if it contains “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.


         I. Improper Claims Practices Act Claim

         In his second cause of action, Plaintiff alleges Defendant violated section 38-59-20 of the Improper Claims Practice Act (S.C. Code Ann. § 38-59-20 (2015)) and that it did so without reasonable cause and in bad faith. See Compl. at ¶ 29. Plaintiff seeks an award of attorney’s fees pursuant to S.C. Code Ann. § 38-59-40 (2015). Id. at ¶ 30. Defendant requests dismissal of this cause of action, arguing the Improper Claims Practice Act does not create a private cause of action. See ECF No. 6-1.

         The Improper Claims Practices Act states that if an insurer commits any of the specific actions listed in the statute without just cause and so frequently that it indicates a general business practice, the action constitutes an improper claim practice. S.C. Code Ann. § 38-59-20 (2015). Such acts include:

(1) Knowingly misrepresenting to insureds or third-party claimants pertinent facts or policy provisions relating to coverages at issue or providing deceptive or misleading information with respect to coverages.
(2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies, including third-party claims arising under liability insurance policies.
(3) Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims, including third-party liability ...

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