                             UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                             No. 09-1691


LUMBERMENS MUTUAL CASUALTY INSURANCE COMPANY,

                Plaintiff - Appellant,

           v.

FIRST INSURANCE SERVICES, INCORPORATED,

                Defendant - Appellee.



Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. Malcolm J. Howard,
Senior District Judge. (5:04-cv-00580-H)


Argued:   October 26, 2010                 Decided:   January 14, 2011


Before WILKINSON and MOTZ, Circuit Judges, and Damon J. KEITH,
Senior Circuit Judge of the United States Court of Appeals for
the Sixth Circuit, sitting by designation.


Affirmed by unpublished per curiam opinion.


ARGUED: Chad Eric Jacobs, DREW, ECKL & FARNHAM, Atlanta,
Georgia, for Appellant.   Michael Terry Medford, MANNING, FULTON
& SKINNER, Raleigh, North Carolina, for Appellee.      ON BRIEF:
Paul W. Burke, DREW, ECKL & FARNHAM, Atlanta, Georgia, for
Appellant.   William S. Cherry, III, MANNING, FULTON & SKINNER,
Raleigh, North Carolina, for Appellee.


Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       A    jury    trial   began     in    the        Eastern     District    of   North

Carolina on May 26, 2009 pursuant to diversity jurisdiction on

the        plaintiff’s      claims     of        breach       of     fiduciary      duty,

misrepresentation, and negligence arising under North Carolina

law.        The    plaintiff,    an   insurer,         Lumbermens     Mutual    Casualty

Company      a    subsidiary     of   Kemper      (“Kemper”)        alleged    that   the

defendant,        First   Insurance    Services,         an   independent      insurance

agency (“FIS”) sold one of its homeowners’ insurance policies

but unlawfully withheld appraisal information.                        Kemper contended

that it would not have provided the insurance coverage had FIS

timely informed it of a Wachovia bank appraisal FIS received.

The insured home was damaged by fire and the plaintiff paid over

$3 million to cover the homeowners’ loss.

       At trial, following the close of the plaintiff’s case-in-

chief, FIS orally moved for judgment as a matter of law, which

the district court held in abeyance until after the close of the

defendant’s evidence.            Upon FIS’s renewal of its oral motion for

judgment      as    a   matter   of   law,       the    court      orally   granted   the

motion, but only as to Kemper’s breach of fiduciary duty claim.

The jury returned a verdict in favor of the defendant as to the

other two claims.            Kemper appeals the district court’s order

granting FIS’s motion for judgment as a matter of law on its

claim of breach of fiduciary duty.                 We affirm.

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                                      I. BACKGROUND

       Kemper    offers    insurance     products      through      agreements      with

independent      insurance     agencies        including    FIS.        J.A.   330-34.

FIS, an independent insurance agency, handles insurance issued

by multiple insurance carriers, including Kemper.                       J.A. 373-74,

430-32.    Kemper and FIS entered into a franchise agreement which

permitted FIS to bind insurance coverage for houses costing less

than   $600,000       on   Kemper’s    behalf,     and     FIS    was   designated     a

“franchise      agency.”      J.A.     334-37.        Houses     costing     more   than

$600,000        required      approval         from      Kemper’s       underwriting

department.       J.A. 337-38.         After it issued an insurance policy

for a home, Kemper sent inspectors to the insured property if it

was    valued    at    more   than     $400,000.         J.A.      374-75.      Kemper

generally sent these inspectors within thirty to sixty days of

issuance of the insurance policy to determine the replacement

cost of the insured home.         J.A. 375-76, 441-43.

       Sally and John Graham were long-time Kemper policyholders

and customers of FIS.          J.A. 407-08, 413-14.              The Grahams built a

new home and sought to obtain a Kemper insurance policy from

FIS.    J.A. 407-08.        The stated replacement cost of the Grahams’

6400 square foot home was $800,000, which equaled the cost of

the    home’s    construction.          J.A.    408-09,     J.A.     444-45.        John

Curtis, an FIS agent, added, as buffer, an additional $50,000

coverage for a total policy amount of $850,000.                         J.A. 420-21,

                                          3
445-46.        Curtis submitted the Grahams’ policy information to

Kemper     since     the     cost       was    above      the     $600,000     limit       and,

accordingly, required approval from Kemper’s underwriters.                                 J.A.

420-21.        Curtis      and    FIS    obtained         approval    for    the     $850,000

coverage.         J.A.   343.         Kemper    issued      the    written     homeowner’s

insurance policy with an effective date of February 15, 2003.

J.A. 449.         Curtis ate lunch with John Graham on February 26,

2003 and planned to deliver the homeowner’s insurance policy to

him and obtain his signature.                      J.A. 419-21.        At lunch, Graham

told     Curtis     that     a     Wachovia        bank     appraisal       estimated       the

replacement       cost     of     slightly     less       than    $1.3      million.        Id.

Graham then gave Curtis a copy of the Wachovia appraisal.                                   Id.

Curtis did not give the Wachovia appraisal to Kemper.                               J.A. 421-

25.      Curtis     made    a     notation     in    FIS’s       records     that    he     felt

Wachovia’s        appraisal       was     inaccurate        and      knew    Kemper        would

conduct its own appraisal.               J.A. 420, 444.

       Kemper’s inspector missed his initial appointment on March

6,     2003;    however,        the   appointment          was    rescheduled        and    the

appraisal was completed on March 26, 2003.                        J.A. 420, 451.             The

inspector estimated the replacement cost of the Grahams’ home at

about $1.6 million.              Kemper received the report on Friday, April

11, 2003.       Kemper did not make any adjustments to the Grahams’

policy.        On Thursday, April 17, 2003, a fire severely damaged

the Grahams’ house.               J.A. 412.         The Grahams received about $3

                                               4
million from Kemper to cover their losses from the fire.                         J.A.

412-13.

      Kemper filed suit against FIS under North Carolina law for

breach of contract, breach of fiduciary duty, misrepresentation,

and negligence.        J.A. 14-20.         The district court granted FIS’s

motion    for   summary    judgment    only       on   the   breach    of   contract

claim, thus, a jury trial ensued on three claims.                     J.A. 124-128.

At trial, Kemper’s underwriter contended that Kemper would have

canceled the Grahams’ homeowners’ insurance policy had it known

about the Wachovia appraisal, J.A. 345-46; that Kemper had never

approved policies over $1 million, J.A. 389-90; and that Kemper

would not have approved the Grahams’ policy if it had known that

the home was not within 1,000 feet of a fire hydrant, J.A. 127;

398-99.       Trial    evidence   also      included     issuance     of    a   Kemper

policy for a home with a replacement cost of $1.4 million to

another FIS customer from 2002 to 2003, J.A. 390-92; testimony

that there was no rigid cut-off beyond which homes would not be

insured, J.A. 479; testimony that Kemper never communicated a

cut-off to FIS, J.A. 479; testimony that Kemper always sent its

inspectors to evaluate high-value homes after policy issuance to

determine replacement cost, J.A. 440-43; and testimony that Fire

Protection Class 10 (and nothing lower) was the only category

for   homes     that    resulted      in       automatic,    non-renewal        of   a

homeowners’ insurance policy at the end of a policy term such

                                           5
that the Grahams’ home in Class 9 would not have necessitated

policy cancellation or non-renewal, J.A. 456-59.

     The district court granted FIS’s motion for judgment as a

matter of law pursuant to Federal Rule of Civil Procedure 50,

having found that FIS owed no fiduciary duty to Kemper.                     J.A.

715-16.    Kemper timely appealed.



                      II.   JUDGMENT AS A MATTER OF LAW

                            A. STANDARD OF REVIEW

     A district court’s ruling on a motion for judgment as a

matter    of   law   is   renewed   de       novo.   Myrick   v.   Prime    Ins.

Syndicate, Inc., 395 F.3d 485, 489 (4th Cir. 2005).

     If a reasonable jury could reach only one conclusion
     based on the evidence or if the verdict in favor of
     the non-moving party would necessarily be based upon
     speculation and conjecture, judgment as a matter of
     law must be entered.    If the evidence as a whole is
     susceptible of more than one reasonable inference, a
     jury issue is created and a motion for judgment as a
     matter of law should be denied.

Id. (internal citations omitted); see Fed. R. Civ. P. 50.                  North

Carolina law applies to this diversity action.                See Breezewood

of Wilmington Condos. Homeowners’ Ass’n, Inc. v. Amerisure Mut.

Ins. Co., 335 F. App’x 268, 270 (4th Cir. 2009).




                                         6
                                     B. ANALYSIS

     Pursuant to North Carolina law, a fiduciary duty exists

where:

     ‘there has been a special confidence reposed in one
     who in equity and good conscience is bound to act in
     good faith and with due regard to the interests of the
     one reposing confidence . . ., [and] ‘it extends to
     any possible case in which a fiduciary relationship
     exists in fact, and in which there is confidence
     reposed on one side, and resulting domination and
     influence on the other.’

Dalton v. Camp, 353 N.C. 647, 651-52 (2001) (quoting Abbitt v.

Gregory, 201 N.C. 577 (1931)) (emphasis in original) (additional

internal    citations   omitted).           North    Carolina   law     generally

provides that contracting parties “owe no special duty to one

another beyond the terms of the contract. . .”                       Broussard v.

Meineke    Disc.   Muffler    Shops,    155   F.3d    331,   347-48    (4th   Cir.

1998).     “Only when one party figuratively holds all the cards --

all the financial power or technical information, for example --

have North Carolina courts found that the ‘special circumstance’

of a fiduciary relationship has arisen.”                Id. at 348 (internal

citation omitted) (emphasis added).            Generally, the existence of

a fiduciary relationship is a question of fact for a jury.                    Tin

Originals, Inc. v. Colonial Tin Works, Inc., 98 N.C. App. 663,

666 (1993).

     In    Tin   Originals,    the    defendant’s     tin    items    constituted

eighty percent of the plaintiff’s sales and the defendant was


                                        7
the plaintiff’s only source of those items, but, ultimately, the

defendant began to sell its items directly to the public and

sought to take over the relevant market.                            Id. at 665-66.         The

defendant asserted that despite the special trust and confidence

the plaintiff placed in the defendant, the defendant held no

corresponding superiority or influence necessary to establish a

fiduciary     relationship.              Id.        The     North    Carolina      Court    of

Appeals affirmed the trial court’s grant of a directed verdict

to the defendant, having found that the parties had mutually

interdependent        businesses;              and,       therefore,        no     fiduciary

relationship existed.             Id.

     In Mikels v. Unique Tool & Mfg. Co., the district court

denied the defendant’s motion for summary judgment where the

plaintiff,     who     sold        the    defendant          manufacturing         company’s

products as a representative, alleged that the defendant company

failed   to    properly           pay     him       commissions       and    fraudulently

concealed information which it had a duty to disclose to him as

a fiduciary.     No. 5:06CV32, 2007 U.S. Dist. LEXIS 91814, at *29-

36   (W.D.N.C.       Dec.    3,     2007).            The     court    found      that     the

plaintiff’s    allegation          that     the     defendant       withheld      the    total

amount   of    sales        for     which       the       plaintiff    was       responsible

prevented the plaintiff from accurately keeping track of his

commissions.     See id.          Thus, the court held that a genuine issue



                                                8
of material fact existed since only the defendant had access to

the aggregate sales.          Id.

       Kemper argues that the franchise agreement is of paramount

importance      and    establishes        the       fiduciary      relationship     between

Kemper and FIS.           Kemper contends that it relied on FIS since

Kemper generally has no contact with its insured, the agent is

the sole source of information for Kemper, and, therefore, FIS

bore a fiduciary duty to Kemper and should have relayed the

Wachovia appraisal to Kemper.                   Kemper states that it would have

declined insurance for the Grahams’ home if it knew the home’s

true    value.         Kemper     contends          that     it    presented     sufficient

evidence for a jury to consider its breach of fiduciary duty

claim and find in Kemper’s favor.

       FIS asserts that no authority exists to establish that a

fiduciary relationship is created between an insurance carrier

and    an     independent       insurance           agency    where       the    independent

insurance agency handles insurance issued by multiple carriers

and    acts    an     agent   for    the     customers.             The    defendant    also

contends      that     Kemper’s      claim      of     negligence,         considered    and

rejected      by    the   jury,     was   predicated          on   the    same   assertions

Kemper makes in support of its fiduciary duty claim — that it

would not have insured the Grahams’ home if it had known that

the replacement cost exceeded $1 million and that Kemper placed

special trust in FIS as its “franchise agency” and only source

                                                9
of information about the replacement cost.                               Further, FIS asserts

that coverage had begun already at the time Curtis learned of

the Wachovia appraisal.                   Thus, FIS states that Kemper was too

late to reject the application for coverage solely based on the

Wachovia    appraisal         and     that       FIS    and        its    agent     Curtis          acted

reasonably.

     Contrary          to    Tin     Originals          and    Mikels           where    one        party

exercised    domination            and    control       over        another       party,       in     the

instant action, the evidence presented at trial established that

FIS was not the sole means of Kemper’s ability to calculate

replacement       cost       value    of       the    Grahams’           home    and     FIS.         The

evidence    presented         at     trial,       the       record,       and     relevant          North

Carolina    case       law    demonstrate            that     no    fiduciary           relationship

existed    between          Kemper       and    FIS;     rather,          they     were       mutually

interdependent parties.               See Tin Originals, 98 N.C. App. at 666.

Routinely,      Kemper       did     not       rely    upon     FIS’s       determinations             of

replacement costs but always sent its own inspectors for high

value homes.           FIS learned of the Wachovia appraisal after the

policy    was     issued       and       during       the     time       period     within          which

Kemper’s    inspection         was       to    take     place.           Nothing        in    Kemper’s

designation       of    FIS     as    a       “franchise       agency”           transformed          the

parties’ relationship into that of a fiduciary, since Kemper

continued to do its own inspections and continued to require

approval    for    issuance          of    its       insurance       policies.               That    fire

                                                 10
destroyed the Grahams’ home so soon after the issuance of the

policy is unfortunate, but Kemper had opportunity to conduct its

own inspection and had access to the replacement cost of the

Grahams’ home. Indeed, Kemper received the inspector’s report

prior to the fire.      Therefore, the district court properly found

that    no   genuine   issue   of   material   fact   existed   such   that

judgment as a matter of law was appropriate on Kemper’s claim of

breach of fiduciary duty.



                               III. CONCLUSION

       The judgment of the district court is

                                                                 AFFIRMED.




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