General Contractor Not a Lawyer
Barry Zalma
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Steven Hester Hall appealed from an order granting Defendants’ motion to dismiss Hall’s claims for breach of fiduciary duties, insurance licensing violations, bank fraud, insurance fraud, breach of implied covenant of good faith and fair dealing, harassment, and unfair and deceptive trade practices.
In Steven Hester Hall v. Brunswick Plantation Property Owners Association, Greg Mayol, Cathy Six, And Community Association Management Services, No. COA21-748, 2022-NCCOA-604, Court of Appeals of North Carolina (September 6, 2022) Hall wanted to build a house without the bond required by the Community Associations’ regulations.
FACTUAL BACKGROUND
Hall is a general contractor and the CEO of Eco Lakes Construction, LLC. Eco Lakes owns real property at 649 Covington Drive NW, Calabash, NC (“property”), in the Brunswick Plantation and Golf Course Community (“Community”). Defendants are the Brunswick Plantation Property Owners Association (“Association”); Community Association Management, the property management company for the Association; Greg Mayol, the Community Association Manager for the Community; and Cathy Six, the Administrator for the Architectural Standards Committee for the Association.
The Contract Performance and Master Deportment Agreement (“Master Deportment Agreement”) is a contract between the Architectural Standards Committee and a general contractor on a construction project in the Community. The Master Deportment Agreement requires the general contractor to provide to the Association a $5,000 bond to be held as security for the performance of the construction project in accordance with the community governing documents-the Brunswick Plantation Architectural Plan and Residential Design and Construction Standards, and the Amended and Restated Master Declaration and Development Plan for Brunswick Plantation.
Plaintiff submitted plans to construct a home on the property but did not provide the $5,000 Contractor Compliance Bond required by the Master Deportment Agreement. Defendants declined to act on Plaintiff’s construction proposal until he provided the bond. Plaintiff sought a bond waiver; Defendants declined to issue a waiver. Plaintiff again refused to provide the bond, and Defendants directed Plaintiff to cease construction on the lot.
On 23 April 2021, Plaintiff Hall sued and filed a motion for a temporary restraining order, and motion for a preliminary injunction against Defendants. The trial court denied the motion for a temporary restraining order.
In an amended complaint, Hall alleged breach of fiduciary duties, insurance licensing violations, bank fraud, insurance fraud, breach of the implied covenant of good faith and fair dealing, harassment, and unfair and deceptive trade practices. Defendants moved to dismiss the amended. Hall moved to amend his complaint to add additional causes of action and an additional defendant, and an objection to Defendants’ motion to dismiss. The trial court granted Defendants’ motion to dismiss on 29 July 2021.
DISCUSSION
When dealing with a motion to dismiss the court must liberally construe the allegations and the court should not dismiss the complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief.
The caption of Plaintiff’s complaint indicates that he is bringing actions for breach of fiduciary duties, insurance licensing violations, bank fraud, insurance fraud, breach of implied covenant of good faith and fair dealing, harassment, and unfair and deceptive trade practices. The suit indicates only that Hall is challenging the propriety of the Contractor Compliance Bond as required by the Master Deportment Agreement. Hall failed to state a claim upon which relief may be granted under some legal theory.
Standing
In order for a court to have subject matter jurisdiction to hear a claim, the party bringing the claim must have standing. Standing means that the party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy. Every claim must be prosecuted in the name of the real party in interest. A real party in interest is a party who is benefited or injured by the judgment in the case. A lack of standing may be challenged by motion to dismiss for failure to state a claim upon which relief may be granted.
The court noted that Hall appeared to argue that the Amended and Restated Master Declaration and Development Plan for Brunswick Plantation was unenforceable because it is ambiguous and is a restrictive covenant on the property. Plaintiff does not own the property, nor does he have a protected legal interest in the property. Accordingly he lacked standing to bring this action.
In the alternative, the trial court dismissed Plaintiff’s claims because Plaintiff did not have the authority to bring suit on behalf of Eco Lakes. In North Carolina a corporation must be represented by a duly admitted and licensed attorney-at-law and cannot proceed pro se.
Here, there is no indication that Plaintiff is a licensed attorney. Rather, Plaintiff is a general contractor and is the president and CEO of Eco Lakes. To the extent Plaintiff purports to bring claims on behalf of Eco Lakes, he may not do so.
The trial court’s order dismissing Plaintiff’s complaint was affirmed.
ZALMA OPINION
This case is an example of the misuse by a litigant of allegations of insurance fraud and the tort of bad faith which had no relationship to the problem. To avoid buying a miniscule $5,000 bond, Hall fled suit alleging the planned community where he wanted to build a house accusing the defendants of multiple torts and the crime of insurance fraud because they insisted he obtain a bond. He had no standing and was, if anything, attempting to bludgeon the defendants and cause it to retain counsel and defend this spurious claim. The Court of Appeal refused to honor his scheme and should have sanctioned him for bringing the case without standing.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at and [email protected].
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ZIFL Volume 30, Number 2
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5260
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Contents of the January 15, 2026 Issue of ZIFL Includes:
Use of the Examination Under Oath to Defeat Fraud
The insurance Examination Under Oath (“EUO”) is a condition precedent to indemnity under a first party property insurance policy that allows an insurer ...
ERISA Life Policy Requires Active Employment to Order Increase in Benefits
Post 5259
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In Katherine Crow Albert Guidry, Individually And On Behalf Of The Estate Of Jason Paul Guidry v. Metropolitan Life Insurance Company, et al, Civil Action No. 25-18-SDD-RLB, United States District Court, M.D. Louisiana (January 7, 2026) Guidry brought suit to recover life insurance proceeds she alleges were wrongfully withheld following her husband’s death on January 9, 2024.
FACTUAL BACKGROUND
Jason Guidry was employed by Waste Management, which provided life insurance coverage through Metropolitan Life Insurance Company (“MetLife”). Plaintiff contends that after Jason’s death, the defendants (MetLife, Waste Management, and Life Insurance Company of North America (“LINA”)) engaged in conduct intended to confuse and ultimately deny her entitlement to...
Failure to Respond to Motion to Dismiss is Agreement to the Motion
Post 5259
Read the full article at https://lnkd.in/gP52fU5s, see the video at https://lnkd.in/gR8HMUpp and at https://lnkd.in/gh7dNA99, and at https://zalma.com/blog plus more than 5250 posts.
In Mercury Casualty Company v. Haiyan Xu, et al., No. 2:23-CV-2082 JCM (EJY), United States District Court, D. Nevada (January 6, 2026) Plaintiff Mercury Casualty Company (“plaintiff”) moved to dismiss. Defendant Haiyan Xu and Victoria Harbor Investments, LLC (collectively, “defendants”) did not respond.
This case revolves around an insurance coverage dispute when the parties could not be privately resolved, litigation was initiated in the Eighth Judicial District Court of Nevada. Plaintiff subsequently filed for a declaratory judgment in this court.
On or about April 15, 2025, the state court action was dismissed with prejudice pursuant to a stipulation following mediation. Plaintiff states that the state court dismissal renders its ...
Court Must Follow Judicial Precedent
Post 5252
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Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...