# Clemmons Farming, Inc. v. Silveus Southeast LLC

> District Court, E.D. North Carolina · January 26, 2024

URL: https://www.frixlaw.com/law-library/cases/10253043

## Case

- **Court:** District Court, E.D. North Carolina
- **Decided:** January 26, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION

NO. 7:21-CV-126-FL

CLEMMONS FARMING, INC.; JODY E. )
CLEMMONS; and LAUREN B. )
CLEMMONS, )
)
Plaintiffs, )
)
ORDER
v. )
)
SILVEUS SOUTHEAST, LLC and JAMES )
M. CARROLL, JR., )
)
Defendants. )

This matter is before the court on defendants’ motion for summary judgment (DE 32),
plaintiffs’ motion for summary judgment (DE 38), defendants’ motion to exclude Clifton R. Parker
(“Parker”) as an expert (DE 36), and defendants’ motion to seal (DE 55). The motions have been
fully briefed and the issues raised are ripe for ruling. For the following reasons, defendants’ motion
to seal is granted, and each other motion is granted in part and denied in part as set forth herein.
STATEMENT OF THE CASE
Plaintiffs commenced this action against defendants June 8, 2021 in Brunswick County
Superior Court arising out of a crop insurance claim. Plaintiffs assert claims against defendant
James M. Carroll, Jr. (“Carroll”) for breach of fiduciary duty, constructive fraud, and negligence;
against defendant Silveus Southeast LLC (“Silveus”) for negligence and respondeat superior; and
against both defendants for unfair and deceptive trade practices under N.C.G.S. §§ 58-63-15(1),
75-1.1 (“UDTP”). Defendants removed the action to this court July 12, 2021.
Following a period of discovery, the parties filed the instant motions for summary
judgment. Defendants rely on 1) deposition testimony of plaintiff Jody E. Clemmons
(“Clemmons”); defendant Carroll; and Jeffrey Vanlandingham (“VanLandingham”), the regional
vice president of Producers Agriculture Insurance Company (“ProAg”); 2) an arbitration order;
3) documents concerning the operations of plaintiffs’ farm, comprising an operations report and

financial statements; and 4) expert report and deposition testimony of Clifton R. Parker (“Parker”).
Plaintiffs rely upon 1) defendants’ answer; 2) the parties’ depositions and affidavits; 3)
various third parties’ depositions; 4) an arbitration award; 5) defendants’ discovery responses; 6)
numerous documents related to the insurance policy at issue in this case; 7) communications from
plaintiffs’ financial institution; 8) correspondence from ProAg; and 9) Parker’s deposition and
report.
Defendants subsequently moved to exclude Parker as an expert. Defendants rely upon
Parker’s deposition and report, while plaintiffs rely upon these materials and Parker’s affidavit.
STATEMENT OF FACTS

Plaintiff Clemmons Farming, Inc. (“Clemmons Farming”) is a North Carolina corporation
with a principal place of business located in Brunswick County. (Statement of Material
Undisputed Facts by Pls. (DE 40) ¶ 1 (“Pls’ SMF”)). Defendant Silveus is an Indiana limited
liability company which sells crop insurance in North Carolina. Defendant Carroll worked for
Silveus as an insurance agent. (Id. ¶ 2).
The United States Department of Agriculture (“USDA”) closely supervises the farm
insurance industry. (Id. ¶ 5). Beginning in 2015, Congress and the USDA approved a new
insurance product, Whole Farm Revenue Protection (“WFRP”), (id. ¶ 12), which provides
coverage against loss of expected revenue from commodities produced during the insurance period
under a single policy. (Id. ¶ 7). WFRP insures all products grown on a farm, which differs from
traditional crop insurance. (Id. ¶ 13). A farmer’s expected revenue, which determines coverage,
is set as the lower figure produced by two different formulas. (Id. ¶¶ 8, 14). Under the first
formula, a farmer calculates his or her average revenue over the previous five years using tax
records (hereinafter “historical average”). (See id.). Under the second formula, a farmer submits

projected crop yields, prices, and acreages for his or her various products to arrive at a projected
future revenue (hereinafter “expected revenue”). (See id.).
Before 2017, plaintiff Clemmons Farming had no experience with WFRP, and had never
carried a WFRP policy. (Id. ¶ 10). In February 2017, plaintiff Jody Clemmons, the president of
Clemmons Farming, attended a “farm peer-group meeting” in Rocky Mount, North Carolina,
convened primarily to discuss WFRP. (Id. ¶ 11). At the meeting, Clemmons spoke to Carroll,
another Silveus agent (“Tillman”), and VanLandingham, a representative of ProAg, which is an
insurance company offering crop insurance policies. (Id. ¶ 12). At the meeting, Carroll, Tillman,
and VanLandingham all held themselves out as knowledgeable about WFRP policies. (Id. ¶ 18;

Defs’ Resp. Pls’ Statement of Material Facts (DE 47) ¶ 18 (“Resp. Pls’ SMF”)). Based on this
meeting, Clemmons Farming decided to obtain a WFRP policy from Silveus; Carroll and Tillman
generated a ProAg WFRP application covering Clemmons Farming’s soybean, corn, and tobacco
crops on February 28, 2017. (Pls’ SMF ¶ 20). Carroll represented to Clemmons that he would
submit supporting documentation alongside the application to ProAg. (See id. ¶ 21). Carroll,
Tillman, and Clemmons completed and executed the application the same day. (See id. ¶¶ 22–
23).
Clemmons Farming’s expected revenue documented in this application was $1,993,313.00,
while its historical average was $1,571,071.00 (See id. ¶¶ 33, 44). Because the latter figure was
lower, it governed coverage amount. (See id. ¶ 8). In turn, the policy had an 80% coverage level,
meaning that ProAg would cover up to 80% of the lower figure; this calculation resulted in a
coverage amount of $1,256,857.00. (See id. ¶ 45).
The parties dispute numerous aspects of what information Carroll should have submitted
to ProAg alongside the application, what information he actually submitted, and various actions

by third parties with implications for these questions. (See id. ¶¶ 24–31; Resp. Pls’ SMF ¶¶ 24,
27–33).
Broadly, plaintiffs contend that the WFRP handbook from the USDA (the “handbook”)
requires an insurance agency to calculate coverage figures using yield data from a farm’s historical
yields, and price data from the USDA’s Risk Management Agency (“RMA”). (Pls’ SMF ¶ 24).
Defendants argue that neither assertion is correct. (See Resp. Pls’ SMF ¶ 24). Plaintiffs further
contend that Carroll improperly failed to submit Clemmons Farming’s historical yield data (Pls’
SMF ¶ 28–29), while defendants argue that this data was not required, and also that Carroll
requested it but Clemmons Farming failed to provide it. (See Resp. Pls’ SMF ¶ 28–29). Finally,

plaintiffs contend that Carroll improperly bypassed Silveus’s normal internal review processes
(see Pls’ SMF ¶¶ 30–31, 54–56); defendants assert that this course of action was proper, because
Carroll filled out the WFRP application with, and relying on, VanLandingham, a ProAg executive.
(See Resp. Pls’ SMF ¶¶ 30–31, 54–56).
Following the meeting and application execution, Clemmons Farming entered into a loan
with Cape Fear Farm Credit (“CFFC”), which required crop insurance as a loan term (“Loan 44”).
(See Pls’ SMF ¶ 37; Pls’ App. Statement of Material Facts (DE 41) (“Pls’ App. SMF”) Ex. L (DE
41-12) (“March Loan Letter”) 2, 5).1 Loan 44 pledged as collateral all of Clemmons Farming’s
assets, as well as real and personal property owned by plaintiffs Clemmons and Lauren B.
Clemmons, including their primary residence. (Pls’ SMF ¶ 39).
In 2018, Clemmons Farming submitted a claim under the policy for a revenue loss of
$304,306.00 sustained during the 2017 crop year. (Id. ¶¶ 40–41). ProAg submitted a response on

June 13, 2018, stating that ProAg had adjusted the coverage figure because ProAg believed the
data used to determine expected revenue was not “justified, reasonable, and documented.” (Pls’
SMF ¶ 42; Pls’ App. SMF Ex. L (DE 41-14) (“ProAg Letter”) 3). Specifically, ProAg disputed
the projected yields of all three crops, and the projected price of corn. (See Pls’ SMF ¶ 42; Resp.
Pls’ SMF ¶ 42; ProAg Letter 3). On this basis, ProAg revised Clemmons Farming’s Expected
Revenue downwards to $1,286,970.00. (Pls’ SMF ¶ 44).
This adjustment made expected revenue lower than historical average, and therefore the
figure governing coverage amount. (See id. ¶¶ 8, 44). Under the policy’s 80% coverage level,
Clemmons Farming’s coverage figure therefore dropped from $1,256,857.00 to $1,029,576.00.

(Id. ¶ 45). After this reduction and based on its claimed loss, Clemmons Farming received an
indemnity of $77,568.00. (Id.). Clemmons Farming did not receive the revised coverage figure
until after it made the 2018 claim, which occurred after it took out the loans requiring crop
insurance. (See id. ¶ 47). In 2019, CFFC declared Clemmons Farming in default of Loan 44 and
declared its intent to foreclose on the collateral specified in the loan. (Id. ¶ 52). Plaintiffs now
argue that defendant Carroll improperly submitted the application to ProAg, causing plaintiffs to
believe they had greater coverage than they did.

1 Unless otherwise specified, page numbers specified in citations to the record in this order refer to the page
number of the document designated in the court’s electronic case filing (ECF) system, and not to page numbering, if
any, specified on the face of the underlying document.
Clemmons Farming commenced an arbitration proceeding against ProAg, and a hearing
occurred on January 20, 2020. (Id. ¶ 48). The arbitrator concluded that while some downward
adjustments on prices and yields were warranted, ProAg’s numbers were too low. (See generally
App. Statement of Material Facts (“Defs’ App. SFM”) (DE 34) Ex. 3 (DE 34-3) (“Arbitration
Order”)). The arbitrator therefore arrived at a third set of figures between the numbers defendant

Carroll submitted and ProAg’s downwardly adjusted figures, and ordered the parties to calculate
Clemmons Farming’s claim using these numbers. (See Arbitration Order 11). The arbitrator thus
awarded Clemmons Farming an additional indemnity payment of $95,660.00, which Clemmons
Farming paid towards the balance of Loan 44. (Id. ¶¶ 48–49).
COURT’S DISCUSSION
A. Cross-Motions for Summary Judgment
1. Standard of Review
Summary judgment is appropriate where “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). The party seeking summary judgment “bears the initial responsibility of informing
the district court of the basis for its motion, and identifying those portions of [the record] which it
believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986).
Once the moving party has met its burden, the non-moving party must then “come forward
with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co.
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Only disputes between the parties over
facts that might affect the outcome of the case properly preclude the entry of summary judgment.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (holding that a factual dispute
is “material” only if it might affect the outcome of the suit and “genuine” only if there is sufficient
evidence for a reasonable jury to return a verdict for the non-moving party).
“[A]t the summary judgment stage the [court’s] function is not [itself] to weigh the
evidence and determine the truth of the matter but to determine whether there is a genuine issue
for trial.” Id. at 249. In determining whether there is a genuine issue for trial, “evidence of the

non-movant is to be believed, and all justifiable inferences are to be drawn in [non-movant’s]
favor.” Id. at 255; see United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (“On summary
judgment the inferences to be drawn from the underlying facts contained in [affidavits, attached
exhibits, and depositions] must be viewed in the light most favorable to the party opposing the
motion.”).
Nevertheless, “permissible inferences must still be within the range of reasonable
probability, . . . and it is the duty of the court to withdraw the case from the [factfinder] when the
necessary inference is so tenuous that it rests merely upon speculation and conjecture.” Lovelace
v. Sherwin-Williams Co., 681 F.2d 230, 241 (4th Cir. 1982). Thus, judgment as a matter of law

is warranted where “the verdict in favor of the non-moving party would necessarily be based on
speculation and conjecture.” Myrick v. Prime Ins. Syndicate, Inc., 395 F.3d 485, 489 (4th Cir.
2005). By contrast, when “the evidence as a whole is susceptible of more than one reasonable
inference, a [triable] issue is created,” and judgment as a matter of law should be denied. Id. at
489-90.
2. Analysis
a. Proximate Cause
Defendants argue as a threshold matter that plaintiffs cannot demonstrate proximate cause
between any of defendants’ actions and plaintiffs’ injuries, which defeats all of plaintiffs’ claims
as a matter of law. The court disagrees.

Under North Carolina law, each of plaintiff’s claims includes an element of proximate
cause. See Chisum v. Campagna, 376 N.C. 680, 724 (2021) (breach of fiduciary duty and
constructive fraud); Stein v. Asheville City Bd. of Educ., 360 N.C. 263, 267 (2006) (negligence);
Gray v. N.C. Ins. Underwriting Ass’n, 352 N.C. 61, 68 (2000) (UDTP).
Proximate cause is a cause which in natural and continuous sequence, unbroken by
any new and independent cause, produced the plaintiff’s injuries, and without
which the injuries would not have occurred, and one from which a person of
ordinary prudence could have reasonably foreseen that such a result, or
consequences of a generally injurious nature, was probable under all the facts as
they existed.

Hairston v. Alexander Tank & Equip. Co., 310 N.C. 227, 233 (1984).
Thus, a plaintiff must demonstrate that a “defendant might have foreseen that some injury
would result from his act or omission.” Id. at 234. Further, “without doubt” there can be more
than one proximate cause to an injury; “accordingly, where several causes combined to produce
injuries, a person is not relieved from liability because he is responsible for only one of them.”
Price v. Gray, 246 N.C. 162, 166 (1957). “In order to . . . supersed[e] prior negligence, the new
independent, intervening cause must be . . . adequate to bring about the injurious event.” Riddle
v. Artis, 243 N.C. 668, 671 (1956) (emphasis added).
Thus:
An efficient intervening cause is . . . an independent force, entirely superseding the
original action and rendering its effect in the causation remote. It is immaterial how
many new elements or forces have been introduced, if the original cause remains
active, the liability for its result is not shifted. Thus, where a horse is left unhitched
in the street and unattended, and is maliciously frightened by a stranger and runs
away: but for the intervening act, he would not have run away and the injury would
not have occurred; yet it was the negligence of the driver in the first instance which
made the runaway possible. This negligence has not been superseded nor
obliterated, and the driver is responsible for the injuries resulting. If, however, the
intervening responsible cause be of such a nature that it would be unreasonable to
expect a prudent man to anticipate its happening, he will not be responsible for
damage resulting solely from the intervention.

Hairston, 310 N.C. at 236–37 (quoting Harton v. Telephone Co., 141 N.C. 455, 462–63 (1906)).
Finally, “[o]nly when the facts are all admitted and only one inference may be drawn from
them will the court declare whether an act was the proximate cause of an injury or not.” Adams
v. Mills, 312 N.C. 181, 193 (1984). “[B]ecause that is rarely the case . . . proximate cause . . . is
ordinarily a question for the jury.” Id.
Defendants advance two proximate cause arguments against all of plaintiffs’ claims.
Defendants contend that two events constituted unforeseeable acts of a third party: ProAg’s
decision to reduce the policy’s coverage figure, and plaintiffs’ decision to cut acreage under
cultivation. The court examines each in turn.
i. ProAg’s Decision
Based upon undisputed evidence in the record, ProAg’s decision to reduce coverage was
foreseeable to defendant Carroll and therefore not an intervening cause that severed proximate
cause between Carroll’s conduct and plaintiff’s injury. Carroll admits in his deposition that he
knew ProAg could reduce or deny coverage if information used to determine expected revenue is
incorrect or undocumented. (See Pls’ App. SMF Ex. B (“Carroll Deposition) 101:1–16). Thus, if
a jury decides that Carroll wrongfully submitted incorrect information to ProAg, it could also find
that ProAg’s decision to reduce coverage is not a superseding cause. See Hairston, 310 N.C. at
236–37 (“yet it was the negligence of the [first actor] which made the [injury] possible”).
Defendants rely upon Harris v. State Farm Fire and Cas. Co., No. 5:13-CV-61-BO, 2013
WL 3356582 (E.D.N.C. July 3, 2013), to argue that an insurer’s actions are always beyond the
control of an individual agent and therefore unforeseeable as a matter of law. (See Defs’ Mem.
Supp. Mot. Summ. J. (DE 35) (“Defs’ Br. Supp.”) 14). But Harris rested on distinguishable facts.
In Harris and both cases upon which Harris relies, the insurance agent had undisputedly fulfilled

all duties to the plaintiff, or his individual actions were entirely unrelated to the claims presented.
See Harris, 2013 WL 3356583, at *2–3; Selvaggi v. Prudential Prop. and Cas. Ins. Co., 871 F.
Supp. 815, 819 (E.D. Pa. 1995); Newman ex rel. Poston v. Bankers Life and Cas. Co., No. 2:10-
CV-02135-DCN, 2010 WL 4638566, at *3 (D.S.C. Nov. 8, 2010). In contrast, Carroll’s fulfillment
of his duties is mired in factual dispute. Among other matters, the parties dispute what information
Carroll submitted to ProAg, and what information he should have submitted. (See generally Pls’
SMF ¶¶ 22–31; Resp. Pls’ SMF ¶¶ 22–31). Thus, ProAg’s actions cannot overcome the ordinary
rule that proximate cause is a jury question. See Mills, 312 N.C. at 193.
ii. Plaintiffs’ Decision to Cut Acreage

Defendants also argue that plaintiffs’ decision to reduce acreage under cultivation is an
independent event that severs proximate cause between Carroll and plaintiffs’ injuries. (See Defs’
Br. Supp. 6–8). As noted above, an event can have more than one proximate cause, “without
doubt.” See Price, 246 N.C. at 166. And a new cause must be “adequate to bring about the
[injury][.]” Riddle, 243 N.C. at 671. Plaintiff’s decision to reduce acreage, however, was not
“adequate” to bring about the injury in itself.
Plaintiffs’ reduction in acreage, using the figures defendants submitted, resulted in an
expected revenue of $1,622,355.44, which left the historic average as the governing figure.
Plaintiffs’ original cultivation area, using the prices and yields ultimately found by the arbitrator,
would have resulted in an expected revenue of $1,725,525.00, which also would have left historic
average as governing coverage.2 But using both reduced acreage and the arbitrator’s figures results
in an expected revenue of $1,408,740.45.3 Thus, neither the cut in acreage nor the arbitrator’s
ultimate reduction in prices and yields would have lowered expected revenue below historic
average, and thus reduced plaintiffs’ coverage alone; instead, the two actions together produced

the injury. “If the intervening cause is in reality only a condition on or through which the
negligence of the defendant operates to produce an [injury], it does not break the line of
causation[.]” Riggs v. Akers Motor Lines, 233 N.C. 160, 165 (1951) (emphasis added). Plaintiffs’
decision to reduce acreage was not “adequate” to produce the injury by itself, Riddle, 243 N.C. at
671, but rather a “condition on . . . which” defendants’ actions operated to produce an injury.
Riggs, 233 N.C. at 165.
Finally, defendants argue that Clemmons’s decision to cut acreage was contributorily
negligent. However, defendants advance these arguments cursorily, and numerous issues of fact
on applicable duties and breaches thereof preclude entry of judgment as a matter of law on

contributory negligence. Defendants’ conclusory assertion that this decision was contributorily
negligent does not meet defendants’ burden to establish entitlement to judgment as a matter of law.
(See, e.g., Defs’ Mem. Opp’n Pls’ Mot. Summ. J. (DE 46) (“Defs’ Br. Opp’n”) 16–17).
The court therefore rejects defendants’ overarching proximate cause arguments as a basis
for summary judgment, and concludes that plaintiffs have presented sufficient evidence to

2 Using the arbitrator’s price and yield figures and plaintiffs’ reduced acreage results in an expected revenue
of $1,053,900.00 for tobacco, $397,575.000 for corn, and $274,050.00 for soybeans, which total $1,725,525.00. (See
Arbitration Order 11 (adjusted prices and yields); Pls’ App. SMF Ex. O (DE 41-15) (“RFOR”) (reduced acreage
figures)).

3 1) Tobacco: 2,342 pounds/acre * $2/pound * 199.76 acres = $ 935,675.84,
2) Corn: 114 bushels/acre * $4.65/bushel * 501.37 acres = $265,776.24,
3) Soybeans: 29 bushels/acre * $10.50/bushel * 680.75 acres = $ 207,288.37,
4) Total: $1,408,740.45. (See Arbitration Order 11 (prices and yields); RFOR (acreage)).
demonstrate a genuine issue of fact for trial on this issue. Proximate cause on all claims is a jury
question. With this determination in mind, the court turns to examine each of plaintiffs’ claims in
sequence.
b. Substantive Claims
i. Breach of Fiduciary Duty

Defendants argue that no genuine issue of material fact exists that defendant Carroll
breached neither 1) a basic fiduciary duty owed by all insurance agents, nor 2) an implied duty to
advise assumed through the parties’ course of dealing, nor 3) a de facto fiduciary relationship. The
court disagrees only with the first contention, and then only to the extent necessary to present the
question to a jury.
North Carolina law recognizes two types of fiduciary relationship: de jure and de facto. De
jure relationships exist by operation of law, while de facto relationships arise from particular facts
and circumstances. See Azure Dolphin, LLC v. Barton, 371 N.C. 579, 593 (2018) (discussing de
jure and de facto relationships); Hager v. Smithfield E. Health Holdings, LLC, 264 N.C. App. 350,

355 (2019).
A North Carolina insurance agent is subject to two possible de jure relationships. First, all
insurance agents have a “limited fiduciary duty” to correctly name the insured in a policy, and to
correctly advise the insured of the nature and extent of coverage. Cobb v. Pa. Life Ins. Co., 215
N.C. App. 268, 275 (2011).4 Second, an agent may have a more general duty to affirmatively
advise an insured if 1) the agent receives consideration beyond payment of the premium; 2) the

4 The Supreme Court of North Carolina has not weighed in on this issue, but the North Carolina Court of
Appeals has relied upon Cobb in the following years. See Country Cafaye, Inc. v. Travelers Cas. Ins. Co. of Am., No.
COA 14-226, 2014 WL 4557533, at *5 (N.C. Ct. App. Sept. 16, 2014); Rayfield Props., LLC v. Bus. Ins. of Carolinas,
Inc., No. COA12-791, 2012 WL 6595558, at *3 (N.C. Ct. App. Dec. 18, 2012); see also IDS Prop. Cas. Ins. Co. v.
Lu, No. 5:15-CV-561-BO, 2016 WL 1532235, at *4 (E.D.N.C. Apr. 15, 2016).
insured makes a clear request for advice; or 3) an extended course of dealings between the parties
would put an objectively reasonable insurance agent on notice that his or her advice is being sought
and relied upon. Bigger v. Vista Sales & Mktg., Inc., 131 N.C. App. 101, 104 (1998).
By contrast, a de facto relationship arises “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.” Abbitt v. Gregory, 160 S.E. 896, 906 (N.C. 1931).
This test is “intentionally amorphous,” but nonetheless “demanding[.]” Hager, 264 N.C. App. at
356. Only when one party “holds all the cards – all the financial power or technical information,
for example – have North Carolina courts found a [de facto fiduciary relationship][.]” Lockerman
v. S. River Elec. Membership Corp., 250 N.C. App. 631, 637 (2016).
Plaintiffs argue that there is a genuine issue of fact that a fiduciary relationship existed
under all three formulations. (See Pls’ Resp. Opp’n Defs’ Mot. Summ. J. (DE 49) (“Pls’ Br.
Opp’n”) 8–12).5
First, the court turns to the “limited” duty imposed on all insurance agents. All insurance

agents have a duty to correctly name the insured in the policy, and to correctly advise the insured
about the nature and extent of the insured’s coverage. Cobb, 215 N.C. App. at 274. Plaintiffs do
not argue that Carroll named the wrong insured, but rather that he failed to correctly advise
Clemmons Farming about the extent of coverage. The record reflects that Carroll used the
subsequently reduced figures in the application he and Clemmons filled out together, (see Pls’
App. SMF Ex. G (DE 41-7) 4), and silence on any other or subsequent possible misrepresentations
by Carroll.

5 Plaintiffs’ brief appears to blend the standards for the de jure implied duty to advise, and a de facto
relationship. (See Pls’ Br. Opp’n 9–11) Out of an abundance of caution, the court addresses possible relationships
under all three standards.
But the policy application is just that: an application, not a policy itself. And crucially,
defendants have produced no evidence that Carroll ever advised plaintiffs on the extent of coverage
on the policy once issued. Defendants argue that an insured has a duty to review a policy document
once issued, so that a fiduciary duty claim against an agent cannot stand if the insured fails to do
so. However, Clemmons testified at his deposition that defendants never gave him a copy of the

template policy that explained how WFRP policies functioned, (see Pls’ App. SMF Ex. C (DE 41-
3) (“Clemmons Deposition”) 73:1–17), and the record is silent on whether defendants ever
provided a written copy of the policy here to plaintiffs. Defendants state that this information was
available on the USDA website, but cite no record evidence to support this assertion. (See Defs’
Reply Pls’ Opp’n Defs’ Mot. Summ. J. (DE 51) (“Defs’ Reply Br.”) 5). Plaintiffs have thus
presented sufficient evidence of a breach of this duty to survive summary judgment. However,
breach of fiduciary duty also requires a causative chain between breach and injury, and so the
court’s conclusion above that a jury must decide proximate cause in this case precludes entry of
summary judgment on this theory in favor of either side.

Second, a de jure duty to advise an insured may arise if an agent receives consideration
beyond payment of a premium, the insured makes a clear request for advice, or an extended course
of dealing would have put a reasonable agent on notice that his or her advice was being relied
upon. Bigger, 131 N.C. App. at 104. Plaintiffs make no argument based on the extra consideration
prong. Plaintiffs further produce no argument or evidence, in their complaint, statement of
material facts, or elsewhere in the record, that plaintiffs ever made a “clear request for advice”
from Carroll. (See generally Compl.; Pls’ SMF).
Plaintiffs also fail to demonstrate a genuine issue of fact that an extended course of dealing
existed. Clemmons met with Carroll three times, including the meeting at which the two men
filled out the application. (See Clemmons Dep. 71:6–14). However, Cobb held that three
meetings, including one at which the agent proposed a policy and the parties filled out an
application, did not establish an extended course of dealing. See Cobb, 215 N.C. App. at 275. In
addition and in the alternative, plaintiffs produce no evidence of conduct or communications that
would have put an objectively reasonable agent on notice that his or her advice was relied upon.

Plaintiffs instead argue that Clemmons was unfamiliar with WFRP policies, and in fact relied upon
Carroll. (See Pls’ SMF ¶¶ 10, 19). But Clemmons’s own experience and internal decision-making
processes would not place an objectively reasonable agent on notice of anything if not
communicated. And plaintiffs present no evidence that Clemmons’s thoughts were so
communicated. The court therefore concludes that plaintiffs’ fiduciary duty claim under this
theory does not survive defendants’ motion, and defendants are entitled to summary judgment on
this issue, under this theory.
Third, plaintiffs fail to establish a de facto fiduciary relationship, for many of the same
reasons discussed above with reference to the duty to advise. The North Carolina courts have

consistently emphasized that the standard for a de facto fiduciary relationship is “demanding[.]”
Lockerman, 250 N.C. App. at 636. Further, “general contractual relationships do not typically rise
to the level of fiduciary relationships.” Sykes v. Health Network Sols., Inc., 372 N.C. 326, 340
(2019). A de facto fiduciary relationship will not arise “absent the existence of dominion and
control by one party over another.” Kaplan v. O.K. Techs, LLC, 196 N.C. App. 469, 474 (2009).
As with their duty to advise theory, plaintiffs have not demonstrated a genuine issue of fact
or circumstances that could give rise to a de facto fiduciary relationship. Plaintiffs effectively
allege a mere arms-length transaction; the North Carolina courts have rejected de facto duty claims
premised on dynamics involving greater degrees of influence than here, and have required
extraordinary circumstances to conclude that a de facto relationship existed. See, e.g., Dalton v.
Camp, 353 N.C. 647, 651–52 (2001) (trust and confidence inherent in employer-employee
relationship did not create fiduciary duties); McNew v. Fletcher Hosp., Inc., 2022 NCBC 53, at
*4–5 (N.C. Bus. Ct. 2022) (hospital administrators did not owe de facto duties in billing to
emergency head injury patient); cf. Curl ex rel. Curl v. Key, 311 N.C. 259, 262–64 (1984) (holding

that grieving minor siblings were owed fiduciary duties by family friend whom they had trusted
their entire lives and who tricked them into signing away their home under false pretenses); Can-
Dev, ULC v. SSTI Centennial, LLC, 2018 NCBC 9, at *6–7 (N.C. Bus. Ct. 2018) (LLC member
owed de facto duties to another member once he took over all the LLC’s projects, excluded
plaintiff from any influence or even information over or about business, and LLC agreement
provided no recourse). Plaintiffs’ de facto fiduciary duty claim therefore also does not survive
defendants’ motion, and defendants are entitled to summary judgment on this issue, under this
theory.
In sum, plaintiffs have failed to present evidence of a de jure duty to advise or of a de facto

fiduciary relationship. The court grants defendants’ motion on these two theories. However,
plaintiffs have produced evidence sufficient to survive summary judgment on the de jure duty to
inform an insured about the nature and extent of coverage. Defendants’ motion will therefore be
denied on this theory. Plaintiffs’ motion for summary judgment on this claim is denied.
ii. Constructive Fraud
To maintain a constructive fraud claim under North Carolina law, a plaintiff must show
that he or she and “defendants were in a relation of trust and confidence . . . [which] led up to and
surrounded the consummation of [a] transaction in which defendant is alleged to have taken
advantage of his position . . . to the hurt of plaintiff.” Barger v. McCoy Hillard & Parks, 346 N.C.
650, 666 (1997) (alteration in original). The defendant must also have “[sought] to benefit
himself” in the transaction. Id. For the reasons stated above with respect to the breach of fiduciary
duty claim, plaintiffs have brought forth sufficient evidence of a fiduciary relationship to survive
summary judgment only with respect to the “limited duty” to correctly advise an insured about the
nature and extent of coverage. Plaintiffs therefore meet the first element of this claim only under

this theory.
The court has already concluded above that the question of proximate cause on plaintiffs’
claims should be submitted to the jury. Summary judgment on the constructive fraud claim
therefore depends on whether plaintiffs have produced evidence that Carroll sought to benefit
himself in the parties’ transaction.
Carroll testified at his deposition that he would receive greater commissions the more a
policy was worth. (See Pls’ App. SMF Ex. B (DE 41-2) (“Carroll Deposition”) 97:20–98:22).
Carroll denied that his commissions played any role in his decisions. (See id. 99:5–14). But
viewing this admission in the light most favorable to plaintiffs under the summary judgment

standard, see Anderson, 477 U.S. at 255, the court concludes that it raises a reasonable inference
that Carroll sought to benefit himself by inflating policy values, which creates an issue of material
fact on his motivations and intent. See, e.g., United States ex rel. Bunk v. Gov’t Logistics N.V.,
842 F.3d 261, 276–77 (4th Cir. 2016) (noting that summary judgment generally should not be
awarded when intent is at issue); Morrison v. Nissan Co., Ltd., 601 F.2d 139, 141 (4th Cir. 1979)
(to similar effect). Plaintiffs’ claim for constructive fraud therefore survives defendants’ motion,
insofar as it rests upon an insurance agent’s duty to advise on coverage and the alleged breach
thereof. Defendants’ motion accordingly is denied as to plaintiffs’ constructive fraud claim on this
theory, but granted in all other respects concerning this claim. Plaintiffs’ motion for summary
judgment on this claim is denied.
iii. Negligence
Defendants argue that plaintiffs cannot establish any element of negligence except the
existence of a duty. The court disagrees, and concludes that plaintiffs have produced sufficient

evidence of each element to survive summary judgment and present this claim to a jury, but that
issues of fact preclude entry of summary judgment for either side.
Under North Carolina law, negligence has three elements: 1) a legal duty owed by the
defendant to the plaintiff; 2) a breach of that duty; and 3) injury proximately caused by the breach.
Keith v. Health-Pro Home Care Servs., Inc., 381 N.C. 442, 450 (2022).
If an insurance agent undertakes to procure insurance for another, the law imposes a duty
to use reasonable skill and care to procure such insurance, and will hold the agent liable to the
insured for loss proximately caused by failure to do so. Wiles v. Mullinax, 267 N.C. 392, 395
(1966); White v. Consol. Planning, Inc., 166 N.C. App. 283, 301 (2004). The parties agree that

Carroll undertook to procure insurance for Clemmons Farming, and therefore owed this duty. (See
Defs’ Br. Opp’n 3). The court has also concluded above that proximate cause, between Carroll’s
actions and any of the various damages plaintiffs allege, is a question for the jury. Finally,
defendants argue that plaintiffs’ claimed damages were not reasonably foreseeable. But this
contention is essentially a proximate cause argument, which the jury should decide. (See Defs’
Br. Opp’n 9–10).6 See McNair v. Richardson, 244 N.C. 65, 67 (1956) (“foreseeability of injury is
a requisite of proximate cause”).

6 Defendants also argue that any damages suffered by plaintiffs Clemmons and Lauren B. Clemmons
individually are unconnected to defendants’ conduct as a matter of law, because defendant Carroll owed duties only
to plaintiff Clemmons Farming, a business entity. (See Defs’ Br. Opp’n 9). However, privity of contract is not
necessary to establish a duty under North Carolina law. See Finley Forest Condo. Ass’n v. Perry, 163 N.C. App. 735,
Summary judgment on plaintiffs’ negligence claim therefore revolves around whether
Carroll breached his duty to Clemmons Farming. This issue is rife with factual issues. For
example, the parties clash over whether Carroll’s admitted failure to follow Silveus’s internal
review procedures was proper. Plaintiffs argue it was not; defendants claim it was, because Carroll
filled out the WFRP in reliance on the advice of VanLandingham, a ProAg executive. (See Mem.

Law Supp. Pls’ Mot. Summ. J. (Pls’ Br. Supp.) (DE 39) 6; Defs’ Br. Opp’n 6). The parties also
dispute numerous facts concerning what information Carroll should have submitted to ProAg,
whether he did so, and whether, if not, Carroll or Clemmons was responsible. (See generally Pls’
SMF ¶¶ 22–31; Resp. Pls’ SMF ¶¶ 22–31).
Whether Carroll acted reasonably is therefore entangled with a cascade of disputed factual
questions, but “negligence claims are rarely susceptible of summary adjudication, and should
ordinarily be resolved by trial on the merits,” in part because “it is for the jury to determine whether
the applicable standard of care has been breached.” Goodman v. Wenco Foods, Inc., 333 N.C. 1,
17, 27 (1992); see Taylor v. Walker, 320 N.C. 729, 734 (1987) (“[A]pplication of the prudent man

test, or any other applicable standard of care, is generally for the jury.”); Finley Forest Condo.
Ass’n v. Perry, 163 N.C. App. 735, 739 (2004) (“[s]ummary judgment is rarely appropriate in a
negligence action because ordinarily it is the duty of the jury to apply the standard of care of a
reasonably prudent person”).

739 (2004). To determine whether the law imposes a duty to act with reasonable care to not injure a third person, the
court must balance six factors: 1) extent to which the transaction was intended to affect the other person; 2)
foreseeability of harm to the third person; 3) degree of certainty that the third person suffered injury; 4) closeness of
the connection between the conduct and the injury; 5) moral blame attached to the defendant’s conduct; and 6) public
policy of preventing future harm. Id. at 740. Balancing these factors is appropriate at summary judgment. See id. at
740–41. Clemmons and Lauren B. Clemmons were the sole officers and shareholders of Clemmons Farming, Carroll
discussed WFRP extensively with Clemmons, and eventually the two men filled out the application together. (See
Pls’ SMF ¶¶ 1, 11–12, 20–23). The court determines that the first two factors therefore point strongly towards
imposing a duty on Carroll to act with reasonable care towards Clemmons and Lauren B. Clemmons, and that no
conclusion on the other factors is appropriate at this time, given the parties’ disputes on proximate cause. The court
therefore rejects defendants’ arguments that Carroll owed no duties to Clemmons and Lauren B. Clemmons.
The court therefore concludes that neither party is entitled to judgment as a matter of law
on plaintiffs’ negligence claim, because numerous disputes of material fact surround proximate
cause and breach of duty.
iv. Respondeat Superior
Plaintiffs pleaded that Silveus should be vicariously liable as Carroll’s principal if Carroll

is ultimately found liable for breach of fiduciary duty or constructive fraud. (Compl. ¶¶ 87–92).
Defendants concede that respondeat superior would be appropriate if a jury finds Carroll liable for
either claim. (See Defs’ Br. Supp. 15; Defs’ Br. Opp’n 15). The court therefore grants plaintiffs’
motion for summary judgment as to respondeat superior, and Silveus will be held vicariously liable
as Carroll’s principal if a jury finds Carroll liable for breach of fiduciary duty or constructive fraud
at trial.
v. Negligence against Silveus
Plaintiffs plead a negligence claim against Silveus. Defendants argue that this claim
appears identical to plaintiffs’ respondeat superior theory, but address it in their briefing anyway

as a negligent supervision claim out of an abundance of caution. (See Defs’ Br. Supp. 16–17).
Plaintiffs do not address this claim in any of their briefing, so the court construes this claim as
defendants do, and addresses it in the same way.
Negligent supervision under North Carolina law has four elements:
(1) the specific negligent act on which the action is founded, which may, in
some cases, but not generally, be such as to prove incompetency, but never can, of
itself, provide notice to the master; (2) incompetency, by inherent unfitness or
previous specific acts or negligence, from which incompetency may be inferred;
(3) either actual notice to the master of such unfitness or bad habits, or constructive
notice, by showing that the master could have known the facts had he used ordinary
care in “oversight and supervision,” or by proving general reputation of the servant
for incompetency or negligence; and (4) that the injury complained of resulted from
the incompetency proved.
Walters v. Durham Lumber Co., 80 S.E. 49, 51 (N.C. 1913); see also Medlin v. Bass, 327
N.C. 587, 590–91 (1990).
Plaintiffs have produced no evidence that any of the above elements was met at the time
Carroll obtained the policy in February 2017. Nor do plaintiffs make any argument to the contrary
beyond conclusory statements in their complaint. The court will therefore grant defendants

summary judgment on plaintiffs’ claim for negligence against Silveus. Plaintiffs’ motion is denied
to the extent it seeks summary judgment on this claim.
vi. Unfair and Deceptive Trade Practices (“UDTP”)
Defendants argue that neither Carroll nor Silveus misrepresented the terms of any
insurance policy, which defeats plaintiffs’ UDTP claim. The court agrees.
Generally, a UDTP claim must meet three elements: 1) the defendant committed an unfair
or deceptive act or practice 2) in or affecting commerce, which 3) proximately caused injury to the
plaintiff. E.g., Gray, 352 N.C. at 68; D C Custom Freight, LLC v. Tammy A. Ross & Assocs.,
Inc., 273 N.C. App. 220, 227 (2020). In addition, a plaintiff pursuing a UDTP claim based on a

misrepresentation must demonstrate reasonable reliance on the alleged misrepresentation.
Bumpers v. Cmty. Bank of N. Va., 367 N.C. 81, 88 (2013).
Plaintiffs rest their UDTP claim entirely upon an alleged violation of N.C.G.S. § 58-63-
15(1). (Compl. ¶¶ 101–07). This statute prohibits a variety of insurance industry practices and
declares that they constitute unfair and deceptive acts as a matter of law, for which a plaintiff may
recover through N.C.G.S. § 75-1.1, which creates the private right of action for UDTP. See id. §§
58-63-15(1), 75-1.1. Because this claim therefore revolves around § 58-63-15(1), the court
reproduces this provision in its entirety:
The following are hereby defined as unfair methods of competition and unfair and
deceptive acts or practices in the business of insurance:
(1) Misrepresentations and False Advertising of Policy Contracts--Making, issuing,
circulating, or causing to be made, issued or circulated, any estimate, illustration,
circular or statement misrepresenting the terms of any policy issued or to be issued
or the benefits or advantages promised thereby or the dividends or share of the
surplus to be received thereon, or making any false or misleading statement as to
the dividends or share or surplus previously paid on similar policies, or making any
misleading representation or any misrepresentation as to the financial condition of
any insurer, or as to the legal reserve system upon which any life insurer operates,
or using any name or title of any policy or class of policies misrepresenting the true
nature thereof, or making any misrepresentation to any policyholder insured in any
company for the purpose of inducing or tending to induce such policyholder to
lapse, forfeit, or surrender his insurance.

Id.

A violation of § 58-63-15(1) meets the first UDTP element as a matter of law. Pearce v.
Am. Defender Life Ins. Co., 316 N.C. 461, 470 (1986).7 Defendants make no argument on the
second element, and the court has already concluded that proximate cause should be submitted to
the jury. Whether this claim survives defendants’ motion therefore depends on whether plaintiffs
have established a genuine issue of material fact of a violation of § 58-63-15(1).
Plaintiffs’ UDTP theory rests upon two alleged misrepresentations: Carroll’s statements to
Clemmons, and Carroll’s statements to ProAg. The court addresses these issues in turn.
Much of § 58-63-15(1) prohibits conduct plainly unrelated to the facts of this case. The
court therefore focuses on its first sentence, which forbids making any “estimate, illustration,
circular, or statement” misrepresenting the terms of “any policy issued or to be issued or the
benefits or advantages promised thereby[.]” Defendants first argue that “all” of the information
placed in the application came from Clemmons, (see Defs’ Br. Supp. 18), so that Carroll’s use of
this information in the application cannot qualify as a statement by Carroll at all, much less a
misrepresentation. But Carroll’s deposition testimony contradicts this argument. In his deposition,

7 When Pearce was decided, § 58-63-15 was codified under a different statutory section number, but did not
differ in substance from its current form.
Carroll testifies that he advised Clemmons to accept the use of the specific figures which plaintiffs
now contend were improper. (See Carroll Dep. 86:18–87:6). The court therefore rejects this
argument.
But even assuming that Carroll’s use of particular numbers in the application constituted a
statement to Clemmons, defendants also argue that nothing contained in the application qualifies

as a misrepresentation about a policy “issued or to be issued” because ProAg did issue a policy
providing those numbers’ coverage level. (See Pls’ App. SMF Ex. J (DE 41-10) 1).
Indeed, the decisions interpreting § 58-63-15(1) have involved affirmative
misrepresentations by an agent or insurer about a policy’s coverage. For example, in Pearce the
Supreme Court of North Carolina upheld a UDTP claim by the estate of an insured air force pilot
against an insurer which affirmatively misrepresented his coverage in the event of his death during
his air force duties. See Pearce, 316 N.C. at 463–465, 471–73. Similarly, in Tammy A. Ross &
Assocs., Inc., the North Carolina Court of Appeals concluded that an agent’s assurances to a third
party that the insured had coverage for a particular event constituted a misrepresentation within

the meaning of the statute. See Tammy A. Ross & Assocs., Inc., 273 N.C. App. at 229–30. Finally,
FSI, Inc. v. Newson, No. COA13-222, 2013 WL 5947132 (N.C. Ct. App. Nov. 5, 2013) determined
that an agent’s affirmative misrepresentation to the insured that a policy covered a particular risk,
when the policy written and provided to the agent clearly did not provide such coverage, satisfied
§ 58-63-15(1). See id. at *1–2, *4–6. In each case, the agent’s representation about coverage
differed from the terms of the policy. In contrast, plaintiffs present no evidence that the figures on
the policy application, assuming these constitute representations by Carroll, differed in any way
from the terms of the policy ProAg actually issued. The court therefore concludes that defendants
did not make any statement to Clemmons misrepresenting the terms of any policy issued or to be
issued.
The court next turns to plaintiffs’ argument that Carroll’s submission of allegedly incorrect
documents to ProAg in itself constituted a misrepresentation. (See Pls’ Br. Supp. 13). This
argument fails for the same reasons as plaintiffs’ first UDTP argument: even assuming that figures

included in an insurance application constitute representations by an agent, they are not
misrepresentations if they align with the policy actually issued. Given that Carroll made these
statements to ProAg, not Clemmons, this outcome also accords with statements in Jefferson-Pilot
Life Ins. Co. v. Spencer, 336 N.C. 49 (1994), that § 58-63-15(1) is principally concerned with
regulating insurance sales and protecting customers. See id. at 53.
Finally, although plaintiffs’ UDTP briefing focuses solely on § 58-63-15(1), the court
addresses a possible standalone § 75-1.1 claim out of an abundance of caution. A standalone
§ 75-1.1 claim must involve “egregious or aggravating circumstances[.]” Dalton v. Camp, 353
N.C. 647, 657 (2001) (emphasis in original); see Broussard v. Meineke Disc. Muffler Shops, Inc.,

155 F.3d 331, 347 (4th Cir. 1998) (“North Carolina law requires a showing of substantial
aggravating circumstances to support a claim under the UTPA [sic]”); Chapel H.O.M. Assocs.,
LLC v. RME Mgmt., LLC, 256 N.C. App. 625, 629 (2017) (“Our cases finding sufficient
aggravating factors have generally involved forms of forgery or deception.”); cf. Post v. Avita
Drugs, LLC, 2017 NCBC 93, at *4–5 (N.C. Bus. Ct. 2017) (collecting numerous cases that met
this standard, but which involved actual fraud, forgery, destruction of evidence, deliberate
concealment of contractual breach, abuse of the corporate form, or other dramatic misconduct).
Whether a plaintiff has presented evidence of egregious or aggravating circumstances is a question
of law for the court. Dalton, 353 N.C. at 656. Here, plaintiffs have not presented evidence meeting
this standard. Thus, plaintiffs cannot sustain their UDTP claim on § 75-1.1 either.
In sum, plaintiffs cannot demonstrate a violation of § 58-63-15(1), or circumstances
supporting a standalone § 75-1.1 claim. Plaintiffs cannot establish that defendants committed an
unfair or deceptive act, and their UDTP claim therefore fails as a matter of law.

B. Motion to Exclude Parker
1. Standard of Review
Federal Rule of Evidence 702 governs the admissibility of expert opinion testimony. Under
Rule 702, expert testimony is appropriate when “the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact to understand the evidence or to determine a fact
in issue.” Fed. R. Evid. 702. A witness qualified as an expert may be permitted to testify where
“(b) the testimony is based upon sufficient facts or data, (c) the testimony is the product of reliable
principles and methods, and (d) the expert has reliably applied the principles and methods to the
facts of the case.” Id.

Federal Rule of Evidence 702 imposes a “basic gatekeeping obligation” upon a trial judge
to “ensure that any and all scientific testimony is not only relevant, but reliable.” Kumho Tire Co.
v. Carmichael, 526 U.S. 137, 147 (1999); Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579,
592-93 (1993). “The proponent of the testimony must establish its admissibility by a
preponderance of proof.” Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001).
“[R]elevance – or what has been called ‘fit’ – is a precondition for the admissibility of
expert testimony, in that the rules of evidence require expert opinions to assist the ‘the trier of fact
to understand the evidence or to determine a fact in issue.’” United States v. Ancient Coin
Collectors Guild, 899 F.3d 295, 318 (4th Cir. 2018). A key “aspect of relevancy . . . is whether
expert testimony proffered in the case is sufficiently tied to the facts of the case that it will aid the
jury in resolving a factual dispute.” Daubert, 509 U.S. at 591.
The reliability inquiry is a “flexible one focusing on the principles and methodology
employed by the expert, not on the conclusions reached.” Westberry v. Gislaved Gummi AB, 178
F.3d 257, 261 (4th Cir. 1999). One factor pertinent to reliability is the proposed expert’s

qualifications. See Thomas J. Kline, Inc. v. Lorillard, Inc., 878 F.2d 791, 799 (4th Cir. 1989). A
witness may qualify to render expert opinions in any one of the five ways listed in Rule 702:
knowledge, skill, experience, training, or education. Kumho Tire, 526 U.S. at 147. When an
expert’s qualifications are challenged, “‘the test for exclusion is a strict one, and the purported
expert must have neither satisfactory knowledge, skill, experience, training nor education on the
issue for which the opinion is proffered.’” Kopf v. Skyrm, 993 F.2d 374, 377 (4th Cir. 1993).
In assessing whether expert testimony is “reliable,” the court considers additional factors
besides the expert’s qualifications. These include:
(1) whether a theory or technique can be (and has been) tested; (2) whether the
theory has been subjected to peer review and publication; (3) the known or potential
rate of error; (4) the existence and maintenance of standards controlling the
techniques’ operation; and (5) whether the technique has received general
acceptance within the relevant scientific or expert community.
United States v. Crisp, 324 F.3d 261, 266 (4th Cir. 2003). These factors are “neither definitive,
nor exhaustive,” and “particular factors may or may not be pertinent in assessing reliability,
depending on the nature of the issue, the expert’s particular expertise, and the subject of his
testimony.” Cooper, 259 F.3d at 199–200. “[T]he court has broad latitude to consider whatever
factors bearing on validity that the court finds to be useful[,] . . . depend[ing] upon the unique
circumstances of the expert testimony involved.” Westberry, 178 F.3d at 261.
Of course, the admission of expert testimony must be considered within the context of the
other rules of evidence. In particular, Rule 403 provides that the court must ensure that the
probative value of any proffered evidence is not “substantially outweighed by the danger of unfair
prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay,
waste of time, or needless presentation of cumulative evidence.” Fed. R. Evid. 403. As this court
has noted, “[d]espite the court’s ability to exercise broad discretion and flexibility when
determining the admissibility of expert testimony, the court must balance this discretion with the

concerns of Rule 403 to ensure that the probative value of the proffered testimony is not
‘substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading
the jury.’” Bouygues Telecom, S.A. v. Tekelec, 472 F. Supp. 2d 722, 725 (E.D.N.C. 2007)
(quoting Fed. R. Evid. 403).
2. Analysis
Parker is a former USDA official and current crop insurance consultant, developer, and
agent. (See Defs’ Mem. Supp. Mot. In Limine Exclude Opinions and Test. of Clifton R. Parker as
Expert (DE 37) (“Br. Supp. Exclude”) Ex. 1 (DE 37-1) 5 (“Parker Report”)). Parker worked for
the USDA for thirty years, over which time he held five different crop insurance-related positions.

(Id. at 5). Since his retirement from the USDA in 2007, Parker has worked as a crop insurance
consultant and licensed crop insurance agent. (Id.)
Defendants do not contend that Parker lacks qualifications, or pose any general objections
to his testimony under Daubert or Rule 702. Instead, they move to exclude Parker as an expert on
four specific grounds which, together, would exclude all of his testimony: 1) Parker’s conclusions
about price calculations are contradicted by his source and his own report, which renders them
unreliable; 2) Parker’s conclusions about yield are contradicted by his source; 3) Parker attempts
to testify improperly about others’ states of minds; and 4) Parker improperly attempts to offer legal
conclusions. The court agrees with the third contention in full and with the fourth in part, which
renders a separate examination of the first or second unnecessary.
Defendants first contend that Parker improperly attempts to testify about the mental states
of other people. In his report, Parker opines about assurances Carroll offered to Clemmons, that
Clemmons believed Carroll, and that Clemmons relied on Carroll “in good faith[.]” (Parker Report

4). He later opines that Clemmons relied upon Carroll to make business decisions. (Id. 7).
However, a central requirement for expert testimony is that it “concerns . . . scientific,
technical, or other specialized knowledge[.]” Fed. R. Evid. 702(a); e,g., Westberry, 178 F.3d at
260. Whether Carroll assured Clemmons of anything, whether Clemmons believed him, and what
Clemmons relied upon do not involve any specialized knowledge that would assist a jury. The
court further notes that this proposed testimony likely violates Rule 602, which requires personal
knowledge of the subject of testimony, because Parker has no way to know what Clemmons
believed about anything when he and Carroll interacted in 2017.8 See Fed. R. Evid. 602. The
court therefore agrees with defendants that these statements should be excluded. Parker will not

be permitted to present the opinions contained in the last complete paragraph of page 8 of his
report, the sentence on page 11 that Clemmons and CFFC “relied upon” Carroll to make their
business decisions, or other testimony in his report about Clemmons’s state of mind or beliefs, that
Clemmons relied upon Carroll, or that Carroll made assertions.9
Next, defendants argue that Parker’s opinions constitute legal conclusions, on a variety of
grounds. Generally, an expert may not testify to a legal conclusion. E.g., United States v. Barile,

8 Rule 602 contains an exception that permits an expert to testify about facts and data which he or she has not
personally observed, but this exception is not relevant here. See Fed. R. Evid. 602; Fed. R. Evid. 703.

9 In their briefing, the parties generally cite to the page numbers on the face of the report. To be clear, this
sentence refers to pages 8 and 11 under the court’s ECF filing system, which are numbered as pages 4 and 7 on the
fact of the report. The last complete paragraph on page 8 begins with “Mr. Carroll assured” and ends with “crop
insurance and WFRP.”
286 F.3d 749, 760 (4th Cir. 2002). However, experts generally may testify about specialized
industries, including the standard of care and accepted practices in such fields. See Friendship
Heights Assocs. v. Vlastimil Koubek, A.I.A., 785 F.2d 1154, 1162 (4th Cir. 1986).
Courts routinely hold that insurance is a specialized industry on which expert testimony,
including on generally accepted practices, is permissible. See, e.g., Peckham v. Cont’l Cas. Co.,

895 F.2d 830, 837 (1st Cir. 1990); SR Int’l Bus. Ins. Co., Ltd. v. World Trade Center Props., LLC,
467 F.3d 107, 133–3 (2d Cir. 2006); United Prop. & Cas. Ins. v. Couture, 639 F. Supp. 3d 590,
599 (D.S.C. 2022); Carlisle v. Allianz Life Ins. Co. of N. Am., No. 2:19cv565, 2021 WL 8445825,
at *6 (E.D. Va. Nov. 15, 2021); Hopeman Bros., Inc. v. Cont’l Cas. Co., No. 4:16-cv-187, 2018
WL 4169282, at *14 (E.D. Va. Jan. 12, 2018); see also Merrill v. McCarthy, No. 7:14-CV-4-BR,
2016 WL 1258472, at *3 (E.D.N.C. Mar. 30, 2016) (noting in dicta that courts often permit experts
to testify about insurance industry custom).
Nonetheless, an expert may not “construe[] a document for its legal effect” or testify to
“the meaning and applicability” of pertinent law. Adalman v. Baker, Watts & Co., 807 F.2d 359,

366–68 (4th Cir. 1986), abrogated on other grounds, 486 U.S. 622 (1988).
With these principles in mind, the court examines each of defendants’ arguments in
sequence.
First, defendants contend that insurance practices are known to the average layperson, such
that expert assistance and interpretation is unnecessary.10 (See Br. Supp. Exclude 8). Parker’s
qualifications demonstrate extensive experience in crop insurance. (See Parker Report 5). And
he opines about the workings of the insurance industry and the reasonable responsibilities of

10 This argument, as defendants present it, does not appear to implicate impermissible legal conclusions.
However, defendants include it in that section of their brief, and so the court examines it with defendants’ other legal
conclusion contentions.
insurance agents, specialized fields with which average laypersons would be unfamiliar. (See
Parker Report 9, 10–11). The court therefore rejects defendants’ argument that insurance is
inherently so well-understood a field that a jury needs no expert assistance. E.g., Peckham, 895
F.2d at 837; Couture, 639 F. Supp. 3d at 599; (see Br. Supp. Exclude 8).
Defendants also argue that Parker’s reliance on internal Silveus memos expressing concern

over Carroll’s compliance with company policy is improper because these memos issued in 2018,
and do not state that Carroll’s conduct in 2017 violated then-prevailing policies.11 (Br. Supp.
Exclude 8–9). However, this argument goes to credibility, not admissibility. These memos
express general concern about Carroll’s history and refer to his performance in 2017. (See Parker
Report 10). The court therefore rejects this argument as well and concludes that Parker should be
permitted to rely upon and reference these documents. To the extent that defendants believe these
documents speak only weakly to Carroll’s 2017 conduct, they are free to present such points
through their own witnesses and through cross-examination. See, e.g., United States v. Baller, 519
F.2d 463, 466 (4th Cir. 1975).

Finally, defendants argue that Parker’s opinions interpreting the handbook on an agent’s
duties, and on calculating future crop prices and yields, are legal conclusions. The court can
resolve all three arguments on the same basis. On all three issues, Parker expresses some opinions
that purport to interpret the WFRP handbook published by the USDA and the RMA, and others
that do not. But he admits, and plaintiffs contend, that the USDA’s supervision of crop insurance
means that the handbook is binding on crop insurance policies. (See Pls’ SMF ¶ 5; Parker Report
6; Defs’ App. SMF Ex. 2A (DE 34-5) 2).

11 Like defendants’ first argument, this point does not appear to implicate legal conclusions, but the court
addresses it here for the same reasons.
Therefore, Parker’s opinions that purport to interpret directly the requirements outlined in
the handbook, and whether Carroll obeyed them, impermissibly “construe[] a document for its
legal effect” and testify to “the meaning and applicability” of pertinent law. See Adalman, 807
F.2d at 366–68. But his opinions on industry custom, or other subjects that do not involve
interpretation of the handbook, do not.

Parker construes the handbook directly in two ways. First, he interprets the handbook’s
requirements for calculating crop prices, and whether Carroll followed those procedures. (See
Parker Report 7–8). Second, he does the same for calculating expected crop yields. (See id.). All
these opinions interpret a legal instrument and decide how it applies, legally, to the facts of this
case. For this point, defendants rely heavily upon Garey v. James S. Farrin, P.C., 514 F. Supp. 3d
784 (M.D.N.C. 2021). The court finds this case instructive. In Garey, the proposed expert
attempted to interpret the terms of a statute, and applied its terms directly to the facts of the case.
See id. at 790. Similarly, Parker here interprets the language of the handbook, and opines directly
that Carroll violated its directives in various ways. Presenting such legal conclusions is

impermissible. E.g., Adalman, 807 F.2d at 366.
Conversely, Parker also offers opinions that merely speak generally to a crop insurance
agent’s duties and related issues. (See Parker Report 9). These opinions do not present legal
conclusions.
Between these two extremes, Parker also presents opinions on agent duties that suggest at
least implicit interpretation of the handbook. (See Parker Report 9–10). This testimony may or
may not be permissible, depending on the precise contours of a line of questioning and responses.
The court therefore concludes that direct interpretation of the handbook is impermissible,
testimony on the insurance industry and its customs should be permitted, and testimony that skirts
the boundary between these two categories, or that suggests implicit interpretation of the
handbook, should first be presented through a proffer at trial, at which time the court will rule on
admissibility of specific lines of testimony or questions.
In sum, Parker may not testify to what Carroll allegedly assured Clemmons, or about
Clemmons’s state of mind or thoughts. Nor may he testify about the legal effect and meaning of

the handbook, and whether Carroll followed its directives. He may, however, testify about
generally accepted practices and customs in the insurance industry, and about whether defendants
adhered to those practices. Finally, testimony that relies upon or implicitly interprets the handbook
should first be proffered at trial, at which time the court will rule on admissibility. Accordingly,
defendants’ motion to exclude is granted in part and denied in part.
C. Motion to Seal
Defendants filed a motion to seal contemporaneously with their summary judgment motion
(DE 44). The court denied this motion without prejudice on grounds that the document defendants
wished to seal did not actually appear on the docket. (See Order (DE 53)). This order directed

defendants to file the document in question, and to show cause why it should be sealed. Defendants
timely filed the document.
In considering a request to seal, the court generally must first determine if the source of the
public’s right to access the documents is derived from the common law or the First Amendment.
See Stone v. Univ. of Md., 855 F.2d 178, 180 (4th Cir. 1988). The common law presumption in
favor of access attaches to all judicial records and documents, whereas First Amendment
protection is extended to only certain judicial records and documents, including, for example, those
filed in connection with a summary judgment motion. Id.
The First Amendment provides a qualified right of access to summary judgment briefs,
which “may be abrogated only in unusual circumstances.” Doe v. Public Citizen, 749 F.3d 246,
266–67 (4th Cir. 2014). When the First Amendment right of access applies, the moving party must

show that sealing the entire brief is “necessitated by a compelling government interest.” Id.
Furthermore, when presented with a motion to seal, the court must “1) provide public notice of the
sealing request and a reasonable opportunity for the public to voice objections to the motion; 2)
consider less drastic alternatives to closure; and 3) if it determines that full access is not necessary,
it must state its reasons—with specific findings—supporting closure and its rejections of less
drastic alternatives.” Id. at 272 (citing In re Knight Pub. Co., 743 F.2d 231, 234–35 (4th Cir.
1984)); Stone, 855 F.2d at 180–81.
The exhibit defendants seek to seal contains sensitive information such as recent business
information for internal consumption only, and internal evaluations of Silveus personnel. (See

generally Proposed Sealed Document (DE 54)). Because the interests in sealing such information
outweigh the First Amendment and common law interests in disclosure of the same in connection
with the court’s instant rulings, defendants’ motion to seal (DE 55) is granted. The court directs
the clerk to maintain under seal DE 42 and 54.
CONCLUSION
Based on the foregoing, plaintiffs’ motion for summary judgment (DE 38) is GRANTED
IN PART and DENIED IN PART as follows. Plaintiff’s motion is GRANTED insofar as it seeks
to hold Silveus vicariously liable through respondeat superior in the event a jury finds Carroll
liable for breach of fiduciary duty or constructive fraud; Plaintiffs’ motion is otherwise DENIED.
Defendants’ motion for summary judgment (DE 32) is GRANTED IN PART and DENIED
IN PART as follows. Defendants’ motion is GRANTED as to the following claims, which are
DISMISSED WITH PREJUDICE:
1) Negligence against Silveus;
2) Breach of fiduciary duty against Carroll insofar as the claim rests upon an alleged violation

of an implied duty to advise or a de facto fiduciary relationship;
3) Constructive fraud against Carroll insofar as it rests upon an alleged violation of an implied
duty to advise or a de facto fiduciary relationship; and
4) Unfair and deceptive trade practices against Silveus and Carroll in violation of N.C.G.S.
§§ 58-63-15(1) or 75-1.1.
Defendants’ motion is DENIED as to the following claims, which shall proceed to trial:
1) Breach of fiduciary duty against Carroll insofar as it rests upon an alleged violation of the
de jure fiduciary duty to advise an insured of the nature and extent of coverage;
2) Constructive fraud against Carroll insofar as it rests upon an alleged violation of the de jure

fiduciary duty to advise an insured of the nature and extent of coverage;
3) Negligence against Carroll.
Defendants’ motion to exclude Parker as an expert (DE 36) is GRANTED IN PART and
DENIED IN PART as follows. Defendants’ motion is GRANTED as to the following proposed
testimony by Parker, which shall be excluded at trial:
1) Assurances Carroll offered to Clemmons;
2) Clemmons’s state of mind or reliance on Carroll’s statements;
3) Whether Carroll violated the WFRP handbook’s guidelines on calculating expected crop
prices and yields;
4) Whether Carroll violated the WFRP handbook’s guidelines on the duties of a crop
insurance agent.
Defendants’ motion is DENIED as to the following proposed testimony by Parker, which
shall be permitted at trial, subject to the other Federal Rules of Evidence and objections properly
made thereunder:
1) Proposed testimony about the general customs, structure, accepted practices, and other
areas of the insurance industry with which an average layperson would be unfamiliar;
2) Whether Carroll violated such customs and general practices.
Defendants motion to seal (DE 55) is GRANTED, and the clerk is DIRECTED to maintain
under seal DE 42 and 54.
In accordance with the case management order entered September 15, 2021, as amended
August 26, 2022, this case now is ripe for entry of an order governing deadlines and procedures
for final pretrial conference and trial. The parties are DIRECTED to confer and file within 14
days from the date of this order a joint status report informing the court of 1) estimated trial length;
2) particular pretrial issues which may require court intervention in advance of trial, if any; and
3) at least three suggested alternative trial dates. The parties shall specify if they wish to schedule
a court-hosted settlement conference or additional alternative dispute resolution procedures in
advance of trial, and if so the date for completion of such.
SO ORDERED, this the 26th day of January, 2024.

LOUISE W. FLANAGAN
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10253043. Public record. Not legal advice.