(BREACH OF CONTRACT)   (DECLARATORY JUDGMENT AND RELIEF)   11.  Pursuant to the Watkins Policy, Plaintiffs paid Universal premiums in exchange  for insurance coverage.  The required premiums were paid at all times relevant to this Complaint.    12.  On or about December 25, 2017, Plaintiffs’ dwelling located on the Insured  Premises suffered direct physical loss caused by covered peril(s) (the “Loss”).    13.  The Watkins Policy was in effect at the time of the Loss, and the Loss is  compensable under the terms of the Policy.  As it relates to the Loss, there is no applicable  exclusion.   14.  Plaintiffs promptly notified Universal of the Loss and made a claim against the  Watkins Policy.   15.  After its inspection, Universal determined that the Loss was covered by the terms  of the Watkins Policy.     16.  Universal calculated its actual cash value (“ACV”) payment obligation to  Plaintiffs by first estimating the cost to repair or replace the damage with new materials  (replacement cost value, or “RCV”), then subtracted depreciation.     17.  The Watkins Policy, and the other property forms at issue in this pleading, do not  permit the withholding or deduction of labor as depreciation as described below.     18.  The Watkins Policy does not define ACV.  B. Universal’s Calculation of Plaintiffs’ ACV Payment   20.  Universal used commercially-available computer software to make its RCV,  depreciation, and ACV calculations.  Universal uses this software to calculate RCV,  depreciation, and ACV.     21.  On or about January 12, 2018, Universal calculated the RCV of Plaintiffs’  damaged home at $10,688.11.    22.  Universal then used the same software to calculate the depreciation for Plaintiffs’  damaged home at $1,394.39.    23.  Plaintiffs were underpaid on their ACV claim as more fully described below.  C. Universal’s Practice Of Withholding Labor As Depreciation   24.  When it calculated Plaintiffs’ ACV benefits owed under the Watkins Policy,  Universal withheld costs for both materials and the labor required to repair or replace Plaintiffs’  home as depreciation, even though labor does not depreciate in value over time.  Universal  withheld labor costs throughout its ACV calculations as depreciation.  Universal also withheld  labor costs as depreciation for other work necessary to repair and replace Plaintiffs’ property.   25.  Like all property insurance claims estimating software, the specific commercial  claims estimating software used by Universal allows for the depreciation of materials only or the  depreciation of both material and labor in its depreciation setting preferences.   27.  Universal’s withholding of labor costs as depreciation associated with the repair  or replacement of Plaintiffs’ property resulted in Plaintiffs receiving payment for their losses in  an amount less than they were entitled to receive under the Watkins Policy.  Universal breached  its obligations under the Watkins Policy by improperly withholding the cost of labor as  depreciation.    28.  Plaintiffs cannot determine the precise amount of labor that has been withheld  based only upon the written estimate provided.  To determine the precise amount of labor  withheld, it is necessary to have access to the commercial property insurance program at issue, as  well as the electronic file associated with their estimate.   29.  While an insurer may lawfully depreciate material costs when calculating the  amount of an ACV payment owed to an insured, it may not lawfully withhold repair labor as  depreciation under Universal’s policy forms at issue in North Carolina.  Universal’s failure to  pay the full cost of the labor necessary to return Plaintiffs back to their pre-loss condition left  Plaintiffs under-indemnified and underpaid for their loss.    30.  Universal materially breached its duty to indemnify Plaintiffs by withholding  labor costs associated with repairing or replacing Plaintiffs’ property in its ACV payment as  depreciation, thereby paying Plaintiffs less than they were entitled to receive under the terms of  the Watkins Policy.  32.  Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Plaintiffs bring this  lawsuit as a class action on behalf of themselves and on behalf of all others similarly situated.  This action satisfies the requirements of numerosity, commonality, typicality, and adequacy of  representation.  Only to the extent it is a requirement under applicable law, the proposed class  herein is ascertainable.   33.  The proposed class that Plaintiffs seek to represent is defined as follows:  All Universal policyholders (or their lawful assignees) who made:  (1) a structural damage claim for property located in the State of  North Carolina; and (2) which resulted in an actual cash value  payment during the class period from which “non-material  depreciation” was withheld from the policyholder; or which should  have resulted in an actual cash value payment but for the  withholding of non-material depreciation causing the loss to drop  below the applicable deductible.  The class period for the proposed class is the maximum time  period as allowed by applicable law.   The class excludes all claims arising under policy forms expressly  permitting the “depreciation” of “labor” within the text of the  policy form and any claims in which the initial actual cash value  payment exhausted the applicable limits of insurance   34.  Plaintiffs reserve the right to amend the definition of the proposed class through  discovery. The following persons are expressly excluded from the class: (1) Defendant and its  subsidiaries and affiliates; (2) all persons who make a timely election to be excluded from the  proposed Class; and (3) the Court to which this case is assigned and its staff.   36.  The members of the proposed class are so numerous that joinder of all members is  impracticable. Plaintiffs reasonably believe that hundreds or thousands of people geographically  dispersed across North Carolina have been damaged by Universal’s actions.  The names and  addresses of the members of the proposed class are readily identifiable through records  maintained by Universal or from information readily available to Universal.   37.  The relatively small amounts of damage suffered by most members of the  proposed class make filing separate lawsuits by individual members economically impracticable.   38.  Universal has acted on grounds generally applicable to the proposed class in that  Universal has routinely withheld labor costs as described herein in its adjustment of property  damage claims under its policies of insurance.  It is reasonable to expect that Universal will  continue to withhold labor to reduce the amount it pays to its insureds under these policies absent  this lawsuit.    40.  Plaintiffs’ claim is typical of the claims of the proposed class members, as they  are all similarly affected by Universal’s custom and practice concerning the withholding of labor.  Further, Plaintiffs’ claims are typical of the claims of the proposed class members because their  claims arose from the same practices and course of conduct that give rise to the claims of the  members of the proposed class and are based on the same factual and legal theories.  Plaintiffs  are not different in any material respect from any other member of the proposed class.   41.  Plaintiffs and their counsel will fairly and adequately protect the interests of the  members of the proposed class. Plaintiffs’ interests do not conflict with the interests of the  proposed class they seek to represent. Plaintiffs have retained lawyers who are competent and  experienced in class action and insurance litigation.  Plaintiffs and Plaintiffs’ counsel have the  necessary financial resources to adequately and vigorously litigate this class action, and Plaintiffs  and counsel are aware of their fiduciary responsibilities to the members of the proposed class and  will diligently discharge those duties by vigorously seeking the maximum possible recovery for  the proposed class while recognizing the risks associated with litigation.   43.  In contrast, a class action will minimize case management difficulties and provide  multiple benefits to the litigating parties, including efficiency, economy of scale, unitary  adjudication with consistent results and equal protection of the rights of Plaintiffs and members  of the proposed class. These benefits would result from the comprehensive and efficient  supervision of the litigation by a single court.   45.  Class certification is further warranted because Universal has acted or refused to  act on grounds that apply generally to the class, so final injunctive relief or corresponding  declaratory relief is appropriate with respect to the class as a whole.   46.  Plaintiffs may seek, in the alternative, certification of issues classes.   47.  Rule 23(c)(4) provides that an action may be brought or maintained as a class  action with respect to particular issues when doing so would materially advance the litigation as  a whole.  48.  Plaintiffs restate and incorporates by reference all preceding allegations.   49.  Universal entered into policies of insurance with Plaintiffs and members of the  proposed class. These insurance policies govern the relationship between Universal and  Plaintiffs, and members of the proposed class, as well as the manner in which claims for covered  losses are handled.   50.  The policies of insurance between Universal, Plaintiffs and the other members of  the proposed class are binding contracts under North Carolina law, supported by valid  consideration in the form of premium payments in exchange for insurance coverage.   51.  Universal drafted the insurance policies at issue, which are essentially identical in  all respects material to this litigation concerning the withholding of labor as depreciation.   53.  Universal breached its contractual duty to pay Plaintiffs, and members of the  proposed class the ACV of their claims by unlawfully withholding labor costs as described  herein.   54.  Universal’s actions in breaching its contractual obligations to Plaintiffs and  members of the proposed class benefitted and continue to benefit Universal. Likewise,  Universal’s actions damaged and continue to damage Plaintiffs and members of the proposed  class.   55.  Universal’s actions in breaching its contractual obligations, as described herein,  are the direct and proximate cause of damages to Plaintiffs and members of the proposed class.   56.  In light of the foregoing, Plaintiffs and members of the proposed class are entitled  to recover damages sufficient to make them whole for all amounts Universal unlawfully withheld  from their ACV payments, including prejudgment interest as may be allowed by law.  57.  Plaintiffs restate and incorporates by reference all preceding allegations.   58.  This Court is empowered by the Declaratory Judgment Act as codified at 28  U.S.C. § 2201 and Fed. R. Civ. P. 57 to declare the rights and legal relations of parties regardless  of whether further relief is or could be claimed.   59.  A party may seek to have insurance contracts, before or after a breach, construed  to obtain a declaration of rights, status, and other legal relations thereunder adjudicated.   6.  Universal is an insurance company that provides property coverage for homes,  commercial buildings, and other structures.  Universal is one of the nation’s largest insurers.     60.  Plaintiffs and members of the proposed class have all complied with all relevant  conditions precedent in their contracts.   62.  Plaintiffs further seek, individually and on behalf of the proposed class, any and  all other relief available under the law arising out of a favorable declaration.   63.  Plaintiffs and members of the proposed class have suffered injuries.    7.  Universal sells its property insurance policies in, inter alia, the state of North  Carolina.     8.  Plaintiffs were insured pursuant to an insurance contract whereby Universal  agreed to insure, inter alia, Plaintiffs’ property located on the Insured Premises against property  damage, bearing Policy No. 4204-1500-1051 (the “Watkins Policy”).   9.  The Watkins Policy provided insurance coverage for direct physical loss to the  residence and structures located on the Insured Premises, except as specifically excluded or  limited by the Watkins Policy.   A. The Property Insurance Policy and Casualty Loss  