Aetna Cas. & Sur. Co. v. Nationwide Mut. Ins. Co.

• Decision Date: 15 August 1989
• Docket Number: No. 895SC182,895SC182
• Citation: 381 S.E.2d 874,95 N.C.App. 178
• Court: North Carolina Court of Appeals
• Parties: AETNA CASUALTY & SURETY COMPANY, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, William T. Sawyer, Jr., John William Slater, Jr., and Ralph Landon McLean, Defendants.

Page 874

381 S.E.2d 874

95 N.C.App. 178

AETNA CASUALTY & SURETY COMPANY, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, William T. Sawyer, Jr. John William Slater, Jr., and Ralph Landon McLean Defendants.

No. 895SC182.

Court of Appeals of North Carolina.

Aug. 15, 1989.

Poisson, Barnhill & Britt by James R. Sugg, Jr., Wilmington, for plaintiff.

Murchison, Taylor, Kendrick, Gibson & Davenport by Vaiden P. Kendrick, Wilmington, for defendants Nationwide Mut. Ins. Co. and Ralph Landon McLean.

ORR, Judge.

On 3 October 1986, an auto collision occurred between John Slater and Ralph McLean. At the time, Slater was driving a truck owned by William Sawyer. Sawyer's truck was insured for liability through Aetna Casualty & Surety Company (Aetna). McLean filed an action against Slater for damages which he sustained in the crash.

Thereafter, Aetna filed this declaratory judgment action. Its complaint states that Slater is not an insured motorist under the terms of its policy with Sawyer, the owner of the truck. Instead, Aetna alleged that its policy does not cover Slater because Slater was "using [the] vehicle without reasonable belief that [he ... was] entitled to do so" in contravention of section A(8) in the "EXCLUSIONS" portion of its policy. Aetna asked for a declaration that if it was liable to McLean at all, then its liability would be limited to $25,000.00. That is the maximum amount of liability insurance which a motorist is required to carry under G.S. 20-279.21(b)(2). However, that amount is less than the amount provided for under Sawyer's policy with Aetna. Later on, Aetna amended its complaint and asked for a declaration that if McLean was awarded a judgment against Slater which exceeded $25,000.00, then Nationwide Mutual Insurance Company (Nationwide) would pay McLean such amounts in accordance with its uninsured motorist coverage with McLean.

Defendants denied all material allegations and moved to strike plaintiff's amended complaint. Following defendant's answer, Aetna moved the court for summary judgment under G.S. 1A-1, Rule 56(c). The court reviewed the motion and its supporting affidavits and granted the motion. Nationwide and McLean appeal.

The sole question raised by defendants' appeal is whether summary judgment was improperly granted for plaintiff. According to appellants, Aetna's policy with Sawyer, the owner of the truck driven by Slater, must provide coverage to McLean if it is determined that Slater was driving Sawyer's truck with a reasonable belief that he was entitled to do so. Appellants contend that since Slater's subjective belief is a question of fact which was not resolved by Aetna's complaint or supporting affidavit, summary judgment in Aetna's favor was inappropriate. On the other hand, Aetna argues that Slater was driving without permission from Sawyer and that its policy does not extend to him. In the alternative, Aetna contends that Slater was driving without a license and he could not have reasonably believed that he was entitled to drive Sawyer's truck.

Summary judgment may '... be rendered ... if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.' G.S. 1A-1, Rule 56(c).... The rule does not contemplate that the court is to decide an issue of fact, but rather it impels the court to determine whether a real issue of fact exists.

Insurance Co. v. Chantos, 25 N.C.App. 482, 484-85, 214 S.E.2d 438, 441, cert. denied, 287 N.C. 465, 215 S.E.2d 624 (1975).

In the case at bar, Aetna's policy with Sawyer provides in Part A, entitled "LIABILITY COVERAGE," that a "covered person [is] ... [a]ny person using your covered auto." However, under the exclusionary section of the policy, section A states "[w]e do not provide Liability Coverage for any person: ... 8. Using a vehicle without a reasonable belief that that person is entitled to do so." Based upon this language, for an order of summary judgment to have been entered by the court below, Aetna's pleadings and/or other materials must have compelled the conclusion that Slater was not using Sawyer's truck under a reasonable belief of entitlement.

The record reveals that William Sawyer loaned his truck to one employee, Fall, who loaned it to another employee, Slater, who had the accident. The accident occurred while Slater was out running an errand at the request of Fall. Sawyer, the truck owner, had given...