Bissette v. Auto–owners Ins. Co.
| Citation | 703 S.E.2d 168 |
| Decision Date | 07 December 2010 |
| Docket Number | No. COA09–1721.,COA09–1721. |
| Parties | Joshua Watson BISSETTE, Plaintiff,v.AUTO–OWNERS INSURANCE COMPANY and Bryan Keith Cothran, Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by Defendant Auto–Owners Insurance Company from order entered 16 September 2009 by Judge Milton F. Fitch, Jr. in Wilson County Superior Court. Heard in the Court of Appeals 12 May 2010.
Taylor Law Office, Wilson, by W. Earl Taylor, Jr., for Plaintiff.
Brown, Crump, Vanore & Tierney, L.L.P., Raleigh, by O. Craig Tierney, Jr., for Defendant Auto–Owners Insurance Company.No Brief for Defendant Bryan Keith Cothran.
At issue is whether the trial court erred in granting summary judgment in favor of Plaintiff because there were genuine issues of material fact regarding (1) Defendant Auto–Owners Insurance Company's (“Auto–Owners”) duty to defend, indemnify, or cover Bryan Keith Cothran (“Cothran”),1 and (2) the impact on Auto–Owners' duty to defend, indemnify, or cover Cothran in light of Cothran's failure to cooperate in his defense. For the reasons stated herein, we affirm the judgment of the trial court.
Craig A. Cleveland (“Cleveland”), owner and President of Connected Fiber, Inc. (“Connected”), allegedly sold a 1997 Ford F–150 (“vehicle”) to Cothran on 11 August 2007 in North Myrtle Beach, South Carolina. Cleveland sold the vehicle to Cothran on behalf of Connected. At the time of the sale, the vehicle was registered and titled in North Carolina.
When the vehicle was transferred to Cothran, the signed Certificate of Title was not notarized, nor were the North Carolina license plates removed. Cleveland gave Cothran the un-notarized, signed Certificate of Title, the keys to the vehicle, and possession of the vehicle. Cothran, a South Carolina resident, never registered the vehicle in South Carolina or obtained South Carolina license places for the vehicle. The vehicle remained titled in Connected's name in North Carolina.
On 14 October 2007, Cleveland sent an email to General Insurance Services, Connected's insurance agent, informing it that the vehicle had been sold and requesting that the vehicle be removed from Connected's insurance policy with Auto–Owners (“Policy”) “at renewal.” Renewal was to occur on 25 November 2007. Alicia Cathey of General Insurance Services received the email. Ms. Cathey notified Auto–Owners that the vehicle was to be removed from the Policy effective 25 November 2007.
On 16 November 2007, Cothran was driving the vehicle in Wilson County, North Carolina when he collided with a vehicle being driven by Plaintiff Joshua Watson Bissette (“Bissette”). Bissette sustained serious personal injuries. On 21 November 2007, General Insurance Services recorded a loss notice regarding the accident for the claim filed by Bissette. At that time, the vehicle was listed as an “insured vehicle” on the Policy, and Connected was listed as the vehicle's owner.
Bissette brought a negligence action against Cothran to recover for injuries he sustained in the accident. On 27 December 2007, Auto–Owners assigned attorney Ronald G. Baker (“Baker”) to represent Cothran in that action. 2 Baker spoke with Cothran on the telephone on 29 January 2008. During that call, Baker informed Cothran of the lawsuit against him and stressed the importance of his cooperation, but did not discuss any specific details of the case with Cothran. Although Baker attempted to contact Cothran on numerous occasions thereafter, he was never able to speak with Cothran again, and Cothran did not appear at trial.
Due to his continued inability to contact Cothran, Baker filed a Motion to Intervene on behalf of Auto–Owners on 25 May 2008. The motion was granted on 25 August 2008. Baker thus defended Bissette's negligence suit in the name of Auto–Owners. Bissette prevailed in the negligence action on 27 October 2008, and was awarded $375,000 in compensatory damages and $80,000 in punitive damages.
Bissette initiated this declaratory judgment action against Auto–Owners on 28 October 2008 after Auto–Owners failed to pay the judgment, failed to acknowledge insurance coverage, and raised issues questioning the existence of coverage for the damages awarded Bissette. On 27 August 2009, Bissette filed a Motion for Summary Judgment. Following a hearing, Judge Fitch, Jr. granted Bissette's motion. From the order granting summary judgment, Auto–Owners appeals.
A. Duty to Defend, Indemnify, or Cover
Auto–Owners first contends that the trial court erred in granting summary judgment in favor of Bissette because there were genuine issues of material fact as to whether Auto–Owners had a duty under the Policy to defend, indemnify, or cover Cothran for the claims or judgments arising from Bissette's lawsuit. For the reasons stated herein, we conclude that the trial court properly granted summary judgment in favor of Bissette on this issue.
1. Standard of Review
Summary judgment is appropriate “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.” N.C. Gen.Stat. § 1A–1, Rule 56(c) (2009). Furthermore, when considering a summary judgment motion, “all inferences of fact ... must be drawn against the movant and in favor of the party opposing the motion.” Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d 379, 381 (1975) (citation and quotation marks omitted). We review a trial court's order granting or denying summary judgment de novo. Builders Mut. Ins. Co. v. N. Main Constr., Ltd., 361 N.C. 85, 88, 637 S.E.2d 528, 530 (2006). “Under a de novo review, the court considers the matter anew and freely substitutes its own judgment” for that of the lower tribunal. In re Greens of Pine Glen Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003).
2. Insurance Policy Coverage for the Vehicle
Where the language of an insurance policy is clear and unambiguous, the contract must be enforced “as the parties have made it.” Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970). Thus, a court is authorized to construe an insurance policy only when ambiguity exists in a policy provision. Id. In order for an ambiguity to exist, the language of an insurance policy provision must be “fairly and reasonably susceptible to either of the constructions for which the parties contend.” Id. Our Supreme Court recently restated its longstanding view of insurance policy construction in Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1, 692 S.E.2d 605 (2010), when it stated that “[t]his Court resolves any ambiguity in the words of an insurance policy against the insurance company.” Id. at 9, 692 S.E.2d at 612. Further, “this Court ‘construe[s] liberally’ insurance policy provisions that extend coverage ‘so as to provide coverage[ ] whenever possible by reasonable construction[.]’ ” Id. at 9–10, 692 S.E.2d at 612 (quoting State Capital Ins. Co. v. Nationwide Mut. Ins. Co., 318 N.C. 534, 538, 350 S.E.2d 66, 68 (1986)).
Auto–Owners specifically argues that at the time of the accident, the vehicle was not owned by Connected, and because Connected's policy with Auto–Owners provides liability coverage only for vehicles owned by Connected, no coverage is afforded to Cothran for the accident. We disagree.
The relevant portions of the Policy are as follows:
ITEM ONE
INSURED CONNECTED FIBER INC CRAIG CLEVELAND
....
POLICY TERM
12:01 a.m. 11–25–2006 to 12:01 a.m. 11–25–2007
....
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY.
This policy provides only those coverages where a charge is shown in the premium column below. Each of these coverages will apply only to those “autos” shown as covered “autos[.]” “AUTOS” are shown as covered “autos” for a particular coverage by the entry of one or more symbols from the COVERED AUTO section of the Business Auto Coverage Form next to the name of the coverage.
LIMIT OF LIABILITY3 .... $1Million ea acc[ident]
....
ITEM THREE—Schedule of Covered Autos You Own, Additional Coverages and Endorsements....
DESCRIPTION OF ITEM INSURED....
_________________________
4. 1997 FORD F–150....
LIMITS.... $1Million each acc[ident]
....
BUSINESS AUTO COVERAGE FORM
....
SECTION I—COVERED AUTOS
....
A. DESCRIPTION OF COVERED AUTO DESIGNATION SYMBOLS
....
2 = OWNED “AUTOS” ONLY. Only those “autos” you own....
....
7 = SPECIFICALLY DESCRIBED “AUTOS.” Only those “autos” described in ITEM THREE of the Declarations for which a premium charge is shown....
Under ITEM ONE of the Policy, coverage applied until the end of the Policy term at 12:01 a.m. on 25 November 2007. Auto–Owners acknowledged that on 14 October 2007, Cleveland sent an email to General Insurance Services, Inc. stating that he had sold the vehicle and that he desired to remove the vehicle from the Policy “at renewal.” It is undisputed that the date of renewal was 25 November 2007, nine days after the 16 November 2007 accident. Thus, the vehicle was still covered by the Policy when the accident occurred.
Under “ITEM TWO—SCHEDULE OF COVERED AUTOS AND COVERAGES[,]” coverage applies to those autos shown as “covered ‘autos[.]’ ” Autos are designated as “covered” by the entry of one or more symbols from the “COVERED AUTOS” section of the Business Auto Coverage Form. Coverage under Connected's Policy is described as “Combined Liability” coverage, and this “Combined Liability” coverage covers those autos that meet the coverage requirements of Symbol “7[.]”
The BUSINESS AUTO COVERAGE FORM, which defines symbol meanings, defines Symbol “7...
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