Fireman's Fund Ins. Co. v. North Carolina Farm Bureau Mut. Ins. Co., No. 534

Docket NºNo. 534
Citation152 S.E.2d 513, 269 N.C. 358
Case DateFebruary 03, 1967
CourtUnited States State Supreme Court of North Carolina

Page 513

152 S.E.2d 513
269 N.C. 358
FIREMAN'S FUND INSURANCE COMPANY and the Insurance Company
of the State of Pennsylvania,
v.
NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY.
No. 534.
Supreme Court of North Carolina.
Feb. 3, 1967.

Dupree, Weaver, Horton, Cockman & Alvis, Raleigh, for plaintiff appellants.

Broughton & Broughton, Raleigh, for defendant appellee.

LAKE, Justice.

Each of the plaintiffs, by its policy, contracted with Jerry Denning to do two different things. First, it contracted to pay on his behalf all sums for the payment of which he became legally liable, because of bodily injury sustained by any person arising out of the use of an automobile not owned by him, to the extent that such liability exceeded other valid and collectible insurance and did not exceed the limit fixed by its policy. Second, it contracted to defend, at its expense, on his behalf, any suit, even though groundless, [269 N.C. 361] brought against him, alleging such bodily injury and seeking damages payable under the terms of the policy.

It will be observed that the first of these undertakings requires the plaintiff company to step into the shoes of Jerry Denning and pay a sum for the payment of which he became liable. The second undertaking is not of that nature. In the performance of it the company does not step into the shoes of the policyholder. Its liability under that undertaking is not contingent upon the existence of a liability on his part, and its performance of that undertaking does not impose any liability upon him. That undertaking is absolute.

The attorneys employed to defend such suit were selected by the company and looked to it for their compensation. At no time did Jerry Denning have any liability to the attorneys. He made no payment to them. He, therefore, never had a right of recovery, against any person or organization, because of fees paid to these attorneys. Consequently, the subrogation provisions of the policies issued to him by the plaintiffs have no application, since they provide only that the issuing company will be subrogated 'to all the insured's rights of recovery' for any payment made by the company.

The plaintiffs are, therefore, not entitled to recover of the defendant in this action unless, as a matter of law, apart from these subrogation clauses, there is a right in the plaintiffs to such recovery.

It is elementary that provisions of an insurance policy, if ambiguous, are to be construed in favor of the insured. Anderson v. Insurance Co., 266 N.C. 309, 145 S.E.2d 845; Walsh v. Insurance Co., 265 N.C. 634, 144 S.E.2d 817; Mills v. State Life & Health Insurance Co., 261 N.C. 546, 135 S.E.2d 586.

The policy issued by the defendant provided, 'with respect to such insurance as is afforded by this policy for bodily injury liability,' the defendant would defend

Page 517

any suit against the insured (i.e., Jerry Denning), alleging such injury and seeking damages on account thereof, the expenses of defending such suit to be 'in addition to the applicable limit of liability of this policy.' When this provision in the defendant's policy and the above mentioned 'excess insurance' provisions of the plaintiffs' policies are construed in favor of Jerry Denning, it is apparent that the 'excess' clauses of the plaintiffs' policies relate to the amount to be paid in discharging the liability, if any, of the insured to a third party claimant. Irrespective of the existence of other insurance...

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26 practice notes
  • Signal Companies, Inc. v. Harbor Ins. Co.
    • United States
    • United States State Supreme Court (California)
    • July 3, 1980
    ...authorities and views contrary to the Occidental Fire & Casualty, supra, premises; and see Fireman's Fund Ins. Co. v. North Carolina Ins., 269 N.C. 358, 152 S.E.2d 513, 518; 7C Appleman, Insurance Law and Practice (1980 supp.) § 4691; American F. & C. Co. v. Pennsylvania T. & F. M. Cas. Ins......
  • Craige v. Gov't Emps. Ins. Co., 1:19-cv-408
    • United States
    • United States District Courts. 4th Circuit. Middle District of North Carolina
    • November 25, 2020
    ...is absolute. Indiana Lumbermen's Mut. Ins. Co. v. Champion, 80 N.C.App. 370, 343 S.E.2d 15 (1986) (citing Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E.2d 513 (1967) ). An insurer has a duty to defend against even groundless, false, or fraudulent accusations. Waste Mgmt. of Carolina......
  • State Capital Ins. Co. v. Nationwide Mut. Ins. Co., No. 89PA86
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • November 18, 1986
    ...280 S.E.2d 907 (1981); Grant v. Emmco Insurance [318 N.C. 547] Co., 295 N.C. 39, 243 S.E.2d 894 (1978); Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E.2d 513 (1967). Provisions which exclude liability of insurance companies are not favored. Therefore all ambiguous provisions are stri......
  • National Mortg. Corp. v. American Title Ins. Co., No. 7815SC587
    • United States
    • North Carolina Court of Appeal of North Carolina (US)
    • June 19, 1979
    ...Co., 295 N.C. 39, 243 S.E.2d 894 (1978); Pleasant v. Insurance Co., 280 N.C. 100, 185 S.E.2d 164 (1971); Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E.2d 513 (1967). In applying a similar rule of construction, the courts in other jurisdictions have consistently concluded that policy......
  • Request a trial to view additional results
26 cases
  • Signal Companies, Inc. v. Harbor Ins. Co.
    • United States
    • United States State Supreme Court (California)
    • July 3, 1980
    ...authorities and views contrary to the Occidental Fire & Casualty, supra, premises; and see Fireman's Fund Ins. Co. v. North Carolina Ins., 269 N.C. 358, 152 S.E.2d 513, 518; 7C Appleman, Insurance Law and Practice (1980 supp.) § 4691; American F. & C. Co. v. Pennsylvania T. & F. M. Cas. Ins......
  • Craige v. Gov't Emps. Ins. Co., 1:19-cv-408
    • United States
    • United States District Courts. 4th Circuit. Middle District of North Carolina
    • November 25, 2020
    ...is absolute. Indiana Lumbermen's Mut. Ins. Co. v. Champion, 80 N.C.App. 370, 343 S.E.2d 15 (1986) (citing Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E.2d 513 (1967) ). An insurer has a duty to defend against even groundless, false, or fraudulent accusations. Waste Mgmt. of Carolina......
  • State Capital Ins. Co. v. Nationwide Mut. Ins. Co., No. 89PA86
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • November 18, 1986
    ...280 S.E.2d 907 (1981); Grant v. Emmco Insurance [318 N.C. 547] Co., 295 N.C. 39, 243 S.E.2d 894 (1978); Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E.2d 513 (1967). Provisions which exclude liability of insurance companies are not favored. Therefore all ambiguous provisions are stri......
  • National Mortg. Corp. v. American Title Ins. Co., No. 7815SC587
    • United States
    • North Carolina Court of Appeal of North Carolina (US)
    • June 19, 1979
    ...Co., 295 N.C. 39, 243 S.E.2d 894 (1978); Pleasant v. Insurance Co., 280 N.C. 100, 185 S.E.2d 164 (1971); Insurance Co. v. Insurance Co., 269 N.C. 358, 152 S.E.2d 513 (1967). In applying a similar rule of construction, the courts in other jurisdictions have consistently concluded that policy......
  • Request a trial to view additional results

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