Jaftex Corp. v. Aetna Cas. and Sur. Co.
| Decision Date | 31 March 1980 |
| Docket Number | No. 79-1265,79-1265 |
| Parties | JAFTEX CORPORATION and Insurance Company of North America, Appellants, v. AETNA CASUALTY AND SURETY COMPANY and Randolph Mills, Inc., Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
John H. Hasty, Charlotte, N. C. (R. C. Carmichael, Jr., Wade & Carmichael, Charlotte, N. C., on brief) for appellants.
Robert L. Burchette, Charlotte, N. C. (Marvin K. Gray, Golding, Crews, Meekins, Gordon & Gray, Harry C. Hewson, Jones, Hewson & Woolard, Charlotte, N. C., on brief) for appellees.
Before BRYAN, Senior Circuit Judge, and RUSSELL and PHILLIPS, Circuit Judges.
In this diversity action plaintiffs, Jaftex Corporation and the Insurance Company of North America, sought a declaratory judgment that they were entitled to coverage under a policy of liability insurance issued by defendant Aetna Casualty and Surety Company to defendant Randolph Mills, Inc., a corporation located in Franklinville, North Carolina. The district court granted defendants' motion for summary judgment. We conclude that the entry of summary judgment was correct and affirm.
Jaftex brought this action after it was named as defendant in a suit filed in the District of Massachusetts. The Massachusetts suit alleged injuries to a minor plaintiff who was burned when her pajamas caught fire. Jaftex sold the pajama fabric to certain other defendants in the Massachusetts action. Jaftex purchased the fabric from Randolph Mills. Aetna issued an insurance policy to Randolph Mills that included a "vendors endorsement." The endorsement insured vendors of Randolph Mills' products. The endorsement did not by its terms limit its coverage to particular vendors, but it included a statement of premium which was to be a percentage of sales by Randolph Mills to Montgomery Ward only.
In ruling on the motion for summary judgment the district court considered affidavits filed by both parties. Jaftex argues that the contract unambiguously extended coverage to all vendors, and, therefore, extrinsic evidence could not be considered. Although a court may not look outside the contract if it contains an unambiguous expression of intent, Corbin v. Langdon, 23 N.C.App. 21, 208 S.E.2d 251 (1974), external matters may be considered when the terms of the written instrument are ambiguous; extrinsic evidence may be used to make the meaning of the instrument plain but may not be used to contradict or vary the written...
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