N.C. Farm Bureau Mut. Ins. Co. v. Carpenter
| Decision Date | 18 October 2022 |
| Docket Number | COA21-588 |
| Parties | NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC., Plaintiff, v. Joshua CARPENTER ; All Pro Billiards & Spas, LLC; James Banks ; Kenneth Barrett ; Mary Belue as Personal Representative of the Estate of Delmer Eugene Belue; Shane Biddix; Douglas C. Browder; Jerry Buckner ; Christopher A. Churchill as Executor of Estate of David Churchill; Paul Claus ; James Climo, Jr.; Megan Climo; Jack Clinard; Louis Elders; Kimberly Ferguson; Anna Franks; William Good; Kimberly Grant; Linda Hartley ; Clifton Hoyle Helms, Jr.; Candia Higgins; Roger Higgins; Dawson Hunter ; Edward Ingle ; Marilyn P. Ingle; Robert Laughter; Tina Ledford; Vicki McCarson; Vanessa Metcalf; Shelby Nix; Anthony Glenn Ownbey; William Parker; Stephen Parris; Brandon Payne; Marcia Reitz; Alber Rioux; Michael Rogers ; Elizabeth Roper; Jimmy Rumfelt; Marvin Scott; Delmar Sherman; John Sherman; Rose Shetley; Jamin Skipper; Judy Smathers; Jimmy Thomas; Terri Tolley; Randal Weis; Harold Womick; Linda Woody ; Phyillis Marie Young; North Carolina Department of Agriculture & Consumer Services; Stephen Baldwin; Maxine Crawford; Jeremy Edmonds; John Gavin; Veronica Grier ; Albert Isom ; John Lyda; Timothy McFalls ; Deborah Parham; Michael Petrey; Sharon Smith; Brett Temple; Ronal Monson; Peggy Duncan; Denice Williams; Crystal Holder; Randy Houston; James Clow; Maylon Arrington; Darell Douglas Cable; and Nathan Drew Walker, Defendants. |
| Court | North Carolina Court of Appeals |
Young Moore and Henderson, P.A., by Walter E. Brock, Jr., Raleigh, David W. Early, and William F. Lipscomb, Wilkesboro, for plaintiff-appellant.
Patterson Harkavy LLP, by Christopher A. Brook, Raleigh, Wake County, and Narendra K. Ghosh, Chapel Hill, for defendants-appellees.
Barbour, Searson, Jones & Cash, PLLC, Asheville, by W. Bradford Searson, for Joshua Carpenter and All Pro Billiards & Spa, LLC, defendants-appellees.
¶ 1 Plaintiff appeals from an order entered by the trial court denying its motion for judgment on the pleadings. The trial court concluded Plaintiff has a duty under an insurance policy it issued to defend certain underlying claims and stayed this action pending additional determinations relevant to the scope of any duty of Plaintiffs to indemnify for losses under its insurance policy. On appeal, Plaintiff argues 1) its Fungi or Bacteria Exclusion bars the underlying claims; 2) Defendant Joshua Carpenter ("Defendant Carpenter") and Defendant All Pro Billiards & Spas, LLC's ("Defendant All Pro") hot tubs were intended for display, and thus its Consumption Exception does not apply; and 3) it does not have a duty to indemnify Defendant Carpenter or Defendant All Pro. After a careful review of the record and applicable law, we affirm the order of the trial court.
¶ 2 Plaintiff is an insurance company organized under the laws of North Carolina and whose principal place of business is also North Carolina. Plaintiff issued a Commercial General Liability Policy (the "Policy") to Defendant Carpenter for the period of May 16, 2019, to May 16, 2020. This Policy had a per occurrence limit of $1,000,000.00 for Defendant Carpenter's business, All Pro, of which he is a co-owner. North Carolina Mountain State Fair is also named as an additional insured.
¶ 3 From September 6 to 15, 2019, the Western North Carolina Mountain State Fair was held at the North Carolina Agricultural Center. Thereat, various attractions and exhibits were displayed at the Davis Center. Defendant All Pro displayed hot tubs actively circulating water in the Davis Event Center.
¶ 4 Shortly after the fair concluded, the Buncombe County Department of Health and Human Services and Henderson County Health Department notified the North Carolina Division of Public Health ("NCDPH") that there had been an increase in cases of Legionnaires’ disease
on September 23, 2019.1 All reported cases of Legionnaires’ disease were connected to the North Carolina Mountain State Fair. The same day, the NCDPH, along with other health agencies, initiated an epidemiological and microbiological investigation to determine the source of the Legionnaires’ disease. The NCDPH created a comprehensive list of aerosolized water sources at the fair which may have caused the outbreak of Legionnaires’ disease. The NCDPH identified Defendants All Pro and Carpenter's hot tubs as possible sources of aerosolized water.
Ultimately, the NCDPH concluded "that this outbreak most likely resulted from exposure to Legionella bacteria in aerosolized water from hot tubs on display in the Davis Event Center at the fair." The NCDPH was unable to obtain complete maintenance records for the hot tubs; as such, it was "impossible to determine if the chemicals in the hot tubs were adequate to prevent bacterial growth for the duration of the fair." As a result of the outbreak of Legionnaires’ disease
at the fair, one hundred and thirty-five cases of the disease were reported, ninety-six individuals were hospitalized, and four individuals died.
¶ 6 Thereafter, eleven separate lawsuits were filed against, inter alai , Defendants All Pro and Carpenter between September 15, 2019 and February 16, 2021. Additionally, one suit was filed against only Defendant All Pro.2 Most of the claimants in these suits visited the Davis Center and fell ill because of, or relating to, Legionnaires’ disease
and suffered damages arising therefrom.3 These suits alleged Defendants Carpenter or All Pro were negligent in maintaining their hot tub displays, and such negligence caused the outbreak of Legionnaires’ disease at the fair.
However, the Policy's Consumption Exception provided the Fungi or Bacteria Exclusion did "not apply to any ‘fungi’ or bacteria that are, are on, or are contained in, a good or product intended for bodily consumption." Based on the Fungi or Bacteria Exclusion, Plaintiff alleged in its complaint it had no "duty to defend or indemnify Carpenter [or] All Pro" from their present suits.
¶ 8 On November 16, 2020, after Plaintiff filed its original complaint, various Defendants filed a motion to change venue to Buncombe County, North Carolina. Additional claimants filed suits against Defendants All Pro and Carpenter, and as a result, Plaintiff filed an amended complaint on December 1, 2020, to include these additional claimants. Defendants filed a motion to stay the proceeding on December 31, 2020. On January 11, 2021, Defendants All Pro and Carpenter filed another motion to change venue with the trial court, again requesting the venue be moved to Buncombe County "[f]or the convenience of witnesses and to promote the ends of justice." Shortly thereafter, on March 22, 2021, Plaintiff moved for judgment on the pleadings. On May 17, 2021, Plaintiff withdrew its motion for judgment on the pleadings solely as it related to Defendant North Carolina Agriculture & Consumer Services.
¶ 9 All of the parties’ motions came on for hearing before the trial court on May 25, 2021. By order entered June 7, 2021, the trial court denied Defendants’ motion to change venue but granted Defendants’ motion to stay the proceedings. The trial court denied Plaintiff's motion for judgment on the pleadings, finding "the exception to the bacteria exclusion in the insurance policy in question is ambiguous as applied to the facts alleged in the underlying cases" and thus, "there is at least a mere possibility that the policy covers this situation and the facts alleged, giving the Plaintiff a duty to defend in the underlying cases." Plaintiff filed a timely notice of appeal of the trial court's order.
¶ 10 At the outset, we note that "an appeal of an order denying ... [a] motion for judgment on the pleadings is an interlocutory appeal." Paquette v. County of Durham , 155 N.C. App. 415, 418, 573 S.E.2d 715, 717 (2002) ; see Webb v. Nicholson , 178 N.C. App. 362, 363, 634 S.E.2d 545, 546 (2006). Since "there is no right of appeal from an interlocutory order," we must first determine whether Plaintiff's appeal is properly before us. Larsen v. Black Diamond French Truffles, Inc. , 241 N.C. App. 74, 76, 772 S.E.2d 93, 95 (2015) ; see also Waters v. Qualified Personnel, Inc. , 294 N.C. 200, 207, 240 S.E.2d 338, 343 (1978) (...
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