Nationwide Mut. Ins. Co. v. Roberts, 379

• Citation: 261 N.C. 285,134 S.E.2d 654
• Decision Date: 26 February 1964
• Docket Number: No. 379,379
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY v. Mac Ray ROBERTS and Johnny Scippio.
• Court: United States State Supreme Court of North Carolina

Page 654

134 S.E.2d 654

261 N.C. 285

NATIONWIDE MUTUAL INSURANCE COMPANY v. Mac Ray ROBERTS and Johnny Scippio.

No. 379

Supreme Court of North Carolina.

Feb. 26, 1964

Hudson, Ferrell, Petree, Stockton, Stockton & Robinson, by W. F. Maready, Winston-Salem, for plaintiff appellant.

White & Crumpler, by Harrell Powell, Jr., Leslie G. Frye, and Fred G. Crumpler, Jr., Winston-Salem, for defendant appellees.

SHARP, Justice.

An attempt was made to make the insured Roberts a party defendant by service upon the Commissioner of Motor Vehicles under G.S. §§ 1-105 and 1-105.1. The attempt was ineffectual. This action is one for a declaratory judgment to construe a contract of insurance. It does not arise out of an automobile collision. Lindsay v. Short, 210 N.C. 287, 186 S.E. 239.

The Superior Court has jurisdiction to render a declaratory judgment only when the pleadings and evidence disclose the existence of a genuine controversy between the parties to the action, arising out of conflicting contentions as to their respective legal rights and liabilities under a deed, will, contract, statute, ordinance, or franchise. G.S. §§ 1-253 to 1-267; First-Citizens Bank & Trust Co. v. Barnes, 257 N.C. 274, 125 S.E.2d 437; City of Greensboro v. Wall, 247 N.C. 516, 101 S.E.2d 413; Lide v. Mears, 231 N.C. 111, 56 S.E.2d 404. When jurisdiction exists, a contract may be construed either before or after there has been a breach of it. G.S. § 1-254. The purpose of the Declaratory Judgments Act is, 'to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations * * *. ' Walker v. Phelps, 202 N.C. 344, 349, 162 S.E. 727, 729; Little v. Wachovia Bank & Trust Co., 252 N.C. 229, 113 S.E.2d 689. It is to be liberally construed and administered.

Generally, questions involving the liability of an insurance company under its policy are a proper subject for a declaratory judgment. Iowa Mut. Insurance Co. v. Fred M. Simmons, Inc., 258 N.C. 69, 128 S.E.2d 19; Annot., 142 A.L.R. 8, 67. In this case there exists a genuine controversy between the plaintiff Insurance Company and the defendant Scippio as to whether plaintiff is liable under its insurance contract for injuries intentionally inflicted by its insured. Until this controversy is resolved there will be a conflict of interest between plaintiff and its insured as to the case of Scippio v. Roberts. If the liability insurer is not liable for injuries intentionally inflicted by its insured, it would be in plaintiff's interest in that action to prove a wilful tort which would establish absolute liability on Roberts and exonerate the plaintiff. If, on the other hand, plaintiff is liable within the limits of its policy for Roberts' assault upon Scippio, the interests of the insurer and the insured are the same. The instant case, therefore, presents a problem such as the Declaratory Judgment Act was designed to solve.

This appeal, however, is from an order of the Superior Court sustaining a demurrer to the complaint. When a complaint alleges a bona fide controversy justiciable under the Declaratory Judgments Act, and it does not appear from the complaint that necessary parties are absent from the suit, a demurrer to the complaint should be overruled. The parties are entitled to a declaration of their rights and liabilities and the action should be disposed of only by a judgment declaring them.

'The test of the sufficiency of a complaint in a declaratory judgment proceeding is not whether the complaint shows that the plaintiff is entitled to the declaration of rights in accordance with his theory, but whether he is entitled to a declaration of rights at all, so that even if the plaintiff is on the wrong side of the controversy, if he states the existence of a controversy which should be settled, he states a cause of suit for a declaratory judgment. And where a complaint in a proceeding for a declaratory judgment stated a justiciable controversy, a demurrer should have been overruled, and after the filing of an answer a decree containing a declaration of right should have been entered.'

1 Anderson, Declaratory Judgments, (2d ed.) § 318; Cabell v. City of Cottage Grove, 170 Or.256, 130 P.2d 1013, 144 A.L.R. 286.

In the absence of a stipulation, a declaratory judgment may be entered only after answer and on such evidence as the parties may introduce upon the trial or hearing. For the same reason, a judgment of nonsuit may not be entered. Board of Managers, etc. v. City of Wilmington, 237 N.C. 179, 194, 74 S.E.2d 749. This rule is analogous to that which prohibits a nonsuit in a caveat proceeding. In re Will of Redding, 216 N.C. 497, 5 S.E.2d 544.

In this case it appears that the court and the parties treated the demurrer as a stipulation by the defendant Scippio that the ultimate facts are as alleged in the complaint which presents this single question: Does an assault and battery with an automobile constitute an 'accident' within the meaning of that term as used in an automobile liability insurance policy issued pursuant to the North Carolina Financial Responsibility Act? It further appears that the court, by sustaining the demurrer, in effect undertook to answer this question by declaring the rights of the parties in accordance with the contentions of Scippio and against those of the plaintiff. Therefore, in this instance to the end that another appeal may be eliminated, we have decided to waive the procedural defect and to pass upon the question presented.

When an insured is intentionally injured or killed by another, and the mishap is, as to him, unforeseen and not the result of his own misconduct, the general rule is that the injury or death is accidentally sustained within the meaning of the ordinary accident insurance policy, and the insurer is liable therefor in the absence of a policy provision excluding such liability. Annot., 116 A.L.R. 396. This is likewise the rule under the Workmen's Compensation Act. Withers v. Black, 230 N.C. 428, 53 S.E.2d 668.

A number of cases have considered the question whether an assault is an 'accident' within the coverage of automobile liability insurance policies. The answers given have depended upon whether the court looked at the occurrence from the viewpoint of the aggressor or from that of the injured party. Jernigan v. Allstate Insurance Co., 5 Cir., 269 F.2d 353. See annotations in 111 A.L.R. 1043; 173 A.L.R. 503; 33 A.L.R.2d 1027. From the standpoint of the aggressor, an injury intentionally inflicted upon another is certainly not an accident. However, from the point of view of the victim of an unexpected and unprovoked assault with an automobile, his damages are just as accidental as if he had been negligently struck while crossing the street.

On the ground that public policy will not permit one to profit from his own wrong, some courts exclude all intentional injuries from the policy coverage while some make a distinction between cases where the named insured himself committed the assault and those where it was committed by an agent or employee without his knowledge. Nevertheless, 'it is apparently the more widely accepted view that an assault constitutes an 'accident,' and that injuries therefrom are 'accidentally sustained,' within the coverage of liability insurance policies. However, there is substantial authority to the contrary.' 33 A.L.R.2d 1027, 1030; 29A Am.Jur., Insurance § 1342

In North Carolina today all insurance policies covering loss from liability arising out of the ownership, maintenance, or use of a motor vehicle are, to the extent required by G.S. § 20-279.21, mandatory. All which insure in excess of the compulsory coverage are voluntary policies to the extent of the excess. Swain v. Nationwide Mut. Insurance Co., 253 N.C. 120, 116 S.E.2d 482. The policy under consideration, being an assigned risk, is entirely compulsory, both as to the insurer and the insured.

With respect to voluntary insurance, North Carolina aligned itself with the minority in Jackson v. Maryland Casualty Co., 212 N.C. 546, 193 S.E. 703. There, P, driving the automobile of S, defendant's insured, purposely ran over the plaintiff. After execution on plaintiff's judgment against P was returned unsatisfied, plaintiff sued defendant on the judgment. Defendant's motion for nonsuit was sustained. This Court affirmed, saying:

'The policy of insurance sued on did not cover the liability of the named insured, or that of any other person embraced within its terms, for a willful or intentional injury. The policy provided indemnity 'against loss from liability imposed by law upon the assured for damages on account of bodily injuries accidentally suffered by any person, caused by the ownership or operation of the automobile described.''

The policy in the instant case contains a provision that an assault will be considered an accident 'unless committed by or at the direction of the insured. ' Either this provision or the holding in Jackson v. Maryland Casualty Co., supra, would clearly eliminate plaintiff's liability in the present case if the policy were an entirely voluntary one. It is, however, an assigned risk policy providing no coverage in excess of...