North Carolina Farm Bureau Mut. Ins. Co. v. Stox

• Decision Date: 27 January 1992
• Docket Number: No. 124A91,124A91
• Citation: 330 N.C. 697,412 S.E.2d 318
• Parties: NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY v. Louise Hooks STOX and Gordon Owens.
• Court: North Carolina Supreme Court

Page 318

412 S.E.2d 318

330 N.C. 697

NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY v. Louise Hooks STOX and Gordon Owens.

No. 124A91.

Supreme Court of North Carolina.

Jan. 27, 1992.

Appeal by the defendant Stox pursuant to N.C.G.S. § 7A-30(2) from a decision by a divided panel of the Court of Appeals, 101 N.C.App. 671, 401 S.E.2d 82 (1991), reversing the judgment and order entered by Watts, J., on 9 April 1990 in Superior Court, Pitt County. The plaintiff's petition for discretionary review of additional issues was allowed by the Supreme Court. Heard in the Supreme Court on 12 November 1991.

Speight, Watson and Brewer by James M. Stanley, Jr., Greenville, for plaintiff-appellee.

Ward and Smith, P.A. by A. Charles Ellis, Greenville, for defendant-appellant Stox.

MITCHELL, Justice.

The plaintiff, North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau), brought this declaratory judgment action seeking a determination as to the proper construction of a homeowners insurance policy. The primary issue to be resolved in this appeal is whether liability for personal injuries suffered by the defendant Louise Hooks Stox, which occurred when she fell as the result of a push by the defendant Gordon Owens, is covered by a policy of homeowners liability insurance issued to Owens by Farm Bureau. We conclude that under the language of the policy in question, coverage is provided. Accordingly, the decision of the Court of Appeals, which held to the contrary, is reversed.

All parties to the present case waived trial by jury. Evidence was introduced before the trial court tending to show, inter alia, that on 20 May 1989, the defendant Stox, age seventy, received a severely fractured right arm as a result of a fall which occurred while she was working at a Roscoe-Griffin shoe store in Greenville. While another employee, the defendant Owens, age sixty-eight, was assisting a customer, Stox began speaking with the customer's mother. Owens was sitting on a stool in front of the customer, a few feet away from Stox. Owens got up, stepped toward Stox, placed his hands on her left shoulder and pushed her, while saying "get away from here." This unexpected push caused Stox to lose her balance and fall, severely fracturing her right arm.

Stox was wearing shoes with heels at the time of the fall. Stox testified that had she been expecting the push to her shoulder, she could have braced herself for it and not fallen. No evidence tended to show that Stox experienced any pain or injury in the area where Owens put his hands on her shoulder. Owens testified at deposition that he did not intend to knock Stox to the floor or cause her any injury. Prior to 20 May 1989, Owens had never pushed or laid a hand upon Stox or any other employee of the store.

On 20 May 1989, Owens was insured under a homeowners insurance policy issued by the plaintiff Farm Bureau which provided him liability coverage. The relevant portions of that policy provide:

COVERAGE E--Personal Liability

If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will:

1. pay up to our limit of liability for the damages for which the insured is legally liable; and

2. provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent....

....

DEFINITIONS

....

5. "occurrence" means an accident, including exposure to conditions, which results, during the policy period, in:

a. bodily injury; or

b. property damage.

....

SECTION II--EXCLUSIONS

Coverage E--Personal Liability and Coverage F--Medical Payments to Others do not apply to bodily injury or property damage:

a. which is expected or intended by the insured;

b. arising out of business pursuits of an insured or the rental or holding for rental of any part of any premises by an insured.

This exclusion does not apply to:

(1) activities which are usual to non-business pursuits; ....

Business is defined in the policy as "trade, profession, or occupation."

At the conclusion of the evidence, the trial court entered its Judgment and Order in which it made the following findings of fact:

2. On May 20, 1989, Gordon Owens intentionally pushed Louise Stox, causing her to fall and receive injury.

3. The pushing of Louise Stox by Gordon Owens involved foreseeable consequences of significant bodily injury.

4. At the time Gordon Owens pushed Louise Stox, he had no specific intent to cause bodily injury to Louise Stox, and the injuries sustained by Louise Stox were the unintended result of an intentional act by Gordon Owens.

5. Although the pushing incident occurred in an employment setting, the pushing incident did not occur as a result of Gordon Owens engaging in a business pursuit.

6. The "business pursuit" exclusion in Plaintiff's insurance policy and the exception to the exclusion are ambiguous.

Based on its findings, the trial court entered the following conclusions of law:

1. The pushing incident constituted an "occurrence" under the terms of the homeowners insurance policy issued by Plaintiff to Gordon Owens.

2. The "expected or intended injury" exclusion contained in the policy is inapplicable.

3. The "business pursuit" exclusion contained in the policy is inapplicable.

4. In the alternative, if the pushing incident occurred as a result of Gordon Owens engaging in a business pursuit, the act of pushing Ms. Stox constituted an activity which was usual to a non-business pursuit under the exception to the "business pursuit" exclusion.

5. The policy of insurance issued by Plaintiff to Gordon Owens affords liability coverage to Gordon Owens for damages for which he becomes legally responsible because of the pushing incident involving Louise Stox, and which forms the basis of Pitt County Case....

Based on its findings and conclusions, the trial court ordered the plaintiff to pay any amount for which Owens became legally liable to Stox, up to the limit of liability of the homeowners insurance policy. The plaintiff appealed. A divided panel of the Court of Appeals concluded that the policy did not cover Owens' liability for Stox's injuries, because those injuries were excluded from coverage by the exclusion for "expected or intended" injuries. For that reason the Court of Appeals reversed the judgment of the trial court.

We conclude that there was competent evidence to support the trial court's findings of fact which, in turn, supported its conclusions of law that Stox's injuries were covered under the Farm Bureau policy. Therefore, we reverse the decision of the Court of Appeals.

At the outset, it is important to note that the rules of construction which govern the interpretation of insurance policy provisions extending coverage to the insured differ from the rules of construction governing policy provisions which exclude coverage. State Capital Ins. Co. v. Nationwide Mut. Ins. Co., 318 N.C. 534, 538, 350 S.E.2d 66, 68 (1986). Those provisions in an insurance policy which extend coverage to the insured must be construed liberally so as to afford coverage whenever possible by reasonable construction. Id. However, the converse is true when interpreting the exclusionary provisions of a policy; exclusionary provisions are not favored and, if ambiguous, will be construed against the insurer and in favor of the insured. Id.; Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348, 172 S.E.2d 518 (1970).

It must also be remembered that on appellate review of a declaratory judgment, a trial court's findings of fact in a trial without a jury will be upheld if supported by any competent evidence. Williams v. Pilot Life Ins. Co., 288 N.C. 338, 218 S.E.2d 368 (1975). This is true even when evidence to the contrary is present. Id. The function of an appellate court in reviewing declaratory judgments in such cases "is, then, to determine whether the record contains competent evidence to support the findings; and whether the findings support the conclusions." Nationwide Mut. Ins. Co. v. Allison, 51 N.C.App. 654, 657, 277 S.E.2d 473, 475, disc. rev. denied, 303 N.C. 315, 281 S.E.2d 652 (1981). If the trial court's findings are supported by competent evidence and, in turn, support its conclusions, the declaratory judgment must be affirmed on appeal.

We first consider whether the policy's exclusion of "bodily injury ... which is expected or intended by the insured" places Owens' liability for injury to Stox in the present case outside the coverage of the policy. The trial court found from competent evidence before it that, although Gordon Owens intentionally pushed Louise Stox, he had no specific intent to cause her injury. Thus, the injuries she sustained were "the unintended result of an intentional act." These findings supported the trial court's conclusion that "the 'expected or intended injury' exclusion contained in the policy is inapplicable."

The Court of Appeals, however, reversed the trial court, concluding that the present case was controlled by Commercial Union Insurance Co. v. Mauldin, 62 N.C.App. 461, 303 S.E.2d 214 (1983). We disagree with the Court of Appeals and conclude that Commercial Union is not controlling. In Commercial Union, one of the defendants, Tommy Joe Wilmoth, drove up beside a car occupied by his wife and Kay Mauldin Pugh. After arguing with his wife for a moment, Wilmoth pulled out a .38 caliber pistol and fired four or five shots into Pugh's car. The shots killed Pugh and injured Wilmoth's wife. Wilmoth pled guilty to the second-degree murder of Pugh, and stipulated that he had intended to shoot and injure his wife but not Pugh. The Court of Appeals affirmed the trial court's holding that Wilmoth's actions in shooting Pugh were excluded from coverage under his homeowners policy by the "expected or intended injury" exclusion.

In the present case, the Court of Appeals put misplaced reliance on Commercial Union and focused...