One Beacon Ins. Co. v. United Corp., COA09-1691.

Decision Date19 October 2010
Docket NumberNo. COA09-1691.,COA09-1691.
Citation700 S.E.2d 121
CourtNorth Carolina Court of Appeals


Appeal by Plaintiffs from judgment entered 15 July 2008 by Judge Robert P. Johnston in Mecklenburg County Superior Court. Heard in the Court of Appeals 13 May 2009.

The Law Office of Donald J. Vicini, P.C., by Donald J. Vicini, Charlotte, for Plaintiff-Appellants.

Dean & Gibson, PLLC, by Jeremy S. Foster and Michael G. Gibson, Charlotte, for Defendant-Appellees.

ERVIN, Judge.

Plaintiffs One Beacon Insurance Company and Wire-Bond appeal from an award of summary judgment entered in favor of Defendant United Mechanical Corporation. After careful consideration of the arguments that Plaintiffs have advanced on appeal in light of the record and the applicable law, we conclude that the trial court's order should be affirmed.

I. Factual Background

Wire-Bond is a North Carolina corporation that procured liability insurance coverage from One Beacon. On 28 January 2005, Wire-Bond hired Industrial Piping, Inc., to fabricate and install an improved duct work venting system in Wire-Bond's facility. On 1 February 2005, Industrial Piping subcontracted with United Mechanical to perform the work which Industrial Piping had agreed to perform for Wire-Bond. The contract between United Mechanical and Industrial Piping, which identified Wire-Bond as the Owner, included an indemnity clause providing, in pertinent part, that United Mechanical “shall protect, fully indemnify, and hold harmless [Industrial Piping] and the Owner ... from any demands, claims, liability, suits, losses, penalties, damages, or actions of any kind arising from or relating to any act or omission of Subcontractor[.]

On 14 February 2005, Hazel Ray Myers, an employee of United Mechanical, was seriously injured while performing work related to the Industrial Piping-United Mechanical subcontract at Wire-Bond's facility. Mr. Myers received workers' compensation from United Mechanical as a result of his injuries. Subsequently, he pursued a personal injury claim against Wire-Bond. After Wire-Bond unsuccessfully demanded that United Mechanical provide it with a defense against Mr. Myers' claim and indemnify it for any amounts paid to Mr. Myers, One Beacon settled Mr. Myers claim against Wire-Bond for $1,480,000.00.

On 11 June 2009, Plaintiffs filed suit against United Mechanical for the purpose of attempting to recover damages for United Mechanical's alleged breach of the indemnity clause in the Industrial Piping-United Mechanical contract. According to the allegations in Plaintiffs' complaint, Wire-Bond was entitled to indemnification for the amounts paid to Mr. Myers because it was a third party beneficiary of the indemnity provision of the Industrial Piping-United Mechanical contract and One Beacon was subrogated to Wire-Bond's rights under the indemnity provision as a result of the fact that it had paid Mr. Myers' claim on behalf of Wire-Bond.

Defendant filed motions seeking summary judgment against One Beacon and Wire-Bond on 27 May 2009 and 25 June 2009, respectively. On 15 July 2009, the trial court entered an order granting summary judgment in favor of Defendant against both Plaintiffs. Plaintiffs noted an appeal to this Court from the trial court's order.

II. Legal Analysis
A. Standard of Review

Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C. Gen.Stat. § 1A-1, Rule 56(c) (2009). “A defendant may show entitlement to summary judgment by: (1) proving that an essential element of the plaintiff's case is nonexistent, or (2) showing through discovery that the plaintiff cannot produce evidence to support an essential element of his or her claim, or (3) showing that the plaintiff cannot surmount an affirmative defense which would bar the claim.’ Carcano v. JBSS, LLC, --- N.C.App. ----, ----, 684 S.E.2d 41, 46 (2009) (quoting James v. Clark, 118 N.C.App. 178, 181, 454 S.E.2d 826, 828, disc. review denied, 340 N.C. 359, 458 S.E.2d 187 (1995)).

“When considering a motion for summary judgment, the trial judge must view the presented evidence in a light most favorable to the nonmoving party.” Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707 (2001) (citation omitted).

“Once the party seeking summary judgment makes the required showing, the burden shifts to the nonmoving party to produce a forecast of evidence demonstrating

specific facts, as opposed to allegations, showing that he can at least establish a prima facie case at trial.” “To hold otherwise ... would be to allow plaintiffs to rest on their pleadings, effectively neutralizing the useful and efficient procedural tool of summary judgment.”

Draughon v. Harnett Cty. Bd. Of Educ., 158 N.C.App. 705, 708, 582 S.E.2d 343 (2003) (quoting Gaunt v. Pittaway, 139 N.C.App. 778, 784-85, 534 S.E.2d 660, 664, disc. review denied, 353 N.C. 262, 546 S.E.2d 401 (2000), cert. denied, 353 N.C. 371, 547 S.E.2d 810 (2001), cert. denied, 534 U.S. 950, 122 S.Ct. 345, 151 L.Ed.2d 261 (2001), and Roumillat v. Simplistic Enterprises, Inc., 331 N.C. 57, 64, 414 S.E.2d 339, 342 (1992), aff'd, 358 N.C. 131, 591 S.E.2d 521 (2004)).

“An appeal from an order granting summary judgment solely raises issues of whether on the face of the record there is any genuine issue of material fact, and whether the prevailing party is entitled to judgment as a matter of law.” Carcano, --- N.C.App. at ----, 684 S.E.2d at 46 (citing Smith-Price v. Charter Behavioral Health Sys., 164 N.C.App. 349, 352, 595 S.E.2d 778, 781 (2004)). We review a trial court's order granting or denying summary judgment de novo. ‘Under a de novo review, the court considers the matter anew and freely substitutes its own judgment’ for that of the lower tribunal.” Craig v. New Hanover Cty. Bd. of Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (quoting In re Appeal of The Greens of Pine Glen Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)).

As a result, summary judgment may be entered against a party if the nonmovant fails to allege or forecast evidence supporting all the elements of his claim. See e.g., Edwards v. GE Lighting Sys., Inc., 193 N.C.App. 578, 582, 668 S.E.2d 114, 116 (2008) (reversing denial of summary judgment motion “because the complaint failed to state a claim for relief as provided for in Woodson); Fabrikant v. Currituck Cty., 174 N.C.App. 30, 38, 621 S.E.2d 19, 25-26 (2005) (stating that summary judgment was properly entered against a plaintiff whose complaint failed to allege a required element of waiver of sovereign immunity); Northwestern Bank v. Roseman, 81 N.C.App. 228, 231, 344 S.E.2d 120, 123 (1986), aff'd, 319 N.C. 394, 354 S.E.2d 238 (1987) (stating that, to avoid summary judgment, defendant “was required to allege facts that, if believed, would prove each element of [the defense asserted by defendant]). Thus, in order to avoid the entry of summary judgment, Plaintiffs were required to allege sufficient facts and forecast sufficient evidence to make out a prima facie case that Defendant's failure to indemnify them for their settlement with Mr. Myers constituted a breach of the indemnity provision of the Industrial Pipeline-United Mechanical contract.

B. Legal Analysis
1. Existence of Disputed Factual Issues

The first issue we must consider is whether the trial court correctly concluded that there were no issues of material fact arising from the factual allegations made and evidentiary forecasts submitted by the parties. As we understand the record, no party contends that any material issue of fact is in dispute in this case. On the contrary, Plaintiffs' counsel expressly represented to the trial court that the facts of this case obviously are not an issue in this Motion for Summary Judgment. This is a breach of contract case.” For that reason, both before the trial court and on appeal, all parties have relied on their preferred interpretations of various documents instead of advancing competing factual contentions. Thus, the trial court correctly concluded that this case “was appropriate for entry of a summary judgment order, because it presents issues of law rather than fact:

‘Each party based its claim upon the same sequence of events[, and] ... [n]either party has challenged the accuracy or authenticity of the documents establishing the occurrence of these events. Although the parties disagree on the legal significance of the established facts, the facts themselves are not in dispute. Consequently, we conclude that there is no genuine issue as to any material fact surrounding the trial court's summary judgment order.’

Musi v. Town of Shallotte, --- N.C.App. ----, ----, 684 S.E.2d 892, 894 (2009) (quoting

Adams v. Jefferson-Pilot Life Ins. Co., 148 N.C.App. 356, 359, 558 S.E.2d 504, 507, disc. review denied, 356 N.C. 159, 568 S.E.2d 186 (2002)).

2. Breach of Contract

We must next determine whether Defendant was entitled to the entry of judgment on Plaintiffs' breach of contract claim as a matter of law. ‘The elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of the terms of that contract.’ Ahmadi v. Triangle Rent A Car, Inc., --- N.C.App. ----, ----, 691 S.E.2d 101, 103 (2010) (quoting Poor v. Hill, 138 N.C.App. 19, 26, 530 S.E.2d 838, 843 (2000)). In order to determine whether Plaintiffs have alleged and forecast sufficient evidence to support their breach of contract claim, we must analyze the contents of the indemnity clause contained in the Industrial Piping-United Mechanical contract, a process which, in turn, requires consideration of (1) the general law of indemnity, (2) the language of the indemnity clause under consideration in ...

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