Reliance Ins. Co. v. Lexington Ins. Co., 8714SC121

• Decision Date: 03 November 1987
• Docket Number: No. 8714SC121,8714SC121
• Citation: 87 N.C.App. 428,361 S.E.2d 403
• Court: North Carolina Court of Appeals
• Parties: RELIANCE INSURANCE COMPANY v. LEXINGTON INSURANCE COMPANY.

Page 403

361 S.E.2d 403

87 N.C.App. 428

RELIANCE INSURANCE COMPANY v. LEXINGTON INSURANCE COMPANY.

No. 8714SC121.

Court of Appeals of North Carolina.

Nov. 3, 1987.

Faison, Brown, Fletcher & Brough by O. William Faison, Reginald B. Gillespie, Jr. and Thomas N. Cochran, Durham, for plaintiff-appellant.

Womble Carlyle Sandridge & Rice by Hada V. Haulsee and Allan R. Gitter, Winston-Salem, for defendant-appellant.

EAGLES, Judge.

This case involves three insurance policies and two insurance companies and determination of their respective rights and obligations among themselves for previously paid damages. There are three issues raised on appeal: (1) was plaintiff's summary judgment motion properly denied; (2) was the trial court's grant of defendant's directed verdict motion correct; and (3) what is the order of payment among the three remaining insurance policies. The summary judgment issue is moot. As to the directed verdict issue, the trial court correctly granted a directed verdict in favor of defendant on the "borrowed" vehicle issue. The trial court erred as to the order of payment among the policies and, accordingly, we reverse as to that issue.

A

Plaintiff assigns as error the trial court's denial of its summary judgment motion. We note that denial of a summary judgment motion is interlocutory and that the proper method of review before appeal of the case is through a writ of certiorari. Carr v. Carbon Corp., 49 N.C.App. 631, 272 S.E.2d 374 (1980), disc. rev. denied, 302 N.C. 217, 276 S.E.2d 914 (1981). The purpose of summary judgment is to reach an early decision on the merits where there is no genuine issue of fact and the movant is entitled to judgment as a matter of law, McNair v. Boyette, 282 N.C. 230, 192 S.E.2d 457 (1972). Once a decision on the merits is reached through a trial, review of the denial of summary judgment is improper. Harris v. Walden, 314 N.C. 284, 333 S.E.2d 254 (1985). Accordingly, plaintiff's first assignment of error is without merit.

B

Plaintiff's second assignment of error concerns the trial court's granting a directed verdict in favor of the defendant. The defendant's motion for directed verdict presents whether the evidence is sufficient for submission to the jury. Kelly v. Harvester Co., 278 N.C. 153, 179 S.E.2d 396 (1971). Furthermore, a directed verdict may be granted when facts are no longer at issue, Cutts v. Casey, 278 N.C. 390, 180 S.E.2d 297 (1971), and the issue submitted is a question of law. Jones v. Development Co., 16 N.C.App. 80, 191 S.E.2d 435, cert. denied, 282 N.C. 304, 192 S.E.2d 194 (1972). In ruling on defendant's motion, the evidence must be considered in the light most favorable to the plaintiff. Kelly, 278 N.C. at 153, 179 S.E.2d at 396.

The issue here is whether the truck was "borrowed" as that term is used in Reliance # 1. Robert Perera is an additional insured under Reliance # 1 only if the fire truck can be considered to be owned, hired, or borrowed by the City. The County, not the City, owns the fire truck. The parties neither briefed nor argued the "hired" issue and, therefore, it is waived. N.C.R.App.Proc. 10(a). The dispositive issue, then, is whether the City "borrowed" the County's fire truck. When a term, such as "borrowed," is not specifically defined in the contract itself, the meaning of language in an insurance policy is a question of law. The term must be given the meaning most favorable to the insured consistent with its use in ordinary speech. Wachovia Bank & Trust Co. v. Westchester Fire Insurance Co., 276 N.C. 348, 172 S.E.2d 518 (1970).

Webster's Third New International Dictionary defines "borrow" to mean:

1. to receive temporarily from another, implying or expressing the intention either of returning the thing received or of giving its equivalent to the lender: obtain the temporary use of....

This implies that when something is borrowed the borrower assumes control of the object. F & M Schaefer Brewing v. Forbes Food Division, 151 N.J.Super. 353, 376 A.2d 1282 (1977).

The basic facts here are not in dispute. The County owned this particular fire truck, which was known as Engine 13. The oral agreement between the City and County provided that the City would man and maintain the truck. In exchange, the County agreed to reimburse the City for the expenses incurred in this arrangement. The City trained and clothed the fire fighting crews. The County reimbursed the City for the training and uniforms of those crews manning Engine 13. The County never knew which of the City's personnel were manning its fire truck. The City decided all personnel questions of this type. Additionally, the City dispatcher issued all initial orders to each of the fire trucks, including Engine 13. The County fire marshal or the appropriate volunteer fire chief directed Engine 13 and its crew once it arrived at the scene of a fire within the County's jurisdiction. No City fire department supervisors responded to calls in the County. Engine 13 responded to fires within the City limits when necessary and when available.

Since no critical facts were disputed and the question was one of law, the trial judge properly refused to submit this issue to the jury. Cutts v. Casey, 278 N.C. 390, 180 S.E.2d 297 (1971). Further, the trial court's determination that the County's fire truck, Engine No. 13, was borrowed by the City is adequately supported by the evidence. Though the County owned the truck, the City controlled Engine 13 in every aspect of its workday. The City determined who would man the truck and when it would go out. While the truck could be released by the County from its obligation to go to a County fire before it arrived, it was not until Engine 13 arrived at the scene of a County fire that the County exercised any control over the vehicle. Accordingly, Robert Perera is an additional insured under both Reliance policies.

C

Both Reliance and Lexington assign as error the trial court's determination of the order of payment among the three remaining excess insurance policies. The contracts of insurance here were not made between plaintiff and defendant, but between each of them and third parties. Each policy is a contract between the respective parties involved; the parties' intent must be examined in order to properly construe each policy. Consequently, each policy must be construed separately and irrespective of the others to determine their effect on each other. Allstate Insurance Co. v. Shelby Mutual Insurance Co., 269 N.C. 341, 152 S.E.2d 436 (1967) (hereinafter Allstate ).

To begin we consider the first policy written, Reliance # 1. This Reliance policy, by its own terms, was primary insurance for the City and its vehicles. The policy's "other insurance" clause converted the coverage to excess in the event that the covered vehicle was one not owned by the City, but rather one which the City hired or borrowed. Generally, excess coverage "provides that if other valid and collectible insurance covers the occurrence in question, the 'excess' policy will provide coverage only for liability above the maximum coverage of the primary policy or policies." Horace Mann Insurance Co. v. Continental Casualty Co., 54 N.C.App. 551, 555, 284 S.E.2d 211, 213 (1981) (quoting 8A Appleman, Insurance Law and Practice Section 4909 (1981)).

The next policy written, Reliance # 2, was written the following day. This policy differed from Reliance # 1 in that Reliance # 2 was titled an excess-umbrella policy. Further, Reliance # 2 covered the City and its employees for general liability purposes, not simply the City's vehicles and their drivers. The risks insured were different.

Reliance # 2's "other insurance" clause provided that in the event any other valid and collectible insurance was available to the City, this coverage (Reliance # 2) was excess. Reliance # 1 was excess coverage because the fire truck was "borrowed." Reliance # 2 contained a limit of liability clause which exempted Reliance # 2 from liability for losses to the extent covered by any policies set out in a referenced schedule. The Reliance # 1 policy was set out as one of the underlying policies.

Later in February, the County contracted with South Carolina for a liability policy for the County, its vehicles and its employees. The maximum amount payable in one accident under the policy was $100,000. Both parties to this action acknowledge that South Carolina's policy...