Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., No. 5

Docket NºNo. 5
Citation276 N.C. 348, 172 S.E.2d 518
Case DateMarch 11, 1970
CourtUnited States State Supreme Court of North Carolina

Page 518

172 S.E.2d 518
276 N.C. 348
WACHOVIA BANK & TRUST COMPANY, Administrator C.T.A. of the
Estate of Herbert Gillespie Barnes, Deceased
v.
WESTCHESTER FIRE INSURANCE COMPANY.
No. 5.
Supreme Court of North Carolina.
March 11, 1970.

Page 522

Young, Moore & Henderson, by B. T. Henderson, II, and John C. B. Regan, III, Raleigh, for defendant appellant.

Dupree, Weaver, Horton, Cockman & Alvis, by F. T. Dupree, Jr., and John E. Aldridge, Jr., Raleigh, for plaintiff appellee.

[276 N.C. 354] LAKE, Justice.

The sole question before us is, What is the meaning of the language used in this policy of insurance? This is a question of law. Lowe v. Jackson, 263 N.C. 634, 140 S.E.2d 1; Parker v. State Capital Life Insurance Co., 259 N.C. 115, 130 S.E.2d 36. The rules for determining it have long been established.

The words used in the policy having been selected by the insurance company, any ambiguity or uncertainty as to their meaning must be resolved in favor of the policyholder, or the beneficiary, and against the company. Williams v. Nationwide Mutual Insurance Co., 269 N.C. 235, 152 S.E.2d 102; Jamestown Mutual Insurance Co. v. Nationwide Mutual Insurance Co., 266 N.C. 430, 146 S.E.2d 410; Mills v. State Life & Health Insurance Co., 261 N.C. 546, 135 S.E.2d 586. However, ambiguity in the terms of an insurance policy is not established by the mere fact that the plaintiff makes a claim based upon a construction of its language which the company asserts is not its meaning. No ambiguity, calling the above rule of construction into play, exists unless, in the opinion of the court, the language of the policy is fairly and reasonably susceptible to either of the constructions for which the parties contend. Squires v. Textile Insurance Co., 250 N.C. 580, 108 S.E.2d 908. If it is not, the court must enforce the contract as the parties have made it and may not, under the guise of interpreting an ambiguous provision, remake the contract and impose liability upon the company which it did not assume and for which the policyholder did not pay. Williams v. Nationwide Mutual Insurance Co., supra; Huffman v. Occidental Life Insurance Co., 264 N.C. 335, 141 S.E.2d 496; McDowell Motor Co. v. New York Underwriters Insurance Co., 233 N.C. 251, 63 S.E.2d 538.

As in other contracts, the objective of construction of terms in the insurance policy is to arrive at the insurance coverage intended by the parties when the policy was issued. Motor Co. v. New York Underwriters Insurance Co., supra; Kirkley v. Merrimack Mutual Fire Insurance Co., 232 N.C. 292, 59 S.E.2d 629. When the policy contains a definition of a term used in it, this is the meaning which must be given to that term wherever it appears in the policy, unless the context clearly requires otherwise. Kirk v. Nationwide Mutual Insurance Co., 254 N.C. 651, 119 S.E.2d 645. In the absence of such definition, nontechnical words are to be given a meaning consistent with the sense in which they are used in ordinary speech, unless the context clearly requires otherwise. Peirson v. American Hardware Mutual Insurance Co., 249 N.C. 580, 107 S.E.2d 137. If such a word has more than one meaning in its ordinary usage and if the context does not indicate clearly the one intended, it is to be given the meaning most favorable to the policyholder, or beneficiary, since the insurance company selected the word for use.

[276 N.C. 355] Where the immediate context in which words are used is not clearly indicative of the meaning intended, resort may be had to other portions of the policy and all clauses of it are to be construed, if possible, so as to bring them into harmony. Peirson v. American Hardware Mutual Insurance Co., supra. Each word is deemed to have been put into the policy for a purpose and will be given effect, if that can be done by any reasonable construction in accordance with the foregoing principles. Williams v. Nationwide Mutual Insurance Co., supra.

Subject to these principles of construction, exclusions from, conditions upon and limitations of undertakings by the

Page 523

company, otherwise contained in the policy, are to be construed strictly so as to provide the coverage, which would otherwise be afforded by the policy. Allstate Insurance Co. v. Shelby Mutual Insurance Co., 269 N.C. 341, 152 S.E.2d 436; Thompson v. Mutual Benefit Health & Accident Association, 209 N.C. 678, 184 S.E. 695.

We turn now to the application of these principles of construction to the terms of this policy. The policy is one contract, not two separate contracts. Under it, two automobiles are insured. By its express provision, the terms of the policy apply 'separately' to each automobile. This does not make two separate contracts out of the policy. It merely has the effect of repeating, as to each automobile, all of the terms applicable to the medical payments coverage provision (or such other coverage as may be in question). These terms, as applied with reference to each vehicle, must be interpreted in the context of the entire policy unless the immediate context requires otherwise.

The Court of Appeals took the contrary view (i.e., that this policy is to be construed as if it were two separate, independent policies), which finds support in the following authorities: Greer v. Associated Indemnity Corp., 5 Cir., 371 F.2d 29 (the parties being in agreement upon this proposition, it was not presented to the court as a question in controversy); Travelers Indemnity Co. v. Watson, 111 Ga.App. 98, 140 S.E.2d 505; Southwestern Fire and Casualty Co. v. Atkins, 346 S.W.2d 892 (Tex.Civ.App.); Cockrum v. Travelers Indemnity Co., 420 S.W.2d 230 (Tex.Civ.App.); 8 Appleman, Insurance Law and Practice, § 4896, 1969 pocket parts. See also: Kansas City Fire & Marine Insurance Co. v. Epperson, 234 Ark. 1100, 356 S.W.2d 613, and the dissenting opinion of Tate, J., in Odom v. American Insurance Co., 213 So.2d 359 (La.Ct.App.). To the contrary, see Pacific Indemnity Co. v. Thompson, 56 Wash.2d 715, 355 P.2d 12. We do not have before us the question of the maximum recovery afforded by two separate policies written by the [276 N.C. 356] same insurance company upon two separate automobiles owned by the same insured and we express no opinion thereon.

In this policy, the company undertook to pay expenses incurred by or for Mr. Barnes for medical and other services rendered to or for him in consequence of bodily injuries sustained by him as the result of an accident of any one of the following three types: (a) While he occupied 'the owned automobile'; (b) while he occupied 'a non-owned automobile'; or (c) if he was 'struck by an automobile.'

The term 'struck by an automobile' is not defined in the policy. Consequently, it is to be given the meaning most favorable to the insured which is consistent with the use of the term in ordinary speech. In strict accuracy, the term is limited to a situation in which there is direct, physical contact between the body of the insured and an automobile. In...

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267 practice notes
  • Brown v. Lumbermens Mut. Cas. Co., No. 337PA88
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • April 5, 1990
    ...makes a claim based upon a construction of its language which the company asserts is not its meaning." Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 [326 N.C. 393] "All parts of a contract are to be given effect if possible. It is presumed that each part of the contract......
  • Blis Day Spa, LLC v. Hartford Ins. Group, No. 3:04CV231.
    • United States
    • United States District Courts. 4th Circuit. Western District of North Carolina
    • April 11, 2006
    ...to either of the constructions for which the parties contend." Wachovia Bank & Trust Company v. Westchester Fire Insurance Company, 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970). Where the ambiguity creates a genuine issue of material fact regarding the parties' intent, it is necessary to P......
  • Lunsford v. Mills, No. 385PA13.
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • December 19, 2014
    ...of statutory interpretation is ultimately a question of law for the courts."); Wachovia Bank & Trust v. Westchester Fire Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970) (observing that the interpretation of "the language used in [a] policy of insurance" is "a question of law"). This......
  • Wm. C. Vick Const. Co. v. Pennsylvania Nat. Mut., No. 5:97-CV-692-BR(1).
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • March 24, 1999
    ...of [the policy's] language which the company asserts is not its meaning." Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970). Further, the North Carolina Supreme Court has instructed that when interpreting the terms of an insurance contract......
  • Request a trial to view additional results
266 cases
  • Brown v. Lumbermens Mut. Cas. Co., No. 337PA88
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • April 5, 1990
    ...makes a claim based upon a construction of its language which the company asserts is not its meaning." Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 [326 N.C. 393] "All parts of a contract are to be given effect if possible. It is presumed that each part of the contract......
  • Blis Day Spa, LLC v. Hartford Ins. Group, No. 3:04CV231.
    • United States
    • United States District Courts. 4th Circuit. Western District of North Carolina
    • April 11, 2006
    ...to either of the constructions for which the parties contend." Wachovia Bank & Trust Company v. Westchester Fire Insurance Company, 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970). Where the ambiguity creates a genuine issue of material fact regarding the parties' intent, it is necessary to P......
  • Lunsford v. Mills, No. 385PA13.
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • December 19, 2014
    ...of statutory interpretation is ultimately a question of law for the courts."); Wachovia Bank & Trust v. Westchester Fire Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970) (observing that the interpretation of "the language used in [a] policy of insurance" is "a question of law"). This......
  • Wm. C. Vick Const. Co. v. Pennsylvania Nat. Mut., No. 5:97-CV-692-BR(1).
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • March 24, 1999
    ...of [the policy's] language which the company asserts is not its meaning." Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970). Further, the North Carolina Supreme Court has instructed that when interpreting the terms of an insurance contract......
  • Request a trial to view additional results
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