Bissette v. Auto-Owners Insurance
703 S.E.2d 168
N.C. Ct. App.2010Background
- Bissette sued Cothran for injuries from a 16 Nov 2007 NC collision; Auto-Owners insured Connected, which remained owner on the policy after sale to Cothran.
- Cothran purchased a 1997 Ford F-150 from Connected’s agent; title remained in Connected’s name, and NC registration persisted.
- Auto-Owners was notified on 14 Oct 2007 to remove the vehicle at renewal (25 Nov 2007); accident occurred before renewal.
- Auto-Owners assigned Baker to defend Cothran in the underlying negligence action; Cothran did not cooperate or appear at trial.
- Bissette obtained a $375,000 compensatory and $80,000 punitive damages verdict against Cothran on 27 Oct 2008.
- Bissette filed a declaratory judgment action in Oct 2008; the trial court granted summary judgment in Bissette’s favor, Auto-Owners appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Auto-Owners had a duty to defend/indemnify/cover Cothran. | Bissette contends the vehicle was covered and Cothran was an insured. | Auto-Owners argues no coverage because ownership/permission issues negate insured status. | Yes; policy covered the vehicle and Cothran as an insured. |
| Whether Cothran's non-cooperation voided Auto-Owners' coverage. | Non-cooperation did not prejudice coverage under the policy. | Non-cooperation prejudiced Auto-Owners and voided coverage. | No material prejudice shown; summary judgment affirmed on non-cooperation. |
Key Cases Cited
- Henderson v. Rochester American Insurance Co., 254 N.C. 329 (1961) (reasonableness of notice and cooperation requirements in liability policies; material prejudice standard)
- Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co., 276 N.C. 348 (1970) (policy interpretation when unambiguous; liberally construe coverage to provide it when possible)
- Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1 (2010) (ambiguity resolved against insurer; liberal construction to provide coverage)
- Nationwide Mut. Ins. Co. v. Land, 78 N.C.App. 342 (1985) (express/implication of permission to use a covered auto; cooperation principles)
- Jenkins v. Aetna Cas. & Sur. Co., 324 N.C. 394 (1989) (ownership transfer requirements for passing title; mandatory nature)