NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC. v. Sadler
365 N.C. 179
| N.C. | 2011Background
- Sadler insured his home under a limited-peril Farm Bureau policy for mold and other damages.
- After mold and wind-related damage, Farm Bureau denied coverage for mold, asserting no coverage under policy language.
- Sadler invoked appraisal provisions; umpire and appraisers determined damages at wind-related loss.
- Farm Bureau tendered a reduced amount; Sadler challenged the appraisal and pursued breach of contract and other claims.
- Trial court granted partial summary judgment to Sadler on breach of contract for $150,500; Court of Appeals affirmed; Supreme Court granted discretionary review.
- Court reversal and remand: appraisal determines damages but coverage remains policy-governed; genuine issues exist about what part of loss is covered and subject to fungi exclusions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether partial summary judgment on breach of contract was proper. | Sadler claims appraisal fixed damages within policy coverage. | Farm Bureau argues coverage determinations remain with policy terms, not appraisal. | No; summary judgment improper; issues of coverage and causation remain. |
| Whether appraisal can determine coverage or whether policy exclusions control. | Appraisal determines only loss amount, not coverage. | Appraisal may not interpret coverage; insurer may deny based on exclusions. | Appraisal deals with amount; coverage determinations require factual/causal analysis under policy terms. |
| Whether damages must be apportioned between wind and mold under policy. | Wind caused damages; mold is separate; fungi cap applies. | Damage causation includes mold and wind; fungi cap limits under policy. | Facts unresolved; remand needed to determine wind-caused vs. mold-caused loss and applicability of fungi coverage. |
| Whether trial court should remand for further proceedings rather than finalizing the breach award. | Breach amount should be final. | Further fact-finding required for coverage scope. | Remand warranted for determinations consistent with policy exclusions and causation. |
Key Cases Cited
- Fidelity Bankers Life Ins. Co. v. Dortch, 318 N.C. 378, 348 S.E.2d 794 (1986) (insurance contract governs rights and duties; appraisal resolves amount, not coverage)
- Thomasville Chair Co. v. United Furn. Workers of Am., 233 N.C. 46, 62 S.E.2d 535 (1950) (appraisal scope limited to amount; not policy interpretation)
- Dendy v. Watkins, 288 N.C. 447, 219 S.E.2d 214 (1975) (Rule 56 burden; issue of fact relevant to coverage and damages)
- Markham v. Nationwide Mut. Fire Ins. Co., 125 N.C.App. 443, 481 S.E.2d 349 (1997) (causation and coverage questions for finder of fact)
- Wood v. Mich. Millers Mut. Fire Ins. Co., 245 N.C. 383, 96 S.E.2d 28 (1957) (whether the loss was caused by a covered risk is a question for the jury)