*1 IN THE COURT OF APPEALS CONSTR., BUILDERS MUT. INS. CO. NORTH MAIN LTD. (2006)] [176 we County remand this case to the Superior Burke Court for the cor- apparent rection of this clerical error. prejudicial error;
No remanded with instructions.
Judges WYNNand McGEE concur. BUILDERS MUTUAL INSURANCE Plaintiff v. NORTH MAIN COMPANY, GAJENDRA and CONSTRUCTION, LTD, POONAM Defendants SIROHI, wife, SIROHI,
No. COA04-1717 (Filed 2006) 21 February Insurance— policy commercial exclu- — automobile applicability hiring, supervision sion — retention claims The automobile exclusion in a general liability commercial issued compаny bodily construction for injury property damage “arising ownership, out of’ the main- tenance, use or entrustment of applied automobile to exclude coverage for defendants’ claims for negligent hiring, supervision employee and retention of an of the insured who drove a com- pany intoxicated, automobile while median, crossed the struck the vehicle in which riding (1) defendants were bеcause: in determining exception applies, whether an automobile appellate court looks to the actual causes of a given separate considers whether a cause from the use of a vehicle particular injuries; resulted those defendants’ actual separate did not result from a employee’s from the use of the automobile.
Judge dissenting. Wynn (cid:127) Appeal plaintiff from order entered Judge 19 October 2004 Jr., E. Manning, County Superior Howard in Wake Court. Heard in the Appeals September Court of
Pinto, Coates, Kyre Brown, P.L.L.C., by & Richard L. Pinto and Malone, Jr., I. plaintiff-appellant. John Pulley, Watson, King Lischer, P.A., by Guy Crabtree, Esq., & W. defendants-appellees Gajendra Sirohi and Poonam Sirohi. IN THE MUT. v. NORTH MAIN INS. CO.
BUILDERS *2 CALABRIA,Judge. Company appeals from (“plaintiff’) Mutual Insurance
Builders partial summary judgment in favor of granting order the trial court’s We and Gajendra (“Sirohi defendants”). reverse and Poonam Sirohi entry summary judgment in favor of remand the trial court for to plaintiff. of Construction, provider Main is the insurance for North
Plaintiff Liability policies, (“North Main”), under two a Commercial Auto Ltd. only Policy. policy at issue in Policy The and a Commercial Insurance Policy. a sought Insurance Plaintiff this case the Commercial County it had declaratory Superior in Wake Court that Exware, duty indemnify Ronald F. Jr. North Main and no to defend Policy. under the Commercial Insurance (“Exware”) judice, plain- in The-underlying facts in the case sub relief, declaratory complaint tiff’s as follows: allegations North Main specific 9. the defendants Exware a citation for DWI (a) and assert that received Exware driving time that he became and and reckless at the careless Sirohi, (b) with Poonam in and caused the accident involved year driving record included several citations Exware’s seven convictions, speeding and a including charges three driving charge open consuming, after under transporting of container Exware 20-138.7], (c) North Main allowed § Gen. Stat. [N.C. company despite poor driving record. to drive the van Exware’s plaintiffs specifically allege . that North Main was . . [T]he employee, (a) Main knew that its Ronald negligent in that North having Exware, Jr., operating F. was one of their vehicles after July 17, driving wrong on the side a citation on 2001 for received road, knew have known that (b) North Main or should extremely driving poor, extent Exware’s record likely great risk and operation his of a vehicle would motor although Plaintiff, (c) North Main danger to others such as the driving had a knew known that Exwаre bad or should have Exware, provided company (d) Main a van to record, North Exware a driving providing record and in ignoring Exware’s bad record, driving bad North Main company despite vehicle his safety employees for its and for failed to exercise due care [’] safety as the upon public highway such traveling of others proper policy gov- a plaintiff Sirohi, (e) failed enforce Poonam IN THE OF APPEALS BUILDERS MUT. INS. CO. v. NORTH MAIN eming company vehicles, the safe use of its and failed to exercise employees due care to ensure its were safe drivers failed safety exercise due care upon for the traveling pub- others highway, (f) lic negligently entrusted vehicle to Exware. specific 11. The allegations factual complaint the amended employees assert (a) chiefs, such as crew fоremen and officers North Main, supervised required who crews were to come into headquarters North Main office from time to time to deliver pick up pay time sheets and crews, checks for their and for other reasons, (b) often company headquarters, while North Main chiefs, foremen, the crew supervisors and officers of North Main *3 would marijuana consume beer and together smoke and with other, (c) each the senior of officers North Main were of aware marijuana consumption the and place alcohol that took on the company premises during both and working hours, after normal nothing prevent stop and did to or this behavior even it though was known that these individuals return pos- would to work and sibly operate company machinery equipment, or or would leave conduct, company operating vehicles, (d) and the of the officers of North in condoning Main above conduct, the described created atmosphere of acceptance tolerance and of drug alcohol and among employees use the while or working operating company machinery vehicles, equipment, or and which conduct in turn was likely causing injury to lеad to incidents death or to others. 12. Based on these additional factual allegations, the amended complaint includes allegations additional of negligence on the part of North Main in that Main negligent North was (a) that it hire, properly supervise, failed to and employees, (b) retain its. participated and employees condoned conduct its that was likely to others, lead death (c) and created and fos- atmosphere tered an among employees its and officers the that consumption drugs of company alcohol and and the use the equipment permissible. vehicles and The Sirohi defendants further negligence both Exware’s and North Main’s negligence resulted their when Exware intoxicated, drove while crossed the median on Interstate the struck Sirohi defendаnts with North Main’sautomobile. plaintiff’s declaratory The trial judgment court heard action on 11 August 2004. Plaintiff for judgment pleadings, made motion on summary which was converted to a motion for judgment, IN THE COURT MÜT. INS. CO. NORTH BUILDERS summary judgment. On made a motion for defendants also Sirohi issue, Judge reviewing the after October negligent plaintiffs as to all claims for motion Manning granted however, granted the Sirohi he negligent driving; entrustment supervision, and negligent negligent hiring, as to motion defendants’ appeals. retention. Plaintiff negligent is whether the trial court question presented for our review law, declared, properly as a matter . . policy[,] . issued to plaintiffs general commercial Company, provide for does North Main Construction asserted the claims defendants] [Sirohi Construction, underlying in the plaintiffs insured, North Main summary as all plaintiffs judgment . . . motion action supеrvision, and/or retention negligent hiring, claims summary judg- DENIED, Sirohi motion for and [the defendants’] hiring, supervision, . and/or as to all claims . . for ment retention is ALLOWED. Procedure, of Civil
In with North Carolina Rules accordance depositions, pleadings, summary judgment granted shall be “if file, together on with the interrogatories, and admissions answers to no issue as to ma- affidavits, any, genuine if show that there is any party is entitled to a a matter and that terial fact motion, deciding 1A-1, 56(c) (2005). Rule law.” Gen. Stat. § *4 in against . . the movant and . must be drawn “all inferences fact Barker, v. 172 party the motion.” Cater N.C. opposing favor of the 113, (2005) (citations and internal App. 441, 444, 617 S.E.2d 116 summary has quotations omitted). party moving judgment “The any (cita- issue.” Id. establishing the lack of triable the burden omitted). tions summary judgment is ruling a motion for
A trial court’s on by Tillett, & Power Co. v. this Court. Va. Elec. reviewed de novo appeal, we rеview 383, 385, 188, (1986). On App. 343 S.E.2d N.C. is the and determine whether there presented to trial court materials any party any if to material fact and entitled genuine a issue to 311, App. Roberts, 49 N.C. judgment as a matter of law. Oliver duty to defend North (1980). Plaintiff admits a 271 S.E.2d ‘bodily injury’ ‘prop- or against “any seeking damages Main ‘suit’ applies].” . . policy at . erty damage’ which insurance to issue] [the duty its the insured is broader than “an insurer’s to defend Becausе Motorists duty coverage,” Wilkins v. American provide to IN THE COURT OF APPEALS CO. v. BUILDERS MUT. INS. NORTH MAIN Co., Insurance 388 S.E.2d 193 (citations omitted), we need not consider whether the Sirohi defend- ultimately prevail ants will underlying in the action. Id. This Court held, has duty by alleged defend is determined the facts as in the
[t]he pleadings of insured; the lawsuit if pleadings any allege facts possibility which disclose a insured’s potential liability policy, is covered under the then the insurer has duty If, however, to defend. in pleadings facts arguably by are not even policy, duty covered then no Any defend exists. as to coverage doubt must be resolved favor of the insured. (citations
Id. omitted).
It is uncontested this case that there no material issues of We,therefore, fact. analysis limit our to whether prop- the trial court erly determined that the Sirohi defendants were entitled to as a law. matter of Policy
Thе Commercial Insurance coverage excluded from the following: Aircraft,
g. Auto or Watercraft “Bodilyinjury” “property or damage” arising out of the owner- ship, maintenance, any use or entrustment to others of air- craft, operated “auto” or watercraft owned or or rented operation or loaned to insured. Use includes “loading unloading.” initially whether, precedent We address rеgarding under the “aris- ing language policy exclusions, out of’ in similar insurance the trial properly granted summary court judgment for the defendants on the negligent hiring, supervision, and reviewing retention claims. In issue, insurance arewe mindful of the rule of construction “provisions policies coverage ... which extend must liberally be provide possible construed so as whenever Capital reasonable construction.” Ins. Co. v. Nationwide Co., 534, 538, Mut. Ins. 68 (1986).
In
Capital,
Supreme
our
Court considered whether exclu-
sionary language similar
language
to the
at issue in this
would
case
apply
a
policy
prevent
under
coverage
homeowner’s insurance
accidentally
when a
discharged
rifle
in a car while the insured was
APPEALS
THE
OF
IN
88
CONSTR., LTD.
INS.
v.
MUT.
CO. NORTH
BUILDERS
App.
N.C.
83
Supreme
passenger.
In
case our
handling it, causing
the
that
strictly construed[,] the standard of causation
held, “when
Court
in a home-
ambiguous ‘arising
language
out of
applicable to the
proximate
Capital,
cause.” State
policy
is one of
exclusion
ownerf’s]
that the
at 74. The Court further held
N.C. at
318
exclusionary
interpreted
excluding
accidents
language “should be
proximate
of an automobile.
cause involves the use
which the sole
cause, then the automobile
proximate
is
If there
non-automobile
neg-
the
apply.”Id. Because
Court found
exclusion does not
use
proximate
mishandling
was a
of the rifle
non-automobile
ligent
apply.
exception did not
Id.
injury, the automobile use
of the
holding
Wilkins,
distinguished
Supreme
our
Court’s
In
this Court
entering
Capital.
argued that the trial court erred
in State
summary
Plaintiff
when “the
does not
judgment for
defendant
upon
clearly
to warn and
coverage for
based
failure
exclude
App. 269,
at
at
Wilkins, 97
the “use” of van sole supervision dent; cause was a concurrent [the woman’s] the van granddaughter] exited granddaughter] when [the [the Capital, Therefore, because Superette. under State to enter accident, proximate of the cause” there was “non-automobile apply to bar under exclusion does not automobile poliсy. the homeowner’s S.E.2d at 896.
Id., 118 N.C.
Corp., Integon
Indem.
Mut. Ins. Co.
Nationwide
this
considered whether
(1996),
IN THE COURT OF APPEALS BUILDERS MUT. INS. CO. v. NORTH MAIN (2006)] [176 exception policy applied in automobile a homeowner’s when a man improperly vehicle, attached a metal livestock trailer to his and the loose, highway, trailer came careened across the and resulted in Integon distinguished the death of another driver. This Court from Davis as follows:
Coverage negligent supervision existed in Davis because the separate negligence of the child was an act of from the use of case, however, damages the vehicle. this the defendant Estate’s solely Timothy to have resulted from Ward’s“use” of trailer, any independent in towing truck and not “non- alleged negligence attaching, securing automotive” cause. His towing damages the trailer could not hаve caused that were independent of the “use” of the truck itself. Integon. Here, injuries
The instant case is similar to resulted automobile, separate from Exware’s use of North Main’s not from a Although allege negligent hiring, super- cause. the Sirohi defendants vision, Exware, and retention of these causes are intertwined with automobile, Exware’s use of North Main’s and the Sirohi defendants’ particular injuries could nоt have occurred the absence of the use Wilkins, supra proposition of the automobile. See (standing for the properly allegations failing pilot prevent that instruct a did not airplane an applying injuries exclusion from when the suffered were airplane an crash). due to
In determining exception applies, whether an automobile this given injury Court looks to the actual causеs of a and considers separate whether a cause from the use of a vehicle resulted in those particular injuries. Thus, hypothesizes although the dissent negligent hiring, supervision, to North Main’s and/or retention “[d]ue occurred, example, have through could Exware’s use of equipment,” hypothetical construction we need not consider such injuries when the facts show that the actual did not result seрarate from a cause from the use of the automobile.
Accordingly, we hold in granting the trial court erred summary judgment defendants, in favor of the Sirohi and we remand entry summary judgment this matter to the trial court for in favor plaintiff. Having held, plaintiff’s assignment so we need not address other of error. IN THE COURT CONSTR., LTD. INS. CO. NORTH
BUILDERS MUT. remanded. Reversed and *7 LEVINSONconcurs.
Judge opinion. separate WYNNdissents with Judge WYNN,Judge, dissenting. from homeowners liability which are excluded sources “[T]he injury in of the order the sole cause
policy coverage must be Capital Ins. Co. v. policy.” State coverage under the exclude 66, 534, 546, S.E.2d 73 Co., 318 N.C. 350 Mut. Ins. Nationwide dispute that the majority opinion does not added). The (emphasis negli- not exclude from of the did plain language of the Sirohi defend- retention claims supervision, and/or gent hiring, hiring, Main. Since the Exware and North against ants cause, the trial court a non-excluded retention is supervision, and/or of Defendants. summary judgment in favor in granting did not err respectfully I dissent. Accordingly, policies are con- insurance that in North Carolina
It is well settled companies and in favor of the strictly insurance strued 648, Co., 303 N.C. & Accident Ins. v. Colonial insured. Maddox Life liability of Provisions which exclude 907, (1981). 908 650, 280 S.E.2d ambiguous provi- all companies are not favored. Therefore and in favor of strictly against the insurer construed sions Co., Ins. Co. v. WestchesterFire Bank & Trust insured. Wachovia (1970). 348, 355, 172 S.E.2d 522-23 N.C. liability policy general provision at issue exclusion
states:
2. Exclusions apply does not to:
This insurance [***] Aircraft, Auto Or Watercraft
g. arising out of the own-
“Bodily injury”
“property damage”
or
any air-
to others of
maintenance, use or entrustment
ership,
operated
or rented
or
craft,
or watercraft owned
“auto”
operation
“loading
includes
insured. Use
or loaned
unloading”.
APPEALS
IN THE COURT OF
CONSTR., LTD.
INS. CO. v. NORTH
BUILDERS MUT.
prin
following
previously established
Suprеme Court has
Our
coverage of homeowners or
determining ciple
respect
with
liability which are
policies:
sources of
“all risks”
general
“[T]he
be the sole cause
policy coverage must
from homeowners
excluded
policy.”
State
coverage under
in order to exclude
of the
(emphasis added);
Co.,
Like in State
proximate
retention are non-automobile
supervision, and/or
ing,
IN THE
v. NORTH MAIN
BUILDERS MUT. INS. CO.
Capital,
Therefore,
at
causes. State 318 N.C. proximate since Exware’s use of the automobile is not the sole by injuries, of the Sirohi’s the claim is not excluded from automobile exclusion. majority opinion in relies on this Court’s Wilkins v. Am. Cо., App. 266, (1990),
Motorists Ins.
Accordingly, negligent hiring, supervision, since the and/or reten- proximate cause, tion is non-automobile the trial court did not err summary granting in favor of Defendants.