*1 ‘ IN THE COURT OF APPEALS GRECO v. PENN NAT’L SEC. INS. CO. v. PENN NATIONAL SECURITY INSURANCE
VICTORIA KLOTZ GRECO, PENN NATIONAL HOLDING PENNSYLVANIA COMPANY, CORPORATION, NATIONAL MUTUAL CASUALTY INSURANCE CAROLINA HOME COMPANY, and DONALD JOSEPH Defendants EXTERIORS, L.L.C., MCKINNON,
No. COA11-483 February (Filed 2012) declaratory judgment duty Insurance — — declaratory judgment concerning The trial court erred in a action parties’ responsibilities policy by rights under an insurance summary company. in granting judgment favor of defendant insurance Defendant failed to demonstrate that defendants McKinnonand Hanson had breached their under the insurance Appeal by plaintiff February by Judge from order entered 17 Jay Hockenbury County Superior D. in Craven Court. Heard in the Appeals Court of 12 October 2011.
Whitley Firm, by Whitley, plaintiff E. Law Robert Kyre PLLC, Brown, Pinto Coates & Deborah J. Bowers and II, David G. Harris for defendants.
ELMORE, Judge. (plaintiff) appeals summary Victoria Klotz Greco from an order of Security in entered favor of Penn National Insurance Company, Holding Corporation, Pennsylvania Company National Mutual (collectively, Insurance Penn National). Because Penn National has not shown that the case, Joseph this defendant Donald McKinnon and Sharon Hanson (Hanson), failed to with defendant Penn we reverse the order of the trial court. stipulated purposes have to the facts for May
Penn National’s motion: On 1 driving McKinnonand Hanson were in a Ford truck owned Hanson utility pulling Exteriors, trailer owned Carolina Home L.L.C. County. (CHE), Highway 17 in Craven The trailer detached from plaintiff’s seriously the truck and collided with injured. vehicle. Plaintiff was Rusty Hanson, McKinnonworked for who had subcontracted vinyl replace siding with CHE to at a house Richlands. McKinnon permission utility trailer, had to use the which was insured Penn National. The Ford truck was insured Nationwide. v. PENN NAT’L SEC. INS. CO. *2 (2012)] N.C. 394
[218 sued, complaint other materials of the though Plaintiff the and appeal. part record on underlying tort claim are not of the 2009,plaintiff declaratory judgment seeking action filed a parties National insur- rights a declaration of the as to the Penn plaintiff complaint, alleged ance In her that the policy, limit, $1 in full force and insurance which had a million and, policy, Penn at the time of the collision under that effect indemnify plaintiff damages arising out of the National must for her rights and accident. She asked the trial court for a declaration of the policy, specifically obligations of the to the Penn National as. liability policy provides coverage full asking the court to rule that the plaintiff’s for benefit. summary judgment, for which the trial
Penn National moved hearing and its review of an affidavit granted following court Fusaiotti, representative a senior claim for Penn and Janet appeals. supporting its exhibits. Plaintiff now argues granting trial erred defendant that the court summary judgment because Penn Penn National’s motion National failed demonstrate that McKinnon and Hanson had to duty policy. The breached their to under the insurance accident, includes several duties in the event of states, part, National has claim, or loss. It in relevant that Penn suit there has been provide coverage “no to under this unless any compliance dut[y]: . . . other full [Y]ou [c]ooperate investigation or ‘insured’must. .. with us the involved against the The essence of settlement of the claim or defense suit[.]” proved parties’ disagreement appeal is whether Penn National investigation. that McKinnon and Hanson did We hold that it did not. Mut. de novo. Builders
Wereview an order
Constr., Ltd., 361 N.C.
Ins. Co. v. North Main
no
“Summary
when there is
530
any
party is entitled to a
issue as to
material fact and
genuine
(quotations
a matter of law.” Id.
and citations
judgment as
approach when
“the strict contractual
Our courts do not follow
and have held
construing cooperation clauses in insurance contracts
coop-
that,
obligations,
an insurer of its
order to relieve
Ins.
v. C.
prejudicial.”
Great Am.
Co.
erate must be both material
n.2
Co.,
n.2,
773
Constr.
303N.C.
G. Tate
Insurance
254N.C.
(citing Henderson v. Rochester American
IN THE COURT
SEC. INS. CO.
GRECO PENN NATL
explained
has
(1961)). Our
Court
332, 118 S.E.2d
requirement
a failure
cooperation
and the
purpose of both
clauses
prejudicial as follows:
cooperate must be material and
to
interpretation
provisions
given
are to be
reasonable
intended,
is,
put insurer on
accomplish
purpose
opportunity
to make such
notice and afford it
necessary
properly
settle claims
defend or
deem
fairly
honestly
asserted,
and to
which
brought
in the defense of
action which
insurer
upon compliance
provisions
with these
against insured, and
*3
protect
indemnify
policy limits the insured from
within the
negligent acts. An insurer will not be relieved
the result of his
mere
obligation because of an immaterial or
technical
of its
comply
policy provisions.
The failure must
contrary
prejudicial.
. . .
be material and
“While there
some
authority,
cases hold that the failure to
the better reasoned
by
be attended
co-operate
alleged
instance
must
Blashfield,
prejudice
conducting
to the insurer in
the defense.
p.
Law,
6,
4059,
Vol.
sec.
78.”
Automobile
Henderson,
332,
(additional
Our courts have reviewed few cases issue, cooperate under an insurance was at and none of those unavailability directly complete cases addressed whether the cooperate. However, together, read insured constitutes a failure to by the decisions show that some kind of affirmative action the law, required conclude, a court can as a matter of insured is before cooperate. example, the insured failed to For Lockwood cooperated Porter, the insured contacted the insurer period refusing a of time before to submit to the medical insurer for required. App. 410, 411, 743, evaluations that the insurer by was motion of sum- The action dismissed mary appeal, explaining affirmed on the judgment, and we
GRECO v. PENN NAT’L SEC. INS. CO. coopera- “unjustified refusal to be so examined violated the insured’s law.” the and bar his action as a matter of tion clause of [red] Id., at 390 S.E.2d 743-44. MacGlure, Supreme judgment the Court reversed a of nonsuit insurer based on a failure to when
in favor of the defendant
MacClure,
and thus unavailable.
229N.C.
the insured was unreachable
plaintiff,
at
748. The
the estate of a child
at
nonsuited because the
killed
a car driven
the
despite
located
“continuous efforts to
driver of the car could not be
persons
inquiries
written
locate
letters
[him]
[him]
likely
Id. The insured worked
thought
to know [his] whereabouts[.]”
apparently
traveling carnival,
a
and the letters
went to his home
at
traveling.
306-07,
while he was
Id. at
Where there has been injured and the courts have been careful between the usually protect Courts hold that misstatements to the insurer. subsequent plead- persisted filing in until the trial or to the of shifting ground of and a new and ings requiring insured a fail- as a matter of law to establish different defense suffice cases, cooperate. Except these classes of courts ure to question materiality prejudice is a generally hold the question jury. for the Though Henderson
Henderson,
Here, neither evidence that McKinnon or any stage had ever with Penn National at Hanson communicated proceedings, had ever received of Penn National’s communi- respect cations, or had undertaken affirmative action with to the clearly fact, suit. In Penn National’s evidence states that McKinnon and Hanson have never communicated with Penn either on response their own initiative or to communications from Penn CHE, National. Penn National received notice of the accident from and it notice of the suit as well. Penn National was not received deprived opportunity investigate of its to the accident a lack of misrepresentations by any insureds, notice or of the and thus it only prejudice; cannot show it has been unsuccessful in its actual Nothing of the accident vis-a-vis McKinnon. in the record ability significant impairment indicates of Penn investi- National’s defend, exactly gate, or settle this matter. It is also not clear what Hanson, efforts Penn National made contact McKinnon and much diligent. Although less whether those efforts were both would certainly speaking benefit or McKinnon Hanson about the particulars they appear, accident, stage, simply at this unavailable. That alone is not sufficient to demonstrate a failure to and, thus, coop- as a matter of law a breach of their erate under It was not for the summary grant trial court to on that basis alone. Accordingly, we reverse the order of *5 proceedings. remand to the trial court for further Reversed and remanded.
Judge BRYANTconcurs.
IN THE COURT CO. v. PENN NAT’L SEC. INS. opinion. by separate dissents Judge STEPHENS STEPHENS, Judge, dissenting. summary judg- majority, noted respectfully
I dissent. As of material fact. genuine there is no issue is where ment Constr., Ltd., 361 N.C. N. Main Mut. Ins. Co. v. Builders majority’s agree (2006). also policies and cooperation clauses State’s case law on our particular following language: emphasize in interpretation to a reasonable provisions given The are to be is, put purpose intended, insurer accomplish the opportunity to make such and afford it an notice claims necessary properly defend or settle deem honestly fairly asserted, and which and brought action which with insurer in the defense of compliance provi- with these against and [the] indemnify policy limits the protect and within sions to will negligent acts. An insurer from the result of his immaterial or obligation because of an not be relieved of its provisions. comply mere technical prejudicial. and failure must be material The 329, 332, 887 118 S.E.2d Am. Ins. 254 N.C. v. Rochester Henderson requires appeal con- Thus, I resolution of this believe insured; (2) if McKinnon an questions: (1) was of three sideration cooperate with Penn insured, did he fail to was an McKinnon cooperate, was that failure fail to National; if McKinnon did ability settle to defend or prejudicial to Penn National’s material and technical by Plaintiff, rather than a mere brought the claim produced National uncontradicted I believe Penn failure? Because “yes,” I would questions these the answer to each of evidence that National. summary judgment to Penn grant of affirm the trial court’s underlying filed First, in an answer dated 7 October CHE, McKinnon, Hanson, against brought tort action permis- using the trailer with the McKinnon was CHE admitted that the Penn National and holder of CHE, the named insured sion of anyone who borrows an “insured” to include policy.1 defines estoppel forbids a 1. is bound this admission. “[J]udicial CHE lit position in the same or related asserting legal inconsistent with one taken earlier 450, 452 (2005) (citation Price, igation.” Price v. quotation marks *6 NAT’L GRECO PENN SEC. INS. CO. (2012)] N.C.
[218 permission Thus, an insured vehicle with the of the named insured. there is no issue that McKinnon is an insured under the Second, Penn National it has shown that obtained current contact attempted information for McKinnon and him contact numerous times, September 2010, to no avail. In an affidavit dated 10 Janet Fusaiotti, representative a senior claims with Penn stated attempted that Penn National had to contact McKinnon “on numerous starting occasions” on 14 but that “all mess- . . . ages respond went unreturned” and McKinnon “refused to way to the communications sent Penn National.” No evidence in [] cooperated the record indicates that McKinnon whatsoever with Penn matter, National in this allegation nor does the record contain even an cooperation by Plaintiff or other Thus, of McKinnon. there is no issue that McKinnon has failed to attempts Penn investigate, defend, National its and/or settle Plaintiff’s claim. majority asserts that our law case establishes that “some
kind of required affirmative action the insured is before a court can conclude as a matter of law cooperate.” that the insured failed to While I agree that failure to be shown an affirma- action, lying, tive such as nothing majority in the cases cited suggests an only way that affirmative action is the to establish failure cooperate. Indeed, refusing respond to communicate with or company seems to me the very definition of a “failure to cooperate.” reject particular, majority’s claim that MacClure
v. Accident & Cas. Ins.
It is the refrain, of this Court to far as with- clarity out destroying opinion, comment on the evidence when the case is sent back a new trial —a rule always strictly cannot observed when the upon believe, however, involved is a nonsuit demurrer. We the case under review calls for an observance of the rule. We have passing objections refrained from to the evi- recur, dence because the same situation but the want specific significance. discussion has no other THE COURT IN CUMBERLAND
FORT v. CNTY. OF added). (emphasis at 748 312-13,49 S.E.2d Id. at *7 question, Fusaiotti’s and final to the third As prejudiced McKinnon’s was Penn National affidavit states that per- company unable to “has been cooperate, because the failure to Further, in her meaningful [a]ccident[.]” form able to was not that Penn National testified deposition, Fusaiotti trailer, using were passenger] his learn “how [McKinnon up the trailer, who hooked they going were where [or] had been unable also stated that She trailer[.]” any other source. information from obtain this the trailer the result of occurred as Here, where the accident it, agree I pick-up hauling truck from the becoming detached attached the about who obtaining information Penn National that being attached, the truck was how truck, how it was trailer to the detachment, related information and other just prior to the driven ability to Penn National’s indeed, essential —to highly relevant — Thus, I hold would Plaintiff’s claim. defend, and/or settle investigate, prejudice McKinnon’s Penn National has established sum- grant trial court’s affirm the cooperate. Accordingly, would National. mary in favor of Penn B. and RAEFORD FAIRCLOTH, JULIE KATHERINE and DORIS FORT,
SAMUEL North Carolina, OF CUMBERLAND, v. COUNTY Petitioners LOCKAMY, II, Respondent Inc. Intervenor Respondent, TIGERSWAN, No. COA11-758 2012) (Filed 7 February challenge proposed use — owner Zoning standing 1. — special prohibited adjoining land — use ordinance — damages alleged County challenge the Cumberland standing to
Petitioners had respondent’s plan approval of intervenor Adjustment’s Board of owners facility. were the Petitioners training build a firearms prohib- use was lands, challenged land nearby adjoining or they alleged that ordinance, petitioners zoning ited a valid through proposed use special damage from the would sustain property. their in the value of reduction