Integon Indem. Corp.v Federated Mut. Ins. Co
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NO. COA98-117 NORTH CAROLINA COURT OF APPEALS Filed: 3 November 1998 INTEGON INDEMNITY CORPORATION, Plaintiff, v. FEDERATED MUTUAL INSURANCE COMPANY, MONTGOMERY MOTORS, INC., JOSEPH BURGESS HARRIS, and PAUL RAY BRANSON, Defendants. Appeal by plaintiff from order entered 18 July 1997 by Judge William C. Griffin, Jr. in Pitt County Superior Court. Heard in the Court of Appeals 5 October 1998. On 20 August 1994, defendant Paul Ray Branson was in an automobile accident with defendant Greenville, North Carolina. Joseph Burgess Harris in At the time of the accident, Branson was driving a used car owned by his employer, defendant Montgomery Motors, Inc. ( Montgomery Motors ). Branson s personal car was in the Montgomery Motors repair shop and Montgomery Motors provided Branson the Montgomery Motors automobile on loan for his personal use. Montgomery Motors had a policy of loaning vehicles without charge to good customers who need a vehicle for their personal use while their car is being serviced or repaired in their shop. the date insurance of the policy ( Integon ). accident, with Branson plaintiff had Integon a personal Indemnity On automobile Corporation Defendant Montgomery Motors also had an automobile liability insurance policy in force and effect with defendant Federated Mutual Insurance Company ( Federated ). On 2 May 1995, defendant Burgess filed a tort action against defendant Branson seeking monetary damages for injuries sustained in the 20 August 1994 accident. behalf of Branson by That action is being defended on counsel employed by Integon under a reservation of rights pursuant to the terms of the Integon policy. On 28 September 1995 Integon filed this declaratory judgment action seeking to determine whether it was required to provide Branson coverage for claims arising out of the 20 August 1994 accident. Defendants Federated and Montgomery Motors moved for summary judgment on 17 April 1997. summary judgment on 6 June 1997. Plaintiff Integon moved for On 18 July 1997 an order was entered granting Federated s and Montgomery Motors motions for summary judgment and denying Integon s motion for summary judgment. Plaintiff appeals. Dunn, Dunn, Stoller & Pittman, LLP, by Anne D. Edwards, for plaintiff-appellant. Womble Carlyle Sandridge & Rice, PLLC, by Robert H. Sasser, III and Mark A. Davis, for defendant-appellees. EAGLES, Chief Judge. We first consider whether the trial court erred in granting summary judgment. Plaintiff contends that there was a genuine issue of material fact as to whether an employee getting his car repaired by his employer was a customer or an employee under the terms of the insurance policy at issue. Plaintiff argues that Branson was covered under the Federated policy if, at the time of the accident, he was an employee of Montgomery Motors and was using an auto owned by Montgomery Motors. Defendants contend that Integon provides sole coverage because the Federated policy excludes customers from its definition of who is an insured. Defendants contend that the policy further provides that the term customers includes your employees . . . who pay for [repair] services performed. Defendants contend that the record and exhibits clearly demonstrate that Branson was a customer of Montgomery Motors when he was provided with the vehicle. Defendants cite the testimony of both Branson and Harold S. Asbill, the owner of Montgomery Motors, who testified that Branson received the vehicle because he was a customer. Accordingly, defendants argue that Branson was not an insured under the Federated policy. After careful review of the record, briefs and contentions of the parties, we affirm. The Federated policy states that [w]e will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from garage operations involving the ownership, maintenance or use of covered autos. It is undisputed that the automobile driven by Branson was a covered auto under the terms of the policy because the vehicle was owned by Montgomery Motors. Additionally, the garage operations definition was satisfied because of the use of a covered auto. However, under the terms of the policy, Branson was not an insured because he was a customer, and customers are excluded from coverage. The term customer is not defined anywhere in the policy. While the section determining whether an auto is a covered auto states that customers include your employees . . . who pay for [repair] services performed, this definition applies solely for the determination of whether an automobile left by an employee for service is a covered auto under the policy, and not whether the employee is a customer under the terms of the policy. Accordingly, since customer is not defined in the policy, the term customer should be defined by its ordinary meaning. See McLeod v. Nationwide Mutual Ins. Co., 115 N.C. App. 283, 290, 444 S.E.2d 487, 491-92, disc. rev. denied, 337 N.C. App. 694, 448 S.E.2d 528 (1994)( In the absence of policy definitions, the court should use a term in accordance with ordinary speech and is encouraged to use standard, nonlegal dictionaries as a guide. ). Webster s Dictionary defines customer as one that purchases a commodity or service. 318 (1985). Webster s Ninth New Collegiate Dictionary Branson was billed almost $800.00 for repairs made by Montgomery Motors during the time Branson had the loaner car. Both Branson and Asbill testified that Branson received the vehicle because he was a customer and not because he was an employee. Accordingly, we hold that on this record Branson was a customer under the Federated policy. The assignment of error is overruled. We next consider whether the trial court erred by failing to find as a matter of law that the terms of the policy were ambiguous with regard to coverage for employees who also were customers. Plaintiff argues that the Federated policy contains conflicting provisions which provide an exception precluding coverage for customers, employees contends while using that at the covered because of same time vehicles this providing with ambiguity coverage permission. the policy for Plaintiff must be interpreted to find coverage for the individual employee/customer. Additionally, plaintiff contends that the policy is ambiguous because there are no policy provisions requiring that an individual who is both a customer and an employee be treated as a customer only for the purposes of limiting coverage. Plaintiff argues that once the Federated policy conflict is resolved in favor of finding coverage for Branson, the terms of the Integon and Federated policies indicate that Federated provides primary coverage. Defendants contend that there was no ambiguity and that the key provisions of the Federated policy are not in conflict. Defendants argue that although Branson was an employee, he was a customer on this occasion. Defendants assert that there is no reason that a customer, who happens to work for Montgomery Motors, should not fall within the customer exclusion. We hold that the Federated policy is not ambiguous. Nothing in the policy requires that an employee cannot be considered a customer for purposes of determining insurance coverage. policy clearly excludes coverage for customers. The Accordingly, because Branson acquired the car on loan because his own car was being repaired by Montgomery Motors, he was therefore a customer and not an insured under the Federated policy. The assignment of error is overruled and summary judgment is affirmed. Affirmed. Judges LEWIS and HUNTER concur.
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