An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA09-1298
NORTH CAROLINA COURT OF APPEALS
Filed: 20 July 2010
NORTH CAROLINA FARM BUREAU
MUTUAL INSURANCE COMPANY,
Plaintiff,
v.
Durham County
No. 08 CVS 6393
CHARLIE SUTTON,
Defendant.
Appeal by plaintiff from order entered 22 April 2009 by Judge
Abraham Penn Jones in Durham County Superior Court.
Heard in the
Court of Appeals 10 March 2010.
Haywood, Denny & Miller, L.L.P., by Robert E. Levin, for
plaintiff-appellant.
Perry, Perry & Perry, P.A., by Robert T. Perry, for defendantappellee.
BRYANT, Judge.
Plaintiff North Carolina Farm Bureau Mutual Insurance Company
(Farm
Bureau)
appeals
from
a
trial
court
order
denying
Farm
Bureau’s motion for summary judgment and declaratory judgment. For
the reasons stated herein, we affirm.
On 22 December 2006, defendant Charlie Sutton was injured in
a collision with an unknown vehicle that occurred while Sutton was
riding as a passenger in the owner’s vehicle.
On 29 December 2006,
Sutton filed a claim for uninsured motorist coverage with the
-2vehicle owner’s insurance carrier, Farm Bureau. Farm Bureau alleges
that it notified Sutton he was scheduled to be examined under oath
on 1 February 2007 pursuant to the terms of the insurance policy
and that Sutton failed to attend the examination.
On 29 April
2008, Sutton retained legal representation and, on 12 June 2008,
offered to give a statement to Farm Bureau provided Farm Bureau
would not use the statement against him should the matter go to
trial.
Farm Bureau declined to accept the condition.
On 29 July 2008, Sutton filed a complaint against Farm Bureau
in Durham County District Court seeking to recover damages from the
uninsured motorist coverage for personal injuries and medical
expenses occurring as a result of the alleged collision.
A stay
was entered in the district court action, and on 26 November 2008,
Farm Bureau filed the current declaratory judgment action in Durham
County Superior Court. Farm Bureau sought a determination that the
insurance policy does not provide uninsured motorist coverage for
Sutton or, in the alternative, that Sutton violated the terms of
the policy and was not entitled to coverage.
along
with
an
affidavit
and
a
transcript
On 3 April 2009,
from
an
interview
conducted on 12 June 2008, Farm Bureau filed a motion for summary
judgment.
At a hearing on Farm Bureau’s motion for summary judgment,
Sutton asserted that he consented to having his statement recorded
for investigatory purposes on the condition that the recording
would not be used to impeach him should the matter go to trial and
that Farm Bureau refused to proceed with recording his statement.
-3After hearing the arguments of counsel, the trial court denied
Farm Bureau’s motion for summary judgment and declaratory judgment.
In addition, the trial court found that Sutton did not refuse to
cooperate with Farm Bureau, and that the policy referenced did
provide coverage for Sutton.
However, Sutton was ordered to
submit, upon proper notice, to an oral examination under oath.
Farm Bureau appeals.
_____________________________________
In this appeal, Farm Bureau challenges the trial court’s
denial of its motion for summary judgment. Farm Bureau argues that
the trial court erred in determining that Sutton did not refuse to
cooperate and in concluding that the Farm Bureau policy provided
coverage for Sutton. We affirm the trial court.
Standard of Review
A party against whom a claim is asserted or a declaratory
judgment is sought, “may, at any time, move with or without
supporting affidavits for a summary judgment in his favor as to all
or any part thereof.” N.C. R. Civ. P. 56(b). “Summary judgment is
proper if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show
that there is no genuine issue
as to any material fact and that
any party is entitled to a judgment as a matter of law.”
Stott v.
Nationwide Mut. Ins. Co., 183 N.C. App. 46, 49, 643 S.E.2d 653, 656
(2007) (citation omitted).
At the summary judgment stage, facts
must be viewed in the light most favorable to the nonmoving party
only if there is a genuine dispute as to those facts.
See Dobson
-4v. Harris, 352 N.C. 77, 83, 530 S.E.2d 829, 835 (2000).
If there
is any genuine issue of material fact, a motion for summary
judgment should be denied.
See Smith v. Harris, 181 N.C. App. 585,
587, 640 S.E.2d 436, 438 (2007).
The standard of review on appeal
from a summary judgment order is de novo.
Howerton v. Arai Helmet,
Ltd., 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004) (citation
omitted).
A
Farm Bureau maintains that the trial court erred in finding
the uninsured motorist section of the policy covered Sutton after
he breached the cooperation agreement.
“When the language of the contract is clear and unambiguous,
construction of the agreement is a matter of law for the court . .
. and the court cannot look beyond the terms of the contract to
determine the intentions of the parties.”
Piedmont Bank & Trust
Co. v. Stevenson, 79 N.C. App. 236, 240, 339 S.E.2d 49, 52 (1986)
(internal citations omitted).
Here, the insurance policy states that “insured” under the
uninsured motorist coverage section includes “(1) You or any family
member[;] [and] (2) [a]ny other person occupying: (a) your covered
auto[,] or (b) any other auto operated by you.”
The contract
clearly and unambiguously provides for coverage of any person
occupying the insured’s vehicle.
passenger.
Sutton was the policy holder’s
Therefore, we hold the trial court did not err by
determining that Sutton is considered an insured under the policy.
B
-5Farm Bureau argues in the alternative that because Sutton is
considered an “insured” under the policy, the cooperation clause
was binding upon him and his failure to cooperate was a breach of
the
clause
and
thereby
materially
prejudiced
Farm
Bureau’s
investigation. Whether there has been a material failure to comply
with the cooperation clause of an insurance agreement is a question
of
fact.
Henderson v. Rochester American Ins. Co., 254 N.C. 329,
118 S.E.2d 885 (1961). An insured’s failure to cooperate must have
“materially prejudiced [the insurer’s] ability to investigate and
defend the [UM] claim” as a result of the delay.
Liberty Mut. Ins.
Co. v. Pennington, 356 N.C. 571, 580-81, 573 S.E.2d 118, 124
(2002).
An insurer claiming the forfeiture of coverage by the
insured’s breach of the cooperation clause has the burden of proof.
Henderson, 254 N.C. 329, 118 S.E.2d 885.
The uninsured motorist section of the insurance policy at
issue states that a person seeking uninsured motorist coverage must
comply with the following:
1. Cooperate with us in the investigation,
settlement or defense of any claim or suit.
2. Promptly send us copies of any notices or
legal papers received in connection with the
accident or loss.
3. Submit as often as we reasonably require:
a. to physical exams by physicians we select.
We will pay for these exams.
b. to examinations under oath and subscribe
the same.
4. Authorize us to obtain:
a. medical reports; and
b. other pertinent records;.
5. Submit a proof of loss when required by us.
-6The policy requires that the insured to “cooperate with [Farm
Bureau] in the investigation, settlement or defense of any claim or
suit” and to submit to “examinations under oath.”
Farm Bureau
scheduled an interview and/or examination of Sutton for 12 June
2008.
Before Sutton would give his statement, he asked that Farm
Bureau promise that the statement would not be used against him in
court.
Farm Bureau refused to accept Sutton’s condition and
refused to proceed with recording Sutton’s statement.
In the instant case, the trial court found that Sutton had not
refused to cooperate. Farm Bureau asserts that Sutton’s failure to
give a statement under oath had a material and adverse effect on
the insurance company’s ability to investigate the claim. However,
Farm Bureau has not shown that the trial court erred in not finding
and concluding that Sutton failed to cooperate.
Moreover, the
trial court ordered defendant upon proper notice to submit to oral
examination under oath within twenty days from the date of order
denying summary judgment. This portion of the trial court’s order
vitiates much of plaintiff’s argument regarding defendant’s failure
to cooperate.
Accordingly, Farm Bureau’s arguments are overruled.
The judgment of the trial court is affirmed.
Affirmed.
Judge BEASLEY concurs.
Judge STEELMAN concurs in separate opinion.
Report per Rule 30(e).
NO. COA09-1298
NORTH CAROLINA COURT OF APPEALS
Filed: 20 July 2010
NORTH CAROLINA FARM BUREAU
MUTUAL INSURANCE COMPANY,
Plaintiff,
v.
Durham County
No. 08 CVS 6393
CHARLIE SUTTON,
Defendant.
STEELMAN, Judge concurs in separate opinion.
I concur in the result because plaintiff failed to demonstrate
material prejudice before the trial court.
