York Industrial Center, Inc. v. Michigan Mutual Liability Co.

155 S.E.2d 501 (1967) 271 N.C. 158

YORK INDUSTRIAL CENTER, INC. and York Building Company
v.
MICHIGAN MUTUAL LIABILITY COMPANY.

No. 535.

Supreme Court of North Carolina.

July 24, 1967.

Holding, Harris, Poe & Cheshire, Raleigh, for defendant appellant.

Manning, Fulton & Skinner, Raleigh, for plaintiff appellees.

LAKE, Justice.

The appellant states in its brief that in this case there is no issue of fact. As it concedes, the evidence is sufficient to support the findings of fact by the trial judge. These are, therefore, conclusive. Sherrill v. Boyce, 265 N.C. 560, 144 S.E.2d 596.

The determinative question is, Does the policy issued by the defendant insure the plaintiffs against liability for damage to the land of a third person by the insured's entry thereon and acts thereon due to a bona fide mistake as to the location of the boundary line between the land of the insured and the land of such third person? The basic principles to be applied in answering this question were recently stated by us in Allstate Insurance Co. v. Shelby utual Insurance Co., 269 N.C. 341, 152 S.E.2d 436, as follows:

"It is well settled that, in the construction of a policy of insurance, ambiguous provisions will be given the meaning most favorable to the insured. Exclusions from and exceptions to undertakings by the company are not favored. Jamestown Mutual Insurance Co. v. Nationwide Mutual Insurance Co., 266 N.C. 430, 146 S.E.2d 410; Anderson v. Allstate Insurance Co., 266 N.C. 309, 145 S.E.2d 845. Nevertheless, it is the duty of the court to construe an insurance policy as it is written, not to rewrite it and thus make a new contract for the parties. Hardin v. American Mutual Fire Insurance Co., 261 N.C. 67, 134 S.E.2d 142; Richardson v. Liberty Life Insurance Co., 254 N.C. 711, 119 S.E.2d 871, 87 A.L.R. 2d 475; Pruitt v. Great American Insurance Co., 241 N.C. 725, 86 S.E.2d 401."

The policy, as originally issued, provided coverage against legal liability for the payment of damages because of injury to or destruction of property "caused by accident." Subsequently, it was amended by the attachment of a rider providing for the substitution of the word "occurrence" for the word "accident" and defining "occurrence." For this change in the policy, the plaintiffs paid a substantial additional premium. The necessary inference is that the parties intended that the policy, as amended, would provide substantial additional protection to the policyholder; that is they intended that the word "occurrence," as defined in the rider, would bring within the protection of the policy substantial risks not included under the original limitation to damage to property "caused by accident."

Since the word "occurrence" is defined in the amended policy, it must be given that meaning, regardless of whether a broader or narrower meaning is customarily given to the term, the parties being free, apart from statutory limitations, to make their contract for themselves and to give words therein the meaning they see fit. Substituting this agreed definition of "occurrence" for the word "accident" in the policy, the undertaking of the defendant is thus stated in the contract of the parties:

"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, * * * caused by an unexpected event or happening * * * which results during the policy period in * * * injury to or destruction of property * * * provided the insured did not intend that injury * * * or destruction would result. * * *"

We turn first to the proviso which excepts from the coverage, otherwise provided by the policy, liability of the insured for injury to or destruction of property intended by him. This, like other exceptions from coverage, otherwise provided by a policy of insurance, is to be strictly construed against the company.

It is obvious that the plaintiffs intended to cut down and destroy every tree which they did destroy on the land of the Wests. It is equally clear that they did so in the belief that these trees and shrubs belonged to them and not to the Wests. That is, the plaintiffs did not destroy the trees with the intent to injure or destroy any property right of the Wests. A fair construction of this excluding clause in the policy is that it is intended to remove from the protection otherwise afforded by the policy only the liability of an insured who wilfully damages property, knowing that he has no right to do so. Therefore, if the judgment rendered against the plaintiffs was for damage to the land of the Wests "caused by an unexpected event or happening," the proviso does not eliminate the plaintiffs' claim from the coverage of the policy.

The basis of the plaintiffs' present claim against the defendant is a judgment rendered against the plaintiffs in favor of the Wests for trespass. In the absence of negligence, which is not shown in the present case, trespass to land requires an intentional entry thereon. Schloss v. Hallman, 255 N.C. 686, 122 S.E.2d 513. It does not, however, require that such entry be wilful and an action for trespass lies even though the entry was made under a bona fide belief by the defendant that he was the owner of the land and entitled to its possession or was otherwise entitled to go upon the property. See Lee v. Stewart, 218 N.C. 287, 10 S.E.2d 804; 52 Am.Jur., Trespass, §§ 7, 35; 87 C.J.S. Trespass § 5; Restatement, Torts, 2d § 164; Prosser on Torts, 3d ed, § 17. Consequently, there is no inconsistency between the claim of the plaintiffs for reimbursement for their payment of the judgment rendered against them for trespass and their contention that they "did not intend" the injury or destruction of the property of the Wests, which was the basis for such judgment against them. The testimony of the plaintiffs' witnesses Castleberry, Gilliam, Edwards and York, the admission of which the defendant assigns as error on the ground of irrelevance to any issue in the present action, was relevant to this question of the plaintiffs' intent to injure or destroy the property of the Wests. It showed a bona fide effort by the plaintiffs to determine the location of the boundary of the West property so as to avoid injury to it. This assignment of error is, therefore, without merit.

We are brought next to the question of whether the injury to or destruction of the property of the Wests was caused by "an unexpected event or happening" within the meaning of the policy issued by the defendant. The cause of the injury to the property of the Wests was the crossing of the boundary line by the plaintiffs and their acts subsequent thereto without knowledge of such crossing. This invasion of the land of the Wests was, in turn, due to the error of the surveyor in locating the line. This error of the surveyor was "an unexpected event" within the meaning of this policy.

In Haynes v. American Casualty Co., 228 Md. 394, 179 A.2d 900, employees of a contractor, by mistake, crossed a boundary, entered the property of another person and cut down trees thereon. The court held the damage so done was "caused by accident" within the meaning of the liability insurance policy there in question, which was similar to the original policy issued by the defendant here. In J. D'Amico, Inc. v. City of Boston, 345 Mass. 218, 186 N.E.2d 716, an excavating contractor, following lines established for his guidance by the city engineer, went over the line of an adjoining property owner and destroyed trees on his land. The contractor, having been sued by the landowner, brought a proceeding to compel his liability insurer to defend the claim made against him by the property owner. The policy was similar to the one originally issued to the defendant here. The Supreme Court of Massachusetts, though reversing a judgment in favor of the insured on grounds not presented in the matter before us, said, "[T]respass by D'Amico by mistake, or without actual intent to invade property upon which it knew it was not entitled to carry on work under its contract, would be ``caused by accident' within the policy." A like result was reached under a like policy in McAllister v. Hawkeye-Security Ins. Co., 68 Ill.App.2d 222, 215 N.E.2d 477. See also Gray v. State, (La.App.), 191 So. 2d 802, 816.

The policy issued by the defendant in this case, as amended, was designed to provide coverage substantially more extensive than that limited to liability for damages "caused by accident." We hold, therefore, that the invasion of the land of the Wests by the plaintiffs, and the resulting damage thereto and liability therefor, was "caused by an unexpected event or happening," namely, an error as to the location of the boundary line, and that such injury to the land of the Wests was not intended by the plaintiffs. Consequently, the liability of the plaintiffs to the Wests for such damages was within the coverage of the policy and there was no error in the denial of the defendant's motion for nonsuit or in the entry of the judgment for the plaintiffs.

Affirmed.