Manhattan Life Insurance v. Lacy J. Miller MacHine Co.

298 S.E.2d 190 (1982)

MANHATTAN LIFE INSURANCE COMPANY
v.
LACY J. MILLER MACHINE COMPANY, INC.

No. 8122SC1319.

Court of Appeals of North Carolina.

December 21, 1982.

Cansler, Lockhart, Parker & Young, P.A. by Thomas Ashe Lockhart and George K. Evans, Jr., Charlotte, for plaintiff-appellee.

Wilson, Biesecker, Tripp & Sink by Joe E. Biesecker, Lexington, and House, Blanco & Osborn, P.A. by Lawrence U. McGee, Winston-Salem, for defendant-appellant.

BECTON, Judge.

I

The purpose of summary judgment is to "pierce" the pleadings and determine whether a genuine issue of material fact exists. Singleton v. Stewart, 280 N.C. 460, 464, 186 S.E.2d 400, 403 (1972). Should there exist any issue of material fact, the reviewing court must deny the motion. Id.

The Miller Company first argues that there is a material factual dispute concerning whether Lacy Miller was "active and working full time" within the meaning of the insurance policy. The Miller Company cites numerous cases for the proposition that a person need not be physically at the office forty (40) hours per week in order to be considered an active and full time employee. We agree that the usefulness or active status of an employee is as much a function of his employer's needs and demands as any other criterion. However, the Miller Company proffers no authority upon which we could rule that an employee who has been legally barred from both his employer's premises and his former duties by agents of that employer is, nevertheless, an "active and full time" employee. That dearth of authority is not surprising. Indeed, we find it difficult to understand how the Miller Company officers, the plaintiffs in the action to get the restraining order, so alarmed by Lacy Miller's alleged incompetence that they sought extraordinary equitable relief against him on 21 January 1980, could nevertheless consider him a valued member of their firm just eleven days later. One is led to speculate whether the Miller Company's change of heart was motivated by its status as beneficiary of the policy proceeds.

We need look no further than the restraining order to conclude that no issue of fact exists on this point. The restraining order enjoined Lacy Miller from "taking or attempting to take any action whatsoever with regard to the assets, funds, obligations, rights ... from attempting to fire or hire employees or agents of [Miller Machine Company], and from selling or attempting to sell any assets of the [Miller Machine Company]." Lacy Miller was stripped of all the duties, rights and responsibilities he had to the company he founded by the temporary restraining order. For the defendants to consider Lacy Miller an officer of the Company after they had obtained the restraining order on 21 January 1980 requires more than legal ingenuity; it requires a resort to intellectual gymnastics. We hold that, because of the temporary restraining order entered for the defendants, Lacy Miller was not active and working full time as a matter of law.

II

Defendant's second and third arguments concern whether Manhattan waived its requirement that an insured be active and working full time to qualify for protection, and whether Roger Brooks, the person who solicited the insurance application, was an agent of Manhattan.

Assuming, arguendo, that Roger Brooks was an agent of Manhattan when he solicited, submitted and sold the "key man" policy on the life of Lacy J. Miller, the Miller Company's argument is still without merit. Without the knowledge of Roger Brooks, defendants purposely took action to remove Lacy J. Miller from any and all meaningful involvement with the Company. Key man insurance is, by definition, designed to fund buy-out or stock redemption plans upon the death of major shareholders, senior officers, and the like. Lacy Miller was in no manner a "key man", by reason of the temporary restraining order; he was thus ineligible for protection under the policy by its own terms and defendant's actions. Thus the policy was void ab initio, and no issue of fact exists as to these contentions of the Miller Company.

III

Finally, the Miller Company asserts that its motion to continue the hearing on plaintiff's motion for summary judgment should have been allowed because discovery procedures were pending. The decision to grant or deny a continuance is solely within the discretion of the trial judge, and his decision will not be reviewed absent a manifest abuse of discretion. Wood v. Brown, 25 N.C.App. 241, 243, 212 S.E.2d 690, 691, cert. denied, 287 N.C. 469, 215 S.E.2d 626 (1975). We find no abuse here. Generally, it is error for a court to hear and rule on a motion for summary judgment when discovery procedures which might lead to evidence relevant to the motion are pending. Conover v. Newton, 297 N.C. 506, 256 S.E.2d 216 (1979). That rule pre-supposes that any information gleaned will be useful. When, as here, undisputed facts themselves resolve the matter against the party seeking the continuance, the general rule does not apply. We find neither error nor any abuse of the trial judge's discretion in denying the motion to continue.

IV

In summary: We hold that Lacy Miller could not have been an employee of the Miller Machine Company as a matter of law by reason of the temporary restraining order granted the Miller Company on 21 June 1980 and that therefore the purported insurance contract was void ab initio. Summary judgment for Manhattan Life Insurance Company was proper.

Affirmed.

MORRIS, C.J., and JOHNSON, J., concur.