Integon National Insurance v. Helping Hands Specialized Transport, Inc.

NO. COA13-1266
NORTH CAROLINA COURT OF APPEALS
Filed: 6 May 2014
INTEGON NATIONAL INSURANCE
COMPANY,
Plaintiff,
v. Forsyth County
No. 12 CVS 6350
HELPING HANDS SPECIALIZED
TRANSPORT, INC. and LESLIE TAYLOR,
Executor of the Estate of MARY
LEWIS FAGGART SMITH,
Defendants.
Appeal by plaintiff from order entered 12 August 2013 by
Judge A. Moses Massey in Forsyth County Superior Court. Heard
in the Court of Appeals 7 April 2014.
Bennett & Guthrie, P.L.L.C., by Roberta King Latham, for
plaintiff-appellant.
Mills & Levine, by Michael J. Greer, for defendant-appellee
Leslie Taylor.
MARTIN, Chief Judge.
Plaintiff Integon National Insurance Company filed this
action seeking a declaration of its obligations to provide
coverage pursuant to a business automobile liability insurance
policy issued to defendant Helping Hands Specialized Transport,
Inc. for the alleged personal injuries and death of Mary Lewis
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Faggart Smith which arose out of an incident on 24 May 2010.
Defendant Leslie Taylor is Ms. Smith’s niece and the executor of
Ms. Smith’s estate. Ms. Taylor, through counsel, accepted
service of process and filed an answer. Helping Hands was
served with process, but failed to answer or otherwise respond
to the complaint, and its default was entered by the Clerk of
Superior Court. After discovery, both Integon and Ms. Taylor
filed motions for summary judgment.
The materials before the trial court at the summary
judgment hearing tended to show that at the time of Ms. Smith’s
injury, Helping Hands had a business automobile insurance policy
with Integon which insured against liability for damages “caused
by an accident and resulting from the ownership, maintenance or
use of a covered” vehicle.
The materials also disclosed that prior to 24 May 2010, Ms.
Smith had been hospitalized at Carolinas Medical Center and her
treating physician had determined that she was nearing the end
of her life and recommended to Ms. Taylor that she arrange for
palliative care for her aunt. Ms. Taylor contracted with
Hospice of Cabarrus County to provide hospice care for Ms. Smith
at Ms. Smith’s home. Hospice arranged for Helping Hands to
transport Ms. Smith from the hospital to her home on May 24th.
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A Helping Hands handicapped accessible van, driven by Helping
Hands driver Robert Brennan, went to the hospital on that date.
Ms. Smith, who was seated in a Geri-chair, was loaded into the
van and Mr. Brennan transported her safely to her residence,
where Ms. Taylor was waiting.
There was also evidence tending to show that prior to the
van’s arrival, Ms. Taylor had received two telephone calls
asking whether a ramp would be needed to negotiate the steps to
Ms. Smith’s home, and she responded that a ramp would be needed.
The record is unclear as to whether these inquiries were made by
Helping Hands or Hospice. Nevertheless, when the van arrived
with Ms. Smith, there was no ramp.
Mr. Brennan used the van’s hydraulic lift to lower Ms.
Smith, in the Geri-chair, from the van to the driveway and
removed the Geri-chair from the van’s lift. Shortly thereafter,
it began to rain. Mr. Brennan rolled Ms. Smith up a sidewalk to
the house’s front steps. Although the Geri-chair had wheels, it
was not appropriate for transporting Ms. Smith up the steps and
into the house, so Mr. Brennan asked Ms. Taylor if she had a
wheelchair. Ms. Taylor went into the house and rolled a
wheelchair onto the porch and Mr. Brennan carried it down the
steps. Ms. Smith was transferred from the Geri-chair to the
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wheelchair without sustaining any injury. Mr. Brennan then
proceeded to ascend the steps backwards and pull the wheelchair,
facing backwards, up the steps. After going up the first step,
Ms. Smith started sliding out of the wheelchair; Ms. Taylor
grabbed one of her legs to keep her from sliding out of the
chair, and Mr. Brennan put his arm around Ms. Smith and pulled
the wheelchair up the second step. Once they were on the porch,
Ms. Taylor discovered that Ms. Smith had sustained a gash on her
leg. Ms. Smith passed away two days later. Neither Ms. Taylor
nor Mr. Brennan recall whether the van’s engine was running
while Ms. Smith was unloaded from the van, transferred to the
wheelchair, and taken up the porch steps. The series of events
from the time Ms. Smith arrived at her home until the injury
lasted approximately five minutes.
Ms. Taylor has filed an action seeking damages in Cabarrus
County Superior Court entitled Leslie Taylor, Executor of the
Estate of Mary Lewis Faggart Smith v. Hospice of Cabarrus
County, Inc. and Helping Hands Specialized Transport, Inc., 12
CVS 1741, asserting that the alleged negligence, on the part of
the named defendants, proximately resulted in Ms. Smith’s
injuries and death.
The trial court denied Integon’s motion for summary
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judgment and granted Ms. Taylor’s motion for summary judgment,
holding that Integon’s policy provides coverage in the full
amount of the policy limits to Helping Hands for its liability,
if any, with respect to the incident, and that Integon is
obligated to provide a defense to Helping Hands for the claim.
Integon appeals.
_________________________
“Our standard of review of an appeal from summary judgment
is de novo; such judgment is appropriate only when the record
shows 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.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572,
576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649
S.E.2d 382, 385 (2007)). A question of fact
is material if the facts alleged would
constitute a legal defense, or would affect
the result of the action, or if its
resolution would prevent the party against
whom it is resolved from prevailing in the
action. The issue is denominated “genuine”
if it may be maintained by substantial
evidence.
Koontz v. City of Winston-Salem, 280 N.C. 513, 518, 186 S.E.2d
897, 901 (1972).
In this case, while there may be genuine issues of fact
which are material to the issues of negligence and the liability
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of Helping Hands for the injuries and death of Ms. Smith, none
of those factual issues are material to the issue of whether
Integon’s policy of insurance provides coverage to Helping Hands
for any such liability. Thus, summary judgment is an
appropriate procedure for the resolution of this declaratory
judgment action. See Pine Knoll Ass’n v. Cardon, 126 N.C. App.
155, 158, 484 S.E.2d 446, 448, disc. review denied, 347 N.C.
138, 492 S.E.2d 26 (1997).
While Integon’s policy insured Helping Hands against
liability for damages “caused by an accident and resulting from
the ownership, maintenance or use of a covered” vehicle,
N.C.G.S. § 20-279.21 requires that an automobile liability
insurance policy provide coverage for damages “arising out of
the ownership, maintenance or use of” the covered vehicle. N.C.
Gen. Stat. § 20-279.21(b)(2) (2013). Our case law has
established that this statute is written into every automobile
liability policy. Nationwide Mut. Ins. Co. v. Chantos, 293 N.C.
431, 441, 238 S.E.2d 597, 604 (1977), appeal after remand, 298
N.C. 246, 258 S.E.2d 334 (1979).
In Fidelity & Casualty Co. of New York v. North Carolina
Farm Bureau Mutual Insurance Co., 16 N.C. App. 194, 198–99, 192
S.E.2d 113, 117–18, cert. denied, 282 N.C. 425, 192 S.E.2d 840-7-
(1972), this Court defined the meaning of the language “arising
out of the ownership, maintenance and use” of a vehicle as used
in an automobile liability insurance policy. The Court stated:
The policy provision in question speaks of
liability “arising out of the ownership,
maintenance or use” of the truck. The words
“arising out of” are not words of narrow and
specific limitation but are broad, general,
and comprehensive terms effecting broad
coverage. They are intended to, and do,
afford protection to the insured against
liability imposed upon him for all damages
caused by acts done in connection with or
arising out of such use. They are words of
much broader significance than “caused by.”
They are ordinarily understood to mean
“originating from,” “having its origin in,”
“growing out of,” or “flowing from,” or in
short, “incident to,” or “having connection
with” the use of the automobile. The act of
loading and unloading a truck is not an act
separate and independent of the use and is
an act necessary to accomplish the purpose
of using the truck.
The parties do not, however, contemplate a
general liability insurance contract. There
must be a causal connection between the use
and the injury. This causal connection may
be shown to be an injury which is the
natural and reasonable incident or
consequence of the use, though not foreseen
or expected, but the injury cannot be said
to arise out of the use of an automobile if
it was directly caused by some independent
act or intervening cause wholly
disassociated from, independent of, and
remote from the use of the automobile.
Id. (emphasis added) (citations omitted).
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Citing the foregoing, the North Carolina Supreme Court, in
State Capital Insurance Co. v. Nationwide Insurance Co., 318
N.C. 534, 539–40, 350 S.E.2d 66, 69 (1986) stated: “In short,
the test for determining whether an automobile liability policy
provides coverage for an accident is not whether the automobile
was a proximate cause of the accident. Instead, the test is
whether there is a causal connection between the use of the
automobile and the accident.”
In State Capital, two men traveled together in a pickup
truck to survey some hunting land. Id. at 536, 350 S.E.2d at
67. The truck contained three guns, a rifle and shotgun in the
gun rack and another rifle on the floor behind the seat. Id.The men stopped at a tract of land and got out of the truck to
survey the area. Id. Thereafter, the passenger returned to the
truck and, a short time later, the driver saw a deer and
returned to the truck to retrieve his rifle. Id. As he moved
the seat and reached for the rifle, it discharged, striking the
passenger. Id. at 536, 350 S.E.2d at 68. The Supreme Court
held that a causal connection existed between the use of the
vehicle and the injury to the passenger because “the
transportation and unloading of firearms are ordinary and
customary uses of a motor vehicle” and the accident was a
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reasonable consequence of such use. Id. at 540, 350 S.E.2d at
70.
Since the decision in State Capital, this Court has been
liberal in its application of the principle that a motor vehicle
liability insurance policy will provide coverage if an injury is
caused by an activity that is necessarily or ordinarily
associated with the use of the insured vehicle. In Nationwide
Mutual Insurance Co. v. Davis, 118 N.C. App. 494, 498, 455
S.E.2d 892, 895, disc. review denied, 341 N.C. 420, 461 S.E.2d
759 (1995), this Court held that an automobile liability policy
provided coverage for injuries to a child who was struck by
another motor vehicle after getting out of the insured vehicle,
driven by her grandmother, and crossing a roadway to go to a
store. The Court reasoned that the grandmother was
“purposefully using” the insured vehicle to go to the store, so
that the vehicle “was instrumental in the trip” to the store,
and that because the grandmother had parked the van where the
child had to cross a roadway to get to the store, there was a
causal connection between its use and the child’s injury. Id.Also, in Integon National Insurance Co. v. Ward ex rel.
Perry, 184 N.C. App. 532, 535, 646 S.E.2d 395, 397 (2007), this
Court held that an automobile liability policy provided coverage
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to a minor child who had accompanied the owner of the insured
vehicle to an automobile repair shop. While the insured vehicle
was undergoing repairs, the child was struck by another vehicle
in the shop. Id. This Court relied on State Capital and Davis
to hold that because the insured driver, accompanied by the
child, used the insured vehicle to go to the repair shop so that
the vehicle could be repaired, a sufficient causal connection
existed between the vehicle’s use and the child’s injuries to
require coverage for the child’s injuries. Id. at 534–35, 646
S.E.2d at 397.
In the present case, the insured vehicle was intended for
use, on the date of the occurrence of Ms. Smith’s injury, to
transport her from the hospital to her residence for palliative
care. Because she was unable to ambulate, application of the
logic contained in Davis and Ward leads to the inference that
the use of the insured van included moving Ms. Smith into her
residence as a part of the transport service. Since we are
unable to draw any meaningful distinction between the Davis and
Ward facts and the facts of the instant case, and even though we
might believe that the extension of coverage in those cases goes
beyond the common-sense application of the principles of a
causal connection, we are bound to follow them and hold that
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there is a sufficient “causal connection” between the van’s use
and Ms. Smith’s injury requiring Integon’s policy to provide
coverage.1 Our decision is not to be construed as an indication
that we express any opinion as to the liability of any party to
the underlying civil action.
Finally, plaintiff argues that after the trial court found
that the insurance policy covered Ms. Smith’s injury, the trial
court should have reformed the policy to require payment of only
the statutorily mandated minimum coverage amount. We do not
reach this argument.
North Carolina Rule of Appellate Procedure 10 requires:
In order to preserve an issue for appellate
review, a party must have presented to the
trial court a timely request, objection, or
motion, stating the specific grounds for the
ruling the party desired the court to make
if the specific grounds were not apparent
from the context. It is also necessary for
the complaining party to obtain a ruling
upon the party’s request, objection, or
motion.
N.C.R. App. P. 10(a)(1).
Integon’s complaint did not seek reformation of the
1
Our Supreme Court has stated: “While we recognize that a panel
of the Court of Appeals may disagree with . . . an opinion by a
prior panel and may duly note its disagreement . . . in its
opinion, the panel is bound by that prior decision until it is
overturned by a higher court.” State v. Jones, 358 N.C. 473,
487, 598 S.E.2d 125, 134 (2004).
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insurance contract, only a declaration that its policy provided
no coverage to Helping Hands for Ms. Smith’s injuries. Nothing
in the record before us shows affirmatively that plaintiff
argued reformation of the policy before the trial court.
Therefore, we will not review this argument because it was not
properly preserved for appeal.
Also, to the extent that plaintiff asserts the reformation
argument is part of the declaratory judgment action, that
argument fails. “The purpose of the Declaratory Judgment Act
is, to settle and afford relief from uncertainty and insecurity
with respect to rights, status, and other legal relations.”
Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285, 287, 134
S.E.2d 654, 657 (1964) (internal quotation marks omitted).
While the Declaratory Judgment Act should be liberally construed
the Act applies “only when the pleadings and evidence disclose
the existence of a genuine controversy between the parties to
the action, arising out of conflicting contentions as to their
respective legal rights and liabilities under a deed, will,
contract, statute, ordinance, or franchise.” Id. at 287, 134
S.E.2d at 656–57. Thus, a declaratory judgment action is
appropriate when it will “alleviat[e] uncertainty in the
interpretation of [a] written instrument[].” Danny’s Towing 2,
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Inc. v. N.C. Dep’t of Crime Control & Pub. Safety, 213 N.C. App.
375, 382, 715 S.E.2d 176, 181 (2011). However, our courts have
held that a declaratory judgment action is inappropriate when
used as “a vehicle for the nullification of [written]
instruments.” Farthing v. Farthing, 235 N.C. 634, 635, 70
S.E.2d 664, 665 (1952).
While none of the previously cited cases directly address
plaintiff’s argument, they do provide a framework for when a
declaratory judgment action is appropriate. Plaintiff seems to
assert that the trial court should have reformed the terms of
the automobile liability policy because the language of the
policy was intended to apply to a narrower scope of causation
than N.C.G.S. § 20-279.21, and therefore, plaintiff should have
to pay only the statutorily mandated minimum coverage and not
the minimum coverage stated in the policy. Plaintiff’s argument
asserts that this Court should change the terms of the policy
based on the interaction between the language of the parties’
agreement and the requirements of statutory law. The
Declaratory Judgment Act, however, applies to the interpretation
of written instruments. Therefore, we find that this type of
determination is beyond the scope of the Declaratory Judgment
Act.
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For the reasons stated above we affirm.
Affirmed.
Judges McGEE and CALABRIA concur.