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NO. COA05-222
NORTH CAROLINA
COURT OF APPEALS
Filed: 21
February 2006
BRIAN
DAVIS,
Plaintiff-Appellee,
v. Orange County
No. 04-CVS-1104
JOSEPH
DIBARTOLO, ARRCS, INC.,
ARRCS,
INC. d/b/a ANNIE’S OLD
FASHIONED
TRATTORIA AND PIZZERIA,
MONTGOMERY
DEVELOPMENT CAROLINA
CORP.,
S.V. CENTER, LLC, MEL
DeSHA
d/b/a MEL’S PLUMBING &
ELECTRIC
CO., ROGER ALAN GIBSON
d/b/a
GIBSON PLUMBING and the
TOWN
OF CHAPEL HILL, a North
Carolina
Municipality,
Defendants-Appellants.
Appeal by
defendant Town of Chapel Hill from order entered 22 November 2004 by Judge Wade
Barber in Superior Court, Orange County.
Heard in the Court of Appeals 14 November 2005.
Battle,
Winslow, Scott & Wiley, P.A., by Marshall A. Gallop, Jr.; and Heidi G.
Chapman, PLLC, by Heidi G. Chapman, for plaintiff-appellee.
Little &
Little, PLLC, by Cathryn M. Little, for defendant-appellant, Town of Chapel
Hill.
McGEE, Judge.
Brian Davis
(plaintiff) filed a complaint on 11 June 2004 alleging he was injured on 14
June 2003 while working as a bartender at ARRCS, Inc. d/b/a Annie’s Old
Fashioned Trattoria and Pizzeria in Chapel Hill, North Carolina. Plaintiff alleged that various non-appealing
defendants created a dangerous condition by installing a gas-powered deep fat
fryer, a Pitco Friolator Model #35C (the fryer), in contravention to the
architect’s plans and the installation instructions. Plaintiff filed an amendment to the complaint on 12 July 2004,
alleging that he slipped on the unprotected floor of Annie’s Old Fashioned
Trattoria and Pizzeria on 14 June 2003 while working there as a bartender. Plaintiff further alleged he fell and slid
towards the fryer. Plaintiff alleged he
struck the fryer feet first, causing the “unrestrained” fryer to topple over
onto him, spilling hot grease on plaintiff’s torso, arms and legs. Plaintiff alleged he sustained second and
third degree burns.
Plaintiff also
made several allegations specifically against the Town of Chapel Hill
(defendant). Plaintiff alleged
defendant was grossly negligent because defendant’s employees in its building
inspections department failed to properly inspect the construction of Annie’s
Old Fashioned Trattoria and Pizzeria with respect to the placement and
installation of the fryer.
Defendant filed
motions to dismiss plaintiff’s complaint and amendment to the complaint
pursuant to N.C. Gen. Stat. §1A-1, Rule 12(b)(1) and Rule 12(b)(6) on 2 August
2004. In support of its motions,
defendant argued that plaintiff did not allege any waiver of defendant’s
sovereign immunity by purchase of liability insurance by defendant. Defendant also contended that it was denied
liability coverage for plaintiff’s claim by its insurance carrier and that
defendant had not purchased any other form of liability insurance.
The trial court
granted plaintiff’s motion to amend his complaint to allege the existence of
defendant’s applicable liability insurance, if such insurance existed, in an
order filed 13 September 2004. The
trial court also ordered defendant to “produce complete copies of all liability
insurance policies that have any conceivable coverage in this case,” and
deferred ruling on defendant’s motions to dismiss.
Defendant
provided plaintiff with, inter alia, a certified copy of its general
liability insurance policy for the coverage period 1 July 2002 through 1 July
2003. Plaintiff filed a second
amendment to his complaint on 29 September 2004, alleging that defendant had
liability insurance that was applicable to this case and that defendant waived
any governmental immunity by its purchase of insurance.
Plaintiff
subsequently filed a motion for leave to file a third amendment to his complaint,
which the trial court granted.
Plaintiff filed a third amendment to his complaint on 16 November 2004,
amending two paragraphs of the complaint.
Defendant filed
renewed motions to dismiss plaintiff’s complaint under Rule 12(b)(1) and Rule
12(b)(6) on 2 November 2004, again raising the defense of sovereign
immunity. The trial court denied
defendant’s motions to dismiss in an order filed 22 November 2004, finding that
defendant waived sovereign immunity by the purchase of general liability
insurance coverage for the period 1 July 2002 through 1 July 2003. Defendant appeals.
Defendant
argues that it has sovereign immunity from plaintiff’s action. Specifically, defendant argues plaintiff’s
alleged injuries were not caused by an occurrence, as defined by its general
liability insurance policy, but rather were caused by the intentional,
discretionary acts of its building inspector, acts for which defendant has sovereign immunity. Plaintiff argues, and the trial court found,
that defendant waived sovereign immunity by its purchase of general liability
insurance coverage for the period 1 July 2002 through 1 July 2003. Plaintiff argues his injuries were caused by
an occurrence, which was covered by defendant’s general liability insurance
policy, and that defendant waived its sovereign immunity to the extent of that
coverage.
The denial of a
12(b)(6) motion to dismiss for failure to state a claim is immediately
appealable where the motion raises the defense of sovereign immunity. Anderson v. Town of Andrews, 127 N.C.
App. 599, 601, 492 S.E.2d 385, 386 (1997).
However, in Data Gen. Corp. v. Cty. of Durham, 143 N.C. App. 97,
545 S.E.2d 243 (2001), our Court stated that “an appeal of a motion to dismiss
based on sovereign immunity presents a question of personal jurisdiction rather
than subject matter jurisdiction[.]” Id.
at 100, 545 S.E.2d at 245-46. Therefore, our Court held that the denial of
a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction is not
immediately appealable, even where the defense of sovereign immunity is
raised. Id. at 100, 545 S.E.2d
at 246. Accordingly, we only review the
trial court’s denial of defendant’s 12(b)(6) motion. “The question before a court considering a motion to dismiss for
failure to state a claim is whether, if all the plaintiff’s allegations are
taken as true, the plaintiff is entitled to recover under some legal
theory.” Toomer v. Garrett, 155
N.C. App. 462, 468, 574 S.E.2d 76, 83 (2002), appeal dismissed and disc.
review denied, 357 N.C. 66, 579 S.E.2d 576 (2003)).
“It is a
fundamental rule that sovereign immunity renders this state, including counties
and municipal corporations herein, immune from suit absent express consent to
be sued or waiver of the right of sovereign immunity.” Data Gen. Corp., 143 N.C. App. at
100, 545 S.E.2d at 246. However, a city
or town may waive its sovereign immunity pursuant to N.C. Gen. Stat.
§160A-485(a) (2005), which provides:
Any city is authorized to waive its immunity from civil liability in tort by the act of purchasing liability insurance. Participation in a local government risk pool pursuant to Article 23 of General Statute Chapter 58 shall be deemed to be the purchase of insurance for the purposes of this section. Immunity shall be waived only to the extent that the city is indemnified by the insurance contract from tort liability.
An insurance
policy is a contract and should be interpreted so as to effectuate the intent
of the parties at the time the policy was issued. Gaston County Dyeing Machine Co. v. Northfield Ins. Co.,
351 N.C. 293, 299, 524 S.E.2d 558, 563 (2000).
To the extent possible, every word and provision of an insurance policy
should be given effect. Id. However, ambiguous provisions and words
should be construed in favor of the insured.
Id. at 299-300, 524 S.E.2d at 563. An insurer’s unilateral determination of the scope of its
insurance policy’s coverage is not binding.
Herndon v. Barrett, 101 N.C. App. 636, 641, 400 S.E.2d 767, 770
(1991).
Defendant’s
general liability insurance contract provides that the Interlocal Risk
Financing Fund of North Carolina “will pay those sums that [defendant] becomes
legally obligated to pay as compensatory damages because of ‘bodily injury’ or
‘property damage’ to which this insurance applies.” Defendant’s general liability insurance policy further provides
that “[t]his insurance applies to ‘bodily injury’ and ‘property damage’ only
if: (1) The ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’
that takes place in the ‘coverage territory[.]’“ Defendant’s general liability insurance policy defines an
“occurrence” as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.” Finally, defendant’s general liability insurance policy excludes from
coverage “‘[b]odily injury’ or ‘property damage’ expected or intended from the
standpoint of any insured.”
Defendant’s
general liability insurance policy does not define the term “accident.” However, as our Court has recently noted:
“‘Non-technical words are to be given their meaning in ordinary speech unless
it is clear that the parties intended the words to have a specific technical
meaning.’“ McCoy v. Coker, ___
N.C. App. ___, ___, 620 S.E.2d 691, 694 (2005) (quoting Allstate Ins. Co. v.
Chatterton, 135 N.C. App. 92, 95, 518 S.E.2d 814, 816‑17 (1999), disc.
review denied, 351 N.C. 350, 542 S.E.2d 205 (2000)). In McCoy, our Court quoted Black’s
Law Dictionary’s definition of an accident in the context of insurance policies
as “‘“an occurrence which is unforeseen, unexpected, extraordinary, either by
virtue of the fact that it occurred at all, or because of the extent of the
damage.”‘“ McCoy, ___ N.C. App.
at ___, 620 S.E.2d at 694 (quoting Black’s Law Dictionary 15 (8th ed. 2004)
(citation omitted)).
In McCoy,
the plaintiff filed suit against a county and its building inspector for
property damage and personal injuries allegedly sustained when the building
inspector failed to properly inspect work performed on the plaintiff’s house
and improperly issued a certificate of occupancy. McCoy, ___ N.C. App. at ___, 620 S.E.2d at 692-93. The defendants’ motion for summary judgment
based on sovereign immunity was denied because the defendants waived sovereign
immunity by the purchase of insurance. Id.
at ___, 620 S.E.2d at 693.
The language of
the general liability insurance policy at issue in McCoy was
substantially the same as the language of the policy at issue here. The policy at issue in McCoy covered
damages for “bodily injury” or “property damage” caused by an “event,” which
the policy defined as an “accident, including continuous or repeated exposure
to substantially the same general harmful conditions.” Id. at ___, 620 S.E.2d at 694. As discussed above, our Court defined
“accident” according to its ordinary meaning.
Id. at ___, 620 S.E.2d at 694.
In McCoy,
our Court analogized several cases in which the insurance policies at issue
defined “occurrence” as “‘an accident, including continuous or repeated
exposure to conditions, which results in bodily injury or property damage neither
expected nor intended from the standpoint of the insured.’“ McCoy, ___ N.C. App. at ___, 620
S.E.2d at 694-95 (quoting Waste Management of Carolinas, Inc. v. Peerless
Ins. Co., 315 N.C. 688, 694, 340 S.E.2d 374, 379 (1986)). In so doing, our Court in McCoy
focused upon “whether the damages incurred were expected or intended by
the insured in light of the conduct in question[]” rather than on whether the
underlying conduct was accidental. McCoy,
___ N.C. App. at ___, 620 S.E.2d at 695 (emphasis added). Our Court stated the applicable test for
determining whether the plaintiff’s damages were “neither expected nor intended
from the standpoint of the insured[,]” and thus were caused by an “accident”:
“[t]he test should be a ‘subjective one, from the standpoint of the insured, and not an objective one asking whether the insured “should have” expected the resulting damage,’ i.e., whether the resulting damage was unexpected or unintended, not whether the act itself was unintended. An ‘expected or intended’ exclusion applies only ‘if the resulting injury as well as the act were intentional.’“
McCoy, ___ N.C. App.
at ___, 620 S.E.2d at 695 (quoting Washington Housing Auth. v. N.C. Housing
Authorities, 130 N.C. App. 279, 285, 502 S.E.2d 626, 630, disc. review
denied, 526 S.E.2d 477 (1998)).
In McCoy,
we applied the test set forth in Washington Housing Authority to hold
that while the building inspector’s actions in inspecting the plaintiff’s
property and issuing a certificate of occupancy were intentional, the
plaintiff’s resulting property damage and bodily injuries were neither intended
nor expected. McCoy, ___ N.C.
App. at ___, 620 S.E.2d at 695.
Accordingly, the plaintiff’s damages were caused by an “accident,” and
therefore an “event,” which was covered by the defendants’ insurance
policy. Our Court held the defendants
waived sovereign immunity to the extent of the applicable insurance
coverage. Id.
The insurance
policy at issue in McCoy did not contain the following language within
its definition of occurrence: “[W]hich results in bodily injury or property
damage neither expected nor intended from the standpoint of the
insured[.]” McCoy, ___ N.C. App.
at ___, 620 S.E.2d at 695. Similarly,
the policy at issue in this case does not include, within its definition of
“occurrence,” the language quoted above.
However, defendant’s general liability insurance policy does exclude
from coverage “‘[b]odily injury’ or ‘property damage’ expected or intended from
the standpoint of any insured.”
In Holz-Her
U.S., Inc. v. U.S. Fid. & Guar. Co., 141 N.C. App. 127, 539 S.E.2d 348
(2000), this Court also applied the test set forth in Washington Housing
Authority to the determination of whether damages were caused by an
“occurrence.” Id. at 129-30, 539
S.E.2d at 350-51. In Holz-Her,
our Court cogently set forth the proper focus of the inquiry:
The ultimate
focus is on the injury, i.e., whether it was expected or intended, not
upon the act and whether it was intended.
Even intentional acts can trigger a duty to defend, so long as the
injury was “not intentional or substantially certain to be the result of the
intentional act.”
Holz-Her, 141 N.C. App.
at 129, 539 S.E.2d at 350 (internal citations omitted).
In the case
before us, as in McCoy, Holz-Her and Washington Housing
Authority, in determining whether plaintiff’s alleged injuries were caused
by an “occurrence,” the focus should be on whether plaintiff’s damages were
unexpected and unintended. In other
words, we should not focus on the nature of defendant’s alleged precedent acts
of negligence in determining whether plaintiff’s alleged damages were caused by
an ‘occurrence.” Plaintiff alleged he
was
severely
injured, when he slipped on the unprotected floor while walking towards the fryer. He fell and slid towards the fryer, feet
first. His feet struck the unrestrained
Pitco Friolator Model #35C, causing it to tip over. The fryer toppled over on top of him, spilling hot grease over
his torso, arms and legs. Plaintiff
. . . sustained second and third degree burns over his torso,
arms and legs, while performing his job duties as a bartender.
Such a sequence
of events clearly was “unforseen” and “unexpected” pursuant to Black’s Law
Dictionary’s definition of an “accident.”
Additionally, plaintiff’s damages were unexpected and unintended from
defendant’s standpoint. If anything,
plaintiff’s damages in the present case were more unexpected than the
plaintiff’s damages in McCoy where the plaintiff was the homeowner who
suffered damages as a result of the defendants’ negligent inspection of her
home. In the present case, it was
clearly unintended and unexpected that a third party occupant of the building
would suffer damages as a result of defendant’s allegedly negligent
inspection. Therefore, we hold that
defendant’s general liability insurance policy covers plaintiff’s alleged
injuries and defendant has waived its sovereign immunity to the extent of the
coverage. Accordingly, the trial court
did not err in denying defendant’s motion to dismiss.
Defendant’s
reliance on City of Wilmington v. Pigott, 64 N.C. App. 587, 307 S.E.2d
857 (1983), disc. review denied, 310 N.C. 308, 312 S.E.2d 650 (1984) is
unpersuasive. In Pigott, the
City of Wilmington’s chief building inspector informed the plaintiffs that two
greenhouses on their property did not conform to the city building code. Id. at 587, 307 S.E.2d at 858. The building inspector gave the plaintiffs
thirty days in which to remove the greenhouses and the plaintiffs complied by
removing them. Id. Subsequently, the building inspector
informed the plaintiffs that if the greenhouses were less than 400 square feet,
they would be allowed. The plaintiffs
then filed suit against the City of Wilmington for damages for the loss of
their greenhouses, alleging their greenhouses met the requirements of the
building code. Id.
The City of
Wilmington had purchased liability insurance, but its insurance company denied
liability for the plaintiffs’ claims. Id. The City of Wilmington filed a motion for summary
judgment which the trial court denied. Id.
at 588, 307 S.E.2d at 858. The City of
Wilmington then filed an action for declaratory judgment and the trial court
found that the City of Wilmington’s insurance policy covered the plaintiffs’
claims for damages. Id.
The insurance
policy at issue in Pigott was similar to the policy in the case before
us in that it covered damages for “bodily injury” or “property damage” caused
by an “occurrence,” which it defined as an “accident.” Id. at 588, 307 S.E.2d at
858-59. In reversing the trial court,
the Court held as follows:
We cannot label
[the building inspector’s] order to the [plaintiffs] to remove their
greenhouses an “accident.” The decision
did not happen by chance and was not unexpected, unusual or unforseen. It was certainly intended by the City that
[the] chief building inspector . . . would exercise his
discretion to make these sorts of decisions as he saw fit. While [the building inspector] may have
mistakenly or erroneously interpreted the Wilmington building code, his conduct
did not amount to an “accident.” Since
there was no showing at trial that the act of the City constituted an
“accident,” we find that there was no “occurrence” within the meaning of the
multi‑peril insurance policy.
Id. at 589, 307
S.E.2d at 859.
In determining
the plaintiffs’ injuries were not caused by an occurrence, the Court appeared
to focus on the nature of the precedent acts of the building inspector rather
than on the damages suffered by the plaintiffs. However, in light of McCoy, Holz-Her and
Washington Housing Authority, this was an improper focus. We find the test articulated in McCoy,
Holz-Her and Washington Housing Authority to be more persuasive
on the facts in the present case.
Additionally, even if we were unable to conclusively determine whether
plaintiff’s damages were caused by an “accident,” we are required to construe
any ambiguities within an insurance policy in favor of the insured. McCoy, ___ N.C. App. at ___, 620 S.E.2d at 695; Gaston County Dyeing
Machine Co., 351 N.C. at 299-300, 524 S.E.2d at 563.
Defendant also
attempts to argue the trial court erred by denying defendant’s motions to
dismiss based upon a lack of proximate cause between defendant’s alleged
negligence and plaintiff’s alleged injuries.
However, because defendant failed to assign error to this issue in the
record on appeal, we do not review this argument. N.C.R. App. P. 10(a).
Affirmed.
Chief Judge
MARTIN and Judge ELMORE concur.