Copyright 1997 - N.C. Administrative Office of the Courts


WILLIAM Z. DEASON, Plaintiff v. J. KING HARRISON CO., INC. d/b/a J. KING HARRISON

    

No. COA96-1527

(Filed 21 October 1997)

    

    Appeal by plaintiff from judgment dated 23 September 1996 by Judge Melzer A. Morgan, Jr. in Mecklenburg County Superior Court. Heard in the Court of Appeals 28 August 1997.

    Waggoner, Hamrick, Hasty, Monteith and Kratt, PLLC, by S. Dean Hamrick and G. Bryan Adams, III, for plaintiff appellant.

    Womble, Carlyle, Sandridge & Rice, PLLC, by Richard T. Rice and Lawrence B. Somers, for defendants appellees American National Fire Insurance Company.

    GREENE, Judge.

    William Z. Deason (plaintiff) appeals from a judgment denying his claim against American National Insurance Company (American National). The trial court granted judgment for the plaintiff against J. King Harrison Co., Inc., d/b/a J. King Harrison Transportation Company, Inc. (Harrison) and there is no appeal from that judgment.

    The undisputed evidence reveals: Plaintiff is a resident of Missouri and Harrison is a North Carolina corporation with a place of business in Charlotte. American National is an insurance company authorized to do business in North Carolina and issued an Owners', Landlords' and Tenants' Liability Insurance policy (commonly known as a premises-operations policySee footnote 1) to Harrison who was engaged in the sale of cotton and fiber products at 1605-09 North Brevard Street in Charlotte. This policy provides coverage for the "designated premises [1605-09 N. Brevard St., Charlotte, NC] and related operations in progress," including bodily injury "caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental thereto." The policy contains the following exclusion, known as the "completed operations hazard":

    See Lindley Chemical, Inc. v. Hartford Acci. and Indemn. Co., 71 N.C. App. 400, 403, 322 S.E.2d 185, 187 (1984).


Footnote: 2      If negligence prevents an operation from being complete until the negligence is detected, then the completed operations hazard exclusion would be illusory and the insurer's liability would extend far beyond the limits of the intended coverage. Roger C. Henderson, Insurance Protection for Products Liability and Completed Operations - What Every Lawyer Should Know, 50 Neb. L. Rev. 415, 436-438 (1971). Premises-operations liability policies are intended to limit the insurer's liability for an operation to its logical point of completion. To hold, as plaintiff argues, would convert premises-operations policies into comprehensive general liability policies without requiring payment of the additional premiums.
Footnote: 3 West American Insurance Co. v. Tufco Flooring East, 104 N.C. App. 312, 320, 409 S.E.2d 692, 697 (1991), disc. review denied, 332 N.C. 479, 420 S.E.2d 826 (1992).
Footnote: 4 Id.
Footnote: 5 C.D. Spangler Constr. Co. v. Industrial Crankshaft & Eng'g Co., 326 N.C. 133, 142, 388 S.E.2d 577, 563 (1990).
Footnote: 6 Grant v. Emmco Ins. Co., 295 N.C. 39, 43, 243 S.E.2d 894, 897 (1978).

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