Appeal by defendant from judgment entered 24 March 2000 by
Judge W. Douglas Albright in Guilford County Superior Court. Heard
in the Court of Appeals 18 September 2001.
Tuggle Duggins & Meschan, P.A., by J. Reed Johnston, Jr. and
Amanda L. Fields, for plaintiffs-appellees.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by
Jeffrey E. Oleynik, John W. Ormand, III, and S. Kyle Woosley,
for defendant-appellant.
TYSON, Judge.
Elizabeth W. Glidewell (“defendant”) appeals from a
declaratory judgment entered against her after a bench trial. Weaffirm the trial court's judgment.
I. Facts
In October 1997, Martha Glidewell (“Martha”) filed a complaint
against defendant alleging alienation of affection and criminal
conversation. Martha alleged that she and Powell W. Glidewell
(“Pete”) were married in 1967, and continued to enjoy a
“relationship of love and affection” until defendant invaded their
lives. Defendant, whose name was Elizabeth Wooten Morgan at that
time, was alleged to have engaged in a sexual relationship with
Martha's husband, Pete. According to defendant's deposition
testimony, she and Pete engaged in sexual relations during
December 1996. Defendant also admitted that she knew Pete was
married to Martha. On 15 October 1998, defendant and Pete were
married.
After defendant was served with Martha's complaint, she timely
filed notice with American Manufacturers Mutual Insurance Company
and Lumbermens Mutual Casualty Company (collectively “plaintiffs”).
Defendant requested defense and payment of judgment, if any, from
either her homeowner's policy or her personal catastrophe liability
endorsement (“PCL Endorsement”) in effect at relevant times.
Plaintiffs declined to defend and subsequently brought this
declaratory judgment action to determine whether they had a duty to
defend or indemnify defendant for damages. The trial court entered
its findings of fact, conclusions of law, and judgment on 28 April
2000. The trial court determined that plaintiffs were not
obligated to defend or to indemnify defendant and denied
defendant's counterclaim for breach of contract and declaratoryjudgment. Defendant appeals.
II. Issues
Defendant assigns as error the trial court's holding that the
homeowner's policy and the 1995/1996 and 1996/1997 PCL Endorsements
do not require plaintiffs to defend nor indemnify defendant for
alienation of affection and criminal conversation claims. “The
interpretation of language used in an insurance policy is a
question of law, governed by well-established rules of
construction.”
Allstate Ins. Co. v. Runyon Chatterton, 135 N.C.
App. 92, 94, 518 S.E.2d 814, 816 (1999),
disc. rev. denied,
351
N.C. 350, 542 S.E.2d 205 (2000). “[O]n appellate review of a
declaratory judgment, a trial court's findings of fact in a trial
without a jury will be upheld if supported by any competent
evidence.”
North Carolina Farm Bureau Mut. Ins. Co. v. Stox, 330
N.C. 697, 702, 412 S.E.2d 318, 322 (1992). We are “to determine
whether the record contains competent evidence to support the
findings; and whether the findings support the conclusions.”
Nationwide Mut. Ins. Co. v. Allison, 51 N.C. App. 654, 657, 277
S.E.2d 473, 475,
disc. rev. denied, 303 N.C. 315, 281 S.E.2d 652
(1981). “If the trial court's findings are supported by competent
evidence and, in turn, support its conclusions, the declaratory
judgment must be affirmed on appeal.”
Stox, 330 N.C. at 703, 412
S.E.2d at 322. However, if the conclusions from the facts found
involve legal questions, they are subject to review on appeal.
Davidson v. Duke University, 282 N.C. 676, 712, 194 S.E.2d 761,
783 (1973).
III. Homeowner's Policy
Defendant argues that the “bodily injury” suffered by Martha
was caused by an “occurrence” that triggered coverage.
The homeowner's policy provides that:
If a claim is made or a suit is brought
against an
insured for damages because of
bodily injury or
property damage caused by an
occurrence to which this coverage applies, we
will:
1. pay up to our limit of liability for the
damages for which the
insured is legally
liable and
2. provide a defense at our expense by
counsel of our choice, even if the suit
is groundless, false or fraudulent. We
may investigate and settle any claim or
suit that we decide is appropriate. Our
duty to settle or defend ends when the
amount we pay for damages resulting from
the
occurrence equals our limit of
liability. (emphasis supplied)
. . . .
The policy defines “occurrence” as follows:
5. '
occurrence' means an accident, including
exposure to conditions, which results,
during the policy period, in:
a.
bodily injury; or
b.
property damage.
The homeowner's policy provides coverage for defending and
indemnifying claims for damages caused by an “occurrence,” defined
as an “accident” during the policy period. The homeowner's policy
does not define “accident.” “Our Supreme Court has held that when
the term 'accident' is not defined in an insurance policy,
'accident' includes 'injury resulting from an intentional act, ifthe injury is not intentional or substantially certain to be the
result of the intentional act.'” Russ v. Great American Ins.
Companies, 121 N.C. App. 185, 188, 464 S.E.2d 723, 725 (1995)
(emphasis in the original) (quoting Stox, 330 N.C. at 709, 412
S.E.2d at 325). “[A]n injury that is intentional or substantially
certain to be the result of an intentional act is not an
'accident.'” Id. (emphasis in the original) (citing Stox, 330
N.C. at 709, 412 S.E.2d at 325). “[I]f an intentional act is
either intended to cause injury or substantially certain to result
in injury, it is not an occurrence under the policy definitions .
. . and no coverage is provided.” Henderson v. U.S. Fidelity &
Guar. Co., 124 N.C. App. 103, 110, 476 S.E.2d 459, 464 (1996).
In Russ we discussed whether the “bodily injury” complained of
was covered by the policy which required that the “bodily injury”
be caused by an “occurrence.” The policy defined an “occurrence”
as an accident but failed to define accident. After concluding
that an accident does not include an injury that is intentional or
substantially certain to result from an intentional act, we
concluded “that since sexual harassment is substantially certain to
cause injury to the person harassed, intent to injure may be
inferred as a matter of law from the intent to act for the purpose
of determining coverage under an insurance policy.” Russ, 121 N.C.
App. at 189, 464, S.E.2d at 725; see also Henderson, 124 N.C. App.
at 111, 476 S.E.2d at 464 (“Notwithstanding . . . assertions that
he did not intend or anticipate his misrepresentations to injure ordamage plaintiffs, such purposeful and intentional acts were so
substantially certain to cause injury and damage as to infer an
intent to injure as a matter of law” and was not an occurrence).
In Nationwide Mut. Ins. Co. v. Abernethy, 115 N.C. App. 534, 445
S.E.2d 618 (1994), we construed an exclusionary clause in an
insurance policy, and determined that even though a predator did
not intend injury by performing certain sexual acts on children,
the intentional sexual acts necessarily implied intentional injury.
In Eubanks v. State Farm Fire and Cas. Co., 126 N.C. App. 483, 487,
485 S.E.2d 870, 872 (1997), we stated that the act of solicitation
to commit murder is so certain to result in emotional injury to the
intended victim, spouse, or parent that intent to commit such
injury may be inferred from the solicitous act. In all these
cases, the insured's intent to injure was inferred from insured's
intent to act and precluded coverage under their policies.
A. Criminal Conversation
Criminal conversation protects a spouse's interest in “'the
fundamental right of exclusive sexual intercourse between spouses,
and also on the loss of consortium.'”
Sebastian v. Kluttz, 6 N.C.
App. 201, 209, 170 S.E.2d 104, 108 (1969) (quoting 42 C.J.S.,
Husband and Wife, § 698). In determining damages a jury “may
consider the loss of companionship, loss of services, mental
anguish, humiliation, and fear of sexually transmitted disease. In
addition, there may be recovery for the injury to health and family
honor . . . .” David A. Logan and Wayne A. Logan,
North Carolina
Torts, § 20.20 at 442 (1996) (citing
Bryant v. Carrier, 214 N.C.191, 198 S.E. 619 (1938);
Cottle v. Johnson, 179 N.C
. 426, 102 S.E.
769 (1920);
Gray v. Hoover, 94 N.C. App. 724, 381 S.E.2d 472
(1989);
Sebastian, 6 N.C. App. 201, 170 S.E.2d 104). “[T]he loss
of marital rights is a species of mental distress . . . .” W. Page
Keeton,
Prosser and Keeton on Torts, § 124 at 923 (1988). “'The
plaintiff is entitled to recover for emotional distress resulting
from the fact that the defendant has had sexual relations with [her
husband].'”
Sebastian, 6 N.C. App.
at 218, 170 S.E.2d at 114
(quoting Restatement of Torts § 685 cmt. e).
B. Alienation of Affection
Similarly, alienation of affection “involves a wrongful act
that deprives a married person of the affection, love, society,
companionship, and comfort of the spouse.”
North Carolina Torts §
20.30 at 443. The tort protects a spouse's interest in having a
peaceful and uninterrupted marriage.
Sebastian, 6 N.C. App. at
206, 170 S.E.2d at 106. “'[D]amages may include recovery for
emotional distress caused by an invasion of such interests.'”
Id.
at 218, 170 S.E.2d at 114 (quoting Restatement of Torts § 690 cmt.
b).
In claims for criminal conversation and alienation of
affection, the law protects a spouse's interests in the exclusivity
of the marital relationship, and affords an injured spouse a remedy
against a third party's conduct which affects those protected
interests. Our Court has held that certain intentional actions, in
other contexts, may raise an inference of an intent to injure, if
injury is substantially certain to follow. Here, paragraph 1 of the trial court's conclusions of law
provides that:
To the extent any of the foregoing Findings of
Fact may be deemed more properly to be
Conclusions of Law, the same are incorporated
herein. Likewise, to the extent that any of
the following Conclusions of Law may be deemed
more properly to be Findings of Fact, the same
are incorporated into the above Findings of
Fact.
Paragraph 16 of the trial court's findings of fact states that “The
conduct engaged in by [defendant] . . . as alleged in the complaint
. . . was intentional and volitional and that conduct . . . gives
rise to the inference that [defendant] intended the harm alleged to
have been sustained by Martha Glidewell, that is, the inference
that Elizabeth Glidewell knew to a substantial certainty that
Martha Glidewell would be injured . . . .”
We have carefully reviewed the entire record and conclude that
competent evidence supports the fact that defendant engaged in
intentional sexual activities with Pete, who was married to Martha
at that time. We also conclude that this finding supports the
conclusion, as a matter of law, that defendant intended to injure
Martha, considering the interests protected by the torts of
criminal conversation and alienation of affection. We hold that
when a defendant engages in conduct that is sufficient to
constitute alienation of affection or criminal conversation tort
actions, intent to injure the marriage and the non-consenting
spouse may be inferred, as a matter of law, from such conduct when
interpreting the term “accident” if the policy fails to define it.
IV. Personal Catastrophe Liability Endorsement
Defendant argues that either the 1995-1996 or the 1996-1997PCL Endorsement requires plaintiffs to defend and indemn
ify
defendant in the underlying action. We disagree.
Generally an “insurer's duty to defend the insured is broader
than its obligation to pay damages . . . .”
Waste Management v.
Peerless Ins. Co.,
315 N.C. 688, 691, 340 S.E.2d 374, 377 (1986).
“An insurer's duty to defend is ordinarily measured by the facts as
alleged in the pleadings; its duty to pay is measured by the facts
ultimately determined at trial.”
Id.;
see also Strickland v.
Hughes, 273 N.C. 481, 487, 160 S.E.2d 313, 318 (1968) (an
obligation to defend becomes absolute when the allegations in the
complaint bring the claim within the coverage of the policy).
“Conversely, when the pleadings allege facts indicating that the
event in question is not covered, and the insurer has no knowledge
that the facts are otherwise, then it is not bound to defend.”
Waste Management, 315 N.C. at 691, 340 S.E.2d at 377.
A. 1995-1996 PCL Endorsement
Defendant argues that the 1995-1996 (“95-96”) PCL
Endorsement's definition of “personal injury” includes the injuries
that Martha alleged, and under North Carolina's “comparison test”
her allegations satisfy the coverage provisions thereby
necessitating a duty to defend and indemnity by plaintiffs.
See
e.g Waste Management, 315 N.C. at 693, 340 S.E.2d at 378.
Defendant's 95-96 PCL Endorsement provides coverage for
“personal injury.” The policy defines “personal injury” as:
Bodily injury, sickness, disease, death,
disability, shock, mental anguish and mental
injury;
False arrest, false imprisonment, wrongful
entry, wrongful eviction, wrongful detention,
malicious prosecution or humiliation;
Libel, slander, defamation of character, or
invasion of privacy;
Assault and battery not committed or directed
by a covered person.
The 95-96 policy was effective from 14 November 1995 to 14
November 1996. The trial court found that “[t]he allegations in
the complaint . . . establish that Martha Glidewell had no
knowledge of this affair until sometime in 1997.” It also found
that the complaint provided no basis to determine when the alleged
injuries occurred. After review of the entire record, we conclude
that there was competent evidence supporting the trial court's
finding of fact that Martha's injuries did not occur, and that
Martha's complaint did not allege that her injuries occurred,
during the 95-96 PCL Endorsement period. This finding supports the
trial court's conclusion of law that plaintiffs had no duty to
defend or indemnify defendant under the 95-96 PCL Endorsement
policy.
Defendant also contends that the 95-96 policy remained in
effect because plaintiffs never gave defendant valid notice of any
reduction in coverage in the renewal of the 1996-1997 (“96-97”) PCL
Endorsement policy. Despite defendant's argument, we find that the
record contains sufficient evidence that plaintiffs communicated
valid legal notice to defendant. We hold that the defendant's
alleged injury, as pled and as supported by the evidence, occurred
after the expiration of the 95-96 PCL Endorsement policy, and that
plaintiffs had no duty to defend or indemnify defendant under thatpolicy.
B. 1996-1997 PCL Endorsement
Defendant additionally contends plaintiffs had a duty to
defend under the 96-97 PCL Endorsement policy arguing that Martha's
complaint alleges “bodily injury” as defined by that endorsement.
Defendant's 96-97 PCL Endorsement policy defines “personal
injury” differently from the 95-96 policy. “Personal injury” and
“bodily injury” were separated in the definition section.
'Bodily injury' means:
Bodily harm, sickness, disease, death or
disability,
including shock mental anguish and
mental injury arising therefrom. (emphasis
supplied)
'Personal injury' means injury arising out of
one or more of the following offenses:
a) False arrest, detention or imprisonment, or
malicious prosecution;
b) Libel, slander or defamation of character,
or
c) Invasion of privacy, wrongful eviction or
wrongful entry.
Defendant has failed to allege any injury arising out of any
one of the offenses listed under “personal injury.” With respect
to “bodily injury,” the trial court found that “Martha['s] . . .
alleged humiliation, mental anguish and injuries to her feelings
and her health, as alleged . . . and the claims for alienation of
affection and criminal conversation . . . do not present claims for
'bodily injury' as that term is defined . . . in the [96-97 PCL
Endorsement].”
A careful review of the entire record shows competent evidenceto support the trial court's finding of fact. This f
inding
supports the trial court's conclusion of law that plaintiffs had no
duty to defend or indemnify under the 96-97 PCL Endorsement.
V. Summary
We hold that plaintiffs did not have a duty to defend or
indemnify defendant under defendant's homeowner's policy, or under
either PCL Endorsement policies. In view of our holding, it is
unnecessary to consider the parties' other arguments concerning
various policy “exclusions.”
The judgment of the trial court is affirmed.
Affirmed.
Judges MARTIN and WALKER concur.
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