ERIE INSURANCE EXCHANGE,
Plaintiff-Appellant,
v
.
ST. STEPHEN'S EPISCOPAL CHURCH, BRIAN RUFF, AMY RUFF, and LEVI
RUFF,
Defendants-Appellees.
Edgar & Paul, by Patrick M. Anders, for plaintiff-appellant.
Brown, Crump, Vanore & Tierney, LLP, by Andrew A. Vanore, III
and Christopher G. Lewis, for defendant-appellee St. Stephen's
Episcopal Church.
McGEE, Judge.
Erie Insurance Exchange (plaintiff) filed an action for
declaratory judgment on 8 November 2000 seeking a judicial
determination as to whether a homeowners insurance policy it issued
to defendant Brian Ruff provided coverage for property damage
incurred by defendant St. Stephen's Episcopal Church (St.
Stephen's) in a fire. Defendants filed answers to plaintiff's
complaint. Defendant Levi Ruff (Levi), the son of defendants Brian
and Amy Ruff, was deposed in the present case on 2 February 2001
and on 7 April 2000 in a separate suit filed earlier based on the
same facts. Defendant St. Stephen's filed a motion for summary
judgment in the present action on 12 March 2001. Plaintiff fileda motion for summary judgment on 3 April 2001. Following a
hearing, the trial court denied plaintiff's motion for summary
judgment in an order entered 26 January 2001; the trial court
granted summary judgment for defendant St. Stephen's, determining
that the policy issued by plaintiff did provide coverage for the
fire. Plaintiff appeals.
In his depositions, Levi testified he was at St. Stephen's
with his mother and siblings for the siblings' choir practice on 1
June 1998. Levi went to an unoccupied office in the back of the
church to study. While in the office, Levi found a box of matches
and decided to find out if the choir robes hanging in the office
closet would burn. Levi lit a match and held it up against one of
the robes. The robe ignited and the flame spread to an area the
size of a nickel or quarter. Levi left the room to find his
mother. He told her that he would be in the office but failed to
tell her about the fire. When he returned to the office, the fire
had spread throughout the closet. Levi left the room again and
informed the church secretary that the office was on fire. The
fire caused damages in excess of $10,000 through loss of personal
property and smoke and water damage to the church.
Levi also testified that he had used matches before with his
parents in lighting a fire in a fireplace at home. He knew that
some materials, such as baby pajamas would not burn. He also knew
that carelessness with matches could result in fire and damage to
property.
At the time of the fire, Brian Ruff had an insurance policywith plaintiff, which provided coverage for the Ruffs' home, their
personal property, and damages to property of a third party for
which the insured was liable. The policy contained the following
exclusion of liability:
1. Coverage E - Personal Liability and
Coverage F - Medical payments to Others
do not apply to bodily injury or property
damage:
a. which is intended by or which may
reasonably be expected to result
from the intentional acts or
omissions or criminal acts or
omissions of one or more insured
persons. This exclusion applies
even if:
1) the insured persons lack the
mental capacity to govern their
own conduct;
2) the bodily injury or property
damage is of a different kind,
quality or degree then [sic]
intended or reasonably
expected; or;
3) the bodily injury or property
damage is sustained by a
different person or entity than
intended or reasonably
expected.
This exclusion applies regardless of
whether or not one or more insured
persons are actually charged with, or
convicted of, a crime.
Plaintiff argues the trial court erred in granting summary
judgment for St. Stephen's and denying summary judgment for
plaintiff on the issue that damage caused when Levi intentionally
set fire to church property was covered under the insureds'
homeowners policy. "Summary judgment is proper 'if the pleadings,depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show 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.'" Snipes v. Jackson, 69 N.C. App. 64,
71-72, 316 S.E.2d 657, 661 (1984) (quoting N.C. Gen. Stat. § 1A-1,
Rule 56(c)). "On appeal, this Court's standard of review involves
a two-step determination of whether (1) the relevant evidence
establishes the absence of a genuine issue as to any material fact,
and (2) either party is entitled to judgment as a matter of law."
Guthrie v. Conroy, ____ N.C. App. ____, ____, 567 S.E.2d 403, 408
(2002) (citations omitted). The parties conceded there is no
question of material fact by submitting cross-motions for summary
judgment. In determining coverage issues,
[t]he interpretation of language used in
an insurance policy is a question of law,
governed by well-established rules of
construction. . . . [T]he policy is subject to
judicial construction only where the language
used in the policy is ambiguous and reasonably
susceptible to more than one interpretation.
In such cases, the policy must be construed in
favor of coverage and against the insurer;
however, if the language of the policy is
clear and unambiguous, the court must enforce
the contract of insurance as it is written.
Allstate Ins. Co. v. Chatterton, 135 N.C. App. 92, 94-95, 518
S.E.2d 814, 816 (1999) (citations omitted).
Plaintiff argues that the trial court should have denied
coverage as a matter of law under the "intentional acts" exclusion
provision of the insurance policy. In construing insurance policy
exclusionary provisions, our Supreme Court has stated
it is important to note that the rules ofconstruction which govern the interpretation
of insurance policy provisions extending
coverage to the insured differ from the rules
of construction governing policy provisions
which exclude coverage. Those provisions in
an insurance policy which extend coverage to
the insured must be construed liberally so as
to afford coverage whenever possible by
reasonable construction. However, the
converse is true when interpreting the
exclusionary provisions of a policy;
exclusionary provisions are not favored and,
if ambiguous, will be construed against the
insurer and in favor of the insured.
N.C. Farm Bureau Mut. Ins. Co. v. Stox, 330 N.C. 697, 702, 412
S.E.2d 318, 321-22 (1992) (citations omitted).
Case law interpreting and applying insurance coverage
exclusions is varied and heavily dependent upon individual factual
circumstances. Plaintiff relies on N.C. Farm Bureau Mut. Ins. Co.
v. Mizell, 138 N.C. App. 530, 530 S.E.2d 93 (2000), in arguing that
Levi's actions constitute an intentional act that excludes coverage
under the policy. In Mizell, our Court held that an insurance
policy's exclusion provision applied where the insured
intentionally fired a weapon in the general direction of an
intruder but did not intend to inflict injury. Id. at 533-34, 530
S.E.2d at 95. We stated that a person who fires a weapon at a
nearby intruder "could reasonably expect injury or damage to result
from the intentional act." Id. Our Court also noted that the
policy excluded coverage for acts "'which may reasonably be
expected to result from the intentional act.'" Id. at 533, 530
S.E.2d at 95 (quoting the insurance policy exclusion provision).
We reasoned that such language contained in the insurance policy
suggested a more objective standard for examining the results of anintentional act, rather than requiring subjective proof that the
insured actually expected or intended his actions to result in
injury. Id.
St. Stephen's also cites Stox in support of finding coverage
under the policy. In Stox, our Supreme Court held the exclusionary
provision for intentional acts did not apply where the insured
pushed someone who fell and fractured her arm. 330 N.C. at 703-04,
412 S.E.2d at 322. The Court held that "the resulting injury, not
merely the volitional act, . . . must be intended for [the]
exclusion to apply." Id. While the insured intentionally pushed
the victim in Stox, the Court held that the evidence did not
require that an intent to inflict the resulting injury be inferred.
Id. at 706, 412 S.E.2d at 324 ("Merely showing the act was
intentional will not suffice.").
The issue of insurance exclusion provisions has been further
addressed by our Court in N.C. Farm Bureau Mut. Ins. Co. v. Allen,
146 N.C. App. 539, 553 S.E.2d 420 (2001), where the defendant fired
gunshots through a door and in close proximity of a suspected
intruder, injuring the intruder. While the defendant argued that
he did not intend to injure the intruder, we held the insurance
exclusion applied because the "intentional act . . . was
sufficiently certain to cause injury that [the defendant] should
have expected such injury to occur." Id. at 546, 553 S.E.2d at
424.
This Court found an insurance exclusion provision to not apply
in Miller v. Nationwide Mutual Ins. Co., 126 N.C. App. 683, 486S.E.2d 246 (1997), where an individual fired a gunshot at a stop
sign, which entered the plaintiff's home and shattered an overhead
light fixture above the plaintiff's sleeping children. We relied
on Stox in holding that the character of the act did not require
the inference of an intent to inflict an injury. Id. at 688, 486
S.E.2d at 249. We reasoned that the insured intended to shoot at
the stop sign but did not intend to shoot into the children's
bedroom window or cause the resulting harm, thus constituting an
accident that was covered under the insurance policy. Id. at 686,
486 S.E.2d at 248. We further concluded that the acts of the
insured were not substantially certain to cause injury and were
distinguishable from similar cases that excluded coverage on that
basis. Id. at 688, 486 S.E.2d at 248-49; see also Nationwide Mut.
Fire Ins. Co. v. Grady, 130 N.C. App. 292, 502 S.E.2d 648 (1998)
(holding that there was an issue of material fact regarding the
intent to injure the plaintiff when the insured punched the
plaintiff in the back).
We find Mizell and Allen controlling in the case before us.
As in Mizell, plaintiff's insurance policy specifically excludes
coverage for acts "which may reasonably be expected to result from
the intentional acts or omissions . . . of one or more insured
persons." Applying the objective standard in Mizell, 138 N.C. App.
at 533, 530 S.E.2d at 95, the test is whether Levi should have
reasonably expected a fire to result from his actions. In
articulating the test, we analogously look to the language used by
our Courts in determining when a child is contributorily negligent. Children between the ages of seven and fourteen are presumed to be
incapable of contributory negligence, but this presumption may be
overcome. Hoots v. Beeson, 272 N.C. 644, 649, 159 S.E.2d 16, 20
(1968). This Court has stated that "the test of foreseeability is
whether a child of similar 'age, capacity, discretion, knowledge,
and experience' could have foreseen some injurious result from his
or her use of the product." Hastings v. Seegars Fence Co., 128
N.C. App. 166, 170, 493 S.E.2d 782, 785 (1997) (quoting Hoots, 272
N.C. at 649, 159 S.E.2d at 20); see In re T.S., 133 N.C. App. 272,
277, 515 S.E.2d 230, 233 (1999) ("The child's discretion, maturity,
knowledge, and experience interact in rebutting the presumption.").
The record demonstrates that Levi should have reasonably expected
the damages that resulted from his intentional act, in light of his
knowledge, experience, capacity, and discretion.
Levi's testimony demonstrates that he intended to light the
match and hold it up to the robe to see if the robe would burn.
Levi testified that he saw the flames spread to the size of a
nickel or quarter before leaving to find his mother. When asked
why he ran back to the office where he had set the fire, Levi
responded, "because I knew that cloth would burn pretty easily, and
I ran because I wanted to get there soon enough to blow it out."
Furthermore, Levi testified that his parents had shown him how to
start a fire with matches and instructed him never to use them
unless he was supervised. Levi also testified that he was aware of
the danger of matches and the damage that could result from playing
with them. This evidence demonstrates that a child of similarknowledge, experience, capacity, and discretion should have
reasonably expected the results of his intentional acts. Based
upon the evidence presented in the record, there is no issue of
material fact concerning the application of the exclusion
provision.
St. Stephen's argues that the qualifiers of the exclusion are
inapplicable and do not bar exclusion in this case. First, St.
Stephen's contends that the term "mental capacity" is not defined
in the policy and is therefore ambiguous and void. St. Stephen's
states that the term could refer to a mental deficiency or a
person's cognitive reasoning based on age or maturity, thereby
creating conflicting meanings.
Ambiguity in the terms of the policy is not
established simply because the parties contend
for differing meanings to be given to the
language. 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. Use of the
ordinary meaning of a term is the preferred
construction, and in construing the ordinary
meaning of a disputed term, it is appropriate
to consult a standard dictionary.
Allstate, 135 N.C. App. at 94-95, 518 S.E.2d at 816-17 (citations
omitted).
Mental capacity is defined in Black's Law Dictionary as "[t]he
mental ability to understand the nature and effect of one's acts."
Black's Law Dictionary 199 (7th ed. 1999). The ability to
understand the nature of one's acts can be the product of multiple
factors, including age, experience, or mental impairment. We
reject St. Stephen's argument that mental capacity should bedefined to only include mental retardation or other learning
disorders. Such a definition is too narrow and does not reflect
the ordinary meaning of the phrase. Furthermore, the fact that
mental capacity may be influenced by multiple factors does not
render the phrase ambiguous as used in the policy. We decline to
find the policy's use of the term "mental capacity" ambiguous and
uphold this qualification.
St. Stephen's further argues that the second qualifier fails
to save the exclusion because there is no evidence as to what
objective an eight-year-old could intend or reasonably expect to
result from his actions, thus the qualifier cannot be used to
exclude results beyond those reasonably expected. St. Stephen's
relies on Mizell in arguing that Levi did not intend to destroy the
robe and could not have anticipated the results of his actions. We
have previously discussed the objective test in Mizell and
determined that a child of similar knowledge, experience, capacity,
and discretion should have reasonably expected the results of
Levi's intentional acts. The policy provision that excludes
resulting damage that is different or greater than that intended or
reasonably expected is not ambiguous and is therefore upheld.
St. Stephen's finally argues that this case involves
concurrent negligent causes of loss that would nullify the
exclusion. St. Stephen's contends that some of Levi's actions
constitute negligence, thereby making it impossible to
differentiate between the intentional or foreseeable actions and
the negligent actions. Negligent acts are not excluded by theinsurance policy. "[S]ources of liability which are excluded from
[a] homeowners policy coverage must be the sole cause of the injury
in order to exclude coverage under the policy." Nationwide Mutual
Ins. Co. v. Davis, 118 N.C. App. 494, 500, 455 S.E.2d 892, 896
(1995) (quoting State Capital Ins. Co. v. Nationwide Mut. Ins. Co.,
318 N.C. 534, 546, 310 S.E.2d 66, 73 (1986) (emphasis omitted)).
In the case before us, the sole cause of the fire and the resulting
damage stemmed from Levi's action of setting fire to the robe.
There are no additional events that constitute concurrent causes
for the fire and the resulting damage. The fact that one might
also argue some of Levi's actions were negligent does not make the
terms and standards of the policy ambiguous. It also does not
negate Levi's intentional actions, which the policy clearly
excludes. We find St. Stephen's argument unpersuasive.
We reverse the trial court's order granting summary judgment
for St. Stephen's and remand for entry of an order granting summary
judgment for plaintiff.
Reversed and remanded.
Judges McCULLOUGH and BRYANT concur.
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