Appeal by defendant from judgment filed 18 February 2002 by
Judge Russell J. Lanier, Jr. in Wayne County Superior Court. Heard
in the Court of Appeals 11 March 2003.
Thomas and Farris, P.A., by Kurt D. Schmidt, for plaintiff
appellee.
Thompson, Smyth & Cioffi, L.L.P., by Theodore B. Smyth, for
defendant appellant.
BRYANT, Judge.
North Carolina Farm Bureau Mutual Insurance Company
(defendant) appeals from a judgment filed 18 February 2002
declaring that an insurance policy (the business auto policy)
issued by defendants provided liability coverage.
On 9 April 2001, Jerry Keith Rowe (plaintiff) filed a
declaratory judgment action seeking a declaration that the business
auto policy extended coverage to Gerry Phillips, Jr. (Phillips,
Jr.) along with his operation of a 1973 Ford F-150 pick-up truck
(the pick-up truck). The undisputed facts of this case show
plaintiff was injured in a collision involving his vehicle and thepick-up truck negligently operated by Phillips, Jr. The pick-up
truck was owned by Phillips, Jr.'s father, Gerry Phillips, Sr.
(Phillips, Sr.). Phillips, Jr. lived with Phillips, Sr. In the
underlying tort action, the parties entered into an agreement
whereby defendant agreed to pay the policy limits on an insurance
policy insuring the pick-up truck. The parties further agreed
plaintiff would receive an additional sum of money if it were
determined the separate business auto policy provided additional
liability coverage. The business auto policy was issued to
Phillips, Sr. The declarations page of the business auto policy
lists a single vehicle, a 1989 Gulf Stream Motor Home, as a
“covered 'auto.'” Further, the business auto policy provides
liability coverage for “damages because of 'bodily injury' or
'property damage' . . . caused by an 'accident' and resulting from
the ownership, maintenance or use of a covered 'auto.'” Included
in the policy is an endorsement, which states under a subheading
entitled “CHANGES IN LIABILITY COVERAGE”:
2. PERSONAL AUTO COVERAGE
While any “auto” “you” own of the
“private passenger type” is a covered
“auto” under LIABILITY COVERAGE:
a. The following is added to WHO IS AN
INSURED:
“Family members” are “insureds” for
any covered “auto” “you” own of the
“private passenger type”. . . .
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The issue is whether the business auto policy covering the
motor home provides coverage for the pick-up truck under theendorsement.
The exact endorsement at issue in this case was earlier
construed by this Court in
Drye v. Nationwide Mut. Ins. Co., 126
N.C. App. 811, 487 S.E.2d 148 (1997), on very similar factual
grounds. In that case, the plaintiff was injured when his vehicle
was struck by a second vehicle.
Id. at 812, 487 S.E.2d at 148-49.
The driver of the second vehicle was the son of the owner who also
lived with his father.
Id. at 812, 487 S.E.2d at 149. The owner
of the second vehicle had a business auto policy that listed a
different vehicle as the only covered “auto” and contained an
identical endorsement as at issue in this case.
Id. The
Drye
Court construed the policy in that case to provide coverage to the
underlying accident based on the ambiguity caused by the
endorsement language which stated “while any 'auto' you own of the
'private passenger type' is a covered 'auto' under liability
coverage.”
Id. at 814, 487 S.E.2d at 150. Based on this Court's
analysis in
Drye, we conclude the endorsement creates an ambiguity
and, thus, the business auto policy must be construed liberally to
provide coverage and against defendant.
See id.;
see also Woods v.
Insurance Co., 295 N.C. 500, 506, 246 S.E.2d 773, 777 (1978) (where
meaning of words or effect of a provision is uncertain or capable
of several reasonable interpretations, doubts will be resolved in
favor of the insured).
Defendant argues this case presents a different question than
Drye because the vehicle listed on the declarations page in this
case is not of the “private passenger type.” This assertion,however, does not cure the ambiguity created by the endorsement
that is part of the business auto policy which seemingly extends
coverage to “any 'auto' [Phillips, Sr.] own[s] of the 'private
passenger type'” in addition to the vehicle listed in the
declarations page.
See Drye, 126 N.C. App. at 815, 487 S.E.2d at
150 (since this is an endorsement extending coverage, it must be
construed liberally to provide coverage);
see also N.C. Farm Bureau
Mut. Ins. Co. v. Walton, 107 N.C. App. 207, 209, 418 S.E.2d 837,
839 (1992) (provisions extending coverage will be liberally
construed so as to provide coverage). Furthermore, defendant does
not contend the pick-up truck is not of the “private passenger
type.” We thus conclude the business auto policy in this case
provides liability coverage under the endorsement to the pick-up
truck and Phillips, Jr., as a family member. Accordingly, we
affirm the judgment of the trial court.
Affirmed.
Judges HUNTER and ELMORE concur.
Report per Rule 30(e).
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