Appeal by defendant from amended judgment entered 15 December
2004 by Judge W. Robert Bell in Mecklenburg County Superior Court.
Heard in the Court of Appeals 17 November 2005.
DeVore, Acton & Stafford, P.A., by Fred W. DeVore III, for
plaintiffs-appellees.
Newitt & Bruny, by Roger H. Bruny, for defendant-appellant.
LEVINSON, Judge.
This appeal arises from a dispute over the coverage provided
by a commercial home inspection professional liability insurance
policy. Defendant appeals from a judgment awarding damages to
plaintiffs, based on a verdict finding defendant liable for
injuries caused by Charles Solland, LLC. We reverse.
The following is established by stipulation or uncontradicted
evidence: In the spring of 2000, plaintiffs George and Betsy
Wilcox purchased a home in Charlotte, North Carolina. A pre-
closing inspection was performed by Charles Solland, LLC on 14
January 2000. On 25 January 2001 plaintiffs filed suit againstseveral defendants, including Charles Solland, LLC, seeking damages
arising from “substantial defects” in the property, and alleging
that Charles Solland, LLC had negligently failed to identify these
defects in its inspection. Plaintiffs eventually received money
from the other defendants, but not from Charles Solland, LLC. On
4 March 2003 a default judgment was entered against Charles
Solland, LLC for approximately $137,795.
On 21 October 2003 plaintiffs filed an amended complaint
against the National Association of Licensed Appraisers, d/b/a the
Foundation of Real Estate Appraisers (FREA), and against Bankers
Insurance Company. Plaintiffs alleged that Charles Solland, LLC
was a former member of FREA, and was covered “from November, 1999,
through May 1, 2001” by “a policy of errors and omissions liability
insurance with Defendant Bankers Insurance Company, which was
obtained through Defendant FREA.” Both defendants denied that
Charles Solland, LLC was covered by the policy, and moved for
summary judgment. On 1 September 2004 the trial court granted
summary judgment in favor of defendant FREA, which is not a party
to this appeal. However, the court denied defendant Bankers
Insurance Company's motion for summary judgment.
A jury trial was conducted in November 2004. The defendant
moved for directed verdict at the close of the plaintiffs'
evidence, and again at the close of all the evidence; both motions
were denied. Following the presentation of evidence, the jury
returned the following verdict:
1. Did the defendant, Bankers Insurance Company,
issue a policy of errors and omissionscoverage to Chuck Solland, LLC?
Answer: Yes.
2. Was the wrongful act of January 14, 2000
covered under the policy of insurance issued
by the defendant, Bankers Insurance Company?
Answer: Yes.
3. Did Chuck Solland, LLC, provide timely notice
of the claim of George and Betsy Wilcox to the
defendant Bankers Insurance Company?
Answer: Yes.
Upon this verdict, the trial court entered judgment for plaintiffs
in the amount of $137,795.51, plus costs and interest. From this
judgment, defendant appeals.
Defendant argues that the trial court erred by denying its
motions for directed verdict. We agree.
We first review the standard for entry of a directed verdict:
A motion for directed verdict tests the
sufficiency of the evidence to take the case
to the jury. . . . In making its
determination of whether to grant the motion,
the trial court must examine all of the
evidence in a light most favorable to the
nonmoving party, and the nonmoving party must
be given the benefit of all reasonable
inferences[.] . . . [If] the trial judge
finds that there is evidence to support each
element of the nonmoving party's cause of
action, then the motion for directed verdict .
. . should be denied.
Abels v. Renfro Corp., 335 N.C. 209, 214-15, 436 S.E.2d 822, 825
(1993) (citations omitted). “The court should deny motions for
directed verdict . . . when it finds any evidence more than a
scintilla to support plaintiff's
prima facie case in all its
constituent elements.”
Clark v. Moore, 65 N.C. App. 609, 610, 309
S.E.2d 579, 580-81 (1983) (citation omitted). On appeal, “[t]hisCourt applies
de novo review to a trial court's denial of a motion
for directed verdict.”
Cannon v. Day, 165 N.C. App. 302, 306, 598
S.E.2d 207, 211 (citing
Denson v. Richmond County, 159 N.C. App.
408, 411, 583 S.E.2d 318, 320 (2003)),
disc. review denied, 359
N.C. 67, 604 S.E.2d 309 (2004).
The insurance policy at issue is a group professional
liability policy issued to FREA, which makes it available to its
members. Defendant contends that plaintiffs failed to present any
evidence that Charles Solland, LLC was insured under this policy.
We agree.
“We first note the well-settled principle that an insurance
policy is a contract and its provisions govern the rights and
duties of the parties thereto.”
Fidelity Bankers Life Ins. Co. v.
Dortch, 318 N.C. 378, 380, 348 S.E.2d 794, 796 (1986) (citations
omitted). “If the language of a contract is plain and unambiguous,
the construction of the agreement is a matter of law for the
court.”
W.S. Clark & Sons, Inc. v. Ruiz, 87 N.C. App. 420, 421,
360 S.E.2d 814, 816 (1987) (citation omitted). “Further, this
Court has stated that if a policy is not ambiguous, then the court
must enforce the policy as written and may not remake the policy
under the guise of interpreting an ambiguous provision.”
Nationwide Mutual Ins. Co. v. Mabe, 342 N.C. 482, 492, 467 S.E.2d
34, 40 (1996) (citing
Wachovia Bank & Trust Co. v. Westchester Fire
Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970)).
With these principles in mind, we review certain provisions in
the insurance policy. The policy states that it provides coverageto “a Member.” The term “Member” is defined by the policy as “all
persons, natural and legal, named in the Certificate of
Membership.” In turn, “Certificate of Membership” is defined as
the “membership certificate issued to a Member by the Group
Sponsor.” In the instant case, it is undisputed that FREA is the
Group Sponsor. It is likewise undisputed that FREA issued a
Certificate of Membership to Charles Solland, and
not to Charles
Solland, LLC.
It is settled law that a corporation has a legal identity
separate from its individual owners. “A corporation, even one
closely held, is recognized as a separate legal entity in this
jurisdiction.”
Quick v. Quick, 305 N.C. 446, 460, 290 S.E.2d 653,
662 (1982). Further, the separate legal identity of a corporation
from its individual owner applies to insurance coverage.
See,
e.g., Cherry v. State Farm Mut. Auto. Ins. Co., 162 N.C. App. 535,
539, 590 S.E.2d 925, 929 (2004) (policy issued to corporation did
not provide coverage for the corporation's owner as an individual).
In
Cherry, the plaintiff asked the trial court to “disregard [the
corporation's] separate corporate identity . . . for the purpose of
reaching State Farm's coverage.” This Court held that:
Granting plaintiffs' request would be
tantamount to rewriting the terms of the
subject policy by requiring State Farm, [the
corporation's] liability insurance provider,
to cover someone other than the named insured.
Plaintiffs have cited no authority supporting
the application of piercing the corporate veil
in this manner, and we decline to adopt it.
Id. In the instant case, plaintiffs argue that there is evidence
tending to show that Charles Solland
intended to register Charles
Solland, LLC as a member of FREA, or that he
wanted insurance
coverage for the corporation. However, plaintiffs concede that
Charles Solland, LLC is
not a named Member in the FREA Certificate
of Membership, and assert that “the membership certificate was
erroneously issued by FREA.” Assuming,
arguendo, that the
Certificate was “erroneously” issued to Charles Solland, plaintiffs
cite no authority allowing us to disregard the plain language of
the policy and of the Certificate of Membership. Accordingly,
because Charles Solland, LLC is not named on the Certificate of
Membership, it was never a member of FREA, and thus was not covered
by the professional liability insurance policy issued to Charles
Solland.
Because Charles Solland, LLC was not listed as a member on the
FREA Certificate of Membership, it was not a member as the term is
defined by the professional liability policy, and was not covered
by the policy. Accordingly, the trial court erred by denying
defendant's motion for directed verdict, and the judgment entered
must be reversed and remanded for entry of directed verdict in
favor of defendant.
Reversed and remanded.
Judges HUDSON and TYSON concur.
Report per Rule 30(e).
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