KELLY D. BOYD and
Administrators of the
Estate of CAROL B. DORN
v. Carteret County
02 CVS 458
NATIONWIDE MUTUAL INSURANCE
COMPANY and BARBARA DARDEN
d/b/a DARDEN INSURANCE AGENCY,
Bowen, Berry, & Powers, LLC, by Woodberry L. Bowen, for
Cox and Tillery, P.A., by J. Thomas Cox, Jr., for defendant- appellees.
Administrators for the estate of Carol B. Dorn (plaintiffs) appeal from a 9 August 2005 judgment granting summary judgment to Nationwide Mutual Insurance Company and Barbara Darden, d/b/a, Darden Insurance Agency (defendants).
In the summer of 1998, Nationwide Insurance Company advised their insureds with property located within 1000 feet of the water on the North Carolina coast that they would no longer provide insurance for windstorm and hail damage for those properties and would not renew existing insurance policies. On 26 August 1998,Nationwide sent a letter to Ms. Dorn giving her notice that her policy for insurance would be cancelled on 8 October 1998. The letter gave her notice of cancellation, told her that she did not meet the insurability standards at Nationwide, advised her to get coverage through another company, and gave her contact numbers and addresses if she had any questions about the plan. Ms. Dorn denied having received this letter. Subsequently, Nationwide sent a form to be signed by Ms. Dorn and Barbara Darden (her Nationwide agent) that excluded windstorm or hail coverage on her policy. The WINDSTORM OR HAIL REJECTION FORM, states:
The undersigned policyholder or applicant acknowledges and understands that he/she has rejected coverage for the peril of windstorm or hail. This rejection of coverage for these perils will apply to any renewal, reinstatement, substitute, amended, altered, modified, transfer or replacement policy with this company or with any affiliated company. This rejection of coverage for these perils is valid and binding on all insureds and persons claiming benefits under the policy/application. The undersigned also acknowledges that the property is located in an area eligible for coverage for the peril of windstorm or hail from North Carolina Insurance Underwriting Association. Failure by the undersigned to apply for or obtain coverage for the peril of windstorm or hail through the Association does not alter the rejection of this coverage in connection with the policy/application.
Ms. Dorn went into Darden's office, spoke to an agent, and signed the rejection form after reading it. Ms. Dorn thereafter received an application for wind and hail coverage from the North CarolinaJoint Underwriting Association and she went into Darden's office to discuss the application. While in the office, she did not sign the application for wind and hail coverage from the North Carolina Joint Underwriting Association; however she did sign the WINDSTORM OR HAIL REJECTION FORM, so that she could continue her homeowners' policy with Nationwide. Ms. Dorn testified the agent stated Ms. Dorn could get windstorm and hail coverage elsewhere, but that she could not have such coverage through Nationwide. The agent did inform Ms. Dorn that her policy would have a wind deletion.
Following the signing of the rejection form excluding windstorm and hail coverage, Nationwide sent Ms. Dorn a new Homeowners's Policy Declaration indicating the changes made to her policy on 8 October 1998. On the first declarations page after the change in coverage, it indicated in bold print in the section labeled The Following Change(s) Have Been Made to Your Policy that THIS POLICY DOES NOT PROVIDE COVERAGE FOR THE PERILS OF WINDSTORM OR HAIL. Thereafter, Nationwide sent Ms. Dorn two other declaration pages on 25 May 1999 and 29 June 1999 indicating the same windstorm and hail exclusion.
In May of 1999 Ms. Dorn took out a second mortgage on her home with Citifinancial. An agent of Citifinancial, Kay Daughtry, said she contacted Darden Insurance Agency and was told by the receptionist, Glendya White, that the property was fully insured with no exclusions. This contention is denied by Darden who asserts they never make such blanket statements and further asserts there is no insurance policy in existence which provides coveragewithout any exclusions. As to this contact the record reflects that Citifinancial was immediately faxed a Memorandum of Insurance from Darden that indicates the existence of an insurance policy on Ms. Dorn's property and which contains the disclaimer: A formal Declarations page superseding this Memorandum will be mailed which will provide complete updated coverages and premium details. The only specific reference in the memorandum to wind and hail coverage is in the wind and hail deductible portion which indicates N/A for not applicable. The memorandum did not list any exclusion or describe any specific types of coverage that pertained to Ms. Dorn's policy. However, according to defendants, the full declarations pages were sent to Citifinancial and did list the Windstorm Exclusion. Ms. Dorn testified that she never saw the fax that went to Citifinancial.
Ms. Dorn sent a check to Nationwide in early September 1999, a week before Hurricane Floyd hit, in order to obtain flood insurance. On 15 September 1999 a windstorm associated with Hurricane Floyd destroyed Ms. Dorn's house. Nationwide received the loss notice from Ms. Dorn, assigned an adjuster to review the damage, confirmed that it was caused by a windstorm and advised Ms. Dorn the loss was not covered under the insurance policy. Ms. Dorn's loss was determined not to be covered because the application for flood insurance was sent after the check and coverage cannot be requested within thirty days of an insurable event. Ms. Dorn commenced this action on 15 April 2002 for breach of contract, negligence, negligent misrepresentation, constructive fraud, breach of fiduciary duty and unfair and deceptive trade practices, as a result of the denial of coverage for windstorm damage. The complaint was later amended to include claims for bad faith and contract reformation. On 27 July 2005, following the death of Ms. Dorn, the personal representatives of Ms. Dorn's estate filed an Order to Substitute Parties in the action. On 9 August 2005, defendants were granted summary judgment on the grounds that coverage for windstorm and hail were excluded from Ms. Dorn's policy in October 1998. From this order, plaintiffs appeal.
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