Integon Indemnity Corp. v. Federated Mutual Insurance

EAGLES, Chief Judge. We first consider whether the trial court erred in granting summary judgment. Plaintiff contends that there was a genuine issue of material fact as to whether an employee getting his car repaired by his employer was a “customer” or an “employee” under the terms of the insurance policy at issue. Plaintiff argues that Branson was covered under the Federated policy if, at the time of the accident, he was an “employee” of Montgomery Motors and was using an auto owned by Montgomery Motors. Defendants contend that Integon provides sole coverage because the Federated policy excludes “customers” from its definition of who [325] is an “insured.” Defendants contend that the policy further provides that the term “customers” includes “your employees . . . who pay for [repair] services performed.” Defendants contend that the record and exhibits clearly demonstrate that Branson was a “customer” of Montgomery Motors when he was provided with the vehicle. Defendants cite the testimony of both Branson and Harold S. Asbill, the owner of Montgomery Motors, who testified that Branson received the vehicle because he was a “customer.” Accordingly, defendants argue that Branson was not an “insured” under the Federated policy. After careful review of the record, briefs and contentions of the parties, we affirm. The Federated policy states that “[w]e will pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies, caused by an ‘accident’ and resulting from ‘garage operations’ involving the ownership, maintenance or use of covered ‘autos.’ ” It is undisputed that the automobile driven by Branson was a “covered auto” under the terms of the policy because the vehicle was owned by Montgomery Motors. Additionally, the “garage operations” definition was satisfied because of the “use” of a “covered auto.” However, under the terms of the policy, Branson was not an insured because he was a “customer,” and “customers” are excluded from coverage. The term “customer” is not defined anywhere in the policy. While the section determining whether an auto is a “covered auto” states that “customers” include “your employees . . . who pay for [repair] services performed,” this definition applies solely for the determination of whether an automobile left by an employee for service is a “covered auto” under the policy, and not whether the employee is a “customer” under the terms of the policy. Accordingly, since “customer” is not defined in the policy, the term “customer” should be defined by its ordinary meaning. See McLeod v. Nationwide Mutual Ins. Co., 115 N.C. App. 283, 290, 444 S.E.2d 487, 491-92, disc. rev. denied, 337 N.C. App. 694, 448 S.E.2d 528 (1994) (“In the absence of policy definitions,” the court should use a term in accordance with ordinary speech and is “encouraged to use ‘standard, nonlegal dictionaries’ as a guide.”). Webster’s Dictionary defines “customer” as “one that purchases a commodity or service.” Webster’s Ninth New Collegiate Dictionary 318 (1985). Branson was billed almost $800.00 for repairs made by Montgomery Motors during the time Branson had the loaner car. Both Branson and Asbill testified that Branson received the vehicle because he was a “customer” and not because he [326] was an “employee.” Accordingly, we hold that on this record Branson was a “customer” under the Federated policy. The assignment of error is overruled. We next consider whether the trial court erred by failing to find as a matter of law that the terms of the policy were ambiguous with regard to coverage for employees who also were customers. Plaintiff argues that the Federated, policy contains conflicting provisions which provide an exception precluding coverage for “customers,” while at the same time providing coverage for “employees” using covered vehicles with permission. Plaintiff contends that because of this ambiguity the policy must be interpreted to find coverage for the individual employee/customer. Additionally, plaintiff contends that the policy is ambiguous because there are no policy provisions requiring that an individual who is both a “customer” and an “employee” be treated as a “customer” only for the purposes of limiting coverage. Plaintiff argues that once the Federated policy conflict is resolved in favor of finding coverage for Branson, the terms of the Integon and Federated policies indicate that Federated provides primary coverage. Defendants contend that there was no ambiguity and that the key provisions of the Federated policy are not in conflict. Defendants argue that although Branson was an “employee,” he was a “customer” on this occasion. Defendants assert that there is no reason that a “customer,” who happens to work for Montgomery Motors, should not fall within the “customer” exclusion. We hold that the Federated policy is not ambiguous. Nothing in the policy requires that an “employee” cannot be considered a “customer” for purposes of determining insurance coverage. The policy clearly excludes coverage for “customers.” Accordingly, because Branson acquired the car on loan because his own car was being repaired by Montgomery Motors, he was therefore a “customer” and not an “insured” under the Federated policy. The assignment of error is overruled and summary judgment is affirmed. Affirmed. Judges LEWIS and HUNTER concur.