Mitchell v. N.C. Grange Mutual Insurance

HEDRICK, Judge. The following essential facts are uncontroverted in this matter: 1. During the year 1977 and for some years prior thereto, the defendant, N.C. Grange Mutual Insurance Company, through its agent, C. Hester Allen Insurance Agency, offered crop hazard insurance. [192] 2. During the times pertinent to this lawsuit, the agent could write North Carolina Grange policies at least two ways: (a) directly through the facilities of North Carolina Grange, or (b) through Eastman & Company. 8.Plaintiff applied for and was issued a policy of insurance to cover his six tobacco bams for 1977. Plaintiff made his application to and the policy was written by the C. Hester Allen Agency. 4. The policy names North Carolina Grange Mutual Insurance Company as the issuing party and provides coverage in the amount of $7,000 for barns 1-5 and $8,000 for barn 6. Nowhere on the policy does Eastman & Company’s name appear. 5. When plaintiff applied for the insurance, he did not request that it be written through Eastman & Company. 6. Thomas W. Allen of the C. Hester Allen Insurance Agency made the decision to and in fact did write the policy through Eastman & Company. At no time did he discuss this decision with the plaintiff. 7. In 1976 Eastman & Company sent to all its agents underwriting instructions which limited the amount of coverage available for “homemade” barns to $2,500 per barn. 8. Plaintiffs barns were “homemade.” 9. Plaintiff was an agent of Eastman & Company. 10. North Carolina Grange Mutual had no such limitation on coverage for “homemade” barns during 1977. On these facts the defendant contends, and Judge Riddle obviously agreed, that the single fact of plaintiff’s employment as an agent of Eastman & Company — and therefore of the Grange — limits plaintiffs recovery under his policy of insurance with North Carolina Grange to $2,500 per barn. While we agree that plaintiff’s status as Eastman’s agent charged him with knowledge of Eastman’s limitation on coverage for “home [193] made” barns, Powell v. Insurance Co., 153 N.C. 124, 69 S.E. 12 (1910), we cannot agree that this knowledge determines the controversy between the plaintiff and this defendant. To the contrary, we find it inconsequential. Likewise, the fact that the plaintiff knew Eastman was underwriting policies through the Grange is inconsequential since there is no evidence that he knew or had reason to believe that his policy was underwritten by Eastman. As we noted above, the face of the policy, as well as the application for insurance, shows only North Carolina Grange as the insurer. Indeed, the agent Allen testified that the only way the insured would know whether the policy was written directly through the Grange or indirectly through Eastman “is that the policy would have a little block in the upper right-hand corner that said Eastman & Company.” No such “little block” appears on plaintiffs policy, and Allen conceded that “[n]owhere on the fact of that policy is Eastman Company mentioned.” In our opinion it would be unlikely if not impossible for an insured, including this plaintiff, to reason and conclude under these circumstance that his insurance was in fact carried by Eastman and Company. All the evidence points logically to the conclusion that this policy of insurance was carried by North Carolina Grange. The fact that Eastman & Company placed a limitation of $2,500 coverage on “homemade” barns and so notified its agents is not relevant to the controversy since the defendant insurer had no such limitation on the policy issued to cover plaintiffs barns. We hold the trial court’s conclusion that plaintiffs recovery is limited to $2,500 per barn because he was an agent of Eastman and the Grange, and thus had constructive knowledge of Eastman’s limitation, is erroneous for that the findings do not support the conclusion that the plaintiff had constructive knowledge of the limitation as applied to this policy. To the contrary, the evidence and the findings dictate the conclusion that the defendant, as insurer under the policy in question, is liable to the plaintiff for the full amount of the coverage shown on the policy. For the reasons stated the judgment is vacated and the cause remanded to the Superior Court for the entry of an appropriate judgment for plaintiff consistent with this opinion. [194] Vacated and remanded.- Judges Parker and Vaughn concur.