{ "id": 11918948, "name": "CHRIST LUTHERAN CHURCH, by and through its Trustees, DALE MATTHEWS, O.W. JARRETT, and GARY CARPENTER, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant", "name_abbreviation": "Christ Lutheran Church ex rel. Matthews v. State Farm Fire & Casualty Co.", "decision_date": "1996-06-04", "docket_number": "No. COA95-873", "first_page": "614", "last_page": "618", "citations": [ { "type": "official", "cite": "122 N.C. App. 614" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "15 ALR2d 1006", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "676 F.2d 56", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 561975 ], "weight": 2, "year": 1982, "pin_cites": [ { "page": "61" } ], "opinion_index": 0, "case_paths": [ "/f2d/676/0056-01" ] }, { "cite": "751 F.2d 361", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 301638 ], "weight": 3, "year": 1984, "pin_cites": [ { "page": "363" } ], "opinion_index": 0, "case_paths": [ "/f2d/751/0361-01" ] }, { "cite": "817 F. Supp. 710", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 9050344 ], "weight": 2, "year": 1993, "opinion_index": 0, "case_paths": [ "/f-supp/817/0710-01" ] }, { "cite": "172 S.E.2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 1970, "pin_cites": [ { "page": "522" }, { "page": "665" }, { "page": "522" }, { "page": "522" } ], "opinion_index": 0 }, { "cite": "276 N.C. 348", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561396 ], "weight": 3, "year": 1970, "pin_cites": [ { "page": "354" }, { "page": "354" }, { "page": "354" } ], "opinion_index": 0, "case_paths": [ "/nc/276/0348-01" ] }, { "cite": "428 S.E.2d 270", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1993, "pin_cites": [ { "page": "272" } ], "opinion_index": 0 }, { "cite": "109 N.C. App. 661", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526163 ], "year": 1993, "pin_cites": [ { "page": "664" } ], "opinion_index": 0, "case_paths": [ "/nc-app/109/0661-01" ] }, { "cite": "279 S.E.2d 769", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "parenthetical": "holding that North Carolina follows the reasonable expectations doctrine, whereby an insurance contract is interpreted according to the reasonable expectations of the purchaser of insurance" } ], "opinion_index": 1 }, { "cite": "303 N.C. 387", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573853 ], "year": 1981, "pin_cites": [ { "parenthetical": "holding that North Carolina follows the reasonable expectations doctrine, whereby an insurance contract is interpreted according to the reasonable expectations of the purchaser of insurance" } ], "opinion_index": 1, "case_paths": [ "/nc/303/0387-01" ] }, { "cite": "535 N.W.2d 365", "category": "reporters:state_regional", "reporter": "N.W.2d", "case_ids": [ 10704912 ], "year": 1995, "pin_cites": [ { "page": "372" } ], "opinion_index": 1, "case_paths": [ "/nw2d/535/0365-01" ] }, { "cite": "751 F.2d 361", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 301638 ], "year": 1984, "opinion_index": 1, "case_paths": [ "/f2d/751/0361-01" ] }, { "cite": "817 F. Supp. 710", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 9050344 ], "year": 1993, "opinion_index": 1, "case_paths": [ "/f-supp/817/0710-01" ] } ], "analysis": { "cardinality": 545, "char_count": 10156, "ocr_confidence": 0.752, "pagerank": { "raw": 2.983138237742592e-07, "percentile": 0.8511753001815936 }, "sha256": "f5caa63bea08c4f10b606e89ebacdb8eeb5a2c73dafd9efb237b1196e1c33bae", "simhash": "1:91915b1e9c796416", "word_count": 1568 }, "last_updated": "2023-07-14T15:39:52.508825+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge WALKER concurs.", "Judge WYNN dissents." ], "parties": [ "CHRIST LUTHERAN CHURCH, by and through its Trustees, DALE MATTHEWS, O.W. JARRETT, and GARY CARPENTER, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant" ], "opinions": [ { "text": "JOHNSON, Judge.\nThe essential facts in this case are not in dispute. From approximately 31 January 1992 through 16 February 1993, plaintiff Christ Lutheran Church\u2019s treasurer embezzled church funds totalling $32,760.00 by issuing twenty-four (24) separate checks to himself on various occasions and in various amounts. Defendant State Farm Fire and Casualty Company was plaintiffs insurer at all times relevant herein. Plaintiff\u2019s insurance policy afforded coverage for embezzlement in the Employee Dishonesty subsection, specifically providing that defendant would pay up to $5,000.00 for any one occurrence of embezzlement arising thereunder.\nPlaintiff contends that its policy covers the entire $32,760.00 lost by plaintiff Church due to its employee\u2019s embezzlement in 1992 and 1993. Defendant denies coverage in such amounts, stating that plaintiff\u2019s employee\u2019s acts constitute but one occurrence under plaintiff\u2019s policy and, therefore, defendant is only responsible for coverage in the amount of $5,000.00.\nPlaintiff instituted this action against defendant on 29 April 1994. Defendant was granted an extension of time to answer plaintiff\u2019s complaint, and thereafter, served his answer on plaintiff on 2 June 1994. Subsequently, on 22 May 1995, the parties filed stipulated facts. On that same date, this action came on for hearing before Judge Ronald E. Bogle at the civil session of Catawba County Superior Court. After considering the parties\u2019 stipulations of fact, and their arguments and contentions, Judge Bogle entered judgment for defendant on 30 May 1995. Plaintiff appeals.\nOn appeal, plaintiff argues that the trial court erroneously declared that its insurance policy affords coverage of only $5,000.00 for its employee\u2019s embezzlement of $32,760.00 by twenty-four (24) separate acts, because the policy language was ambiguous. As such, plaintiff contends that the policy should be construed to allow plaintiff recovery of up to $5,000.00 for each act by plaintiff\u2019s employee. We cannot agree.\nInsurance policies are to be strictly construed against the insurer, with any ambiguity being resolved in favor of the insured. Estate of Bell v. Blue Cross and Blue Shield, 109 N.C. App. 661, 664, 428 S.E.2d 270, 272 (1993). \u201cAn ambiguity exists where, .\u2018in the opinion of the court, the language of the policy is fairly and reasonably susceptible to either of the constructions for which the parties contend.\u2019 \u201d Id. (quoting Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970)). However, ambiguity is not established simply because a plaintiff makes a claim based on a construction of the insurance policy\u2019s language contrary to that of the company\u2019s interpretation. Id. at 665, 428 S.E.2d at 272 (citing Trust Co., 276 N.C. at 354, 172 S.E.2d at 522).\nWhen an insurance policy contains a definition of a term used in it, that meaning controls, unless the context of the policy mandates otherwise. Trust Co., 276 N.C. at 354, 172 S.E.2d at 522. \u201cIn the absence of. . . definition, nontechnical words are to be given a meaning consistent with the sense in which they are used in ordinary speech, unless the context clearly requires otherwise.\u201d Id. Finally, if a nontechnical word has more than one meaning in ordinary usage and the context does not indicate clearly the one intended, then and only then, should the court use its own interpretation, giving the word a meaning favorable to the policyholder. Id.\nIn the instant case, plaintiff\u2019s insurance policy provides coverage for employee dishonesty in an amount up to $5,000.00 \u201cfor loss in any one occurrence.\u201d The policy goes on to define \u201coccurrence\u201d: \u201cAll loss involving a single act, or series of related acts, caused by one or more persons is considered one occurrence.\u201d While plaintiff argues that the language of the policy is ambiguous in regards to what constitutes an occurrence within the meaning of the policy\u2014 specifically, contending that the term \u201crelated\u201d in the definition of \u201coccurrence\u201d is ambiguous, we do not agree.\nThere is no case law addressing this particular issue, and thus, this is a case of first impression in North Carolina. However, we do find particularly instructive Diamond Transp. System v. Travelers Indem., 817 F. Supp. 710 (N.D. Ill. 1993) and Business Interiors, Inc. v. Aetna Cas. & Sur. Co., 751 F.2d 361 (10th Cir. 1984). Plaintiff\u2019s attempts to distinguish these cases from the instant case are unpersuasive.\nIn Diamond, the defendant indemnity company had issued five successive one-year commercial crime bonds to the plaintiff. Each bond provided that coverage was limited to a maximum of $250,000.00 per occurrence. In the definition section of plaintiffs commercial crime bond, \u201coccurrence\u201d was defined as \u201call loss caused by, or involving, one or more \u2018employee\u2019, whether the result of a single act or series of acts.\u201d When the plaintiff discovered an employee\u2019s fraudulent check-cashing scheme in April 1991, it submitted a $750,000.00 claim to the defendant indemnity company. The defendant paid the plaintiff the limit of its liability under the 1990-1991 bond, $250,000.00. The United States District Court for the Northern District of Illinois held that the plaintiff\u2019s entire $750,000.00 loss which had occurred over a period of years (1989 through 1992), as a result of an employee\u2019s fraudulent check-cashing scheme, was a single occurrence. Diamond, 817 F. Supp. 710.\nIn Business Interiors, the United States Court of Appeals for the Tenth Circuit concluded that embezzlement by an employee, through forty (40) checks, over a period of approximately seven months, constituted a single \u201coccurrence.\u201d The insurance policy provided, \u201cAs respects any one employee, dishonest or fraudulent acts of such employee during the policy period shall be deemed to be one occurrence for the purpose of applying the deductible.\u201d Plaintiff contended that it had suffered forty (40) separate and independent losses because the employee\u2019s embezzlement was accomplished through forty (40) separate checks. Defendant insurance company, however, asserted that the insurance policy limited recovery to $10,000.00 because the loss resulted from one occurrence. Business Interiors, 751 F.2d 361. In reaching its decision, the Tenth Circuit Court of Appeals employed the general rule that \u201c \u2018an occurrence is determined by the cause or causes of the resulting injury.\u2019 \u201d Id. at 363 (quoting Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d 56, 61 (3d Cir. 1982)). The court noted that the cause of the plaintiff\u2019s loss was the \u201ccontinued dishonesty of one employee\u201d with the \u201c \u2018intent to continue the dishonesty, not to commit an entirely new and different act of dishonesty.\u2019 \u201d Id.\nSimilarly, in the instant case, plaintiff\u2019s employee wrote twenty-four (24) checks, over the course of several weeks, totalling $32,760.00. These checks were all writteii in furtherance of one employee\u2019s dishonest acts. They do not constitute a new and individual act of dishonesty, as alleged by plaintiff, but are instead a continuum of wrongful actions. This was the cause of plaintiff\u2019s loss. Further, in accordance with the courts in Diamond and Business Interiors, we find nothing ambiguous in plaintiff\u2019s policy\u2019s definition of \u201coccurrence,\u201d and that definition controls. Accordingly, we find that plaintiffs employee\u2019s writing the twenty-four (24) checks were \u201ca series of related acts\u201d within the insurance policy\u2019s definition, and therefore, constitute one occurrence under that policy. Plaintiff\u2019s arguments to the contrary are unpersuasive.\nIn light of the foregoing, the trial court\u2019s decision is affirmed.\nAffirmed.\nJudge WALKER concurs.\nJudge WYNN dissents.", "type": "majority", "author": "JOHNSON, Judge." }, { "text": "Judge Wynn\ndissenting.\nI would decline to follow the federal cases cited by the majority, Diamond Trans. Sys., Inc. v. Traveler\u2019s Indemnity Co., 817 F. Supp. 710 (N.D. Ill. 1993) and Business Interiors, Inc. v. Aetna Casualty & Surety Co., 751 F.2d 361 (10th Cir. 1984). Instead, I agree with the Minnesota Court of Appeals that \u201c[t]he phrase \u2018series of related acts\u2019 is subject to more than one reasonable interpretation when determining whether an employee\u2019s dishonest acts are subject to a single occurrence coverage limit, and is, therefore, ambiguous. The ambiguous language must be construed in favor of the insured, and the doctrine of reasonable expectations must be applied.\u201d American Commerce Ins. Brokers, Inc. v. Minnesota Mutual Fire & Casualty Co., 535 N.W.2d 365, 372 (Minn. App. 1995); see also Ins. Co. v. Const. Co., 303 N.C. 387, 279 S.E.2d 769 (1981) (holding that North Carolina follows the reasonable expectations doctrine, whereby an insurance contract is interpreted according to the reasonable expectations of the purchaser of insurance).\nAccordingly, I would remand for a jury determination of what constitutes reasonable expectations of the insured in this matter.", "type": "dissent", "author": "Judge Wynn" } ], "attorneys": [ "Bryce Thomas & Associates, by Bryce 0. Thomas, Jr. & Peter R. Gruning, for plaintiff-appellant.", "Patrick, Harper & Dixon, by Stephen M. Thomas and Kimberly A. Huffman, for defendant-appellee." ], "corrections": "", "head_matter": "CHRIST LUTHERAN CHURCH, by and through its Trustees, DALE MATTHEWS, O.W. JARRETT, and GARY CARPENTER, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant\nNo. COA95-873\n(Filed 4 June 1996)\nInsurance \u00a7 881 (NCI4th)\u2014 employee embezzlement \u2014 24 separate checks \u2014 one \u201coccurrence\u201d \u2014 limited liability\nWhere an insurance policy provided that defendant would pay up to $5,000 for any one occurrence of employee embezzlement, \u201coccurrence\u201d was defined as \u201ca single act, or series of related acts,\u201d and plaintiff\u2019s employee embezzled $32,760 by issuing 24 separate checks to himself over a one-year period, the employee\u2019s writing of the twenty-four checks was a \u201cseries of related acts\u201d and constituted one occurrence under the policy so that defendant was responsible only for coverage in the amount of $5,000.\nAm Jur 2d, Insurance \u00a7 145.\nInsurance of bank against larceny and false pretenses. 15 ALR2d 1006.\nJudge Wynn dissenting.\nAppeal by plaintiff from judgment entered 30 May 1995 by Judge Ronald E. Bogle in Catawba County Superior Court. Heard in the Court of Appeals 18 April 1996.\nBryce Thomas & Associates, by Bryce 0. Thomas, Jr. & Peter R. Gruning, for plaintiff-appellant.\nPatrick, Harper & Dixon, by Stephen M. Thomas and Kimberly A. Huffman, for defendant-appellee." }, "file_name": "0614-01", "first_page_order": 650, "last_page_order": 654 }