{ "id": 11712464, "name": "JAMES PATTI, PAUL H. BAILEY, AND DRS. PATTI AND BAILEY, P.A., Plaintiffs-Appellants v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellee", "name_abbreviation": "Patti v. Continental Casualty Co.", "decision_date": "1997-07-01", "docket_number": "No. COA96-887", "first_page": "643", "last_page": "648", "citations": [ { "type": "official", "cite": "126 N.C. App. 643" } ], "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": "11 Cal. Rptr. 2d 271", "category": "reporters:state", "reporter": "Cal. Rptr. 2d", "year": 1992, "pin_cites": [ { "parenthetical": "\"An employment termination, even if due to mistake, cannot be unintentional\"" } ], "opinion_index": 0 }, { "cite": "445 S.E.2d 618", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1994, "pin_cites": [ { "page": "618-19" }, { "page": "619" }, { "page": "621", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "115 N.C. App. 534", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12135419 ], "year": 1994, "opinion_index": 0, "case_paths": [ "/nc-app/115/0534-01" ] }, { "cite": "467 S.E.2d 905", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "342 N.C. 896", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 796000, 795975, 796076, 796028, 795997 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/nc/342/0896-04", "/nc/342/0896-01", "/nc/342/0896-03", "/nc/342/0896-05", "/nc/342/0896-02" ] }, { "cite": "464 S.E.2d 723", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1995, "pin_cites": [ { "page": "724-25" }, { "page": "725" } ], "opinion_index": 0 }, { "cite": "121 N.C. App. 185", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11916280 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc-app/121/0185-01" ] }, { "cite": "303 S.E.2d 214", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1983, "pin_cites": [ { "page": "216" }, { "page": "217" } ], "opinion_index": 0 }, { "cite": "62 N.C. App. 461", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523150 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/nc-app/62/0461-01" ] }, { "cite": "346 S.E.2d 134", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "316 N.C. 386", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4697093, 4703166 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/316/0386-02", "/nc/316/0386-01" ] }, { "cite": "340 S.E.2d 374", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1986, "pin_cites": [ { "page": "377" } ], "opinion_index": 0 }, { "cite": "315 N.C. 688", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4720126 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/315/0688-01" ] } ], "analysis": { "cardinality": 594, "char_count": 12466, "ocr_confidence": 0.767, "pagerank": { "raw": 2.2899967363676756e-07, "percentile": 0.7861205421628829 }, "sha256": "c9ee2b2b5990b85a217d562cee3431af7f792af49d8d765568965aa6f5157b8b", "simhash": "1:8d61f91b6ca7b050", "word_count": 1980 }, "last_updated": "2023-07-14T19:11:14.463583+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges EAGLES and MARTIN, Mark D. concur." ], "parties": [ "JAMES PATTI, PAUL H. BAILEY, AND DRS. PATTI AND BAILEY, P.A., Plaintiffs-Appellants v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellee" ], "opinions": [ { "text": "WALKER, Judge.\nOn 24 March 1994, Debra Harrison filed suit against the plaintiffs claiming damages for wrongful discharge against public policy, breach of good faith and fair dealing, and intentional or reckless infliction of emotional distress. Each of the claims stemmed from Harrison\u2019s termination as plaintiffs\u2019 office manager.\nAt the time of the events giving rise to Harrison\u2019s lawsuit, plaintiffs were insured under a \u201cProfessional Insurance Coverage\u201d policy with defendant. The policy included general liability coverage which plaintiffs contend requires defendant to provide them with a defense to the claims made by Harrison. Defendant denied coverage and refused to defend in that action. After plaintiffs settled with Harrison, they filed this action for breach of contract seeking to recover indemnification for the damages paid in the settlement and defense costs, including attorney fees. Defendant answered and filed a counterclaim for declaratory judgment seeking a declaration from the court that there was no duty to defend or indemnify plaintiffs based on the insuring agreement and its exclusions.\nThe trial court granted defendant\u2019s motion for summary judgment against the plaintiff professional association and plaintiff doctors individually.\nDefendant\u2019s duty to defend against plaintiffs\u2019 claim is determined by the allegations found in Harrison\u2019s complaint. Waste Management of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 340 S.E.2d 374, rehearing denied, 316 N.C. 386, 346 S.E.2d 134 (1986). In Waste Management, our Supreme Court stated:\nGenerally speaking, the insurer\u2019s duty to defend the insured is broader than its obligation to pay damages incurred by events covered by a particular policy. An insurer\u2019s duty to defend is ordinarily measured by the facts as alleged in the pleadings; its duty to pay is measured by the facts ultimately determined at trial. When the pleadings state facts demonstrating that the alleged injury is covered by the policy, then the insurer has a duty to defend, whether or not the insured is ultimately liable. Conversely, when the pleadings allege facts indicating that the event in question is not covered, and the insurer has no knowledge that the facts are otherwise, then it is not bound to defend (citations omitted).\nId. at 691, 340 S.E.2d at 377. Thus, we must examine the allegations in Harrison\u2019s complaint in order to determine coverage and whether there was a duty to defend under the policy.\nHarrison\u2019s first claim for relief was for wrongful discharge in violation of public policy. She alleged that during her employment she was subjected to \u201cintolerable working conditions\u201d and was \u201cwrongfully discharged\u201d because she testified truthfully in an action against Bailey by his former wife. Harrison was subpoenaed to testily in her capacity as office manager and to produce certain documents of the defendant association at her deposition and later at a hearing in district court. She also testified concerning her knowledge of an adulterous affair that had taken place between Bailey and another employee, Christy Jones. As a result of the discharge, Harrison alleged she incurred substantial damages for emotional distress, medical expenses, lost earnings and benefits, and damage to her reputation. Harrison further claimed the conduct of the plaintiffs was committed \u201cwith malice, oppression, insult, rudeness, indignity or a reckless or wanton disregard\u201d of her rights, entitling her to punitive damages.\nThe second claim for relief alleged in Harrison\u2019s complaint was breach of good faith and fair dealing. Here, she alleged that the implied covenant of good faith and fair dealing \u201cprohibits an employer from terminating an employee who has been subjected by the employer to knowledge about its illicit and illegal activities,\u201d and who is then subpoenaed to testify concerning those matters. Further, she claims that during her employment she was \u201cpressured and induced\u201d to meet with Bailey and Jones, who provided her with information about their affair and that she was terminated because of her truthful testimony about the affair.\nLastly, Harrison sets forth a claim for relief for intentional or reckless infliction of emotional distress. Here, she alleges that by the plaintiffs\u2019 extreme and outrageous conduct they intended to inflict severe emotional distress or that their conduct was taken with knowledge or reason to believe that they would cause severe emotional distress, entitling her to compensatory and punitive damages.\nThe professional insurance coverage policy issued to plaintiffs contained Part I entitled GENERAL LIABILITY COVERAGE PART, COVERAGE AGREEMENTS, which provided as follows:\nWe will pay all amounts, up to the limit of liability, which you become legally obligated to pay as a result of injury or damage. We will also pay claim expenses. The injury or damage must be caused by an occurrence during the policy term. . . . We have no duty to defend any claims not covered by this Coverage Part.\nPart IV of the General Liability section of the policy defines \u201cOccurrence\u201d as follows:\n\u201cOccurrence\u201d means an accident, including continuous or repeated exposure to conditions which:\nA. results in injury and/or damage; and\nB. was not expected nor intended by you.\nPart II of the policy, GENERAL LIABILITY COVERAGE PART, EXCLUSIONS, provides as follows:\nWe will not defend, or pay, under this Coverage Part for:\nA. injury to:\n1. an employee of yours arising out of and in the course of employment by you....\nThis exclusion applies:\n1. whether you may be liable as an employer or in any other capacity....\nThis section of the policy also provides:\nWe will not defend, or pay, under this Coverage Part for:\nL. Injury or damage you expected or intended.\nDefendant alleges that the general liability coverage part of the policy did not cover Harrison\u2019s claims on two grounds: (1) The policy precludes coverage for injury to an employee arising out of and in the course of employment; and (2) The policy excludes coverage for an injury expected or intended by the insured.\nPlaintiffs first allege that Harrison\u2019s injuries were not intended but were an accident. Moreover, plaintiff argues that the term \u201carising out of and in the course of employment by you\u201d in the policy exclusion must be construed narrowly and as such, Harrison\u2019s injuries did not arise out of her employment with plaintiffs but rather from her personal relationship with plaintiffs.\nWe will first examine the provision in the policy that excludes coverage for damages which were expected or intended and review cases from our Court that have dealt with similar issues. In Commercial Union Ins. Co. v. Mauldin, 62 N.C. App. 461, 303 S.E.2d 214 (1983), the insured shot into a car occupied by his wife and killed another person who was the driver. This Court, in examining whether the insured\u2019s homeowner\u2019s policy provided coverage, observed that \u201c[t]here is no ambiguity in the sentence \u2018[This policy does not apply] to bodily injury or property damage which is either expected or intended from the standpoint of the insured.\u2019 The sentence obviously means that the policy is excluding from coverage bodily injury caused by the insured\u2019s intentional acts, determining whether the act is intentional from the insured\u2019s point of view.\u201d Id. at 463, 303 S.E.2d at 216. This Court, in upholding the trial court\u2019s granting of summary judgment for the defendant, determined that the likelihood of one of the bullets hitting the driver should have been expected by the insured and he \u201cobviously knew it was probable that he would hit Pugh [the driver] when he fired four or five shots into her moving car.\u201d Id. at 464, 303 S.E.2d at 217.\nIn Russ v. Great American Ins. Companies, 121 N.C. App. 185, 464 S.E.2d 723 (1995), disc. review denied, 342 N.C. 896, 467 S.E.2d 905 (1996), plaintiffs claimed coverage under a business liability policy for damages arising out of claims for intentional infliction of emotional distress arising from sexual harassment. There were two liability policies in question in Russ. One policy provided coverage for an \u201coccurrence\u201d and defined the term like the policy in question in the instant case. The other policy defined \u201coccurrence\u201d to mean an \u201caccident,\u201d but further excluded from coverage \u201cbodily injury . . . expected or intended from the standpoint of the insured.\u201d The defendant denied coverage and refused to defend the claims. Id. at 187-89, 464 S.E.2d at 724-25.\nThis Court upheld the granting of summary judgment in favor of the defendant concluding that \u201csince sexual harassment is substantially certain to cause injury to the person harassed, intent to injure may be inferred as a matter of law from the intent to act for the purpose of determining coverage under an insurance policy.\u201d Id. at 189, 464 S.E.2d at 725.\nA similar issue was also decided in Nationwide Mutual Ins. Co. v. Abernethy, 115 N.C. App. 534, 445 S.E.2d 618 (1994). In Nationwide, this Court found that a homeowner\u2019s policy issued to defendant Abernethy did not provide coverage for injuries to defendant Lowery resulting from Abernethy\u2019s alleged acts of sexual molestation of Lowery. Id. at 535, 445 S.E.2d at 618-19. Both parties argued that coverage depended on the interpretation of the exclusion for \u201c \u2018bodily injury . . . which is expected or intended by the insured.\u2019 \u201d Id. at 536, 445 S.E.2d at 619.\nThis Court, in deciding whether the injury to Lowery was \u201cexpected or intended,\u201d held that \u201cbecause of the close relationship between an act of child sex abuse and resulting harm to the child . . . we conclude as a matter of law that Abernethy \u2018knew it was probable,\u2019 that his actions would cause Lowery to suffer mental and emotional injury.\u201d Id. at 540, 445 S.E.2d at 621 (citations omitted).\nThe holdings in Mauldin, Russ and Nationwide compel a similar result in the instant case. Here, the plaintiffs obviously intended to terminate Harrison. See Lipson v. Jordache Enterprises, Inc., 11 Cal. Rptr. 2d 271 (1992) (\u201cAn employment termination, even if due to mistake, cannot be unintentional\u201d). Further, Harrison claims her termination was wrongful; therefore, it \u201cmay be inferred as a matter of law\u201d that plaintiffs knew it was probable that she would suffer injuries.\nBased on the nature of the claims made by Harrison against the plaintiffs, we conclude defendant had no duty to defend and presently has no duty to indemnify the plaintiffs, as this policy does not provide coverage for damages which were expected or intended by the insured.\nFurthermore, we are not persuaded by plaintiffs\u2019 argument seeking a narrow construction of the policy provision excluding coverage for injuries \u201carising out of and in the course of employment...\u201d or that any injuries suffered by Harrison arose out of a personal relationship with plaintiffs and therefore coverage should be afforded. However, we need not address this question further in view of our decision.\nThe trial court did not err in granting the defendant\u2019s motion for summary judgment.\nAffirmed.\nJudges EAGLES and MARTIN, Mark D. concur.", "type": "majority", "author": "WALKER, Judge." } ], "attorneys": [ "Gordon & Nesbit, P.L.L.G., by Thomas L. Nesbit, for plaintiffs-appellants.", "Van Winkle, Buck, Wall, Starnes & Davis, P.A., by Michelle Rippon and Marla Adams, for defendant-appellee." ], "corrections": "", "head_matter": "JAMES PATTI, PAUL H. BAILEY, AND DRS. PATTI AND BAILEY, P.A., Plaintiffs-Appellants v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellee\nNo. COA96-887\n(Filed 1 July 1997)\nInsurance \u00a7 895 (NCI4th)\u2014 employment termination \u2014 general liability coverage \u2014 expected or intended damages excluded\nThe trial court did not err by granting defendant insurance company\u2019s motion for summary judgment in a declaratory judgment action to determine whether there was a duty to defend or indemnify where plaintiffs had been the defendants in an action for wrongful discharge, breach of good faith and fair dealing, and intentional or reckless infliction of emotional distress arising from the termination of an office manager. The policy does not provide coverage for damages which were expected or intended by the insured; an employment termination cannot be unintentional and it may be inferred that defendants knew it was probable that plaintiff would suffer injuries since plaintiff claims her termination was wrongful.\nAm Jur 2d, Insurance \u00a7\u00a7 703 et seq.\nAppeal by plaintiffs from order entered 2 May 1996 by Judge L. Todd Burke in Forsyth County Superior Court. Heard in the Court of Appeals 1 April 1997.\nGordon & Nesbit, P.L.L.G., by Thomas L. Nesbit, for plaintiffs-appellants.\nVan Winkle, Buck, Wall, Starnes & Davis, P.A., by Michelle Rippon and Marla Adams, for defendant-appellee." }, "file_name": "0643-01", "first_page_order": 681, "last_page_order": 686 }