{ "id": 8203881, "name": "JASON M. CRANDELL, Plaintiff v. AMERICAN HOME ASSURANCE COMPANY, Defendant", "name_abbreviation": "Crandell v. American Home Assurance Co.", "decision_date": "2007-06-05", "docket_number": "No. COA06-533", "first_page": "437", "last_page": "443", "citations": [ { "type": "official", "cite": "183 N.C. App. 437" } ], "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": "643 S.E.2d 406", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638076, 12638077 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/643/0406-01", "/se2d/643/0406-02" ] }, { "cite": "638 S.E.2d 526", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12637385 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/638/0526-01" ] }, { "cite": "591 S.E.2d 556", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "pin_cites": [ { "page": "559" } ], "opinion_index": 0 }, { "cite": "162 N.C. App. 529", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8918558 ], "year": 2004, "pin_cites": [ { "page": "534" } ], "opinion_index": 0, "case_paths": [ "/nc-app/162/0529-01" ] }, { "cite": "415 S.E.2d 341", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "345" } ], "opinion_index": 0 }, { "cite": "331 N.C. 182", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2498339 ], "year": 1992, "pin_cites": [ { "page": "189" } ], "opinion_index": 0, "case_paths": [ "/nc/331/0182-01" ] }, { "cite": "919 F.2d 235", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1245015 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "239" }, { "page": "240", "parenthetical": "\"If there is any chance that [the patient's] claim even arguably developed during the [insurer's] policy period, [the insurer] had a duty to defend.\"" } ], "opinion_index": 0, "case_paths": [ "/f2d/919/0235-01" ] }, { "cite": "446 S.E.2d 877", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1994, "pin_cites": [ { "page": "878" } ], "opinion_index": 0 }, { "cite": "116 N.C. App. 134", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522716 ], "year": 1994, "pin_cites": [ { "page": "135" } ], "opinion_index": 0, "case_paths": [ "/nc-app/116/0134-01" ] }, { "cite": "539 S.E.2d 348", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "349", "parenthetical": "quoting Smith v. Nationwide Mut. Fire Ins. Co., 116 N.C. App. 134, 135, 446 S.E.2d 877, 878 (1994)" } ], "opinion_index": 0 }, { "cite": "141 N.C. App. 127", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9440185 ], "year": 2000, "pin_cites": [ { "page": "128", "parenthetical": "quoting Smith v. Nationwide Mut. Fire Ins. Co., 116 N.C. App. 134, 135, 446 S.E.2d 877, 878 (1994)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/141/0127-01" ] }, { "cite": "533 S.E.2d 501", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2000, "pin_cites": [ { "page": "506", "parenthetical": "holding that pleadings, which disclose \"mere possibility\" that potential liability is covered suffice to impose duty to defend upon insurer (emphasis omitted)" }, { "page": "506", "parenthetical": "insurer had duty to defend bodily injury claims arising from an automobile accident when insurer was aware that the accident may have happened either before or after 12:00 a.m. on the day the policy was cancelled" } ], "opinion_index": 0 }, { "cite": "139 N.C. App. 311", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9496659 ], "weight": 2, "year": 2000, "pin_cites": [ { "page": "319", "parenthetical": "holding that pleadings, which disclose \"mere possibility\" that potential liability is covered suffice to impose duty to defend upon insurer (emphasis omitted)" }, { "page": "319-20" } ], "opinion_index": 0, "case_paths": [ "/nc-app/139/0311-01" ] }, { "cite": "504 S.E.2d 574", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1998, "pin_cites": [ { "page": "578" }, { "parenthetical": "emphasis added" }, { "page": "578", "parenthetical": "\"Although [the insurer] brings forth arguments addressing each claim for relief, the possibility that [the insurer] could have been liable under one of the claims would have sufficed to impose a duty to defend.\"" } ], "opinion_index": 0 }, { "cite": "130 N.C. App. 729", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11470258 ], "weight": 2, "year": 1998, "pin_cites": [ { "page": "735" }, { "page": "735" } ], "opinion_index": 0, "case_paths": [ "/nc-app/130/0729-01" ] }, { "cite": "361 N.C. 352", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 3742296, 3747541, 3736887 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/nc/361/0352-02", "/nc/361/0352-03", "/nc/361/0352-01" ] }, { "cite": "181 N.C. App. 152", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8373202 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/nc-app/181/0152-01" ] }, { "cite": "340 S.E.2d 374", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 10, "year": 1986, "pin_cites": [ { "page": "377" }, { "page": "378" }, { "page": "377" }, { "page": "378", "parenthetical": "internal quotation marks omitted" } ], "opinion_index": 0 }, { "cite": "315 N.C. 688", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4720126 ], "weight": 4, "year": 1986, "pin_cites": [ { "page": "691" }, { "page": "691" } ], "opinion_index": 0, "case_paths": [ "/nc/315/0688-01" ] } ], "analysis": { "cardinality": 693, "char_count": 16147, "ocr_confidence": 0.75, "pagerank": { "raw": 5.4329632945428046e-08, "percentile": 0.3420699430739012 }, "sha256": "4d2b9ee24680a6bf5a596659ccc4f3df9f614ee73d1663aed3d120dc71a0f61f", "simhash": "1:4502f7a02a5f0a97", "word_count": 2539 }, "last_updated": "2023-07-14T15:07:58.512650+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges CALABRIA and JACKSON concur." ], "parties": [ "JASON M. CRANDELL, Plaintiff v. AMERICAN HOME ASSURANCE COMPANY, Defendant" ], "opinions": [ { "text": "GEER, Judge.\nPlaintiff Jason M. Crandell appeals from an order concluding that American Home Assurance Company (\u201cAmerican Home\u201d) had no duty to defend Crandell against a previously filed lawsuit and, as a result, granting summary judgment to American Home. The Supreme Court has established that if review of the pleadings in an underlying action gives rise even to \u201ca mere possibility\u201d that the insured\u2019s potential liability is covered by the insurance policy, then the carrier has a duty to defend. Waste Mgmt. of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 691 n.2, 340 S.E.2d 374, 377 n.2 (1986). Applying this standard, we reviewed the complaint filed in the underlying action against Crandell, and we hold that at least a mere possibility exists that Crandell\u2019s potential liability in that action is covered by American Home\u2019s policy. Consequently, we hold that American Home had a duty to defend Crandell and reverse the order of the trial court.\nFacts\nIn the early 1990s, Michael Rivest was the pastor of a small congregation of the Charismatic Episcopal Church and had established Isaiah 61 Ministries, Inc., which was providing Christian counseling as the St. Matthew\u2019s Institute for Healing and Growth. In 1994, Crandell, a licensed psychiatrist, agreed to act as a referral for any of Rivest\u2019s clients who could potentially benefit from medical management. Subsequently, Crandell became the medical director and psychiatrist for Isaiah 61. The parties do not dispute that Crandell served in this capacity through 1996. Crandell contends he \u201cprovid[ed] essentially the same supervision\u201d as a \u201cvolunteer\u201d \u2014 rather than as an employee \u2014 through 1998.\nAs more thoroughly detailed in our related opinion, Foster v. Crandell, 181 N.C. App. 152, 638 S.E.2d 526, temporary stay allowed, 361 N.C. 352, 643 S.E.2d 406 (2007), three of Rivest\u2019s counseling clients \u2014 Freida Foster, Tami Borland, and Kathy Bowen \u2014 filed suit against Isaiah 61 and Rivest in October 2001 (the \u201cIsaiah litigation\u201d). Foster, Borland, and Bowen alleged that, between 1996 and 2001, Rivest committed various \u201cindecent liberties\u201d and used \u201cmind control techniques, threats and intimidation to illegally obtain money\u201d from them. Foster, Borland, and Bowen ultimately settled with Isaiah 61 and Rivest and voluntarily dismissed the Isaiah litigation with prejudice in June 2004.\nPrior to the settlement of the Isaiah litigation, Foster, Borland, and Bowen filed suit against Crandell and his employer, PsiMed, P.A. (the \u201cCrandell litigation\u201d). After voluntarily dismissing that action without prejudice, plaintiffs refiled suit in January 2004. In the Crandell litigation, Foster, Borland, and Bowen asserted claims against Crandell for negligent supervision of Rivest, negligent infliction of emotional distress, intentional infliction of emotional distress, breach of fiduciary duty, and professional and medical malpractice.\nAmerican Home is the carrier on a professional liability insurance policy for Isaiah 61 and its employees covering the period from 1 August 1996 until 31 July 1998. American Home provided partial coverage and defense for both Isaiah 61 and Rivest during the Isaiah litigation. Crandell also demanded coverage from American Home in the Crandell litigation and sought to involve himself in the settlement proceedings in the Isaiah litigation, contending that he, like Rivest, was an employee of Isaiah 61. In August 2004, American Home declined to defend Crandell in the Crandell litigation, concluding that he was \u201cneither a named insured nor an additional insured\u201d under American Home\u2019s policy with Isaiah 61.\nOn 22 June 2005, Crandell filed a complaint against American Home, seeking, among other things, a declaration that Crandell was covered with respect to the claims in the Crandell litigation by American Home\u2019s policy with Isaiah 61. American Home filed an answer denying the material allegations of Crandell\u2019s complaint and asserting a counterclaim seeking a declaratory judgment that it had no duty to defend or indemnify Crandell in the Crandell litigation.\nCrandell moved for judgment on the pleadings and, following discovery, American Home moved for summary judgment. In its summary judgment motion, American Home no longer contended that Crandell was neither a named nor additional insured, but, rather, argued that a duty to defend Crandell never arose because the policy explicitly limited coverage to actions committed during the policy period from 1 August 1996 through 31 July 1998, whereas the complaint in the Crandell litigation only alleged negligent acts by Crandell \u201c[a]s early as 2000.\u201d\nThe parties\u2019 motions came on for hearing during the 3 January 2006 civil session of Forsyth County Superior Court. The trial court concluded that the allegations in the Crandell litigation complaint \u201crelate[d] only to \u2018early 2000\u2019 or later.\u201d As this was outside the policy period, the trial court ruled that American Home\u2019s \u201cpolicy afforded no coverage\u201d for Crandell and, consequently, that \u201cthere was no duty to defend.\u201d The trial court denied Crandell\u2019s motion for judgment on the pleadings, awarded summary judgment to American Home, and dismissed Crandell\u2019s action. Crandell timely appealed to this Court.\nDiscussion\nOur Supreme Court has observed that \u201cthe insurer\u2019s duty to defend the insured is broader than its obligation to pay damages incurred by events covered by a particular policy.\u201d Waste Mgmt., 315 N.C. at 691, 340 S.E.2d at 377. This duty to defend \u201cis ordinarily measured by the facts as alleged in the pleadings . ...\u201d Id. \u201cWhen 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.\u201d Id. An insurer is excused from its duty to defend only \u201cif the facts are not even arguably covered by the policy.\u201d Id. at 692, 340 S.E.2d at 378.\nAny doubt as to coverage must be resolved in favor of the insured. Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C. App. 729, 735, 504 S.E.2d 574, 578 (1998). If the \u201cpleadings allege multiple claims, some of which may be covered by the insurer and some of which may not, the mere possibility the insured is liable, and that the potential liability is covered, may suffice to impose a duty to defend.\u201d Id. (emphasis added). See also Waste Mgmt., 315 N.C. at 691 n.2, 340 S.E.2d at 377 n.2 (\u201c[Allegations of facts that describe a hybrid of covered and excluded events or pleadings that disclose a mere possibility that the insured is liable (and that the potential liability is covered) suffice to impose a duty to defend upon the insured.\u201d); Naddeo v. Allstate Ins. Co., 139 N.C. App. 311, 319, 533 S.E.2d 501, 506 (2000) (holding that pleadings, which disclose \u201cmere possibility\u201d that potential liability is covered suffice to impose duty to defend upon insurer (emphasis omitted)).\nIn determining whether an insurer has a duty to defend the underlying lawsuit, \u201cour courts employ the so-called \u2018comparison test.\u2019 \u201d Holz-Her U.S., Inc. v. U.S. Fid. & Guar. Co., 141 N.C. App. 127, 128, 539 S.E.2d 348, 349 (2000) (quoting Smith v. Nationwide Mut. Fire Ins. Co., 116 N.C. App. 134, 135, 446 S.E.2d 877, 878 (1994)). That test requires us to read the pleadings in the underlying suit side-by-side with the insurance policy to determine whether the alleged injuries are covered or excluded. Id.\nIn this case, a side-by-side comparison of the pertinent American Home policy with the complaint from the Crandell litigation reveals at least a \u201cmere possibility\u201d of coverage. The sole dispute presented by the parties is whether the acts or omissions alleged in the Crandell litigation fell within the policy period of 1 August 1996 through 31 July 1998.\nThe complaint alleged that plaintiffs Bowen and Borland each began psychological counseling with Rivest in 1997 and Foster in 1998, and \u201c[a]t all times alleged herein, Crandell maintained supervisory authority over Rivest.\u201d The complaint added that \u201c[a]t all times during the counseling relationship between Rivest and the plaintiffs, Crandell was Rivest\u2019s and/or Isaiah 61 Ministeries\u2019 medical director and/or clinical supervisor.\u201d The complaint then alleged \u201cDefendant Crandell, at all times alleged herein, had the ability to properly supervise and control Rivest\u2019s behavior; however, he failed to do so.\u201d Given the allegations of negligent supervision throughout Rivest\u2019s counseling of the plaintiffs, which the complaint indicates began in 1997 and 1998, it is apparent that the complaint contains sufficient factual allegations to bring the claims within the policy period. See St. Paul Fire & Marine Ins. Co. v. Vigilant Ins. Co., 919 F.2d 235, 239 (4th Cir. 1990) (holding that allegations passed the \u201ccomparison test\u201d when complaint did not allege that plaintiffs sought relief for only the time after insured psychiatrist\u2019s improper sexual contact, a date outside the policy period, but rather allegations referred to entire treatment period, a portion of which fell within policy period).\nAmerican Home nonetheless urges this Court to focus on another paragraph of the compliant that states:\nAs early as 2000, [Crandell] knew or should have known that. . . Rivest was engaged in an unprofessional, unethical and illegal relationship with [Foster, Borland, and Bowen].\n(Emphasis added.) According to American Home, nothing can \u201cchange the indisputable fact\u201d that this paragraph only references \u201cearly 2000,\u201d long after American Home\u2019s policy had expired. According to American Home, this allegation is controlling because any negligent supervision claim required proof that Crandell \u201cknew or should have known\u201d about Rivest\u2019s conduct: \u201cThe \u2018early 2000\u2019 dates . . . are pivotal because those allegations unequivocally establish the earliest possible time by which they allege that Crandell\u2019s conduct (whether by negligent act, error or omission) supports the plaintiffs\u2019 claims.\u201d We disagree.\nAmerican Home has overlooked Mozingo v. Pitt County Mem\u2019l Hosp., Inc., 331 N.C. 182,189, 415 S.E.2d 341, 345 (1992), in which our Supreme Court held that \u201ca physician who undertakes to provide on-call supervision of residents actually treating a patient may be held accountable to that patient, if the physician negligently supervises those residents and such negligent supervision proximately causes the patient\u2019s injuries.\u201d Under Mozingo, Crandell could arguably be held liable for negligently supervising Rivest during 1997 and 1998 regardless whether he knew or should have known of any misconduct by Rivest. American Home has also overlooked the three plaintiffs\u2019 claims for negligent infliction of emotional distress and breach of fiduciary duty during the counseling period that began in 1997 and 1998 \u2014 neither of those claims necessarily depend upon the allegation of what Crandell knew of should have known in 2000.\nAmerican Home\u2019s focus on a single sentence in the complaint to the exclusion of other allegations referring to acts and omissions within the policy period overlooks the applicable test, which requires only that the complaint give rise to a \u201cmere possibility\u201d that the potential liability is covered by the policy. See Naddeo, 139 N.C. App. at 319-20, 533 S.E.2d at 506 (insurer had duty to defend bodily injury claims arising from an automobile accident when insurer was aware that the accident may have happened either before or after 12:00 a.m. on the day the policy was cancelled); Bruce-Terminix, 130 N.C. App. at 735, 504 S.E.2d at 578 (\u201cAlthough [the insurer] brings forth arguments addressing each claim for relief, the possibility that [the insurer] could have been liable under one of the claims would have sufficed to impose a duty to defend.\u201d). We cannot, as American Home urges, construe Paragraph 20 as negating the rest of the complaint.\nAmerican Home argues further that any allegations from before \u201cearly 2000\u201d are barred by the applicable statutes of limitations. The duty to defend is not, however, dependent on the viability of the claims \u2014 \u201cthe insurer has a duty to defend, whether or not the insured is ultimately liable.\u201d Waste Mgmt., 315 N.C. at 691, 340 S.E.2d at 377. As the Supreme Court further pointed out in Waste Management, \u201cthe insurer is bound by the policy to defend groundless, false or fraudulent lawsuits filed against the insured . . . .\u201d Id. at 692, 340 S.E.2d at 378 (internal quotation marks omitted). It is only \u201cif the facts [in the complaint] are not even arguably covered by the policy [that] the insurer has no duty to defend.\u201d Id. Indeed, the American Home policy specifically provides for a duty to defend \u201ceven if any of the allegations of the claim or suit are groundless, false or fraudulent.\u201d Here, the claims may ultimately be found groundless because of the statute of limitations, but that possibility does not excuse American Home from providing a defense to establish that fact.\nSince we cannot conclude that the facts alleged in the underlying complaint \u201care not even arguably covered by the policy,\u201d we must hold that American Home had a duty to defend Crandell. Id. See also St. Paul Fire & Marine, 919 F.2d at 240 (\u201cIf there is any chance that [the patient\u2019s] claim even arguably developed during the [insurer\u2019s] policy period, [the insurer] had a duty to defend.\u201d). The trial court, therefore, erred in entering summary judgment in American Home\u2019s favor. We reverse that order and remand for entry of judgment in Crandell\u2019s favor on the issue of the duty to defend. See Purcell v. Downey, 162 N.C. App. 529, 534, 591 S.E.2d 556, 559 (2004). We express no opinion on any other issues raised by the pleadings and parties in this case.\nReversed.\nJudges CALABRIA and JACKSON concur.", "type": "majority", "author": "GEER, Judge." } ], "attorneys": [ "Carruthers & Roth, P.A., by Jack B. Bayliss, Jr.; and Smith, James, Rowlett & Cohen, L.L.P., by Norman B. Smith, for plaintiff-appellant.", "Womble Carlyle Sandridge & Rice, PLLC, by Allan R. Gitter and Bradley R. Johnson, for defendant-appellee." ], "corrections": "", "head_matter": "JASON M. CRANDELL, Plaintiff v. AMERICAN HOME ASSURANCE COMPANY, Defendant\nNo. COA06-533\n(Filed 5 June 2007)\nInsurance\u2014 professional liability \u2014 duty to defend \u2014 comparison test\nThe trial court erred by granting summary judgment in favor of defendant insurance company on the issue of whether it had the duty to defend plaintiff psychiatrist, the medical director of a Christian counseling service, against a previously filed lawsuit for negligent supervision of a pastor who provided counseling services, negligent infliction of emotional distress, intentional infliction of emotional distress, breach of fiduciary duty, and professional and medical malpractice even though defendant contends the policy provided no coverage when the complaint allegedly related only to early 2000 or later when plaintiff knew or should have known about the pastor\u2019s actions, whereas the policy period was from 1 August 1996 through 31 July 1998, because: (1) a comparison test revealed that at least a mere possibility existed that plaintiffs potential liability in that action was covered by defendant\u2019s professional liability policy; (2) given the allegations of negligent supervision throughout the pastor\u2019s counseling, the complaint contains sufficient factual allegations to bring-the claims within the policy period; (3) plaintiff could arguably be held liable for negligently supervising the pastor during 1997 and 1998 regardless of whether he knew or should have known of any misconduct by the pastor; (4) the negligent infliction of emotional distress and breach of fiduciary duty claims were during the counseling period that began in 1997 and 1998, and neither of those claims necessarily depend upon the allegation of what plaintiff knew or should have known in 2000; and (5) the duty to defend is not dependent on the viability of the claims, and the possibility that the claims may ultimately be found groundless based on the statute of limitations does not excuse defendant from providing a defense to establish that fact.\nAppeal by plaintiff from order entered 6 January 2006 by Judge Anderson D. Cromer in Forsyth County Superior Court. Heard in the Court of Appeals 11 January 2007.\nCarruthers & Roth, P.A., by Jack B. Bayliss, Jr.; and Smith, James, Rowlett & Cohen, L.L.P., by Norman B. Smith, for plaintiff-appellant.\nWomble Carlyle Sandridge & Rice, PLLC, by Allan R. Gitter and Bradley R. Johnson, for defendant-appellee." }, "file_name": "0437-01", "first_page_order": 469, "last_page_order": 475 }