{
  "id": 8526849,
  "name": "NATIONWIDE MUTUAL FIRE INSURANCE COMPANY and NATIONWIDE MUTUAL INSURANCE COMPANY v. JOHN W. ALLEN, FREDA P. ALLEN, KATHERYN E. PALAVID, COMMONWEALTH REALTY DEVELOPMENT CORPORATION d/b/A DUTCH VILLAGE APARTMENTS, a corporation, and LUMBERMENS MUTUAL CASUALTY COMPANY, a corporation",
  "name_abbreviation": "Nationwide Mutual Fire Insurance v. Allen",
  "decision_date": "1984-05-01",
  "docket_number": "No. 8326SC683",
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  "casebody": {
    "judges": [
      "Chief Judge VAUGHN and Judge Eagles concur."
    ],
    "parties": [
      "NATIONWIDE MUTUAL FIRE INSURANCE COMPANY and NATIONWIDE MUTUAL INSURANCE COMPANY v. JOHN W. ALLEN, FREDA P. ALLEN, KATHERYN E. PALAVID, COMMONWEALTH REALTY DEVELOPMENT CORPORATION d/b/A DUTCH VILLAGE APARTMENTS, a corporation, and LUMBERMENS MUTUAL CASUALTY COMPANY, a corporation"
    ],
    "opinions": [
      {
        "text": "BRASWELL, Judge.\nA fire occurred in the rented apartment of John and Freda Allen in the Dutch Village Apartments complex. The Allens had tenant-homeowner\u2019s insurance coverage with the plaintiff Nationwide Mutual Fire Insurance Company. Mrs. Allen was the owner of a 1973 Honda motorcycle. The other plaintiff, Nationwide Mutual Insurance Company, provided liability insurance coverage on the motorcycle before policy coverage expired on 10 October 1979. Defendant Katheryn E. Palavid leased an adjacent apartment to the Allens and her personal property was damaged by the fire. Defendant Commonwealth Realty Development Corporation, d/b/a Dutch Village Apartments, a Corporation, owned the apartment complex. Lumbermens Mutual Casualty Company was the fire insurance carrier for Ms. Palavid and Commonwealth Realty.\nOn 20 March 1980, a fire originated in the living room of the Allen apartment and damaged not only its interior, but the apartment structure, the adjacent apartments, and the contents of certain adjacent apartments. The plaintiffs sought a declaratory judgment to determine insurance coverage. The trial judge, based upon a finding of forty-five uncontested facts, concluded and adjudged as a matter of law that coverage was afforded under the policy of Nationwide Mutual Fire Insurance Company, that this company had a duty to provide a defense for the Allens in a related civil action, but that the policy excluded coverage for the fire damage to the interior of the Allen apartment itself and excluded any loss of use coverage of the Allen apartment. Damages were stipulated to be $7,575.26 to the Allen apartment and $46,951.33 to the other apartments.\nThe plaintiff, Nationwide-Fire, appeals. The defendants cross-assign error on the denial of coverage on the Allen apartment loss, but did not appeal. No mention of disposition is made in the final judgment as to plaintiff Nationwide Mutual Insurance Company, the earlier carrier on the Honda motorcycle.\nThe question plaintiff presents for review is whether it was reversible error for the trial court to fail to find and conclude that the homeowner\u2019s insurance policy excluded coverage for all the damages by fire. In a declaratory judgment action our standard of review is \u201cto determine whether the record contains competent evidence to support the findings; and whether the findings support the conclusions.\u201d Insurance Co. v. Allison, 51 N.C. App. 654, 657, 277 S.E. 2d 473, 475, disc. rev. denied, 303 N.C. 315, 281 S.E. 2d 652 (1981); Baucom\u2019s Nursery Co. v. Mecklenburg Co., 62 N.C. App. 396, 303 S.E. 2d 236 (1983). Here, because there were no exceptions to the findings of fact, we will be concerned only with the conclusions and questions of law.\nWhat did the terms of the policy provide? Nationwide-Fire relies upon Exclusions l.a.(2) and 2.d., quoted below, in its effort to avoid coverage.\nSection II-Exclusions\nThis policy does not apply:\n1. Under Coverage E \u2014Personal Liability . . . :\na. to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of:\n* * * *\n(2) any motor vehicle owned or operated by, or rented or loaned to any Insured; but this subsection (2) does not apply to bodily injury or property damage occurring on the residence premises if the motor vehicle is not subject to motor vehicle registration because it is used exclusively on the residence premises or kept in dead storage on the residence premises; or * * * *\n2. Under Coverage E \u2014 Personal Liability * * * *\nd. to property damage to property occupied or used by the Insured or rented to or in the care, custody or control of the Insured or as to which the Insured is for any purpose exercising physical control.\nOn the other hand, the policy\u2019s personal liability coverage provides as follows:\nCoverage E \u2014 Personal Liability.\nThis Company agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay for damages because of bodily injury or property damage, to which this insurance applies, caused by an occurrence. This Company shall have the right and duty, at its own expense, to defend any suit against the Insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, but may make such investigation and settlement of any claim or suit as it deems expedient.\nFor approximately six months prior to the fire on 20 March 1980, the Honda motorcycle had been stored on the patio to the Allen apartment. Because of mechanical damage in its last use, the Honda was now inoperable. The Honda was not registered, bore no license tag, and was not named or covered in any motor vehicle insurance policy. The last liability insurance policy on the Honda expired on 10 October 1979. Mrs. Allen was the owner.\nBecause 20 March 1980 was a rainy day, Mr. Allen was not working. On that day he decided to move the Honda motorcycle into the living room of the apartment, intending to charge the battery, to check the timing, and to inspect the motorcycle to determine what repairs might be needed. Those repairs would be performed at a later date either by him, if possible, or by a repair shop, so that the Honda could be sold and used. He had no repair parts available and did not intend to repair it that day.\nIn preparation for a work place, Mr. Allen placed a plastic cover over the carpet in the living room and newspapers over the plastic. Then he brought in the motorcycle, placing it over the newspaper and plastic. Prior to taking the Honda into the apartment Mr. Allen had drained IV2 gallons of gas, but was unable to remove all of it from the main tank and was unable to remove any gas from the reserve tank. While inside the room he drained the oil from the motorcycle, placing it in a plastic milk carton upon the newspaper-covered plastic.\nThe battery was removed and activated to a trickle charger which was situated upon the newspaper-covered plastic. A portion of the gas tank was removed in order to examine the magneto. The motorcycle was supported by a kickstand, which was wet from exposure to the rain.\nMr. Allen placed a timing light, a bare light bulb in a socket, upon the fork of the front wheel and plugged the light into an outlet. He was not intending to fix or set the timing, but did intend to check to see by visual inspection if the timing was off. At this juncture \u201cMr. Allen went to turn off the television . . . and while at the television he heard a loud crash and looked around and the motorcycle had toppled over on top of his coffee table.\u201d As he looked, \u201che observed flames coming from underneath the motorcycle in the vicinity of the area where he had examined the magneto.\u201d The services of the fire department were required to extinguish the blazing fire.\nOn 5 December 1980 the defendants Palavid and Commonwealth Realty commenced a separate action for damages against Mr. Allen on the basis that he negligently caused the fire. On 23 February 1980 the plaintiffs denied coverage to the Allens.\nNationwide-Fire prepared and issued the policy in question. The Allens paid the premiums, none of which have been returned.\nIt is the insured that has the burden of bringing himself within the insuring language of the policy. Once it has been determined that the insuring language embraces the particular claim or injury, the burden then shifts to the insurance company to prove a policy exclusion excepts the particular injury from coverage. Our Supreme Court\u2019s views on the law of interpreting exclusions and exceptions in insurance contracts were well summed up in Maddox v. Insurance Co., 303 N.C. 648, 650, 280 S.E. 2d 907, 908 (1981):\nIn interpreting the relevant provisions of the insurance policy at issue, we are guided by the general rule that in the construction of insurance contracts, any ambiguity in the meaning of a particular provision will be resolved in favor of the insured and against the insurance company. Exclusions from and exceptions to undertakings by the company are not favored, and are to be strictly construed to provide the coverage which would otherwise be afforded by the policy. The various clauses are to be harmoniously construed, if possible, and every provision given effect. [Citations omitted.] An ambiguity exists where, in the opinion of the court, the language of the policy is fairly and reasonably susceptible to either of the constructions asserted by the parties. (Emphasis added.)\nWithout question the claim in controversy involves property damages caused by an occurrence, a fire. In the separate lawsuit, should the owners of the apartments win and obtain judgment against Mr. Allen, a named insured, he would be \u201clegally obligated to pay for damages because of . . . property damage, to which this insurance applies, caused by an occurrence,\u201d as contracted for by the terms of the policy. Since the insuring language embraces the claim, the burden now shifts to Nationwide-Fire to avoid coverage through the cited provisions for exclusion.\nWe now consider the use of words in the exclusionary sections.\nNationwide-Fire contends the fire arose out of the \u201cownership\u201d and \u201cmaintenance\u201d of the motorcycle, and that coverage is excluded. It also would exclude coverage on the ground that Mr. Allen was exercising physical control over the rented apartment which he occupied and used, and that Exclusion 2.d. also applies. The defendants contend that an ambiguity is present in the meaning of the words \u201cownership\u201d and \u201cmaintenance\u201d which should be construed against the insurer. They also contend that by its language the exclusion should not be applied because the motor vehicle, the motorcycle, was \u201cnot subject to motor vehicle registration because it . . . [was] kept in dead storage on the residence premises.\u201d\nIt was Mr. Allen\u2019s handling of combustible materials (newspapers, plastic floor covering, gasoline, oil) in the immediate vicinity of ignition sources (an operating electrical battery trickle charger and an open light bulb as a timing light left upon a metal frame of the motorcycle) which created a risk covered by Nationwide-Fire\u2019s policy against personal liability and caused the fire. Mr. Allen obtained coverage to protect himself against this type of accident and to pay for property damage to others for which he might be liable.\nWe hold that the property damage which occurred did not arise out of either the ownership or the maintenance of the Honda motorcycle. We also hold that, as of the date of the fire, the motorcycle was not subject to motor vehicle registration and that it had been kept in dead storage for approximately six months on the residence premises. The trial judge ruled correctly in all of his conclusions and in his adjudication of the policy\u2019s exclusions against Nationwide Mutual Fire Insurance Company.\nUnder the canons of construction, exclusionary clauses in a policy are construed narrowly against the insurer. We recognize that the word \u201cmaintenance\u201d may have a different meaning under different circumstances, and \u201c \u2018whenever possible, the courts will apply an interpretation which gives, but never takes away, coverage.\u2019 \u201d See State Farm Mutual Automobile Insurance Co. v. Partridge, 10 Cal. 3d 94, 102, 514 P. 2d 123, 129 (1973), quoting Marcus, Overlapping Liability Insurance 16 Def. L. J. 549, 559 (1967).\nWe note that the defendant appellees cross-assigned as error the conclusion of law by the trial court that Exclusion 2.d. of the policy was applicable, and that coverage for the damages to the interior of the Allen apartment was excluded. Because an appellee\u2019s cross-assignment of error can only be utilized in \u201csupporting the judgment, order, or other determination from which appeal has been taken,\u201d and when the appellee has been deprived of \u201can alternative basis in law for supporting the judgment,\u201d (emphasis added), Rule 10(d), N.C. Rules App. Proc., we do not reach the cross-assignment in this case. The defendants did not appeal as an aggrieved party. The purpose of making a cross-assignment of error is \u201cto protect appellees who have been deprived in the trial court of an alternative basis in law upon which their favorable judgments might be supported and who face the possibility that on appeal prejudicial error will be found in the ground upon which their judgments were actually based.\u201d See Drafting Committee Note to Rule 10(d), N.C. Rules App. Proc. Since the cross-assignment here only conditionally presented the issue we do not reach it by virtue of having upheld the defendants\u2019 favorable judgment on the plaintiffs appeal.\nAffirmed.\nChief Judge VAUGHN and Judge Eagles concur.",
        "type": "majority",
        "author": "BRASWELL, Judge."
      }
    ],
    "attorneys": [
      "Kennedy, Covington, Lobdell & Hickman by Wayne P. Huckel for plaintiff appellant.",
      "Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston by Irvin W. Hankins, III, for defendant appellees, Katheryn E. Palavid, Commonwealth Realty Development Corporation and Lumbermens Mutual Casualty Company."
    ],
    "corrections": "",
    "head_matter": "NATIONWIDE MUTUAL FIRE INSURANCE COMPANY and NATIONWIDE MUTUAL INSURANCE COMPANY v. JOHN W. ALLEN, FREDA P. ALLEN, KATHERYN E. PALAVID, COMMONWEALTH REALTY DEVELOPMENT CORPORATION d/b/A DUTCH VILLAGE APARTMENTS, a corporation, and LUMBERMENS MUTUAL CASUALTY COMPANY, a corporation\nNo. 8326SC683\n(Filed 1 May 1984)\n1. Insurance \u00a7 121\u2014 tenant-homeowner\u2019s policy \u2014 fire not caused by ownership or maintenance of motor vehicle \u2014motorcycle kept in dead storage\nA fire in defendant insured\u2019s apartment did not arise out of the \u201cownership\u201d or \u201cmaintenance\u201d of a motor vehicle (a motorcycle) so that the fire was excluded from coverage under a tenant-homeowner\u2019s insurance policy where the fire was caused by the male insured\u2019s handling of combustible materials in the immediate vicinity of ignition sources (an operating electrical battery trickle charger and an open light bulb as a timing light left upon a metal frame of the motorcycle). Further, the motor vehicle exclusion did not apply since the motorcycle was not subject to motor vehicle registration because it was \u201ckept in dead storage on the residence premises\u201d within the meaning of the policy.\n2. Appeal and Error g 24.1\u2014 inappropriate cross-assignment of error\nA cross-assignment of error by defendants will not be considered where the appellate court upheld defendants\u2019 favorable judgment on plaintiffs appeal, since an appellee\u2019s cross-assignment of error can only be utilized in supporting the judgment from which appeal was taken. Appellate Rule 10(d).\nAppeal by plaintiff from Cornelius, Judge. Judgment entered 6 March 1983 in Superior Court, MECKLENBURG County. Heard in the Court of Appeals 11 April 1984.\nKennedy, Covington, Lobdell & Hickman by Wayne P. Huckel for plaintiff appellant.\nGrier, Parker, Poe, Thompson, Bernstein, Gage & Preston by Irvin W. Hankins, III, for defendant appellees, Katheryn E. Palavid, Commonwealth Realty Development Corporation and Lumbermens Mutual Casualty Company."
  },
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}
