{ "id": 8561783, "name": "NATIONWIDE MUTUAL INSURANCE COMPANY, a Corporation, and JAMES A. QUEEN, Plaintiffs, v. AUBREY McABEE, d/b/a PINE GROVE SERVICE STATION, IRA EARL BEACH, WILLIAM RAY ROBERTSON and FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY, a Corporation, Defendants", "name_abbreviation": "Nationwide Mutual Insurance v. McAbee", "decision_date": "1966-10-19", "docket_number": "", "first_page": "326", "last_page": "330", "citations": [ { "type": "official", "cite": "268 N.C. 326" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "146 S.E. 2d 410", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "266 N.C. 430", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561069 ], "opinion_index": 0, "case_paths": [ "/nc/266/0430-01" ] }, { "cite": "354 F. 2d 777", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 845487 ], "opinion_index": 0, "case_paths": [ "/f2d/354/0777-01" ] }, { "cite": "327 F. 2d 637", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 120964, 121029 ], "opinion_index": 0, "case_paths": [ "/f2d/327/0637-01", "/f2d/327/0637-02" ] }, { "cite": "220 F. Supp 616", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 68283 ], "opinion_index": 0, "case_paths": [ "/f-supp/220/0616-01" ] }, { "cite": "415 P. 2d 998", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 10589372 ], "opinion_index": 0, "case_paths": [ "/p2d/415/0998-01" ] }, { "cite": "137 S.E. 2d 913", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1964, "opinion_index": 0 }, { "cite": "205 Va. 472", "category": "reporters:state", "reporter": "Va.", "case_ids": [ 2042147 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/va/205/0472-01" ] }, { "cite": "40 S.E. 2d 477", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "227 N.C. 31", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8620342 ], "opinion_index": 0, "case_paths": [ "/nc/227/0031-01" ] }, { "cite": "49 S.E. 2d 742", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "229 N.C. 305", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 12165775 ], "opinion_index": 0, "case_paths": [ "/nc/229/0305-01" ] }, { "cite": "100 S.E. 2d 214", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "247 N.C. 72", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625253 ], "opinion_index": 0, "case_paths": [ "/nc/247/0072-01" ] } ], "analysis": { "cardinality": 511, "char_count": 11835, "ocr_confidence": 0.568, "pagerank": { "raw": 3.0592799990384306e-07, "percentile": 0.8565005141226381 }, "sha256": "a07eeae8222a3c26c1ddae2434963443dd27594929c8d81930f2a739c93ef653", "simhash": "1:25cf624f27e1f6d2", "word_count": 1933 }, "last_updated": "2023-07-14T16:01:58.333486+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "NATIONWIDE MUTUAL INSURANCE COMPANY, a Corporation, and JAMES A. QUEEN, Plaintiffs, v. AUBREY McABEE, d/b/a PINE GROVE SERVICE STATION, IRA EARL BEACH, WILLIAM RAY ROBERTSON and FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY, a Corporation, Defendants." ], "opinions": [ { "text": "Higgins, J.\nThe court held both Federated and Nationwide liable within the limits of their respective policies for the personal injuries and property damages proximately caused by the negligence of Beach in the operation of Queen\u2019s Chevrolet on March 4, 1961. Federated did not appeal. Nationwide did appeal, contending that Beach was not Queen\u2019s agent, but was the agent of McAbee\u2019s at the time of the accident, and was using Queen\u2019s Chevrolet in McAbee\u2019s automobile business. If the contention is correct, the court committed error in holding Nationwide liable.\nIn construing insurance policies, the burden is on the insured to show coverage. If the insurer relies on a clause of the policy which excludes coverage, the burden is on the insurer to establish the exclusion. Fallins v. Ins. Co., 247 N.C. 72, 100 S.E. 2d 214; MacClure v. Casualty Co., 229 N.C. 305, 49 S.E. 2d 742; Pearson v. Pearson, 227 N.C. 31, 40 S.E. 2d 477. Unquestionably Queen called McAbee\u2019s Service Station, stating his Chevrolet needed repairs. McAbee\u2019s agreed to send for, repair, and return the vehicle to Queen\u2019s home. McAbee\u2019s sent its employee, Beach, for the vehicle, repaired it, and while Beach was returning it the accident occurred as a result of Beach\u2019s negligence. Beach at all critical times was McAbee\u2019s employee. Queen had an agreement with McAbee\u2019s not only for the actual repair work but to pick up and return the vehicle after the repairs. Queen was responsible to McAbee\u2019s for the repair bill, including the movement to and from the garage. There is nothing in the record to indicate the agreement between Queen and McAbee\u2019s that the latter should pick up the vehicle, repair and return it, was other than a regular and customary part of the repair service. Beach, at all times was under the control and direction of his employer, McAbee\u2019s. At no time was he under Queen\u2019s control. Beach\u2019s acts are covered by McAbee\u2019s garage policy. From that holding Mc-Abee\u2019s and Beach did not appeal.\nIn a similar situation the Court of Appeals of Virginia has held: \u201cObviously, if the operation of the car by Perdue [dealer\u2019s employee] was a use in the automobile business [insured by garage policy] . . . within the meaning of the insuring clause ... it was a use in such automobile business within the meaning of the exclusion clause of United\u2019s policy.\u201d Universal Underwriters Ins. Co. v. Strohkorb, 205 Va. 472, 137 S.E. 2d 913 (1964).\nWhen McAbee\u2019s contracted to pick up the Chevrolet at Queen\u2019s home, service it, and return it to the owner, the custody and control of the vehicle passed from the owner to the garage at the time Beach took charge. During all the time involved, McAbee\u2019s agents were in control. The control began with the movement, continued through the repairs, and likewise was continuing at the time of the accident. In Karner v. Maynor, 415 P. 2d 998 (Okla.) (1966) the Court held: \u201cIt seems clear from the questioned provision . . . that the insurer does not . . . provide liability insurance for any person or organization . . . employees or agents who operate any of the . . . businesses specified [automobile business]. The reason for refusing to extend insurance coverage to such persons and organizations is obvious. When the named insured places his automobile in the custody of any . . . repair shop, service station . . . the insured has no knowledge as to who will be entrusted with the operation . . . while it is in the control of such person or organization. Since the risks involved in the operation ... by the agents or employees of such businesses is great, the [owner\u2019s] insurance company refuses to extend coverage . . .\u201d\nThe appellees cite cases holding the transportation to and from a garage for repairs is not using the automobile in the garage business. Among the cases is Goforth v. Allstate Ins. Co., 220 F. Supp 616, a District Court decision. On appeal the Fourth Circuit, by per curiam decision, 327 F. 2d 637, said: \u201cWe agree with the District Court that a private automobile being driven from the place of business of the owner by a garage keeper for the purpose of repairs . . . was not being used in the automobile business within the meaning of the exclusion clause in the owner\u2019s liability insurance policy.\u201d The court attempted to justify the reasoning by saying the business of the man driving the car did not determine the business in which the car was being used while he drove it. The decision has been soundly criticized. The Fifth Circuit, in Sanders v. Liberty Mutual Co., 354 F. 2d 777, rejected the theory advanced by the Fourth Circuit and held the exclusion does apply. The Goforth decision holds the use was not in the automobile business, therefore not insured by the garage policy but by the owner\u2019s policy.\nIn this case the use in the automobile business was found by the court and neither Beach nor McAbee\u2019s appealed. The judgment of the Superior Court on that question, therefore, becomes the law of the case as to them. Goforth does not fit the case before us.\nThe appellees cite Insurance Co. v. Insurance Co., 266 N.C. 430, 146 S.E. 2d 410, as authority sustaining Judge Hasty\u2019s decision in this case. In that case William Clark Hamrick, the driver of the automobile belonging to Tedder Motor Company was in sole possession of and was driving the vehicle to determine whether he would purchase it. He was a textile worker living in the home of his father whose liability policy covered the members of his household. The policy contained an exclusion clause the same as Queen\u2019s in this case. Hamrick was not engaged in the automobile business. He had permission of the dealer to drive the vehicle but in doing so he was acting on his own. He was neither the agent nor was he working for Tedder Motor Company. The court properly held Hamrick was not using the vehicle in the automobile business. Hence the exclusion clause would not exempt Hamrick\u2019s insurance carrier from liability. Such was our holding in the Jamestown case. The holding, in so far as applicable, accords with our present decision.\nWe have considered the authorities cited in the appellees\u2019 excellent brief. However, upon the admitted facts we think sound reasoning compels the legal conclusion that McAbee\u2019s was using Queen\u2019s automobile in its automobile business as defined in Nationwide\u2019s policy. Under the stipulations it appears as a matter of law that Nationwide is not liable for the personal injury or property damage, or expenses of defending claims against Beach and McAbee\u2019s resulting from Beach\u2019s negligence. The judgment as to Nationwide is\nReversed.", "type": "majority", "author": "Higgins, J." } ], "attorneys": [ "Kennedy, Covington, Lobdell & Hickman by Charles V. Tompkins, Jr., for plaintiff appellants.", "Craighill, Rendleman & Clarkson by Hugh B. Campbell, Jr., for defendant appellees." ], "corrections": "", "head_matter": "NATIONWIDE MUTUAL INSURANCE COMPANY, a Corporation, and JAMES A. QUEEN, Plaintiffs, v. AUBREY McABEE, d/b/a PINE GROVE SERVICE STATION, IRA EARL BEACH, WILLIAM RAY ROBERTSON and FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY, a Corporation, Defendants.\n(Filed 19 October, 1966.)\n1. Insurance \u00a7 54\u2014\nIn an action on an automobile liability policy, tbe burden is upon insured to show coverage, and, if insurer relies upon a clause excluding coverage, the burden is on insurer to establish the exclusion.\n2. Same\u2014 Accident occurring while employee of garage was returning vehicle to owner after repairs held covered by garage liability policy.\nThe stipulations and findings disclosed that the owner arranged with a repair garage to pick up the owner\u2019s car for the purpose of repairs and return it after repairs were made, that the garage sent its employee who took charge of the vehicle and drove it to the repair shop and after the repairs were made, undertook to return the vehicle to the owner\u2019s home, and that the collision occurred as the garage employee was on his way to deliver the vehicle to the owner. Held,: Under the agreement of the garage not only to do the repair work but to pick up and return the vehicle after the repairs, the garage employee was operating the vehicle in the garage business so that liability for his negligence was covered by the garage liability policy, and came within the exclusion clause of the owner\u2019s liability policy.\nAppeal by plaintiffs from Hasty, J., January 31, 1966 Regular Schedule D Civil Session, MecicleNbuRG Superior Court.\nNationwide Mutual Insurance Company [Nationwide] and James A. Queen [Queen] instituted this civil action, asking the court by declaratory judgment to determine the respective obligations of the parties to defend and indemnify Ira Earl Beach, Aubrey McAbee d/b/a Pine Grove Service Station, against the personal injury and the property damage claims of William Ray Robertson and Emily Jean Perkins growing out of a collision between the Queen automobile and the Robertson motorcycle. The facts are stipulated.\nOn March 4, 1961, Queen owned a 1959 Chevrolet automobile. Nationwide\u2019s policy of liability insurance provided the owner coverage against claims growing out of the use of the vehicle. On the same date Aubrey McAbee operated Pine Grove Service Station. Federated Mutual Implement and Hardware Insurance Company\u2019s garage policy provided coverage for McAbee\u2019s Pine Grove Service Station.\nAccording to the stipulations and findings, on March 4, 1961, Queen, by telephone, arranged for McAbee\u2019s to pick up Queen\u2019s Chevrolet automobile at the owner\u2019s home for the purpose of repairs. McAbee\u2019s sent its agent, Ira Beach, who took charge of and drove the automobile to the repair shop. After the repairs, which were completed at the garage, Beach undertook to return the Chevrolet to Queen\u2019s home. On the way, a collision occurred between the Chevrolet and a motorcycle operated by Robertson, on which Emily Jean Perkins was a passenger. As a result of the collision, Robertson and Emily Jean Perkins, a minor, were injured.\nEmily Jean Perkins, by her Next Friend, instituted an action for personal injury against Queen, Beach and McAbee\u2019s. Nationwide defended for Queen but refused to defend for Beach or McAbee\u2019s. Federated defended for both Beach and McAbee\u2019s but contended its policy did not cover the accident for that Beach was the agent of Queen in picking up the Chevrolet and returning it after the repairs. Federated compromised and settled the Perkins claim. Robertson instituted an action against Queen and Beach for his personal injuries. Federated undertook the defense of Beach and McAbee\u2019s. Nationwide undertook the defense of Queen but refused to participate in the defense of Beach or McAbee\u2019s, alleging Beach was the agent of McAbee\u2019s at the time of the accident and injury. Nationwide\u2019s policy issued to Queen contained this clause:\n\u201c1. This policy does not apply under Coverages D and E; (g) to an owned automobile while used in the automobile business, but this exclusion does not apply to the named insured, a resident of the same household as the named insured, a partnership in which the named insured or such resident is a partner, or any partner agent or employee of the named insured, such resident or partnership; [automobile business being defined in the Nationwide policy as \u2018the business or occupation of selling, repairing, servicing, storing or parking automobiles\u2019].\u201d\nThe court held both Nationwide and Federated were liable within the limits of their respective policies for the injuries resulting from the negligence of Beach in the operation of Queen\u2019s automobile; that Nationwide is liable to Federated for the proportionate part of the expenses and amount paid in settlement of the Perkins claim. The court further held that both Nationwide and Federated are legally obligated under their policies to indemnify the insureds against claims growing out of the accident.\nTo the judgment entered, Nationwide excepted, and from it, appealed.\nKennedy, Covington, Lobdell & Hickman by Charles V. Tompkins, Jr., for plaintiff appellants.\nCraighill, Rendleman & Clarkson by Hugh B. Campbell, Jr., for defendant appellees." }, "file_name": "0326-01", "first_page_order": 366, "last_page_order": 370 }