Ortez v. Penn Nat'l Sec. Ins. Co.

Opinions

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA24-169

Filed 17 December 2024

Onslow County, No. 19CVS2391

LUIS ORTEZ and THERESA BEDDARD ESTES, Individually and as Administratrix of the ESTATE OF DARREN DRAKE ESTES, Plaintiffs,

v.

PENN NATIONAL SECURITY INURANCE COMPANY, PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY and PAMELA A. TOKARZ, Defendants.

Appeal by defendant from judgment entered 19 July 2019 by Judge John E.

Nobles, Jr. in Onslow County Superior Court. Heard in the Court of Appeals 14

August 2024.

White & Stradley, PLLC, by J. David Stradley and Nicole D. McNamara, for the plaintiff-appellee Ortez.

Abrams & Abrams, PA, by Noah B. Abrams, for the plaintiff-appellee Estes.

Kellum Law Firm, by John T. Briggs, for the plaintiff-appellee Estes.

Goldberg Segalla, LLP, by David L. Brown and John I. Malone, Jr., for the defendant-appellant.

TYSON, Judge.

Penn National Security Insurance Company (“Penn National”) appeals from

the trial court’s order granting Luis Ortez’s (“Ortez”) motion for Rule 12(c) judgment

on the pleadings. We reverse.

Opinion of the Court

I. Background

Penn National Security Insurance Company (“Penn National”) issued a

commercial auto insurance policy (“policy”), No. AX9 0615893 to Kitchen and

Lighting Designs Inc. (“employer”) on 1 August 2017, for a policy period extending

from 1 August 2017 to 1 August 2018. The policy provided, inter alia, coverage as an

“insured” for “[a]nyone else while using with [employer’s] permission a covered ‘auto’

you own, hire or borrow . . . .” The policy also contained an exclusion as an “insured”,

stating, “This insurance does not apply to any of the following . . . fellow employee.”

One week later, on 8 August 2017, Plaintiff Luis Ortez was driving the employer’s

insured vehicle, when due to Ortez’s distracted driving, he was involved in an

accident, which resulted in the death of fellow employee, Darren Drake Estes, a

passenger in the employer’s insured vehicle.

Penn National was notified of the accident by their employer, Kitchen &

Lighting Designs, who informed Penn National it employed both Ortez and Estes.

Employer also notified Penn National it had submitted Ortez’s and Estes’ claims to

its workers’ compensation carrier.

On 5 March 2018, Estes’ wife, Theresa Beddard Estes, individually and as

Administratrix of the Estate of Darren Drake Estes, filed a wrongful death suit

against Passport Transportations, Inc., their driver, Zemo Fissaha, and Luis Ortez,”

in Craven County Superior Court (“Wrongful Death Lawsuit”). The Estes and Estes

Estate’ suit asserted five claims: (1) negligent, grossly negligent, willful, wanton and

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reckless conduct of Fissaha; (2) punitive damages against Fissaha; (3) vicarious

liability of Passport Transportation; (4) independent negligent and wanton conduct

of Passport Transportation; and, (5) reckless, willful, and wanton conduct of Ortez.

The Wrongful Death Lawsuit did not explicitly allege Ortez and Estes were co-

employees, but baldly asserted Pleasant v. Johnson, 312 N.C. 710, 325 S.E.2d 244

(1985) as the basis for the claim. Kitchen and Lighting Designs Inc. was not named

as a party defendant. Ortez made no demands on his employer nor Penn National to

defend or indemnify him against the Estes Estate’s claims asserted against him.

On 4 March 2019, the Craven County Superior Court entered partial summary

judgment on liability against Ortez. On 27 March 2019, the Estes Estate served a

motion for summary judgment on damages from both Ortez and, Penn National,

along with a notice of hearing setting the motion hearing for 8 April 2019. The Estes

Estate served an amended notice of hearing on 4 April 2019, noting its summary

judgment motion would be heard on 9 April 2019 at 9:30 a.m. On 5 April 2019, the

Estes Estate transmitted a settlement offer to Penn National, offering to execute a

covenant not to enforce judgment in favor of Ortez in exchange for delivery of a check

in the amount of $30,000 to the office of counsel for the Estate before 3:00 p.m. on 8

April 2019, the day before the amended summary judgment hearing. Penn National

agreed to the settlement but asserted it could not deliver the check by the deadline.

Counsel for the Estes Estate withdrew the settlement.

The Estes Estate’s summary judgment motion was heard on 9 April 2019.

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Penn National engaged an attorney to enter a special appearance on behalf of Penn

National, seeking to stay the Wrongful Death Lawsuit. The trial court denied the

motion to stay. The court heard the motion for summary judgment and entered

judgment against Ortez in the amount of $9,500,000 plus interest and costs.

Ortez and the Estes Estate filed a complaint alleging Penn National had

breached its duty to defend by failing “to defend a wrongful death claim against

[Ortez], and as a result, a judgment of $9,500,000.00 was entered against [Ortez].”

Ortez and the Estes Estate also alleged Penn National had breached its duty to settle,

and that they had committed unfair and deceptive trade practices in violation of N.C.

Gen. Stat. § 58-63-15(11), N.C. Gen. Stat. § 75-1.1 et seg. (“Unfair and Deceptive

Trade Practices Act”) (2023).

Ortez filed a motion for judgment on the pleadings as to his claims for breach

of the duty to defend, breach of the duty to settle, and violation of the Unfair and

Deceptive Trade Practices Act. The trial court granted Ortez’s motion for judgment

on the pleadings and entered a judgment entitling him “to recover the sum of

$9,649,808.27 from [Penn National] as compensatory damages for breach of the duty

to defend, breach of the duty to settle, and unfair and deceptive trade practices” by

order entered 19 July 2019. The trial court then trebled the damages and entered

judgment in the amount of $28,949,424.80 against Penn National for violating the

North Carolina Unfair and Deceptive Trade Practices Act. Penn National appeals.

II. Jurisdiction

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This Court possesses jurisdiction pursuant to N.C. Gen. Stat. § 7A-27(b)

(2023).

III. Issues

Penn National contends the trial court erred in concluding: (1) it had a duty to

defend; (2) it had breached its duty to defend; (3) it had breached its duty to settle;

(4) Ortez was entitled to a judgment as a matter of law on his claim for unfair and

deceptive trade practices; and (5) erred in entering a $28.9 million judgment against

defendant.

IV. Judgment on the Pleadings

A. Standard of Review

“Judgment on the pleadings, pursuant to Rule 12(c), is appropriate when all

the material allegations of fact are admitted in the pleadings and only questions of

law remain.” Groves v. Community Hous. Corp., 144 N.C. App. 79, 87, 548 S.E.2d

535, 540 (2001) (internal citations and quotations omitted). “Judgments on the

pleadings are disfavored in law, and the trial court must view the facts and

permissible inferences in the light most favorable to the non-moving party.” Id.

(citations omitted).

A trial court’s grant of a motion for judgment on the pleadings is reviewed de

novo by this Court. Toomer v. Branch Banking & Tr. Co., 171 N.C. App. 58, 66, 614

S.E.2d 328, 335, disc. rev. denied, 360 N.C. 78, 623 S.E.2d 263 (2005).

B. Analysis

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1. Duty to Defend

Penn National contends the trial court erred in granting Ortez’s partial Rule

12(c) motion for judgment on the pleadings and asserts a comparison of the policy

language and exclusions with the allegations in the pleading negates any duty to

defend. We agree.

“An insurer’s duty to defend is ordinarily measured by the facts as alleged in

the pleadings . . . . [w]hen the pleadings state facts demonstrating that the alleged

injury is covered by the policy, then the insurer has a duty to defend.” Waste Mgmt.

of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 691, 340 S.E.2d 374, 377 (1986).

Our Supreme Court held long ago an insurer’s duty to defend “becomes absolute when

the allegations of the complaint bring the claim within the coverage of the policy.”

Strickland v. Hughes, 273 N.C. 481, 487, 160 S.E.2d 313, 318 (1968).

More recently, our Supreme Court re-affirmed: “In determining whether an

insurer has a duty to defend, the facts as alleged in the complaint are to be taken as

true and compared to the language of the insurance policy.” Harleysville Mut. Ins.

Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1, 7, 692 S.E.2d 605, 611 (2010).

Referred to as the “comparison test,” the plain language of the insurance policy is

reviewed and compared with the plain language of the facts alleged and the pleadings

before the court. Id.

The allegations in the complaint, as compared with the exclusions in the policy

does not require Penn National to defend Ortez. The Penn National Policy states:

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SECTION II – LIABILITY COVERAGE

A. Coverage We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto”. * * * We will have the right and duty to defend any “insured” against a “suit” asking for such damages … However, we will have no duty to defend any “insured” against a “suit” seeking damages for “bodily injury” or “property damage” … to which this insurance does not apply. We may investigate and settle any claim or “suit” as we consider appropriate.

(emphasis supplied).

This policy provision clearly provides coverage, to an “insured”, but also

includes unambiguous exclusions:

B. Exclusions This insurance does not apply to any of the following:

...

5. Fellow Employee “Bodily injury” to:

a. Any fellow “employee” of the “insured” arising out of and in the course of the fellow “employee’s” employment or while performing duties related to the conduct of your business; or b. The spouse, child, parent, brother or sister of that fellow “employee” as a consequence of Paragraph a. above.

The complaint alleged “Defendant Luis J. Ortez is liable to the Plaintiff based

on the legal precedent of Pleasant v. Johnson, and subsequent legal authority in

North Carolina recognizing that legal duty and that legal right of recovery.” The

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opinion of Pleasant v. Johnson provides, “. . . the North Carolina Workers’

Compensation Act does not insulate a co-employee from the effects of his willful,

wanton and reckless negligence. An injured worker in such situations may receive

benefits under the Act and also maintain a common law action against the co-

employee.” Pleasant v. Johnson, 312 N.C. 710, 718, 325 S.E.2d 244, 250.

After our Supreme Court’s decision, similar claims asserted between co-

workers, not based upon negligence, have been referred to as Pleasant claims in this

Court’s decisions. See Estate of Baker v. Reinhardt, 288 N.C. App. 529, 537, 887

S.E.2d 437, 444 (2023); Blue v. Mountaire Farms, Inc., 247 N.C. App. 489, 505, 786

S.E.2d 393, 403 (2016); Greene v. Barrick, 198 N.C. App. 647, 650, 680 S.E.2d 727,

730 (2009).

Using the comparison test to compare and assess the plain language of the

policy and the allegations in the complaint, it is clear Penn National had no duty to

defend Ortez in the Complaint as written. The only claim Estes and the Estes Estate

asserted against fellow employee Ortez in the Wrongful Death Lawsuit was the

Pleasant claim, which could only be asserted by one employee against another

employee for injuries resulting from intentional acts. These acts fall squarely within

Pleasant’s exception from the worker’s compensation exclusivity of negligence claims

and the express and unambiguous policy exclusions stated in Penn National’s policy.

Id.

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Plaintiffs argue Pleasant, like many landmark cases, embodies more than a

single legal proposition. However, Pleasant has one clear and distinct holding that

has become well-recognized in North Carolina law. Id. In cases involving actions

asserted between fellow or co-employees, “the Workers, Compensation Act does not

shield a co-employee from common law liability for willful, wanton and reckless

negligence.” Pleasant, 312 N.C. at 716, 325 S.E.2d at 249 (emphasis supplied). A

“Pleasant claim” addresses matters relating to the scope and limits of liability among

co-workers, rather than to implicate their employer in the litigation involving

international torts or “willful, wanton and reckless” acts. Pleasant’s central holding

is unambiguous and occupies a limited, unique, and specific claim between fellow

employees for alleged intentional torts. Id.

Employer’s insurance carriers are allowed to exclude fellow or co-employee

intentional torts from coverage in their policies. Worker’s Compensation insurance

generally covers an employer’s liability in negligence actions by and/or between co-

employees at work. “[T]he plain language of G.S. 20-279.21(e) . . . allows an

exemption from policy coverage of an employee only insofar as there are benefits

available to that employee pursuant to North Carolina’s Workers’ Compensation

Act.” South Carolina Ins. Co. v. Smith, 67 N.C. App. 632, 639, 313 S.E.2d 856, 861

(1984). The North Carolina Workers’ Compensation Act provides the sole remedy

against the employer for an employee who has been injured by the ordinary

negligence of a co-employee. Id; Reece v. Forga, 138 N.C. App. 703, 705, 531 S.E.2d

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881, 882-83 (2000) (The Workers’ Compensation Act is “the exclusive remedy in the

event of [an] employee’s injury by accident in connection with [their] employment.”)

The Estes Estate’s allegations against Ortez allege “reckless, willful, and

wanton conduct” between co-workers, not simple negligence. Employer is not a party

to this litigation and no allegations implicate or suggest their employer’s complicity

or directing Ortez’s alleged “reckless, willful, and wanton conduct” toward Estes.

Workers’ compensation insurance is designed to cover an employer’s liability

for an employee’s accidental or negligent acts arising out of acts in the course and

scope of employment occurring in the workplace. Any conduct outside of that scope—

such as intentional or grossly reckless acts—is excluded from coverage under both

the Workers’ Compensation Act and Penn National’s express Fellow Employee

exclusion. Pleasant, 312 N.C. at 717, 325 S.E.2d at 250. This statute and policy

exclusion excludes coverage for employee behaviors arising outside of ordinary

negligence, encompassing alleged intentional, reckless, or willful actions, which are

beyond those reasonably covered in a typical workplace negligence incident. Id.

Under North Carolina law, particularly as clarified in Pleasant v. Johnson,

workers’ compensation indemnity protections do not extend to cases involving willful,

wanton, or reckless conduct by a co-employee. Id. 312 N.C. at 716, 325 S.E.2d at 249.

This precedent leaves room for assertion of personal liability for intentional acts

outside of the Workers’ Compensation Act’s exclusivity. Ortez can be held personally

liable for any intentional harm and damage he allegedly caused to Estes and the

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Estes Estate. Id. Fellow or co-employee exclusions allow employer’s insurers to

exclude covering claims based upon an employee’s gross misconduct or intentional

harm, which acts are fundamentally different from the unintentional accidents or

minor negligence actions workers’ compensation policies address. Id.; South Carolina

Ins. Co, 67 N.C. App. at 639, 313 S.E.2d at 861.

Requiring the insurer to defend Ortez would defeat the purpose of the Fellow

Employee exclusion, which exists to shield the employer and insurer from being

required to cover claims rooted in extreme recklessness or willful misconduct, conduct

which aligns more closely with intentional harm, than with accidental injury. Courts

generally interpret these exclusions to protect employers and their carriers from

liability for egregious conduct not arising within the scope of employment-related

negligence risk coverage. Id.

The holding in Pleasant and the purpose behind the Fellow Employee policy

exclusion together show the insurer has no duty to defend or indemnify Ortez,

particularly where Ortez never demanded his employer or Penn National to provide

him with defense counsel. This exclusion is intended to limit coverage strictly to

accidental or negligent conduct and not to encompass allegations of extreme or

intentional wrongdoing between co-employees. As such, the Estes Estate’s assertions

of Ortez’s alleged reckless and willful conduct are plainly and unambiguously

excluded from coverage under the Fellow Employee exclusion in Penn National policy

and falls outside the insurer’s duty to defend. Id.

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2. Duty to Settle

The Penn National policy and the statutes provides insurance carriers with the

right to settle under indemnity coverage, not a duty to settle. This right is conferred

by the Financial Responsibility Act in N.C. Gen. Stat. §20-30- 279.21(f)(3) (2023),

“The insurance carrier shall have the right to settle any claim covered by the policy

…”

When exercising its right to settle, the insurer “owes a duty to its insured to

act deligently [sic] and in good faith in effecting settlements within policy limits, and

if necessary to accomplish that purpose, to pay the full amount of the policy.” Alford

v. Textile Ins. Co. 248 N.C. 224, 229, 103 S.E.2d 8, 13 (1958).

When Penn National received an offer to settle from the Estes Estate on Friday

afternoon, the terms of the settlement required a check for $30,000 to be delivered to

its attorney’s offices on the following Monday by 3:00 p.m. Penn National replied by

agreeing to the settlement and to deliver full payment the following day on Tuesday,

which Plaintiffs denied, and withdrew their offer. Asking for a one-day extension to

deliver payment to a demanded less-than-one-business-day turnaround does not

support a finding and conclusion Penn National had failed to act in good faith to

settle. Id. N.C. Gen. Stat. §20-30- 279.21(f)(3) (2023).

The trial court erred in finding Penn National had breached its duty to settle

the intentional tort claim Estes and the Estes Estate had asserted against Ortez.

Penn National had no duty to settle, only the right to seek settlement, which Penn

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National chose to exercise when it offered to settle for a $30,000 payment within two

business days to the Estes Estate. The trial court’s ruling on this issue is erroneous,

prejudicial, and reversed.

3. Finding Penn National Violated the Unfair and Deceptive Trade Practices Act

As noted above, the express policy language and the statute allows insurance

companies the right to seek a settlement, not a duty to settle. N.C. Gen. Stat. §20-

30- 279.21(f)(3) (2023) (“The insurance carrier shall have the right to settle any claim

covered by the policy …”)

When exercising its right to settle, the insurer “owes a duty to its insured to

act deligently [sic] and in good faith in effecting settlements within policy limits, and

if necessary to accomplish that purpose, to pay the full amount of the policy.” Alford

v. Textile Ins. Co. 248 N.C. 224, 229, 103 S.E.2d 8, 13 (1958). When Penn National

received an offer to settle from Estes and the Estes Estate on Friday afternoon, the

terms of the settlement included a check for $30,000 to be delivered to its attorney’s

offices on the following Monday by 3:00 p.m. Penn National replied asking to deliver

on Tuesday, which was denied, and Plaintiffs withdrew their offer. Requesting a one-

day extension to a demanded one business day turnaround does not support the

finding Penn National had failed to act in good faith to settle to trigger treble

damages and attorney fees liability under the Unfair and Deceptive Trade Practices

Act. N.C. Gen. Stat. § 75-1.1.

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The trial court erred in finding that Penn National had breached its duty to

settle the claims. No duty to settle arose, only the right to seek settlement, which

Penn National tried to exercise when it offered to settle for $30,000 with payment to

be made within two business days thereafter in exchange for a covenant not to enforce

judgment against Ortez.

The trial court erred in concluding Penn National had failed to act in good faith

or committed unfair or deceptive trade practices to trigger treble damages and

attorney fees liability under the Unfair and Deceptive Trade Practices Act. N.C. Gen.

Stat. § 75-1.1 et seg. The trial court’s ruling on this issue is erroneous, prejudicial,

and reversed.

V. Conclusion

The trial court erred in granting Ortez’s partial motion for a Rule 12(c)

judgment on the pleadings. Under the comparison tests of the policy to the

allegations and pleadings, Plaintiff failed to allege Penn National had breached its

duty to defend or its duty to settle.

Plaintiff also failed to show the employer or Penn National had violated the

Unfair and Deceptive Trade Practices Act. Id. The trial court erred in trebling the

award of damages pursuant to N.C. Gen. Stat. § 75-1.1. The order of the trial court

is reversed. It is so ordered.

REVERSED.

Judge Stading concurs.

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Judge Thompson concurs in result only by separate opinion.

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No. COA 24-169 – Ortez v. Penn National Sec. Ins. Co.

THOMPSON, Judge, concurring in result only.

Because I disagree with the majority’s determination that “it is clear that

[defendant] Penn National had no duty to defend [plaintiff] Ortez in the complaint as

written[,]” I concur in result only.

A. Duty to defend

“An insurer’s duty to defend is ordinarily measured by the facts as alleged in

the pleadings . . . . [w]hen the pleadings state facts demonstrating that the alleged

injury is covered by the policy, then the insurer has a duty to defend.” Waste Mgmt.

of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 691, 340 S.E.2d 374, 377 (1986).

As our Supreme Court held long ago, an insurer’s duty to defend “becomes absolute

when the allegations of the complaint bring the claim within the coverage of the

policy.” Strickland v. Hughes, 273 N.C. 481, 487, 160 S.E.2d 313, 318 (1968)

(emphasis added).

“In determining whether an insurer has a duty to defend, the facts as alleged

in the complaint are to be taken as true and compared to the language of the

insurance policy.” Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364

N.C. 1, 7, 692 S.E.2d 605, 611 (2010). “If the insurance policy provides coverage for

the facts as alleged, then the insurer has a duty to defend.” Id. (emphasis added). “An

insurer is excused from its duty to defend only if the facts are not even arguably

covered by the policy.” Kubit v. MAG Mut. Ins. Co., 210 N.C. App. 273, 277–78, 708

S.E.2d 138, 144 (2011) (internal quotation marks and citation omitted) (emphasis

Justice Thompson, concurring

added).

Defendant argues that the “fellow employee” provision of the policy nullified

its duty to defend plaintiff Ortez in the underlying wrongful death action, and the

majority contends that

[t]he only claim Estes and the Estes Estate asserted against fellow employee [plaintiff] Ortez in the Wrongful Death Lawsuit was the Pleasant claim, [under Pleasant v. Johnson, 312 N.C. 710, 325 S.E.2d 244 (1985)] which could only be asserted by one employee against another for employee injuries resulting from intentional acts. These acts fall squarely within Pleasant’s exception from the worker’s compensation exclusivity of negligence claims and the express and unambiguous policy exclusions stated in [defendant] Penn National’s policy.

After my review of the allegations of the complaint—the guidepost for

determining whether an insurer has a duty to defend, per our Supreme Court’s

longstanding precedent—I would conclude that the trial court did err in determining

that defendant had a duty to defend plaintiff Ortez in the underlying wrongful death

action. Although there were no allegations in the complaint that plaintiff Ortez was

a “fellow employee” of decedent Drake Estes at the time of the accident, as the

majority notes, the initial complaint alleged that plaintiff “Ortez is liable . . . based

on the legal precedent of Pleasant v. Johnson, and subsequent legal authority in

North Carolina recognizing that legal duty and that legal right of recovery.” Although

“[a]n insurer is excused from its duty to defend only if the facts are not even arguably

covered by the policy[,]” Kubit, 210 N.C. App. at 277–78, 708 S.E.2d at 144 (internal

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quotation marks and citation omitted) (emphasis added), I would conclude that this

reference to Pleasant v. Johsnon1 did suffice to bring the allegations of the complaint

outside of the coverage of the policy, thereby absolving defendant Penn National of

their duty to defend. I do not agree that this lone reference in the complaint, made it

“clear that [defendant] Penn National had no duty to defend [plaintiff] Ortez in the

complaint as written[,]” (emphasis added), and seek further clarity from our Supreme

Court on whether this allegation in the complaint sufficed to absolve defendant Penn

National of their duty to defend for purposes of the “comparison test” established in

Strickland.

B. Duty to settle

Finally, the majority contends that “the statutes provide[ ] insurance carriers

with the right to settle under indemnity coverage, not a duty to settle.” This is not

correct, as our courts have consistently held that insurance companies owe a duty to

their insured to act diligently and in good faith in reaching settlements.

“The law imposes on the insurer the duty of carrying out in good faith its

contract of insurance.” Alford v. Textile Ins. Co., 248 N.C. 224, 229, 103 S.E.2d 8, 12

(1958). “It is a matter of common knowledge that fair and reasonable settlements can

generally be made at much less than the financial burden imposed in litigating

1 In Pleasant, our Supreme Court held that “the Worker’s Compensation Act does not shield

a co-employee from common law liability for . . . negligence.” Pleasant, 312 N.C. 710, 716, 325 S.E.2d 244, 249 (emphasis added).

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claims.” Id. “It is for this reason that courts have consistently held that an insurer

owes a duty to its insured to act diligently and in good faith in effecting settlements

within policy limits, and if necessary to accomplish that purpose, to pay the full

amount of the policy.” Id. (emphasis added). “Liability has been repeatedly imposed

upon insurance companies because of their failure to act diligently and in good faith

in effectuating settlements with claimants.” Id.

Indeed, our Legislature has enacted N.C. Gen. Stat. § 58-63-15, which defines

“unfair methods of competition and unfair and deceptive acts or practices in the

business of insurance” as a matter of law, and provides, in pertinent part, that one

commits an “Unfair Claim Settlement Practice[ ]” by “[n]ot attempting in good faith

to effectuate prompt, fair and equitable settlements of claims in which liability has

become reasonably clear . . . .” N.C. Gen. Stat. § 58-63-15(11)(f) (2023).

I agree with the majority that defendant Penn National did not have a duty to

defend, nor a duty to settle, but write separately to note that insurance companies in

North Carolina do “owe[ ] a duty to their insured to act diligently and in good faith in

effecting settlements within policy limits, and if necessary to accomplish that purpose,

to pay the full amount of the policy.” Id. (emphasis added). For the aforementioned

reasons, I concur in result only.

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