Watson Insurance Agency, Inc. v. Price Mechanical, Inc.

417 S.E.2d 811, 106 N.C. App. 629, 1992 N.C. App. LEXIS 557

• Court: Court of Appeals of North Carolina
• Decided: July 7, 1992
• Docket: No. 9127SC360
• Status: Published

Opinions

ORR, Judge.

The issue on appeal is whether the trial court erred in granting summary judgment in favor of Watson. For the reasons below, we reverse in part and affirm in part the judgment of the trial court.

Price first contends that the trial court erred in failing to grant its motion to dismiss pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (1990), and in the alternative, by failing to grant summary judgment in its favor. “Where matters outside the pleadings are presented to and not excluded by the court on a motion to dismiss for failure to state a claim, the motion shall be treated as one for summary judgment under Rule 56.” DeArmon v. B. Mears Corp., 312 N.C. 749, 758, 325 S.E.2d 223, 229 (1985). The denial of a motion for summary judgment is an non-appealable interlocutory order. Id. at 788, 325 S.E.2d at 230.

However, Price also contends that the trial court erred in granting summary judgment for Watson when “numerous triable issues of fact were raised by the defendant and while requests for discovery were outstanding and made within a reasonable time of the filing of the answer.” “Review of summary judgment on appeal is limited to whether the trial court’s conclusions are correct as to the questions of whether there is a genuine issue of material fact and whether the movant is entitled to judgment.” Vernon v. Barrow, 95 N.C. App. 642, 643, 383 S.E.2d 441, 442 (1989). Summary judgment is proper if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (1990); Gregory v. Perdue, Inc., 47 N.C. App. 655, 267 S.E.2d 584 (1980). “[T]he trial court must determine if there is a triable material issue of fact, viewing all evidence presented in the light most favorable to the nonmoving party.” Waddle v. Sparks, 100 N.C. App. 129, 131, 394 S.E.2d 683, 685 (1990), aff’d in part and rev’d in part on other grounds, 331 N.C. 73, 414 S.E.2d 22 (1992). The party moving for summary judgment has the burden of showing that there is no genuine issue as to any material fact. Walker v. Durham Life Ins. Co., 90 N.C. App. 191, 368 S.E.2d 43 (1988). “Once the movant shows that no genuine issues of fact exist, the burden shifts to the nonmovant to set forth specific facts showing that genuine issues of fact remain for trial.” Id. at 193, 368 S.E.2d at 45.

In its brief Price argues that “this is a claim that the Plaintiff is subrogated to the rights of the insurance companies for amounts it has paid on behalf of the Defendant” and that there are genuine issues of material fact surrounding this subrogation claim. However, this contention is not supported by the record.

In 1987 Price requested that Watson obtain business and personal insurance. Watson arranged for insurance through Aetna. In 1988 Price became dissatisfied with Aetna because of disputes involving claims and informed Watson of its dissatisfaction. Thereafter, Price’s accounts became delinquent, but Watson continued the policies. In its amended complaint, Watson alleged that Price requested that Watson procure insurance coverage and renewals for Price which Watson procured, that Watson forwarded insurance premiums to insurance companies, that Watson was obligated to forward the premiums whether or not it had received the premiums from Price, and that Price is indebted to Watson for sums paid by Watson for insurance for the benefit of Price. According to the deposition of Thomas Watson, president of Watson, Price never suggested that the policies be canceled.

In its answer, Price alleged that it engaged Watson to obtain insurance but did not agree “to provide renumeration itself to Watson for insurance coverage.” Price further alleged that in the summer of 1989 it moved its personal insurance from Watson and Aetna and discussed with Watson the outstanding claims pending with Aetna. Price also alleged that following 15 August 1989 it did not authorize Watson to provide coverage with Aetna, and that there was never any agreement obligating Price to pay premiums to Watson or for Watson to obligate itself on behalf of Price. Keith Price, president of Price, stated in his affidavit that Price never entered any contract or agreement rendering it liable to Watson for any payments and that it never agreed to pay premiums to Watson.

Although the above evidence shows that Price entered into an agreement with Watson whereby Watson would procure insurance coverage for Price, there is a genuine issue of material fact as to whether the contract was terminated at some time prior to the cancellation of the policies and whether the damages sought by Watson occurred before such notice of termination. “[A] contract of indefinite duration may be terminated by either party on giving reasonable notice.” East Coast Development Corp. v. Alderman-250 Corp., 30 N.C. App. 598, 603, 228 S.E.2d 72, 77 (1976). The record before us is not clear as to exactly when payments by Watson were made or when Price said to terminate coverage. There thus appears to be a genuine issue of material fact. Price alleged and Watson apparently denied that as of 15 August 1989 Watson was not authorized to provide insurance for Price with Aetna. Thus the trial court erred in granting summary judgment.

Price also argues that the trial court erred in dismissing its counterclaims against Watson. Price alleged that Watson undertook to process certain claims submitted by Price but negligently failed to process the claims properly. A motion to dismiss pursuant to Rule 12(b)(6) is “converted to a Rule 56 motion for summary judgment when matters outside the pleadings are presented to and not excluded by the court.” Stanback v. Stanback, 297 N.C. 181, 205, 254 S.E.2d 611, 627 (1979); N.C. Gen. Stat. § 1A-1, Rule 12(b). In ruling on the motion, the trial court considered affidavits, the pleadings, discovery, arguments of counsel, and memoranda. Thus, even though the counterclaim states a claim upon which relief may be granted, the motion is converted to a motion for summary judgment. Summary judgment is properly granted where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits . . . show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c). Here there is no genuine issue of material fact, and therefore the trial court did not err in granting summary judgment in favor of Watson.

We have reviewed Price’s remaining assignments of error and determined that they are without merit.

Reversed in part and affirmed in part.

Judge EAGLES concurs. Judge COZORT concurs in part and dissents in part.