NO. COA13-1096

NORTH CAROLINA COURT OF APPEALS

Filed: 15 April 2014

CURTIS RAY HOLMES,

Plaintiff,

v. Guilford County

No. 12 CVS 10238

NORTH CAROLINA FARM BUREAU MUTUAL 

INSURANCE CO., INC.,

Defendant.

Appeal by plaintiff from Order entered 10 July 2013 by 

Judge John O. Craig, III, in Superior Court, Guilford County. 

Heard in the Court of Appeals 6 February 2014.

Cahoon & Swisher, North & Cooke, by A. Wayland Cooke, for 

plaintiff-appellant.

Nelson Levine De Luca & Hamilton, LLC, by David L. Brown 

and David G. Harris II, for defendant-appellee.

STROUD, Judge.

Dr. Curtis Holmes (“plaintiff”) appeals from an order 

denying his motion for summary judgment and granting summary 

judgment in favor of North Carolina Farm Bureau Mutual Insurance 

Co., Inc. We affirm.

I. Background

Plaintiff is a dentist and property owner living in 

Greensboro. He owns several office buildings in the Greensboro 
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area, including one at 5415 Friendly Avenue (“5415 Friendly”)

and one across the street at 5411 Friendly Avenue (“5411 

Friendly”). Plaintiff purchased an office-lessor’s insurance 

policy from defendant to cover his property. The policy 

excludes from coverage any building that has been vacant for 

more than 60 consecutive days before a loss, including loss by 

theft. The policy defines a vacant building for property owner 

policies under section 9(a)(1)(b) of the policy. Under this 

section, a building is vacant “when 70% or more of its total 

square footage: (i) Is not rented; or (ii) Is not used to 

conduct customary operations.” The policy clarifies that 

“[w]hen this policy is issued to the owner of a building, 

building means the entire building.”

In November 2011, someone stole eight heating and air 

conditioning units from outside 5415 Friendly. Plaintiff 

informed the police, but the perpetrator was never found. 

Plaintiff also made a claim to defendant for the loss under the 

office-lessor policy. Defendant refused to cover plaintiff’s 

loss because it believed that the vacancy provision of the 

policy applied.

Plaintiff filed a complaint in Guilford County Superior 

Court alleging breach of the insurance contract and seeking 
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recovery in excess of $40,000 for the stolen heating units plus 

attorney’s fees and costs. Defendant answered, contending that 

plaintiff’s recovery was barred by the vacancy provision of the 

insurance contract. Defendant also filed a counterclaim for 

declaratory judgment concerning the rights and obligations of 

the parties under this policy. The parties conducted discovery 

and filed cross-motions for summary judgment. The evidence 

forecast by the parties tended to show the following:

5415 Friendly has five separate units: named “A,” “B,” “C,”

“D,” and “G.” Unit A was 1,344 square feet; Unit B was 1,064 

square feet; Unit C was either 2,688 or 2,577 square feet1; Unit 

D was 2,128 square feet; and Unit G was 1,064 square feet. The 

total square footage of 5415 Friendly was thus either 8,288 

square feet or 8,177 square feet. As of November 2011, only one 

of the five units at 5415 Friendly was rented—Unit A. Units B, 

D, and G were all vacant.2 The classification of Unit C was the 

primary point of contention at the summary judgment hearing.

The evidence showed that Unit C was not leased in the sixty 

days before the theft. However, plaintiff had been allowing one 

 

1 In his deposition, plaintiff stated that Unit C was 

approximately 2,688 square feet. In his responses to 

defendant’s requests for admission, however, he claimed that 

Unit C was 2,577 square feet.

2 The evidence showed that plaintiff used Unit D to store excess 

furniture, but he agreed that it should be considered “vacant.”
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of the tenants of 5411 Friendly, two independent real estate 

attorneys named Charles McNeil III and Ken Lucas, to use Unit C

as storage for their old files and excess furniture. The 

attorneys had a key to Unit C and could have used the entire 

space until plaintiff found a regular tenant. Mr. McNeil and Mr. 

Lucas kept their files in one 144 square foot room in Unit C.

They did not use two additional 144 square foot rooms which

contained various furniture of uncertain provenance. The rest 

of the space was not used.

Mr. McNeil testified that he, Mr. Lucas, or one of their 

employees would go to Unit C once or twice a week to store, 

retrieve, or review files. He further stated that they would 

sometimes sit in one of the chairs in Unit C to review the 

stored files, but that they normally only stayed five to ten 

minutes. None of them used any of the space on the second floor 

of Unit C. Mr. McNeil stated that the storage and review of old 

files was a “customary operation” of his law practice.

After reviewing the discovery and hearing arguments from 

the parties, the trial court allowed defendant’s motion for 

summary judgment, and denied plaintiff’s motion, by order 

entered 10 July 2013. Plaintiff filed notice of appeal to this 

Court on 31 July 2013.
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II. Summary Judgment

On appeal, plaintiff argues that the trial court erred in 

granting summary judgment to defendant and denying his motion 

for summary judgment because the undisputed facts showed that 

over 30% of 5415 Friendly was either rented or used for 

customary operations.

A. Standard of Review

We review a trial court order granting or 

denying a summary judgment motion on a de 

novo basis, with our examination of the 

trial court’s order focused on determining 

whether there is a genuine issue of material 

fact and whether either party is entitled to 

judgment as a matter of law. As part of that 

process, we view the evidence in the light 

most favorable to the nonmoving party.

Cox v. Roach, ___ N.C. App. ___, ___, 723 S.E.2d 340, 347 (2012)

(citation and quotation marks omitted), disc. rev. denied, 366 

N.C. 423, 736 S.E.2d 497 (2013).

B. Analysis

Both parties agree that there are no genuine issues of 

material fact. They only disagree on the proper interpretation 

of the vacancy provision of the insurance contract. That 

provision states:

9. Vacancy

a. Description of Terms
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(1) As used in this Vacancy Condition, the 

term building and the term vacant have the 

meanings set forth in (1)(a) and (1)(b) 

below:

(a) When this policy is issued to a tenant, 

and with respect to that tenant’s interest 

in Covered Property, building means the unit 

or suite rented or leased to the tenant. 

Such building is vacant when it does not 

contain enough business personal property to 

conduct customary operations.

(b) When this policy is issued to the owner 

of a building, building means the entire 

building. Such building is vacant when 70% 

or more of its total square footage:

(i) Is not rented; or

(ii) Is not used to conduct customary 

operations. 

. . . .

b. Vacancy Provisions

If the building where loss or damage occurs 

has been vacant for more than 60 consecutive 

days before that loss or damage occurs:

(1) We will not pay for any loss or damage 

caused by any of the following even if 

they are Covered Causes of Loss:

. . . .

(e) Theft;

Defendant contends that under the definition in subsection

(a)(1)(b), which applies to plaintiff as an owner, if either 30%

or less of the entire covered building is rented, or if 30% or 
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less of the building is used to conduct customary operations, 

then the building is considered vacant. Under this 

interpretation, a building could be 30% rented and have another 

30% used for customary operations, but the building would still 

be considered vacant. Plaintiff argues, by contrast, that this 

provision means that if more than 30% of the building is either 

rented or used to conduct customary operations, then it is not 

vacant. Under this interpretation, that same building with 30% 

rented and 30% used for customary operations would be considered 

60% occupied, and therefore not vacant. We conclude that we need 

not resolve this issue here because even under plaintiff’s 

interpretation of the contract, 5415 Friendly was vacant for 

more than sixty days before the theft.

It is uncontested that all of Unit A, 1,344 square feet, 

was rented during the relevant period. Unit A constitutes 

approximately 16% of the total square footage of the building. 

Unit C has been the sole point of contention in this case. There 

was no evidence that it was rented at a relevant time. 

Therefore, the only question is whether Unit C was used for 

“customary operations” and how much of Unit C was so used.

The evidence showed that Mr. McNeil and Mr. Lucas only 

stored files in one 144 square foot room of Unit C. The evidence 
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did show that Mr. McNeil and Mr. Lucas used that room on a 

fairly regular basis, once or twice a week. They would store and 

retrieve client files in the room and sometimes sit in the chair 

in that room to review the files. Mr. McNeil opined that the 

storage and review of these archived files was a part of his 

customary operations. Nevertheless, that 144 square foot room

was the only portion of Unit C that they used as part of these 

operations. Although there was evidence that some pieces of 

furniture were stored in two additional rooms, there was no 

evidence that Mr. McNeil and Mr. Lucas ever used those rooms. 

Mr. McNeil stated that he was unsure who owned the furniture, 

but that he did not think it was his.

Plaintiff argues that we should count the entirety of Unit 

C as being “used for customary operations” because one room 

within that unit was being used and those using it had 

permission to occupy the entire unit. But that interpretation is 

contrary to the plain language of the contract.

The court is to interpret a contract 

according to the intent of the parties to 

the contract, unless such intent is contrary 

to law. If the plain language of a contract 

is clear, the intention of the parties is 

inferred from the words of the contract. 

When the language of the contract is clear 

and unambiguous, construction of the 

agreement is a matter of law for the court, 

and the court cannot look beyond the terms 
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of the contract to determine the intentions 

of the parties.

Williams v. Habul, ___ N.C. App. ___, ___, 724 S.E.2d 104, 111 

(citations and quotation marks omitted).

Subsection (b) of the definitional section defines 

“building” as the “entire building” and defines “vacancy” in 

relation to the total square footage of the building. While

plaintiff contends that not considering all of Unit C “occupied” 

is “like being a little bit pregnant,” the plain language of the 

contract directs us to consider only the portion of the total 

square footage “used to conduct customary operations.” 

Therefore, the relevant question under the contract is what 

percentage of the total square footage was actually so used, not 

what amount could have been used.

Here, only 144 square feet of Unit C were used to conduct 

customary operations of Mr. McNeil’s law practice. Combined with 

the area of Unit A, which was 1344 square feet, the total square 

footage either rented or used to conduct customary operations 

was 1488 square feet. Using either measure of the total square 

footage—8288 square feet or 8177 square feet—this area does not 

exceed 30%.3 We conclude that the uncontested facts show that 

 

3 Using either measure of total square footage, the percentage

rented or used was approximately 18%.
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5415 Friendly was “vacant” for purposes of the insurance 

contract for more than 60 days prior to the theft.

As a result, under that contract, plaintiff was not 

entitled to compensation for his loss and defendant did not 

breach the contract by refusing to pay the $40,000 to replace 

the stolen heating units. We hold that there are no genuine 

issues of material fact and defendant is entitled to judgment as 

a matter of law. Therefore, we affirm the trial court’s order

allowing defendant’s motion for summary judgment and denying 

plaintiff’s motion.

III. Conclusion

For the foregoing reasons, we hold that the trial court 

correctly determined that there are no genuine issues of 

material fact and that defendant is entitled to judgment as a 

matter of law. Therefore, we affirm the trial court’s order 

allowing defendant’s motion for summary judgment.

AFFIRMED.

Judges CALABRIA and DAVIS concur.