Court Opinion

ID: 9348574
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:06:50.814007+00
Date Added: 2024-06-11T16:42:24.903708
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                2022-NCCOA-677

                                No. COA21-588

                             Filed 18 October 2022

Wake County, No. 20 CVS 11158

NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC.,
Plaintiff,

           v.

JOSHUA CARPENTER; ALL PRO BILLIARDS & SPAS, LLC; JAMES BANKS;
KENNETH BARRETT; MARY BELUE AS PERSONAL REPRESENTATIVE OF
THE ESTATE OF DELMER EUGENE BELUE; SHANE BIDDIX; DOUGLAS C.
BROWDER; JERRY BUCKNER; CHRISTOPHER A. CHURCHILL AS EXECUTOR
OF ESTATE OF DAVID CHURCHILL; PAUL CLAUS; JAMES CLIMO, JR.;
MEGAN CLIMO; JACK CLINARD; LOUIS ELDERS; KIMBERLY FERGUSON;
ANNA FRANKS; WILLIAM GOOD; KIMBERLY GRANT; LINDA HARTLEY;
CLIFTON HOYLE HELMS, JR.; CANDIA HIGGINS; ROGER HIGGINS; DAWSON
HUNTER; EDWARD INGLE; MARILYN P. INGLE; ROBERT LAUGHTER; TINA
LEDFORD; VICKI MCCARSON; VANESSA METCALF; SHELBY NIX; ANTHONY
GLENN OWNBEY; WILLIAM PARKER; STEPHEN PARRIS; BRANDON PAYNE;
MARCIA REITZ; ALBER RIOUX; MICHAEL ROGERS; ELIZABETH ROPER;
JIMMY RUMFELT; MARVIN SCOTT; DELMAR SHERMAN; JOHN SHERMAN;
ROSE SHETLEY; JAMIN SKIPPER; JUDY SMATHERS; JIMMY THOMAS; TERRI
TOLLEY; RANDAL WEIS; HAROLD WOMICK; LINDA WOODY; PHYILLIS
MARIE YOUNG; NORTH CAROLINA DEPARTMENT OF AGRICULTURE &
CONSUMER SERVICES; STEPHEN BALDWIN; MAXINE CRAWFORD; JEREMY
EDMONDS; JOHN GAVIN; VERONICA GRIER; ALBERT ISOM; JOHN LYDA;
TIMOTHY MCFALLS; DEBORAH PARHAM; MICHAEL PETREY; SHARON
SMITH; BRETT TEMPLE; RONAL MONSON; PEGGY DUNCAN; DENICE
WILLIAMS; CRYSTAL HOLDER; RANDY HOUSTON; JAMES CLOW; MAYLON
ARRINGTON; DARELL DOUGLAS CABLE; and NATHAN DREW WALKER,
Defendants.

     Appeal by Plaintiff from order entered 9 June 2021 by Judge George Collins in

Wake County Superior Court. Heard in the Court of Appeals on 26 April 2022 in
                        N.C. FARM BUREAU MUT. INS. CO. V. CARPENTER

                                         2022-NCCOA-677

                                        Opinion of the Court

     session at Elon University School of Law in the City of Greensboro pursuant to N.C.

     Gen. Stat. § 7A-19(a).

           Young Moore and Henderson, P.A., by Walter E. Brock, Jr., David W. Early,
           and William F. Lipscomb, for plaintiff-appellant.

           Patterson Harkavy LLP, by Christopher A. Brook and Narendra K. Ghosh, for
           defendants-appellees.

           Barbour, Searson, Jones & Cash, PLLC, by W. Bradford Searson, for Joshua
           Carpenter and All Pro Billiards & Spa, LLC, defendants-appellees.

           WOOD, Judge.

¶1         Plaintiff appeals from an order entered by the trial court denying its motion

     for judgment on the pleadings. The trial court concluded Plaintiff has a duty under

     an insurance policy it issued to defend certain underlying claims and stayed this

     action pending additional determinations relevant to the scope of any duty of

     Plaintiffs to indemnify for losses under its insurance policy. On appeal, Plaintiff

     argues 1) its Fungi or Bacteria Exclusion bars the underlying claims; 2) Defendant

     Joshua Carpenter (“Defendant Carpenter”) and Defendant All Pro Billiards & Spas,

     LLC’s (“Defendant All Pro”) hot tubs were intended for display, and thus its

     Consumption Exception does not apply; and 3) it does not have a duty to indemnify

     Defendant Carpenter or Defendant All Pro. After a careful review of the record and

     applicable law, we affirm the order of the trial court.
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                         I.   Factual and Procedural Background

¶2          Plaintiff is an insurance company organized under the laws of North Carolina

     and whose principal place of business is also North Carolina. Plaintiff issued a

     Commercial General Liability Policy (the “Policy”) to Defendant Carpenter for the

     period of May 16, 2019, to May 16, 2020. This Policy had a per occurrence limit of

     $1,000,000.00 for Defendant Carpenter’s business, All Pro, of which he is a co-owner.

     North Carolina Mountain State Fair is also named as an additional insured.

¶3          From September 6 to 15, 2019, the Western North Carolina Mountain State

     Fair was held at the North Carolina Agricultural Center.                  Thereat, various

     attractions and exhibits were displayed at the Davis Center. Defendant All Pro

     displayed hot tubs actively circulating water in the Davis Event Center.

¶4          Shortly after the fair concluded, the Buncombe County Department of Health

     and Human Services and Henderson County Health Department notified the North

     Carolina Division of Public Health (“NCDPH”) that there had been an increase in

     cases of Legionnaires’ disease on September 23, 2019.1               All reported cases of

     Legionnaires’ disease were connected to the North Carolina Mountain State Fair.

     The same day, the NCDPH, along with other health agencies, initiated an

            1Legionnaires’ disease is a serious form of legionellosis, an infection caused by the
     microorganism Legionella. “Legionellosis is caused by inhaling airborne droplets of water
     containing Legionella.”
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     epidemiological and microbiological investigation to determine the source of the

     Legionnaires’ disease. The NCDPH created a comprehensive list of aerosolized water

     sources at the fair which may have caused the outbreak of Legionnaires’ disease. The

     NCDPH identified Defendants All Pro and Carpenter’s hot tubs as possible sources

     of aerosolized water.

¶5         From September 25 to 27, 2019, the NCDPH collected twenty-seven water and

     environmental samples from the fair. The NCDPH’s epidemiological investigation

     revealed,

                  individuals who were sickened at the [f]air were twelve
                  times more likely to have visited the Davis Event Center;
                  twenty-three times more likely to report spending more
                  than an hour in the Davis Event Center; more than nine
                  times more likely to report walking by or spending time by
                  the hot tubs; and more than thirty-six times more likely to
                  have attended the [f]air during the last five days of the
                  [f]air (September 11 to September 15, 2019).

     Ultimately, the NCDPH concluded “that this outbreak most likely resulted from

     exposure to Legionella bacteria in aerosolized water from hot tubs on display in the

     Davis Event Center at the fair.”     The NDCPH was unable to obtain complete

     maintenance records for the hot tubs; as such, it was “impossible to determine if the

     chemicals in the hot tubs were adequate to prevent bacterial growth for the duration

     of the fair.” As a result of the outbreak of Legionnaires’ disease at the fair, one

     hundred and thirty-five cases of the disease were reported, ninety-six individuals
                         N.C. FARM BUREAU MUT. INS. CO. V. CARPENTER

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                                         Opinion of the Court

     were hospitalized, and four individuals died.

¶6          Thereafter, eleven separate lawsuits were filed against, inter alai, Defendants

     All Pro and Carpenter between September 15, 2019 and February 16, 2021.

     Additionally, one suit was filed against only Defendant All Pro.2            Most of the

     claimants in these suits visited the Davis Center and fell ill because of, or relating to,

     Legionnaires’ disease and suffered damages arising therefrom.3 These suits alleged

     Defendants Carpenter or All Pro were negligent in maintaining their hot tub

     displays, and such negligence caused the outbreak of Legionnaires’ disease at the fair.

¶7          On October 5, 2020, Plaintiff brought an action for declaratory relief, arguing,

     in relevant part, the Policy’s Fungi or Bacteria Exclusion bars insurance coverage.

     The Policy’s Fungi or Bacteria Exclusion provided,

            2 Each Defendant in the case sub judice except Mary Belue as personal
     representative of the estate of Delmer Eugene Belue, Jack Clinard, N.C. Dep’t of
     Agriculture & Consumer Serv.’s, Peggy Duncan, Denice Williams, Crystal Holder, Randy
     Houston, and James Clow, was a party to these original suits.
            3 Claimant Kimberly Grant (“Defendant Grant”) was the only claimant who did not

     specify whether she did or did not enter the Davis Event Center. Defendant Grant’s
     “Damages” section provided little information, only stating she “attended the 2019 NCMSF
     on September 15, 2019.” Thus, this Court is unable to determine whether Defendant Grant
     entered the Davis Event Center.
            Additionally, we note the only record information regarding damages incurred by
     Defendants Mary Belue as personal representative of the Estate of Delmer Eugene Belue,
     Jack Clinard, Peggy Duncan, Denice Williams, Crystal Holder, Randy Houston, and James
     Clow is found in Plaintiff’s amended complaint: “The above-identified persons and estates
     have filed suit and/or asserted claims against Carpenter and/or All Pro for injury or death
     due to Legionnaires’ disease allegedly contracted from Carpenter’s hot tub display located
     in the Davis Event Center at the 2019 NC Mountain State Fair.”
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                  This insurance does not apply to:

                  Fungi or Bacteria

                  a. “Bodily injury” or “property damage” which would not
                  have occurred, in whole or in part, but for the actual,
                  alleged or threatened inhalation of, ingestion of, contact
                  with, exposure to, existence of, or presence of, any “fungi”
                  or bacteria on or within a building or structure, including
                  its contents, regardless of whether any other cause, event,
                  material or product contributed concurrently or in any
                  sequence to such injury or damage.

                  b. Any loss, cost or expenses arising out of the abating,
                  testing for, monitoring, cleaning up, removing, containing,
                  treating, detoxifying, neutralizing, remediating or
                  disposing of, or in any way responding to, or assessing the
                  effects of, “fungi” or bacteria, by any insured or by any
                  other person or entity.

     However, the Policy’s Consumption Exception provided the Fungi or Bacteria

     Exclusion did “not apply to any ‘fungi’ or bacteria that are, are on, or are contained

     in, a good or product intended for bodily consumption.” Based on the Fungi or

     Bacteria Exclusion, Plaintiff alleged in its complaint it had no “duty to defend or

     indemnify Carpenter [or] All Pro” from their present suits.

¶8         On November 16, 2020, after Plaintiff filed its original complaint, various

     Defendants filed a motion to change venue to Buncombe County, North Carolina.

     Additional claimants filed suits against Defendants All Pro and Carpenter, and as a

     result, Plaintiff filed an amended complaint on December 1, 2020, to include these

     additional claimants. Defendants filed a motion to stay the proceeding on December
                          N.C. FARM BUREAU MUT. INS. CO. V. CARPENTER

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                                              Opinion of the Court

       31, 2020. On January 11, 2021, Defendants All Pro and Carpenter filed another

       motion to change venue with the trial court, again requesting the venue be moved to

       Buncombe County “[f]or the convenience of witnesses and to promote the ends of

       justice.” Shortly thereafter, on March 22, 2021, Plaintiff moved for judgment on the

       pleadings. On May 17, 2021, Plaintiff withdrew its motion for judgment on the

       pleadings solely as it related to Defendant North Carolina Agriculture & Consumer

       Services.

¶9           All of the parties’ motions came on for hearing before the trial court on May

       25, 2021. By order entered June 7, 2021, the trial court denied Defendants’ motion

       to change venue but granted Defendants’ motion to stay the proceedings. The trial

       court denied Plaintiff’s motion for judgment on the pleadings, finding “the exception

       to the bacteria exclusion in the insurance policy in question is ambiguous as applied

       to the facts alleged in the underlying cases” and thus, “there is at least a mere

       possibility that the policy covers this situation and the facts alleged, giving the

       Plaintiff a duty to defend in the underlying cases.” Plaintiff filed a timely notice of

       appeal of the trial court’s order.

                                        II.      Jurisdiction

¶ 10         At the outset, we note that “an appeal of an order denying . . . [a] motion for

       judgment on the pleadings is an interlocutory appeal.” Paquette v. County of Durham,

       155 N.C. App. 415, 418, 573 S.E.2d 715, 717 (2002); see Webb v. Nicholson, 178 N.C.
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                                          Opinion of the Court

       App. 362, 363, 634 S.E.2d 545, 546 (2006). Since “there is no right of appeal from an

       interlocutory order,” we must first determine whether Plaintiff’s appeal is properly

       before us. Larsen v. Black Diamond French Truffles, Inc., 241 N.C. App. 74, 76, 772

       S.E.2d 93, 95 (2015); see also Waters v. Qualified Personnel, Inc., 294 N.C. 200, 207,

       240 S.E.2d 338, 343 (1978) (explaining the purpose of this rule “is to prevent

       fragmentary, premature and unnecessary appeals by permitting the trial divisions to

       have done with a case fully and finally before it is presented to the appellate

       division”).

¶ 11          As a general rule, a party may appeal an interlocutory order if

                     (1) the order is final as to some claims or parties, and the
                     trial court certifies pursuant to N.C.G.S. § 1A-1, Rule 54(b)
                     that there is no just reason to delay the appeal, or (2) the
                     order deprives the appellant of a substantial right that
                     would be lost unless immediately reviewed.

       Currin & Currin Constr., Inc. v. Lingerfelt, 158 N.C. App. 711, 713, 582 S.E.2d 321,

       323 (2003).

¶ 12          “[A]n interlocutory order concerning the issue of whether an insurer has a duty

       to defend in the underlying action ‘affects a substantial right that might be lost absent

       immediate appeal.’ ” Cinoman v. Univ. of N.C., 234 N.C. App. 481, 483, 764 S.E.2d

       619, 621-22 (2014) (quoting Lambe Realty Inv., Inc. v. Allstate Ins. Co., 137 N.C. App.

       1, 4, 527 S.E.2d 328, 331 (2000)); see Integon Nat’l Ins. Co. v. Villafranco, 228 N.C.

       App. 390, 392, 745 S.E.2d 922, 925 (2013); Enter. Leasing Co. Southeast v. Williams,
                            N.C. FARM BUREAU MUT. INS. CO. V. CARPENTER

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                                          Opinion of the Court

       177 N.C. App. 64, 67-68, 627 S.E.2d 495, 498 (2006); Carlson v. Old Republic Ins. Co.,

       160 N.C. App. 399, 401, 585 S.E.2d 497, 499 (2003). Here, the trial court’s denial of

       judgment on the pleadings also determined that Plaintiff had a duty to defend against

       the underlying claims and stayed this action until the scope of Plaintiff’s alleged duty

       to indemnify could be resolved. Since the issue of whether Plaintiff actually has a

       duty to defend the underlying actions is directly implicated in this matter, it affects

       a substantial right. As such, Plaintiff’s appeal is properly before us.

                                  III.   Standard of Review

¶ 13          This court reviews a trial court’s denial of a motion for judgment on the

       pleadings de novo. CommScope Credit Union v. Butler & Burke, LLP, 369 N.C. 48,

       51, 790 S.E.2d 657, 659 (2016); see Fisher v. Town of Nags Head, 220 N.C. App. 478,

       480, 725 S.E.2d 99, 102 (2012); see also Bauman v. Pasquotank Cnty. ABC Bd., 270

       N.C. App. 640, 642, 842 S.E.2d 166, 168 (2020) (“Under a de novo standard of review,

       this Court considers the matter anew and freely substitutes its own judgment for that

       of the trial court.”).

¶ 14          A motion for a judgment on the pleadings “must be carefully scrutinized lest

       the nonmoving party be precluded from a full and fair hearing on the merits.”

       Ragsdale v. Kennedy, 286 N.C. 130, 137, 209 S.E.2d 494, 499 (1974). “On a motion

       for judgment on the pleadings, all well pleaded factual allegations in the nonmoving

       party’s pleadings are taken as true and all contravening assertions in the movant’s
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                                         Opinion of the Court

       pleadings are taken as false.” CommScope Credit Union, 369 N.C. at 51, 790 S.E.2d

       at 659 (cleaned up) (quoting Daniels v. Montgomery Mut. Ins. Co., 320 N.C. 669, 682-

       83, 360 S.E.2d 772, 780 (1987)); see Ragsdale, 286 N.C. at 137, 209 S.E.2d at 499. For

       the purpose of the motion, “[a]ll allegations in the nonmovant’s pleadings, except

       conclusions of law, legally impossible facts, and matters not admissible in evidence

       at the trial, are deemed admitted by the movant for purposes of the motion.”

       Ragsdale, 286 N.C. at 137, 209 S.E.2d at 499 (citations omitted). Judgment on the

       pleadings is proper when “the pleadings fail to reveal any material issue of fact with

       only questions of law remaining.” Fisher, 220 N.C. App. at 480, 725 S.E.2d at 102

       (citing Ragsdale, 286 N.C. at 137, 209 S.E.2d at 499).

¶ 15         We note that the construction and interpretation of an insurance contract is a

       question of law, and thus the question of Plaintiff’s “duty to defend may be resolved

       by judgment on the pleadings.” Erie Ins. Exch. v. Builders Mut. Ins. Co., 227 N.C.

       App. 238, 244, 742 S.E.2d 803, 809 (2013); see Crandell v. Am. Home Assurance Co.,

       183 N.C. App. 437, 440, 644 S.E.2d 604, 606 (2007) (“This duty to defend is ordinarily

       measured by the facts as alleged in the pleadings.” (cleaned up)).

                                      IV.     Discussion

¶ 16         Plaintiff’s arguments on appeal are premised upon its assertion it has no duty

       to defend Defendants All Pro and Carpenter’s underlying suits. As a general rule, an

       “insurer’s duty to defend the insured is broader than its obligation to pay damages
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       incurred by events covered by a particular policy.” Waste Management of Carolinas,

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

       determine whether an insurer has a duty to defend by examining the facts of the

       pleadings. Id. “When the pleadings state facts demonstrating that the alleged injury

       is covered by the policy, then the insurer has a duty to defend, whether or not the

       insured is ultimately liable.” Crandell v. Am. Home Assurance Co., 183 N.C. App.

       437, 440, 644 S.E.2d 604, 606 (2007) (quoting Waste Management of Carolinas, Inc.,

       315 N.C. at 691, 340 S.E.2d at 377). The “mere possibility that the insured is liable

       (and that the potential liability is covered) suffice[s] to impose a duty to defend upon

       the insurer.” Naddeo v. Allstate Ins. Co., 139 N.C. App. 311, 319, 533 S.E.2d 501, 506

       (2000) (quoting Waste Management of Carolinas, Inc., 315 N.C. at 691 n.2, 340 S.E.2d

       at 377 n.2). Notwithstanding this, “if the facts are not even arguably covered by the

       policy, then the insurer has no duty to defend.” Waste Management of Carolinas, Inc.,

       315 N.C. at 692, 340 S.E.2d at 378; see also Crandall, 183 N.C. App. at 440, 644

       S.E.2d at 606.

¶ 17         To determine whether an insurer has a duty to defend an underlying lawsuit

       against an insured, we utilize a “comparison test.” Crandell, 183 N.C. App. at 440,

       644 S.E.2d at 606; Holz-Her U.S. Inc. v. United States Fid. & Guar. Co., 141 N.C.

       App. 127, 128, 539 S.E.2d 348, 349 (2000); Smith v. Nationwide Mut. Fire Ins. Co.,

       116 N.C. App. 134, 135, 446 S.E.2d 877, 878 (1994). Under the comparison test, “the
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       pleadings are read side-by-side with the policy to determine whether the events as

       alleged are covered or excluded.” Erie Ins. Exch., 227 N.C. App. at 244-45, 742 S.E.2d

       at 809.

¶ 18         It is important to note that, in this case, Plaintiff’s Fungi or Bacteria Exclusion

       operates to exclude coverage.     Our Supreme Court, in State Capital Insurance

       Company v. Nationwide Mutual Insurance Company, explained the different rules of

       construction for an insurance policy provision which extends coverage and an

       insurance policy provision which excludes coverage:

                    provisions of insurance policies and compulsory insurance
                    statutes which extend coverage must be construed liberally
                    so as to provide coverage, whenever possible by reasonable
                    construction. See Moore v. Hartford Fire Insurance Co., 270
                    N.C. 532, 155 S.E. 2d 128 (1967); Jamestown Mutual
                    Insurance Co. v. Nationwide Mutual Insurance Co., 266
                    N.C. 430, 146 S.E. 2d 410 (1966). On the other hand, . . .
                    provisions which exclude liability of insurance companies
                    are not favored and therefore all ambiguous provisions will
                    be construed against the insurer and in favor of the
                    insured. Wachovia Bank & Trust Co. v. Westchester Fire
                    Insurance Co., 276 N.C. 348, 172 S.E. 2d 518 (1970).

       State Capital Ins. Co. v. Nationwide Mut. Ins. Co., 318 N.C. 534, 538, 350 S.E.2d 66,

       68 (1986). The Fungi or Bacteria Exclusion falls into the latter category, and thus,

       we review it accordingly.

       A. Fungi or Bacteria Exclusion

¶ 19         Plaintiff first argues the Fungi or Bacteria Exclusion fully applies to all of
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       Defendants’ pleadings. We disagree.

¶ 20         Plaintiff’s Fungi or Bacteria Exclusion states,

                    This insurance does not apply to:

                    Fungi or Bacteria

                    a. “Bodily injury” or “property damage” which would not
                    have occurred, in whole or in part, but for the actual,
                    alleged or threatened inhalation of, ingestion of, contact
                    with, exposure to, existence of, or presence of, any “fungi”
                    or bacteria on or within a building or structure, including
                    its contents, regardless of whether any other cause, event,
                    material or product contributed concurrently or in any
                    sequence to such injury or damage.

       As such, Plaintiff is not obligated to defend the underlying suits if 1) “bodily injury”

       was caused by “ ‘fungi’ or bacteria,” and 2) this “ ‘fungi’ or bacteria” was “on or within

       a building or structure.”

¶ 21         The terms of the Policy define “bodily injury” as “bodily injury, sickness, or

       disease sustained by a person, including death resulting from any of these at any

       time.” We define “bodily injury,” then, as set out in the Policy. Cf. Holz-Her U.S.

       Inc., 141 N.C. App. at 129, 539 S.E.2d at 350 (defining the term “occurrence” as

       defined in the insurance policy). Both Plaintiff and Defendants concede Legionnaires’

       disease is a form of legionellosis, which is caused by inhaling water droplets

       containing the Legionella bacteria. Thus, it is undisputed the bodily injuries alleged

       in the underlying suits arose due to the “actual, alleged, or threatened inhalation of,

       ingestion of, contact with, exposure to, existence of, or presence of” the Legionella
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       bacteria.

¶ 22          The key to this case, however, is whether the pleadings allege Legionella

       bacteria was “on or within a building or structure” so as to subject the underlying

       suits to the Bacteria and Fungi Exclusion. The Fungi or Bacteria Exclusion’s terms

       “on,” “within,” “building,” and “structure” are not defined within the Policy. We

       presume these terms to be nontechnical and, thus, “can be given the same meaning

       they usually receive in ordinary speech.” Waste Management of Carolinas, Inc., 315

       N.C. at 694, 340 S.E.2d at 379; see Allstate Ins. Co. v. Chatterton, 135 N.C. App. 92,

       95, 518 S.E.2d 814, 817 (1999) (“Use of the ordinary meaning of a term is the preferred

       construction . . . .”).

¶ 23          Here, Plaintiff concedes the Davis Event Center is a “building.” Thus, we must

       determine if the underlying complaints allege the Legionella bacteria was “on” or

       “within” the Davis Event Center. After a careful review of the record, we find all but

       one of the underlying claimants specifically state they entered the Davis Event center

       where Defendants All Pro and Carpenter’s hot tubs were on display.            Notably,

       Kimberly Grant (“Defendant Grant”) is the only claimant who did not claim she

       entered the Davis Event Center. Defendant Grant stated she only “attended the 2019

       NCMSF on September 15, 2019.” (emphasis added). Moreover, the record offers little

       information regarding whether Defendants Mary Belue as personal representative of

       the Estate of Delmer Eugene Belue, Jack Clinard, Peggy Duncan, Denice Williams,
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       Crystal Holder, Randy Houston, and James Clow entered the Davis Event Center.

       Indeed, the only pertinent information for these Defendants is found in Plaintiff’s

       amended complaint: “The above identified persons and estates have filed suit and/or

       asserted claims against Carpenter and/or All Pro for injury or death due to

       Legionnaires’ disease allegedly contracted from Carpenter’s hot tub display located

       in the Davis Event Center at the 2019 NC Mountain State Fair.”              This is not

       sufficient.

¶ 24          Without acknowledgment from these eight Defendants, the lack of specificity

       within the pleadings and underlying complaints as to whether Defendants actually

       entered the Davis Event Center or where they encountered Legionella bacteria

       creates ambiguity. The trial court was left to consider if Legionella bacteria was “on”

       or “within” the Davis Event Center. These “pleadings . . . disclose a mere possibility

       that . . . [Defendants All Pro and Carpenter are] liable and that the potential liability

       is covered.” Naddeo, 139 N.C. App. at 319, 533 S.E.2d at 506. The bodily injuries

       resulting from the Legionella bacteria, therefore, potentially are not barred by the

       Fungi or Bacteria Exclusion, and thus potentially covered by the Policy. See Crandell,

       183 N.C. App. at 443, 644 S.E.2d at 608 (“Since we cannot conclude that the facts

       alleged in the underlying complaint are not even arguably covered by the policy, we

       must hold that American Home had a duty to defend . . . .” (internal quotation marks

       omitted)). Furthermore, Plaintiff “could reasonably ascertain facts that, if proven,
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       would be covered by its policy” by inquiring of these eight Defendants whether they

       entered the Davis Event Center. Waste Management of Carolinas, Inc., 315 N.C. at

       691, 340 S.E.2d at 374-75. Consequently, the trial court did not err in its denial of

       Plaintiff’s motion for judgment on the pleadings.

       B. Consumption Exception

¶ 25         Even if the pleadings did not show the possibility that the underlying suits are

       not barred by the Fungi or Bacteria Exclusion, Plaintiff nonetheless has a duty to

       defend under the Consumption Exception.

¶ 26         The Consumption Exception is an exception to the Fungi or Bacteria Exclusion.

       It provides: “[The Fungi or Bacteria Exclusion] does not apply to any ‘fungi’ or

       bacteria that are, are on, or are contained in, a good or product intended for bodily

       consumption.” Because there is no disagreement that Legionnaires’ disease is caused

       by a bacterium, the question before us becomes what constitutes a “good intended for

       bodily consumption.” Since the Policy does not define “good” or “bodily consumption,”

       we look to their ordinary meanings to deduce the definition of each term. Eerie Ins.

       Exch., 227 N.C. App. at 245, 742 S.E.2d at 810.

¶ 27         Turning first to “good[,]” Black’s Law Dictionary defines a “good” as “1.

       [t]angible or moveable personal property other than money; esp., articles of trade or

       items of merchandise . . . 2. Things that have value, whether tangible or not . . . .”

       Goods, BLACK’S LAW DICTIONARY (11th ed. 2019). Here, the “good” in question is a
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       hot tub and, more specifically, the water therein. This Court has not yet addressed

       whether the water within a hot tub is considered a “good”; therefore, we are guided

       by the analysis in other jurisdictions’ judicial decisions. In Nationwide Mutual Fire

       Insurance Company v. Dillard House, Inc., plaintiff filed a declaratory judgment

       action arguing it was not liable to defend an underlying suit wherein a man died from

       legionnaires’ disease after bathing in a hotel’s hot tub. 651 F. Supp. 2d 1367, 1369

       (N.D. Ga. 2009) [hereinafter Dillard House]. The primary insurance and umbrella

       insurance policy offered by the plaintiff in Dillard House both contained bacteria

       exclusions and consumption exceptions like the one in the case sub judice. Id. at

       1370. The court, analyzing whether the hot tub’s water constituted a “good” for the

       purpose of the consumption exceptions, concluded: “[W]ater in a hot tub is a good—

       indeed, it may most specifically be considered an ‘economic good,’ since it gives

       economic utility to the hot tub and because water is a commodity for which hotels and

       other users pay.” Id. at 1378; see also Acuity v. Reed & Assocs. of TN, LLC, 124 F.

       Supp. 3d 787, 795 (W.D. Tenn. 2015); Westport Ins. Corp. v. VN Hotel Group, LLC,

       761 F. Supp. 2d 1337, 1346 (M.D. Fla. 2010), remanded on other grounds, 513 Fed.

       App’x 927 (11th Cir. 2013) (unpublished) (“At the outset, the court determined that

       bathing water in a hotel hot tub is a good, and there is no basis for deviating from

       that reasoning here.”).

¶ 28         By concluding that a patron’s use of and bathing in a hot tub gives the water
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       economic utility, Dillard House established that the water within a hot tub

       constitutes a “good.” We find the reasoning within Dillard House persuasive and

       adopt it herein. Surely, the water within Defendants All Pro and Carpenter’s hot tub

       provided economic utility. Indeed, Defendants All Pro and Carpenter could have

       displayed their hot tubs without water, but the sight of the swirling water, smell of

       steam, and evaporation of vapors within the atmosphere of the Davis Event Center

       was utilized as a marketing device to attract customers to purchase a hot tub. The

       water within the hot tubs, by virtue of its marketing connection with the final

       product, was a part of the commodity for which purchasers of the hot tub paid when

       purchasing a hot tub from Defendants’ All Pro and Carpenter.              Therefore,

       notwithstanding that patrons did not bathe within Defendants All Pro and

       Carpenter’s hot tubs at the Davis Event Center, the water therein constituted a

       “good” as it provided value to Defendants All Pro and Carpenter’s selling of the hot

       tubs. Accordingly, the primary issue then becomes whether Defendant All Pro and

       Carpenter’s hot tubs were intended for “bodily consumption.” “Bodily” is defined as

       “1: having a body or a material form: PHYSICAL, CORPOREAL[;] 2 a: of or relating

       to the body[;] 2 b: concerning the body.” Dillard House, 651 F. Supp. 2d at 1379

       (emphasis omitted).

¶ 29         The term “consumption,” however, is susceptible to multiple reasonable

       interpretations.   Black’s Law Dictionary defines “consumption” as “[t]he act of
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       destroying a thing by using it; the use of a thing in a way that exhausts it.”

       Consumption, BLACK’S LAW DICTIONARY (11th ed. 2019). Dillard House relies on

       Webster’s   Third    New    International    Dictionary,    Unabridged     and    defined

       “consumption” as

                    1 a: the act or action of consuming or destroying[;]

                    1 b: the wasting, using up, or wearing away of something[;]

                    2: the utilization of economic goods in the satisfaction of
                    wants or in the process of production resulting in
                    immediate destruction (as in the eating of foods), gradual
                    wear and deterioration (as in the habitation of dwellings),
                    no change aside from natural decay (as in the enjoyment of
                    art objects), or transformation into other goods (as in
                    manufacturing).

       Dillard House, 651 F. Supp. 2d at 1378 (emphasis omitted) (quoting WEBSTER’S THIRD

       NEW INTERNATIONAL DICTIONARY, UNABRIDGED (2002)); accord Westport Ins. Corp.,

       761 F. Supp. 2d at 1347-48. The Dillard House court found the second definition of

       “consumption” to be applicable, explaining “[s]urely, a hotel guest who bathes in a hot

       tub does so as a mean of indulging, or ‘satisfying,’ a desire, or ‘want.’ Given the second

       Webster’s definition, the court finds that water in a hot tub falls squarely within a

       reasonable interpretation of the phrase ‘good . . . intended for consumption.’ ” Dillard

       House, 651 F. Supp. 2d at 1378-79.

¶ 30         We are persuaded by Dillard House’s definition of “consumption” and adopt it

       here. Moreover, the term “bodily” as used in the Consumption Exception is properly
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       viewed as a modifier to “consumption.” Westport Ins. Corp., 761 F. Supp. 2d at 1347.

       Therefore, this Court finds Dillard House’s and Westport Insurance Corporation’s

       conclusion that “bodily consumption” is defined as “the utilization of economic goods

       in the satisfaction of wants which relate to the body” is applicable in the case sub

       judice. Id. at 1348 (internal quotation marks omitted).

¶ 31          We pause to note Plaintiff asserts that, because Defendant All Pro and

       Carpenter’s hot tubs were intended for marketing, it falls outside the definition of

       “consumption.” Plaintiff’s argument misses the point. The question is not whether

       Defendant All Pro and Carpenter’s hot tubs were intended for consumption or

       marketing, but whether the water therein was.4 Thus, having established that the

       water within the hot tubs is a “good,” we next must determine whether the water was

       intended for the utilization of economic goods in the satisfaction of wants which relate

       to the body.

¶ 32          After a careful review of the record, we conclude the water within Defendant

       All Pro and Carpenter’s hot tubs was intended to satisfy the wants which relate to

       the patrons’ bodies. Although Defendant All Pro and Carpenter could have chosen to

              4It is the water inside the hot tub, not the hot tub itself, which was the culprit of
       creating Legionella Bacteria. See MAYO CLINIC, https://www.mayoclinic.org/diseases-
       conditions/legionnaires-disease/symptoms-causes/syc-20351747 (last visited July 14, 2022)
       (“Most people catch Legionnaires’ disease by inhaling the bacteria from water or soil.”
       (emphasis added)).
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       display their hot tubs without water, they did not. Rather, the circulating water

       within the hot tubs was intended to attract patrons to Defendant All Pro and

       Carpenter’s display at the Davis Event Center by offering an experience to interact

       with the hot tub in operation. Patrons could feel the mist and heat of the hot tubs,

       put their hands into the water, and smell its mist.          Surely experiencing and

       possessing the ability to touch the water and inhaling and ingesting the water vapor

       caused patrons to satisfy their bodily wants by interacting with the hot tubs’ water.

¶ 33          Our holding today is not novel in its conclusion.        In Wesport Insurance

       Corporation v. VN Hotel Group, LLC, the underlying complaints alleged hotels caused

       an accumulation of Legionella bacteria when they negligently maintained their

       potable water and plumbing system, and, thus, the underlying complainants “were

       infected with Legionnaires’ disease when they inhaled and ingested water vapor from

       the guest room showers and hotel spa tub.” 761 F. Supp. 2d at 1340 (emphasis added).

       Examining the insurance policy offered by plaintiff, the trial court found “the facts

       alleged . . . satisfy the Consumption Exception.” Id. at 1348. The patrons in this case,

       likewise, were infected with Legionnaires’ disease after inhaling and ingesting the

       water vapor from Defendants All Pro and Carpenter’s hot tubs.

¶ 34         In sum, a reasonable interpretation of the Consumption Exception illustrates

       the underlying pleadings fall under this provision. The water within Defendants All

       Pro and Carpenter’s hot tubs is a good which was intended to satisfy a patron’s wants
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       by allowing them to touch the water and inhale and ingest the water vapor. As such,

       Plaintiff has a duty to defend the underlying suits per the terms of the Consumption

       Exception.

       C. Duty to Indemnify

¶ 35         Finally, Plaintiff argues since it has no duty to defend the underlying suits, it

       therefore has no duty to indemnify Defendants All Pro and Carpenter. The insurer’s

       duty to defend is

                    broader than the duty to indemnify only “in the sense that
                    an unsubstantiated allegation requires an insurer to
                    defend against it so long as the allegation is of a covered
                    injury; however, even a meritorious allegation cannot
                    obligate an insurer to defend if the alleged injury is not
                    within, or is excluded from, the coverage provided by the
                    insurance policy.”

       Kubit v. MAG Mut. Ins. Co., 210 N.C. App. 273, 279, 708 S.E.2d 138, 145 (2011)

       (quoting Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1, 7,

       692 S.E.2d 605, 610-11 (2010)). Thus, “[b]ecause the duty to defend may be broader

       than the duty to indemnify we address the duty to defend because if it fails, so too

       does the duty to indemnify.” N.C. Farm Bureau Mut. Ins. Co. v. Phillips, 255 N.C.

       App. 758, 764, 805 S.E.2d 362, 366 (2017). In the case sub judice, we are holding

       Plaintiff does have a duty to defend Defendants All Pro and Carpenter; as such, we

       need not reach the merits of whether Plaintiff has a duty to indemnify Defendants

       All Pro and Carpenter.
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                                        V.     Conclusion

¶ 36          Based on the foregoing, we conclude ambiguity exists as to whether the

       Legionella bacteria was “on” or “within” the Davis Event Center, and, as a result,

       there is a mere possibility that the underlying suits are not barred by the Fungi or

       Bacteria Exclusion. Accordingly, Plaintiff has a duty to defend the underlying suits.

       Moreover, because the water within Defendants All Pro and Carpenter’s hot tubs was

       a good intended for the satisfaction of wants which relate to the body, Plaintiff’s duty

       to defend is also triggered by the Consumption Exception. Accordingly, we affirm the

       order of the trial court.

              AFFIRMED.

              Judges MURPHY and HAMPSON concur.