Court Opinion

ID: 9348537
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:05:14.933838+00
Date Added: 2024-06-11T16:42:21.201059
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                      2022-NCCOA-783

                                        No. COA21-793

                                    Filed 6 December 2022

     Wake County, No. 17 CVS 955

     NUNG HA and NHIEM TRAN, Plaintiffs,

                  v.

     NATIONWIDE GENERAL INSURANCE COMPANY, Defendant.

           Appeal by Plaintiffs from judgment entered 30 July 2021 by Judge Rebecca W.

     Holt in Wake County Superior Court. Heard in the Court of Appeals 24 August 2022.

           John M. Kirby for Plaintiffs-Appellants.

           Robinson, Bradshaw & Hinson, P.A., by Stephen D. Feldman, Travis S.
           Hinman, and Garrett A. Steadman, for Defendant-Appellee.

           Young Moore and Henderson, P.A., by Walter E. Brock, Jr., and Angela Farag
           Craddock, for amicus curiae North Carolina Rate Bureau.

           GRIFFIN, Judge.

¶1         Plaintiffs Nung Ha and Nhiem Tran appeal from a judgment finding that

     Defendant Nationwide General Insurance Company validly cancelled Plaintiffs’

     homeowner’s insurance policy. After review, we affirm the trial court’s judgment.

                       I.   Factual and Procedural Background

¶2         On 24 July 2015, a house fire destroyed Plaintiffs’ home in Wake Forest, North

     Carolina. At issue is whether a homeowner’s insurance policy issued by Nationwide

     was properly cancelled prior to the fire, in which case Plaintiffs are not entitled to
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                                         Opinion of the Court

     coverage under the policy. Specifically, the issue is whether Nationwide properly

     cancelled the policy by mailing notice of cancellation to Plaintiffs, or whether further

     proof that notice was actually received by Plaintiffs is required in order to cancel the

     policy.

¶3             A divided panel of this Court previously considered this matter in June 2019,

     and the majority issued an opinion holding that the word “furnishing” in N.C. Gen.

     Stat. § 58-41-15(c) “requires actual delivery to and/or receipt of [a notice of

     cancellation] by the insured” in order for the homeowner’s policy to be validly

     cancelled: “Because the facts before us demonstrate nothing more than that

     Nationwide provided ‘proof of mailing,’ and the trial court expressly found [P]laintiffs

     did not receive notice, Nationwide failed to afford [P]laintiffs sufficient notice of the

     policy’s cancellation.” Ha v. Nationwide Gen. Ins. Co., 266 N.C. App. 10, 17, 829

     S.E.2d 919, 924 (2019).       Our Supreme Court subsequently vacated this Court’s

     judgment and remanded the matter “to determine whether Article 41, Article 36 or

     other statutes govern in this matter.” Ha v. Nationwide Gen. Ins. Co., 375 N.C. 87,

     845 S.E.2d 436 (2020). A majority of this Court over further dissent remanded the

     case to the trial court for further proceedings consistent with the Supreme Court’s

     instruction.

¶4             Following remand, the trial court issued a new judgment finding that N.C.

     Gen. Stat. § 58-41-15 did not apply to the policy but that section 58-44-16 was
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                                        Opinion of the Court

     applicable. The trial court then found that Nationwide complied with the latter

     provision by providing proof that the cancellation notice was mailed to Plaintiffs.

     Plaintiffs timely appeal.

                                       II.    Analysis

¶5         We are now asked to interpret whether N.C. Gen. Stat. § 58-44-16 requires

     proof that the cancellation notice was actually received by Plaintiffs, or whether proof

     of mailing is sufficient to cancel the policy.      We hold that Nationwide properly

     cancelled the policy under section 58-44-16 by proving that the cancellation notice

     was mailed to Plaintiffs.      Plaintiffs alternatively argue that the trial court

     erroneously determined that section 58-41-15 did not apply to the policy.           We

     disagree.

     A. N.C. Gen. Stat. § 58-44-16

¶6         “A question of statutory interpretation is ultimately a question of law for the

     courts.” Brown v. Flowe, 349 N.C. 520, 523, 507 S.E.2d 894, 896 (1998). “This Court

     reviews questions of law de novo, meaning that we consider the matter anew and

     freely substitute our judgment for the judgment of the lower court.” Lunsford v. Mills,

     367 N.C. 618, 623, 766 S.E.2d 297, 301 (2014).

¶7         N.C. Gen. Stat. § 58-44-16(f)(10) governs cancellation of standard fire

     insurance policies, providing that such policies “may be cancelled at any time by th[e]

     insurer by giving to the insured a five days’ written notice of cancellation[.]” N.C.
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     Gen. Stat. § 58-44-16(4)(10) (2021) (emphasis added). Article 44 does not define what

     the word “giving” requires, so we look to the plain meaning of the term in order to

     ascertain the intent of the legislature. Lunsford, 367 N.C. at 623, 766 S.E.2d at 301

     (“The primary objective of statutory interpretation is to ascertain and effectuate the

     intent of the legislature. If the language of the statute is clear and is not ambiguous,

     we must conclude that the legislature intended the statute to be implemented

     according to the plain meaning of its terms.” (citations and internal quotation marks

     omitted)).

¶8         “Undefined words are accorded their plain meaning so long as it is reasonable

     to do so. In determining the plain meaning of undefined terms, this Court has used

     standard, nonlegal dictionaries as a guide.” Midrex Tech., Inc. v. N.C. Dept. of Rev.,

     369 N.C. 250, 258, 794 S.E.2d 785, 792 (2016) (citations and internal quotation marks

     omitted). According to Webster’s New Twentieth Century Dictionary, to “give” means

     “to surrender into the power of another; to convey to another; to bestow.” Webster’s

     New Twentieth Century Dictionary of the English Language 739 (Harold Whitehall

     ed., 1956). “Giving,” the present participle form of “give” used in the statute, means

     “the act of conferring.” Id. at 740 (emphasis added). We conclude that the plain

     meaning of the word “give,” particularly in its present participle form, includes the

     act of mailing notice of cancellation to the insured. Indeed, it is hardly reasonable to

     argue that “giving” does not include the act of mailing an item to another.
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                                          Opinion of the Court

¶9           We note that the General Assembly requires that cancellation notice be sent

       via certified mail or actually received with respect to several different types of

       insurance policies but chose not to include those requirements here. See, e.g., N.C.

       Gen. Stat. § 58-41-15(a) (2021) (requiring “prior written consent of the insured” in

       order to cancel certain types of property, liability, title, and indemnity insurance

       policies); N.C. Gen. Stat. § 58-36-105(b) (2021) (governing worker’s compensation

       insurance policies and providing that notice of cancellation must be in writing and

       sent via certified/registered mail and that “no cancellation by the insurer shall be

       effective unless and until such method is employed and completed”). Absent language

       in the statute requiring more, we conclude that the legislature intended mailing to

       constitute “giving” notice of cancellation.

       B. N.C. Gen. Stat. § 58-41-15

¶ 10         Plaintiffs also argue that the trial court erroneously determined that N.C. Gen.

       Stat. § 58-41-15 did not apply to the policy. This argument is without merit.

¶ 11         N.C. Gen. Stat. § 58-41-10 outlines the scope of insurance policies governed

       under Article 41 and to which the cancellation provisions in section 58-41-15 apply,

       stating “[t]his Article does not apply to insurance written under Articles 21, 26, 36,

       37, 45 or 46 of this Chapter[ or to] insurance written for residential risks in

       conjunction with insurance written under Article 36 of this Chapter[.]” N.C. Gen. Stat.

       § 58-41-10(a) (2021) (emphasis added). Our Administrative Code provides that “[f]or
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                                          Opinion of the Court

       the purposes of G.S. 58-41-10(a), a ‘residential risk’ is a risk covered under any of the

       following North Carolina Rate Bureau residential programs,” including the

       “Homeowners Program[ and the] Dwelling Fire and Extended Coverage Program[.]”

       11 N.C. Admin. Code 10.0313(a) (2022).

¶ 12         Moreover, N.C. Gen. Stat. § 58-36-1 provides that the North Carolina Rate

       “Bureau shall promulgate and propose rates for insurance against loss to residential

       real property with not more than four housing units located in this State[.]” N.C.

       Gen. Stat. § 58-36-1(3) (2021).     Pursuant to section 58-36-55, “[n]o policy form

       applying to insurance on risks or operations covered by this Article may be delivered

       or issued for delivery unless it has been filed with the Commissioner by the Bureau

       and either he has approved it, or 90 days have elapsed and he has not disapproved

       it.” N.C. Gen. Stat. § 58-36-55 (2021). The record reveals that Plaintiffs’ insurance

       policy was written on a standard HO3 form, and the Rate Bureau Commissioner has

       approved the form under the Homeowner’s Program, which is authorized by Article

       36. These statutory provisions along with the record clearly establish that Plaintiffs’

       policy was covered by Article 36, meaning the cancellation provisions in N.C. Gen.

       Stat. § 58-41-15 do not apply to the policy.

¶ 13         Lastly, “[i]t is a general rule of statutory construction that where one of two

       statutes might apply to the same situation, the statute which deals more directly and

       specifically with the situation controls over the statute of more general applicability.”
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       Oxendine v. TWL, Inc., 184 N.C. App. 162, 165–66, 645 S.E.2d 864, 866 (2007)

       (quoting Fowler v. Valencourt, 334 N.C. 345, 349, 435 S.E.2d 530, 532–33 (1993)).

       Article 36 specifically applies to “insurance against loss to residential real property

       with not more than four housing units located in this State[.]” N.C. Gen. Stat. § 58-

       36-1(3) (2021). Article 41 applies generally to a wide variety of policies, including

       property, liability, title, and indemnity insurance policies. N.C. Gen. Stat. § 58-41-

       10(a). Accordingly, it is apparent that the legislature intended for Article 36 to apply

       to standard homeowner’s insurance policies.             Plaintiffs’ argument is therefore

       without merit.

                                       III.     Conclusion

¶ 14         For the foregoing reasons, the judgment of the trial court is affirmed.

             AFFIRMED.

             Judge TYSON concurs.

             Judge ARROWOOD dissents by separate opinion.
        No. COA21-793 – Ha v. Nationwide Gen. Ins. Co.

             ARROWOOD, Judge, dissenting.

¶ 15         I respectfully dissent from the majority’s holding that proof of mailing is

       sufficient to cancel an insurance policy under N.C. Gen. Stat. § 58-44-16. Accordingly,

       I would hold that for an insurance company to effectively cancel a policy under this

       statute, they would need to show proof the notice of cancellation was actually

       received.

¶ 16         Our statute states that a “standard fire insurance policy . . . may be cancelled

       at any time by th[e] insurer by giving to the insured a five days’ written notice of

       cancellation with or without tender of the excess of paid premium.” N.C. Gen. Stat.

       § 58-44-16(f)(10) (2021) (emphasis added). “When construing a statute, the court

       looks first to its plain meaning, reading words that are not defined by the statute

       according to their plain meaning as long as it is reasonable to do so. The court must

       give effect to the plain meaning as long as the statute is clear and unambiguous.”

       State ex rel. Utilities Comm’n v. Env’t Def. Fund, 214 N.C. App. 364, 366, 716 S.E.2d

       370, 372 (2011) (emphasis added) (citing State v. Ward, 364 N.C. 157, 160, 694 S.E.2d

       729, 731 (2010); Woodson v. Rowland, 329 N.C. 330, 338, 407 S.E.2d 222, 227 (1991);

       State v. Jackson, 353 N.C. 495, 501, 546 S.E.2d 570, 574 (2001)). However, when a

       statute is unclear, “courts must resort to statutory construction to determine

       legislative will and the evil the legislature intended the statute to suppress.”

       Jackson, 353 N.C. at 501, 546 S.E.2d at 574 (citations omitted).

¶ 17         Generally, our courts have sought to protect the insured from the contracts of
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                                      ARROWOOD, J., dissenting

       adhesion and the general predatory practices of insurance companies by interpreting

       insurance policy provisions liberally to afford coverage whenever reasonable. See

       N.C. Farm Bureau Mut. Ins. Co. v. Stox, 330 N.C. 697, 702, 412 S.E.2d 318, 321

       (1992); State Cap. Ins. Co. v. Nationwide Mut. Ins. Co., 318 N.C. 534, 538, 350 S.E.2d

       66, 68 (1986) (“[P]rovisions of insurance policies and compulsory insurance statutes

       which extend coverage must be construed liberally so as to provide coverage,

       whenever possible by reasonable construction.”) (citations omitted). This is true

       whether the statute or insurance provision seeks to extend or exclude coverage. State

       Cap. Ins. Co., 318 N.C. at 538, 350 S.E.2d at 68 (explaining that policy provisions

       which extend coverage should be construed to provide coverage and exclusion

       provisions should be construed against the insurer in favor of the insured).

¶ 18         Furthermore, other jurisdictions interpreting similar statutes have found that

       more than proof of mailing is required to effectively cancel an insurance policy. For

       example, in Nunley v. Florida Farm Bureau Mutual Insurance Company, the court,

       interpreting an insurance policy, found receipt of the cancellation notice was required

       to be effective. Nunley v. Fla. Farm Bureau Mut. Ins. Co., 494 So. 2d 306, 307 (Fla.

       Dist. Ct. App. 1986). In Nunley, the provision used language identical to the statute

       here, stating: “[t]his policy may be cancelled at any time by this company by giving

       to the insured a ten-days written notice of cancellation with or without tender of the

       excess of said premium above the pro rata premium for the expired time[.]” Id. The
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                                       ARROWOOD, J., dissenting

       Nunley court found the language was ambiguous and should therefore be “most

       reasonably construed as requiring the actual receipt of the notice by the insured.” Id.

       Specifically, that court found that when the insurance provision states “the policy

       may be cancelled by giving notice to the insured in a specific number of days . . . actual

       receipt by the insured of such notice is a condition precedent to cancellation of the

       policy by the insured[.]” Id. Therefore, any “notice of cancellation mailed by the

       insurer but not received by the insured [wa]s consequently ineffective as a

       cancellation.” Id.

¶ 19         Because the term “giving” is ambiguous in this context, I would conclude the

       statute must be interpreted in favor of the insured and therefore require proof of

       delivery for a cancellation notice to be effective. For the foregoing reasons, I would

       reverse the trial court’s order and I respectfully dissent.