NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, INC., Plaintiff,
BEVERLY LEE PHILLIPS, VICTORIA PHILLIPS, and JOHN DOE 236, Defendants.
in the Court of Appeals 16 November 2016.
by plaintiff from judgment entered 12 April 2016 by Judge G.
Bryan Collins, Jr. in Superior Court, Wake County No. 15 CVS
Moore and Henderson P.A., by Walter E. Brock, Jr. and Andrew
P. Flynt, for plaintiff-appellant.
Poore & Williams, PC, by J. Patrick Williams, for
defendant-appellee Beverly Lee Phillips and Victoria
Anderson & Associates, P.A., by Gregg Meyers, pro hac
vice, and Copeley Johnson & Groninger PLLC, by Leto
Copeley, for defendant-appellee John Doe 236.
North Carolina Farm Bureau Mutual Insurance Company, Inc.
appeals a judgment ordering it to defend and indemnify
defendants Beverly Lee Phillips and Victoria Phillips under
the insurance policy plaintiff issued to them. We reverse and
background of this case is provided by the trial court's
judgment and is not at issue on appeal:
1. Farm Bureau issued policy FO 1051463 to
Beverly Lee Phillips and Vicki O. Phillips as named insureds
effective January 11, 2008. The policy has been renewed
annually and amended from time to time through January 11,
. . . .
5. Beverly Lee Phillips was charged with various sexual
offenses which occurred over a period of time against the
minor child of John Doe 236, referred to in this order as
6. From those various charges, Beverly Lee Phillips agreed to
plead guilty to two counts of taking indecent liberties with
KGK (a violation of N.C. G.S. 14-202.1) and two counts of
sexual activity by a substitute parent (a violation of N.C.
7. The date of the offenses pertinent to the plea were within
the 2008 policy year: May 1, 2008 and August 7, 2008. The
date on which the cause of action for John Doe 236 arose was
in the 2012 policy year, when he learned of the abuse of KGK.
8. John Doe 236 is a pseudonym for the father of KGK. John
Doe 236 filed a civil action in Chatham County Superior Court
against Beverly Lee Phillips and Victoria Phillips: John
Doe 236 v. Beverly Lee Phillips and Victoria Phillips,
14 CVS 885, Chatham County Superior Court (the Chatham County
Action). That complaint alleges one cause of action for
negligence and one cause of action for loss of services.
9. The Chatham County Action alleges in its statement of the
"Nature of the Wrongdoing" that "Beverly
Phillips was convicted of indecent liberty with [John Doe
236's] minor child;" that "Beverly Lee Phillips
was charged and convicted for the sexual battery of the [John
Doe 236's] minor child;" and that "[t]his case
is about sexual battery made against [John Doe 236's]
child by Beverly Lee Phillips, and the negligence of Victoria
Phillips to entrust that minor with Beverly Lee
10. The First Cause of Action of the Chatham County Action
alleges in pertinent part that "Defendant Victoria
Phillips was negligent in failing to properly supervise
Beverly Lee Phillips, or warn [John Doe 236] about the
assailant;" that "as a result of the conduct of the
Defendants, [John Doe 236's] child suffered damage, and
that damage also impeded the relationship between [John ...