Eagles v. Discovery Ins. Co.

IN THE COURT OF APPEALS OF NORTH CAROLINA No. COA25-610 Filed 21 October 2026 Nash County, No. 24CVS000245-630 BENJAMIN EAGLES, as Receiver for Ikeem Cherry, Plaintiff, v. DISCOVERY INSURANCE COMPANY, Defendant. Appeal by Defendant and Cross-Appeal by Plaintiff from Orders entered 22 July 2024 and 26 November 2024 by Judge Timothy W. Wilson in Nash County Superior Court. Heard in the Court of Appeals 26 March 2026. White & Stradley, PLLC, by J. David Stradley, for Plaintiff-Appellee/Cross- Appellant. Bennett Guthrie PLLC, by Joshua H. Bennett and Mitchell H. Blankenship, for Defendant-Appellant/Cross-Appellee. HAMPSON, Judge. Factual and Procedural Background Defendant Discovery Insurance Company (Discovery) and Plaintiff Benjamin Eagles (Receiver), as the appointed Receiver for Ikeem Cherry, appeal from Orders granting summary judgment in favor of Receiver and awarding attorney fees and costs to Receiver. The Record before us tends to reflect the following: Early on 10 May 2020, Ikeem Cherry and Samuel Tomlin were involved in a single-vehicle car accident. Cherry was driving a Honda owned by Melanie Sauls,  EAGLES V. DISCOVERY INS. CO. Opinion of the Court the mother of his child. Cherry had taken the vehicle after dropping off a Mother’s Day present at Sauls’ home earlier that evening. Tomlin was a passenger and sustained injuries in the crash. At the time of the accident, the vehicle was insured under an insurance policy issued by Discovery (the Policy). The Policy provided coverage to Sauls as the named insured and to “[a]ny person using your [Saul’s] covered auto.” The Policy does not cover any insured who uses a covered vehicle “without a reasonable belief that [the] insured is entitled to do so.” Under Discovery’s Claims Manual, an investigation of each claim is to be conducted to “obtain facts concerning coverage, liability and damages.” The Claims Manual requires an investigation be “carried out until there are no unanswered questions.” Discovery must also obtain a Vehicle Theft Affidavit from the insured on any vehicle theft claim. The accident was first reported to Discovery on 11 May 2020. Sauls told Discovery that Cherry had stolen the vehicle. She also told Discovery Cherry wanted her insurance information but she “is not giving it to him.” The claims adjuster noted she told Sauls that Discovery “would not pay anything” on behalf of Cherry “anyway” because Cherry had allegedly stolen the vehicle. The Record does not show that Discovery inquired any further into the stolen nature of the vehicle or obtained a Vehicle Theft Affidavit from Sauls. 2  EAGLES V. DISCOVERY INS. CO. Opinion of the Court On 23 December 2020, Tomlin filed a complaint in Wilson County against Cherry and Sauls (the Tomlin Action) alleging claims for the injuries he suffered in the accident. Sauls faxed Discovery a copy of the lawsuit and Discovery hired an attorney to represent her. Cherry did not file an answer or responsive motion, nor did he hire an attorney. On 26 January 2021, Tomlin’s attorney emailed Discovery a courtesy copy of the complaint. Shortly thereafter, Tomlin dismissed Sauls from the suit. On 23 March 2021, the trial court entered a Default Judgment against Cherry in the amount of $3,000,000.00. After the Sheriff’s Office returned the writ of execution unsatisfied, Tomlin moved for appointment of a receiver. On 2 May 2022, Benjamin Eagles was appointed as Receiver to take jurisdiction and possession of certain “chose[s] in action belonging to” Cherry. In the order appointing the Receiver, the trial court set out specific powers: (a) The power to prosecute any claims which form any part of the receivership assets, including institution of lawsuits in the pursuit of any available remedies, whether legal or equitable in nature; (b) The power to retain counsel and experts to assist with the prosecution of such claims, including entering such contracts with counsel and others as he shall deem appropriate; (c) To incur expenses in connection with the prosecution of those claims; (d) The power to compromise such claims, subject to approval with the court. 3  EAGLES V. DISCOVERY INS. CO. Opinion of the Court Accordingly, Receiver initiated the instant suit against Discovery on 13 June 2022, alleging claims for Breach of Duty to Defend, Unfair and Deceptive Trade Practices, and Bad Faith Failure to Defend. Discovery then filed suit against Tomlin and Cherry in Lenoir County seeking to vacate the Default Judgment (the Lenoir County Action). Receiver intervened in the Lenoir County Action with the consent of the parties. Cherry, represented by counsel secured and paid for by Receiver, filed a motion to dismiss and answer on 10 March 2023. The Lenoir County Action was consolidated with Receiver’s suit on 14 June 2023.1 On 25 August 2023, Receiver subpoenaed Discovery President David Stuart Lindley to appear for deposition on 5 September 2023. In response, Discovery filed a motion to quash the subpoena and for a protective order. Discovery argued, inter alia, the information Receiver sought from Lindley was irrelevant and privileged. After a hearing on 6 September 2023, the trial court ordered Receiver could not depose Lindley “at this time.” Discovery and Tomlin entered into a Settlement on 28 May 2024 (the Settlement Agreement). In exchange for a $1,500,000.00 payment from Discovery to Tomlin, the parties dismissed with prejudice all claims asserted against each other. As an additional term of the Settlement Agreement, Tomlin marked his judgment 1 On 9 February 2024, the trial court entered an order transferring the cases to Nash County and assigning new file numbers. 4  EAGLES V. DISCOVERY INS. CO. Opinion of the Court against Cherry as satisfied and agreed to release Cherry and Discovery from any future liability arising out of the accident. The Default Judgment was marked satisfied on 4 June 2024. Tomlin and Discovery jointly dismissed the Lenoir County Action pursuant to Rule 41(a) of the North Carolina Rules of Civil Procedure on 6 June 2024. A hearing on the parties’ Motions for Summary Judgment was conducted on 7 June 2024. On 22 July 2024, the trial court entered an Order granting Partial Summary Judgment in favor of Receiver on his claims for Breach of Duty to Defend, Unfair and Deceptive Trade Practices, and Bad Faith Failure to Defend. However, the trial court further determined Receiver failed to show Cherry suffered any actual or compensatory damages. Accordingly, the trial court concluded only nominal damages were warranted and granted summary judgment in favor of Discovery on the issues of Receiver’s compensatory, treble, and punitive damages. The trial court further concluded grounds existed to award Receiver attorney fees. Noting it had “insufficient evidence before it from which to make” findings on “the time and labor expended by the attorney, the skill required to perform the services rendered, the experience and ability of the attorney, and the customary fee for like work[,]” the trial court directed Receiver to submit evidence from which the trial court could base its award of attorney fees. On 26 November 2024, the trial court entered an Attorney Fees Order awarding Receiver $16,325.00 for his own fees and $358.76 in costs, $246,425.00 in 5  EAGLES V. DISCOVERY INS. CO. Opinion of the Court attorney fees and $12,957.66 in costs, and $29,487.32 for the fees and costs incurred in hiring Cherry’s attorney. The trial court ordered Discovery to pay Receiver nominal damages in the amount of $10.00. Receiver filed Notice of Appeal on 23 December 2024. Discovery gave Notice of its Cross-Appeal on 2 January 2025. On 5 March 2026, after both parties completed their briefing in this case, Discovery filed a Motion to Dismiss the Appeal, arguing the receivership terminated when the Default Judgment was entered and, thus, Receiver does not have standing to appeal. Issues The issues on appeal are whether the trial court: (I) erred by allowing Receiver to continue to pursue claims for damages against Discovery after Discovery had entered into the Settlement Agreement with Tomlin; (II) erred by granting summary judgment in favor of Receiver on his claims for Breach of Duty to Defend, Unfair and Deceptive Trade Practices, and Bad Faith Failure to Defend; and (III) abused its discretion in awarding attorney fees. Analysis I. Subject Matter Jurisdiction Discovery asserts the trial court erred in allowing Receiver to continue to pursue his claims against Discovery after Discovery and Tomlin entered into the Settlement Agreement. Discovery argues Receiver was appointed only to satisfy the Default Judgment. Thus, according to Discovery, the trial court lost subject matter 6  EAGLES V. DISCOVERY INS. CO. Opinion of the Court jurisdiction over Receiver’s claims against Discovery once Discovery and Tomlin entered into the Settlement Agreement. We disagree. “ ‘In reviewing a question of subject matter jurisdiction, our standard of review is de novo.’ ” In re Cornblum, 220 N.C. App. 100, 102, 727 S.E.2d 338, 340 (2012) (quoting In re K.A.D., 187 N.C. App. 502, 503, 653 S.E.2d 427, 428 (2007)). “[T]he purpose of receivership ‘is to afford the largest and most thorough means of scrutiny, legal and equitable in their character, in reaching such property as the debtor has, that ought justly to go to the discharge of the debt his creditor has against him.’ ” Haarhuis v. Cheek, 261 N.C. App. 358, 368, 820 S.E.2d 844, 852 (2018) (emphasis in original) (quoting Massey v. Cates, 2 N.C. App. 162, 166, 162 S.E.2d 589, 592 (1968)) (internal quotation marks omitted). “It is an important part of the duties of the receiver to take possession and get control of the property of the judgment debtor, whether in possession or action, as soon as practicable, and to bring all actions necessary to secure and recover such property as may be in the hands of third parties, however they may hold and claim the same . . . .” Coates v. Wilkes, 92 N.C. 376, 380, 1885 WL 1539, at *2. “[E]quity authorizes the appointment of a receiver so long as the party seeking the same ‘establishes an apparent right to property[.]’ ” Haarhuis, 261 N.C. App. at 367, 820 S.E.2d at 852 (emphasis removed) (quoting Neighbors v. Evans, 210 N.C. 550, 554, 187 S.E. 796, 797 (1936)). “Once an apparent right to property is shown, it becomes the task of the receiver, rather than the trial court, to determine whether 7  EAGLES V. DISCOVERY INS. CO. Opinion of the Court any given ‘apparent right to property’ is indeed worth pursuing[.]” Id. (emphasis in original). In the instant case, the trial court gave the Receiver the power to prosecute claims which form any part of the receivership assets: (a) The power to prosecute any claims which form any part of the receivership assets, including institution of lawsuits in the pursuit of any available remedies, whether legal or equitable in nature; (b) The power to retain counsel and experts to assist with the prosecution of such claims, including entering such contracts with counsel and others as he shall deem appropriate; (c) To incur expenses in connection with the prosecution of those claims; (d) The power to compromise such claims, subject to approval with the court. (emphasis added). The trial court expressly defined the “receivership assets” as “any claim for damages against any insurer” and “any claim for the breach of any duty to defend the defendant against the claims brought by the plaintiff[.]” Discovery asserts the receivership terminated when Discovery and Tomlin entered into the Settlement Agreement. Discovery argues there are two prerequisites to the “existence and continuance” of a receivership: (1) a judgment debtor and (2) an unsatisfied judgment. Discovery cites Coates, where the Court stated: “[A] receiver is appointed almost as of course, where it appears that the judgment debtor has, or probably has, property that ought to be so subjected to the satisfaction of the 8  EAGLES V. DISCOVERY INS. CO. Opinion of the Court judgment[,]” 92 N.C. at 380, 1885 WL 1539, at *2, and Travelers Indemnity Co. v. Triple S Marketing Group,2 which provides: “[N.C. Gen. Stat. §] 1-352 sets the return of an unsatisfied judgment as a necessary condition for a judgment creditor to seek relief in supplemental proceedings[,]” 213 N.C. App. 425, 714 S.E.2d 274, 2011 WL 2848839, at *4 (unpublished). However, each of these authorities discuss circumstances which must exist for the appointment of a receiver. Neither provide express guidance as to what terminates a receivership. Discovery also cites Righton v. Pruden, 73 N.C. 61, 1875 WL 2776. This case is inapposite. In Righton, the judgment was paid off after the plaintiff-receiver was appointed but before he had “filed his bond and was qualified as receiver[.]” The plaintiff-receiver did not institute any action against the defendant until after the judgment had already been satisfied. 73 N.C. at 63, 1885 WL 2776, at *2. The Court held “it would seem too clear for argument, that when the judgment had been satisfied before the receiver began his suit, that he was proceeding without having a cause of action.” Id. (emphasis added). Here, unlike the plaintiff-receiver in Righton, Receiver instituted his suit against Discovery prior to Tomlin and Discovery entering into the Settlement Agreement. Receiver filed the present claims against Discovery on 13 June 2022— 2 Travelers is an unpublished opinion. “An unpublished decision of the North Carolina Court of Appeals does not constitute controlling legal authority. Accordingly, citation of unpublished opinions in briefs, memoranda, and oral arguments in the trial and appellate divisions is disfavored[.]” N.C. R. App. P. 30(e) (2026). 9  EAGLES V. DISCOVERY INS. CO. Opinion of the Court nearly two years before Tomlin and Discovery executed the Settlement Agreement on 4 June 2024. Thus, at the time Receiver instituted his suit, it appeared “the judgment debtor [had], or probably [had], property that ought to be so subjected to the satisfaction of the judgment[.]” Coates, 92 N.C. at 380, 1885 WL 1539, at *2. Nothing in Righton suggests the receivership terminates automatically upon satisfaction of the judgment. Indeed, Discovery has not been able to cite authority showing otherwise. Likewise, nothing in the trial court’s order limited Receiver’s “power to prosecute claims” to satisfaction of the Default Judgment. Rather, the trial court’s order appointing Receiver gave Receiver “the power to prosecute any claims which form any part of the receivership assets.” To the extent Cherry had asserted valid claims against Discovery for unfair and deceptive trade practices, these certainly formed part of the receivership assets. Thus, the trial court did not lose subject matter jurisdiction over Receiver’s claims against Discovery when Tomlin and Discovery entered into the Settlement Agreement. Therefore, the trial court did not err by allowing Receiver to continue pursuing claims against Discovery on behalf of Cherry after Tomlin and Discovery entered into the Settlement Agreement.3 II. Motion for Summary Judgment 3 Accordingly, we deny Discovery’s Motion to Dismiss the Appeal. 10  EAGLES V. DISCOVERY INS. CO. Opinion of the Court Discovery argues the trial court erred in granting Receiver’s Motion for Summary Judgment. “Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows 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.” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citation and quotation marks omitted). “Evidence presented by the parties is viewed in the light most favorable to the non-movant.” Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003) (citing Dobson v. Harris, 352 N.C. 77, 83, 530 S.E.2d 829, 835 (2000)). Discovery argues the trial court erred by granting summary judgment in favor of Receiver because there was no evidence Cherry provided Discovery with “actual notice” of Tomlin’s lawsuit. “[I]n North Carolina, the duty to defend arises when an insurer receives actual notice of the underlying action.” Kubit v. MAG Mut. Ins. Co., 210 N.C. App. 273, 293, 708 S.E.2d 138, 154 (2011). When faced with a claim that notice was not timely given, the trier of fact must first decide whether the notice was given as soon as practicable. If not, the trier of fact must decide whether the insured has shown that he acted in good faith, [e.g.], that he had no actual knowledge that a claim might be filed against him. If the good faith test is met the burden then shifts to the insurer to show that its ability to investigate and defend was materially prejudiced by the delay. Great Am. Ins. Co. v. C.G. Tate Constr. Co., 303 N.C. 387, 399, 279 S.E.2d 769, 776 (1981). Discovery contends “actual notice” is “not simply notice that an insured has 11  EAGLES V. DISCOVERY INS. CO. Opinion of the Court been named in a lawsuit.” Rather, Discovery argues “actual notice” requires that the insured forward a copy of the summons served on him to the insurer. In support of its argument, Discovery cites Davenport v. Travelers Indemnity Co., 283 N.C. 234, 195 S.E.2d 529 (1973), which it also relied on in the trial court proceedings. In that case, the plaintiff was injured on the premises of a business run by Thomas Mills and Ralph Mills. 283 N.C. at 235-36, 195 S.E.2d at 531. Thomas and Ralph Mills were covered under an insurance policy that conditioned coverage on “immediately forward[ing] to the [insurance] company every demand, notice, summons, or other process received by him or his representative.” Id. at 237, 195 S.E.2d at 531. The name on the insurance policy was “Thomas Mills and Ralph Mills, d/b/a Mills Motor Company.” Id. at 241, 195 S.E.2d at 534. The plaintiff filed her a complaint asserting claims for her injuries against “Thomas Mills, t/a Mills Grocery.” Id. at 235, 195 S.E.2d at 531. Thomas Mills “turned over all of the suit papers to his attorney who then transmitted them to the defendant insurance company”; however, the defendant insurance company determined it had not issued an insurance policy to “Thomas Mills, t/a Mills Grocery,” and denied coverage. Id. at 236, 195 S.E.2d at 531. After that, the plaintiff amended the caption of her complaint to assert claims against the parties as they were named in their insurance policy. Id. However, the defendant insurance company never received notice of the amended complaint, and default judgments were subsequently entered against both Ralph Mills and Thomas Mills. Id. 12  EAGLES V. DISCOVERY INS. CO. Opinion of the Court The plaintiff filed suit against the defendant insurance company seeking recovery of the default judgments. Id. at 236, 195 S.E.2d at 531. The trial court concluded the defendant insurance company was not liable for the default judgment against Ralph Mills because the defendant insurance company never received notice of the amended complaint in which Ralph Mills was named. Id. However, it further concluded the defendant insurance company had “waived the sending of further papers by Thomas Mills” under the policy because it had denied coverage to Thomas Mills in the proceedings before the plaintiff filed her amended complaint. Id. As such, the defendant insurance company had a duty to defend Thomas Mills and was liable for the default judgment against him. Id. at 237, 195 S.E.2d at 531-32. This Court affirmed and our Supreme Court reversed, holding “the facts found by the trial judge do not support his conclusions of law that ‘when the insurance company denied coverage of the defendant Thomas Mills they waived the condition of the policy that all summonses and other papers be forwarded to them.’ ” Id. at 241, 195 S.E.2d at 534. The Court explained that because the defendant insurance company denied Thomas Mills coverage before the plaintiff amended her complaint, it could not have waived its right to notice in the amended lawsuit. Id. at 241, 195 S.E.2d at 534. In the present case, the trial court concluded Davenport was inapposite to the facts at bar because the defendant insurance company in Davenport “never received any notice of the Amendment to the Complaint, or the summons, or any other notice, 13  EAGLES V. DISCOVERY INS. CO. Opinion of the Court after the initial Complaint was amended to name the defendant insurance company’s insured.” The trial court noted here, by contrast, Discovery had “receive[d] the Complaint naming [Cherry] and alleging facts that, if true, would bring [Cherry] within the coverage of the policy it had issued to [Sauls] as an insured.” We agree with the trial court’s reasoning. While it is clear from the Record that Cherry did not personally forward Discovery summons or a copy of the complaint in the Tomlin Action, Discovery received copies of the complaint from Sauls and from Tomlin’s attorney.4 Similarly, in Kubit, the notice of the lawsuit did not come directly from the individual anesthesiologist plaintiffs but from the “practice manager” of their hospital. 210 N.C. App. at 276, 708 S.E.2d at 143. Here, unlike the insurer in Davenport, Discovery had notice of the underlying proceedings against Cherry.5 4 Tomlin’s attorney forwarded a copy of the lawsuit to Discovery on 26 January 2021—about one month after the complaint was filed. It is not clear from the Record when Sauls forwarded her copy of the lawsuit to Discovery. Accordingly, we presume Discovery had actual notice of the lawsuit by 26 January 2021. 5 The Davenport Court, in reaching its decision, quoted significant portions of the 8th Circuit’s decision in Campbell v. Continental Casualty Co. of Chicago, 170 F.2d 669, 6 A.L.R.2d 655 (8th Cir. 1948). In Campbell, the “insured’s principal contention” was that “he was not required to forward his summons and copy of petition to the insurer” because another party insured under the same policy “had previously delivered his summons and copy of petition to an employee in the insurer’s office and this constituted a sufficient compliance as to both of them.” 170 F.2d at 671. The 8th Circuit disagreed, noting “the insurer never knew, until after the default judgment was entered, that the insured had been brought into court by the service of process.” Id. Notably, Davenport’s discussion of this case is non-binding dicta. See Trs. of Rowan Tech. Coll. v. J. Hyatt Hammond Assocs., Inc., 313 N.C. 230, 242, 328 S.E.2d 274, 281 (1985) (“Language in an opinion not necessary to a decision is obiter dictum and later decisions are not bound thereby.”). Davenport’s holding was that the trial court’s findings did not support its conclusions, as the defendant insurance company had no notice of the amended complaint and thus “could not have knowingly and intentionally waived the policy provision upon which it . . . relies.” 283 N.C. App. at 241, 195 S.E.2d at 534. Indeed, the Court stated, “failure to give notice or immediately forward summons or other process received by the insured may be waived by denial of liability on other grounds”, id. at 238, 195 S.E.2d at 532 (emphasis added)—suggesting notice may be given through means other than forwarding summons. 14  EAGLES V. DISCOVERY INS. CO. Opinion of the Court Moreover, Cassandra Stallings, Discovery’s vice president of automotive claims, averred Discovery knew “both Sauls and Cherry had been sued”: [Counsel]: And [Sauls’ attorney] sent [Discovery] a copy of [Tomlin’s] lawsuit after it was filed; correct? [Stallings]: Yes, sir. [Counsel]: And [Discovery]—so [Discovery] knew that both Sauls and Cherry had been sued in connection with this accident; correct? [Stallings]: Yes. “The clear purpose of the notice provision is to protect the ability of the insurer to prepare a viable defense by preserving its ability fully to investigate the accident.” Great Am. Ins. Co. 303 N.C. at 397, 279 S.E.2d at 775. “No condition of timely notice will be given a greater scope than required to fulfill its purpose. . . . If, under the circumstances of a particular case, the purpose behind the [notice] requirement has been met, the insurer will not be relieved of its obligations.” Id. at 396, 279 S.E.2d at 775. Stallings’ deposition testimony undermines any assertion by Discovery that an alleged lack of notice undermined its ability to fully investigate the accident. Thus, Discovery’s argument it lacked notice is without merit. Even presuming Discovery’s knowledge Cherry had been named in the lawsuit was insufficient to trigger its duty to defend Cherry in the Tomlin Action, the trial court further concluded Discovery had waived the notice requirement by denying Cherry liability on other grounds. See Davenport, 283 N.C. at 238, 195 S.E.2d at 532 15  EAGLES V. DISCOVERY INS. CO. Opinion of the Court (“[F]ailure to give notice or immediately forward summons or other process received by the insured may be waived by denial of liability on other grounds.”). Indeed, the Record shows a Discovery claims adjuster told Sauls, when she reported that Cherry wanted her insurance information and she had refused to give it to him, Discovery “would not pay anything anyway because her [vehicle] was stolen.” Discovery essentially argues it did not waive its rights to notice when it made this statement because it was not a formal denial of coverage made directly to Cherry. Nevertheless, Discovery made a clear statement it would “not pay anything” on Cherry’s behalf, even if it did not make that statement directly to Cherry—which is all that Davenport appears to require. See id. at 238, 195 S.E.2d at 532 (“[D]enial of liability on other grounds is generally regarded as saying that payment would not have been made had the policy provisions been complied with[.]” (citations omitted)). Finally, the trial court additionally concluded that if Cherry was required to make a showing of good faith under Great American Insurance Co., Cherry had done so. The trial court concluded any alleged failure by Cherry to give notice was in good faith because “Cherry was not the named insured and did not know for certain that he was covered by Discovery[.]” It is true, “[a]nyone who knows that he may be at fault or that others have claimed he is at fault and who purposefully and knowingly fails to notify [the insurer] ought not to recover even if no prejudice [to the insurer] results.” Great Am. Ins. Co., 303 N.C. at 399, 279 S.E.2d at 776. Here, however, there is no indication Cherry’s 16  EAGLES V. DISCOVERY INS. CO. Opinion of the Court failure to personally contact Discovery was purposeful. See id. The Record shows Cherry attempted to get Sauls’ insurance information, but she refused to give it to him. When asked if he provided Discovery with a copy of the lawsuit in which he had been named, Cherry responded he “had no way to do that.” The allegations in the complaint alleged facts which, if true, would bring Cherry within Discovery’s coverage. See Waste Mgmt. of the Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 691, 340 S.E.2d 374, 377 (1986) (“An insurer’s duty to defend is ordinarily measured by the facts as alleged in the pleadings[.]”). Specifically, the complaint alleged: (1) Cherry was driving Sauls’ vehicle when the crash occurred, and (2) frequently drove the vehicle with Sauls’ permission and consent, and (3) Cherry “had lawful possession” of the vehicle at the time of the accident. Discovery had notice Cherry had been operating Sauls’ vehicle at the time of the accident and that claims had been asserted against him in the Tomlin Action. Further, presuming that notice was insufficient, the Record tends to show Cherry acted in good faith. Thus, the trial court did not err in granting Receiver’s Motion for Summary Judgment as to his claims for Bad Faith Failure to Defend, Breach of the Contractual Duty to Defend, and Unfair and Deceptive Trade Practices. III. Attorney Fee Award Both parties present arguments relating to the trial court’s award of attorney fees. “This Court employs a two-pronged standard of review in considering a trial court’s award of fees pursuant to N.C. Gen. Stat. § 75-16.1(1).” Faucette v. 6303 17  EAGLES V. DISCOVERY INS. CO. Opinion of the Court Carmel Road, LLC, 242 N.C. App. 267, 278, 775 S.E.2d 316, 325 (2015) (citation omitted). “First, we determine whether any competent evidence supports the trial court’s findings of fact and whether these findings support the court’s conclusions of law. Second, we review the trial court’s fee award for abuse of discretion.” Id. (citations omitted). “A trial court abuses its discretion only when its award of fees is manifestly unsupported by reason or wholly arbitrary.” Id. (citation and quotation marks omitted). A. Awarding attorney fees Discovery argues the trial court erred by awarding Receiver attorney fees. Under N.C. Gen. Stat. § 75-16.1(1), in any suit instituted by a person who alleges the defendant committed unfair or deceptive trade practices, the trial court may, “in his discretion, allow a reasonable attorney fee” to the attorney representing the prevailing party upon a finding [t]he party charged with the violation has willfully engaged in the act or practice, and there was an unwarranted refusal by such party to fully resolve the matter which constitutes the basis of such suit[.] Here, the trial court found Discovery “willfully engaged in acts or practices prohibited by law, and that [Discovery] made an unwarranted refusal to even attempt a resolution of Tomlin’s claim against Cherry and [Discovery].” Discovery asserts the trial court’s Finding was erroneous because there was “no evidence” Discovery: (1) committed a “willful” act or (2) made an unwarranted refusal to settle. 18  EAGLES V. DISCOVERY INS. CO. Opinion of the Court 1. Willfulness “An act is ‘willful’ within the meaning of N.C. Gen. Stat. § 75-16.1(1) if it is ‘done voluntarily and intentionally with the view to doing injury to another.’ ” Faucette, 242 N.C. App. at 279, 775 S.E.2d at 326 (quoting Standing v. Midgett, 850 F. Supp. 396, 404 (E.D.N.C. 1993)). In the instant case, the Record shows Discovery did not conduct an investigation consistent with the directive of its claims manual before informing Sauls that Cherry would not be covered under her policy. Further, as discussed above, the allegations in the complaint alleged facts which, if true, would bring Cherry within Discovery’s coverage, but Discovery did not take steps to determine whether Cherry was entitled to coverage under the Policy. Likewise, Stallings’ deposition testimony was that Discovery knew Cherry was named in the Tomlin Action, but Discovery did not make any efforts to defend him. She also testified Discovery knew the injury that could be done to an insured if the company failed to defend a lawsuit. Thus, the Record tends to disclose Discovery failed to make an effort to defend Cherry or inquire into whether he came within Policy coverage despite knowing he had been named in Tomlin’s Lawsuit. Therefore, the Record supports the trial court’s Finding that Discovery’s conduct was willful. 2. Unwarranted refusal to settle The trial court also found Discovery made an unwarranted refusal to settle: 19  EAGLES V. DISCOVERY INS. CO. Opinion of the Court 6. [Discovery] made an unwarranted refusal even to attempt a resolution of the claim against it and its insured, Ikeem Cherry, in the [Tomlin Lawsuit], which refusal ultimately led to the appointment of Benjamin Eagles as Receiver for Ikeem Cherry . . . and then to the filing of this action and of the previously consolidated case. There was thus an unwarranted refusal by [Discovery] “to fully resolve the matter which constitutes the basis of [this] suit.” See N.C. Gen. Stat. § 75-16.1. 7. Further, [Discovery] persisted in pursuing litigation in both this case and in the previously consolidated case for nearly two years, with apparently no offer to settle Plaintiff’s claims herein until June 22, 2024, after it had shortly before settled the previously consolidated case, and after the hearing on [Discovery’s] motion for summary judgment shortly before did not result in an outright victory for [Discovery]. Although the Court was never called upon to rule on the issue in the previously consolidated case, it appears to the Court, as stated in the July 22 Order, that there was a lack of facts to support [Discovery’s] claim in that previously consolidated case. There was thus an unwarranted refusal by [Discovery] “to fully resolve the matter which constitutes the basis of [this] suit.” See N.C. Gen. Stat. § 75-16.1. Discovery argues the trial court erred by basing Finding 6 on Discovery’s actions in the Tomlin Action, as opposed to the suit at bar. We disagree. In order to award attorney fees, the trial court must find there was an unwarranted refusal to fully resolve the matter which constitutes the basis of the suit. N.C. Gen. Stat. § 75-16.1(1). The present case is inextricably intertwined with the Tomlin Action: the basis of the case at bar is Discovery’s bad faith and failure to defend Cherry in the Tomlin Action. Further, the Record shows Discovery did not defend Cherry in the Tomlin Action or make any attempts to settle that suit. Thus, the trial court’s Finding that Discovery made an unwarranted refusal to settle “the 20  EAGLES V. DISCOVERY INS. CO. Opinion of the Court matter which constitutes the basis of [this] suit” is supported by competent evidence. See id. Moreover, even presuming the trial court’s consideration of the Tomlin Action was inappropriate, it made a separate Finding that Discovery made an unwarranted refusal to settle the case at bar. In Finding 7, the trial court found Discovery had been litigating the present case for “nearly two years, with apparently no offer to settle Plaintiff’s claims” until shortly after the summary judgment hearing. Discovery contends Finding 7 is erroneous because it found that fees should be awarded to the Receiver because Discovery “persisted in pursuing litigation in . . . [the Lenoir County Action][.]” This mischaracterizes the trial court’s Finding. While the trial court did find Discovery persisted in pursuing litigation in the Lenoir County Action, it further found Discovery did so with “apparently no offer to settle Plaintiff’s claims[.]” That Discovery pursued litigation without making an offer to settle is the crux of the Finding. Discovery’s challenge to this Finding is, therefore, unavailing. B. Awarding fees and costs for Cherry’s attorney Discovery argues the trial court erred by awarding Receiver compensation for the fees and costs he incurred in hiring an attorney to represent Cherry in the Lenoir 21  EAGLES V. DISCOVERY INS. CO. Opinion of the Court County Action. Specifically, Discovery argues hiring an attorney for Cherry was outside the scope of the Receiver’s authority.6 We disagree. As discussed above, the trial court gave Receiver the power to “prosecute any claims which form any part of the receivership assets” and to “retain counsel and experts to assist with the prosecution of such claims.” Thus, Receiver had authority to incur legal fees. Discovery further argues the trial court did not consider the required statutory factors in awarding these fees. See United Labs., Inc. v. Kuykendall, 335 N.C. 183, 195, 437 S.E.2d 374, 381-82 (1993) (explaining trial court should consider time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney, novelty and difficulty of the questions of law, adequacy of the representation, the difficulty of the problems faced by the attorney, and the kind of case for which the fees are sought and the result obtained). See also N.C. State Bar Rules, Ch. 1