Braddy v. Nationwide Mut. Liability Ins. Co.

• Decision Date: 21 May 1996
• Docket Number: No. COA95-910,COA95-910
• Citation: 122 N.C.App. 402,470 S.E.2d 820
• Parties: Kevin E. BRADDY, Plaintiff-Appellant, v. NATIONWIDE MUTUAL LIABILITY INSURANCE COMPANY, Defendant-Appellee.
• Court: North Carolina Court of Appeals

Page 820

470 S.E.2d 820

122 N.C.App. 402

Kevin E. BRADDY, Plaintiff-Appellant, v. NATIONWIDE MUTUAL LIABILITY INSURANCE COMPANY, Defendant-Appellee.

No. COA95-910.

Court of Appeals of North Carolina.

May 21, 1996.

Brown & Bunch by Charles Gordon Brown and Scott D. Zimmerman, Chapel Hill, for plaintiff-appellant.

Bryant, Patterson, Covington & Idol, P.A. by Lee A. Patterson, II, and W. Randall Stroud, Durham, for defendant-appellee.

MARK D. MARTIN, Judge.

Plaintiff Kevin E. Braddy (Braddy) appeals from judgment entered on jury verdict awarding Braddy $70,000 in damages.

On 8 June 1990 Braddy, while riding his motorcycle, collided with a pickup truck operated by Thomas Brooks at the intersection of N.C. 157 and State Road 1184 in Orange County. Brooks was issued an unsafe movement citation for his actions leading up to the accident and fined $50. On 16 June 1990 Brooks paid the $50 fine without contesting the citation and, thereby, admitted he was guilty of an unsafe movement.

Brooks was covered under an insurance policy (Brooks policy) issued by Nationwide Mutual Liability Insurance Company (Nationwide) which had a $50,000 limit for bodily injury. Braddy had underinsured motorist (UIM) coverage under three separate policies (UIM policies) also issued by Nationwide. It is undisputed the UIM policies could be stacked to provide $600,000 in UIM coverage. On 24 February 1993 Braddy, Brooks and Nationwide executed a Partial Settlement Agreement (Agreement) under which Brooks and Nationwide agreed to compensate Braddy for his injuries and damages up to the $50,000 limit of the Brooks policy. Braddy also expressly reserved the right "to bring any actions necessary against Brooks [and] Nationwide ... to recover any unsatisfied portion of Braddy's Claim...."

On 4 June 1993 Braddy, alleging the $50,000 had not fully compensated him for his injuries, instituted the present action. On 23 January 1995 Braddy voluntarily dismissed Brooks without prejudice as a party defendant to the action leaving only Braddy's claims for UIM coverage (Count IV) and bad faith refusal to settle and punitive damages (Count V) against Nationwide. On the same day, the trial court severed Counts IV and V; and, pursuant to N.C.Gen.Stat. § 20-279.21(b)(4), ordered Nationwide remain an unnamed defendant.

After hearing all the evidence, the jury returned the following verdict:

1. Was the plaintiff injured by the negligence of the defendant?

ANSWER: Yes

2. Did the plaintiff by his own negligence contribute to his injury?

ANSWER: No

3. What amount, if any, is the plaintiff entitled to recover for personal injury?

ANSWER: $70,000

On 27 January 1995 the trial court entered judgment in favor of plaintiff for $25,114.98 representing $70,000 less the $50,000 already paid pursuant to the settlement agreement, plus pre-judgment interest and $2,480.46 in costs.

On appeal Braddy contends the trial court erred by: (1) bifurcating Counts IV and V; (2) ordering Count IV tried as a personal injury action rather than a contract action; (3) allowing Nationwide, pursuant to N.C.Gen.Stat. § 20-279.21(b)(4), to proceed as an unnamed defendant; (4) excluding statements by Nationwide valuing Braddy's claim; (5) excluding expert testimony regarding the appropriate amount of damages for Braddy's injuries; and (6) denying Braddy's motion for a new trial.

I.

We first consider Braddy's contention the trial court abused its discretion by bifurcating Counts IV and V.

N.C.R.Civ.P. 42(b) provides, in pertinent part, "[t]he court may in furtherance of convenience or to avoid prejudice ... order a separate trial of any claim...." N.C.Gen.Stat. § 1A-1, Rule 42(b) (1990). A bifurcation order will not be disturbed on appeal unless the trial court abused its discretion, Hoots v. Toms and Bazzle, 100 N.C.App. 412, 417, 396 S.E.2d 820, 822-823 (1990), by making a decision "manifestly unsupported by reason," White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985). In any event, "[a] bifurcated trial is particularly appropriate where separate submission of issues avoids confusion and promotes a logical presentation to the jury, and where resolution of the separated issue will potentially dispose of the entire case." In re Will of Hester, 320 N.C. 738, 743, 360 S.E.2d 801, 804, reh'g denied, 321 N.C. 300, 362 S.E.2d 780 (1987) (emphasis added) (citations omitted). See also Hoots, 100 N.C.App. at 417, 396 S.E.2d at 823 (finding no abuse of discretion when trial court severed certain issues which "had the advantage of possibly making it unnecessary to try the other issues").

The present record establishes the trial court, by severing Counts IV and V, clearly reduced "the delay, expense and inconvenience to all participants." 2 G. GRAY WILSON, NORTH CAROLINA CIVIL PROCEDURE § 42-3 (2d ed. 1995). Further, we note the resolution of Count IV, in fact, obviated the need for a trial on Count V. See N.C.Gen.Stat. §§ 58-63-15(11) g-h (1994). Therefore, under Hester and Hoots, we cannot say the trial court abused its discretion by bifurcating Counts IV and V.

II.

Braddy also contends the trial court erred by ordering Count IV tried as a personal injury action rather than a breach of contract action.

At the outset we note, although the legal principles herein followed are often enunciated in uninsured motorist (UM) cases, this Court has nonetheless found them applicable to UIM actions. Brace v. Strother, 90 N.C.App. 357, 360, 368 S.E.2d 447, 449, disc. review denied, 323 N.C. 171, 373 S.E.2d 104 (1988), overruled on other grounds, Ragan v. Hill, 337 N.C. 667, 447 S.E.2d 371 (1994).

It is well settled that "[u]nless an insured is ' "legally entitled to recover damages" ... from the [underinsured] motorist the contract upon which he sues precludes him from recovering against [the UIM carrier].' " Id. (quoting Brown v. Casualty Co., 285 N.C. 313, 320, 204 S.E.2d 829, 834 (1974)). See also Williams v. Insurance Co., 269 N.C. 235, 237, 152 S.E.2d 102, 105 (1967) (to recover under a UM endorsement the claimant must show "(1) he is legally entitled to recover damages, (2) from the owner ... of an uninsured automobile, (3) because of bodily injury, (4) caused by accident, and (5) arising out of the ... use of the uninsured automobile"). Put simply, the right to recover under a UIM endorsement is "derivative and conditional" and, consequently, any defense available to the alleged tortfeasor is also available to the insurer. Brace, 90 N.C.App. at 360, 368 S.E.2d at 449.

We believe, therefore, "[i]t is manifest ... that despite the contractual relation between plaintiff insured and defendant [UIM] insurer, this action is actually one for the tort allegedly committed by the [underinsured] motorist." Brown, 285 N.C. at 319, 204 S.E.2d at 834. Accordingly, as Count IV sounds in tort, we affirm the trial court's order that Count IV be tried as a personal injury action rather than a contract action.

III.

We next consider Braddy's contention the trial court erred by allowing Nationwide, pursuant to N.C.Gen.Stat. § 20-279.21(b)(4), to remain an unnamed defendant.

Neither party disputes that section 20-279.21(b)(4) applies to the present UIM policies. See Baxley v. Nationwide Mutual Ins. Co., 115 N.C.App. 718, 721, 446 S.E.2d 597, 598 (1994) ("[T]he provisions of [an applicable] statute become terms of the policy to the same extent as if they were written in the policy...."). Therefore, we must now determine whether, under the present facts and circumstances, section 20-279.21(b)(4) permitted Nationwide to remain an unnamed defendant.

Nationwide cites Sellers v. N.C. Farm Bureau Mut. Ins. Co., 108 N.C.App. 697, 424 S.E.2d 669 (1993) as being dispositive of this issue. In Sellers, plaintiff filed a negligence action against defendant tortfeasor. Id. at 698, 424 S.E.2d at 669. Plaintiff subsequently amended her complaint to add a claim for UIM coverage. Id. As plaintiff admitted she had settled and released her claim against the tortfeasor, the trial court granted the tortfeasor's motion for summary judgment. Id. at 698, 424 S.E.2d at 669-670. After dismissing the action against the tortfeasor, the trial court substituted the heretofore unnamed UIM carrier as the named defendant in the action. Id. at 698, 424 S.E.2d at 670.

On appeal this Court reversed the trial court holding, "release or settlement of an action against the tortfeasor does not vitiate the express statutory terms of N.C.G.S. 20-279.21(b)(4) such that the action can continue with the [UIM] carrier remaining as an unnamed defendant." Id. at 699-700, 424 S.E.2d at 670 (emphasis added). Indeed, as the Sellers Court admonished:

[section 20-279.21(b)(4) ] is, to us, clear and unambiguous. The [UIM] insurer ... "shall have the right to appear in defense of the claim without being named as a party therein, and ... may participate in the suit as fully as if it were a party." This language and the cases which demonstrate its application convince us that even if the tortfeasor is released from the action, the case can continue, if requested [by the UIM insurer pursuant to section 20-279.21(b)(4) ], in the tortfeasor's name only.

Sellers, 108 N.C.App. at 699, 424 S.E.2d at 670 (citation omitted) (emphasis added). The Sellers Court indicated this interpretation was necessary to ensure "[juries] would ... concentrate on the facts and the law as instructed, rather than the parties...." Id.

In an attempt to distinguish the present case from Sellers, Braddy contends he joined Brooks as a party defendant at Nationwide's request and subsequently dismissed Brooks after discovering Nationwide concealed its waiver of subrogation rights against Brooks from 1992 to 1995. Assuming Braddy's allegation is true, we nevertheless conclude this is a distinction without legal significance.

Although the separate concurrence opines that section 20-279.21(b)(4) does not expressly envision the UIM carrier defending as an unnamed party when the...