Brown v. Truck Ins. Exchange

• Decision Date: 21 May 1991
• Docket Number: No. 9015SC713,9015SC713
• Citation: 404 S.E.2d 172,103 N.C.App. 59
• Parties: Robin G. BROWN, Personal Representative of the Estate of Carl S. Brown, Plaintiff, v. TRUCK INSURANCE EXCHANGE, A California Corporation, Defendant.
• Court: North Carolina Court of Appeals

Page 172

404 S.E.2d 172

103 N.C.App. 59

Robin G. BROWN, Personal Representative of the Estate of Carl S. Brown, Plaintiff, v. TRUCK INSURANCE EXCHANGE, A California Corporation, Defendant.

No. 9015SC713.

Court of Appeals of North Carolina.

May 21, 1991.

Northen, Blue, Little, Rooks, Thibaut & Anderson by J. William Blue, Jr. and Jo Ann Ragazzo Woods, Chapel Hill, for plaintiff-appellant.

Haywood, Denny, Miller, Johnson, Sessoms & Patrick by George W. Miller, Jr. and E. Elizabeth Lefler, Durham, for defendant-appellee.

JOHNSON, Judge.

This is an appeal from judgment by the court without a jury concluding as a matter of law that an insurance policy issued by defendant does not provide underinsured motorists coverage for Carl Brown. The court made, inter alia, the following findings of fact, to which plaintiff does not except.

On 29 June 1985, Carl Brown was a passenger in a car owned by a third party when it was struck by a vehicle driven by Terri Tripp. Mr. Brown sustained fatal injuries. Robin G. Brown, the personal representative of his estate, brought suit against Terri Tripp and obtained a jury verdict in the amount of $326,485.14. Plaintiff received a total of $170,000.00 from various insurance carriers in partial satisfaction of that judgment.

Prior to his death, Brown was engaged in the trucking business and had entered into an "Independent Contractor Operating Agreement" with Schneider National Carriers, Inc. ("Schneider") whereby Brown leased his services and certain tractor truck units which he owned to Schneider. The agreement required Brown to pay all operating expenses, permits and workers' compensation insurance coverage. Schneider was legally obligated to maintain insurance coverage for the protection of the public pursuant to 49 U.S.C. § 10927 and regulations of the Interstate Commerce Commission.

Forms from the Division of Motor Vehicles were entered into evidence listing Schneider as applicant on a "North Carolina Registration Application." An "Owners Certificate for Eligibility to Renew Registration" form certified that for the motor vehicles so described on the application [being three trucks owned by Brown and leased to Schneider], Schneider had financial responsibility as required by law with Truck Insurance Exchange, Inc., on policy No. 8-03-00-73. Schneider was listed as named insured on the declarations page of the policy. Registration tags were issued in the name of Schneider National Carriers, Inc., covering the tractor truck units leased to Schneider by Brown.

Policy No. 8-03-00-73 was in full force and effect on the date that Brown was killed. At the time of the accident Carl Brown was not engaged in the business covered by the "Independent Contractor Operating Agreement" and was not in one of his three leased trucks. The trial court concluded that the policy did not provide underinsured motorists coverage for Carl Brown.

Policy No. 8-03-00-73 contains Endorsement No. 4 which states:

SPECIAL ADDITIONAL INSURED ENDORSEMENT

In consideration of the premium it is agreed that such insurance as is afforded by this policy for Bodily Injury Liability and for Property Damage Liability with respect to any automobile hired by the named insured shall also apply to the owner thereof, provided the actual use of the automobile is in the business of the named insured.

On page seven of the policy, under "Conditions" is the following, in pertinent part:

FINANCIAL RESPONSIBILITY LAWS: When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, such insurance as is afforded by this policy for bodily injury liability or for property damage liability shall comply with the provisions of such law to the extent of the coverage and limits of liability required by such law.

The definitions section of the policy states:

INSURED means (1) the named insured or a relative, (2) any other person while occupying an insured motor vehicle, and (3) any person with respect to damages he is entitled to recover because of bodily injury to which this insurance applies sustained by an insured under (1) or (2) above.

NAMED INSURED: If the insured named in item 1 of the Declarations is an individual, the term "named insured" includes his spouse if a resident of the same household.

Plaintiff argues that Carl Brown is a "named insured" under Endorsement 4 and that under this Court's decision in Crowder v. N.C. Farm Bureau Mut. Ins. Co., 79 N.C.App. 551, 340 S.E.2d 127, disc. rev. denied, 316 N.C. 731, 345 S.E.2d 387 (1986), he is covered under the policy regardless that he was killed while riding in an vehicle other than one of his trucks while engaged in the business of transporting freight.

Defendant argues that Carl Brown is not the "named insured" because he is not listed as such on the declarations page of the policy but is an "additional insured" under Endorsement 4 and therefore coverage as to him is limited by the terms of the endorsement.

"When examining cases to determine whether insurance coverage is provided by a particular automobile liability insurance policy, careful attention must be given to the type of coverage, the relevant statutory provisions, and the terms of the policy." Smith v. Nationwide Mut. Ins. Co., 328 N.C. 139, 142, 400 S.E.2d 44, 47 (1991). Thus, we must first determine whether Carl Brown is a covered person under the relevant statutory provisions and if not, whether he is covered under the terms of the insurance contract.

Carl Brown died on 29 June 1985, therefore the relevant statute is G.S. § 20-279.21. The type of insurance at issue here, underinsured motorist coverage (UIM), is governed by § 20-279.21(b)(4) which incorporates by reference the definition of "persons insured" that is found in § 20-279.21(b)(3), dealing with uninsured motorists (UM) coverage. Thus, for both UM and UIM coverage, "persons insured" means

the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle or otherwise, and any person who uses with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies and a guest in such motor vehicle to which the policy applies or the personal representative of any of the above or any other person or persons in lawful possession of such motor vehicle.

G.S. § 20-279.21(b)(3). Smith, 328 N.C. 139, 143, 400...