Erie Ins. Exch. v. Smith
Decision Date | 16 March 2021 |
Docket Number | No. COA 20-246,COA 20-246 |
Citation | 856 S.E.2d 874 |
Parties | ERIE INSURANCE EXCHANGE, Plaintiff v. Edward R. SMITH; Archie N. Smith, a minor; Emily A. Tobias, as Administrator of the Estate of John Pinto, Jr., Deceased; Valley Auto World, Inc.; Universal Underwriters Insurance Company; VW Credit Leasing, Ltd.; and Doe Insurance Companies 1-3, Defendants |
Court | North Carolina Court of Appeals |
Martineau King PLLC, Charlotte, by Lee M. Thomas and Elizabeth A. Martineau, for plaintiff-appellee Erie Insurance Exchange.
Van Camp, Meacham & Meacham, PLLC, Pinehurst, by Thomas M. Van Camp, for defendant-appellees the Smiths.
Gallivan, White & Boyd, P.A., by James M. Dedman, Charlotte, and Tyler L. Martin, for defendant-appellant Universal Underwriters Insurance Company.
¶ 1 This appeal involves a Declaratory Judgment action filed consistent with N.C. Gen. Stat. § 1-283 et seq. , to establish the respective obligations, if any, of Erie Insurance Exchange (Erie) and Universal Underwriters Insurance Company (Universal) to provide insurance coverage for liability arising from a 2016 car accident. Specifically, Universal appeals from an Order entered 17 January 2020, granting in part Erie's Motion for Summary Judgment, denying Universal's cross Motion for Summary Judgment, and entering a Declaratory Judgment adjudicating:
¶ 2 1. Universal was obligated to provide liability insurance coverage with limits of $500,000.00, umbrella liability coverage with limits of $10,000,000.00, and that the aggregate coverage of $10,500,000.00 was the primary insurance coverage for the liability arising from the 2016 accident; and
¶ 3 2. Erie was obligated to provide excess liability insurance coverage with limits in the amount of $100,000.00 per person and $300,000.00 per accident.
¶ 4 The factual background giving rise to the present case is set forth in this Court's earlier opinion in Smith v. USAA Cas. Ins. Co. , 261 N.C. App. 40, 819 S.E.2d 610 (2018), involving a separate but related action arising from the same underlying facts.
Id. at 42-43, 819 S.E.2d at 612 (footnote and quotation marks omitted).
¶ 5 After the accident, the Smiths filed a Complaint alleging a Negligence action against Pinto's Estate and a Declaratory Judgment action seeking to establish, in part, the respective obligations of Erie and Universal to provide insurance coverage. Id. at 43, 819 S.E.2d at 612. Erie brought a crossclaim for Declaratory Judgment in that action. Id. In that case, the trial court also entered Summary Judgment concluding Universal was obligated to provide aggregate primary insurance coverage of up to $10,500,000.00 and Erie's policy provided excess coverage. Id. at 44, 819 S.E.2d at 613. On appeal, this Court vacated that order and remanded that case for additional proceedings after concluding there was a failure to join necessary parties precluding entry of a Declaratory Judgment. Id. at 49-50, 819 S.E.2d at 616-17. On remand, the trial court entered a Consent Order severing the Smiths’ Negligence action from the Declaratory Judgment action and permitting Erie to re-plead its claim for Declaratory Judgment. Id.
¶ 6 As a result, on 19 November 2018, Erie, who issued the auto insurance policy to Pinto covering his 2004 Saturn, initiated this action by filing a Complaint for Declaratory Judgment "seeking a determination [by the trial court] concerning its rights and obligations under a policy of insurance issued by it[.]" Universal, as the insurer for Valley, the dealer that sold the Beetle to Pinto, filed its Answer to Erie's Complaint on 30 January 2019, in which it also asserted counterclaims against Erie and sought Declaratory Judgment. On 21 October 2019, both Erie and Universal filed cross Motions for Summary Judgment seeking a determination of the application of N.C. Gen. Stat. § 20-75.1 addressing the conditional delivery of vehicles by a dealer to a purchaser and the obligations of a dealer to provide liability insurance in conditional delivery transactions.
¶ 7 After hearing arguments from the parties on 13 December 2019, the trial court entered its Order on 17 January 2020, ultimately granting Erie's Motion for Summary Judgment in part, denying Universal's Motion for Summary Judgment, and entering Judgment against Universal and Erie. The trial court determined "all necessary parties to this dispute have been joined and provided the opportunity to be heard in this matter." Then, the trial court concluded the transaction between Pinto and Valley, as the dealer, was a conditional sale and delivery and "Pinto was operating a covered vehicle with permission, [and] he became an insured under the terms of the Dealer's policy[ ]" and, therefore, N.C. Gen. Stat. § 20-75.1 applied. As it related to the policies’ respective coverage, the trial court ordered:
¶ 8 Universal filed Notice of Appeal from the trial court's Order on 29 January 2020. The trial court's Order, which fully and conclusively establishes the rights and responsibilities of the parties in a Declaratory Judgment, operates as a final judgment. See N.C. Gen. Stat. § 1-283 (2019). Thus, this Court has jurisdiction to review Universal's appeal as a final judgment of a superior court. N.C. Gen. Stat. § 7A-27(b)(1). In addition, without taking a cross appeal, Erie purports to challenge the trial court's ruling it is obligated to provide excess insurance coverage for the accident.
¶ 9 The dispositive issues in this appeal are: (I) whether Valley's sale and delivery of the Beetle to Pinto was a conditional delivery under N.C. Gen. Stat. § 20-75.1 such that Universal, as the dealer's insurer, was obligated to provide insurance coverage at the time of the accident; and if so, (II) whether such insurance coverage by Universal operated as the primary or excess insurance coverage; (III) what coverage limits are applicable under Universal's liability insurance policy with the dealer; (IV) whether Universal is obligated to provide additional coverage for the accident under its umbrella insurance policy covering the dealer; and (V) whether this Court has appellate jurisdiction to review Erie's separate challenge to the trial court's Order concluding Erie is obligated to provide excess insurance coverage for liability arising from the accident.
¶ 10 We review a trial court's grant of summary judgment de novo. Forbis v. Neal , 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007) (citation omitted). We also review questions of statutory interpretation and a "lower court's interpretation of an insurance policy's language[,]" de novo. Satorre v. New Hanover Cnty. Bd. of Comm'rs , 165 N.C. App. 173, 176, 598 S.E.2d 142, 144 (2004) ; JVC Enters., LLC v. City of Concord , 269 N.C. App. 13, 16, 837 S.E.2d 206,...
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