Hardin v. American Mut. Fire Ins. Co., 377

• Decision Date: 17 January 1964
• Docket Number: No. 377,377
• Citation: 261 N.C. 67,134 S.E.2d 142
• Court: North Carolina Supreme Court
• Parties: Ralph Williams HARDIN v. The AMERICAN MUTUAL FIRE INSURANCE COMPANY.

Page 142

134 S.E.2d 142

261 N.C. 67

Ralph Williams HARDIN v. The AMERICAN MUTUAL FIRE INSURANCE COMPANY.

No. 377

Supreme Court of North Carolina.

Jan. 17, 1964

Walser & Brinkley, by Walter F. Brinkley, Lexington, for defendant appellant.

Charles F. Lambeth, Jr., Thomasville, for plaintiff appellee.

PARKER, Justice.

Plaintiff commenced this action by the issuance of summons on 4 January 1963, which was served on defendant on 10 January 1963. In his complaint he alleges in substance:

On 18 November 1961 he was injured while riding as a passenger in his Ford automobile, which at the time was being driven by Ruby Blackwell, when his automobile was involved in a collision in the intersection of U. S. Highway 74 and North Carolina Highway 226 in the town of Shelby, North Carolina, with a Plymouth automobile which was registered in South Carolina and was being operated by Ronnie Lee Bradley. Specific acts of negligence on the part of Bradley are alleged as the proximate cause of the collision and of personal injuries sustained by plaintiff in the collision. The particular personal injuries sustained by plaintiff are alleged in detail.

On or about 11 October 1961 the defendant insurance company had issud to plaintiff an automobile liability policy No. ACF 43 34 11, under the terms of which plaintiff was the named insured, which policy was in effect at the time of the collision, covering the Ford automobile in which plaintiff was riding. This policy of automobile liability insurance has attached to it an endorsement effective 11 October 1961, and forming a part thereof, entitled 'PROTECTION AGAINST UNINSURED MOTORISTS INSURANCE.' A copy of this endorsement is attached to the complaint and marked Exhibit A. Its provisions relevant to this appeal are as follows:

'In consideration of the payment of the premium [$2.00] for this endorsement, the company agrees with the named insured, subject to the limits of liability, exclusions, conditions and other terms of this endorsement and to the applicable terms of the policy:

'INSURING AGREEMENTS

'I. DAMAGES FOR BODILY INJURY AND PROPERTY DAMAGE CAUSED BY UNINSURED AUTOMOBILES: To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of:

'(a) bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' sustained by the insured;

'(b) [Relates to property damage and is not applicable.]

caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile

'II. DEFINITIONS.

'(c) UNINSURED AUTOMOBILE. The term 'uninsured automobile' means:

'(1) with respect to damages for bodily injury and property damage an automobile with respect to the ownership, maintenance or use of which there is, in the amounts specified in the North Carolina Motor Vehicle Safety and Financial Responsibility Act, neither (i) in cash or securities on file with the North Carolina Commissioner of Motor Vehicles nor (ii) a bodily injury and property damage liability bond or insurance policy, applicable to the accident with respect to any person or organization legally responsible for the use of such automobile, or * * *.'

Ronnie Lee Bradley was an uninsured motorist, and the automobile he was operating at the time of the collision resulting in injuries to plaintiff was an uninsured automobile within the meaning of the provisions of the uninsured motorists endorsement made a part of the policy issued by the defendant insurance company to plaintiff, and that under the terms of this endorsement plaintiff is entitled to recover the sum of $5,000 as the insured's portion of the damages he sustained. He duly notified defendant of his claim, but it has refused and still refuses to pay it, and the defendant is now indebted to him in the sum of $5,000 with interest.

Defendant in its answer admits the allegations of the complaint relating to the residence of plaintiff, its existence as an insurance corporation, and the ownership of the automobiles, but it denies that plaintiff was injured by the negligence of Ronnie Lee Bradley. Defendant further admits that it issued to plaintiff the automobile liability insurance policy described in the complaint, with an endorsement attached thereto and made a part thereof, as set forth in plaintiff's exhibit attached to the complaint, providing protection against uninsured motorists, and that said policy with its endorsement was in effect on 18 November 1961, but it denies that the automobile operated by Ronnie Lee Bradley was an uninsured automobile within the provisions of the endorsement attached to its policy. It further admits receipt of notice of claim from plaintiff and its denial of any liability.

For a First Further Answer and Defense, it pleads contributory negligence of plaintiff as a bar to recovery. For a Second Further Answer and Defense, it pleads its right to have Ronnie Lee Bradley and the owner of the automobile he was driving at the time of the collision made defendants in this action.

For a Third Further Answer and Defense, it alleges that at the time of the collision in which plaintiff was injured, a policy of automobile liability insurance insuring Ronnie Lee Bradley against liability for damages caused by the negligent operation of the automobile which he was driving at that time had been theretofore issued by the Guaranty Insurance Exchange. This policy had been issued to Richard Bradley, the father of Ronnie Lee Bradley, covered the Plymouth automobile which Ronnie Lee Bradley was operating at the time of the collision, and was in full force and effect at such time. This policy provided for the payment of damages in an amount equal to or in excess of the amount specified in the North Carolina Motor Vehicle Safety and Financial Responsibility Act and qualified under the provisions of Paragraph II (c) (1) (i) and (ii) of the Insuring Agreements of the endorsement forming a part of the automobile liability insurance policy as set forth in Exhibit A as a 'bodily injury and property damage liability bond or insurance policy, applicable to the accident with respect to any person or organization legally responsible for the use of such automobile.'

The Guaranty Insurance Exchange became insolvent, and on 29 August 1962 was placed in receivership in the State of Kansas where its principal office was located. It was further placed in receivership in the State of South Carolina on 4 September 1962. Subsequent to 18 November 1961 and until the date of its insolvency, the Guaranty Insurance Exchange engaged in the normal course of its business, including the investigation, determination and settlement of claims against it, and the defense of any claims which were determined to be unfounded. The Guaranty Insurance Exchange investigated the claim of plaintiff. The plaintiff instituted suit against Ronnie Lee Bradley and Richard Bradley, and the Guaranty Insurance Exchange employed counsel to defend this suit.

It is informed and believes that this action is still pending in the superior court of Davidson County, but that counsel employed by the Guaranty Insurance Company have withdrawn from the defense, and that the Guaranty Insurance Exchange is not now in a position to provide a defense for its insureds or to pay at this time any judgment which may be recovered against them to the extent provided by the Motor Vehicle Safety and Financial Responsibility Act of North Carolina.

There was at the time of the occurrence of the accident upon which plaintiff's claim is based a bodily injury and property damage liability insurance policy in effect on the automobile which collided with the automobile of the plaintiff, and the subseqnent insolvency of the company which issued this policy does not invoke the coverage of an uninsured motorists endorsement issued by defendant to plaintiff, and the defendant pleads the existence of this automobile liability policy issued by the Guaranty Insurance Exchange covering the automobile which Ronnie Lee Bradley was driving at the time of the accident as a complete defense and plea in bar to plaintiff's entire action and to any liability of the defendant in this action.

Defendant alleges as a Fourth Further Answer and Defense that the extent of the insolvency of Guaranty Insurance Exchange is unknown to it, but it is advised and believes it has substantial assets which are available to creditors, and its affairs are being administered by a receiver of a court of competent jurisdiction. That even if it should be held that the endorsement forming a part of the policy of automobile liability insurance issued by it to plaintiff obligates it to plaintiff in this action, which it denies, it is impossible to determine its amount of liability until a determination has been made of assets of Guaranty Insurance Exchange available for claims of plaintiff in this action. Plaintiff has not recovered a judgment against Ronnie Lee Bradley or Richard Bradley and has not pursued his claim against Guaranty Insurance Exchange. Its liability would not accrue, if there is any, until plaintiff has exhausted all his remedies against Guaranty Insurance Exchange, and it has been finally determined that his claim against this company will not be paid in full by the...