Integon Nat'l Ins. Co. v. Phillips

• Decision Date: 21 June 2011
• Docket Number: No. COA10–1185.,COA10–1185.
• Citation: 712 S.E.2d 381
• Parties: INTEGON NATIONAL INSURANCE COMPANY, Plaintiff,v.Kelley PHILLIPS, Tammy Phillips, Tarrah Kasey Jones, Hailee Jones, by and through her Guardian Ad Litem, Andrew Fink, Donald Burrell Pressley, and North Carolina Farm Bureau Mutual Insurance Company, Inc., Defendants.
• Court: North Carolina Court of Appeals

712 S.E.2d 381

INTEGON NATIONAL INSURANCE COMPANY, Plaintiff,

v.Kelley PHILLIPS, Tammy Phillips, Tarrah Kasey Jones, Hailee Jones, by and through her Guardian Ad Litem, Andrew Fink, Donald Burrell Pressley, and North Carolina Farm Bureau Mutual Insurance Company, Inc., Defendants.

No. COA10–1185.

Court of Appeals of North Carolina.

June 21, 2011.

OPINION TEXT STARTS HERE

Appeal by defendant from order entered 8 June 2010 by Judge Mark E. Klass in Union County Superior Court. Heard in the Court of Appeals 8 March 2011.

Bennett & Guthrie, P.L.L.C., Winston–Salem, by Rodney A. Guthrie and Roberta B. King, for plaintiff-appellee Integon National Insurance Company.

McAngus, Goudelock & Courie, P.L.L.C., Charlotte, by John T. Jeffries and James D. McAlister, for defendant-appellant North Carolina Farm Bureau Mutual Insurance Company, Inc.Fink & Hayes, P.L.L.C., Charlotte, by Andrew Fink, for Andrew Fink, guardian ad litem for defendant-appellee Hailee Jones.

HUNTER, ROBERT C., Judge.

Defendant North Carolina Farm Bureau Mutual Insurance Company, Inc. appeals from the trial court's entry of summary judgment in favor of plaintiff Integon National Insurance Company.¹ After careful review, we reverse.

Facts

This case arises out of a motor vehicle accident occurring on 8 January 2007, in Monroe, North Carolina. At the time of the accident, Tarrah Kasey Jones was driving a 2006 Chevrolet vehicle, with her sister, Hailee Jones, in the passenger seat. The Jones vehicle collided with a 2005 Mercury automobile, driven by Donald Burrell Pressley, in which Mr. Pressley's wife, Carolyn Pressley, was a passenger. As a result of the accident, Mrs. Pressley sustained fatal injuries; Mr. Pressley and Hailee Jones were also injured. It is undisputed that Tarrah Jones' negligence proximately caused the auto accident and the resulting injuries.

At the time of the accident, there were two automobile liability insurance policies providing coverage. Farm Bureau issued a policy to Tammy Phillips, Tarrah and Hailee Jones' mother, carrying bodily injury coverage of $100,000 per person and $300,000 per accident. Tarrah Jones was listed as an additional driver on Mrs. Phillips' policy. The only vehicle listed on Mrs. Phillips' policy was a 2005 Honda Civic. The other policy in effect at the time of the accident was issued by Integon to Kelley Phillips, Tarrah and Hailee Jones' stepfather. This policy carried bodily injury coverage limits of $50,000 per person and $100,000 per accident. The Integon policy listed a 1999 Buick Century as the only covered vehicle and the only drivers listed on the policy were Mr. and Mrs. Phillips.

The 2006 Chevrolet being driven by Tarrah Jones on 8 January 2007 was a rental car owned by Hertz Vehicles, Inc. Mrs. Phillips had rented the car while the listed 2005 Honda Civic was out for repairs.

Claims for personal injury were filed by Hailee Jones and Mr. Pressley, as well as a wrongful death claim by the estate of Mrs. Pressley. The wrongful death claim was settled, with Farm Bureau contributing its per person limit of $100,000 and Integon paying its per person limit of $50,000. Mr. Pressley also filed a claim to recover for his personal injuries stemming from the 8 January 2007 accident. Mr. Pressley's claim was settled for $50,000: Farm Bureau paid $33,000 and Integon paid $16,667. As a result of these settlements, Integon has paid $66,667, leaving $33,333 on its per accident coverage to be applied toward the settlement of Hailee Jones' claim; Farm Bureau has paid $133,333, leaving more than its $100,000 per person coverage limit.

The Integon policy issued to Mr. Phillips and the Farm Bureau policy issued to Mrs. Phillips contain identical “Other Insurance” clauses:

If there is other applicable liability insurance, we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.

(Emphasis added.)

Integon filed a declaratory judgment action on 24 August 2009, seeking a declaration that “the automobile insurance policy issued by [Integon] to Kelley Phillips as named insured provides excess coverage over the primary coverage provided under the automobile insurance policy issued by [Farm Bureau] to Tammy Phillips as named insured for any claims arising from the [8 January 2007] accident[.]” Both Integon and Farm Bureau filed motions for summary judgment in March 2010. After conducting a hearing on 19 April 2010 on the parties' cross-motions, the trial court entered an order on 8 June 2010 granting Integon's motion for summary judgment and, consequently, denying Farm Bureau's motion. Farm Bureau timely appealed to this Court.

Discussion

In this case, there is no dispute regarding the relevant facts. The sole issue is the proper interpretation of the personal automobile insurance policies issued by Integon and Farm Bureau. The interpretation and application of insurance policy provisions to undisputed facts is a question of law, appropriately resolved on summary judgment. McGuire v. Draughon, 170 N.C.App. 422, 424–25, 612 S.E.2d 428, 430 (2005); Certain Underwriters at Lloyd's London v. Hogan, 147 N.C.App. 715, 718, 556 S.E.2d 662, 664 (2001), disc. review denied, 356 N.C. 159, 568 S.E.2d 188 (2002).

It is well established that “[a]n insurance policy is a contract to be construed under the rules of law applicable to other written contracts.” Chavis v. Southern Life Ins. Co., 76 N.C.App. 481, 484, 333 S.E.2d 559, 561 (1985), aff'd, 318 N.C. 259, 347 S.E.2d 425 (1986). “As with all contracts, the object of construing an insurance policy is to arrive at the insurance coverage intended by the parties when the policy was issued.” Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield, L.L.C., 364 N.C. 1, 9, 692 S.E.2d 605, 612 (2010) (citation and internal quotation marks omitted). As the language of the policy “is the clearest indicator of the parties' intentions[,]” Metropolitan Prop. and Casualty Ins. Co. v. Lindquist, 120 N.C.App. 847, 851, 463 S.E.2d 574, 576 (1995), where the policy is unambiguous, “[i]t must be presumed the parties intended what the language used clearly expresses, and the [policy] must be construed to mean what on its face it purports to mean[,]” Hartford Acc. & Indemnity Co. v. Hood, 226 N.C. 706, 710, 40 S.E.2d 198, 201 (1946) (internal citations omitted). “[I]t is the duty of the court to construe an insurance policy as it is written, not to rewrite it and thus make a new contract for the parties.” Allstate Ins. Co. v. Shelby Mut. Ins. Co., 269 N.C. 341, 346, 152 S.E.2d 436, 440 (1967).

With respect to the policy's terms, our Supreme Court has explained:

“Where a policy defines a term, that definition is to be used. If no definition is given, non-technical words are to be given their meaning in ordinary speech, unless the context clearly indicates another meaning was intended. The various terms of the policy are to be harmoniously construed, and if possible, every word and every provision is to be given effect.”

Gaston County Dyeing Machine Co. v. Northfield Ins. Co., 351 N.C. 293, 299–300, 524 S.E.2d 558, 563 (2000) (quoting Woods v. Nationwide Mut. Ins. Co., 295 N.C. 500, 505–06, 246 S.E.2d 773, 777 (1978)).

Under the “Insuring Agreement” of the policies' liability coverage provisions, both Farm Bureau and Integon agree to “pay damages for bodily injury or property damage for which any insured becomes legally responsible because of an auto accident.” ² For purposes of liability coverage, an “insured” is defined, in pertinent part, as:

1. You or any family member for the ownership, maintenance or use of any auto or trailer.

2. Any person using your covered auto.

Both Farm Bureau and Integon agreed at summary judgment, as well as now on appeal, that, under these terms, both policies provide liability coverage for the 8 January 2007 auto accident. The focus of the parties' dispute is their relative obligations under each policy in light of the policies' identically worded “Other Insurance” provisions:

If there is other applicable liability insurance, we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.

(Emphasis added.) See generally Aetna Casualty and Surety Co. v. Continental Ins. Co., 110 N.C.App. 278, 282, 429 S.E.2d 406, 409 (1993) (“An excess clause in an insurance policy ‘generally provides that if other valid and collectible insurance covers the occurrence in question, the “excess” policy will provide coverage only for liability above the maximum coverage of the primary policy or policies.’ ” (quoting Horace Mann Ins. Co. v. Continental Casualty Co., 54 N.C.App. 551, 555, 284 S.E.2d 211, 213 (1981))).

In construing “excess” clauses, this Court has explained that “[w]here it is impossible to determine which policy provides primary coverage due to identical ‘excess' clauses, ‘the clauses are deemed mutually repugnant and neither ... will be given effect.’ ” Iodice v. Jones, 133 N.C.App. 76, 78, 514 S.E.2d 291, 293 (1999) (quoting N.C. Farm Bureau Mut. Ins. Co. v. Hilliard, 90 N.C.App. 507, 511, 369 S.E.2d 386, 388 (1988)). Where “excess” clauses are not given effect due to mutual repugnancy, the claim is “prorated between the two insurers according to their respective policy limits.” Hilliard, 90 N.C.App. at 511, 369 S.E.2d at 389; accord Hlasnick v. Federated Mut. Ins. Co., 136 N.C.App. 320, 330, 524 S.E.2d 386, 393 (“Where ... the ‘other insurance’ clauses in the policies are mutually repugnant, the claims will be prorated.”), aff'd in part and disc. review improvidently allowed in part, 353 N.C. 240, 539 S.E.2d 274 (2000). Thus, in this case, “if the identically worded ‘excess' clauses in the ...