Miller v. Nationwide Mut. Ins. Co.

• Decision Date: 19 October 1993
• Docket Number: No. 9219SC498,9219SC498
• Citation: 112 N.C.App. 295,435 S.E.2d 537
• Parties: Marcus D. MILLER, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.
• Court: North Carolina Court of Appeals

Page 537

435 S.E.2d 537

112 N.C.App. 295

Marcus D. MILLER, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.

No. 9219SC498.

Court of Appeals of North Carolina.

Oct. 19, 1993.

Wallace and Whitley by Michael Doran, Salisbury, for plaintiff.

Nichols, Caffrey, Hill, Evans & Murrelle by Paul D. Coates and Tonola D. Brown, Greensboro, for defendant.

MARTIN, Judge.

NATIONWIDE'S APPEAL

Nationwide argues that the trial court erred in granting plaintiff's motion for partial summary judgment allowing plaintiff to engage in intrapolicy stacking of the UIM coverage under his father's policy. This very same issue has been recently decided by our Supreme Court in Harrington v. Stevens, 434 S.E.2d 212 (1993), under nearly identical facts to those in the present case. The plaintiff in Harrington, an adult male who was injured in an automobile collision with a negligent third party, was insured by Nationwide under a policy issued to him. Nationwide had also issued insurance policies to plaintiff's brother and father with whom plaintiff, who was financially independent, resided. The policies issued to plaintiff's father and brother each provided UIM coverage for two vehicles in the amounts of $50,000 per person and $100,000 per accident. The plaintiff sought to stack the four coverages under those two policies for a total UIM pool of $200,000. The Supreme Court held that the provisions of G.S. § 20-279.21(b)(3) and (4) in effect at the time of the accident require that "the plaintiff be allowed to stack, both interpolicy and intrapolicy, the underinsured motorist coverages of the policies of his brother and his father." Harrington, 434 S.E.2d at 214.

Like the plaintiff in Harrington, the plaintiff in the present case lived in the same household as his father, the owner of the Nationwide policy providing UIM coverage for two vehicles. Plaintiff is, therefore, a "person insured" under the policy, as defined by G.S. § 20-279.21(b)(3). Thus, he is entitled to the same rights to stack coverages intrapolicy under G.S. § 20-279.21(b)(4) as the owner. The trial court properly granted partial summary judgment permitting plaintiff to stack the UIM coverages on multiple vehicles insured under the policy which Nationwide issued to his father. Defendant's assignments of error related thereto are overruled.

PLAINTIFF'S APPEAL

Plaintiff contends that the trial court erred by dismissing, pursuant to G.S. § 1A-1, Rule 12(b)(6), Counts II and III of his complaint by which he sought to recover damages for unfair trade practices and punitive damages for defendant's alleged bad faith refusal to settle his claim. Under Rule 12(b)(6), a claim should be dismissed where it appears that plaintiff is not entitled to relief under any set of facts which could be proven. Garvin v. City of Fayetteville, 102 N.C.App. 121, 401 S.E.2d 133 (1991). This occurs where there is a lack of law to support a claim of the sort made, an absence of facts sufficient to make a good claim, or the disclosure of some fact which will necessarily defeat the claim. Id. In analyzing the sufficiency of the complaint under Rule 12(b)(6), the complaint must be liberally construed. Dixon v. Stuart, 85 N.C.App. 338, 354 S.E.2d 757 (1987). The question for the court is whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory, whether properly labeled or not. Harris v. NCNB, 85 N.C.App. 669, 355 S.E.2d 838 (1987). To prevent a dismissal under this rule, a party must (1) give sufficient notice of the events on which the claim is based to enable the adverse party to respond and prepare for trial, and (2) state enough to satisfy the substantive elements of at least some legally recognized claim. Hewes v. Johnston, 61 N.C.App. 603, 604, 301 S.E.2d 120, 121 (1983).

Defendant argues first that plaintiff's claims as set forth in Counts II and III of his complaint were barred by the Conditional Release and Contract executed between plaintiff and defendant at the time defendant made the $150,000 payment to plaintiff. The significant portions of the Conditional Release and Contract, which was attached to the complaint, provide:

Whereas, except for the parties' dispute concerning the purported additional $100,000.00 of UIM coverage under the aforesaid policies, the parties have agreed to a payment of $150,000.00 in UIM coverage to Miller in exchange for a release of Nationwide's liability under the aforesaid policies of insurance arising out of the aforesaid accident;

. . . . .

2. Miller hereby ... does forever release and discharge Nationwide of and from all claims of whatsoever kind and nature prior to and including the date hereof growing out of the UIM coverage for one of the two automobiles insured under Automobile Insurance Policy number 61-32B-240-542 issued by Nationwide to Sammy E. Miller, and resulting or to result from an automobile accident which occurred on July 28, 1990 at or near Salisbury, Rowan County, North Carolina.

3. That Miller does NOT release Nationwide, and Nationwide agrees that Miller may prosecute his claim for additional UIM coverage against Nationwide for the second of the two automobiles insured under Automobile Insurance Policy number 61-32B-240-542 issued by Nationwide to Sammy E. Miller along with any claims Miller might have arising out of Nationwide's refusal to pay said purported additional UIM coverage as demanded by Miller.

Generally a release executed by an injured party based on valuable consideration is a complete defense to an action for damages for such injuries. Cunningham v. Brown, 51 N.C.App. 264, 276 S.E.2d 718 (1981), appeal after remand, 62 N.C.App. 239, 302 S.E.2d 822, disc. review denied, 308 N.C. 675, 304 S.E.2d 754 (1983). What a release means depends upon the executing parties' intent which is determined from the language used, the parties' situation and the objectives they sought to accomplish. McGladrey, Hendrickson & Pullen v. Syntek Fin., 92 N.C.App. 708, 375 S.E.2d 689, disc. review denied, 324 N.C. 433, 379 S.E.2d 243 (1989). When the circumstances surrounding the execution of the release are not in dispute and its terms are free from ambiguity, its meaning is for the court to determine. Id.

The language of the Conditional Release and Contract as set forth above is not ambiguous and the intent of the parties is clear. Plaintiff specifically released all claims related to the UIM coverage for the first vehicle covered under the Miller policy. However, plaintiff specifically retained "his claim for additional UIM coverage ... for the second of the two automobiles ... along with any claims ... arising out of Nationwide's refusal to pay said purported additional UIM coverage as demanded by Miller." Therefore, by its plain language the Conditional Release and Contract does not bar plaintiff's claims for unfair trade practices and bad faith refusal to settle to the extent that they relate to or arise out of plaintiff's retained claim to the additional UIM coverage for the second automobile listed under the Miller policy.

To prevail on a claim for unfair and deceptive trade practices, one must show: (1) an unfair or deceptive act or practice, or unfair method of competition, (2) in or affecting commerce, and (3) which proximately caused actual injury to the plaintiff or his business. Spartan Leasing v. Pollard, 101 N.C.App. 450, 460, 400 S.E.2d 476, 482 (1991). A practice is unfair when it offends established public policy and when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers. Johnson v. Beverly-Hanks & Assoc., 328 N.C. 202, 208, 400 S.E.2d 38, 42 (1991). "If a party engages in conduct that results in an inequitable assertion of his power or position, he has committed an unfair act or practice." Id. Evidence of negligence, good faith or lack of intent are not defenses to an action under G.S. § 75-1.1. Forbes v. Par Ten Group, Inc., 99 N.C.App. 587, 394 S.E.2d 643 (1990), disc. review denied, 328 N.C. 89, 402 S.E.2d 824 (1991).

The insurance business is definitely one "in commerce" as an "exchange of value" occurs when a consumer purchases a policy. Pearce v. American Defender Life Ins. Co., 316 N.C. 461, 469, 343 S.E.2d 174, 179 (1986). Unfair or deceptive trade practices in the insurance industry are governed by G.S. § 58-63-15. Bentley v. N.C. Insurance Guaranty Assn., 107 N.C.App. 1, 418 S.E.2d 705 (1992). A violation of G.S. § 58-63-15 constitutes an unfair and deceptive trade practice in violation of G.S. § 75-1.1 as a matter of law. Pearce, 316 N.C. at 470, 343 S.E.2d at 179 (construing G.S. § 58-54.4, the predecessor to G.S. § 58-63-15); Jefferson-Pilot Life Ins. Co. v. Spencer, 110 N.C.App. 194, 429 S.E.2d 583, disc. review allowed, 334 N.C. 434, 433 S.E.2d 176 (1993). "The relationship between the insurance statute and the more general unfair or deceptive trade practices statutes is that the latter provide a remedy in the nature of a private action for the former." Kron Medical Corp. v. Collier Cobb & Associates, 107 N.C.App. 331, 335, 420 S.E.2d 192, 194, disc. review denied, 333 N.C. 168, 424 S.E.2d 910 (1992), reconsideration dismissed, 333 N.C. 345, 426 S.E.2d 706 (1993).

Plaintiff relies specifically on G.S. § 58-63-15(11)(f, h, m and n) which provide as follows:

(11) Unfair Claim Settlement Practices.--Committing or performing with such frequency as to indicate a general business practice of any of the following: Provided, however, that no violation of this subsection shall of itself create any cause of action in favor of any person other than the Commissioner:

f. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;

h. Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled;

m....